Document:

exv10w35

 

Exhibit 10.35

December 28,
2005

Dr. Frank H. Levinson

Chairman of the Board and

Chief Technical Officer

Finisar Corporation

1389 Moffett Park Drive

Sunnyvale, CA 94089

			
		 	Re: Change in Status

Dear Frank:

     You have advised Finisar’s Board of Directors (the “Board”) of your desire to reduce the level
of your involvement with the Company in order to pursue other interests, including a new business
venture. This letter will confirm our understanding regarding the change in your status with
Finisar.

     1.     Resignation. You hereby resign from the following positions effective January 2,
2006 (the “Effective Date”): (a) Chief Technical Officer of the Company; (b) employee of the
Company; and (c) any positions that you currently hold as a director or officer of any of the
Company’s subsidiaries.

     2.     Continued Board Service. You will remain a member of the Board, although you
hereby resign as Chairman of the Board effective as of the Effective Date. You will retain the
title Chairman Emeritus. You will be entitled to receive compensation for your service as a
director following the Effective Date in accordance with the Company’s policy for the compensation
of non-employee directors, as such policy may be revised from time to time.

     3.     Consulting Services. Following the Effective Date, you will provide consulting
services to senior management of the Company, subject to the following terms:

            (a) You will report to the Chief Executive Officer of the Company or his designee, and will
provide such consulting services as are reasonably requested in areas related to the Company’s
technology and strategic direction and such other matters as you and he may agree from time to
time. Preparation for and attendance at meetings of the Board or its committees and performance of
your other duties as a member of the Board or its committees shall not be deemed consulting
services.

            (b) You will make yourself available to provide consulting services, on a part-time basis, for
up to an average of 20 hours per month. The Company shall make reasonable

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efforts to schedule the performance of your services in such a manner as to not interfere with
your other business activities and commitments.

        (c) Either party shall have the right to terminate your consulting services at any time upon
30 days written notice.

        (d) As compensation for your consulting services, and for holding yourself available to
perform such services, the Company shall pay you a consulting fee at the rate of $60,000 per annum,
payable monthly. Fees for any partial period shall be pro-rated. In addition, so long as you are
performing consulting services for the Company, it will reimburse you for the premiums for
continued group medical and dental insurance coverage that you elect to obtain under COBRA and, if
you are still providing such services to the Company following the expiration of your eligibility
under COBRA, for the cost of alternate, comparable health and dental insurance that you elect to
obtain. The Company will also reimburse you for your reasonable out-of-pocket expenses incurred in
connection with the performance of your consulting services hereunder.

4.     Stock Options.          You currently hold outstanding options to purchase up to an
aggregate of 1,600,000 shares of Finisar Common Stock, of which options to purchase 760,000 shares
are vested as of the Effective Date (the “Vested Options”) and options to purchase 840,000 shares
are unvested (the “Unvested Options”). The Vested Options shall remain in effect during your
continued performance of services for the Company as a director and/or consultant, subject to the
terms and conditions of the 1999 Stock Option Plan and your applicable option agreements. Your
options will cease to vest as of the Effective Date, and your Unvested Options will terminate.
Your applicable option agreements are hereby amended to reflect the
provisions of this paragraph.

5.     Confidentiality and Finisar Intellectual Property.          You agree that you will
continue to be bound by and comply with the terms of any confidentiality/assignment of invention
agreements currently in effect between you and the Company, and that such agreements will apply to
your consulting services for the Company. You specifically acknowledge that you will not make use
of any proprietary intellectual property or confidential information of the Company in connection
with your pursuit of your new business venture or any other business activities except pursuant to
the terms of a written agreement with the Company authorizing such use. Should you desire to use
any proprietary intellectual property or confidential information of the Company in connection with
your other business activities, the Company will enter into good faith negotiations with you or
your new company regarding an appropriate license or other
arrangement.

6.     Entire Agreement.          You understand and acknowledge that you shall not be entitled to
any payments or other benefits related to the change in your status with the Company other than
those expressly set forth in this letter, and you further acknowledge that you have been paid all
wages that you earned during your employment with the Company. This letter agreement constitutes
the entire agreement between the parties with respect to the subject matter hereof and supersedes
all prior negotiations and agreements, whether written or oral, with the exception of the
agreements described in paragraph 5 and the applicable stock option
agreements

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between the parties (as modified by paragraph 4). This Agreement may not be modified or
amended except by a document signed by you and by an authorized officer of the Company.

     If the foregoing accurately reflects our understanding, please sign a copy of the letter in
the space indicated below and return it to me.

     On behalf of the Board, we extend our thanks for all that you have done for Finisar over your
many years of service and wish you success in your new endeavors. We also look forward to your
continuing contributions as an active member of the Board.

	 	 	 	 	 
	 	Yours very truly,

 	 
	 	/s/ Stephen K. Workman
 	 
	 	Senior Vice President, Finance, and CFO 	 
	 	 	 
	 

	 	 	 	 	 
	AGREED TO AND ACCEPTED:

Dated: December 28, 2005

 	 
	/s/ Frank H. Levinson
 	 
	Frank H. Levinson 	 
	 	 	 
	 

3<PAGE>
                                                                   Exhibit 10.35

                SEVENTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER

     THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this "Amendment"),
dated as of the 6th day of November, 2003, by and between STEEL CITY PRODUCTS,
INC., a Delaware corporation (the "Borrower"), and NATIONAL CITY BANK OF
PENNSYLVANIA (the "Bank").

                                   BACKGROUND

     A. The Borrower and the Bank entered into a certain Credit Agreement dated
as of July 13, 2001 (as amended, supplemented, replaced or otherwise modified,
the "Agreement") pursuant to which the Bank has made a credit facility or
facilities available to the Borrower.

     B. The Borrower has requested the Bank to, among other things, (i) extend
the maturity date, (ii) revise the interest rate and (iii) waive a covenant
default, and the Bank is willing to do so upon the terms and conditions set
forth in this Amendment.

     NOW THEREFORE, intending to be legally bound hereby, the parties hereto
amend the Agreement and agree as follows:

     Section 1. Capitalized Terms.

     Unless otherwise specified herein, capitalized terms used in this Amendment
(including the BACKGROUND above) without definition shall have the same meaning
as set forth in the Agreement as amended by this Amendment.

     Section 2. Amendments.

     The Agreement is hereby amended as follows:

     2.1 Section 2.04(a) of the Agreement is hereby amended and restated in its
entirety as follows:

          "(a) Interest-Rate. Subject to the terms and conditions of this
Agreement, the aggregate outstanding principal balance of the Revolving Credit
Loans shall bear interest for each day at a rate per annum equal to the Prime
Rate plus one percent (1.0%) (the "Interest Rate")."

     2.2 Section 2.09(c)(ii) of the Agreement is hereby amended and restated in
its entirety as follows:

          "(ii) If 35% or more of otherwise Eligible Receivables due and owing
from any obligor are more than 90 days past the invoice date, the aggregate
amount of

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receivables of such obligor and its Affiliates shall be excluded until such time
as 35% or more of such Receivables are no longer more than 90 days past the
invoice date."

     2.3 Section 5.12 of the Agreement is hereby amended and restated in its
entirety as follows:

          "5.12 Inventory Appraisal. On or before May 31, 2004, the Borrower
shall deliver to the Bank an updated appraisal of the Eligible Inventory from an
independent appraiser, in form and substance satisfactory to the Bank."

     2.4 The following defined term set forth in Annex A to the Agreement is
hereby amended and restated in its entirety as follows:

          ""Revolving Credit Maturity Date" shall mean December 31, 2004."

     Section 3. Waiver.

     3.1 Waiver of Section 6.01 of the Agreement. The Borrower has informed the
Bank that it has violated its EBITDA/Fixed Charges Ratio set forth in Section
6.01 of the Agreement for the fiscal quarters ending June 30, 2003 and September
30, 2003. The Bank agrees to waive the violation of Section 6.01 and the Event
of Default related to those violations only for the fiscal quarters ending June
30, 2003 and September 30, 2003.

     3.2 No Other Waivers. The waiver by the Bank herein does not either
implicitly or explicitly alter, waive or amend, except as provided herein, the
provisions of the Agreement.

     Section 4. Covenants, Representations and Warranties.

     4.1 The Borrower ratifies, confirms and reaffirms, without condition, all
the terms and conditions of the Agreement and the other Loan Documents and
agrees that it continues to be bound by the terms and conditions thereof as
amended by this Amendment; and, the Borrower further confirms and affirms that
it has no defense, set off or counterclaim against the same. The Agreement and
this Amendment shall be construed as complementing each other and as augmenting
and not restricting the Banks rights, and, except as specifically amended by
this Amendment, the Agreement shall remain in full force and effect in
accordance with its terms.

     4.2 The Borrower ratifies, confirms and reaffirms without condition, all
liens and security interests granted to the Bank pursuant to the Agreement and
the other Loan Documents, if any, and such liens and security interests shall
continue to secure the indebtedness and obligations of the Borrower to the Bank
under the Agreement, the Note and the other Loan Documents, including, but not
limited to, all loans made by the Bank to the Borrower as amended by this
Amendment.

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<PAGE>

     4.3 The Borrower represents and warrants to the Bank that:

          (a) This Amendment has been duly executed and delivered by the
Borrower and constitutes the legal, valid and binding obligations of the
Borrower enforceable in accordance with its terms;

          (b) The execution and delivery of this Amendment by the Borrower and
the performance and observance by the Borrower of the provisions hereof, do not
violate or conflict with the organizational agreements of the Borrower or any
law applicable to the Borrower or result in a breach of any provision of or
constitute a default under any other agreement, instrument or document binding
upon or enforceable against the Borrower;

          (c) The representations and warranties set forth within Article III of
the Agreement continue to be true and correct in all material respects as of the
date of this Amendment except those changes resulting from the passage of time;
and

          (d) No material adverse change has occurred in the business,
operations, consolidated financial condition or prospects of the Borrower since
the dates of the most recent annual financial statement delivered to the Bank,
and no Event of Default or condition which, with the passage of time, the giving
of notice or both, could become an Event of Default has occurred and is
continuing.

     4.4 The Borrower shall execute or cause to be executed and deliver to the
Bank all other documents, instruments and agreements deemed necessary or
appropriate by the Bank in connection herewith.

     Section 5. Conditions Precedent.

     5.1 This Amendment shall be effective on the date hereof so long as each of
the following conditions has been satisfied:

          (a) No Event of Default shall have occurred and be continuing on the
date of this Amendment.

          (b) The representations and warranties set forth within Article III of
the Agreement shall continue to be true and correct in all material respects as
of the date of this Amendment except those changes resulting from the passage of
time only.

          (c) Contemporaneously with the execution hereof, the Borrower shall
deliver, or cause to be delivered, to the Bank:

               (i) The payment of a waiver fee in the amount of $7,500;

               (ii) A certificate of the corporate secretary or assistant
secretary of the Borrower, dated the date hereof, certifying (1) that the
Articles of Incorporation and By-

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Laws of the Borrower have not been changed since they were delivered to the
Bank, or if there have been any such changes, attaching copies thereof as then
in effect and (2) as to true copies of all corporate action taken by the
Borrower in authorizing the execution, delivery and performance of this
Amendment, and the transactions contemplated thereby; and

               (iii) Such other documents, instruments and certificates required
by the Bank in connection with the transactions contemplated by this Amendment.

     5.2 The Bank shall continue to have a first priority lien on and security
interest in the Collateral, if any, previously granted to the Bank.

     5.3 All legal details and proceedings in connection with the transactions
contemplated in this Amendment shall be satisfactory to counsel for the Bank,
and the Bank shall have received all such originals or copies of such documents
as the Bank may request.

     Section 6. Miscellaneous.

     6.1 This Amendment shall be construed in accordance with, and governed by
the laws of the Commonwealth of Pennsylvania without giving effect to the
provisions thereof regarding conflicts of law.

     6.2 Except as amended hereby, all of the terms and conditions of the
Agreement shall remain in full force and effect. This Amendment amends the
Agreement and is not a novation thereof.

     6.3 This Amendment shall inure to the benefit of, and shall be binding
upon, the respective successors and assigns of the Borrower and the Bank. The
Borrower may not assign any of its rights or obligations hereunder without the
prior written consent of the Bank.

     6.4 This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument.

                [THIS PORTION OF PAGE INTENTIONALLY LEFT BLANK.]

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     IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Seventh Amendment to Credit Agreement the
day and year first above written.

ATTEST:                                 STEEL CITY PRODUCTS, INC.

By: /s/ Karen A. Stempinski             By: /s/ Martin Hemsley
    ---------------------------------       ------------------------------------
Name: Karen A. Stempinski               Name: Martin Hemsley
Title: Assistant Secretary              Title: C.F.O.

                (SEAL)

                                        NATIONAL CITY BANK OF PENNSYLVANIA

                                        By: /s/ Lori B. Shure
                                            ------------------------------------
                                        Name: Lori B. Shure
                                        Title: Vice President

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