Exhibit 10.22


 


LETTER OF CREDIT REIMBURSEMENT
AGREEMENT


 


This LETTER OF
CREDIT REIMBURSEMENT AGREEMENT (this “Agreement”) dated as of April 29,
2005, between SILICON VALLEY BANK, a California chartered bank, with
its principal place of business at 3003 Tasman Drive, Santa Clara, California
95054 (“Bank”) and FINISAR CORPORATION, a Delaware corporation (“Borrower”),
provides the terms on which Bank shall extend credit to Borrower and Borrower
shall repay Bank.  The parties agree as
follows:


 


1              ACCOUNTING
AND OTHER TERMS


 


Accounting terms not defined in this Agreement shall be construed
following GAAP.  Calculations and
determinations must be made following GAAP. 
The term “financial statements” includes the notes and schedules
attached thereto.  The terms “including”
and “includes” always mean “including (or includes) without limitation,” in
this or any Credit Document.  Capitalized
terms in this Agreement shall have the meanings set forth in Article 13.


 


2              LOAN
AND TERMS OF PAYMENT


 


2.1          Promise to Pay.  Borrower
hereby unconditionally promises to pay Bank the unpaid principal amount of all
Credit Extensions and interest on the unpaid principal amount of the Credit
Extensions as and when due in accordance with this Agreement.


 


2.1.1       Letter of Credit Line.


 


(a)           Borrower
may request Letters of Credit from time to time hereunder, in each instance in
accordance with such procedures as may from time to time be acceptable to Bank.


 


(b)           The
Letter of Credit Line terminates on the Letter of Credit Line Maturity Date.


 


2.1.2       Issuance
of Letters of  Credit.


 


(a)           The
face amount of outstanding Letters of Credit (including drawn but unreimbursed
Letters of Credit and any Letter of Credit Reserve) may not exceed the Letter
of Credit Line.  Borrower’s Letter of
Credit reimbursement obligation shall be secured by cash on terms acceptable to
Bank on and after (i) the Letter of Credit Line Maturity Date, or (ii) the
termination of the Letter of Credit Line by Borrower, or (iii) the
occurrence of an Event of Default hereunder. 
All Letters of Credit shall be in form and substance acceptable to Bank
in its sole discretion, and shall be subject to the terms and conditions of
Bank’s standard Application and Letter of Credit Agreement (“Letter of Credit
Application”).  Borrower agrees to
execute any further documentation in connection with the Letters of Credit as
Bank may reasonably request.


 


(b)           The
obligation of Borrower to immediately reimburse Bank for drawings made under
Letters of Credit shall be absolute, unconditional and irrevocable, and shall
be performed strictly in accordance with the terms of this Agreement and such
Letters of Credit, and the Letter of Credit Application.  Borrower shall indemnify, defend, protect,
and hold Bank harmless from any loss, cost, expense or liability, including,
without limitation, reasonable attorneys’ fees, arising out of or in connection
with any Letters of Credit.


 


(c)           Borrower
may request that Bank issue a Letter of Credit payable in a currency other than
United States Dollars.  Upon the issuance
of any Letter of Credit payable in a currency other than United States Dollars,
Bank shall create a reserve under the Letter of Credit Line for protection
against fluctuations in currency exchange rates, in an amount equal to ten
percent (10%) of the face amount of such Letter of Credit (the “Letter of
Credit Reserve”).  The amount of the
Letter of Credit Reserve may be amended by Bank from time to time to account
for fluctuations in the exchange rate. 
The availability of funds under the Letter of Credit Line shall be
reduced by the amount of the Letter of Credit Reserve for as long as such
Letter of Credit remains outstanding.


 


2.2          Undisbursed Credit Extensions.  Bank’s
obligation to issue any Letters of Credit hereunder shall terminate if, in Bank’s
sole discretion, there has been a material adverse change in the general
affairs, management, results of operation, condition (financial or otherwise)
or the prospect of repayment of the Obligations, or there has


 

















 


been any material
adverse deviation by Borrower from the most recent business plan of Borrower
presented to and accepted by Bank prior to the execution of this Agreement.


 


2.3          Fees.  Borrower shall pay to Bank:


 


(a)           Commitment
Fee.  A fully earned, non-refundable
commitment fee of Thirty-Five Thousand Dollars ($35,000.00) due and payable on
the Closing Date;


 


(b)           Letter
of Credit Fee.  Borrower shall pay
Bank’s customary fees and expenses for the issuance or renewal of Letters of
Credit upon the issuance or renewal of such Letter of Credit by Bank; and


 


(c)           Bank
Expenses.  All Bank Expenses
(including reasonable attorneys’ fees and expenses) incurred through and after
the Closing Date, when due.


 


3              CONDITIONS PRECEDENT


 


3.1          Conditions Precedent to Initial Credit
Extension.  Bank’s obligation to make the
initial Credit Extension is subject to the condition precedent that Bank shall
have received, in form and substance satisfactory to Bank, such documents, and
completion of such other matters, as Bank may reasonably deem necessary or
appropriate, including, without limitation, the following:


 


(a)           this
Agreement;


 


(b)           a
certificate of the Secretary of Borrower with respect to articles, bylaws,
incumbency and resolutions authorizing the execution and delivery of this
Agreement, the Credit Documents, and all transactions related thereto;


 


(c)           payment
of the fees and Bank Expenses;


 


(d)           Certificate
of Foreign Qualification (if applicable);


 


(e)           Certificate of Good
Standing/Legal Existence; and


 


(f)            such
other documents, and completion of such other matters, as Bank may reasonably
deem necessary or appropriate.


 


3.2          Conditions Precedent to all Credit Extensions.  Bank’s
obligations to make each Credit Extension, including the initial Credit
Extension, is subject to the representations and warranties in Article 5
shall be true in all material respects on the date any Credit Extension is
requested by Borrower hereunder and on the effective date of each Credit
Extension and no Event of Default shall have occurred and be continuing, or
result from the Credit Extension.  Each
Credit Extension is Borrower’s representation and warranty on that date that
the representations and warranties in Article 5 remain true in all
material respects.


 


4              NEGATIVE PLEDGE
REGARDING ASSETS


 


4.1          Negative Pledge.  In accordance with Sections 7.1 and 7.5
hereof, Borrower has granted to Bank a negative pledge with respect to its
Assets.


 


4.2          Authorization to File
Financing Statements.  Borrower
hereby authorizes Bank to file UCC financing statements with all appropriate
filing offices (in Bank’s discretion) naming Borrower as Debtor and Bank as
Secured Party therein with the following “collateral” description: THE PURPOSE
OF THIS FINANCING STATEMENT IS TO GIVE NOTIFICATION THAT DEBTOR AND SECURED
PARTY ARE PARTIES TO THAT CERTAIN LETTER OF CREDIT REIMBURSEMENT AGREEMENT,
WHEREBY DEBTOR, IN CONNECTION WITH SECURED PARTY’S CREDIT EXTENSIONS TO DEBTOR,
HAS AGREED, AMONG OTHER THINGS, NOT TO, VOLUNTARILY OR INVOLUNTARILY, ASSIGN,
MORTGAGE, PLEDGE, LEASE, SUFFER ANY ATTACHMENT, GRANT A SECURITY INTEREST IN,
OR ENCUMBER ANY OF


 


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DEBTOR’S ASSETS OR
PROPERTY (SUBJECT TO EXCEPTIONS SET FORTH THEREIN), WITHOUT SECURED PARTY’S
WRITTEN CONSENT IN EACH INSTANCE.


 


5              REPRESENTATIONS
AND WARRANTIES


 


Borrower
represents and warrants to Bank as follows:


 


5.1          Due Organization and
Authorization.  Borrower, and
each Subsidiary, is duly existing and in good standing in its state of
formation and qualified and licensed to do business in, and in good standing
in, any state in which the conduct of its business or its ownership of property
requires that it be qualified except where the failure to do so could not
reasonably be expected to cause a Material Adverse Change.  The execution, delivery and performance of
the Credit Documents have been duly authorized, and do not conflict with
Borrower’s organizational documents, nor shall they constitute an event of
default under any material agreement by which Borrower is bound.  Borrower is not in default under any agreement
to which or by which it is bound in which the default could reasonably be
expected to cause a Material Adverse Change.


 


5.2          Litigation.  There are no actions or proceedings
pending or, to the knowledge of Borrower’s Responsible Officers or legal
counsel, threatened by or against Borrower or any Subsidiary in which an
adverse decision could reasonably be expected to cause a Material Adverse
Change.


 


5.3          No Material
Deterioration in Financial Statements. 
All consolidated financial statements for Borrower and any
Subsidiary delivered to Bank fairly present in all material respects Borrower’s
consolidated financial condition and Borrower’s consolidated results of
operations.  There has not been any
material deterioration in Borrower’s consolidated financial condition since the
date of the most recent financial statements submitted to Bank.


 


5.4          Insurance.  Borrower shall keep
its business insured for risks and in amounts, and as Bank may reasonably
request.  Insurance policies shall be in
a form, with companies, and in amounts that are satisfactory to Bank.


 


5.5          Solvency.  The fair salable value of Borrower’s assets
(including goodwill minus disposition costs) exceeds the fair value of its
liabilities; Borrower is not left with unreasonably small capital after the
transactions in this Agreement; and Borrower is able to pay its debts
(including trade debts) as they mature.


 


5.6          Regulatory Compliance.  Borrower is not an “investment company”
or a company “controlled” by an “investment company” under the Investment
Company Act of 1940.  Borrower is not
engaged as one of its important activities in extending credit for margin stock
(under Regulations X, T and U of the Federal Reserve Board of Governors).  Borrower has complied in all material
respects with the Federal Fair Labor Standards Act.  Borrower has not violated any laws,
ordinances or rules, the violation of which could reasonably be expected to
cause a Material Adverse Change.  None of
Borrower’s or any Subsidiary’s properties or assets has been used by Borrower
or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons,
in disposing, producing, storing, treating, or transporting any hazardous
substance other than legally.  Borrower
and each Subsidiary has timely filed all required tax returns and paid, or made
adequate provision to pay, all material taxes, except those being contested in
good faith with adequate reserves under GAAP. 
Borrower and each Subsidiary has obtained all consents, approvals and
authorizations of, made all declarations or filings with, and given all notices
to, all government authorities that are necessary to continue its business as
currently conducted except where the failure to obtain or make such consents,
declarations, notices or filings would not reasonably be expected to cause a
Material Adverse Change.


 


5.7          Subsidiaries;
Investments.  Borrower does not
own any stock, partnership interest or other equity securities except for
Permitted Investments and its equity interest in its Subsidiaries.


 


5.8          Full Disclosure.  No written representation, warranty or
other statement of Borrower in any certificate or written statement given to
Bank taken together with all such written certificates and written statements
given to Bank contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained in the
certificates or statements not misleading (it being recognized by Bank that the
projections and forecasts provided by Borrower in good faith and based upon
reasonable assumptions are not viewed


 


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as facts and that
actual results during the period or periods covered by such projections and
forecasts may differ from the projected or forecasted results).


 


6              AFFIRMATIVE COVENANTS


 


Borrower shall do
all of the following:


 


6.1          Government Compliance.  Borrower shall maintain its, and all
Subsidiaries’, legal existence and good standing in their respective
jurisdictions of formation and maintain qualification in each jurisdiction in
which the failure to so qualify would reasonably be expected to have a material
adverse effect on Borrower’s business or operations.  Borrower shall comply, and have each
Subsidiary comply, with all laws, ordinances and regulations to which it is
subject, noncompliance with which could have a material adverse effect on
Borrower’s business or operations or would reasonably be expected to cause a
Material Adverse Change.


 


6.2          Financial Statements, Reports, Certificates.


 


(a)           Borrower
shall deliver to Bank: (i) as soon as available, but no later than thirty
(30) days after the last day of each month, a company prepared consolidated
balance sheet and income statement covering Borrower’s consolidated operations
during the period certified by a Responsible Officer and in a form acceptable
to Bank; (ii) as soon as available, but no later than ninety (90) days
after the last day of Borrower’s fiscal year, audited consolidated financial
statements of Borrower prepared under GAAP, consistently applied, together with
an unqualified opinion on the financial statements from an independent
certified public accounting firm reasonably acceptable to Bank; (iii) within
five (5) days of filing, Borrower shall provide Bank copies of or
electronic notice of links to all statements, reports and notices made
available to Borrower’s security holders or to any holders of Subordinated Debt
and all reports on Form 10-K, 10-Q and 8-K filed with the Securities and
Exchange Commission; (iv) a prompt report of any material legal actions pending
or threatened against Borrower or any Subsidiary; (v) as requested by
Bank, Board-approved projections; and (vi) other financial information
reasonably requested by Bank.


 


(b)           Within
thirty (30) days after the last day of each month, Borrower shall deliver to
Bank, with the monthly financial statements, a Compliance Certificate signed by
a Responsible Officer in the form of Exhibit A.


 


6.3          Taxes.  Borrower shall make, and cause each
Subsidiary to make, timely payment of all material federal, state, and local
taxes or assessments (other than taxes and assessments which Borrower is
contesting in good faith, with adequate reserves maintained in accordance with
GAAP) and will deliver to Bank, on demand, appropriate certificates attesting
to such payments.


 


6.4          Accounts.  In order to permit Bank to monitor
Borrower’s financial performance and condition, Borrower, and all Borrower’s
Subsidiaries, shall maintain Borrower’s, and such Subsidiaries’, primary
depository, operating and securities accounts with Bank, which accounts shall
represent at least fifty percent (50.0%) of the dollar value of Borrower’s and
such Subsidiaries accounts at all financial institutions.


 


6.5          Financial Covenant.  Borrower shall have at all times, to be
tested as of the last day of each month, cash or cash equivalents of at least
Forty Million Dollars ($40,000,000.00), net of any and all Indebtedness owing
by Borrower to Bank, including, without limitation, all Obligations outstanding
hereunder (including the face amount of any issued, but undrawn, Letters of
Credit).


 


6.6          Further Assurances.  Borrower
shall execute any further instruments and take further action as Bank
reasonably requests to effect the purposes of this Agreement.


 


7              NEGATIVE COVENANTS


 


Borrower shall not do any of the following without
Bank’s prior written consent, which consent will not be unreasonably withheld:


 


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7.1          Dispositions.  Convey, sell, lease, transfer, assign or
otherwise dispose of (collectively a “Transfer”), all or any part of Borrower’s
assets, business or property, including the Intellectual Property
(collectively, the “Assets”), except for Transfers of (a) inventory in the
ordinary course of business; (b) nonexclusive licenses and similar
arrangements for the use of the property of Borrower or its Subsidiaries in the
ordinary course of business; (c) worn-out or obsolete equipment or (d) Non-Core
Business Intellectual Property.  Borrower
shall not enter into an agreement with any Person other than Bank which
restricts the subsequent granting of a security interest in the Assets.


 


7.2          Changes in Business,
Ownership, Management or Business Locations.  (i) Engage in or permit any of its
Subsidiaries to engage in any business other than the businesses currently
engaged in by Borrower or reasonably related thereto, or (ii) permit or
suffer any Change in Control or (iii) permit or suffer any change in
Borrower’s chief executive officer, chief financial officer or president.  Borrower shall not, without at least thirty
(30) days’ prior written notice to Bank: (a) relocate its chief executive
office, or (b) change its jurisdiction of organization, or (c) change
its organizational structure or type, or (d) change its legal name, or (e) change
any organizational number (if any) assigned by its jurisdiction of
organization.


 


7.3          Mergers or
Acquisitions.  Merge or
consolidate, or permit any of its Subsidiaries to merge or consolidate, with
any other Person, or acquire, or permit any of its Subsidiaries to acquire, all
or substantially all of the capital stock or property of another Person; except
where (a) no Event of Default has occurred and is continuing or would
exist after giving effect to the transactions and (b) Borrower is the
surviving legal entity.


 


7.4          Indebtedness.  Create, incur, assume, or be liable for
any Indebtedness, or permit any Subsidiary to do so, other than Permitted
Indebtedness.


 


7.5          Encumbrance.  Create, incur, or allow any Lien on any
of the Assets, including any right to receive income or the sale of any
accounts, or permit any of its Subsidiaries to do so, subject to Permitted
Liens.


 


7.6          Distributions;
Investments.  (a) Directly
or indirectly acquire or own any Person, or make any Investment in any Person,
other than Permitted Investments, or permit any of its Subsidiaries to do so;
or (b) pay any dividends or make any distribution or payment or redeem,
retire or purchase any capital stock.


 


7.7          Transactions with
Affiliates.  Directly or
indirectly enter into or permit to exist any material transaction with any
Affiliate of Borrower, except for transactions that are in the ordinary course
of Borrower’s business, upon fair and reasonable terms that are no less
favorable to Borrower than would be obtained in an arm’s length transaction
with a non-affiliated Person.


 


7.8          Subordinated Debt.  Make or permit any payment on any
Subordinated Debt, except under the terms of the Subordinated Debt, or amend
any provision in any document relating to the Subordinated Debt.


 


7.9          Compliance.  (a) Become an “investment
company” or a company controlled by an “investment company”, under the
Investment Company Act of 1940 or undertake as one of its important activities
extending credit to purchase or carry margin stock, or use the proceeds of any
Credit Extension for that purpose; (b) fail to meet the minimum funding
requirements of ERISA, or permit a Reportable Event or Prohibited Transaction,
as defined in ERISA, to occur; or (c) fail to comply with the Federal Fair
Labor Standards Act or violate any other law or regulation, if the violation
could reasonably be expected to have a material adverse effect on Borrower’s
business or operations or would reasonably be expected to cause a Material
Adverse Change, or permit any of its Subsidiaries to do so.


 


8              EVENTS OF DEFAULT


 


Any
one of the following shall constitute an event of default hereunder (an “Event
of Default”):


 


8.1          Payment Default.  Borrower
fails to pay any of the Obligations when due, including, without limitation,
the failure of Borrower to immediately reimburse Bank for any drawing under any
Letter of Credit.


 


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8.2          Covenant Default.  (a) Borrower
fails or neglects to perform any obligation in Section 6.2 or Section 6.5
or violates any covenant in Article 7; or (b) Borrower fails or
neglects to perform, keep, or observe any other material term, provision,
condition, covenant or agreement contained in this Agreement, any of the Credit
Documents, or in any present or future agreement between Borrower and Bank and
as to any default under such other material term, provision, condition,
covenant or agreement that can be cured, has failed to cure the default within
ten (10) days after the occurrence thereof; provided, however, that if the
default cannot by its nature be cured within the ten (10) day period or
cannot after diligent attempts by Borrower be cured within such ten (10) day
period, and such default is likely to be cured within a reasonable time, then
Borrower shall have an additional period (which shall not in any case exceed
thirty (30) days) to attempt to cure such default, and within such reasonable
time period the failure to have cured such default shall not be deemed an Event
of Default (provided that no Credit Extensions shall be made during such cure period).  Grace periods provided under this Section shall
not apply, among other things, to financial covenants or any other covenants
that are required to be satisfied, completed or tested by a date certain.


 


8.3          Material Adverse
Change.  A Material Adverse
Change occurs.


 


8.4          Attachment.  (a) Any material portion of Borrower’s
assets is attached, seized, levied on, or comes into possession of a trustee or
receiver and the attachment, seizure or levy is not removed in ten (10) days;
(b) the service of process upon Borrower seeking to attach, by trustee or
similar process, any material funds of Borrower on deposit with Bank, or any
entity under control of Bank (including a subsidiary); (c) Borrower is
enjoined, restrained, or prevented by court order from conducting a material
part of its business; (d) a judgment or other claim becomes a Lien on a
material portion of Borrower’s assets; or (e) a notice of lien, levy, or
assessment is filed against a material portion of Borrower’s assets by any
government agency and not paid within ten (10) days after Borrower
receives notice.  These are not Events of
Default if stayed or if a bond is posted pending contest by Borrower (but no
Credit Extensions shall be made during the cure period).


 


8.5          Insolvency.  (a) Borrower is unable to pay its
debts (including trade debts) as they become due or otherwise becomes
insolvent; (b) Borrower begins an Insolvency Proceeding; or (c) an
Insolvency Proceeding is begun against Borrower and not dismissed or stayed
within forty-five (45) days (but no Credit Extensions shall be made before any
Insolvency Proceeding is dismissed).


 


8.6          Other Agreements.  If there is a default in any agreement to
which Borrower is a party with a third party or parties resulting in a right by
such third party or parties, whether or not exercised, to accelerate the
maturity of any Indebtedness in an amount in excess of One Million Dollars
($1,000,000.00) or that could result in a Material Adverse Change.


 


8.7          Judgments.  If a judgment or judgments for the payment
of money in an amount, individually or in the aggregate, of at least of One
Million Dollars ($1,000,000.00) shall be rendered against Borrower and shall
remain unsatisfied and unstayed for a period often (10) days (provided
that no Credit Extensions will be made prior to the satisfaction or stay of
such judgment).


 


8.8          Misrepresentations.  If Borrower or any Person acting for Borrower
makes any material misrepresentation or material misstatement now or later in
any warranty or representation in this Agreement or in any writing delivered to
Bank or to induce Bank to enter this Agreement or any Credit Document.


 


8.9          Subordinated Debt.  A
default or breach occurs under any agreement between Borrower and any creditor
of Borrower that signed a subordination agreement with Bank, or any creditor
that has signed a subordination agreement with Bank breaches any terms of the
subordination agreement.


 


9              BANK’S RIGHTS AND REMEDIES


 


9.1          Rights and Remedies.    When
an Event of Default occurs and continues, Bank may, without notice or demand,
do any or all of the following:


 


(a)           Declare
all Obligations immediately due and payable (but if an Event of Default
described in Section 8.5 occurs all Obligations are immediately due and
payable without any action by Bank);


 


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(b)           Stop
advancing money or extending credit for Borrower’s benefit under this Agreement
or under any other agreement between Borrower and Bank;


 


(c)           Demand
that Borrower: (i) deposit cash with Bank in an amount equal to the
aggregate amount of any Letters of Credit remaining undrawn, as collateral
security for the repayment of any future drawings under such Letters of Credit,
and Borrower shall forthwith deposit and pay such amounts, and (ii) pay in
advance all Letter of Credit fees scheduled to be paid or payable over the
remaining term of any Letters of Credit;


 


(d)           Apply to
the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any
amount held by Bank owing to or for the credit or the account of Borrower;


 


(e)           Place a “hold”
on any account maintained with Bank; and


 


(f)            Exercise all rights
and remedies hereunder or under applicable law.


 


9.2          Bank Expenses.  Any amounts paid by Bank as provided
herein shall constitute Bank Expenses and are immediately due and payable.  No payments by Bank shall be deemed an
agreement to make similar payments in the future or Bank’s waiver of any Event
of Default.


 


9.3          Remedies Cumulative.  Bank’s rights and remedies under this
Agreement, the Credit Documents, and all other agreements are cumulative.  Bank has all rights and remedies provided by
law or in equity.  Bank’s exercise of one
right or remedy is not an election, and Bank’s waiver of any Event of Default
is not a continuing waiver.  Bank’s delay
is not a waiver, election, or acquiescence. 
No waiver hereunder shall be effective unless signed by Bank and then is
only effective for the specific instance and purpose for which it was given.


 


9.4          Demand Waiver.  Borrower
waives demand, notice of default or dishonor, notice of payment and nonpayment,
notice of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees held by Bank on which Borrower is liable.


 


10           NOTICES


 


All notices or demands by any party to this Agreement
or any related agreement must be in writing and be personally delivered or sent
by an overnight delivery service, by certified mail, postage prepaid, return
receipt requested, or by facsimile at the addresses listed below.  Either Bank or Borrower may change its notice
address by giving the other party written notice.


 


	
  If to Borrower:

  	
  Finisar Corporation

  	
   

  
	
   

  	
  1399 Moffett Park Drive

  	
   

  
	
   

  	
  Sunnyvale, California
  94089

  
	
   

  	
  Attn:

  	
   

  	
  Steve Workman

  	
   

  
	
   

  	
  FAX:

  	
   

  	
  408-541-4154

  	
   

  
	
   

  	
   

  
	
  If to Bank:

  	
  Silicon Valley Bank

  	
   

  
	
   

  	
  2400 Geng Road,
  Suite 200

  	
   

  
	
   

  	
  Palo Alto, California
  94303

  
	
   

  	
  Attn:

  	
   

  	
  Amanda Peters

  	
   

  
	
   

  	
  FAX:

  	
   

  	
  650-320-0016

  	
   

  
						



 


Notice will be deemed to have been given (a) if
by personal delivery, on the date of delivery; (b) if by overnight
delivery service, on the earlier of the date delivery was first attempted or
the next Business Day after such notice has been delivered to the overnight
delivery service; (c) if by certified mail, postage prepaid, return
receipt requested, on the earlier of the date delivery was first attempted or
the second Business Day after such notice has been delivered to the United
States Postal Service; and (d) if by facsimile transmission, on the date
of the transmission if sent on a Business Day prior to 3:00 p.m.,
California time, or on the next Business Day if sent after such time, provided
that a copy of such notice is also sent on the same day as the facsimile
transmission by overnight delivery service.


 


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11           CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER


 


California law governs the Credit Documents without regard to
principles of conflicts of law.  Borrower
and Bank each submit to the exclusive jurisdiction of the State and Federal
courts in California, and Borrower accepts jurisdiction of the courts and venue
in Santa Clara County, California. 
NOTWITHSTANDING THE FOREGOING, BANK SHALL HAVE THE RIGHT TO BRING ANY
ACTION OR PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN THE COURTS OF ANY
OTHER JURISDICTION WHICH BANK DEEMS NECESSARY OR APPROPRIATE IN ORDER TO
ENFORCE BANK’S RIGHTS AGAINST BORROWER OR ITS PROPERTY.


 


BORROWER
AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE CREDIT DOCUMENTS OR ANY
CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL
OTHER CLAIMS.  THIS WAIVER IS A MATERIAL
INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.  EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS
COUNSEL.


 


12           GENERAL PROVISIONS


 


12.1        Successors and Assigns.  This Agreement binds and is for the
benefit of the successors and permitted assigns of each party.  Borrower may not assign this Agreement or any
rights or Obligations under it without Bank’s prior written consent which may
be granted or withheld in Bank’s discretion. 
Bank has the right, without the consent of or notice to Borrower, to
sell, transfer, assign, negotiate, or grant participation in all or any part
of, or any interest in, Bank’s obligations, rights and benefits under this
Agreement, the Credit Documents or any related agreement.


 


12.2        Indemnification.  Borrower hereby indemnifies, defends and
holds Bank and its directors, officers, employees and agents harmless against: (a) all
obligations, demands, claims, and liabilities asserted by any other party or
Person in connection with the transactions contemplated by the Credit
Documents; and (b) all losses or Bank Expenses incurred, or paid by Bank
from, following, or consequential to transactions between Bank and Borrower
(including reasonable attorneys’ fees and expenses), except for losses caused
by Bank’s gross negligence or willful misconduct.


 


12.3        Time of Essence.  Time is of the essence for the
performance of all Obligations in this Agreement.


 


12.4        Severability of
Provision.  Each provision of
this Agreement is severable from every other provision in determining the
enforceability of any provision.


 


12.5        Amendments in
Writing:  Integration.  All amendments to this Agreement must be
in writing signed by both Bank and Borrower. 
This Agreement and the Credit Documents represent the entire agreement
about this subject matter, and supersede prior negotiations or agreements.  All prior agreements, understandings,
representations, warranties, and negotiations between the parties about the
subject matter of this Agreement and the Credit Documents merge into this
Agreement and the Credit Documents.


 


12.6        Counterparts.  This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, are an original, and all taken together,
constitute one Agreement.


 


12.7        Survival.  All covenants, representations and
warranties made in this Agreement continue in full force until this Agreement
has terminated pursuant to its terms, and all Obligations have been
satisfied.  The obligation of Borrower in
Section 12.2 to indemnify Bank shall survive until the statute of
limitations with respect to such claim or cause of action shall have run.


 


12.8        Confidentiality.  In
handling any confidential information, Bank shall exercise the same degree of
care that it exercises for its own proprietary information, but disclosure of
information may be made: (a) to Bank’s subsidiaries or affiliates in
connection with their business with Borrower; 
(b) to prospective transferees or


 


8

















 


purchasers of any
interest in the Credit Extensions (provided, however, Bank shall use
commercially reasonable efforts in obtaining such prospective transferee’s or
purchaser’s agreement to the terms of this provision); (c) as required by
law, regulation, subpoena, or other order, (d) as required in connection
with Bank’s examination or audit; and (e) as Bank considers appropriate in
exercising remedies under this Agreement. 
Confidential information does not include information that either: (i) is
in the public domain or in Bank’s possession when disclosed to Bank, or becomes
part of the public domain after disclosure to Bank; or (ii) is disclosed
to Bank by a third party, if Bank does not know that the third party is
prohibited from disclosing the information.


 


12.9        Attorneys’ Fees, Costs and Expenses.  In
any action or proceeding between Borrower and Bank arising out of the Credit
Documents, the prevailing party will be entitled to recover its reasonable
attorneys’ fees and other reasonable costs and expenses incurred, in addition
to any other relief to which it may be entitled.


 


13           DEFINITIONS


 


13.1        Definitions.  In this Agreement:


 


“Affiliate” is a
Person that owns or controls directly or indirectly the Person, any Person that
controls or is controlled by or is under common control with the Person, and
each of that Person’s senior executive officers, directors, partners and, for
any Person that is a limited liability company, that Person’s managers and
members.


 


“Assets” is defined in Section 7.1.


 


“Bank Expenses” are
all audit fees and expenses and reasonable costs or expenses (including
reasonable attorneys’ fees and expenses) for preparing, negotiating,
administering, defending and enforcing the Credit Documents (including appeals
or Insolvency Proceedings).


 


“Business
Day” is any day that is not a Saturday, Sunday or a day on
which Bank is closed.


 


“Change in Control” is
a transaction or series of transactions in which any “person” or “group”
(within the meaning of Section 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended), directly or indirectly, of greater than 35% of the shares of all
classes of stock then outstanding of Borrower ordinarily entitled to vote in
the election of directors.


 


“Closing
Date” is the date of this Agreement.


 


“Contingent Obligation” is, for any Person,
any direct or indirect liability, contingent or not, of that Person for (a) any
indebtedness, lease, dividend, letter of credit or other obligation of another
such as an obligation directly or indirectly guaranteed, endorsed, co-made,
discounted or sold with recourse by that Person, or for which that Person is
directly or indirectly liable; (b) any obligations for undrawn letters of
credit for the account of that Person; and (c) all obligations from any
interest rate, currency or commodity swap agreement, interest rate cap or
collar agreement, or other agreement or arrangement designated to protect a
Person against fluctuation in interest rates, currency exchange rates or
commodity prices; but “Contingent Obligation” does not include endorsements in
the ordinary course of business.  The
amount of a Contingent Obligation is the stated or determined amount of the
primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it determined by
the Person in good faith; but the amount may not exceed the maximum of the
obligations under any guarantee or other support arrangement.


 


“Credit Documents” are,
collectively, this Agreement, the Letter of Credit Application and any other
present or future agreement between Borrower and/or for the benefit of Bank in
connection with this Agreement, all as amended, extended or restated.


 


“Credit Extension” is
each Letter of Credit, or any other extension of credit by Bank for Borrower’s
benefit.


 


“ERISA” is the Employment Retirement Income
Security Act of 1974, and its regulations.


 


“Event of Default” is defined in Article 8.


 


9

















 


“GAAP” is generally accepted
accounting principles in the United States.


 


“Indebtedness” is (a) indebtedness
for borrowed money or the deferred price of property or services, such as
reimbursement and other obligations for surety bonds and letters of credit, (b) obligations
evidenced by notes, bonds, debentures or similar instruments, (c) capital
lease obligations and (d) Contingent Obligations.


 


“Insolvency Proceeding” is
any proceeding by or against any Person under the United States Bankruptcy
Code, or any other bankruptcy or insolvency law, including assignments for the
benefit of creditors, compositions, extensions generally with its creditors, or
proceedings seeking reorganization, arrangement, or other relief.


 


“Intellectual Property” is
any copyrights, copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work, whether published or unpublished, now owned or later acquired; any
patents, trademarks, service marks and applications therefor; any trade secret
rights, including any rights to unpatented inventions, now owned or hereafter
acquired.


 


“Investment” is any
beneficial ownership of (including stock, partnership interest or other
securities) any Person, or any loan, advance or capital contribution to any
Person.


 


“Letter of Credit” means a letter of credit
or similar undertaking issued by Bank pursuant to Section 2.1.1.


 


“Letter of Credit Application” is defined
in Section 2.1.2(a).


 


“Letter of Credit Line” is
the issuance of a Letter of Credit or Letters of Credit of up to Seven Million
Dollars ($7,000,000.00).


 


“Letter
of Credit Line Maturity Date” is April 29, 2006.


 


“Letter of Credit Reserve” is defined in Section 2.1.2(c).


 


“Lien”
is a mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.


 


“Material Adverse Change” is: (a) a
material impairment in the value of the Assets; (b) a material adverse
change in the business, operations, or condition (financial or otherwise) of
Borrower; (c) a material impairment of the prospect of repayment of any
portion of the Obligations; or (d) the determination by Bank, based upon
information available to it and in its reasonable judgment, that there is a
reasonable likelihood that Borrower shall fail to comply with one or more of
the financial covenants in Article 6 during the next succeeding financial
reporting period.


 


“Non-Core Business Intellectual
Property” is Intellectual Property owned, developed, or
obtained by Borrower, which Intellectual Property is not material in Borrower’s
core business and the disposition of which will not have any material adverse
effect on Borrower or its business.


 


“Obligations” are
all liabilities, obligations, covenants, agreements, debts, principal,
interest, Bank Expenses and other amounts Borrower owes Bank now or later,
including letters of credit, cash management services, and foreign exchange
contracts, if any, and including interest accruing after Insolvency Proceedings
begin and debts, liabilities, or obligations of Borrower assigned to Bank.


 


“Permitted Indebtedness” is:


 


(a)           Borrower’s
Indebtedness to Bank under this Agreement or the Credit Documents;


 


(b)           Indebtedness
existing on the Closing Date and disclosed to Bank;


 


10

















 


(c)           Subordinated
Debt;


 


(d)          Indebtedness to trade
creditors incurred in the ordinary course of business;


 


(e)           Indebtedness
secured by Permitted Liens; and


 


(f)           Extensions,
refinancings, modifications, amendments and restatements of any items of
Permitted Indebtedness (a) through (e) above, provided that the
principal amount thereof is not increased or the terms thereof are not modified
to impose more burdensome terms upon Borrower or its Subsidiary, as the case
may be.


 


“Permitted Investments” are:
(i) marketable direct obligations issued or unconditionally guaranteed by
the United States or its agency or any state maturing within 1 year from its
acquisition, (ii) commercial paper maturing no more than 1 year after its
creation and having the highest rating from either Standard & Poor’s
Corporation or Moody’s Investors Service, Inc., (iii) Bank’s
certificates of deposit issued maturing no more than 1 year after issue, (iv) any
other investments administered through Bank, (v) any Investments currently
owned by Borrower that were made in accordance with Borrower’s investment
policy in effect at the time the Investment was made, and (vi) any
Investments made hereafter in accordance with Borrower’s investment policy, as
amended from time to time, provided that such investment policy (and any such
amendments thereto) has been approved by Bank.


 


“Permitted
Liens” are:


 


(a)           Liens
for taxes, fees, assessments or other government charges or levies, either not
delinquent or being contested in good faith and for which Borrower maintains
adequate reserves on its Books;


 


(b)           Purchase
money Liens and capital leases (i) on equipment acquired or held by
Borrower incurred for financing the acquisition of the equipment securing no
more than One Hundred Thousand Dollars ($100,000.00) in the aggregate amount
outstanding, or (ii) existing on equipment when acquired;


 


(c)           Leases
or subleases and non-exclusive licenses or sublicenses granted in the ordinary
course of Borrower’s business;


 


(d)           Liens
incurred in the extension, renewal or refinancing of the indebtedness secured
by Liens described in (a) through (c), but any extension, renewal
or replacement Lien must be limited to the property encumbered by the existing
Lien and the principal amount of the indebtedness may not increase; and


 


(e)           Banker’s
liens, rights of set-off, and similar Liens in favor of other financial
institutions arising in connection with Borrower’s deposit accounts held at
such institutions.


 


“Person” is any
individual, sole proprietorship, partnership, limited liability company, joint
venture, company, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, firm, joint stock company, estate,
entity or government agency.


 


“Responsible Officer” is
each of the Chief Executive Officer, President, Chief Financial Officer and
Controller of Borrower.


 


“Subordinated Debt” is
debt incurred by Borrower subordinated to Borrower’s debt to Bank (pursuant to
a subordination agreement entered into between Bank, Borrower and the
subordinated creditor), on terms acceptable to Bank.


 


“Subsidiary” is any
Person, or any other business entity of which more than 50% of the voting stock
or other equity interests is owned or controlled, directly or indirectly, by
the Person or one or more Affiliates of the Person.


 


11

















 


IN
WITNESS WHEREOF, the parties hereto have caused this Agreement as of the date
first above written.


 


BORROWER:


 


FINISAR CORPORATION


 


	
  By:

  	
  /s/ S.K. Workman

  	
   

  
	
  Name:

  	
  S.K. Workman

  	
   

  
	
  Title:

  	
  CFO

  	
   

  
	
   

  
	
   

  
	
  BANK:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SILICON VALLEY BANK

  	
   

  
	
   

  
	
  By:

  	
  /s/ Amanda
  Peters

  	
   

  
	
  Name:

  	
  Amanda Peters

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  
					



 


S-1














 


EXHIBIT A


COMPLIANCE
CERTIFICATE


 


TO:                            SILICON VALLEY BANK


FROM:         FINISAR CORPORATION


 


The undersigned authorized officer of FINISAR
CORPORATION certifies that under the terms and conditions of the Letter of
Credit Reimbursement Agreement between Borrower and Bank (the “Agreement”), (i) Borrower
is in complete compliance for the period ending                     with
all required covenants except as noted
below and (ii) there are no Events of Default, and all representations and
warranties in the Agreement are true and correct in all material
respects on this date.  Attached are the
required documents supporting the certification.  The
Officer certifies that these are prepared in accordance with Generally Accepted
Accounting Principles (GAAP) consistently applied from one period to the
next except as explained in an accompanying letter or footnotes.  The Officer
acknowledges that no borrowings may be requested at any time or date of
determination that Borrower is not in compliance with any of the terms of the Agreement,
and that compliance is determined not just at the date this certificate
is delivered.


 


Please
indicate compliance status by circling Yes/No under “Complies” column.


 


	
  Reporting Covenant

  	
   

  	
  Required

  	
   

  	
  Complies

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Monthly financial
  statements with CC

  	
   

  	
  Monthly within 30 days

  	
   

  	
  Yes

  	
  No

  
	
  Annual financial
  statements (CPA Audited)

  	
   

  	
  FYE within 90 days

  	
   

  	
  Yes

  	
  No

  
	
  10-Q, 10-K and 8-K

  	
   

  	
  Within 5 days after
  filing with SEC

  	
   

  	
  Yes

  	
  No

  



 


	
  Financial Covenant

  	
   

  	
  Required

  	
   

  	
  Actual

  	
   

  	
  Complies

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Maintain on a Monthly
  Basis:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minimum
  Cash and Cash Equivalents (net of SVB debt and L/Cs)

  	
   

  	
  $

  	
  40,000,000

  	
   

  	
  $

  	
                    

  	
   

  	
  Yes

  	
  No

  
										



 


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BANK
  USE ONLY

  
	
  Comments Regarding
  Exceptions:  See
  Attached.

  	
   

  	
  Received by:

  	
   

  	
   

  
	
  Sincerely,

  	
   

  	
   

  	
  AUTHORIZED
  SIGNER

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNATURE

  	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TITLE

  	
   

  	
  Verified:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  AUTHORIZED
  SIGNER

  	
   

  
	
  DATE

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Compliance Status:

  	
  Yes

  	
  No

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
							



 

















 


FIRST AMENDMENT
TO LETTER OF CREDIT REIMBURSEMENT AGREEMENT


 


This First Amendment to
Letter of Credit Reimbursement Agreement (this “First Amendment”) is entered
into as of Oct. 20, 2005, by and between SILICON
VALLEY BANK, a California-chartered bank, with its principal place of business at 3003 Tasman
Drive, Santa Clara, California 95054 (“Bank”) and FINISAR CORPORATION, a
Delaware corporation with its chief executive office located at 1399 Moffett
Park Drive, Sunnyvale, California 94089 (“Borrower”).


 


1.                                       DESCRIPTION OF EXISTING INDEBTEDNESS AND
OBLIGATIONS.  Among other indebtedness and obligations which may be owing by Borrower to
Bank, Borrower is indebted to Bank pursuant to a financing arrangement
dated as of April 29, 2005, evidenced by, among other documents, a certain
Letter of Credit Reimbursement Agreement dated as of April 29, 2005,
between Borrower and Bank (as amended, the “Reimbursement
Agreement”).  Capitalized terms used but
not otherwise defined herein shall have the same meaning as in the
Reimbursement Agreement.


 


2.                                       DESCRIPTION OF CHANGE IN TERMS.


 


A.                                   Modifications to Reimbursement Agreement.


 


1.                                      The Reimbursement Agreement shall be amended by deleting the following definitions
appearing in Section 13.1
thereof:


 


““Letter
of Credit Line” is
the issuance of a Letter of Credit or Letters of Credit of up to Seven Million Dollars ($7,000,000.00).


 


“Letter
of Credit Line Maturity Date” is April 29, 2006.”


 


and
inserting in lieu thereof the following:


 


““Letter
of Credit Line” is the issuance of a Letter of Credit or
Letters of Credit of up to Twenty Million Dollars ($20,000,000.00).


 


“Letter
of Credit Line Maturity Date” is October 26, 2006.”


 


3.                                       FEES.  Borrower shall pay to Bank a loan fee equal
to $100,000.00, which fee shall be due on the date hereof and shall be deemed
fully earned as of the date hereof. Borrower shall also reimburse Bank for all
legal fees and expenses incurred in connection with this amendment to the
Reimbursement Agreement.


 


4.                                       CONTINUING
VALIDITY.  Borrower understands and
agrees that in modifying the existing Obligations, Bank is relying upon
Borrower’s representations, warranties, and agreements, as set forth in the
Reimbursement Agreement. Except as expressly modified pursuant to this First
Amendment, the terms of the Reimbursement Agreement remain unchanged and in
full force and effect. Bank’s agreement to modifications to the existing Obligations
pursuant to this First Amendment in no way shall obligate Bank to make any
future modifications to the Obligations. Nothing in this First Amendment shall
constitute a satisfaction of the Obligations. It is the intention of Bank and
Borrower to retain as liable parties all makers of the Reimbursement Agreement,
unless the party is expressly released by Bank in writing. No maker will be
released by virtue of this First Amendment.


 


5.                                       COUNTERSIGNATURE.  This First Amendment shall become effective only
when it shall have been executed by Borrower and Bank.


 

















 


This First
Amendment is executed as a sealed instrument under the laws of the State of
California as of the date first written above.


 


	
  BORROWER:

  	
   

  	
  BANK:

  
	
   

  	
   

  	
   

  
	
  FINISAR CORPORATION

  	
   

  	
  SILICON VALLEY BANK

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ S. K. Workman

  	
   

  	
  By:

  	
    /s/ Amanda Peters

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
    S. K. Workman

  	
   

  	
  Name:

  	
    Amanda Peters

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
    CFO

  	
   

  	
  Title:

  	
    Vice President

  
						



 

















 


SECOND
AMENDMENT TO LETTER OF CREDIT REIMBURSEMENT AGREEMENT


 


This Second Amendment to Letter of Credit
Reimbursement Agreement (this “First Amendment”) is entered into as of Oct. 26,
2006, and is effective as of October 26, 2006, by and between SILICON VALLEY
BANK, a California-chartered bank,
with its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 (“Bank”) and FINISAR CORPORATION, a Delaware corporation with its chief executive office located at 1399 Moffett Park Drive,
Sunnyvale, California 94089 (“Borrower”).


 


1.                                       DESCRIPTION
OF EXISTING INDEBTEDNESS AND OBLIGATIONS. 
Among other indebtedness and obligations which may be owing by Borrower
to Bank, Borrower is indebted to Bank pursuant to a financing arrangement dated
as of April 29, 2005, evidenced by, among other documents, a certain Letter of
Credit Reimbursement Agreement dated as of April 29, 2005, between Borrower and
Bank, as amended by a certain First Amendment to Letter of Credit Reimbursement
Agreement dated as of October 20, 2005, between Borrower and Bank (as amended,
the “Reimbursement Agreement”).  Capitalized
terms used but not otherwise defined herein shall have the same meaning as in
the Reimbursement Agreement.


 


2.                                       DESCRIPTION
OF CHANGE IN TERMS.


 


A.                                  Modifications to Reimbursement Agreement.


 


1.                                     The Reimbursement Agreement shall be amended by
deleting the following definition appearing in Section 13.1 thereof:


 


“                                          “Letter of Credit Line Maturity
Date” is October 26, 2006.”


 


and inserting in lieu thereof the following:


 


“                                          “Letter of Credit Line Maturity Date” is December 25, 2006.”


 


3.                                       FEES.  Borrower shall pay to Bank a modification fee
equal to $16,666.67, which fee shall be due on the date hereof and shall be
deemed fully earned as of the date hereof. 
Borrower shall also reimburse Bank for all legal fees and expenses
incurred in connection with this amendment to the Reimbursement Agreement.


 


4.                                       RATIFICATION
OF PERFECTION CERTIFICATE.  Borrower
hereby ratifies, confirms and reaffirms, all and singular, the terms and
disclosures contained in a certain Perfection Certificate dated as of October
20, 2005 between Borrower and Bank, and acknowledges, confirms and agrees the
disclosures and information Borrower provided to Bank in the Perfection
Certificate has not changed, as of the date hereof.


 


5.                                       NO
DEFENSES OF BORROWER.  Borrower
hereby acknowledges and agrees that Borrower has no offsets, defenses, claims,
or counterclaims against Bank with respect to the Obligations, or otherwise,
and that if Borrower now has, or ever did have, any offsets, defenses, claims,
or counterclaims against Bank, whether known or unknown, at law or in equity,
all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from
any liability thereunder.


 


6.                                       CONTINUING VALIDITY.  Borrower
understands and agrees that in modifying the existing Obligations, Bank is relying upon Borrower’s representations,
warranties, and agreements, as set forth in the Reimbursement Agreement. 
Except as expressly modified pursuant to this First Amendment, the terms
of the Reimbursement Agreement remain unchanged and in full force and
effect.  Bank’s agreement to
modifications to the existing Obligations
pursuant to this First Amendment in no way shall obligate Bank to make any
future modifications to the Obligations.  Nothing in this First Amendment shall
constitute a satisfaction of the Obligations. 
It is the intention of Bank and Borrower to retain as liable
parties all makers of the Reimbursement Agreement, unless the party is expressly released by Bank in writing.  No maker will be released by virtue of this
First Amendment.


 

















 


7.                                       COUNTERSIGNATURE.  This Second Amendment shall become effective
only when it shall have been executed by
Borrower and Bank.


 


[The remainder of this page is intentionally left
blank]


 

















 


This Second Amendment is executed
as a sealed instrument under the laws of the State of California as of the date
first written above.


 


	
  BORROWER:

  	
   

  	
  BANK:

  
	
   

  	
   

  	
   

  	
   

  
	
  FINISAR CORPORATION

  	
   

  	
  SILICON VALLEY BANK

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ S. K. Workman

  	
   

  	
  By:

  	
    /s/ 
  Nick Tsiagkas

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
    S. K. Workman

  	
   

  	
  Name:

  	
    Nick Tsiagkas

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
    CFO

  	
   

  	
  Title:

  	
    Relationship Manager

  
							



 

















 


THIRD AMENDMENT
TO LETTER OF CREDIT REIMBURSEMENT AGREEMENT


 


This
Third Amendment to Letter of Credit Reimbursement Agreement (the “Amendment”)
is entered into as of December 21, 2006,
and is effective as of December 25, 2006, by and between SILICON VALLEY BANK, a California-chartered bank, with its principal place of
business at 3003 Tasman Drive, Santa Clara, California
95054 (“Bank”) and FINISAR CORPORATION, a Delaware corporation with its
chief executive office located at 1399 Moffett Park Drive, Sunnyvale,
California 94089 (“Borrower”).


 


1.                                       DESCRIPTION
OF EXISTING INDEBTEDNESS AND OBLIGATIONS. 
Among other indebtedness and obligations which may be owing by Borrower
to Bank, Borrower is indebted to Bank pursuant to a financing arrangement dated
as of April 29, 2005, evidenced by, among other documents, a certain Letter of
Credit Reimbursement Agreement dated as of April 29, 2005, between Borrower and
Bank, as amended by a certain First Amendment to Letter of Credit Reimbursement
Agreement dated as of October 20, 2005, between Borrower and Bank, and as
further amended by a certain Second Amendment to Letter of Credit Reimbursement
Agreement dated as of October 26, 2006, between Borrower and Bank (as amended,
the “Reimbursement Agreement”). 
Capitalized terms used but not otherwise defined herein shall have the
same meaning as in the Reimbursement Agreement.


 


2.                                       DESCRIPTION
OF CHANGE IN TERMS.


 


A.                                   Modifications to Reimbursement Agreement.


 


1.                                      The Reimbursement Agreement shall be amended by
deleting the following definition appearing in Section 13.1 thereof:


 


“                                          “Letter of Credit Line” is the issuance of a Letter of Credit or Letters of
Credit of up to Twenty Million Dollars ($20,000,000.00).”


 


“                                          “Letter of Credit Line Maturity Date” is December 25, 2006.” and inserting in lieu
thereof the following:


 


“                                          “Letter of Credit Line” is the issuance of a Letter of Credit or Letters of
Credit of up to Fifteen Million Dollars ($ 15,000,000.00).”


 


“                                          “Letter
of Credit Line Maturity Date” is October 26, 2007.”


 


3.                                       10-Q
FILINGS.  Notwithstanding the terms
of the Reimbursement Agreement to the contrary, Borrower must deliver to Bank
its 10-Q filings with respect to its fiscal quarters ending October 31,
2006 and January 31, 2007 on or before April 30, 2007.


 


4.                                       FEES.  Borrower shall pay to Bank a modification fee
equal to $31,250.00, which fee shall be due on the date hereof and shall be
deemed fully earned as of the date hereof. 
Borrower shall also reimburse Bank for all legal fees and expenses
incurred in connection with this amendment to the Reimbursement Agreement.


 


5.                                       RATIFICATION
OF PERFECTION CERTIFICATE.  Borrower
hereby ratifies, confirms and reaffirms, all and singular, the terms and
disclosures contained in a certain Perfection Certificate dated as of October
20, 2005 between Borrower and Bank, and acknowledges, confirms and agrees the
disclosures and information Borrower provided to Bank in the Perfection
Certificate have not changed, as of the date hereof.


 


6.                                       NO
DEFENSES OF BORROWER.  Borrower
hereby acknowledges and agrees that Borrower has no offsets, defenses, claims,
or counterclaims against Bank with respect to the Obligations, or otherwise,
and that if Borrower now has, or ever did have, any offsets, defenses, claims,
or counterclaims against Bank, whether known or unknown, at law or in equity,
all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from
any liability thereunder.


 

















 


7.                                       CONTINUING
VALIDITY.  Borrower understands and
agrees that in modifying the existing Obligations, Bank is relying upon
Borrower’s representations, warranties, and agreements, as set forth in the
Reimbursement Agreement.  Except as
expressly modified pursuant to this Amendment, the terms of the Reimbursement
Agreement remain unchanged and in full force and effect.  Bank’s agreement to modifications to the
existing Obligations pursuant to this Amendment in no way shall obligate Bank
to make any future modifications to the Obligations.  Nothing in this Amendment shall constitute a
satisfaction of the Obligations.  It is
the intention of Bank and Borrower to retain as liable parties all makers of
the Reimbursement Agreement, unless the party is expressly released by Bank in
writing.  No maker will be released by
virtue of this Amendment.


 


8.                                       COUNTERSIGNATURE.  This Amendment shall become effective only
when it shall have been executed by Borrower and Bank.


 


[The remainder
of this page is intentionally left blank]


 

















 


This Amendment is executed as a sealed instrument
under the laws of the State of California as of the date first written above.


 


	
  BORROWER:

  	
   

  	
  BANK:

  
	
   

  	
   

  	
   

  	
   

  
	
  FINISAR CORPORATION

  	
   

  	
  SILICON VALLEY BANK

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ 
  J.E. Drury

  	
   

  	
  By:

  	
    /s/ 
  Nick Tsiagkas

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
    John Drury

  	
   

  	
  Name:

  	
    Nick Tsiagkas

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
    Vice President and Corporate

  	
   

  	
  Title:

  	
    Relationship Manager

  
	
   

  	
    Controller and Acting CFO

  	
   

  	
   

  	
   

  
							



 

















 


FOURTH AMENDMENT TO LETTER OF CREDIT REIMBURSEMENT
AGREEMENT


 


This Fourth Amendment to Letter of Credit
Reimbursement Agreement (the “Amendment”) is entered into as of Nov. 1,
2007, and is effective as of October 26, 2007, by and between SILICON VALLEY BANK, a California corporation, with its principal
place of business at 3003 Tasman Drive, Santa Clara, California 95054 (“Bank”) and FINISAR
CORPORATION, a Delaware corporation with its chief executive office
located at 1399 Moffett Park Drive, Sunnyvale, California 94089 (“Borrower”).


 


1.                                     DESCRIPTION
OF EXISTING INDEBTEDNESS AND OBLIGATIONS. 
Among other indebtedness and obligations which may be owing by Borrower
to Bank, Borrower is indebted to Bank pursuant to a financing arrangement dated
as of April 29, 2005, evidenced by, among other documents, a certain Letter of
Credit Reimbursement Agreement dated as of April 29, 2005, between Borrower and
Bank, as amended by a certain First Amendment to Letter of Credit Reimbursement
Agreement dated as of October 20, 2005, between Borrower and Bank, as further
amended by a certain Second Amendment to Letter of Credit Reimbursement
Agreement dated as of October 26, 2006, between Borrower and Bank, and as
further amended by a certain Third Amendment to Letter of Credit Reimbursement
Agreement dated as of December 21, 2006, between Borrower and Bank (as amended,
the “Reimbursement Agreement”).  Capitalized
terms used but not otherwise defined herein shall have the same meaning as in
the Reimbursement Agreement.


 


2.                                     DESCRIPTION
OF CHANGE IN TERMS.


 


A.                                  Modifications
to Reimbursement Agreement.


 


1.                                       The Reimbursement Agreement shall be amended by
deleting the following definition appearing
in Section 13.1 thereof:


 


                                                                                                “                                          “Letter of Credit Line Maturity Date” is October 26,
2007.”


 


and inserting in lieu thereof the following:


 


                                                       “                                          “Letter of Credit Line Maturity Date” is October 25,
2008.”


 


3.                                     10-Q
FILINGS.  Notwithstanding the terms
of the Reimbursement Agreement to the contrary, Bank and Borrower hereby agree
that Borrower must deliver to Bank its 10-Q filings with respect to its fiscal
quarters ended/ending October 31, 2006, January 31, 2007, July 31, 2007,
October 31, 2007 and January 31, 2008 on or before April 30, 2008.


 


4.                                     10-K
FILINGS.  Notwithstanding the terms
of the Reimbursement Agreement to the contrary, Bank and Borrower hereby agree
that Borrower must deliver to Bank its 10-K filing with respect to its fiscal
year ended April 30, 2007 on or before April 30, 2008.


 


5.                                     FEES.  Borrower shall pay to Bank a modification fee
equal to $37,500.00, which fee shall be due on the date hereof and shall be
deemed fully earned as of the date hereof. 
Borrower shall also reimburse Bank for all legal fees and expenses
incurred in connection with this amendment to the Reimbursement Agreement.


 


6.                                     RATIFICATION
OF PERFECTION CERTIFICATE.  Borrower
hereby ratifies, confirms and reaffirms, all and singular, the terms and
disclosures contained in a certain Perfection Certificate dated as of October
20, 2005 between Borrower and Bank, and acknowledges, confirms and agrees the
disclosures and information Borrower provided to Bank in the Perfection
Certificate have not changed, as of the date hereof.


 


7.                                     NO
DEFENSES OF BORROWER.  Borrower
hereby acknowledges and agrees that Borrower has no offsets, defenses, claims,
or counterclaims against Bank with respect to the Obligations, or otherwise,
and that if Borrower now has, or ever did have, any offsets, defenses, claims,
or counterclaims against Bank, whether known or unknown, at law or in equity,
all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from
any liability thereunder.


 

















 


8.                                     CONTINUING
VALIDITY.  Borrower understands and
agrees that in modifying the existing Obligations, Bank is relying upon
Borrower’s representations, warranties, and agreements, as set forth in the
Reimbursement Agreement.  Except as
expressly modified pursuant to this Amendment, the terms of the Reimbursement
Agreement remain unchanged and in full force and effect.  Bank’s agreement to modifications to the
existing Obligations pursuant to this Amendment in no way shall obligate Bank
to make any future modifications to the Obligations.  Nothing in this Amendment shall constitute a
satisfaction of the Obligations.  It is
the intention of Bank and Borrower to retain as liable parties all makers of
the Reimbursement Agreement, unless the party is expressly released by Bank in
writing.  No maker will be released by
virtue of this Amendment.


 


9.                                     COUNTERSIGNATURE.  This Amendment shall become effective only
when it shall have been executed by Borrower and Bank.


 


[The remainder
of this page is intentionally left blank]


 

















 


This Amendment is executed as a
sealed instrument under the laws of the State of California as of the date first
written above.


 


	
  BORROWER:

  	
   

  	
  BANK:

  
	
   

  	
   

  	
   

  	
   

  
	
  FINISAR CORPORATION

  	
   

  	
  SILICON VALLEY BANK

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ 
  S. K. Workman

  	
   

  	
  By:

  	
    /s/ 
  Nick Tsiagkas

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
    S. K. Workman

  	
   

  	
  Name:

  	
    Nick Tsiagkas

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
    CFO

  	
   

  	
  Title:

  	
    Relationship Manager

  
							



 

















 


FIFTH AMENDMENT
TO LETTER OF CREDIT REIMBURSEMENT AGREEMENT


 


This Fifth Amendment to Letter
of Credit Reimbursement Agreement (the “Amendment”) is entered into as of
March 14, 2008, by and between SILICON
VALLEY BANK, a
California corporation, with its principal place of business at 3003 Tasman
Drive, Santa Clara, California 95054 (“Bank”) and FINISAR CORPORATION, a
Delaware corporation with its chief executive office located at 1399 Moffett
Park Drive, Sunnyvale, California 94089 (“Borrower”).


 


1.             DESCRIPTION OF
EXISTING INDEBTEDNESS AND OBLIGATIONS. 
Among other indebtedness and obligations which may be owing by Borrower
to Bank, Borrower is indebted to Bank pursuant to a financing arrangement dated
as of April 29, 2005, evidenced by, among other documents, a certain Letter of
Credit Reimbursement Agreement dated as of April 29, 2005, between Borrower and
Bank, as amended by a certain First Amendment to Letter of Credit Reimbursement
Agreement dated as of October 20, 2005, between Borrower and Bank, as further
amended by a certain Second Amendment to Letter of Credit Reimbursement
Agreement dated as of October 26, 2006, between Borrower and Bank, as further
amended by a certain Third Amendment to Letter of Credit Reimbursement
Agreement dated as of December 21, 2006, between Borrower and Bank, and as
further amended by a certain Fourth Amendment to Letter of Credit Reimbursement
Agreement dated as of November 1, 2007, between Borrower and Bank (as amended,
the “Reimbursement Agreement”). 
Capitalized terms used but not otherwise defined herein shall have the
same meaning as in the Reimbursement Agreement.


 


2.                                       DESCRIPTION
OF CHANGE IN TERMS.


 


A.                                   Modifications
to Reimbursement Agreement.


 


1.                                      The Reimbursement Agreement shall be amended by
inserting the following text appearing at the end of Section 6.5
thereof:


 


“Notwithstanding
the foregoing, Borrower need not comply with this covenant (and Bank will not
test this covenant) from March 14, 2008 until the Revolving Line Agreement
is terminated.”


 


2.                                     The Reimbursement Agreement shall be amended by
inserting the following new Section 8.10 appearing immediately
after Section 8.9 thereof:


 


“                                          8.10                        Revolving Line Agreement.  The occurrence of an Event of Default (as defined in the Revolving
Line Agreement) under the Revolving Line Agreement.”


 


3.                                      The Reimbursement Agreement shall be amended by
inserting the following new definition appearing alphabetically in Section 13.1
thereof:


 


“                                           “Revolving  Line 
Agreement” is  that
certain  Loan  and 
Security Agreement dated as of March 14, 2008 between Borrower and
Bank, as may be amended from time to time.”


 


4.                                      The Reimbursement Agreement shall be amended by
deleting the following definition appearing in Section 13.1
thereof:


 


“                                         “Letter of Credit Line” is the issuance of a Letter of Credit or Letters of
Credit of up to Fifteen Million Dollars ($15,000,000.00).”


 


and
inserting in lieu thereof the following:


 


“                                          “Letter of Credit Line” is the issuance of a Letter of
Credit or Letters of Credit of up to Ten Million Five Hundred Thousand Dollars
($10,500,000.00).”


 


3.                                       FEES.  Borrower shall reimburse Bank for all legal
fees and expenses incurred in connection with this amendment to the
Reimbursement Agreement.


 

















 


4.                                       RATIFICATION
OF PERFECTION CERTIFICATE.  Borrower
hereby ratifies, confirms and reaffirms, all and singular, the terms and
disclosures contained in a certain Perfection Certificate dated as of October
20, 2005 between Borrower and Bank, and acknowledges, confirms and agrees the
disclosures and information Borrower provided to Bank in the Perfection
Certificate have not changed, as of the date hereof.


 


5.                                       NO
DEFENSES OF BORROWER.  Borrower
hereby acknowledges and agrees that Borrower has no offsets, defenses, claims,
or counterclaims against Bank with respect to the Obligations, or otherwise,
and that if Borrower now has, or ever did have, any offsets, defenses, claims,
or counterclaims against Bank, whether known or unknown, at law or in equity,
all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from
any liability thereunder.


 


6.                                       CONTINUING
VALIDITY.  Borrower understands and
agrees that in modifying the existing Obligations, Bank is relying upon
Borrower’s representations, warranties, and agreements, as set forth in the
Reimbursement Agreement.  Except as
expressly modified pursuant to this Amendment, the terms of the Reimbursement
Agreement remain unchanged and in full force and effect.  Bank’s agreement to modifications to the
existing Obligations pursuant to this Amendment in no way shall obligate Bank
to make any future modifications to the Obligations.  Nothing in this Amendment shall constitute a
satisfaction of the Obligations.  It is
the intention of Bank and Borrower to retain as liable parties all makers of
the Reimbursement Agreement, unless the party is expressly released by Bank in
writing.  No maker will be released by
virtue of this Amendment.


 


7.                                       COUNTERSIGNATURE.  This Amendment shall become effective only
when it shall have been executed by Borrower and Bank.


 


[The remainder
of this page is intentionally left blank]


 

















 


This Amendment is executed as a sealed instrument
under the laws of the State of California as of the date first written above.


 


	
  BORROWER:

  	
   

  	
  BANK:

  
	
   

  	
   

  	
   

  	
   

  
	
  FINISAR CORPORATION

  	
   

  	
  SILICON VALLEY BANK

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ 
  S. K. Workman

  	
   

  	
  By:

  	
    /s/ 
  Nick Tsiagkas

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
    S. K. Workman

  	
   

  	
  Name:

  	
    Nick Tsiagkas

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
    CFO

  	
   

  	
  Title:

  	
    Relationship Manager