Exhibit 10.28
THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED
UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE
144 UNDER SUCH ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL
FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE
COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF SUCH ACT.
CONVERTIBLE PROMISSORY NOTE
Finisar
Corporation, a Delaware corporation (the “ Company
”), for value received, promises to pay to Steven Bucher
(“ Holder ”) the principal sum of Eleven Million
Sixty One Thousand Dollars ($11,061,000.00), together with interest
on the outstanding principal balance of this Note at the rate of
three and thirty-five one-hundredths percent (3.35%) per annum.
This Note is issued pursuant to that Agreement and Plan of Merger
dated April 7, 2005 by and among the Company, I-Robot
Acquisition Corp., I-TECH CORP. and the Holder (the “
Merger Agreement ”).
1.
Definitions . As used in this Note, the following terms
shall have the definitions ascribed to them below:
1.1.
“ Commission ” means the United States
Securities and Exchange Commission.
1.2.
“ Common Stock ” means the common stock, $0.001
par value, of the Company, and any securities into which such
common stock may hereafter be classified.
1.3.
“ Conversion Event ” has the meaning set forth
in Section 3.1 below.
1.4.
“ Conversion Shares ” has the meaning set forth
in Section 3.2 below.
1.5.
“ Initial Conversion Amount ” means the lesser
of (a) seventy-four percent (74%)of the product of
(i) the Share Price calculated with respect to the Initial
Conversion Event, multiplied by (ii) the lower of:
(x) the maximum number of shares of Finisar Common Stock that
the Holder may actually sell on the date of the Initial Conversion
Event without violation of the volume restrictions of
Rule 144(e), and (y) the number of shares of Fusion
Common Stock into which the entire original principal amount of
this Note would have been converted on the Initial Conversion Event
without giving effect to the provisions of this Section 1.5,
and (b) the difference between the original principal amount
of this Note plus all accrued interest thereon and the original
principal amount of the Finisar Loan (as defined in the Merger
Agreement), including all accrued interest thereon.
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1.6.
“ Maturity Date ” means November 1,
2005.
1.7.
“ Rule 144 ” means Rule 144
promulgated by the Commission under the Securities Act as in effect
from time to time.
1.8.
“ Securities Act ” means the Securities Act of
1933, as amended.
1.9.
“ Share Price ” means the average closing
trading price per share of the Common Stock on the Nasdaq National
Market (“ NNM ”) for the three (3) Trading
Days ending on the day preceding the applicable Conversion
Event.
1.10.
“ Trading Day ” means a day on which trading
occurs on the NNM (or any successor thereto).
2.
Payment .
2.1.
Payment at Maturity . The entire outstanding principal
balance of, and accrued but unpaid interest on, this Convertible
Promissory Note (the “ Note ”) shall be due and
payable, if not converted prior thereto pursuant to Section 3
below, on the Maturity Date. The Company shall have the right at
any time and without premium or penalty to prepay this Note, in
whole or in part, prior to the Maturity Date.
2.2.
Interest . The Company shall pay interest to the Holder on
the outstanding principal balance of this Note at the rate of three
and thirty-five one-hundredths percent (3.35%) per annum, which
shall be payable in (a) cash on the Maturity Date, or
(b) additional shares of Common Stock if this Note is
converted pursuant to Section 3 below, on the date(s) for
delivery of certificates representing the Conversion Shares
provided for in Section 3.3. Interest shall be calculated on
the basis of a 365-day year and shall accrue daily commencing on
the date hereof.
2.3.
Currency . All payments shall be in lawful money of the
United States of America.
3.
Conversion . This Note shall convert into Common Stock as
follows:
3.1.
Conversion Events .
(a) Upon
the declaration of the effectiveness of a Registration Statement
(as defined in the Merger Agreement) filed by the Company with the
Commission (the “ Initial Conversion Event ”),
the Initial Conversion Amount shall be automatically converted into
that number of shares of Common Stock determined in accordance with
Section 3.2 below.
(b) The
remaining principal balance, if any, outstanding under this Note
after the Initial Conversion Event (the “ Remaining
Principal Balance ”) shall be converted into that number
of shares of Common Stock determined in accordance with
Section 3.2 below on any of two (2) days determined by
the Holder (each of which, a “ Subsequent Conversion
Event ” and, together with the Initial Conversion Event,
each a “ Conversion Event ”); provided, however,
that no conversion at the election of the Holder shall reduce the
Remaining Principal Balance below the amount of the unpaid portion
of the Finisar Loan. The Holder shall give
2
written notice to the Company of
its election to convert additional shares of Finisar Common Stock
on a Subsequent Conversion Event. Should any portion of the
Remaining Principal Balance remain outstanding as of the date that
is four (4) months after the Initial Conversion Event, the
entire Remaining Principal Balance shall be automatically converted
into shares of Finisar Common Stock as of such date.
3.2.
Shares Issuable Upon Conversion . Upon each conversion of
this Note in accordance with Section 3.1 above, the Holder
shall be entitled to receive a certificate representing that number
of shares of Common Stock (the “ Conversion Shares
”) equal to the portion of principal balance of the Note and
accrued interest that is converted on such Conversion Event,
divided by the Share Price.
3.3.
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