CONFIDENTIAL TREATMENT REQUESTED
2002 ISDA MASTER AGREEMENT
dated as of May 30, 2023
between
OPTIWAVE SEMICONDUCTOR CORP. a Delaware corporation ("Party A")
and
RIDGEPOINT CAPITAL MARKETS LLC a Delaware limited liability company ("Party B")
Party A is Optiwave Semiconductor Corp., a corporation duly organized and validly existing under the laws of the State of Delaware, with its principal place of business at 4800 Great America Parkway, Suite 1200, San Jose, California 95054 (Delaware File No. 5738291; Employer Identification Number: 82-4917263).
Party B is Ridgepoint Capital Markets LLC, a limited liability company duly organized and validly existing under the laws of the State of Delaware, with its principal office at 383 Madison Avenue, 22nd Floor, New York, New York 10179, and is registered with the Securities and Exchange Commission as a broker-dealer.
WHEREAS, the parties have entered and/or anticipate entering into one or more transactions (each a "Transaction") that are or will be governed by this 2002 ISDA Master Agreement, including, without limitation, a capped call transaction relating to the 2.75% Convertible Senior Notes due 2028 (the "Notes") issued by Party A, and desire that such Transactions, together with all Confirmations exchanged between the parties confirming such Transactions, be subject to and governed by this Master Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
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SECTION 1. INTERPRETATION
(a) Definitions. The terms defined in Section 14 of this Master Agreement and in the Schedule hereto shall have the meanings therein specified for purposes of this Master Agreement. In addition, the 2006 ISDA Definitions, as published by the International Swaps and Derivatives Association, Inc. ("ISDA"), are hereby incorporated by reference into each Confirmation as if set forth in full therein, unless otherwise expressly provided in such Confirmation. In the event of any inconsistency between the definitions set forth in the Schedule or any Confirmation, on the one hand, and the definitions set forth in the 2006 ISDA Definitions, on the other hand, the definitions set forth in the Schedule or the applicable Confirmation, as the case may be, shall prevail for purposes of the relevant Transaction.
(b) Inconsistency. In the event of any inconsistency between the provisions of any Confirmation, the Schedule, and this Master Agreement, the following hierarchy shall apply: (1) the relevant Confirmation shall prevail over the Schedule and this Master Agreement; (2) the Schedule shall prevail over this Master Agreement; and (3) this Master Agreement shall apply to the extent not inconsistent with either the relevant Confirmation or the Schedule. For the avoidance of doubt, provisions of a Confirmation that supplement but do not contradict provisions of this Master Agreement or the Schedule shall not be deemed inconsistent.
(c) Single Agreement. All Transactions entered into between the parties are entered into in reliance on the fact that this Master Agreement, the Schedule, and all Confirmations form a single agreement between the parties (collectively referred to as this "Agreement"), and the parties would not otherwise enter into any Transaction. The parties acknowledge that the single agreement concept is fundamental to the structure of this Agreement and is a material inducement to each party's willingness to enter into each Transaction hereunder.
SECTION 2. OBLIGATIONS
(a) General Conditions.
(i) Each party shall make each payment or delivery specified in each Confirmation to be made by it, subject to the other provisions of this Agreement.
(ii) Payments under this Agreement shall be made on the due date for value on that date in the place of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the manner customary for payments in the required currency. Where settlement is by delivery (that is, other than by payment), such delivery shall be made for receipt on the due date in the manner customary for the relevant obligation unless otherwise specified in the relevant Confirmation.
(iii) Each obligation of each party under Section 2(a)(i) is subject to (A) the condition precedent that no Event of Default or Potential Event of Default with respect to the other party has occurred and is continuing, (B) the condition precedent that no Early Termination Date in respect of the relevant Transaction has occurred or been effectively designated, and (C) each other applicable condition precedent specified in this Agreement.
(b) Change of Account. Either party may change its account for receiving a payment or delivery by giving the other party at least five Local Business Days' prior written notice of such change, specifying the new account and the date on which such change shall become effective. Such notice shall be given in accordance with the notice provisions set forth in the Schedule (Part 4) and Section 12 of this Agreement.
(c) Netting of Payments. If on any date amounts would otherwise be payable:
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make payment of any such amount shall be automatically satisfied and discharged, and, if the aggregate amount that would otherwise have been payable by one party exceeds the aggregate amount that would otherwise have been payable by the other party, replaced by an obligation upon the party by which the larger aggregate amount would have been payable to pay to the other party the excess of the larger aggregate amount over the smaller aggregate amount.
The foregoing provisions of this Section 2(c) are subject to the elections made in the Schedule, including the election that Multiple Transaction Payment Netting shall apply to all Transactions under this Agreement, as further specified in Part 4(i) of the Schedule.
SECTION 3. REPRESENTATIONS
Each party makes the representations contained in this Section 3 to the other party (which representations will be deemed to be repeated by each party on each date on which a Transaction is entered into and, in the case of the representations in Section 3(e), at all times until the termination of this Agreement).
(a) Basic Representations.
(i) Status. It is duly organized and validly existing under the laws of the jurisdiction of its organization or incorporation and, if relevant under such laws, in good standing. Specifically, Party A is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Delaware. Party B is a limited liability company duly formed, validly existing, and in good standing under the laws of the State of Delaware.
(ii) Powers. It has all requisite power and authority to execute and deliver this Agreement and each Confirmation, to enter into and perform the Transactions contemplated hereby and thereby, and to perform its obligations hereunder and thereunder. Without limiting the foregoing, Party A represents that its Board of Directors adopted resolutions on May 19, 2023 authorizing the entry by Party A into capped call transactions in connection with the issuance of the 2.75% Convertible Senior Notes due 2028, and that the Pricing Committee of the Board of Directors adopted further resolutions on May 23, 2023 specifically authorizing the terms of such capped call transactions, including the Transaction contemplated hereby with Party B. The execution, delivery, and performance of this Agreement and each Transaction hereunder have been duly authorized by all necessary corporate, limited liability company, or other organizational action on the part of each party.
(iii) No Violation or Conflict. The execution, delivery, and performance of this Agreement and each Confirmation, and the consummation of the Transactions contemplated hereby and thereby, do not violate or conflict with (A) any law, rule, regulation, order, judgment, decree, or governmental restriction applicable to it, (B) any provision of its charter, certificate of incorporation, certificate of formation, operating agreement, bylaws, or equivalent constitutional documents, or (C) any agreement or instrument binding upon it or any of its assets that is material to its financial condition or its ability to perform its obligations under this Agreement. Without limiting the generality of the foregoing, Party A represents that the execution and performance of this Agreement and the Transactions contemplated hereby do not violate or conflict with (1) the Indenture dated as of May 30, 2023 between Party A and Broadmere Trust Company, N.A., as Trustee, relating to the 2.75% Convertible Senior Notes due 2028 (the "Indenture"), or (2) the Purchase Agreement dated as of May 24, 2023 among Party A, Party B (in its capacity as a Lead Initial Purchaser), and the other initial purchasers named therein (the "Purchase Agreement").
(iv) Consents. All governmental, regulatory, and other consents that are required to have been obtained by it with respect to this Agreement and the Transactions contemplated hereby have been obtained and are in full force and effect. All other governmental and regulatory approvals, authorizations, and filings that are required to have been obtained or made by it with respect to this Agreement have been obtained or made and are in full force and effect. Without limiting the foregoing, Party A represents that the Limited Consent and Waiver dated May 22, 2023, obtained from the requisite lenders under the senior secured revolving credit facility with Crestline National Bank, N.A., as Administrative Agent, permitting Party A to enter into the capped call transactions contemplated by this Agreement, has been duly obtained and is in full force and effect, and no condition to the effectiveness of such Limited Consent and Waiver has failed to be satisfied.
(v) Obligations Binding. Its obligations under this Agreement and each Confirmation constitute its legal, valid, and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and similar laws affecting creditors' rights generally and subject, as to enforceability, to equitable principles of general applicability, regardless of whether enforcement is sought in a proceeding in equity or at law).
(b) Absence of Certain Events. No Event of Default or Potential Event of Default with respect to it has occurred and is continuing, and no such event or circumstance would occur as a result of its entering into or performing its obligations under this Agreement or any Transaction hereunder.
(c) Absence of Litigation. There is not pending or, to its knowledge, threatened against it, any of its Affiliates, or any of its assets, any action, suit, or proceeding at law or in equity or before any court, tribunal, governmental body, agency, or official, or any arbitral proceedings, that is likely to affect the legality, validity, or enforceability against it of this Agreement or any Confirmation, or its ability to perform its obligations under this Agreement or any Transaction hereunder.
(d) Accuracy of Specified Information. All information that is furnished in writing by or on behalf of it to the other party, and identified in the Schedule or a Confirmation as being subject to this Section 3(d) representation, is, as of the date of the information, true, accurate, and complete in all material respects.
(e) Payer Tax Representations. Each representation specified in the Schedule as being a Payer Tax Representation made by it to the other party is accurate and true. The Payer Tax Representations are set forth in Part 2(a) of the Schedule.
SECTION 4. AGREEMENTS
Each party covenants and agrees with the other party that so long as either party has or may have any obligation under this Agreement or any Transaction:
(a) Furnish Specified Information. It will deliver to the other party, or, in certain cases, to any applicable governmental, tax, or regulatory authority, any form, document, or certificate specified in the Schedule (Part 3) as being required to be delivered, at the time or times specified therein, and any information reasonably requested by the other party to enable it to comply with applicable regulatory or reporting obligations. Without limiting the foregoing, Party A, being a reporting company under the Securities Exchange Act of 1934, as amended (SEC Central Index Key (CIK) 0001823467; Nasdaq Global Select Market ticker symbol: OWS), covenants to provide to Party B copies of its annual reports on Form 10-K and quarterly reports on Form 10-Q promptly after the filing thereof with the Securities and Exchange Commission, to the extent such reports are not available on the SEC's EDGAR system.
(b) Maintain Authorizations. It will use all reasonable efforts to maintain in full force and effect all governmental and other consents, authorizations, licenses, approvals, and registrations that are required to be obtained by it under applicable law with respect to this Agreement, each Transaction, and the performance of its obligations hereunder and thereunder, and will use all reasonable efforts to obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all applicable provisions of law, rules, and regulations to which it may be subject if failure so to comply would materially impair its ability to perform its obligations under this Agreement or any Transaction hereunder.
(d) Tax Agreement. It will comply with its obligations under Section 2(d) of this Agreement with respect to the deduction or withholding of taxes from payments and the related gross-up provisions, in each case as further specified in the Schedule. Each party agrees that if it is required to make any deduction or withholding for or on account of any tax from any payment to be made by it under this Agreement, it will (i) promptly notify the other party of such requirement, (ii) pay to the relevant governmental authority the full amount required to be deducted or withheld (including the full amount required to be deducted or withheld from any additional amount paid under this Section), promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed against the other party, (iii) promptly forward to the other party an official receipt (or certified copy) or other documentation reasonably acceptable to such other party evidencing such payment, and (iv) to the extent required by this Agreement and the Schedule, pay such additional amounts as may be necessary so that, after all such deductions and withholdings, the net amount received by the payee equals the full amount that would have been received had no such deduction or withholding been required.
(e) Payment of Stamp Tax. Party A shall bear and pay any stamp, documentary, registration, or similar tax (including any penalties and interest) levied or imposed by any jurisdiction on or in connection with this Agreement, any Confirmation, or the execution, delivery, enforcement, or admissibility in evidence of this Agreement or any Confirmation. If Party B pays any such tax, Party A shall promptly reimburse Party B therefor.
SECTION 5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) Events of Default. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any of the following events constitutes (subject to Sections 5(c) and 6(e)(iv)) an event of default (an "Event of Default") with respect to such party:
(i) Failure to Pay or Deliver. Failure by the party to make, when due, any payment under this Agreement or delivery under Section 2(a)(i) or 9(h)(i)(2) required to be made by it if such failure is not remedied on or before the third Local Business Day after notice of such failure is given to the party.
(ii) Breach of Agreement; Repudiation of Agreement.
(A) Failure by the party to comply with or perform any agreement or obligation (other than an obligation to make any payment under this Agreement or delivery under Section 2(a)(i) or 9(h)(i)(2)) to be complied with or performed by the party in accordance with this Agreement if such failure is not remedied within thirty (30) days after notice of such failure is given to the party; or
(B) The party disaffirms, disclaims, repudiates, or rejects, in whole or in part, or challenges the validity of, this Agreement, any Confirmation executed and delivered by that party, or any Transaction evidenced by such a Confirmation (or such action is taken by any person or entity appointed or empowered to operate it or act on its behalf).
(iii) Credit Support Default. Not applicable. No Credit Support Annex or other Credit Support Document is contemplated under this Agreement.
(iv) Misrepresentation. A representation (other than a representation under Section 3(e) or 3(f)) made or repeated or deemed to have been made or repeated by the party or any Credit Support Provider of such party in this Agreement or any Confirmation proves to have been incorrect or misleading in any material respect when made or repeated or deemed to have been made or repeated.
(v) Default Under Specified Transaction. The party, any Credit Support Provider of such party, or any applicable Specified Entity of such party (A) defaults (other than by failing to make a delivery) under a Specified Transaction and, after giving effect to any applicable notice requirement or grace period, there occurs a liquidation of, an acceleration of obligations under, or an early termination of, such Specified Transaction, (B) defaults, after giving effect to any applicable notice requirement or grace period, in making any payment due on the last payment or exchange date of, or any payment on early termination of, a Specified Transaction (or, if there is no applicable notice requirement or grace period, such default continues for at least one Local Business Day), or (C) disaffirms, disclaims, repudiates, or rejects, in whole or in part, or challenges the validity of, a Specified Transaction. For purposes of this Section 5(a)(v), "Specified Transaction" means (1) all Transactions under this Master Agreement and (2) any transaction under the ISDA Master Agreement dated as of May 30, 2023, between Party A and Northvane Financial Products LP, as further specified in Part 1(b) of the Schedule.
(vi) Cross-Default. If "Cross-Default" is specified in the Schedule as applying to the party, the occurrence or existence of (A) a default, event of default, or other similar condition or event (however described) in respect of such party, any Credit Support Provider of such party, or any applicable Specified Entity of such party under one or more agreements or instruments relating to Specified Indebtedness of any of them (individually or collectively) where the aggregate principal amount of such agreements or instruments, either alone or together with the amount, if any, referred to in clause (B) below, is not less than the Threshold Amount applicable to the party (as specified in the Schedule), which has resulted in such Specified Indebtedness becoming, or becoming capable at such time of being declared, due and payable under such agreements or instruments, before it would otherwise have been due and payable, or (B) a default by such party, any Credit Support Provider of such party, or any applicable Specified Entity of such party (individually or collectively) in making one or more payments on the due date thereof in an aggregate amount of not less than the applicable Threshold Amount under such agreements or instruments (after giving effect to any applicable notice requirement or grace period).
As specified in Part 1(c) of the Schedule:
• Cross-Default is applicable to Party A. The Threshold Amount for Party A is $25,000,000. Specified Indebtedness includes, without limitation, (1) the 2.75% Convertible Senior Notes due 2028 issued under the Indenture dated as of May 30, 2023 with Broadmere Trust Company, N.A., as Trustee, and (2) the $300,000,000 senior secured revolving credit facility with Crestline National Bank, N.A., as Administrative Agent (maturing August 15, 2026).
• Cross-Default is applicable to Party B. The Threshold Amount for Party B is $50,000,000. Specified Indebtedness means any obligation for borrowed money (whether present or future, contingent or otherwise), including guarantees of any such obligation.
(vii) Bankruptcy. The party, any Credit Support Provider of such party, or any applicable Specified Entity of such party:
(A) is dissolved (other than pursuant to a consolidation, amalgamation, or merger); (B) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (C) makes a general assignment, arrangement, or composition with or for the benefit of its creditors; (D)(1) institutes or has instituted against it, by a regulator, supervisor, or any similar official with primary insolvency, rehabilitative, or regulatory jurisdiction over it in the jurisdiction of its incorporation or organization or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor, or similar official, or (2) has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and such proceeding or petition is instituted or presented by a person or entity not described in clause (1) above and either (I) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (II) is not dismissed, discharged, stayed, or restrained in each case within thirty (30) days of the institution or presentation thereof; (E) has a resolution passed for its winding-up, official management, or liquidation (other than pursuant to a consolidation, amalgamation, or merger); (F) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian, or other similar official for it or for all or substantially all its assets; (G) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration, or other legal process levied, enforced, or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed, or restrained, in each case within thirty (30) days thereafter; (H) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (A) to (G) above (inclusive); or (I) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.
(viii) Merger Without Assumption. The party or any Credit Support Provider of such party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, or reorganizes, reincorporates, or reconstitutes into or as, another entity and, at the time of such consolidation, amalgamation, merger, transfer, reorganization, reincorporation, or reconstitution, (A) the resulting, surviving, or transferee entity fails to assume all the obligations of such party or Credit Support Provider under this Agreement or any Credit Support Document to which it or its predecessor was a party, or (B) the benefits of any Credit Support Document fail to extend (without the consent of the other party) to the performance by such resulting, surviving, or transferee entity of its obligations under this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party, of any of the following events constitutes (subject to Sections 5(c)) an "Illegality" or "Tax Event" or "Tax Event Upon Merger" or "Credit Event Upon Merger" or "Force Majeure Event" or "Additional Termination Event," as the case may be, and, together, "Termination Events":
(i) Illegality. If, due to the adoption of, or any change in, any applicable law after the date on which a Transaction is entered into, or due to the promulgation of, or any change in, the interpretation by any court, tribunal, or regulatory authority with competent jurisdiction of any applicable law after such date, it becomes unlawful (other than as a result of a breach by the party of Section 4(b)) for such party (which will be the Affected Party) to perform any absolute or contingent obligation to make a payment or delivery or to receive a payment or delivery in respect of such Transaction or to comply with any other material provision of this Agreement relating to such Transaction.
(ii) Force Majeure Event. After giving effect to any applicable provision for delay, limitation, or prevention of the obligation to perform as provided in this Agreement, by reason of force majeure or act of state occurring after the date of this Agreement, the party (which will be the Affected Party) is prevented from or hindered in performing any of its payment or delivery obligations under a Transaction, or from complying with any material provision of this Agreement relating to such Transaction, and such event or circumstance is beyond the control of such party and such party could not, after using all reasonable efforts (which will not require such party to incur a loss, other than immaterial, incidental expenses), overcome such prevention or hindrance. The Waiting Period applicable to a Force Majeure Event under this Agreement shall be eight (8) Local Business Days.
(iii) Tax Event. Due to (A) any action taken by a taxing authority of any relevant jurisdiction, or brought in a court of competent jurisdiction, after the date on which a Transaction is entered into (regardless of whether such action is taken or brought with respect to a party to this Agreement), or (B) a Change in Tax Law (as defined in Section 14), a party (the "Affected Party") will, or there is a substantial likelihood that it will, on the next succeeding Scheduled Trading Day, be required to pay to the other party an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 9(h)) (a "Tax Event"). The Affected Party shall use reasonable efforts to transfer or assign its rights and obligations under the affected Transaction(s) to another of its offices or branches or Affiliates so as to eliminate such Tax Event, provided that such efforts would not, in the reasonable judgment of such party, give rise to any material adverse tax, legal, or regulatory consequences to it.
(iv) Tax Event Upon Merger. If a Tax Event occurs as a result of a party to this Agreement or any Credit Support Provider consolidating or amalgamating with, or merging with or into, or transferring all or substantially all its assets to, or reorganizing, reincorporating, or reconstituting into or as, another entity (such party or Credit Support Provider being the "Affected Party"), the resulting Tax Event shall constitute a "Tax Event Upon Merger."
(v) Credit Event Upon Merger. As specified in Part 1(d) of the Schedule, Credit Event Upon Merger is applicable to both Party A and Party B. If a party ("X"), any Credit Support Provider of X, or any applicable Specified Entity of X consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, or reorganizes, reincorporates, or reconstitutes into or as, another entity, and the creditworthiness of the resulting, surviving, or transferee entity is materially weaker than that of X, its Credit Support Provider, or its Specified Entity, as the case may be, immediately prior to such action (X or, as the case may be, the entity that has undergone such action being the "Affected Party"), such occurrence shall constitute a Credit Event Upon Merger.
(vi) Additional Termination Events. If any "Additional Termination Event" is specified in the Schedule or any Confirmation as applying, the occurrence of such event. The following Additional Termination Events, as specified in Part 1(g) of the Schedule, are applicable, with Party A as the sole Affected Party:
(A) Delisting Event. The common stock of Party A (Nasdaq Global Select Market ticker symbol: OWS) ceases to be listed or admitted for trading on the Nasdaq Global Select Market (or any successor exchange thereto) or any other nationally recognized U.S. securities exchange.
(B) Fundamental Change. The occurrence of a "Fundamental Change" as defined in the Indenture dated as of May 30, 2023, between Party A and Broadmere Trust Company, N.A., as Trustee.
(C) Early Redemption or Conversion in Whole. Party A redeems, or the holders of the Notes convert, all of the outstanding 2.75% Convertible Senior Notes due 2028 (CUSIP 683742AA5) prior to their stated maturity date of June 1, 2028, in which case the capped call Transaction entered into between the parties shall terminate in accordance with the terms and conditions set forth in the Capped Call Confirmation dated as of May 30, 2023, between Party A and Party B.
(c) Hierarchy of Events. If an event or circumstance that would otherwise constitute or give rise to an Event of Default also constitutes a Termination Event, it will be treated as a Termination Event and will not constitute an Event of Default.
SECTION 6. EARLY TERMINATION; CLOSE-OUT NETTING
(a) Right to Terminate Following Event of Default. If at any time an Event of Default with respect to a party (the "Defaulting Party") has occurred and is then continuing, the other party (the "Non-Defaulting Party") may, by not more than twenty (20) days' notice to the Defaulting Party specifying the relevant Event of Default, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all outstanding Transactions. If, however, "Automatic Early Termination" is specified in the Schedule as applying to a party, then an Early Termination Date in respect of all outstanding Transactions shall occur immediately upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6), or, to the extent analogous thereto, (8), and as of the time immediately preceding the institution of the relevant proceeding or the presentation of the relevant petition upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(4), and in each case no notice shall be required. As set forth in Part 1(e) of the Schedule, Automatic Early Termination is not applicable to either Party A or Party B.
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party shall, promptly upon becoming aware of it, notify the other party, specifying the nature of such Termination Event and each Transaction affected by it (each such Transaction, an "Affected Transaction") and shall also give the other party such other information about such Termination Event as the other party may reasonably require.
(ii) Transfer to Avoid Termination Event. If an Illegality or a Tax Event occurs and there is only one Affected Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the Affected Party, the Affected Party will, as a condition to its right to designate an Early Termination Date under Section 6(b)(iv), use all reasonable efforts to transfer within twenty (20) days after it gives notice under Section 6(b)(i) all of its rights and obligations under this Agreement in respect of the Affected Transactions to another of its offices or Affiliates so that such Termination Event ceases to exist, provided that such transfer would not, in the reasonable judgment of the Affected Party, give rise to any material adverse consequences.
(iii) Two Affected Parties. If an Illegality occurs and there are two Affected Parties, each party shall use all reasonable efforts to reach agreement within thirty (30) days after notice of such Illegality is given under Section 6(b)(i) on action to avoid the relevant Termination Event.
(iv) Right to Terminate.
(A) If a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii) has not been effected within the applicable period, either party in the case of an Illegality, or the Non-Affected Party in the case of a Tax Event, Tax Event Upon Merger, or Additional Termination Event (to the extent that all Affected Transactions are Transactions affected by the relevant Termination Event and Party A is the sole Affected Party), may, by not more than twenty (20) days' notice to the other party and provided that the relevant Termination Event is then continuing, designate an Early Termination Date in respect of all Affected Transactions.
(B) If a Force Majeure Event has occurred and is continuing, and the Waiting Period of eight (8) Local Business Days has expired, either party may designate an Early Termination Date in respect of all Affected Transactions.
(C) If a Credit Event Upon Merger has occurred and is continuing, the Non-Affected Party may designate an Early Termination Date in respect of all outstanding Transactions.
(c) Effect of Designation.
(i) Upon the occurrence or effective designation of an Early Termination Date, no further payments or deliveries under Section 2(a)(i) or 9(h)(i) in respect of the Terminated Transactions will be required to be made, but without prejudice to the other provisions of this Agreement. The amount, if any, payable in respect of an Early Termination Date shall be determined pursuant to Section 6(e).
(ii) Upon the occurrence or effective designation of an Early Termination Date, each obligation of each party under Section 2(a)(i) that was or would have become payable (but for Section 2(a)(iii) or 6(c)(ii)) after the Early Termination Date and on or prior to the date that is two Local Business Days following the Early Termination Date will, in each case, be deemed to have been due and payable as of the relevant Early Termination Date.
(d) Calculations; Determining Party.
(i) Statement. On or as soon as reasonably practicable following the occurrence of an Early Termination Date, each party that is required to calculate a Close-out Amount shall make the calculations on its part contemplated by Section 6(e) and shall provide to the other party a statement (A) showing, in reasonable detail, such calculations (including all relevant quotations and any amount of Unpaid Amounts owing to it) and (B) giving details of the relevant account to which any amount payable to it is to be paid.
(ii) Determining Party. The "Determining Party" means, in respect of each determination under Section 6(e):
(A) Where there is a Defaulting Party, the Non-Defaulting Party. As set forth in the Schedule: (1) for Events of Default where Party A is the Defaulting Party, Party B (Ridgepoint Capital Markets LLC) shall be the Determining Party; and (2) for Events of Default where Party B is the Defaulting Party, Party A (Optiwave Semiconductor Corp.) shall be the Determining Party.
(B) Where there is a Termination Event with only one Affected Party, the Non-Affected Party.
(C) Where there is a Termination Event with two Affected Parties, each party shall be a Determining Party and each shall determine its own Close-out Amount.
(iii) The Determining Party shall act in good faith and use commercially reasonable procedures in order to produce a commercially reasonable result in making any determination, calculation, or estimate under Section 6(e).
(e) Payments on Early Termination.
(i) Close-out Amount. The Determining Party shall determine the Close-out Amount for each Terminated Transaction (or group of Terminated Transactions) as of the Early Termination Date. The Close-out Amount for each Terminated Transaction shall be determined by the Determining Party on the basis of quotations (either firm or indicative) for replacement transactions supplied by one or more leading dealers in the relevant market (which may include the Determining Party or any of its Affiliates). If the Determining Party uses quotations obtained from third parties, it shall endeavor to obtain at least three such quotations. If the Determining Party determines that it is not reasonably practicable to obtain such quotations or determines that such quotations would not produce a commercially reasonable result, the Determining Party shall determine the Close-out Amount based on relevant market data (including, without limitation, market quotations, yields, yield curves, volatilities, spreads, correlations, or other relevant market data) and industry-accepted valuation models, taking into account the terms of the Terminated Transaction, the creditworthiness of the parties, and any other information that the Determining Party reasonably considers relevant. In each case, the mid-market valuation (without regard to the creditworthiness of the Determining Party or the other party) shall serve as a fallback methodology.
(ii) Net Amount Payable. An amount shall be payable equal to (A) the Close-out Amount plus (B) any Unpaid Amounts owing to the Determining Party less (C) any Unpaid Amounts owing to the other party. If such amount is a positive number, the other party shall pay it to the Determining Party; if it is a negative number, the Determining Party shall pay the absolute value of such amount to the other party.
(iii) Set-Off. As elected in the Schedule (Part 5(c)), set-off rights are applicable. Upon the occurrence of an Early Termination Date, the Non-Defaulting Party (or Non-Affected Party, as the case may be) may, without prior notice to the Defaulting Party (or Affected Party), set off any amount payable to the Defaulting Party (or Affected Party) by the Non-Defaulting Party (or Non-Affected Party) under this Agreement against any amount payable by the Defaulting Party (or Affected Party) to the Non-Defaulting Party (or Non-Affected Party), whether such amounts arise under this Agreement, any other agreement between the parties, or otherwise. For this purpose, any obligation may be converted at the applicable spot exchange rate as of the relevant Early Termination Date.
SECTION 7. TRANSFER
Neither party may transfer, assign, novate, or otherwise dispose of any of its rights, obligations, or interests under this Agreement or any interest or obligation in or under any Transaction without the prior written consent of the other party, except that:
(a) Party B may transfer any of its rights and obligations under this Agreement or any Transaction to any Affiliate of Party B that, at the time of such transfer, has a long-term unsecured, unsubordinated debt rating of at least investment grade (i.e., at least BBB- by S&P Global Ratings or Baa3 by Moody's Investors Service, Inc., or an equivalent rating by another nationally recognized statistical rating organization), provided that (i) Party B delivers to Party A prior written notice of such transfer identifying the transferee and the relevant credit rating, (ii) such transferee assumes in writing all obligations of Party B under this Agreement and the relevant Transactions, (iii) Party B provides to Party A any such documentation reasonably requested by Party A, including evidence of such transferee's creditworthiness and corporate authority, and (iv) no Event of Default, Potential Event of Default, or Termination Event with respect to Party B shall have occurred and be continuing at the time of such transfer.
(b) Either party may transfer its rights and obligations under this Agreement to a successor entity in connection with a merger, consolidation, or transfer of all or substantially all of such party's assets, provided that the resulting, surviving, or transferee entity assumes all of the obligations of such party under this Agreement and each Transaction and satisfies the conditions set forth in Section 5(a)(viii) such that no Event of Default would arise by reason of such merger, consolidation, or transfer.
Any purported transfer, assignment, novation, or disposition in violation of this Section 7 shall be void.
SECTION 8. CONTRACTUAL CURRENCY
(a) Payment in the Contractual Currency. Each payment under this Agreement shall be made in the currency specified for that payment in the relevant Confirmation or, if no currency is specified, in U.S. Dollars (the "Contractual Currency"). The Contractual Currency for all Transactions under this Agreement shall be U.S. Dollars unless otherwise specified in the applicable Confirmation.
(b) Judgments. To the extent permitted by applicable law, if any judgment or order expressed in a currency other than the Contractual Currency is rendered (i) for the payment of any amount owing in respect of this Agreement, (ii) for the payment of any amount relating to any early termination in respect of this Agreement, or (iii) in respect of a judgment or order of another court for the payment of any amount described in clause (i) or (ii) above, the party seeking recovery, after recovery in full of the aggregate amount to which such party is entitled pursuant to the judgment or order, shall be entitled to receive immediately from the other party the amount of any shortfall of the Contractual Currency received by such party as a consequence of sums paid in such other currency, and such shortfall shall be due as a separate debt and shall not be affected by judgment being obtained for any other sums due under or in respect of this Agreement.
(c) Separate Indemnity. To the extent permitted by applicable law, the obligations of the parties under this Section 8 shall constitute separate and independent obligations from the other obligations of such parties, shall give rise to separate and independent causes of action, shall apply irrespective of any indulgence granted from time to time, and shall survive any judgment, order, or decree in respect of any such other obligation.
SECTION 9. MISCELLANEOUS
(a) Entire Agreement. This Agreement (including the Schedule and each Confirmation entered into between the parties) constitutes the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous oral or written communications, proposals, agreements, negotiations, representations, warranties, and understandings with respect to such subject matter.
(b) Amendments. No amendment, modification, or waiver in respect of this Agreement shall be effective unless in writing (including a writing evidenced by a facsimile or electronic transmission) and executed by each of the parties or confirmed by an exchange of telexes, electronic messages, or electronic matching systems.
(c) Survival. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties under this Agreement will survive the termination of any Transaction and will survive the termination of this Agreement itself. Specifically, all payment and delivery obligations that have accrued prior to, and all rights and remedies that arise in connection with, the early termination of any Transaction or the designation of an Early Termination Date shall survive such termination or designation.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies, and privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies, and privileges provided by law.
(e) Counterparts. This Agreement (and each amendment, modification, and waiver in respect of this Agreement) may be executed and delivered in counterparts (including by facsimile transmission, electronic mail in ".pdf" format, or other electronic means), each of which will be deemed an original but all of which together will constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic means shall be effective as delivery of a manually executed counterpart of this Agreement. The parties agree that this Agreement may be executed by electronic signature, which shall be deemed to be an original signature for all purposes.
(f) No Waiver of Rights. A failure or delay in exercising any right, power, or privilege in respect of this Agreement shall not be presumed to operate as a waiver, and a single or partial exercise of any right, power, or privilege shall not be presumed to preclude any subsequent or further exercise of that right, power, or privilege or the exercise of any other right, power, or privilege.
(g) Headings. The headings used in this Agreement are for convenience of reference only and shall not affect the construction of or be taken into consideration in interpreting this Agreement.
(h) Interest and Compensation.
(i) Prior to Early Termination. If a party defaults in the performance of any payment obligation under this Agreement (other than an obligation to pay an amount on an Early Termination Date), the Defaulting Party shall, to the extent permitted by applicable law, and without limiting any other rights the Non-Defaulting Party may have, pay interest (before as well as after judgment) on the overdue amount to the Non-Defaulting Party on demand from (and including) the original due date to (but excluding) the date of actual payment, at the Default Rate. The "Default Rate" shall be a rate per annum equal to the cost (without proof or evidence of any actual cost) to the relevant payee (as certified by it) if it were to fund or of funding the relevant amount plus 1.00% per annum, which cost, unless otherwise specified herein, shall be deemed to be the Federal Funds Rate (as defined in the 2006 ISDA Definitions) applicable from time to time, plus 1.00% per annum, calculated on the basis of daily compounding and the actual number of days elapsed.
(ii) Following Early Termination. If an Early Termination Date occurs, the party obligated to make a net payment under Section 6(e) shall, to the extent permitted by applicable law, pay interest (before as well as after judgment) on such amount from (and including) such Early Termination Date to (but excluding) the date of actual payment, at the Default Rate.
(i) Notices. All notices, demands, and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be given in accordance with the provisions set forth in Part 4 of the Schedule. Notices shall be deemed effective (A) if delivered personally, on the date of delivery, (B) if sent by internationally recognized overnight courier, on the next Business Day following the date of dispatch, (C) if sent by facsimile, upon receipt of confirmation of successful transmission, or (D) if sent by electronic mail (where authorized in the Schedule), upon receipt of electronic confirmation of delivery or, in the absence thereof, upon the sender's receipt of an automated "read receipt" or equivalent thereof.
SECTION 10. OFFICES; MULTIBRANCH PARTIES
(a) Offices. If Section 10 is specified in the Schedule as applying, each obligation of each party under this Agreement shall be entered into through and performed by its office specified in the Schedule.
Party A: 4800 Great America Parkway, Suite 1200, San Jose, California 95054 (sole office).
Party B: 383 Madison Avenue, 22nd Floor, New York, New York 10179 (sole office).
(b) Multibranch Parties. Neither Party A nor Party B is a Multibranch Party. The concept of "Multibranch Party" as used in the 2002 ISDA Master Agreement is not applicable to either party under this Agreement.
SECTION 11. EXPENSES
Each party shall bear its own costs and expenses (including, without limitation, fees and expenses of legal counsel, accountants, and other advisors) in connection with the negotiation, preparation, execution, and delivery of this Agreement, the Schedule, and each Confirmation. Notwithstanding the foregoing, if an Event of Default occurs, the Defaulting Party shall, on demand, indemnify and hold harmless the Non-Defaulting Party for and against all reasonable out-of-pocket expenses, including legal fees and expenses, incurred by the Non-Defaulting Party by reason of the enforcement and protection of its rights under this Agreement, any Confirmation, or any Transaction, including, but not limited to, costs of collection.
SECTION 12. NOTICES
All notices and other communications under this Agreement shall be given to the relevant party at the address, facsimile number, or electronic mail address, and to the attention of the individual or department, specified in Part 4 of the Schedule. The provisions of Section 9(i) shall apply to the delivery and effectiveness of all such notices.
SECTION 13. GOVERNING LAW AND JURISDICTION
(a) Governing Law. This Agreement and each Transaction entered into hereunder shall be governed by and construed in accordance with the laws of the State of New York, without reference to choice of law doctrine (other than Title 14 of Article 5 of the New York General Obligations Law, specifically Sections 5-1401 and 5-1402 thereof).
(b) Jurisdiction. With respect to any suit, action, or proceedings relating to any dispute arising out of or in connection with this Agreement or any Transaction (collectively, "Proceedings"), each party irrevocably:
(i) submits to the non-exclusive jurisdiction of the courts of the State of New York sitting in the Borough of Manhattan, the City of New York, and the United States District Court for the Southern District of New York;
(ii) waives any objection that it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum, and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party; and
(iii) agrees, to the extent permitted by applicable law, that the bringing of Proceedings in any one or more jurisdictions will not preclude the bringing of Proceedings in any other jurisdiction.
(c) Process Agent. Party A appoints an agent for service of process in New York (such agent to be specified in Part 4(b) of the Schedule) and agrees that service of process in any Proceedings may be effected upon such agent at the address specified in the Schedule. Party B is located in New York and no process agent appointment is required with respect to Party B.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent permitted by applicable law, with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of injunction or order for specific performance or recovery of property, (iv) attachment of its assets (whether before or after judgment), and (v) execution or enforcement of any judgment to which it or its revenues or assets might otherwise be entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the extent permitted by applicable law, that it will not claim any such immunity in any Proceedings.
(e) Waiver of Jury Trial. EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY CONFIRMATION, OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
SIGNATURE PAGE — MASTER AGREEMENT
IN WITNESS WHEREOF, the parties have executed this 2002 ISDA Master Agreement as of the date first above written.
OPTIWAVE SEMICONDUCTOR CORP.
By: ________
Name: Rachel Fontaine
Title: Treasurer
Date: May 30, 2023
RIDGEPOINT CAPITAL MARKETS LLC
By: ________
Name: Cameron Walsh
Title: Head of Equity-Linked Origination
Date: May 30, 2023
SCHEDULE
TO THE 2002 ISDA MASTER AGREEMENT
dated as of May 30, 2023
between
OPTIWAVE SEMICONDUCTOR CORP. ("Party A")
and
RIDGEPOINT CAPITAL MARKETS LLC ("Party B")
This Schedule forms part of the 2002 ISDA Master Agreement dated as of May 30, 2023 (the "Agreement") between Optiwave Semiconductor Corp. ("Party A") and Ridgepoint Capital Markets LLC ("Party B"). Capitalized terms used but not otherwise defined herein have the meanings assigned to them in the Agreement.
PART 1. TERMINATION PROVISIONS
(a) Specified Entity.
Party A: None.
Party B: None.
(b) Specified Transaction.
"Specified Transaction" means, for purposes of Section 5(a)(v) of this Agreement:
(i) all Transactions entered into under this Master Agreement; and
(ii) any transaction entered into under the ISDA Master Agreement dated as of May 30, 2023, between Party A and Northvane Financial Products LP.
(c) Cross-Default.
"Cross-Default" (Section 5(a)(vi)) is applicable to both Party A and Party B.
Party A:
Threshold Amount: $25,000,000 (twenty-five million U.S. dollars).
Specified Indebtedness: Any obligation (whether present or future, contingent or otherwise) for the payment or repayment of money in respect of borrowed money, including, without limitation:
(A) the 2.75% Convertible Senior Notes due 2028 issued by Party A under the Indenture dated as of May 30, 2023, between Party A and Broadmere Trust Company, N.A., as Trustee; and
(B) the $300,000,000 senior secured revolving credit facility with Crestline National Bank, N.A., as Administrative Agent, pursuant to the Credit Agreement dated as of August 15, 2021, as amended (maturing August 15, 2026);
and any guarantee of any such obligation.
Party B:
Threshold Amount: $50,000,000 (fifty million U.S. dollars).
Specified Indebtedness: Any obligation (whether present or future, contingent or otherwise) for the payment or repayment of money in respect of borrowed money, including any guarantee of any such obligation.
(d) Credit Event Upon Merger.
Section 5(b)(v) ("Credit Event Upon Merger") is applicable to both Party A and Party B.
(e) Automatic Early Termination.
"Automatic Early Termination" upon the occurrence of an Event of Default specified in Section 5(a)(vii):
Party A: Not Applicable.
Party B: Not Applicable.
Note: The parties have elected not to apply Automatic Early Termination because Party A is a corporation organized under the laws of the State of Delaware and Party B is a limited liability company organized under the laws of the State of Delaware, in each case a United States entity, and automatic termination is not required to preserve the benefit of the safe harbor provisions for swap agreements under the United States Bankruptcy Code (Title 11, United States Code).
(f) Payments on Early Termination; Termination Currency.
Termination Currency: U.S. Dollars.
(g) Additional Termination Events.
Applicable. The following shall each constitute an Additional Termination Event with respect to Party A as the sole Affected Party:
(i) Delisting Event. The common stock of Party A (currently listed on the Nasdaq Global Select Market under the ticker symbol "OWS") ceases to be listed or admitted for trading on the Nasdaq Global Select Market (or any successor exchange thereto) or on any other nationally recognized U.S. securities exchange. For purposes of this clause, a "nationally recognized U.S. securities exchange" means the New York Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market, or any successor thereto.
(ii) Fundamental Change. A "Fundamental Change" (as such term is defined in the Indenture dated as of May 30, 2023, between Party A and Broadmere Trust Company, N.A., as Trustee (as such Indenture may be amended, supplemented, or otherwise modified from time to time in accordance with its terms)) shall have occurred.
(iii) Early Redemption or Conversion in Whole. Party A redeems, or the holders thereof convert, all of the outstanding 2.75% Convertible Senior Notes due 2028 (CUSIP 683742AA5) prior to their stated maturity date of June 1, 2028, in whole (and not merely in part). Upon the occurrence of such event, the capped call Transaction between Party A and Party B shall terminate in accordance with the terms and conditions set forth in the Capped Call Confirmation dated as of May 30, 2023, between Party A and Party B, and all settlement amounts shall be determined thereunder.
PART 2. TAX REPRESENTATIONS
(a) Payer Tax Representations.
Party A represents that it is a "United States person" within the meaning of Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended (the "Code") (Employer Identification Number: 82-4917263).
Party B represents that it is a "United States person" within the meaning of Section 7701(a)(30) of the Code.
(b) Payee Tax Representations.
Each party represents that it is a "United States person" within the meaning of Section 7701(a)(30) of the Code and that all payments made to it under this Agreement will not be subject to U.S. federal withholding tax under the Code.
Each party agrees to deliver to the other party a duly completed and executed Internal Revenue Service Form W-9 (or any successor form) (i) upon execution of this Agreement, (ii) promptly upon reasonable demand by the other party, and (iii) promptly upon learning that any such form previously provided by it has become obsolete or incorrect.
PART 3. AGREEMENT TO DELIVER DOCUMENTS
Documents to be delivered by Party A (Optiwave Semiconductor Corp.):
Documents to be delivered by Party B (Ridgepoint Capital Markets LLC):