1014-00001 · Client 1014 · documents

limited-consent-waiver-credit-facility.docx DOCUMENT Capital Markets

23 / 37 ← → ✕

Contract analysis Extract to table

LIMITED CONSENT AND WAIVER

dated as of May 22, 2023

among

OPTIWAVE SEMICONDUCTOR CORP., as Borrower,

CRESTLINE NATIONAL BANK, N.A., as Administrative Agent,

and

the LENDERS party hereto

Under the Credit Agreement dated as of August 15, 2021 (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement")

Governing a $300,000,000 Senior Secured Revolving Credit Facility

LIMITED CONSENT AND WAIVER

This LIMITED CONSENT AND WAIVER (this "Consent and Waiver"), dated as of May 22, 2023, is entered into among OPTIWAVE SEMICONDUCTOR CORP., a Delaware corporation (Delaware file no. 5738291; EIN 82-4917263) (the "Borrower" or the "Company"), with its principal executive offices at 4800 Great America Parkway, Suite 1200, San Jose, California 95054, CRESTLINE NATIONAL BANK, N.A., a national banking association, with offices at 227 Park Avenue, 14th Floor, New York, New York 10172, in its capacity as administrative agent (in such capacity, the "Administrative Agent") under the Credit Agreement (as defined below), and THE LENDERS party hereto (collectively, the "Lenders"), constituting at least the Required Lenders under Section 1.01 of the Credit Agreement.

RECITALS

A. Credit Agreement. Reference is made to that certain Credit Agreement, dated as of August 15, 2021, among the Borrower, the Administrative Agent, and the Lenders from time to time party thereto (as previously amended, restated, supplemented, or otherwise modified from time to time prior to the date hereof, the "Credit Agreement"). The Credit Agreement provides for a $300,000,000 senior secured revolving credit facility (the "Revolving Credit Facility") in favor of the Borrower, with a scheduled maturity date of August 15, 2026. As of the date hereof, the aggregate outstanding principal amount of Loans drawn under the Revolving Credit Facility is $75,000,000. The Lenders party to this Consent and Waiver include Crestline National Bank, N.A. (in its capacity as a Lender), Piedmont Commerce Bank, a North Carolina state-chartered bank (as a Lender), and Lakeshore Federal Credit Corp., a Delaware corporation (as a Lender), and such Lenders collectively constitute at least the Required Lenders as defined in Section 1.01 of the Credit Agreement.

B. Proposed Convertible Notes Offering. The Borrower has informed the Administrative Agent and the Lenders that the Borrower proposes to issue and sell, pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), up to $250,000,000 aggregate principal amount of its 2.75% Convertible Senior Notes due 2028 (the "Convertible Notes"), with an option granted to the initial purchasers thereof to purchase up to an additional $37,500,000 aggregate principal amount of Convertible Notes (the "Over-Allotment Option"), resulting in a total potential aggregate principal amount of up to $287,500,000. The Convertible Notes will be unsecured senior obligations of the Borrower, maturing on June 1, 2028, and will bear interest at a rate of 2.75% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, commencing on December 1, 2023. The Convertible Notes will be convertible into shares of the Borrower's common stock, par value $0.001 per share (the "Common Stock"), at an initial conversion rate of 10.5820 shares of Common Stock per $1,000 principal amount of Convertible Notes, corresponding to an initial conversion price of approximately $94.50 per share. The Convertible Notes will be issued pursuant to an Indenture (the "Indenture") to be entered into between the Borrower and Broadmere Trust Company, N.A., as trustee (the "Trustee"). In connection with the offering of the Convertible Notes, the Borrower also intends to enter into privately negotiated capped call transactions (the "Capped Call Transactions") with Ridgepoint Capital Markets LLC and Northvane Financial Products LP (collectively, the "Capped Call Counterparties"), at an aggregate cost of approximately $28,750,000, in order to offset potential dilution to the Borrower's Common Stock upon any conversion of the Convertible Notes.

C. Covenant Restriction. Section 7.01(b) of the Credit Agreement restricts the Borrower from incurring, creating, assuming, or suffering to exist any Indebtedness other than Permitted Indebtedness as defined in Section 1.01 of the Credit Agreement. The incurrence of the Convertible Notes constitutes Indebtedness that does not fall within the existing definition of "Permitted Indebtedness" under the Credit Agreement and therefore requires the consent of the Required Lenders under the terms of the Credit Agreement.

D. Request for Consent and Waiver. The Borrower has requested that the Administrative Agent and the Required Lenders (i) consent to the incurrence of the Convertible Notes (and any guarantee or other obligations related thereto, if any) as "Permitted Additional Indebtedness" for purposes of Section 7.01(b) of the Credit Agreement, (ii) waive any Default or Event of Default that would otherwise arise solely as a result of the Borrower's entry into the Indenture, the Purchase Agreement (as defined below), the Capped Call Transactions, and the issuance and sale of the Convertible Notes, and (iii) agree to certain related amendments to the Credit Agreement as set forth herein.

E. Agreement. The Administrative Agent and the Required Lenders are willing to grant such consent and waiver, subject to and upon the terms and conditions set forth in this Consent and Waiver.

F. Capitalized Terms. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.

NOW, THEREFORE, in consideration of the foregoing premises, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1 — DEFINITIONS

Section 1.1 Defined Terms. As used in this Consent and Waiver, the following terms shall have the meanings set forth below:

"Capped Call Transactions" has the meaning set forth in Recital B, and shall include the ISDA Master Agreements (each based on the 2002 ISDA Master Agreement form) and related Confirmations to be entered into between the Borrower and each of the Capped Call Counterparties (Ridgepoint Capital Markets LLC and Northvane Financial Products LP), as such agreements may be amended, supplemented, or otherwise modified from time to time in accordance with their terms and the terms of this Consent and Waiver.

"Convertible Notes" has the meaning set forth in Recital B.

"Convertible Notes Closing Date" means the date on which the Convertible Notes are first issued and delivered to the initial purchasers, which is expected to be on or about May 30, 2023, or such other date as may be agreed among the Borrower and the initial purchasers pursuant to the Purchase Agreement.

"Convertible Notes Documents" means, collectively, (a) the Indenture, dated as of the Convertible Notes Closing Date, between the Borrower and Broadmere Trust Company, N.A., as Trustee, (b) the Convertible Notes issued thereunder (including any Convertible Notes issued upon exercise of the Over-Allotment Option), (c) the Purchase Agreement, dated as of May 24, 2023 (or such other date as the Borrower may confirm to the Administrative Agent), among the Borrower, Ridgepoint Capital Markets LLC, as representative of the initial purchasers, Harborstone Securities Inc., and Velthorn Zanthor & Co. (the "Purchase Agreement"), (d) the Offering Memorandum prepared in connection with the offering of the Convertible Notes (the "Offering Memorandum"), and (e) any other agreements, instruments, certificates, or documents entered into or delivered in connection with the foregoing, in each case as may be amended, supplemented, or otherwise modified from time to time in accordance with their terms and the terms of this Consent and Waiver.

"Net Proceeds" means the gross proceeds received by the Borrower from the issuance and sale of the Convertible Notes, less (a) the initial purchasers' discount payable to the initial purchasers pursuant to the Purchase Agreement, (b) the aggregate cost of the Capped Call Transactions, and (c) estimated offering expenses incurred by the Borrower in connection with the issuance and sale of the Convertible Notes. For the avoidance of doubt, the Borrower intends to use a portion of the Net Proceeds to repay $75,000,000 of outstanding borrowings under the Revolving Credit Facility.

"Over-Allotment Option" has the meaning set forth in Recital B.

All other capitalized terms used and not defined in this Consent and Waiver shall have the respective meanings assigned to such terms in the Credit Agreement.

SECTION 2 — LIMITED CONSENT

Section 2.1 Consent to Incurrence of Convertible Notes. Subject to the terms and conditions of this Consent and Waiver, including the satisfaction (or waiver by the Administrative Agent) of each of the conditions precedent set forth in Section 5 hereof, the Administrative Agent and each of the undersigned Lenders (constituting at least the Required Lenders under the Credit Agreement) hereby consent to:

(a) the Borrower's incurrence of the Convertible Notes in an aggregate principal amount not to exceed $287,500,000 (being $250,000,000, plus up to $37,500,000 pursuant to the Over-Allotment Option) pursuant to the terms and conditions of the Indenture;

(b) the Borrower's entry into, execution and delivery of, and performance of its obligations under, each of the Convertible Notes Documents, including without limitation the Indenture, the Purchase Agreement, and the Convertible Notes;

(c) the performance by the Borrower of all of its obligations under the Convertible Notes Documents in accordance with their respective terms; and

(d) the issuance of shares of Common Stock of the Borrower upon conversion of the Convertible Notes in accordance with the terms and conditions of the Indenture, including any net share settlement or combination settlement elected by the Borrower thereunder.

Section 2.2 Consent to Capped Call Transactions. The Administrative Agent and the undersigned Lenders further consent to the Borrower's entry into the Capped Call Transactions with the Capped Call Counterparties, including the execution, delivery, and performance by the Borrower of the related ISDA Master Agreements and Confirmations with each of Ridgepoint Capital Markets LLC and Northvane Financial Products LP, and the payment by the Borrower of the aggregate capped call premium in an amount not to exceed $28,750,000 in the aggregate (being $17,250,000 to Ridgepoint Capital Markets LLC and $11,500,000 to Northvane Financial Products LP), such payment to be funded from the gross proceeds of the Convertible Notes offering. The consent granted pursuant to this Section 2.2 extends to any unwind, exercise, settlement, or termination of the Capped Call Transactions in accordance with their terms.

Section 2.3 Consent to Use of Proceeds. The Administrative Agent and the undersigned Lenders consent to the Borrower's application and use of the Net Proceeds of the Convertible Notes as follows:

(i) payment of the cost of the Capped Call Transactions (in an aggregate amount not exceeding $28,750,000);

(ii) repayment of $75,000,000 of outstanding borrowings under the Revolving Credit Facility; and

(iii) general corporate purposes of the Borrower, including without limitation working capital, potential acquisitions, research and development expenditures, and capital expenditures.

For the avoidance of doubt, the consent to the use of proceeds set forth in this Section 2.3 is in addition to, and does not limit, any other permitted use of proceeds under the Credit Agreement or the other Loan Documents.

Section 2.4 Treatment as Permitted Additional Indebtedness. For purposes of Section 7.01(b) of the Credit Agreement and any other provision of the Credit Agreement or the other Loan Documents that restricts or limits the incurrence of Indebtedness by the Borrower, the Convertible Notes (in an aggregate principal amount not exceeding $287,500,000, together with any interest, fees, premiums, make-whole payments, and other amounts payable thereunder or in respect thereof) shall constitute "Permitted Additional Indebtedness" and shall be permitted to be incurred, maintained, and outstanding thereunder without giving rise to a Default or Event of Default under the Credit Agreement. The obligations of the Borrower arising under or in connection with the Capped Call Transactions shall not constitute "Indebtedness" for purposes of the Credit Agreement; provided, however, that to the extent that any such obligations are determined to constitute "Indebtedness" for purposes of the Credit Agreement, such obligations shall also be treated as Permitted Additional Indebtedness permitted under the Credit Agreement.

Section 2.5 Limitations on Consent. The consent granted in this Section 2 is limited solely and exclusively to the specific matters described in Sections 2.1, 2.2, 2.3, and 2.4 above and shall not be construed as:

(a) a consent to any other incurrence of Indebtedness by the Borrower or any Subsidiary, any other amendment, modification, or waiver of the Credit Agreement or any other Loan Document, or any other transaction or action not expressly contemplated by this Consent and Waiver;

(b) a waiver of the Administrative Agent's or any Lender's right to enforce any other provision of the Credit Agreement or the other Loan Documents;

(c) a consent to the granting of any Liens to secure the Convertible Notes or any obligations under the Indenture, the Convertible Notes Documents, or the Capped Call Transactions; the Convertible Notes must remain unsecured at all times;

(d) a consent to the establishment of any arrangement pursuant to which the obligations under the Indenture or the Convertible Notes would rank senior in right of payment to the Obligations under the Credit Agreement; no provision of the Indenture, the Convertible Notes, or any other Convertible Notes Document shall restrict the ability of the Borrower to make payments under, comply with the covenants of, or perform its obligations under, the Credit Agreement or any other Loan Document; or

(e) the creation of a course of dealing or any obligation on the part of the Administrative Agent or any Lender to grant any future consent, waiver, or amendment.

The Convertible Notes shall constitute senior unsecured obligations of the Borrower that are either pari passu with or, to the extent structurally or contractually subordinated, junior to the Obligations under the Credit Agreement.

SECTION 3 — LIMITED WAIVER

Section 3.1 Waiver of Defaults. Effective upon the satisfaction of the conditions precedent set forth in Section 5 hereof, the Administrative Agent and each of the undersigned Lenders (constituting at least the Required Lenders) hereby waive any Default or Event of Default under the Credit Agreement that would arise solely and directly from:

(a) the incurrence of the Convertible Notes and the entry into, execution, delivery, and performance of the Convertible Notes Documents by the Borrower, including the Indenture and the Purchase Agreement;

(b) the entry into, execution, delivery, and performance of the Capped Call Transactions by the Borrower, including the related ISDA Master Agreements and Confirmations with the Capped Call Counterparties;

(c) the payment of the aggregate capped call premium (not exceeding $28,750,000), the initial purchasers' discount (not exceeding $5,750,000), and related offering expenses (estimated at approximately $1,200,000) from the gross proceeds of the Convertible Notes offering; and

(d) the filing or delivery of any notices, applications, reports, or other documents in connection with the Convertible Notes offering, including without limitation the supplemental listing application filed with The Nasdaq Stock Market LLC with respect to the shares of Common Stock issuable upon conversion of the Convertible Notes, and any filings made with the Securities and Exchange Commission in connection therewith.

Section 3.2 Scope of Waiver. The waiver set forth in Section 3.1 is limited solely and exclusively to the specific Defaults and Events of Default described therein and shall not extend to, or be construed as a waiver of, any other Default or Event of Default, whether currently existing or hereafter arising, under the Credit Agreement or any other Loan Document. No course of dealing between the Borrower, the Administrative Agent, and the Lenders, and no delay or failure on the part of the Administrative Agent or any Lender in exercising any right, power, or privilege under the Credit Agreement or any other Loan Document, shall operate as a waiver thereof or of any other right, power, or privilege, nor shall any single or partial exercise of any such right, power, or privilege preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies of the Administrative Agent and the Lenders under the Credit Agreement and the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have at law or in equity.

SECTION 4 — AMENDMENTS TO CREDIT AGREEMENT

Section 4.1 Amendment to Definition of "Permitted Indebtedness." Section 1.01 of the Credit Agreement is hereby amended to add the following new clause (q) (or such other appropriate designation, as determined by the Administrative Agent) to the definition of "Permitted Indebtedness" (or, if such term is defined as "Permitted Additional Indebtedness," to the definition of "Permitted Additional Indebtedness"):

"(q) Indebtedness of the Borrower in respect of the 2.75% Convertible Senior Notes due 2028 issued pursuant to the Indenture, dated as of the Convertible Notes Closing Date, between the Borrower and Broadmere Trust Company, N.A., as Trustee, in an aggregate principal amount not exceeding $287,500,000 (which amount includes the principal amount of Convertible Notes that may be issued upon exercise of the Over-Allotment Option), together with any interest, fees, premiums, make-whole payments, and other amounts payable thereunder or in respect thereof from time to time; provided that (i) such Indebtedness shall at all times remain unsecured, (ii) no Lien shall be granted to secure such Indebtedness or any obligations arising under the Indenture, and (iii) such Indebtedness shall not be guaranteed by any Subsidiary of the Borrower unless the Administrative Agent shall have received prior written notice thereof and such guarantee shall be unsecured."

Section 4.2 Amendment to Negative Covenants. To the extent necessary to give full effect to the consent and waiver set forth herein:

(a) Section 7.01(b) of the Credit Agreement is hereby amended to expressly permit the incurrence of the Indebtedness described in Section 4.1 above without violation of any negative covenant contained therein.

(b) To the extent that any covenant in the Credit Agreement restricting Investments or Restricted Payments would be implicated by the payment of the aggregate capped call premium in connection with the Capped Call Transactions, such covenant is hereby clarified and amended to permit the payment by the Borrower of the aggregate capped call premium (in an amount not exceeding $28,750,000) from the gross proceeds of the Convertible Notes offering, and such payment shall not constitute a "Restricted Payment" or a prohibited "Investment" for purposes of the Credit Agreement.

Section 4.3 Amendment to Reporting Covenants. In addition to the reporting obligations set forth in Article VI of the Credit Agreement, the Borrower shall:

(a) provide the Administrative Agent with copies of the executed Indenture, the form of Convertible Note, and the executed Capped Call Confirmations (or, if the Borrower reasonably determines that the full Confirmations contain proprietary commercial terms, detailed term summaries thereof in form and substance reasonably satisfactory to the Administrative Agent) within ten (10) Business Days following the Convertible Notes Closing Date;

(b) notify the Administrative Agent promptly, and in any event within three (3) Business Days, upon any exercise of the Over-Allotment Option by the initial purchasers and, following the expiration of the Over-Allotment Option period, provide written notice to the Administrative Agent of the final aggregate principal amount of Convertible Notes issued and delivered; and

(c) deliver to the Administrative Agent, concurrently with each Compliance Certificate delivered pursuant to the Credit Agreement, a statement confirming the aggregate principal amount of Convertible Notes then outstanding and whether any conversion, redemption, or repurchase of Convertible Notes has occurred since the most recent Compliance Certificate.

Section 4.4 No Other Amendments. Except as expressly set forth in this Section 4, the Credit Agreement and all other Loan Documents shall remain in full force and effect, unmodified and unamended. The amendments set forth in this Section 4 shall be deemed to be amendments to the Credit Agreement for all purposes, and the Credit Agreement, as so amended, is hereby ratified and confirmed in all respects.

SECTION 5 — CONDITIONS PRECEDENT

Section 5.1 Effectiveness Conditions. This Consent and Waiver shall become effective as of the date first written above (May 22, 2023) upon the satisfaction (or waiver by the Administrative Agent in its sole discretion) of each of the following conditions precedent:

(a) Execution and Delivery. The Administrative Agent shall have received counterparts of this Consent and Waiver, duly executed and delivered by the Borrower and by Lenders constituting at least the Required Lenders under the Credit Agreement. Delivery of executed counterparts by facsimile or electronic transmission (including PDF) shall be sufficient for purposes of this clause (a).

(b) Representations and Warranties. Each of the representations and warranties of the Borrower set forth in Section 6 of this Consent and Waiver shall be true and correct in all material respects (or, in the case of any representation or warranty qualified by materiality or Material Adverse Effect, in all respects) as of the date hereof.

(c) No Default. No Default or Event of Default (other than those Defaults or Events of Default that are the subject of the waiver set forth in Section 3 hereof) shall have occurred and be continuing as of the date hereof, both before and after giving effect to this Consent and Waiver.

(d) No Material Adverse Effect. Since December 31, 2022 (being the last day of the Borrower's most recently completed fiscal year, fiscal year 2022, during which the Borrower reported revenue of approximately $812.4 million and Adjusted EBITDA of approximately $198.7 million), no event, condition, change, development, or occurrence shall have occurred that has had or could reasonably be expected to have a Material Adverse Effect (as defined in the Credit Agreement).

(e) Legal Opinions. The Administrative Agent shall have received a written legal opinion of Calderwood & Harkness LLP, counsel to the Borrower, addressed to the Administrative Agent and the Lenders, dated as of the date hereof, in form and substance reasonably satisfactory to the Administrative Agent, covering, among other things, the due organization and good standing of the Borrower, the due authorization, execution, and delivery of this Consent and Waiver by the Borrower, the enforceability of this Consent and Waiver against the Borrower, and the absence of conflicts with applicable law, the Borrower's organizational documents, and material agreements.

(f) Fees and Expenses. The Borrower shall have paid (or made satisfactory arrangements for the payment of) all reasonable and documented out-of-pocket fees, costs, and expenses of the Administrative Agent incurred in connection with the preparation, negotiation, execution, and delivery of this Consent and Waiver, including without limitation the reasonable fees and disbursements of Whitmore & Aldrich LLP, counsel to the Administrative Agent.

(g) Officer's Certificate. The Administrative Agent shall have received a certificate of an authorized officer of the Borrower, substantially in the form attached hereto as Exhibit A (the "Officer's Certificate"), executed by the Chief Financial Officer (Priya Nandakumar) or the Treasurer (Rachel Fontaine) of the Borrower, certifying as to the satisfaction of the conditions set forth in clauses (b), (c), and (d) of this Section 5.1.

(h) Board Authorization. The Administrative Agent shall have received certified copies of the resolutions of the Board of Directors of the Borrower (or a duly authorized committee thereof) authorizing the execution, delivery, and performance of this Consent and Waiver, together with a certificate of the Secretary or an Assistant Secretary of the Borrower certifying as to the incumbency and signatures of the officers executing this Consent and Waiver and attesting to the adoption and continuing effectiveness of such resolutions. The parties acknowledge that the Board of Directors of the Borrower adopted resolutions on May 19, 2023, authorizing the Convertible Notes offering and related transactions, with preliminary authorization sufficient for the execution and delivery of this Consent and Waiver having been obtained prior to such date.

Section 5.2 Post-Closing Conditions. Within five (5) Business Days following the Convertible Notes Closing Date, the Borrower shall deliver to the Administrative Agent (with copies to each Lender, if requested by the Administrative Agent) each of the following:

(a) a fully executed copy of the Indenture, dated as of the Convertible Notes Closing Date, between the Borrower and Broadmere Trust Company, N.A., as Trustee;

(b) a certificate of an authorized officer of the Borrower setting forth the aggregate principal amount of Convertible Notes actually issued and delivered on the Convertible Notes Closing Date (including whether the Over-Allotment Option was exercised in whole or in part, and the final aggregate principal amount of Convertible Notes outstanding);

(c) evidence satisfactory to the Administrative Agent that $75,000,000 of outstanding borrowings under the Revolving Credit Facility have been repaid from the Net Proceeds of the Convertible Notes offering, including wire transfer confirmations or other customary evidence of payment;

(d) copies of the executed Capped Call Confirmations (or, at the Borrower's election and subject to the Administrative Agent's reasonable satisfaction, detailed term summaries thereof) with each of Ridgepoint Capital Markets LLC and Northvane Financial Products LP, reflecting the economic terms of the Capped Call Transactions; and

(e) such other documents, instruments, and information as the Administrative Agent may reasonably request in connection with the consummation of the Convertible Notes offering and the Capped Call Transactions.

The failure to satisfy any post-closing condition set forth in this Section 5.2 within the time period specified herein shall constitute an Event of Default under the Credit Agreement unless the Administrative Agent, in its reasonable discretion, shall have agreed to extend such time period in writing.

SECTION 6 — REPRESENTATIONS AND WARRANTIES OF THE BORROWER

The Borrower hereby represents and warrants to the Administrative Agent and the Lenders as follows:

Section 6.1 Reaffirmation. All representations and warranties of the Borrower set forth in Article V of the Credit Agreement and in each other Loan Document to which the Borrower is a party are true and correct in all material respects (or, in the case of any representation or warranty qualified by materiality or Material Adverse Effect, in all respects) as of the date hereof, except to the extent that any such representation or warranty expressly relates to a specific earlier date, in which case such representation or warranty shall be true and correct in all material respects (or in all respects, as applicable) as of such earlier date.

Section 6.2 Due Authorization. The execution, delivery, and performance by the Borrower of this Consent and Waiver have been duly authorized by all necessary corporate action on the part of the Borrower, including the approval of the Board of Directors of the Borrower (or a duly authorized committee thereof). No other corporate action, consent, approval, or authorization is required on the part of the Borrower in connection with the execution, delivery, and performance of this Consent and Waiver. The Borrower is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware (Delaware file no. 5738291), and has the corporate power and authority to execute, deliver, and perform its obligations under this Consent and Waiver and to consummate the transactions contemplated hereby.

Section 6.3 No Conflict. The execution, delivery, and performance of this Consent and Waiver by the Borrower, and the consummation of the Convertible Notes offering and the Capped Call Transactions, do not and will not:

(a) violate the Amended and Restated Certificate of Incorporation or the Amended and Restated Bylaws of the Borrower;

(b) violate any applicable law, statute, rule, regulation, order, judgment, decree, or injunction of any Governmental Authority binding upon or applicable to the Borrower or any of its properties or assets;

(c) result in a breach of, or constitute a default (with or without notice or lapse of time, or both) under, or give rise to any right of acceleration, termination, or cancellation under, any material agreement, contract, indenture, mortgage, deed of trust, or other instrument to which the Borrower is a party or by which the Borrower or any of its properties or assets is bound (other than the Credit Agreement provisions that are the subject of the consent and waiver granted herein); or

(d) result in the creation or imposition of any Lien upon any property or asset of the Borrower or any of its Subsidiaries (other than Liens permitted under the Credit Agreement).

Section 6.4 Enforceability. This Consent and Waiver constitutes the legal, valid, and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, subject to (a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer, and other similar laws of general applicability affecting creditors' rights generally and (b) general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.

Section 6.5 No Default. After giving effect to this Consent and Waiver and the transactions contemplated hereby, no Default or Event of Default has occurred and is continuing or would result from the execution, delivery, and performance of this Consent and Waiver.

Section 6.6 Use of Proceeds. The proceeds of the Convertible Notes will be used solely as described in Recital B and Section 2.3 of this Consent and Waiver, including without limitation the repayment of $75,000,000 of outstanding borrowings under the Revolving Credit Facility. No portion of the proceeds of the Convertible Notes will be used, directly or indirectly, for any purpose that would violate any applicable law or regulation, including without limitation Regulation U of the Board of Governors of the Federal Reserve System.

Section 6.7 No Material Adverse Effect. Since December 31, 2022, no event, condition, change, development, or occurrence has occurred that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect (as defined in the Credit Agreement).

SECTION 7 — COVENANTS

Section 7.1 Repayment of Revolving Credit Facility. The Borrower covenants and agrees that, on or promptly following the Convertible Notes Closing Date (and in any event within three (3) Business Days thereof), the Borrower shall apply $75,000,000 of the Net Proceeds to the repayment of outstanding borrowings under the Revolving Credit Facility. Such repayment shall be made to the Administrative Agent for the pro rata benefit of the Lenders in accordance with the applicable provisions of the Credit Agreement. Upon such repayment, the amounts so repaid shall be available for re-borrowing under the Revolving Credit Facility, subject to the terms and conditions of the Credit Agreement.

Section 7.2 Compliance with Convertible Notes Documents. The Borrower shall comply in all material respects with the terms and conditions of the Convertible Notes Documents and the Capped Call Transactions. The Borrower shall not amend, supplement, modify, or waive any provision of any Convertible Notes Document (including the Indenture, the Purchase Agreement, or any Capped Call Confirmation) in any manner that would be materially adverse to the interests of the Administrative Agent or the Lenders under the Credit Agreement without the prior written consent of the Administrative Agent (acting at the direction of the Required Lenders). Without limiting the generality of the foregoing, the Borrower shall not agree to any amendment or modification of the Indenture or the Convertible Notes that would (a) increase the aggregate principal amount of the Convertible Notes above $287,500,000, (b) increase the interest rate on the Convertible Notes, (c) shorten the stated maturity of the Convertible Notes, (d) add any security or collateral in respect of the Convertible Notes, or (e) add any covenant, restriction, or event of default that would be more restrictive on the Borrower than the covenants, restrictions, and events of default contained in the Credit Agreement, in each case without the prior written consent of the Required Lenders.

Section 7.3 Unsecured Status. The Borrower shall not at any time grant, create, incur, assume, or suffer to exist any Lien on any property or asset of the Borrower or any of its Subsidiaries to secure the Convertible Notes, the obligations under the Indenture, or the obligations under the Capped Call Transactions. The Convertible Notes shall at all times remain unsecured obligations of the Borrower.

Section 7.4 Notification Obligations. The Borrower shall promptly, and in any event within five (5) Business Days, notify the Administrative Agent in writing upon the occurrence of any of the following:

(a) any "Default" or "Event of Default" (as such terms are defined in the Indenture) under the Indenture or the Convertible Notes;

(b) any "Fundamental Change" (as defined in the Indenture), including without limitation any change of control, merger, consolidation, or delisting event that triggers a repurchase right under the Indenture;

(c) any exercise by the Borrower of the optional redemption right under the Convertible Notes (including the applicable redemption date and aggregate principal amount of Convertible Notes to be redeemed); and

(d) any conversion of the Convertible Notes that results in the issuance of shares of Common Stock of the Borrower (including the number of shares issued and the aggregate principal amount of Convertible Notes converted).

SECTION 8 — REAFFIRMATION OF CREDIT AGREEMENT AND LOAN DOCUMENTS

Section 8.1 Reaffirmation. Except as expressly modified by this Consent and Waiver, the Credit Agreement and all other Loan Documents shall remain in full force and effect and are hereby ratified, reaffirmed, and confirmed in all respects. The Borrower hereby reaffirms all of its obligations under the Credit Agreement and each other Loan Document to which it is a party, including without limitation the obligation to repay all Obligations under the Credit Agreement and to comply with all covenants, agreements, and conditions set forth therein. This Consent and Waiver shall not constitute a novation of any Obligation or any other obligation of the Borrower under the Credit Agreement or any other Loan Document.

Section 8.2 Liens and Collateral. All Liens heretofore granted under the Loan Documents (including without limitation the Security Agreement and any pledge agreements, mortgages, deeds of trust, or other collateral documents) as security for the Obligations under the Credit Agreement continue in full force and effect and are unimpaired, undiminished, and unaffected by this Consent and Waiver. Nothing contained herein shall be deemed to release, diminish, impair, or otherwise affect any collateral securing the Obligations under the Credit Agreement, and the Administrative Agent shall continue to hold all such collateral as security for the Obligations in accordance with the terms of the applicable Loan Documents.

Section 8.3 References to Credit Agreement. On and after the effective date of this Consent and Waiver, (a) each reference in the Credit Agreement to "this Agreement," "hereunder," "hereof," "herein," or words of like import, and each reference in the other Loan Documents to the "Credit Agreement," shall mean and be a reference to the Credit Agreement as modified and amended by this Consent and Waiver, and (b) this Consent and Waiver shall constitute a "Loan Document" for all purposes under the Credit Agreement and the other Loan Documents.

SECTION 9 — MISCELLANEOUS

Section 9.1 Governing Law. THIS CONSENT AND WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAWS PROVISIONS THEREOF (OTHER THAN SECTION 5-1401 AND SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW), CONSISTENT WITH THE GOVERNING LAW PROVISIONS OF SECTION 10.14 OF THE CREDIT AGREEMENT.

Section 9.2 Counterparts. This Consent and Waiver may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Consent and Waiver by facsimile or other electronic transmission (including "PDF" or "TIFF" format) shall be effective as delivery of a manually executed counterpart of this Consent and Waiver. The words "execution," "signed," "signature," and words of like import in this Consent and Waiver shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity, or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any similar state law based on the Uniform Electronic Transactions Act.

Section 9.3 Headings. The headings and captions in this Consent and Waiver are for convenience of reference only and shall not define, limit, or otherwise affect the construction or interpretation of any provision hereof.

Section 9.4 Severability. If any provision of this Consent and Waiver is held to be illegal, invalid, or unenforceable by any court of competent jurisdiction, the legality, validity, and enforceability of the remaining provisions of this Consent and Waiver shall not be affected or impaired thereby. Any illegal, invalid, or unenforceable provision shall be deemed modified to the minimum extent necessary to make it legal, valid, and enforceable, and if no such modification is possible, shall be deemed severed from this Consent and Waiver. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 9.5 Successors and Assigns. This Consent and Waiver shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns in accordance with the terms of the Credit Agreement. No party may assign or transfer its rights or obligations under this Consent and Waiver except in accordance with the provisions of the Credit Agreement governing assignments.

Section 9.6 Integration; Entire Agreement. This Consent and Waiver, together with the Credit Agreement and the other Loan Documents, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, negotiations, representations, warranties, and understandings, whether oral or written, relating to such subject matter. There are no conditions to the effectiveness of this Consent and Waiver other than those expressly set forth in Section 5 hereof.

Section 9.7 No Third-Party Beneficiaries. Nothing in this Consent and Waiver, express or implied, is intended to or shall confer upon any Person (other than the parties hereto, the Lenders under the Credit Agreement, and their respective successors and permitted assigns) any right, benefit, or remedy of any nature whatsoever under or by reason of this Consent and Waiver. Without limiting the foregoing, neither the Trustee, the Capped Call Counterparties, the initial purchasers, nor any holder of the Convertible Notes shall be a third-party beneficiary of this Consent and Waiver.

Section 9.8 Expenses. The Borrower agrees to pay and reimburse the Administrative Agent for all reasonable and documented out-of-pocket costs, fees, and expenses incurred by the Administrative Agent in connection with the preparation, negotiation, execution, delivery, and administration of this Consent and Waiver, including without limitation the reasonable fees, charges, and disbursements of Whitmore & Aldrich LLP, counsel to the Administrative Agent, in accordance with the expense reimbursement provisions set forth in Section 10.04 of the Credit Agreement.

[Remainder of this page intentionally left blank. Signature pages follow.]

SIGNATURE PAGES TO LIMITED CONSENT AND WAIVER

IN WITNESS WHEREOF, the parties hereto have caused this Consent and Waiver to be duly executed and delivered by their respective authorized officers as of the date first written above.

BORROWER:

OPTIWAVE SEMICONDUCTOR CORP.

By: ________

Name: Priya Nandakumar

Title: Chief Financial Officer

Date: May 22, 2023

ADMINISTRATIVE AGENT:

CRESTLINE NATIONAL BANK, N.A., as Administrative Agent

By: ________

Name: Jonathan M. Hargrove

Title: Senior Vice President

Date: May 22, 2023

LENDERS:

CRESTLINE NATIONAL BANK, N.A., as a Lender

By: ________

Name: Jonathan M. Hargrove

Title: Senior Vice President

PIEDMONT COMMERCE BANK, as a Lender

By: ________

Name: Catherine L. Brennan

Title: Managing Director

LAKESHORE FEDERAL CREDIT CORP., as a Lender

By: ________

Name: David R. Whitfield

Title: Vice President, Credit Administration

EXHIBIT A

FORM OF OFFICER'S CERTIFICATE

OFFICER'S CERTIFICATE

Delivered Pursuant to Section 5.1(g) of the Limited Consent and Waiver dated as of May 22, 2023

Reference is made to that certain Limited Consent and Waiver, dated as of May 22, 2023 (the "Consent and Waiver"), among Optiwave Semiconductor Corp., a Delaware corporation (the "Borrower"), Crestline National Bank, N.A., as Administrative Agent, and the Lenders party thereto, under the Credit Agreement dated as of August 15, 2021 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Consent and Waiver or, if not defined therein, in the Credit Agreement.

The undersigned, Priya Nandakumar, in her capacity as Chief Financial Officer of the Borrower, and not in her individual capacity, hereby certifies to the Administrative Agent and the Lenders, as of the date hereof, as follows:

(i) Representations and Warranties. The representations and warranties of the Borrower set forth in Section 6 of the Consent and Waiver are true and correct in all material respects (or, in the case of any representation or warranty qualified by materiality or Material Adverse Effect, in all respects) as of the date hereof, except to the extent that any such representation or warranty expressly relates to a specific earlier date, in which case such representation or warranty is true and correct in all material respects (or in all respects, as applicable) as of such earlier date.

(ii) No Default. No Default or Event of Default (other than those Defaults or Events of Default that are the subject of the waiver set forth in Section 3 of the Consent and Waiver) has occurred and is continuing as of the date hereof, both before and after giving effect to the Consent and Waiver.

(iii) No Material Adverse Effect. Since December 31, 2022, no event, condition, change, development, or occurrence has occurred that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect (as defined in the Credit Agreement).

(iv) Board Authorization. The Board of Directors of the Borrower has duly adopted resolutions authorizing the execution, delivery, and performance of the Consent and Waiver by the Borrower, and such resolutions have not been amended, modified, revoked, or rescinded and remain in full force and effect as of the date hereof.

IN WITNESS WHEREOF, the undersigned has executed this Officer's Certificate as of May 22, 2023.

OPTIWAVE SEMICONDUCTOR CORP.

By: ________

Name: Priya Nandakumar

Title: Chief Financial Officer

Date: May 22, 2023

EXHIBIT B

DESCRIPTION OF CONVERTIBLE NOTES AND CAPPED CALL TRANSACTIONS

(SUMMARY TERM SHEET)

The following is a summary description of the material terms of the Convertible Notes and the Capped Call Transactions. This summary is provided for informational purposes only and is qualified in its entirety by reference to the Convertible Notes Documents and the Capped Call Confirmations.

I. Convertible Notes Summary

II. Capped Call Transactions Summary

III. Use of Proceeds Summary

Note: The foregoing Use of Proceeds table assumes full exercise of the Over-Allotment Option. If the Over-Allotment Option is not exercised, or is exercised only in part, the gross proceeds and applicable deductions will be adjusted accordingly. In such event, the Net Proceeds available for general corporate purposes will be correspondingly reduced.

[End of Exhibit B]

Term	Description
Issuer	Optiwave Semiconductor Corp.
Title	2.75% Convertible Senior Notes due 2028
Aggregate Principal Amount	Up to $287,500,000 (including $37,500,000 Over-Allotment Option)
Coupon	2.75% per annum, payable semi-annually in arrears on June 1 and December 1, commencing December 1, 2023
Maturity	June 1, 2028
Conversion Rate	10.5820 shares of Common Stock per $1,000 principal amount of Convertible Notes
Initial Conversion Price	Approximately $94.50 per share (representing an approximately 28.8% premium over the reference price of $73.38 per share)
Net Share Settlement	The Borrower may elect to settle conversions in cash (up to the principal amount) and shares of Common Stock (for amounts in excess of the principal amount), or in any combination thereof
Optional Redemption	On or after June 6, 2026, the Borrower may redeem all or any portion of the Convertible Notes for cash if the last reported sale price of the Common Stock exceeds 130% of the conversion price (i.e., $122.85 per share) for at least 20 trading days during any 30 consecutive trading day period
Fundamental Change Put	Upon a Fundamental Change (as defined in the Indenture), holders may require the Borrower to repurchase the Convertible Notes at 100% of principal amount plus accrued and unpaid interest
Security	Unsecured
Ranking	Senior unsecured obligations of the Borrower, ranking pari passu in right of payment with all existing and future senior unsecured indebtedness of the Borrower
Trustee	Broadmere Trust Company, N.A.
Offering Format	Rule 144A offering to Qualified Institutional Buyers (QIBs)
CUSIP	683742AA5
ISIN	US683742AA53
Initial Purchasers	Ridgepoint Capital Markets LLC (lead left bookrunner, 60% allocation); Harborstone Securities Inc. (co-manager, 25% allocation); Velthorn Zanthor & Co. (co-manager, 15% allocation)
Initial Purchasers' discount	2.00% of aggregate principal amount ($5,000,000 on base offering; $5,750,000 on full exercise of Over-Allotment Option)
Term	Description
Counterparties	Ridgepoint Capital Markets LLC (60% notional / $172,500,000; premium: $17,250,000) and Northvane Financial Products LP (40% notional / $115,000,000; premium: $11,500,000)
Lower Strike Price	Approximately $94.50 per share (equal to the initial conversion price of the Convertible Notes)
Upper Strike (Cap) Price	$110.07 per share (representing a 50.0% premium over the reference price of $73.38 per share)
Aggregate Premium	$28,750,000
Expiration	June 1, 2028 (co-terminus with the maturity of the Convertible Notes)

Documentation	2002 ISDA Master Agreement and Confirmation between the Borrower and each Capped Call Counterparty
Governing Law	New York law
Purpose	To offset potential dilution to the Common Stock and/or offset any cash payments the Borrower is required to make in excess of the principal amount of the Convertible Notes upon conversion, with such offset subject to a cap based on the Cap Price
Item	Amount
Gross Proceeds (including full exercise of Over-Allotment Option)	$287,500,000
Less: Initial Purchasers' discount (2.00%)	($5,750,000)
Less: Capped Call Cost	($28,750,000)
Less: Estimated Offering Expenses	($1,200,000)
Net Proceeds	$251,800,000
Application: Revolving Credit Facility Repayment	($75,000,000)
Remainder: General Corporate Purposes	$176,800,000

LIMITED CONSENT AND WAIVER
dated as of May 22, 2023
among
OPTIWAVE SEMICONDUCTOR CORP., as Borrower,
CRESTLINE NATIONAL BANK, N.A., as Administrative Agent,
and
the LENDERS party hereto
Under the Credit Agreement dated as of August 15, 2021 (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement")
Governing a $300,000,000 Senior Secured Revolving Credit Facility
LIMITED CONSENT AND WAIVER
This LIMITED CONSENT AND WAIVER (this "Consent and Waiver"), dated as of May 22, 2023, is entered into among OPTIWAVE SEMICONDUCTOR CORP., a Delaware corporation (Delaware file no. 5738291; EIN 82-4917263) (the "Borrower" or the "Company"), with its principal executive offices at 4800 Great America Parkway, Suite 1200, San Jose, California 95054, CRESTLINE NATIONAL BANK, N.A., a national banking association, with offices at 227 Park Avenue, 14th Floor, New York, New York 10172, in its capacity as administrative agent (in such capacity, the "Administrative Agent") under the Credit Agreement (as defined below), and THE LENDERS party hereto (collectively, the "Lenders"), constituting at least the Required Lenders under Section 1.01 of the Credit Agreement.
RECITALS
A. Credit Agreement. Reference is made to that certain Credit Agreement, dated as of August 15, 2021, among the Borrower, the Administrative Agent, and the Lenders from time to time party thereto (as previously amended, restated, supplemented, or otherwise modified from time to time prior to the date hereof, the "Credit Agreement"). The Credit Agreement provides for a $300,000,000 senior secured revolving credit facility (the "Revolving Credit Facility") in favor of the Borrower, with a scheduled maturity date of August 15, 2026. As of the date hereof, the aggregate outstanding principal amount of Loans drawn under the Revolving Credit Facility is $75,000,000. The Lenders party to this Consent and Waiver include Crestline National Bank, N.A. (in its capacity as a Lender), Piedmont Commerce Bank, a North Carolina state-chartered bank (as a Lender), and Lakeshore Federal Credit Corp., a Delaware corporation (as a Lender), and such Lenders collectively constitute at least the Required Lenders as defined in Section 1.01 of the Credit Agreement.
B. Proposed Convertible Notes Offering. The Borrower has informed the Administrative Agent and the Lenders that the Borrower proposes to issue and sell, pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), up to $250,000,000 aggregate principal amount of its 2.75% Convertible Senior Notes due 2028 (the "Convertible Notes"), with an option granted to the initial purchasers thereof to purchase up to an additional $37,500,000 aggregate principal amount of Convertible Notes (the "Over-Allotment Option"), resulting in a total potential aggregate principal amount of up to $287,500,000. The Convertible Notes will be unsecured senior obligations of the Borrower, maturing on June 1, 2028, and will bear interest at a rate of 2.75% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, commencing on December 1, 2023. The Convertible Notes will be convertible into shares of the Borrower's common stock, par value $0.001 per share (the "Common Stock"), at an initial conversion rate of 10.5820 shares of Common Stock per $1,000 principal amount of Convertible Notes, corresponding to an initial conversion price of approximately $94.50 per share. The Convertible Notes will be issued pursuant to an Indenture (the "Indenture") to be entered into between the Borrower and Broadmere Trust Company, N.A., as trustee (the "Trustee"). In connection with the offering of the Convertible Notes, the Borrower also intends to enter into privately negotiated capped call transactions (the "Capped Call Transactions") with Ridgepoint Capital Markets LLC and Northvane Financial Products LP (collectively, the "Capped Call Counterparties"), at an aggregate cost of approximately $28,750,000, in order to offset potential dilution to the Borrower's Common Stock upon any conversion of the Convertible Notes.
C. Covenant Restriction. Section 7.01(b) of the Credit Agreement restricts the Borrower from incurring, creating, assuming, or suffering to exist any Indebtedness other than Permitted Indebtedness as defined in Section 1.01 of the Credit Agreement. The incurrence of the Convertible Notes constitutes Indebtedness that does not fall within the existing definition of "Permitted Indebtedness" under the Credit Agreement and therefore requires the consent of the Required Lenders under the terms of the Credit Agreement.
D. Request for Consent and Waiver. The Borrower has requested that the Administrative Agent and the Required Lenders (i) consent to the incurrence of the Convertible Notes (and any guarantee or other obligations related thereto, if any) as "Permitted Additional Indebtedness" for purposes of Section 7.01(b) of the Credit Agreement, (ii) waive any Default or Event of Default that would otherwise arise solely as a result of the Borrower's entry into the Indenture, the Purchase Agreement (as defined below), the Capped Call Transactions, and the issuance and sale of the Convertible Notes, and (iii) agree to certain related amendments to the Credit Agreement as set forth herein.
E. Agreement. The Administrative Agent and the Required Lenders are willing to grant such consent and waiver, subject to and upon the terms and conditions set forth in this Consent and Waiver.
F. Capitalized Terms. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing premises, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1 — DEFINITIONS
Section 1.1 Defined Terms. As used in this Consent and Waiver, the following terms shall have the meanings set forth below:
"Capped Call Transactions" has the meaning set forth in Recital B, and shall include the ISDA Master Agreements (each based on the 2002 ISDA Master Agreement form) and related Confirmations to be entered into between the Borrower and each of the Capped Call Counterparties (Ridgepoint Capital Markets LLC and Northvane Financial Products LP), as such agreements may be amended, supplemented, or otherwise modified from time to time in accordance with their terms and the terms of this Consent and Waiver.
"Convertible Notes" has the meaning set forth in Recital B.
"Convertible Notes Closing Date" means the date on which the Convertible Notes are first issued and delivered to the initial purchasers, which is expected to be on or about May 30, 2023, or such other date as may be agreed among the Borrower and the initial purchasers pursuant to the Purchase Agreement.
"Convertible Notes Documents" means, collectively, (a) the Indenture, dated as of the Convertible Notes Closing Date, between the Borrower and Broadmere Trust Company, N.A., as Trustee, (b) the Convertible Notes issued thereunder (including any Convertible Notes issued upon exercise of the Over-Allotment Option), (c) the Purchase Agreement, dated as of May 24, 2023 (or such other date as the Borrower may confirm to the Administrative Agent), among the Borrower, Ridgepoint Capital Markets LLC, as representative of the initial purchasers, Harborstone Securities Inc., and Velthorn Zanthor & Co. (the "Purchase Agreement"), (d) the Offering Memorandum prepared in connection with the offering of the Convertible Notes (the "Offering Memorandum"), and (e) any other agreements, instruments, certificates, or documents entered into or delivered in connection with the foregoing, in each case as may be amended, supplemented, or otherwise modified from time to time in accordance with their terms and the terms of this Consent and Waiver.
"Net Proceeds" means the gross proceeds received by the Borrower from the issuance and sale of the Convertible Notes, less (a) the initial purchasers' discount payable to the initial purchasers pursuant to the Purchase Agreement, (b) the aggregate cost of the Capped Call Transactions, and (c) estimated offering expenses incurred by the Borrower in connection with the issuance and sale of the Convertible Notes. For the avoidance of doubt, the Borrower intends to use a portion of the Net Proceeds to repay $75,000,000 of outstanding borrowings under the Revolving Credit Facility.
"Over-Allotment Option" has the meaning set forth in Recital B.
All other capitalized terms used and not defined in this Consent and Waiver shall have the respective meanings assigned to such terms in the Credit Agreement.
SECTION 2 — LIMITED CONSENT
Section 2.1 Consent to Incurrence of Convertible Notes. Subject to the terms and conditions of this Consent and Waiver, including the satisfaction (or waiver by the Administrative Agent) of each of the conditions precedent set forth in Section 5 hereof, the Administrative Agent and each of the undersigned Lenders (constituting at least the Required Lenders under the Credit Agreement) hereby consent to:
(a) the Borrower's incurrence of the Convertible Notes in an aggregate principal amount not to exceed $287,500,000 (being $250,000,000, plus up to $37,500,000 pursuant to the Over-Allotment Option) pursuant to the terms and conditions of the Indenture;
(b) the Borrower's entry into, execution and delivery of, and performance of its obligations under, each of the Convertible Notes Documents, including without limitation the Indenture, the Purchase Agreement, and the Convertible Notes;
(c) the performance by the Borrower of all of its obligations under the Convertible Notes Documents in accordance with their respective terms; and
(d) the issuance of shares of Common Stock of the Borrower upon conversion of the Convertible Notes in accordance with the terms and conditions of the Indenture, including any net share settlement or combination settlement elected by the Borrower thereunder.
Section 2.2 Consent to Capped Call Transactions. The Administrative Agent and the undersigned Lenders further consent to the Borrower's entry into the Capped Call Transactions with the Capped Call Counterparties, including the execution, delivery, and performance by the Borrower of the related ISDA Master Agreements and Confirmations with each of Ridgepoint Capital Markets LLC and Northvane Financial Products LP, and the payment by the Borrower of the aggregate capped call premium in an amount not to exceed $28,750,000 in the aggregate (being $17,250,000 to Ridgepoint Capital Markets LLC and $11,500,000 to Northvane Financial Products LP), such payment to be funded from the gross proceeds of the Convertible Notes offering. The consent granted pursuant to this Section 2.2 extends to any unwind, exercise, settlement, or termination of the Capped Call Transactions in accordance with their terms.
Section 2.3 Consent to Use of Proceeds. The Administrative Agent and the undersigned Lenders consent to the Borrower's application and use of the Net Proceeds of the Convertible Notes as follows:
(i) payment of the cost of the Capped Call Transactions (in an aggregate amount not exceeding $28,750,000);
(ii) repayment of $75,000,000 of outstanding borrowings under the Revolving Credit Facility; and
(iii) general corporate purposes of the Borrower, including without limitation working capital, potential acquisitions, research and development expenditures, and capital expenditures.
For the avoidance of doubt, the consent to the use of proceeds set forth in this Section 2.3 is in addition to, and does not limit, any other permitted use of proceeds under the Credit Agreement or the other Loan Documents.
Section 2.4 Treatment as Permitted Additional Indebtedness. For purposes of Section 7.01(b) of the Credit Agreement and any other provision of the Credit Agreement or the other Loan Documents that restricts or limits the incurrence of Indebtedness by the Borrower, the Convertible Notes (in an aggregate principal amount not exceeding $287,500,000, together with any interest, fees, premiums, make-whole payments, and other amounts payable thereunder or in respect thereof) shall constitute "Permitted Additional Indebtedness" and shall be permitted to be incurred, maintained, and outstanding thereunder without giving rise to a Default or Event of Default under the Credit Agreement. The obligations of the Borrower arising under or in connection with the Capped Call Transactions shall not constitute "Indebtedness" for purposes of the Credit Agreement; provided, however, that to the extent that any such obligations are determined to constitute "Indebtedness" for purposes of the Credit Agreement, such obligations shall also be treated as Permitted Additional Indebtedness permitted under the Credit Agreement.
Section 2.5 Limitations on Consent. The consent granted in this Section 2 is limited solely and exclusively to the specific matters described in Sections 2.1, 2.2, 2.3, and 2.4 above and shall not be construed as:
(a) a consent to any other incurrence of Indebtedness by the Borrower or any Subsidiary, any other amendment, modification, or waiver of the Credit Agreement or any other Loan Document, or any other transaction or action not expressly contemplated by this Consent and Waiver;
(b) a waiver of the Administrative Agent's or any Lender's right to enforce any other provision of the Credit Agreement or the other Loan Documents;
(c) a consent to the granting of any Liens to secure the Convertible Notes or any obligations under the Indenture, the Convertible Notes Documents, or the Capped Call Transactions; the Convertible Notes must remain unsecured at all times;
(d) a consent to the establishment of any arrangement pursuant to which the obligations under the Indenture or the Convertible Notes would rank senior in right of payment to the Obligations under the Credit Agreement; no provision of the Indenture, the Convertible Notes, or any other Convertible Notes Document shall restrict the ability of the Borrower to make payments under, comply with the covenants of, or perform its obligations under, the Credit Agreement or any other Loan Document; or
(e) the creation of a course of dealing or any obligation on the part of the Administrative Agent or any Lender to grant any future consent, waiver, or amendment.
The Convertible Notes shall constitute senior unsecured obligations of the Borrower that are either pari passu with or, to the extent structurally or contractually subordinated, junior to the Obligations under the Credit Agreement.
SECTION 3 — LIMITED WAIVER
Section 3.1 Waiver of Defaults. Effective upon the satisfaction of the conditions precedent set forth in Section 5 hereof, the Administrative Agent and each of the undersigned Lenders (constituting at least the Required Lenders) hereby waive any Default or Event of Default under the Credit Agreement that would arise solely and directly from:
(a) the incurrence of the Convertible Notes and the entry into, execution, delivery, and performance of the Convertible Notes Documents by the Borrower, including the Indenture and the Purchase Agreement;
(b) the entry into, execution, delivery, and performance of the Capped Call Transactions by the Borrower, including the related ISDA Master Agreements and Confirmations with the Capped Call Counterparties;
(c) the payment of the aggregate capped call premium (not exceeding $28,750,000), the initial purchasers' discount (not exceeding $5,750,000), and related offering expenses (estimated at approximately $1,200,000) from the gross proceeds of the Convertible Notes offering; and
(d) the filing or delivery of any notices, applications, reports, or other documents in connection with the Convertible Notes offering, including without limitation the supplemental listing application filed with The Nasdaq Stock Market LLC with respect to the shares of Common Stock issuable upon conversion of the Convertible Notes, and any filings made with the Securities and Exchange Commission in connection therewith.
Section 3.2 Scope of Waiver. The waiver set forth in Section 3.1 is limited solely and exclusively to the specific Defaults and Events of Default described therein and shall not extend to, or be construed as a waiver of, any other Default or Event of Default, whether currently existing or hereafter arising, under the Credit Agreement or any other Loan Document. No course of dealing between the Borrower, the Administrative Agent, and the Lenders, and no delay or failure on the part of the Administrative Agent or any Lender in exercising any right, power, or privilege under the Credit Agreement or any other Loan Document, shall operate as a waiver thereof or of any other right, power, or privilege, nor shall any single or partial exercise of any such right, power, or privilege preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies of the Administrative Agent and the Lenders under the Credit Agreement and the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have at law or in equity.
SECTION 4 — AMENDMENTS TO CREDIT AGREEMENT
Section 4.1 Amendment to Definition of "Permitted Indebtedness." Section 1.01 of the Credit Agreement is hereby amended to add the following new clause (q) (or such other appropriate designation, as determined by the Administrative Agent) to the definition of "Permitted Indebtedness" (or, if such term is defined as "Permitted Additional Indebtedness," to the definition of "Permitted Additional Indebtedness"):
"(q) Indebtedness of the Borrower in respect of the 2.75% Convertible Senior Notes due 2028 issued pursuant to the Indenture, dated as of the Convertible Notes Closing Date, between the Borrower and Broadmere Trust Company, N.A., as Trustee, in an aggregate principal amount not exceeding $287,500,000 (which amount includes the principal amount of Convertible Notes that may be issued upon exercise of the Over-Allotment Option), together with any interest, fees, premiums, make-whole payments, and other amounts payable thereunder or in respect thereof from time to time; provided that (i) such Indebtedness shall at all times remain unsecured, (ii) no Lien shall be granted to secure such Indebtedness or any obligations arising under the Indenture, and (iii) such Indebtedness shall not be guaranteed by any Subsidiary of the Borrower unless the Administrative Agent shall have received prior written notice thereof and such guarantee shall be unsecured."
Section 4.2 Amendment to Negative Covenants. To the extent necessary to give full effect to the consent and waiver set forth herein:
(a) Section 7.01(b) of the Credit Agreement is hereby amended to expressly permit the incurrence of the Indebtedness described in Section 4.1 above without violation of any negative covenant contained therein.
(b) To the extent that any covenant in the Credit Agreement restricting Investments or Restricted Payments would be implicated by the payment of the aggregate capped call premium in connection with the Capped Call Transactions, such covenant is hereby clarified and amended to permit the payment by the Borrower of the aggregate capped call premium (in an amount not exceeding $28,750,000) from the gross proceeds of the Convertible Notes offering, and such payment shall not constitute a "Restricted Payment" or a prohibited "Investment" for purposes of the Credit Agreement.
Section 4.3 Amendment to Reporting Covenants. In addition to the reporting obligations set forth in Article VI of the Credit Agreement, the Borrower shall:
(a) provide the Administrative Agent with copies of the executed Indenture, the form of Convertible Note, and the executed Capped Call Confirmations (or, if the Borrower reasonably determines that the full Confirmations contain proprietary commercial terms, detailed term summaries thereof in form and substance reasonably satisfactory to the Administrative Agent) within ten (10) Business Days following the Convertible Notes Closing Date;
(b) notify the Administrative Agent promptly, and in any event within three (3) Business Days, upon any exercise of the Over-Allotment Option by the initial purchasers and, following the expiration of the Over-Allotment Option period, provide written notice to the Administrative Agent of the final aggregate principal amount of Convertible Notes issued and delivered; and
(c) deliver to the Administrative Agent, concurrently with each Compliance Certificate delivered pursuant to the Credit Agreement, a statement confirming the aggregate principal amount of Convertible Notes then outstanding and whether any conversion, redemption, or repurchase of Convertible Notes has occurred since the most recent Compliance Certificate.
Section 4.4 No Other Amendments. Except as expressly set forth in this Section 4, the Credit Agreement and all other Loan Documents shall remain in full force and effect, unmodified and unamended. The amendments set forth in this Section 4 shall be deemed to be amendments to the Credit Agreement for all purposes, and the Credit Agreement, as so amended, is hereby ratified and confirmed in all respects.
SECTION 5 — CONDITIONS PRECEDENT
Section 5.1 Effectiveness Conditions. This Consent and Waiver shall become effective as of the date first written above (May 22, 2023) upon the satisfaction (or waiver by the Administrative Agent in its sole discretion) of each of the following conditions precedent:
(a) Execution and Delivery. The Administrative Agent shall have received counterparts of this Consent and Waiver, duly executed and delivered by the Borrower and by Lenders constituting at least the Required Lenders under the Credit Agreement. Delivery of executed counterparts by facsimile or electronic transmission (including PDF) shall be sufficient for purposes of this clause (a).
(b) Representations and Warranties. Each of the representations and warranties of the Borrower set forth in Section 6 of this Consent and Waiver shall be true and correct in all material respects (or, in the case of any representation or warranty qualified by materiality or Material Adverse Effect, in all respects) as of the date hereof.
(c) No Default. No Default or Event of Default (other than those Defaults or Events of Default that are the subject of the waiver set forth in Section 3 hereof) shall have occurred and be continuing as of the date hereof, both before and after giving effect to this Consent and Waiver.
(d) No Material Adverse Effect. Since December 31, 2022 (being the last day of the Borrower's most recently completed fiscal year, fiscal year 2022, during which the Borrower reported revenue of approximately $812.4 million and Adjusted EBITDA of approximately $198.7 million), no event, condition, change, development, or occurrence shall have occurred that has had or could reasonably be expected to have a Material Adverse Effect (as defined in the Credit Agreement).
(e) Legal Opinions. The Administrative Agent shall have received a written legal opinion of Calderwood & Harkness LLP, counsel to the Borrower, addressed to the Administrative Agent and the Lenders, dated as of the date hereof, in form and substance reasonably satisfactory to the Administrative Agent, covering, among other things, the due organization and good standing of the Borrower, the due authorization, execution, and delivery of this Consent and Waiver by the Borrower, the enforceability of this Consent and Waiver against the Borrower, and the absence of conflicts with applicable law, the Borrower's organizational documents, and material agreements.
(f) Fees and Expenses. The Borrower shall have paid (or made satisfactory arrangements for the payment of) all reasonable and documented out-of-pocket fees, costs, and expenses of the Administrative Agent incurred in connection with the preparation, negotiation, execution, and delivery of this Consent and Waiver, including without limitation the reasonable fees and disbursements of Whitmore & Aldrich LLP, counsel to the Administrative Agent.
(g) Officer's Certificate. The Administrative Agent shall have received a certificate of an authorized officer of the Borrower, substantially in the form attached hereto as Exhibit A (the "Officer's Certificate"), executed by the Chief Financial Officer (Priya Nandakumar) or the Treasurer (Rachel Fontaine) of the Borrower, certifying as to the satisfaction of the conditions set forth in clauses (b), (c), and (d) of this Section 5.1.
(h) Board Authorization. The Administrative Agent shall have received certified copies of the resolutions of the Board of Directors of the Borrower (or a duly authorized committee thereof) authorizing the execution, delivery, and performance of this Consent and Waiver, together with a certificate of the Secretary or an Assistant Secretary of the Borrower certifying as to the incumbency and signatures of the officers executing this Consent and Waiver and attesting to the adoption and continuing effectiveness of such resolutions. The parties acknowledge that the Board of Directors of the Borrower adopted resolutions on May 19, 2023, authorizing the Convertible Notes offering and related transactions, with preliminary authorization sufficient for the execution and delivery of this Consent and Waiver having been obtained prior to such date.
Section 5.2 Post-Closing Conditions. Within five (5) Business Days following the Convertible Notes Closing Date, the Borrower shall deliver to the Administrative Agent (with copies to each Lender, if requested by the Administrative Agent) each of the following:
(a) a fully executed copy of the Indenture, dated as of the Convertible Notes Closing Date, between the Borrower and Broadmere Trust Company, N.A., as Trustee;
(b) a certificate of an authorized officer of the Borrower setting forth the aggregate principal amount of Convertible Notes actually issued and delivered on the Convertible Notes Closing Date (including whether the Over-Allotment Option was exercised in whole or in part, and the final aggregate principal amount of Convertible Notes outstanding);
(c) evidence satisfactory to the Administrative Agent that $75,000,000 of outstanding borrowings under the Revolving Credit Facility have been repaid from the Net Proceeds of the Convertible Notes offering, including wire transfer confirmations or other customary evidence of payment;
(d) copies of the executed Capped Call Confirmations (or, at the Borrower's election and subject to the Administrative Agent's reasonable satisfaction, detailed term summaries thereof) with each of Ridgepoint Capital Markets LLC and Northvane Financial Products LP, reflecting the economic terms of the Capped Call Transactions; and
(e) such other documents, instruments, and information as the Administrative Agent may reasonably request in connection with the consummation of the Convertible Notes offering and the Capped Call Transactions.
The failure to satisfy any post-closing condition set forth in this Section 5.2 within the time period specified herein shall constitute an Event of Default under the Credit Agreement unless the Administrative Agent, in its reasonable discretion, shall have agreed to extend such time period in writing.
SECTION 6 — REPRESENTATIONS AND WARRANTIES OF THE BORROWER
The Borrower hereby represents and warrants to the Administrative Agent and the Lenders as follows:
Section 6.1 Reaffirmation. All representations and warranties of the Borrower set forth in Article V of the Credit Agreement and in each other Loan Document to which the Borrower is a party are true and correct in all material respects (or, in the case of any representation or warranty qualified by materiality or Material Adverse Effect, in all respects) as of the date hereof, except to the extent that any such representation or warranty expressly relates to a specific earlier date, in which case such representation or warranty shall be true and correct in all material respects (or in all respects, as applicable) as of such earlier date.
Section 6.2 Due Authorization. The execution, delivery, and performance by the Borrower of this Consent and Waiver have been duly authorized by all necessary corporate action on the part of the Borrower, including the approval of the Board of Directors of the Borrower (or a duly authorized committee thereof). No other corporate action, consent, approval, or authorization is required on the part of the Borrower in connection with the execution, delivery, and performance of this Consent and Waiver. The Borrower is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware (Delaware file no. 5738291), and has the corporate power and authority to execute, deliver, and perform its obligations under this Consent and Waiver and to consummate the transactions contemplated hereby.
Section 6.3 No Conflict. The execution, delivery, and performance of this Consent and Waiver by the Borrower, and the consummation of the Convertible Notes offering and the Capped Call Transactions, do not and will not:
(a) violate the Amended and Restated Certificate of Incorporation or the Amended and Restated Bylaws of the Borrower;
(b) violate any applicable law, statute, rule, regulation, order, judgment, decree, or injunction of any Governmental Authority binding upon or applicable to the Borrower or any of its properties or assets;
(c) result in a breach of, or constitute a default (with or without notice or lapse of time, or both) under, or give rise to any right of acceleration, termination, or cancellation under, any material agreement, contract, indenture, mortgage, deed of trust, or other instrument to which the Borrower is a party or by which the Borrower or any of its properties or assets is bound (other than the Credit Agreement provisions that are the subject of the consent and waiver granted herein); or
(d) result in the creation or imposition of any Lien upon any property or asset of the Borrower or any of its Subsidiaries (other than Liens permitted under the Credit Agreement).
Section 6.4 Enforceability. This Consent and Waiver constitutes the legal, valid, and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, subject to (a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer, and other similar laws of general applicability affecting creditors' rights generally and (b) general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.
Section 6.5 No Default. After giving effect to this Consent and Waiver and the transactions contemplated hereby, no Default or Event of Default has occurred and is continuing or would result from the execution, delivery, and performance of this Consent and Waiver.
Section 6.6 Use of Proceeds. The proceeds of the Convertible Notes will be used solely as described in Recital B and Section 2.3 of this Consent and Waiver, including without limitation the repayment of $75,000,000 of outstanding borrowings under the Revolving Credit Facility. No portion of the proceeds of the Convertible Notes will be used, directly or indirectly, for any purpose that would violate any applicable law or regulation, including without limitation Regulation U of the Board of Governors of the Federal Reserve System.
Section 6.7 No Material Adverse Effect. Since December 31, 2022, no event, condition, change, development, or occurrence has occurred that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect (as defined in the Credit Agreement).
SECTION 7 — COVENANTS
Section 7.1 Repayment of Revolving Credit Facility. The Borrower covenants and agrees that, on or promptly following the Convertible Notes Closing Date (and in any event within three (3) Business Days thereof), the Borrower shall apply $75,000,000 of the Net Proceeds to the repayment of outstanding borrowings under the Revolving Credit Facility. Such repayment shall be made to the Administrative Agent for the pro rata benefit of the Lenders in accordance with the applicable provisions of the Credit Agreement. Upon such repayment, the amounts so repaid shall be available for re-borrowing under the Revolving Credit Facility, subject to the terms and conditions of the Credit Agreement.
Section 7.2 Compliance with Convertible Notes Documents. The Borrower shall comply in all material respects with the terms and conditions of the Convertible Notes Documents and the Capped Call Transactions. The Borrower shall not amend, supplement, modify, or waive any provision of any Convertible Notes Document (including the Indenture, the Purchase Agreement, or any Capped Call Confirmation) in any manner that would be materially adverse to the interests of the Administrative Agent or the Lenders under the Credit Agreement without the prior written consent of the Administrative Agent (acting at the direction of the Required Lenders). Without limiting the generality of the foregoing, the Borrower shall not agree to any amendment or modification of the Indenture or the Convertible Notes that would (a) increase the aggregate principal amount of the Convertible Notes above $287,500,000, (b) increase the interest rate on the Convertible Notes, (c) shorten the stated maturity of the Convertible Notes, (d) add any security or collateral in respect of the Convertible Notes, or (e) add any covenant, restriction, or event of default that would be more restrictive on the Borrower than the covenants, restrictions, and events of default contained in the Credit Agreement, in each case without the prior written consent of the Required Lenders.
Section 7.3 Unsecured Status. The Borrower shall not at any time grant, create, incur, assume, or suffer to exist any Lien on any property or asset of the Borrower or any of its Subsidiaries to secure the Convertible Notes, the obligations under the Indenture, or the obligations under the Capped Call Transactions. The Convertible Notes shall at all times remain unsecured obligations of the Borrower.
Section 7.4 Notification Obligations. The Borrower shall promptly, and in any event within five (5) Business Days, notify the Administrative Agent in writing upon the occurrence of any of the following:
(a) any "Default" or "Event of Default" (as such terms are defined in the Indenture) under the Indenture or the Convertible Notes;
(b) any "Fundamental Change" (as defined in the Indenture), including without limitation any change of control, merger, consolidation, or delisting event that triggers a repurchase right under the Indenture;
(c) any exercise by the Borrower of the optional redemption right under the Convertible Notes (including the applicable redemption date and aggregate principal amount of Convertible Notes to be redeemed); and
(d) any conversion of the Convertible Notes that results in the issuance of shares of Common Stock of the Borrower (including the number of shares issued and the aggregate principal amount of Convertible Notes converted).
SECTION 8 — REAFFIRMATION OF CREDIT AGREEMENT AND LOAN DOCUMENTS
Section 8.1 Reaffirmation. Except as expressly modified by this Consent and Waiver, the Credit Agreement and all other Loan Documents shall remain in full force and effect and are hereby ratified, reaffirmed, and confirmed in all respects. The Borrower hereby reaffirms all of its obligations under the Credit Agreement and each other Loan Document to which it is a party, including without limitation the obligation to repay all Obligations under the Credit Agreement and to comply with all covenants, agreements, and conditions set forth therein. This Consent and Waiver shall not constitute a novation of any Obligation or any other obligation of the Borrower under the Credit Agreement or any other Loan Document.
Section 8.2 Liens and Collateral. All Liens heretofore granted under the Loan Documents (including without limitation the Security Agreement and any pledge agreements, mortgages, deeds of trust, or other collateral documents) as security for the Obligations under the Credit Agreement continue in full force and effect and are unimpaired, undiminished, and unaffected by this Consent and Waiver. Nothing contained herein shall be deemed to release, diminish, impair, or otherwise affect any collateral securing the Obligations under the Credit Agreement, and the Administrative Agent shall continue to hold all such collateral as security for the Obligations in accordance with the terms of the applicable Loan Documents.
Section 8.3 References to Credit Agreement. On and after the effective date of this Consent and Waiver, (a) each reference in the Credit Agreement to "this Agreement," "hereunder," "hereof," "herein," or words of like import, and each reference in the other Loan Documents to the "Credit Agreement," shall mean and be a reference to the Credit Agreement as modified and amended by this Consent and Waiver, and (b) this Consent and Waiver shall constitute a "Loan Document" for all purposes under the Credit Agreement and the other Loan Documents.
SECTION 9 — MISCELLANEOUS
Section 9.1 Governing Law. THIS CONSENT AND WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAWS PROVISIONS THEREOF (OTHER THAN SECTION 5-1401 AND SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW), CONSISTENT WITH THE GOVERNING LAW PROVISIONS OF SECTION 10.14 OF THE CREDIT AGREEMENT.
Section 9.2 Counterparts. This Consent and Waiver may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Consent and Waiver by facsimile or other electronic transmission (including "PDF" or "TIFF" format) shall be effective as delivery of a manually executed counterpart of this Consent and Waiver. The words "execution," "signed," "signature," and words of like import in this Consent and Waiver shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity, or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any similar state law based on the Uniform Electronic Transactions Act.
Section 9.3 Headings. The headings and captions in this Consent and Waiver are for convenience of reference only and shall not define, limit, or otherwise affect the construction or interpretation of any provision hereof.
Section 9.4 Severability. If any provision of this Consent and Waiver is held to be illegal, invalid, or unenforceable by any court of competent jurisdiction, the legality, validity, and enforceability of the remaining provisions of this Consent and Waiver shall not be affected or impaired thereby. Any illegal, invalid, or unenforceable provision shall be deemed modified to the minimum extent necessary to make it legal, valid, and enforceable, and if no such modification is possible, shall be deemed severed from this Consent and Waiver. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 9.5 Successors and Assigns. This Consent and Waiver shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns in accordance with the terms of the Credit Agreement. No party may assign or transfer its rights or obligations under this Consent and Waiver except in accordance with the provisions of the Credit Agreement governing assignments.
Section 9.6 Integration; Entire Agreement. This Consent and Waiver, together with the Credit Agreement and the other Loan Documents, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, negotiations, representations, warranties, and understandings, whether oral or written, relating to such subject matter. There are no conditions to the effectiveness of this Consent and Waiver other than those expressly set forth in Section 5 hereof.
Section 9.7 No Third-Party Beneficiaries. Nothing in this Consent and Waiver, express or implied, is intended to or shall confer upon any Person (other than the parties hereto, the Lenders under the Credit Agreement, and their respective successors and permitted assigns) any right, benefit, or remedy of any nature whatsoever under or by reason of this Consent and Waiver. Without limiting the foregoing, neither the Trustee, the Capped Call Counterparties, the initial purchasers, nor any holder of the Convertible Notes shall be a third-party beneficiary of this Consent and Waiver.
Section 9.8 Expenses. The Borrower agrees to pay and reimburse the Administrative Agent for all reasonable and documented out-of-pocket costs, fees, and expenses incurred by the Administrative Agent in connection with the preparation, negotiation, execution, delivery, and administration of this Consent and Waiver, including without limitation the reasonable fees, charges, and disbursements of Whitmore & Aldrich LLP, counsel to the Administrative Agent, in accordance with the expense reimbursement provisions set forth in Section 10.04 of the Credit Agreement.
[Remainder of this page intentionally left blank. Signature pages follow.]
SIGNATURE PAGES TO LIMITED CONSENT AND WAIVER
IN WITNESS WHEREOF, the parties hereto have caused this Consent and Waiver to be duly executed and delivered by their respective authorized officers as of the date first written above.
BORROWER:
OPTIWAVE SEMICONDUCTOR CORP.
By: ________
Name: Priya Nandakumar
Title: Chief Financial Officer
Date: May 22, 2023
ADMINISTRATIVE AGENT:
CRESTLINE NATIONAL BANK, N.A., as Administrative Agent
By: ________
Name: Jonathan M. Hargrove
Title: Senior Vice President
Date: May 22, 2023
LENDERS:
CRESTLINE NATIONAL BANK, N.A., as a Lender
By: ________
Name: Jonathan M. Hargrove
Title: Senior Vice President
PIEDMONT COMMERCE BANK, as a Lender
By: ________
Name: Catherine L. Brennan
Title: Managing Director
LAKESHORE FEDERAL CREDIT CORP., as a Lender
By: ________
Name: David R. Whitfield
Title: Vice President, Credit Administration
EXHIBIT A
FORM OF OFFICER'S CERTIFICATE
OFFICER'S CERTIFICATE
Delivered Pursuant to Section 5.1(g) of the Limited Consent and Waiver dated as of May 22, 2023
Reference is made to that certain Limited Consent and Waiver, dated as of May 22, 2023 (the "Consent and Waiver"), among Optiwave Semiconductor Corp., a Delaware corporation (the "Borrower"), Crestline National Bank, N.A., as Administrative Agent, and the Lenders party thereto, under the Credit Agreement dated as of August 15, 2021 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Consent and Waiver or, if not defined therein, in the Credit Agreement.
The undersigned, Priya Nandakumar, in her capacity as Chief Financial Officer of the Borrower, and not in her individual capacity, hereby certifies to the Administrative Agent and the Lenders, as of the date hereof, as follows:
(i) Representations and Warranties. The representations and warranties of the Borrower set forth in Section 6 of the Consent and Waiver are true and correct in all material respects (or, in the case of any representation or warranty qualified by materiality or Material Adverse Effect, in all respects) as of the date hereof, except to the extent that any such representation or warranty expressly relates to a specific earlier date, in which case such representation or warranty is true and correct in all material respects (or in all respects, as applicable) as of such earlier date.
(ii) No Default. No Default or Event of Default (other than those Defaults or Events of Default that are the subject of the waiver set forth in Section 3 of the Consent and Waiver) has occurred and is continuing as of the date hereof, both before and after giving effect to the Consent and Waiver.
(iii) No Material Adverse Effect. Since December 31, 2022, no event, condition, change, development, or occurrence has occurred that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect (as defined in the Credit Agreement).
(iv) Board Authorization. The Board of Directors of the Borrower has duly adopted resolutions authorizing the execution, delivery, and performance of the Consent and Waiver by the Borrower, and such resolutions have not been amended, modified, revoked, or rescinded and remain in full force and effect as of the date hereof.
IN WITNESS WHEREOF, the undersigned has executed this Officer's Certificate as of May 22, 2023.
OPTIWAVE SEMICONDUCTOR CORP.
By: ________
Name: Priya Nandakumar
Title: Chief Financial Officer
Date: May 22, 2023
EXHIBIT B
DESCRIPTION OF CONVERTIBLE NOTES AND CAPPED CALL TRANSACTIONS
(SUMMARY TERM SHEET)
The following is a summary description of the material terms of the Convertible Notes and the Capped Call Transactions. This summary is provided for informational purposes only and is qualified in its entirety by reference to the Convertible Notes Documents and the Capped Call Confirmations.
I. Convertible Notes Summary
II. Capped Call Transactions Summary
III. Use of Proceeds Summary
Note: The foregoing Use of Proceeds table assumes full exercise of the Over-Allotment Option. If the Over-Allotment Option is not exercised, or is exercised only in part, the gross proceeds and applicable deductions will be adjusted accordingly. In such event, the Net Proceeds available for general corporate purposes will be correspondingly reduced.
[End of Exhibit B]
Term | Description
Issuer | Optiwave Semiconductor Corp.
Title | 2.75% Convertible Senior Notes due 2028
Aggregate Principal Amount | Up to $287,500,000 (including $37,500,000 Over-Allotment Option)
Coupon | 2.75% per annum, payable semi-annually in arrears on June 1 and December 1, commencing December 1, 2023
Maturity | June 1, 2028
Conversion Rate | 10.5820 shares of Common Stock per $1,000 principal amount of Convertible Notes
Initial Conversion Price | Approximately $94.50 per share (representing an approximately 28.8% premium over the reference price of $73.38 per share)
Net Share Settlement | The Borrower may elect to settle conversions in cash (up to the principal amount) and shares of Common Stock (for amounts in excess of the principal amount), or in any combination thereof
Optional Redemption | On or after June 6, 2026, the Borrower may redeem all or any portion of the Convertible Notes for cash if the last reported sale price of the Common Stock exceeds 130% of the conversion price (i.e., $122.85 per share) for at least 20 trading days during any 30 consecutive trading day period
Fundamental Change Put | Upon a Fundamental Change (as defined in the Indenture), holders may require the Borrower to repurchase the Convertible Notes at 100% of principal amount plus accrued and unpaid interest
Security | Unsecured
Ranking | Senior unsecured obligations of the Borrower, ranking pari passu in right of payment with all existing and future senior unsecured indebtedness of the Borrower
Trustee | Broadmere Trust Company, N.A.
Offering Format | Rule 144A offering to Qualified Institutional Buyers (QIBs)
CUSIP | 683742AA5
ISIN | US683742AA53
Initial Purchasers | Ridgepoint Capital Markets LLC (lead left bookrunner, 60% allocation); Harborstone Securities Inc. (co-manager, 25% allocation); Velthorn Zanthor & Co. (co-manager, 15% allocation)
Initial Purchasers' discount | 2.00% of aggregate principal amount ($5,000,000 on base offering; $5,750,000 on full exercise of Over-Allotment Option)
Term | Description
Counterparties | Ridgepoint Capital Markets LLC (60% notional / $172,500,000; premium: $17,250,000) and Northvane Financial Products LP (40% notional / $115,000,000; premium: $11,500,000)
Lower Strike Price | Approximately $94.50 per share (equal to the initial conversion price of the Convertible Notes)
Upper Strike (Cap) Price | $110.07 per share (representing a 50.0% premium over the reference price of $73.38 per share)
Aggregate Premium | $28,750,000
Expiration | June 1, 2028 (co-terminus with the maturity of the Convertible Notes)
Documentation | 2002 ISDA Master Agreement and Confirmation between the Borrower and each Capped Call Counterparty
Governing Law | New York law
Purpose | To offset potential dilution to the Common Stock and/or offset any cash payments the Borrower is required to make in excess of the principal amount of the Convertible Notes upon conversion, with such offset subject to a cap based on the Cap Price
Item | Amount
Gross Proceeds (including full exercise of Over-Allotment Option) | $287,500,000
Less: Initial Purchasers' discount (2.00%) | ($5,750,000)
Less: Capped Call Cost | ($28,750,000)
Less: Estimated Offering Expenses | ($1,200,000)
Net Proceeds | $251,800,000
Application: Revolving Credit Facility Repayment | ($75,000,000)
Remainder: General Corporate Purposes | $176,800,000

LIMITED CONSENT AND WAIVER

LIMITED CONSENT AND WAIVER

RECITALS

SIGNATURE PAGES TO LIMITED CONSENT AND WAIVER

BORROWER:

OPTIWAVE SEMICONDUCTOR CORP.

ADMINISTRATIVE AGENT:

LENDERS:

EXHIBIT A

FORM OF OFFICER'S CERTIFICATE

OFFICER'S CERTIFICATE

OPTIWAVE SEMICONDUCTOR CORP.

EXHIBIT B

DESCRIPTION OF CONVERTIBLE NOTES AND CAPPED CALL TRANSACTIONS

Record

Parties

Dates

Amounts