negative-assurance-letter-10b5.docx

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negative-assurance-letter-10b5.docx DOCUMENT Capital Markets

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CALDERWOOD & HARKNESS LLP 600 Lexington Avenue, 30th Floor New York, New York 10022 Telephone: (212) 455-8000 Facsimile: (212) 455-8001 www.calderwoodharkness.com

May 30, 2023

Ridgepoint Capital Markets LLC 383 Madison Avenue, 22nd Floor New York, New York 10179

Harborstone Securities Inc. 200 Vesey Street, Suite 3100 New York, New York 10281

Velthorn Zanthor & Co. 750 Seventh Avenue, 18th Floor New York, New York 10019

Each in its capacity as an Initial Purchaser

Ladies and Gentlemen:

Re: Offering of $250,000,000 Aggregate Principal Amount of 2.75% Convertible Senior Notes due 2028 (plus up to an additional $37,500,000 aggregate principal amount pursuant to the over-allotment option) of Optiwave Semiconductor Corp.

I. Introduction

We have acted as counsel to Optiwave Semiconductor Corp., a corporation organized and existing under the laws of the State of Delaware (the "Company"), in connection with the offering (the "Offering") by the Company of its 2.75% Convertible Senior Notes due 2028 (the "Notes") pursuant to that certain Purchase Agreement dated as of May 24, 2023 (the "Purchase Agreement"), among the Company and Ridgepoint Capital Markets LLC, as representative of the several initial purchasers named therein (the "Representative"), Harborstone Securities Inc., and Velthorn Zanthor & Co. (the Representative, Harborstone Securities Inc., and Velthorn Zanthor & Co. are collectively referred to herein as the "Initial Purchasers").

The Offering comprises $250,000,000 in aggregate principal amount of Notes initially offered pursuant to the Purchase Agreement, together with an additional $37,500,000 in aggregate principal amount of Notes issued pursuant to the exercise in full of the over-allotment option granted to the Initial Purchasers under the Purchase Agreement, which over-allotment option was exercised on May 26, 2023, resulting in a total aggregate principal amount of $287,500,000 of Notes being issued and sold in the Offering. The Notes are being issued under an Indenture dated as of May 30, 2023 (the "Indenture"), between the Company and Broadmere Trust Company, N.A., a national banking association, as trustee (the "Trustee").

The Notes are being offered and sold by the Company to the Initial Purchasers, and by the Initial Purchasers to subsequent purchasers, in transactions exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Rule 144A under the Securities Act, solely to persons reasonably believed to be qualified institutional buyers ("QIBs") within the meaning of Rule 144A under the Securities Act.

This letter is being delivered to the Initial Purchasers pursuant to Section 6 of the Purchase Agreement as a condition to the closing of the Offering on the date hereof (the "Closing Date"). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.

II. Identification of the Offering Memorandum

In connection with the Offering, the Company prepared the following documents:

(a) the Preliminary Offering Memorandum dated May 18, 2023, relating to the Notes (the "Preliminary Offering Memorandum"); and

(b) the Final Offering Memorandum dated May 24, 2023, relating to the Notes (the "Final Offering Memorandum" and, together with the Preliminary Offering Memorandum, the "Offering Memoranda").

The Final Offering Memorandum reflects the pricing terms for the Notes as established on May 23, 2023 (the "Pricing Date"), including, without limitation, the following terms:

(i) Reference Price: $73.38 per share of the Company's common stock, par value $0.001 per share (the "Common Stock");

(ii) Initial Conversion Rate: 10.5820 shares of Common Stock per $1,000 principal amount of Notes;

(iii) Initial Conversion Price: approximately $94.50 per share, representing an approximate 28.8% conversion premium over the Reference Price;

(iv) Coupon Rate: 2.75% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, commencing December 1, 2023;

(v) Maturity Date: June 1, 2028, unless earlier converted, redeemed, or repurchased;

(vi) CUSIP: 683742AA5; and

(vii) ISIN: US683742AA53.

The Final Offering Memorandum also describes the capped call transactions entered into by the Company with Ridgepoint Capital Markets LLC and Northvane Financial Products LP (each, a "Capped Call Counterparty" and, collectively, the "Capped Call Counterparties") in connection with the Offering. The capped call transactions have a cap price of $110.07 per share of Common Stock (representing a 50.0% premium over the Reference Price), subject to certain adjustments, and are generally expected to reduce the potential dilutive impact upon conversion of the Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap based on the cap price.

III. Scope of Participation and Review

We have acted as counsel to the Company in connection with the Offering. In that capacity, certain lawyers in our firm (the "Participating Lawyers") have participated in the preparation of the Final Offering Memorandum. In the course of such participation, the Participating Lawyers, among other things:

(a) reviewed and discussed the contents of the Final Offering Memorandum with officers and other representatives of the Company;

(b) reviewed and discussed the contents of the Final Offering Memorandum with representatives of the Initial Purchasers;

(c) reviewed and discussed the contents of the Final Offering Memorandum with counsel to the Initial Purchasers, Prescott Whitfield LLP;

(d) reviewed and discussed the contents of the Final Offering Memorandum with representatives of the Company's independent registered public accounting firm, Aldgate & Finch LLP;

(e) participated in conferences and discussions at which the contents of the Final Offering Memorandum and related matters were discussed, including due diligence sessions with officers of the Company, representatives of the Initial Purchasers, counsel to the Initial Purchasers, and representatives of Aldgate & Finch LLP; and

(f) reviewed certain corporate records, agreements, certificates, and other documents furnished to us by the Company, the Initial Purchasers, and their respective representatives.

Notwithstanding the foregoing, we have not undertaken to independently verify, and have not independently verified, the accuracy, completeness, or fairness of the statements contained in the Final Offering Memorandum. Furthermore, except to the extent expressly set forth in this letter, we are not passing upon, and do not assume any responsibility for, the accuracy, completeness, or fairness of the statements contained in the Final Offering Memorandum, and we make no representation that we have independently verified any such statements.

We note that the Final Offering Memorandum contains, among other things: (i) the audited consolidated financial statements of the Company and the notes thereto, audited by the Company's independent registered public accounting firm, Aldgate & Finch LLP; (ii) the unaudited condensed consolidated interim financial statements of the Company and the notes thereto; (iii) financial data, statistical data, market data, and industry data derived from third-party sources or from the Company's internal records; and (iv) forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as to all of which this letter expresses no view.

IV. Limitations and Qualifications

The statements and opinions expressed in this letter are subject to the following limitations, qualifications, and exclusions, each of which is material to the conclusions expressed herein:

1. This letter speaks only as of the date hereof and is limited to the facts and law existing as of the date hereof. We assume no obligation, and undertake no duty, to update, revise, or supplement this letter at any time after the date hereof, whether by reason of changes in fact, changes in law, or for any other reason whatsoever.

2. The negative assurance set forth in Section V of this letter relates solely to the Final Offering Memorandum dated May 24, 2023 (including any supplements or amendments thereto through the date hereof), as of the date of the Final Offering Memorandum (May 24, 2023) and as of the date hereof (the Closing Date, May 30, 2023).

3. The negative assurance expressed in Section V of this letter does not extend to, and we express no view with respect to:

(a) the financial statements, financial statement schedules, notes thereto, and any other financial, statistical, or accounting data (including any pro forma financial information and any related notes thereto) included in, or incorporated by reference into, the Final Offering Memorandum, or any compilation, report, or certification relating thereto;

(b) the comfort letter dated May 24, 2023, the bring-down comfort letter dated May 30, 2023, or any other letter or communication delivered by Aldgate & Finch LLP to the Company or the Initial Purchasers in connection with the Offering;

(c) any information relating to the Initial Purchasers or their respective affiliates that was furnished by or on behalf of the Initial Purchasers specifically for inclusion in the Final Offering Memorandum (including, without limitation, any information contained under the caption "Plan of Distribution" in the Final Offering Memorandum to the extent such information relates to the activities and arrangements of the Initial Purchasers); and

(d) the exhibits and annexes to the Final Offering Memorandum, except to the extent that the substance of such exhibits and annexes is summarized in the narrative text of the Final Offering Memorandum (and then only with respect to such summaries).

4. We express no view as to any matters of fact, and we have relied, without independent investigation or verification, upon certificates and other communications from officers and other representatives of the Company, and upon certificates and other communications from public officials, with respect to the accuracy of material factual matters contained therein which were not independently established.

5. We are members of the Bar of the State of New York, and we express no opinion or view with respect to the laws of any jurisdiction other than the federal laws of the United States and the laws of the State of New York, in each case as in effect on the date hereof.

V. Negative Assurance

On the basis of the foregoing, and subject to the limitations, qualifications, and exclusions set forth in this letter (including, without limitation, those set forth in Section IV above), and without having independently verified the accuracy, completeness, or fairness of the statements contained in the Final Offering Memorandum, nothing has come to the attention of the Participating Lawyers that caused such lawyers to believe that the Final Offering Memorandum, as of the date thereof (May 24, 2023) or as of the date hereof (May 30, 2023):

(a) contained or contains an untrue statement of a material fact; or

(b) omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

The foregoing negative assurance is provided in the context of, and with reference to, Section 10(b) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission. We note that the standard expressed in the preceding paragraph is a professional negative assurance standard based on the Participating Lawyers' involvement in the preparation of the Final Offering Memorandum, and is not a guarantee or certification regarding the accuracy or completeness of the Final Offering Memorandum.

VI. Reliance and Use Limitations

This letter is furnished solely for the benefit of the Initial Purchasers and is delivered solely in connection with the Offering and the transactions contemplated by the Purchase Agreement. This letter is not to be used, circulated, quoted, referred to, or otherwise relied upon by any other person or entity, or for any other purpose, without the prior written consent of Calderwood & Harkness LLP.

Without limiting the generality of the foregoing, this letter may not be quoted in whole or in part, summarized, described, referred to, or filed with any governmental authority, regulatory body, stock exchange, or other person or entity, without the prior written consent of Calderwood & Harkness LLP; provided, however, that this letter may be disclosed (a) as may be required by applicable law, regulation, or legal process, or (b) in connection with any legal proceeding arising out of or relating to the transactions contemplated by the Purchase Agreement, in each case without our prior written consent but with prompt notice to us of any such disclosure (to the extent permitted by applicable law).

VII. Governing Law

This letter shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Jennifer Kwon, Partner Capital Markets Group

JK/mps cc: Optiwave Semiconductor Corp. — Attention: General Counsel Prescott Whitfield LLP — Attention: Capital Markets Group Broadmere Trust Company, N.A. — Attention: Corporate Trust Administration

CALDERWOOD & HARKNESS LLP 600 Lexington Avenue, 30th Floor New York, New York 10022 Telephone: (212) 455-8000 Facsimile: (212) 455-8001 www.calderwoodharkness.com
May 30, 2023
Ridgepoint Capital Markets LLC 383 Madison Avenue, 22nd Floor New York, New York 10179
Harborstone Securities Inc. 200 Vesey Street, Suite 3100 New York, New York 10281
Velthorn Zanthor & Co. 750 Seventh Avenue, 18th Floor New York, New York 10019
Each in its capacity as an Initial Purchaser
Ladies and Gentlemen:
Re: Offering of $250,000,000 Aggregate Principal Amount of 2.75% Convertible Senior Notes due 2028 (plus up to an additional $37,500,000 aggregate principal amount pursuant to the over-allotment option) of Optiwave Semiconductor Corp.
I. Introduction
We have acted as counsel to Optiwave Semiconductor Corp., a corporation organized and existing under the laws of the State of Delaware (the "Company"), in connection with the offering (the "Offering") by the Company of its 2.75% Convertible Senior Notes due 2028 (the "Notes") pursuant to that certain Purchase Agreement dated as of May 24, 2023 (the "Purchase Agreement"), among the Company and Ridgepoint Capital Markets LLC, as representative of the several initial purchasers named therein (the "Representative"), Harborstone Securities Inc., and Velthorn Zanthor & Co. (the Representative, Harborstone Securities Inc., and Velthorn Zanthor & Co. are collectively referred to herein as the "Initial Purchasers").
The Offering comprises $250,000,000 in aggregate principal amount of Notes initially offered pursuant to the Purchase Agreement, together with an additional $37,500,000 in aggregate principal amount of Notes issued pursuant to the exercise in full of the over-allotment option granted to the Initial Purchasers under the Purchase Agreement, which over-allotment option was exercised on May 26, 2023, resulting in a total aggregate principal amount of $287,500,000 of Notes being issued and sold in the Offering. The Notes are being issued under an Indenture dated as of May 30, 2023 (the "Indenture"), between the Company and Broadmere Trust Company, N.A., a national banking association, as trustee (the "Trustee").
The Notes are being offered and sold by the Company to the Initial Purchasers, and by the Initial Purchasers to subsequent purchasers, in transactions exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Rule 144A under the Securities Act, solely to persons reasonably believed to be qualified institutional buyers ("QIBs") within the meaning of Rule 144A under the Securities Act.
This letter is being delivered to the Initial Purchasers pursuant to Section 6 of the Purchase Agreement as a condition to the closing of the Offering on the date hereof (the "Closing Date"). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.
II. Identification of the Offering Memorandum
In connection with the Offering, the Company prepared the following documents:
(a) the Preliminary Offering Memorandum dated May 18, 2023, relating to the Notes (the "Preliminary Offering Memorandum"); and
(b) the Final Offering Memorandum dated May 24, 2023, relating to the Notes (the "Final Offering Memorandum" and, together with the Preliminary Offering Memorandum, the "Offering Memoranda").
The Final Offering Memorandum reflects the pricing terms for the Notes as established on May 23, 2023 (the "Pricing Date"), including, without limitation, the following terms:
(i) Reference Price: $73.38 per share of the Company's common stock, par value $0.001 per share (the "Common Stock");
(ii) Initial Conversion Rate: 10.5820 shares of Common Stock per $1,000 principal amount of Notes;
(iii) Initial Conversion Price: approximately $94.50 per share, representing an approximate 28.8% conversion premium over the Reference Price;
(iv) Coupon Rate: 2.75% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, commencing December 1, 2023;
(v) Maturity Date: June 1, 2028, unless earlier converted, redeemed, or repurchased;
(vi) CUSIP: 683742AA5; and
(vii) ISIN: US683742AA53.
The Final Offering Memorandum also describes the capped call transactions entered into by the Company with Ridgepoint Capital Markets LLC and Northvane Financial Products LP (each, a "Capped Call Counterparty" and, collectively, the "Capped Call Counterparties") in connection with the Offering. The capped call transactions have a cap price of $110.07 per share of Common Stock (representing a 50.0% premium over the Reference Price), subject to certain adjustments, and are generally expected to reduce the potential dilutive impact upon conversion of the Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap based on the cap price.
III. Scope of Participation and Review
We have acted as counsel to the Company in connection with the Offering. In that capacity, certain lawyers in our firm (the "Participating Lawyers") have participated in the preparation of the Final Offering Memorandum. In the course of such participation, the Participating Lawyers, among other things:
(a) reviewed and discussed the contents of the Final Offering Memorandum with officers and other representatives of the Company;
(b) reviewed and discussed the contents of the Final Offering Memorandum with representatives of the Initial Purchasers;
(c) reviewed and discussed the contents of the Final Offering Memorandum with counsel to the Initial Purchasers, Prescott Whitfield LLP;
(d) reviewed and discussed the contents of the Final Offering Memorandum with representatives of the Company's independent registered public accounting firm, Aldgate & Finch LLP;
(e) participated in conferences and discussions at which the contents of the Final Offering Memorandum and related matters were discussed, including due diligence sessions with officers of the Company, representatives of the Initial Purchasers, counsel to the Initial Purchasers, and representatives of Aldgate & Finch LLP; and
(f) reviewed certain corporate records, agreements, certificates, and other documents furnished to us by the Company, the Initial Purchasers, and their respective representatives.
Notwithstanding the foregoing, we have not undertaken to independently verify, and have not independently verified, the accuracy, completeness, or fairness of the statements contained in the Final Offering Memorandum. Furthermore, except to the extent expressly set forth in this letter, we are not passing upon, and do not assume any responsibility for, the accuracy, completeness, or fairness of the statements contained in the Final Offering Memorandum, and we make no representation that we have independently verified any such statements.
We note that the Final Offering Memorandum contains, among other things: (i) the audited consolidated financial statements of the Company and the notes thereto, audited by the Company's independent registered public accounting firm, Aldgate & Finch LLP; (ii) the unaudited condensed consolidated interim financial statements of the Company and the notes thereto; (iii) financial data, statistical data, market data, and industry data derived from third-party sources or from the Company's internal records; and (iv) forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as to all of which this letter expresses no view.
IV. Limitations and Qualifications
The statements and opinions expressed in this letter are subject to the following limitations, qualifications, and exclusions, each of which is material to the conclusions expressed herein:
1.  This letter speaks only as of the date hereof and is limited to the facts and law existing as of the date hereof. We assume no obligation, and undertake no duty, to update, revise, or supplement this letter at any time after the date hereof, whether by reason of changes in fact, changes in law, or for any other reason whatsoever.
2.  The negative assurance set forth in Section V of this letter relates solely to the Final Offering Memorandum dated May 24, 2023 (including any supplements or amendments thereto through the date hereof), as of the date of the Final Offering Memorandum (May 24, 2023) and as of the date hereof (the Closing Date, May 30, 2023).
3.  The negative assurance expressed in Section V of this letter does not extend to, and we express no view with respect to:
(a) the financial statements, financial statement schedules, notes thereto, and any other financial, statistical, or accounting data (including any pro forma financial information and any related notes thereto) included in, or incorporated by reference into, the Final Offering Memorandum, or any compilation, report, or certification relating thereto;
(b) the comfort letter dated May 24, 2023, the bring-down comfort letter dated May 30, 2023, or any other letter or communication delivered by Aldgate & Finch LLP to the Company or the Initial Purchasers in connection with the Offering;
(c) any information relating to the Initial Purchasers or their respective affiliates that was furnished by or on behalf of the Initial Purchasers specifically for inclusion in the Final Offering Memorandum (including, without limitation, any information contained under the caption "Plan of Distribution" in the Final Offering Memorandum to the extent such information relates to the activities and arrangements of the Initial Purchasers); and
(d) the exhibits and annexes to the Final Offering Memorandum, except to the extent that the substance of such exhibits and annexes is summarized in the narrative text of the Final Offering Memorandum (and then only with respect to such summaries).
4.  We express no view as to any matters of fact, and we have relied, without independent investigation or verification, upon certificates and other communications from officers and other representatives of the Company, and upon certificates and other communications from public officials, with respect to the accuracy of material factual matters contained therein which were not independently established.
5.  We are members of the Bar of the State of New York, and we express no opinion or view with respect to the laws of any jurisdiction other than the federal laws of the United States and the laws of the State of New York, in each case as in effect on the date hereof.
V. Negative Assurance
On the basis of the foregoing, and subject to the limitations, qualifications, and exclusions set forth in this letter (including, without limitation, those set forth in Section IV above), and without having independently verified the accuracy, completeness, or fairness of the statements contained in the Final Offering Memorandum, nothing has come to the attention of the Participating Lawyers that caused such lawyers to believe that the Final Offering Memorandum, as of the date thereof (May 24, 2023) or as of the date hereof (May 30, 2023):
(a) contained or contains an untrue statement of a material fact; or
(b) omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
The foregoing negative assurance is provided in the context of, and with reference to, Section 10(b) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission. We note that the standard expressed in the preceding paragraph is a professional negative assurance standard based on the Participating Lawyers' involvement in the preparation of the Final Offering Memorandum, and is not a guarantee or certification regarding the accuracy or completeness of the Final Offering Memorandum.
VI. Reliance and Use Limitations
This letter is furnished solely for the benefit of the Initial Purchasers and is delivered solely in connection with the Offering and the transactions contemplated by the Purchase Agreement. This letter is not to be used, circulated, quoted, referred to, or otherwise relied upon by any other person or entity, or for any other purpose, without the prior written consent of Calderwood & Harkness LLP.
Without limiting the generality of the foregoing, this letter may not be quoted in whole or in part, summarized, described, referred to, or filed with any governmental authority, regulatory body, stock exchange, or other person or entity, without the prior written consent of Calderwood & Harkness LLP; provided, however, that this letter may be disclosed (a) as may be required by applicable law, regulation, or legal process, or (b) in connection with any legal proceeding arising out of or relating to the transactions contemplated by the Purchase Agreement, in each case without our prior written consent but with prompt notice to us of any such disclosure (to the extent permitted by applicable law).
VII. Governing Law
This letter shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Jennifer Kwon, Partner Capital Markets Group
JK/mps cc: Optiwave Semiconductor Corp. — Attention: General Counsel Prescott Whitfield LLP — Attention: Capital Markets Group Broadmere Trust Company, N.A. — Attention: Corporate Trust Administration

CALDERWOOD & HARKNESS LLP

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