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CALDERWOOD & HARKNESS LLP

NEW MATTER MEMORANDUM

Matter Intake Form / New Matter Opening

CONFIDENTIAL — FOR INTERNAL USE ONLY

Date: March 6, 2023

Matter No.: 1014-00001

This memorandum is prepared for internal firm purposes only in connection with the opening of a new matter. It contains confidential client information and is subject to attorney-client privilege and attorney work product protections. This memorandum should not be distributed outside of Calderwood & Harkness LLP. Copies are to be filed with the New Business / Conflicts Department and the Finance Department for billing setup purposes.

I. MATTER IDENTIFICATION

Matter Number: 1014-00001

Billing Code: 48710-001

Matter Name / Description: Optiwave Semiconductor Corp. — $250,000,000 Convertible Notes Offering with Capped Call Overlay

Date Opened: March 6, 2023

Practice Group: Capital Markets

Office: New York (600 Lexington Avenue, 30th Floor, New York, NY 10022)

Matter Type: Securities Offering — Rule 144A Convertible Notes with Derivative Overlay

Status: Active / Open

This matter involves the representation of Optiwave Semiconductor Corp. ("Optiwave" or "OWS" or the "Company") as issuer's counsel in connection with a Rule 144A offering of convertible senior notes due 2028, together with a concurrent capped call overlay transaction. The engagement encompasses the full scope of transactional documentation, regulatory analysis, tax advisory work, and closing deliverables, as described in further detail below. The matter has been assigned to the Capital Markets practice group in the firm's New York office and will be staffed by the engagement team identified in Section III of this memorandum.

II. CLIENT INFORMATION

Client Full Legal Name: Optiwave Semiconductor Corp.

Short Name / Abbreviations: Optiwave Semi; OWS

Entity Type: Corporation

Jurisdiction of Incorporation: State of Delaware (Delaware Secretary of State File No. 5738291)

Employer Identification Number (EIN): 82-4917263

Headquarters Address: 4800 Great America Parkway, Suite 1200, San Jose, California 95054

Exchange Listing: The Nasdaq Stock Market LLC — Ticker Symbol: OWS

SEC Central Index Key (CIK): 0001823467

Industry: Fabless semiconductor design — specializing in radio frequency (RF) and photonic integrated circuits for data-center interconnects and 5G infrastructure applications

Reporting Status: Optiwave Semiconductor Corp. is a reporting company under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company files annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K with the U.S. Securities and Exchange Commission (the "SEC"). The Company is current in all Exchange Act reporting obligations as of the date of this memorandum.

Optiwave is a leading fabless semiconductor company focused on the design and development of high-performance RF and photonic integrated circuits. The Company's products serve critical applications in hyperscale data-center interconnects, 5G wireless infrastructure, and advanced telecommunications systems. Optiwave outsources the fabrication of its semiconductor devices to third-party foundries and maintains design centers in San Jose, California; Austin, Texas; and Hsinchu, Taiwan. For the fiscal year ended December 31, 2022, the Company reported revenues of approximately $812.4 million and Adjusted EBITDA of approximately $198.7 million. As of March 3, 2023, the Company's market capitalization was approximately $4.3 billion, based on approximately 58.6 million diluted shares outstanding at a closing price of $73.38 per share.

Key Client Contacts

The following individuals have been identified as the principal client contacts for purposes of this engagement:

All substantive communications regarding the engagement should be directed through David Shih as primary client contact, with copies as appropriate to Priya Nandakumar and Rachel Fontaine. Direct communications with Marcus Harding or Dr. Evelyn Matsuda should be coordinated through David Shih's office unless otherwise directed by the client.

III. ENGAGEMENT TEAM

The following attorneys have been assigned to this matter. All timekeepers should record their time against Billing Code 48710-001 unless otherwise directed by the Billing Partner.

Responsible Partner. Name: Jennifer Kwon Title: Partner, Capital Markets Role: Responsible Partner — Jennifer Kwon will have overall engagement responsibility and supervision for this matter. She will serve as the principal relationship partner for the client and will be responsible for overseeing all aspects of the transaction, including strategic advice to the Company, supervision of all work streams, review and approval of all legal opinions issued in connection with the offering, and coordination with the initial purchasers' counsel. Ms. Kwon will also be the primary signatory on all opinions issued by the firm in connection with the engagement.

Billing Partner. Name: Theodore Langston Title: Partner, Capital Markets Role: Billing Partner — Theodore Langston will be responsible for all billing review, fee cap compliance monitoring, and maintenance of the client billing relationship. Mr. Langston will review all pre-bills, ensure that invoiced amounts comply with the fee cap arrangement described in Section VI below, coordinate with the Finance Department on billing setup and invoice processing, and serve as the point of escalation for any billing-related inquiries from the client. Mr. Langston will also contribute substantive legal work on certain transaction documents as needed, including review of the Purchase Agreement and participation in key negotiation calls.

Lead Associate. Name: Claire Dempsey Title: Associate, Capital Markets Role: Lead Associate — Claire Dempsey will have primary day-to-day responsibility for the drafting, review, and negotiation of the principal transaction documents, including the Indenture, the Purchase Agreement, the Offering Memorandum, and all closing deliverables. Ms. Dempsey will coordinate with the initial purchasers' counsel (Prescott Whitfield LLP), the Trustee (Broadmere Trust Company, N.A.), and the capped call counterparties on all documentation matters. She will prepare and maintain the master closing checklist and will coordinate the execution and delivery of all documents at closing. Ms. Dempsey will report directly to Jennifer Kwon on all substantive matters.

Working Associate. Name: Audrey Zhou Title: Associate, Capital Markets Role: Working Associate — Audrey Zhou will support the engagement with a particular focus on regulatory and exemption analysis, including the preparation of the Rule 144A / Section 4(a)(2) exemption analysis memorandum. Ms. Zhou will also assist with due diligence support, including review of the Company's existing material contracts, SEC filings, and corporate governance documents. She will prepare ancillary documentation as assigned, including corporate authorizations, officers' certificates, the Nasdaq supplemental listing application, and the DTC eligibility letter. Ms. Zhou will work under the supervision of Claire Dempsey and Jennifer Kwon.

Tax Specialist. Name: Leonard Cross Title: Partner, Tax Role: Specialist Partner, Tax — Leonard Cross will be responsible for all aspects of the U.S. federal income tax analysis relating to the convertible notes and the capped call transactions. His work will include the preparation of a tax opinion or memorandum addressing the U.S. federal income tax treatment of the Notes (including the characterization of the convertible notes as indebtedness for U.S. federal income tax purposes, the treatment of original issue discount, if any, and the tax consequences of conversion), as well as the U.S. federal income tax analysis of the capped call overlay transactions (including considerations under Section 1032 of the Internal Revenue Code, constructive sale analysis, and the treatment of the capped call premium). Mr. Cross will also review the tax disclosure sections of the Offering Memorandum. Time incurred by Mr. Cross and any attorneys in the Tax practice group working under his supervision will be billed against this matter number and included within the fee cap arrangement.

IV. TRANSACTION SUMMARY

A. Nature of Engagement

Calderwood & Harkness LLP has been engaged to serve as issuer's counsel to Optiwave Semiconductor Corp. in connection with a Rule 144A offering of convertible senior notes due 2028 with a concurrent capped call overlay transaction. The engagement encompasses the preparation and negotiation of all offering documentation and transaction agreements, regulatory and exemption analysis, U.S. federal income tax analysis, issuance of legal opinions, and preparation and coordination of all closing deliverables. The scope of the engagement is defined by the engagement letter dated March 6, 2023, executed by Jennifer Kwon on behalf of Calderwood & Harkness LLP and by David Shih on behalf of Optiwave Semiconductor Corp.

B. Transaction Overview

The principal terms of the proposed transaction, as currently contemplated, are set forth below. All terms remain subject to finalization upon pricing and execution of the definitive transaction agreements.

Issuer: Optiwave Semiconductor Corp., a Delaware corporation.

Instrument: 2.75% Convertible Senior Notes due 2028 (the "Notes").

Aggregate Principal Amount (Base Offering): $250,000,000.

Over-Allotment Option: The initial purchasers will be granted an option, exercisable within a 13-day period following the initial issuance of the Notes, to purchase up to an additional $37,500,000 aggregate principal amount of Notes (representing a 15% greenshoe), potentially bringing the total aggregate principal amount of Notes issued to $287,500,000.

Offering Structure: The Notes will be offered and sold in a Rule 144A offering to qualified institutional buyers ("QIBs") as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). The offering will be exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act and Rule 144A thereunder. No registration statement will be filed with the SEC in connection with the offering. The Notes will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

Maturity Date: June 1, 2028, unless earlier converted, repurchased, or redeemed in accordance with the terms of the Indenture.

Coupon: 2.75% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, commencing December 1, 2023.

Conversion Feature: The Notes will be convertible into shares of OWS common stock (or, at the Company's election, cash or a combination of cash and shares) at an initial conversion rate to be determined at pricing, corresponding to an initial conversion premium of approximately 28.8% over the reference price (which will be the last reported sale price of OWS common stock on The Nasdaq Stock Market on the trading day immediately preceding the pricing of the offering). The conversion rate will be subject to customary anti-dilution adjustments as set forth in the Indenture. The Notes will be convertible at the option of the holders during the last three months prior to maturity and, prior to that time, upon the occurrence of certain specified conditions (including stock price conditions, trading price conditions, and specified corporate events).

Ranking: The Notes will be senior unsecured obligations of the Company, ranking senior in right of payment to any future indebtedness of the Company that is expressly subordinated in right of payment to the Notes, ranking equal in right of payment with all existing and future senior unsecured indebtedness of the Company (including trade payables), and effectively subordinated in right of payment to any existing and future secured indebtedness of the Company (including indebtedness under the Company's existing revolving credit facility with Crestline National Bank, N.A.) to the extent of the value of the collateral securing such indebtedness.

Capped Call Overlay: Concurrently with the pricing of the Notes, and in connection with any exercise of the over-allotment option, the Company intends to enter into privately negotiated capped call transactions (the "Capped Call Transactions") with two dealer counterparties. The Capped Call Transactions are expected to cover, subject to customary anti-dilution adjustments, the number of shares of OWS common stock that initially underlie the Notes (including any Notes issued pursuant to the over-allotment option, if exercised). The Capped Call Transactions are intended to reduce the potential dilution to the Company's common stock upon any conversion of the Notes and/or to offset any cash payments the Company is required to make in excess of the principal amount of the converted Notes, as the case may be, with such reduction and/or offset subject to a cap.

Capped Call Counterparties:

• Ridgepoint Capital Markets LLC (acting in its principal capacity, and not as agent or in any fiduciary capacity) — 60% allocation

• Northvane Financial Products LP (acting in its principal capacity, and not as agent or in any fiduciary capacity) — 40% allocation

Cap Price: The cap price of the Capped Call Transactions will initially be set at approximately 50.0% premium over the reference price and will be subject to certain adjustments under the terms of the Capped Call Confirmations.

Capped Call Cost (Estimated): The aggregate cost of the Capped Call Transactions is estimated to be approximately $28,750,000. The final cost will depend on market conditions at the time of pricing and the specific terms negotiated with the capped call counterparties.

ISDA Documentation: The Capped Call Transactions will be documented under 2002 ISDA Master Agreements and related Confirmations between the Company and each of the capped call counterparties. All ISDA documentation will be governed by the laws of the State of New York.

Deal Value for Engagement Purposes: $250,000,000 (base offering amount).

C. Use of Proceeds (Anticipated)

The Company intends to use the net proceeds from the offering of the Notes, together with cash on hand, for the following purposes:

1. Capped Call Transactions. Funding the cost of the Capped Call Transactions (estimated at approximately $28,750,000 in aggregate).

2. Repayment of Revolving Credit Facility. Repayment of approximately $75,000,000 of indebtedness outstanding under the Company's existing $300,000,000 senior secured revolving credit facility with Crestline National Bank, N.A., as Administrative Agent (the "Existing Credit Facility"). The Existing Credit Facility matures on August 15, 2026 and bears interest at a variable rate based on SOFR plus a margin determined by the Company's consolidated leverage ratio.

3. General Corporate Purposes. The remainder of the net proceeds will be used for general corporate purposes, including working capital, potential acquisitions and strategic investments, and capital expenditures.

The foregoing use of proceeds is preliminary and is subject to change. The final allocation of proceeds will be described in the Offering Memorandum and will be subject to the Company's discretion.

V. OTHER PARTIES TO THE TRANSACTION

A. Initial Purchasers

The Notes will be offered and sold to the initial purchasers pursuant to a purchase agreement (the "Purchase Agreement") to be entered into among the Company and the initial purchasers named below. The initial purchasers are expected to resell the Notes to QIBs in reliance on Rule 144A.

Ridgepoint Capital Markets LLC will serve as the sole bookrunning manager and will lead the marketing and distribution of the Notes to QIBs. Harborstone Securities Inc. and Velthorn Zanthor & Co. will participate in the offering as co-managers. The initial purchasers' respective commitments to purchase the Notes will be set forth in the Purchase Agreement.

B. Capped Call Counterparties

The Capped Call Transactions will be entered into with the following counterparties, each acting in its principal capacity:

The allocation between the capped call counterparties reflects the 60/40 split negotiated between the Company and the counterparties. Ridgepoint Capital Markets LLC's participation as both an initial purchaser and a capped call counterparty will be disclosed in the Offering Memorandum and is consistent with market practice for transactions of this type. Northvane Financial Products LP is a CFTC-registered swap dealer, and accordingly, the Capped Call Transactions with Northvane will be subject to certain regulatory requirements under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as further discussed in Section XII below.

C. Initial Purchasers' Counsel

Firm: Prescott Whitfield LLP (New York limited liability partnership) Address: 51 West 52nd Street, New York, NY 10019 Lead Partner: Diana Castellano (Capital Markets) Lead Associate: Ryan Fujimoto

Prescott Whitfield LLP will serve as counsel to the initial purchasers in connection with the offering. The initial purchasers' counsel will be responsible for reviewing and commenting on the Offering Memorandum, the Purchase Agreement, the Indenture, and other transaction documents from the perspective of the initial purchasers. The initial purchasers' counsel will issue an opinion letter and negative assurance letter to the initial purchasers in connection with the closing. The fees and expenses of the initial purchasers' counsel will be borne by the initial purchasers and will not constitute a cost to OWS through this engagement.

D. Trustee / Paying Agent / Conversion Agent / Registrar

Entity: Broadmere Trust Company, N.A. (national banking association) Address: 100 Wall Street, 6th Floor, New York, NY 10005 Relationship Manager: Karen Llewellyn

Broadmere Trust Company, N.A. will serve as Trustee, Paying Agent, Conversion Agent, and Registrar under the Indenture. Broadmere Trust Company, N.A. is a national banking association organized under the laws of the United States and is a qualified trustee under the Trust Indenture Act of 1939, as amended. The Company has engaged Broadmere Trust Company, N.A. in prior transactions and has an existing relationship with the institution. The Trustee's fees and expenses will be borne by the Company under the terms of the Indenture.

E. Independent Auditor

Firm: Aldgate & Finch LLP (Delaware limited liability partnership) Address: 350 South Grand Avenue, Suite 3000, Los Angeles, CA 90071 PCAOB Registration: Registered with the Public Company Accounting Oversight Board Engagement Partner: Robert Nishimura

Aldgate & Finch LLP is the Company's independent registered public accounting firm and has audited the Company's consolidated financial statements for the fiscal years ended December 31, 2022, 2021, and 2020. In connection with this offering, the firm will be requested to deliver a comfort letter (in customary form for Rule 144A offerings) to the initial purchasers and the Company, covering specified financial information included in the Offering Memorandum. Calderwood & Harkness LLP will prepare and transmit the comfort letter request on behalf of the Company and will coordinate with Aldgate & Finch LLP regarding the scope and timing of the comfort letter.

F. Transfer Agent (OWS Common Stock)

Entity: Clearwater Transfer Services Inc. (Delaware corporation) Address: 6201 15th Avenue, Brooklyn, NY 11219

Clearwater Transfer Services Inc. serves as the transfer agent and registrar for the Company's common stock, par value $0.0001 per share, listed on The Nasdaq Stock Market under the ticker symbol "OWS." The transfer agent will coordinate with the Company and the Trustee in connection with any conversion of the Notes into shares of OWS common stock.

G. Administrative Agent, Existing Credit Facility

Administrative Agent: Crestline National Bank, N.A. Address: 227 Park Avenue, 14th Floor, New York, NY 10172

Syndicate Lenders:

• Crestline National Bank, N.A.

• Piedmont Commerce Bank

• Lakeshore Federal Credit Corp.

Facility: $300,000,000 senior secured revolving credit facility, dated August 15, 2021, as amended, maturing August 15, 2026 (the "Existing Credit Facility").

Consent Requirement: Section 7.01(b) of the credit agreement governing the Existing Credit Facility requires the prior written consent of the Required Lenders (as defined in the credit agreement) for the incurrence of indebtedness not otherwise constituting Permitted Indebtedness. The Company will need to obtain a limited consent or waiver from the Required Lenders to permit the incurrence of the Notes as "Permitted Additional Indebtedness" under the credit agreement. Calderwood & Harkness LLP will prepare and negotiate the form of limited consent and waiver for circulation to the syndicate lenders through Crestline National Bank, N.A. as Administrative Agent. The process of obtaining lender consent is expected to run concurrently with the preparation of the offering documentation.

VI. FEE ARRANGEMENT

Fee Structure: Capped fee arrangement, as set forth in the engagement letter dated March 6, 2023, executed between Calderwood & Harkness LLP and Optiwave Semiconductor Corp.

Fee Cap: $1,850,000 for professional fees. This fee cap represents the maximum amount that the firm may invoice the client for professional services rendered in connection with this matter. The fee cap is inclusive of all time incurred by all timekeepers across all practice groups (including Capital Markets and Tax) working on the engagement. In the event that the aggregate professional fees incurred by the firm exceed the fee cap, the excess will be absorbed by the firm. In the event that the aggregate professional fees incurred are less than the fee cap, only the actual fees incurred will be invoiced.

Estimated Disbursements: Approximately $45,000. Disbursements are not included within the fee cap and will be invoiced separately at cost. Anticipated disbursements include, among other things, filing fees, printing and reproduction costs, database and research charges, document management expenses, travel expenses (if any), and courier and delivery charges.

Billing Partner: Theodore Langston. All pre-bills will be reviewed and approved by Mr. Langston prior to submission to the client. Mr. Langston will monitor cumulative fees against the fee cap on a monthly basis and will coordinate with the Finance Department to ensure compliance with the capped fee arrangement.

Billing Rate Basis: Blended / capped. The engagement letter provides for blended billing rates for all timekeepers, subject to the overall fee cap. Specific billing rates for each timekeeper are set forth in the engagement letter and are incorporated by reference herein. Time will be recorded contemporaneously by all timekeepers and will be tracked against the fee cap on a cumulative basis.

Initial Purchasers' Counsel Fees: The fees and expenses of Prescott Whitfield LLP, as counsel to the initial purchasers, will be borne by the initial purchasers and do not constitute a cost to OWS through this engagement. Accordingly, such fees are not reflected in the fee cap or the estimated disbursements set forth above.

Scope of Fee Cap: The fee cap covers all work streams associated with this engagement, including without limitation: (a) the preparation, drafting, review, and negotiation of all offering documentation (Preliminary and Final Offering Memorandum, Rule 144A exemption analysis); (b) the preparation, drafting, review, and negotiation of all transaction agreements (Indenture, Purchase Agreement, Form of Global Note); (c) the preparation, drafting, review, and negotiation of all capped call documentation (ISDA Master Agreements, Capped Call Confirmations, regulatory and structural analysis memoranda); (d) the preparation of all corporate authorizations (board resolutions, pricing committee resolutions, secretary's certificate); (e) the issuance of all legal opinions (issuer's counsel opinion, negative assurance letter, opinion to Trustee, tax opinion/memorandum); (f) the preparation of all officers' certificates and ancillary closing deliverables; (g) the preparation and negotiation of the limited consent and waiver under the Existing Credit Facility; (h) the Nasdaq supplemental listing application; and (i) all related matters arising in connection with the offering.

VII. ANTICIPATED WORK STREAMS AND DELIVERABLES

The following is a summary of the principal work streams and deliverables anticipated in connection with this engagement. The responsible attorneys for each work stream are identified where appropriate. This summary is not exhaustive and may be supplemented as the transaction progresses.

A. Offering Documentation

1. Preliminary Offering Memorandum. Calderwood & Harkness LLP will prepare the initial draft of the Preliminary Offering Memorandum (the "Preliminary OM") and will coordinate with the Company, the initial purchasers, and the initial purchasers' counsel on all revisions and comments. The Preliminary OM will contain customary disclosure for a Rule 144A convertible notes offering, including a description of the Company's business, risk factors, a description of the Notes and the Capped Call Transactions, selected financial data, management's discussion and analysis of financial condition and results of operations, and a description of the Company's capital structure. Much of the disclosure will be drawn from the Company's existing Exchange Act filings, supplemented by additional information provided by the Company. Lead: Claire Dempsey, with assistance from Audrey Zhou.

2. Final Offering Memorandum. Following the pricing of the Notes, Calderwood & Harkness LLP will prepare the Final Offering Memorandum (the "Final OM"), which will supplement the Preliminary OM with final pricing terms, including the aggregate principal amount of Notes sold, the coupon rate, the initial conversion rate, the initial conversion price, the cap price of the Capped Call Transactions, and the closing date. Lead: Claire Dempsey.

3. Rule 144A / Section 4(a)(2) Exemption Analysis. Calderwood & Harkness LLP will prepare a memorandum analyzing the availability of the Rule 144A and Section 4(a)(2) exemptions from the registration requirements of the Securities Act for the offering and sale of the Notes. The memorandum will address the eligibility of the Notes as "securities" within the meaning of Rule 144A(d)(3), the qualification of the Company as a reporting company under the Exchange Act (and the availability of Rule 144A(d)(4) information), and the status of the offerees as QIBs within the meaning of Rule 144A(a)(1). Lead: Audrey Zhou, with review by Jennifer Kwon.

B. Transaction Agreements

1. Indenture. Calderwood & Harkness LLP will prepare the initial draft of the Indenture governing the Notes, to be entered into between Optiwave Semiconductor Corp., as Issuer, and Broadmere Trust Company, N.A., as Trustee. The Indenture will contain customary terms and conditions for convertible notes issued in a Rule 144A offering, including provisions governing interest payments, conversion mechanics (including the conditions to conversion, conversion settlement methods, anti-dilution adjustments, and make-whole fundamental change adjustments), events of default, redemption, repurchase upon fundamental change, and covenants. The Indenture will be governed by the laws of the State of New York. Lead: Claire Dempsey, with review by Jennifer Kwon and Theodore Langston.

2. Form of Global Note. Calderwood & Harkness LLP will prepare the Form of Global Note, which will be attached as Exhibit A to the Indenture. The Global Note will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), and will represent the aggregate principal amount of Notes outstanding. Lead: Claire Dempsey.

3. Purchase Agreement. Calderwood & Harkness LLP will prepare the initial draft of the Purchase Agreement to be entered into among Optiwave Semiconductor Corp. and the initial purchasers, setting forth the terms and conditions upon which the initial purchasers will purchase the Notes from the Company. The Purchase Agreement will contain customary representations and warranties of the Company, conditions to closing, indemnification provisions, and termination rights. Lead: Claire Dempsey, with review by Jennifer Kwon and Theodore Langston.

C. Capped Call Documentation

1. 2002 ISDA Master Agreements. Calderwood & Harkness LLP will review, negotiate, and advise on the 2002 ISDA Master Agreements to be entered into between the Company and each of Ridgepoint Capital Markets LLC and Northvane Financial Products LP. The ISDA Master Agreements will include customary terms and elections, including provisions relating to netting, credit support, events of default, termination events, and close-out netting. All ISDA Master Agreements will be governed by the laws of the State of New York. Lead: Claire Dempsey, with review by Jennifer Kwon.

2. Capped Call Confirmations. Calderwood & Harkness LLP will review, negotiate, and advise on the Capped Call Confirmations to be entered into between the Company and each of the capped call counterparties, which will set forth the specific economic terms of the Capped Call Transactions, including the number of options, the strike price, the cap price, the expiration dates, the settlement method, the anti-dilution adjustments, and the calculation agent provisions. The Capped Call Confirmations will be entered into under and governed by the applicable ISDA Master Agreement. Lead: Claire Dempsey.

3. Regulatory and Structural Analysis Memoranda. Calderwood & Harkness LLP will prepare internal memoranda analyzing the regulatory and structural considerations associated with the Capped Call Transactions. These memoranda will address, among other things: (a) Dodd-Frank compliance considerations, including the applicability of Title VII requirements to the Capped Call Transactions with Northvane Financial Products LP as a CFTC-registered swap dealer (including reporting, recordkeeping, and business conduct requirements); (b) analysis of the Capped Call Transactions under Section 1032 of the Internal Revenue Code (transactions by a corporation in its own stock); and (c) constructive sale analysis under Section 1259 of the Internal Revenue Code with respect to the Company's common stock. Lead: Audrey Zhou (regulatory); Leonard Cross (tax-related analysis).

D. Corporate Authorizations

1. Board Resolutions. Calderwood & Harkness LLP will prepare resolutions of the Board of Directors of Optiwave Semiconductor Corp. authorizing the offering of the Notes, the entry into the Capped Call Transactions, and related matters. The board resolutions will authorize the issuance and sale of the Notes, approve the form of Indenture and Purchase Agreement, authorize the entry into the ISDA Master Agreements and Capped Call Confirmations, authorize the use of proceeds, delegate authority to a Pricing Committee (consisting of specified officers) to determine the final pricing terms, and ratify all actions taken in connection therewith. Lead: Audrey Zhou, with review by Jennifer Kwon.

2. Pricing Committee Resolutions. Calderwood & Harkness LLP will prepare resolutions of the Pricing Committee authorized by the Board, to be adopted following the pricing of the Notes, approving the final terms of the offering (including the aggregate principal amount, the coupon, the initial conversion rate, the initial conversion price, and the cap price) and authorizing the execution and delivery of the definitive transaction documents. Lead: Audrey Zhou.

3. Secretary's Certificate (including Incumbency). Calderwood & Harkness LLP will prepare the Secretary's Certificate to be delivered at closing, certifying as to the Company's certificate of incorporation, bylaws, board resolutions, pricing committee resolutions, and the incumbency and specimen signatures of the officers executing the transaction documents. Lead: Audrey Zhou.

E. Legal Opinions

1. Issuer's Counsel Opinion to Initial Purchasers. Calderwood & Harkness LLP will issue a legal opinion addressed to the initial purchasers, as required by the Purchase Agreement, covering customary matters including: (a) due organization and good standing of the Company; (b) due authorization, execution, and delivery of the transaction documents; (c) enforceability of the Indenture and the Notes; (d) no conflict with applicable law or the Company's organizational documents; (e) no registration of the Notes required under the Securities Act (subject to customary assumptions and qualifications); and (f) the Company is not required to register as an investment company under the Investment Company Act of 1940, as amended. Lead: Jennifer Kwon, with drafting support from Claire Dempsey and Audrey Zhou.

2. Negative Assurance (10b-5) Letter to Initial Purchasers. Calderwood & Harkness LLP will issue a negative assurance letter addressed to the initial purchasers, based on the firm's participation in the preparation and review of the Offering Memorandum and the due diligence process, stating that nothing has come to the attention of the attorneys at the firm who participated in the preparation of the Offering Memorandum that causes them to believe that the Offering Memorandum, as of its date and as of the closing date, contained or contains an untrue statement of a material fact or 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 (customary 10b-5 negative assurance). Lead: Jennifer Kwon.

3. Issuer's Counsel Opinion to Trustee. Calderwood & Harkness LLP will issue a legal opinion addressed to Broadmere Trust Company, N.A., as Trustee, covering customary matters required under the Indenture, including due authorization, execution, and delivery of the Indenture and the Notes, and enforceability thereof. Lead: Jennifer Kwon, with drafting support from Claire Dempsey.

4. Tax Opinion / Memorandum. Calderwood & Harkness LLP will prepare a tax opinion or memorandum addressing the U.S. federal income tax treatment of the Notes and the Capped Call Transactions. The tax opinion will cover, among other things, the characterization of the Notes as indebtedness for U.S. federal income tax purposes, the treatment of original issue discount (if any), the U.S. federal income tax consequences to U.S. and non-U.S. holders of acquiring, holding, converting, and disposing of the Notes, and the U.S. federal income tax treatment of the Capped Call Transactions (including analysis under Sections 1032 and 1259 of the Internal Revenue Code). Lead: Leonard Cross.

F. Officers' Certificates

1. Officers' Certificate pursuant to Purchase Agreement. Calderwood & Harkness LLP will prepare the Officers' Certificate to be delivered at closing pursuant to the Purchase Agreement, certifying as to the accuracy of the Company's representations and warranties in the Purchase Agreement, the Company's compliance with its covenants and agreements thereunder, and the absence of any material adverse change in the Company's business, condition, or results of operations since the date of the most recent financial statements included in the Offering Memorandum. Lead: Claire Dempsey.

2. Officers' Certificate to Trustee re: Indenture. Calderwood & Harkness LLP will prepare the Officers' Certificate to be delivered to the Trustee in connection with the execution and delivery of the Indenture, certifying as to the matters required by the Indenture and the Trust Indenture Act of 1939, as amended (including the Company's compliance with all conditions precedent to the authentication and delivery of the Notes). Lead: Claire Dempsey.

G. Ancillary / Closing Deliverables

1. Limited Consent and Waiver under Revolving Credit Facility. Calderwood & Harkness LLP will prepare and negotiate the form of limited consent and waiver to be delivered by the Required Lenders under the Existing Credit Facility, permitting the incurrence of the Notes as Permitted Additional Indebtedness under Section 7.01(b) of the credit agreement. The limited consent and waiver will be circulated to the syndicate lenders through Crestline National Bank, N.A. as Administrative Agent and is expected to require the consent of the Required Lenders (defined in the credit agreement as lenders holding more than 50% of the aggregate commitments). Lead: Claire Dempsey, with review by Jennifer Kwon.

2. Nasdaq Supplemental Listing Application and Cover Letter. Calderwood & Harkness LLP will prepare the Nasdaq supplemental listing application for the shares of OWS common stock issuable upon conversion of the Notes. The supplemental listing application will be filed with The Nasdaq Stock Market LLC in accordance with Nasdaq Listing Rules and will be accompanied by a cover letter setting forth the details of the offering and the number of shares to be reserved for issuance upon conversion. Lead: Audrey Zhou.

3. DTC Eligibility Letter / Letter of Representations. Calderwood & Harkness LLP will coordinate with the Company and the Trustee to ensure the DTC eligibility of the Notes and will prepare or review the DTC Letter of Representations to be executed by the Company and the Trustee and delivered to DTC. Lead: Audrey Zhou.

4. Instruction Letter to Trustee. Calderwood & Harkness LLP will prepare the instruction letter from the Company to the Trustee directing the authentication and delivery of the Global Note in connection with the closing. Lead: Claire Dempsey.

5. Comfort Letter Request to Aldgate & Finch LLP. Calderwood & Harkness LLP will prepare and transmit the comfort letter request to Aldgate & Finch LLP on behalf of the Company and the initial purchasers, specifying the scope of the comfort letter procedures and the financial information to be covered thereby. The comfort letter request will conform to the standards set forth in AU Section 634 (Letters for Underwriters and Certain Other Requesting Parties) of the PCAOB auditing standards. Lead: Claire Dempsey.

6. Funds Flow Memorandum. Calderwood & Harkness LLP will prepare the funds flow memorandum setting forth the flow of funds at closing, including the receipt of the aggregate purchase price from the initial purchasers, the payment of the capped call premium to the capped call counterparties, the repayment of approximately $75,000,000 under the Existing Credit Facility, and the disbursement of the remaining net proceeds to the Company. The funds flow memorandum will be circulated to all relevant parties for review and approval prior to closing. Lead: Claire Dempsey, in coordination with Rachel Fontaine (Treasurer).

7. Master Closing Checklist. Calderwood & Harkness LLP will prepare and maintain the master closing checklist identifying all documents, certificates, opinions, and deliverables required to be delivered at or in connection with the closing, together with the responsible party and status for each item. The master closing checklist will be circulated to all parties and updated regularly through the closing. Lead: Claire Dempsey, with assistance from Audrey Zhou.

VIII. CONFLICT CHECK STATUS

A comprehensive conflict check was initiated and completed in advance of the opening of this matter. The results are summarized below:

Conflict Check Completed: March 3, 2023

Result: Cleared — No disqualifying conflicts identified.

Reference: See separate Conflict Check Memorandum dated March 3, 2023, prepared by the New Business / Conflicts Department (on file). A copy of the Conflict Check Memorandum has been retained in the firm's conflicts database.

Entities Cleared: The conflict check was run against all parties to the transaction, including the following entities and their known affiliates:

• Optiwave Semiconductor Corp. (the Client)

• Ridgepoint Capital Markets LLC (Lead Initial Purchaser / Capped Call Counterparty)

• Harborstone Securities Inc. (Co-Manager / Initial Purchaser)

• Velthorn Zanthor & Co. (Co-Manager / Initial Purchaser)

• Northvane Financial Products LP (Capped Call Counterparty)

• Broadmere Trust Company, N.A. (Trustee)

The conflict check confirmed that Calderwood & Harkness LLP does not currently represent, and has not within the past three years represented, any of the initial purchasers, the capped call counterparties, or the Trustee in any matter adverse to Optiwave Semiconductor Corp. The firm has performed prior work for certain of the above-listed entities in unrelated matters; however, no current representation exists that would give rise to a conflict of interest under the New York Rules of Professional Conduct or the firm's internal conflicts policies. No consent or waiver from any party is required.

The engagement team should promptly notify the New Business / Conflicts Department if any additional parties are added to the transaction or if any other circumstances arise that may require supplemental conflict clearance.

IX. KEY FINANCIAL DATA — CLIENT PROFILE

The following key financial data is provided for reference purposes in connection with the intake and evaluation of this matter:

FY2022 Revenue: $812.4 million

FY2022 Adjusted EBITDA: $198.7 million

Market Capitalization (as of March 3, 2023): Approximately $4.3 billion, based on approximately 58.6 million diluted shares of OWS common stock outstanding at a closing price of $73.38 per share on The Nasdaq Stock Market on March 3, 2023.

Nasdaq Ticker: OWS

The foregoing financial data is based on publicly available information, including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC, and publicly available market data. Additional financial information will be obtained from the Company in connection with the due diligence process and the preparation of the Offering Memorandum.

X. ANTICIPATED TIMELINE

The following timeline sets forth the currently anticipated milestones for the transaction. All dates are subject to change based on market conditions, the pace of document drafting and negotiation, and the availability of the parties. The engagement team will update this timeline as the transaction progresses and will circulate revised timelines to the client and the initial purchasers as appropriate.

The organizational call scheduled for March 10, 2023 will include representatives of the Company, the initial purchasers, the initial purchasers' counsel, and Calderwood & Harkness LLP, and will be used to discuss the transaction structure, the timeline, the allocation of drafting responsibilities, the due diligence plan, and the scheduling of future calls.

XI. GOVERNING LAW

The principal transaction documents are expected to be governed by the following laws:

Indenture: The Indenture governing the Notes will be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of laws principles (other than Section 5-1401 of the New York General Obligations Law).

Purchase Agreement: The Purchase Agreement among the Company and the initial purchasers will be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of laws principles (other than Section 5-1401 of the New York General Obligations Law).

Capped Call Confirmations and ISDA Master Agreements: The 2002 ISDA Master Agreements and the Capped Call Confirmations entered into between the Company and each of the capped call counterparties will be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of laws principles (other than Section 5-1401 of the New York General Obligations Law).

The selection of New York law as the governing law for all principal transaction documents is consistent with market practice for Rule 144A convertible notes offerings and ISDA-documented derivatives transactions.

XII. REGULATORY CONSIDERATIONS

The engagement team should be mindful of the following regulatory considerations in connection with this transaction:

Securities Act Exemption. The Notes will be offered and sold under Rule 144A of the Securities Act to QIBs only. No registration statement will be filed with the SEC in connection with the offering, and no registration rights will be granted to the holders of the Notes. The availability of the Rule 144A exemption will be confirmed in the exemption analysis memorandum to be prepared by Audrey Zhou. All offering materials, including the Offering Memorandum, must contain customary legends and selling restrictions to preserve the Section 4(a)(2) and Rule 144A exemptions.

No Registration Rights. The Company will not grant registration rights in connection with the offering of the Notes. Holders of the Notes will be required to comply with the transfer restrictions set forth in the Indenture and the Global Note, including the restriction that the Notes may only be resold in compliance with Rule 144A, Regulation S, or pursuant to another available exemption from the registration requirements of the Securities Act.

Exchange Act Compliance. Optiwave Semiconductor Corp. is an SEC reporting company (CIK: 0001823467) and is subject to the periodic reporting and other requirements of the Exchange Act. The Company must remain current in its Exchange Act reporting obligations in order to satisfy the Rule 144A(d)(4) information requirements. The Company's Exchange Act reporting status will be confirmed as part of the due diligence process.

Nasdaq Supplemental Listing Application. The shares of OWS common stock issuable upon conversion of the Notes will require listing on The Nasdaq Stock Market. A supplemental listing application will be filed with Nasdaq in accordance with Nasdaq Listing Rules. The Company must satisfy the applicable listing standards for the additional shares, including the Nasdaq's requirements with respect to minimum bid price, market value of publicly held shares, and shareholder approval (to the extent applicable). Based on a preliminary analysis, the shares issuable upon conversion of the Notes are not expected to trigger the Nasdaq shareholder approval requirements under Listing Rule 5635, as the Notes will be sold in a bona fide public offering at a price not below the applicable thresholds; however, this analysis will be confirmed.

Consent under Existing Credit Facility. As noted in Section V.G above, the incurrence of the Notes as indebtedness of the Company will require the prior written consent of the Required Lenders under the Company's Existing Credit Facility with Crestline National Bank, N.A. as Administrative Agent. Section 7.01(b) of the credit agreement governing the Existing Credit Facility restricts the incurrence of indebtedness other than Permitted Indebtedness, and the Notes do not fall within the existing categories of Permitted Indebtedness. A limited consent and waiver will be prepared and circulated to the syndicate lenders. The engagement team should coordinate with the Company's Treasurer, Rachel Fontaine, and with Crestline National Bank, N.A. to ensure that the consent process is completed prior to the pricing of the Notes.

Dodd-Frank Compliance — Capped Call Transactions. Northvane Financial Products LP, one of the two capped call counterparties, is a CFTC-registered swap dealer (NFA ID: 0587423). As a result, the Capped Call Transactions entered into between the Company and Northvane will be subject to certain requirements under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, including swap reporting obligations (Parts 43 and 45 of the CFTC regulations), recordkeeping requirements, and business conduct standards applicable to swap dealers (Part 23 of the CFTC regulations). The engagement team should confirm the regulatory classification of the Capped Call Transactions (i.e., whether they constitute "security-based swaps" subject to SEC jurisdiction under Section 3(a)(68) of the Exchange Act or "swaps" subject to CFTC jurisdiction, or "mixed swaps" subject to joint jurisdiction). Given that the underlying reference asset is OWS common stock (a single security), the Capped Call Transactions are expected to be classified as security-based swaps subject to SEC jurisdiction, which may trigger additional considerations under SEC rules applicable to security-based swap dealers. The regulatory and structural analysis memoranda described in Section VII.C.3 above will address these issues in detail.

XIII. APPROVALS AND SIGNATURES

This New Matter Memorandum has been prepared and reviewed as indicated below. By signing below, the Responsible Partner and the Billing Partner confirm that the information set forth herein is accurate and complete to the best of their knowledge, that the conflict check has been completed and cleared, that the engagement letter has been executed by the client, and that the matter is authorized to be opened in the firm's accounting and matter management systems.

Prepared by:

JENNIFER KWON Responsible Partner, Capital Markets Calderwood & Harkness LLP

By: ________

Name: Jennifer Kwon

Title: Partner

Date: March 6, 2023

Reviewed by:

THEODORE LANGSTON Billing Partner, Capital Markets Calderwood & Harkness LLP

By: ________

Name: Theodore Langston

Title: Partner

Date: March 6, 2023

Distribution:

• Internal only

• File copy to New Business / Conflicts Department

• File copy to Finance Department (for billing setup and matter opening in firm accounting system)

CONFIDENTIAL — FOR INTERNAL USE ONLY. This New Matter Memorandum is the property of Calderwood & Harkness LLP and is prepared solely for internal firm administration purposes. It contains confidential client information protected by the attorney-client privilege and the attorney work product doctrine. This memorandum should not be disclosed, distributed, or reproduced outside of the firm without the prior written consent of the Responsible Partner. Unauthorized disclosure may result in a waiver of applicable privileges.

Name	Title	Contact Role
David Shih	General Counsel & Corporate Secretary	Primary client contact for all legal matters relating to the engagement; principal liaison between OWS and Calderwood & Harkness LLP
Priya Nandakumar	Chief Financial Officer	Primary contact for all finance and financial matters, including the Offering Memorandum financial disclosure, comfort letter process, and credit facility consent
Rachel Fontaine	Treasurer	Primary contact for all treasury matters, including funds flow, proceeds disbursement, and capped call settlement mechanics
Marcus Harding	Chief Executive Officer	Executive sponsor of the transaction; available for material business and strategic discussions as needed
Dr. Evelyn Matsuda	Chair of the Board (Independent)	Board governance matters; point of contact regarding board-level approvals and resolutions
Entity	Role	Key Contact(s)
Ridgepoint Capital Markets LLC — Delaware limited liability company; SEC-registered broker-dealer (CRD No. 8724); 383 Madison Avenue, 22nd Floor, New York, NY 10179	Lead Initial Purchaser / Sole Bookrunning Manager; also serving as Capped Call Counterparty (60% allocation) in its principal capacity	Cameron Walsh, Head of Equity-Linked Origination; Natasha Okonkwo, Managing Director, ECM Execution
Harborstone Securities Inc. — Delaware corporation; SEC-registered broker-dealer (CRD No. 11942); 200 Vesey Street, Suite 3100, New York, NY 10281	Co-Manager / Initial Purchaser	Jonathan Mercer, Managing Director, Equity-Linked Products
Velthorn Zanthor & Co. — New York general partnership; SEC-registered broker-dealer (CRD No. 6293); 750 Seventh Avenue, 18th Floor, New York, NY 10019	Co-Manager / Initial Purchaser	Samira El-Amin, Director, Convertible Bond Desk
Entity	Allocation	Key Contact
Ridgepoint Capital Markets LLC (acting in principal capacity) — Delaware LLC; 383 Madison Avenue, 22nd Floor, New York, NY 10179	60%	Cameron Walsh, Head of Equity-Linked Origination
Northvane Financial Products LP — Delaware limited partnership; CFTC-registered swap dealer (NFA ID: 0587423); 1 Liberty Plaza, 40th Floor, New York, NY 10006	40%	Philip Granier, Head of Equity Derivatives
Milestone	Target Date
Engagement opened / Mandate letter signed	March 6, 2023
First organizational call (all parties)	March 10, 2023
Draft Preliminary Offering Memorandum (first draft to Company)	Mid-April 2023
First draft Indenture (circulated to initial purchasers' counsel and Trustee)	Late April 2023
First draft Purchase Agreement (circulated to initial purchasers' counsel)	Early May 2023
Preliminary Offering Memorandum finalized and approved for distribution	Mid-May 2023
Pricing of the Notes	Late May 2023
Purchase Agreement execution (Signing)	Late May 2023
Closing / Notes delivery (T+2 after pricing)	Late May / Early June 2023
Capped Call Confirmations executed	Concurrent with closing
Final Offering Memorandum delivered	Concurrent with closing

Post-closing matter wrap-up (closing binder, final billing)

CALDERWOOD & HARKNESS LLP
NEW MATTER MEMORANDUM
Matter Intake Form / New Matter Opening
CONFIDENTIAL — FOR INTERNAL USE ONLY
Date: March 6, 2023
Matter No.: 1014-00001
This memorandum is prepared for internal firm purposes only in connection with the opening of a new matter. It contains confidential client information and is subject to attorney-client privilege and attorney work product protections. This memorandum should not be distributed outside of Calderwood & Harkness LLP. Copies are to be filed with the New Business / Conflicts Department and the Finance Department for billing setup purposes.
I. MATTER IDENTIFICATION
Matter Number: 1014-00001
Billing Code: 48710-001
Matter Name / Description: Optiwave Semiconductor Corp. — $250,000,000 Convertible Notes Offering with Capped Call Overlay
Date Opened: March 6, 2023
Practice Group: Capital Markets
Office: New York (600 Lexington Avenue, 30th Floor, New York, NY 10022)
Matter Type: Securities Offering — Rule 144A Convertible Notes with Derivative Overlay
Status: Active / Open
This matter involves the representation of Optiwave Semiconductor Corp. ("Optiwave" or "OWS" or the "Company") as issuer's counsel in connection with a Rule 144A offering of convertible senior notes due 2028, together with a concurrent capped call overlay transaction. The engagement encompasses the full scope of transactional documentation, regulatory analysis, tax advisory work, and closing deliverables, as described in further detail below. The matter has been assigned to the Capital Markets practice group in the firm's New York office and will be staffed by the engagement team identified in Section III of this memorandum.
II. CLIENT INFORMATION
Client Full Legal Name: Optiwave Semiconductor Corp.
Short Name / Abbreviations: Optiwave Semi; OWS
Entity Type: Corporation
Jurisdiction of Incorporation: State of Delaware (Delaware Secretary of State File No. 5738291)
Employer Identification Number (EIN): 82-4917263
Headquarters Address: 4800 Great America Parkway, Suite 1200, San Jose, California 95054
Exchange Listing: The Nasdaq Stock Market LLC — Ticker Symbol: OWS
SEC Central Index Key (CIK): 0001823467
Industry: Fabless semiconductor design — specializing in radio frequency (RF) and photonic integrated circuits for data-center interconnects and 5G infrastructure applications
Reporting Status: Optiwave Semiconductor Corp. is a reporting company under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company files annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K with the U.S. Securities and Exchange Commission (the "SEC"). The Company is current in all Exchange Act reporting obligations as of the date of this memorandum.
Optiwave is a leading fabless semiconductor company focused on the design and development of high-performance RF and photonic integrated circuits. The Company's products serve critical applications in hyperscale data-center interconnects, 5G wireless infrastructure, and advanced telecommunications systems. Optiwave outsources the fabrication of its semiconductor devices to third-party foundries and maintains design centers in San Jose, California; Austin, Texas; and Hsinchu, Taiwan. For the fiscal year ended December 31, 2022, the Company reported revenues of approximately $812.4 million and Adjusted EBITDA of approximately $198.7 million. As of March 3, 2023, the Company's market capitalization was approximately $4.3 billion, based on approximately 58.6 million diluted shares outstanding at a closing price of $73.38 per share.
Key Client Contacts
The following individuals have been identified as the principal client contacts for purposes of this engagement:
All substantive communications regarding the engagement should be directed through David Shih as primary client contact, with copies as appropriate to Priya Nandakumar and Rachel Fontaine. Direct communications with Marcus Harding or Dr. Evelyn Matsuda should be coordinated through David Shih's office unless otherwise directed by the client.
III. ENGAGEMENT TEAM
The following attorneys have been assigned to this matter. All timekeepers should record their time against Billing Code 48710-001 unless otherwise directed by the Billing Partner.
Responsible Partner.  Name: Jennifer Kwon Title: Partner, Capital Markets Role: Responsible Partner — Jennifer Kwon will have overall engagement responsibility and supervision for this matter. She will serve as the principal relationship partner for the client and will be responsible for overseeing all aspects of the transaction, including strategic advice to the Company, supervision of all work streams, review and approval of all legal opinions issued in connection with the offering, and coordination with the initial purchasers' counsel. Ms. Kwon will also be the primary signatory on all opinions issued by the firm in connection with the engagement.
Billing Partner.  Name: Theodore Langston Title: Partner, Capital Markets Role: Billing Partner — Theodore Langston will be responsible for all billing review, fee cap compliance monitoring, and maintenance of the client billing relationship. Mr. Langston will review all pre-bills, ensure that invoiced amounts comply with the fee cap arrangement described in Section VI below, coordinate with the Finance Department on billing setup and invoice processing, and serve as the point of escalation for any billing-related inquiries from the client. Mr. Langston will also contribute substantive legal work on certain transaction documents as needed, including review of the Purchase Agreement and participation in key negotiation calls.
Lead Associate.  Name: Claire Dempsey Title: Associate, Capital Markets Role: Lead Associate — Claire Dempsey will have primary day-to-day responsibility for the drafting, review, and negotiation of the principal transaction documents, including the Indenture, the Purchase Agreement, the Offering Memorandum, and all closing deliverables. Ms. Dempsey will coordinate with the initial purchasers' counsel (Prescott Whitfield LLP), the Trustee (Broadmere Trust Company, N.A.), and the capped call counterparties on all documentation matters. She will prepare and maintain the master closing checklist and will coordinate the execution and delivery of all documents at closing. Ms. Dempsey will report directly to Jennifer Kwon on all substantive matters.
Working Associate.  Name: Audrey Zhou Title: Associate, Capital Markets Role: Working Associate — Audrey Zhou will support the engagement with a particular focus on regulatory and exemption analysis, including the preparation of the Rule 144A / Section 4(a)(2) exemption analysis memorandum. Ms. Zhou will also assist with due diligence support, including review of the Company's existing material contracts, SEC filings, and corporate governance documents. She will prepare ancillary documentation as assigned, including corporate authorizations, officers' certificates, the Nasdaq supplemental listing application, and the DTC eligibility letter. Ms. Zhou will work under the supervision of Claire Dempsey and Jennifer Kwon.
Tax Specialist.  Name: Leonard Cross Title: Partner, Tax Role: Specialist Partner, Tax — Leonard Cross will be responsible for all aspects of the U.S. federal income tax analysis relating to the convertible notes and the capped call transactions. His work will include the preparation of a tax opinion or memorandum addressing the U.S. federal income tax treatment of the Notes (including the characterization of the convertible notes as indebtedness for U.S. federal income tax purposes, the treatment of original issue discount, if any, and the tax consequences of conversion), as well as the U.S. federal income tax analysis of the capped call overlay transactions (including considerations under Section 1032 of the Internal Revenue Code, constructive sale analysis, and the treatment of the capped call premium). Mr. Cross will also review the tax disclosure sections of the Offering Memorandum. Time incurred by Mr. Cross and any attorneys in the Tax practice group working under his supervision will be billed against this matter number and included within the fee cap arrangement.
IV. TRANSACTION SUMMARY
A. Nature of Engagement
Calderwood & Harkness LLP has been engaged to serve as issuer's counsel to Optiwave Semiconductor Corp. in connection with a Rule 144A offering of convertible senior notes due 2028 with a concurrent capped call overlay transaction. The engagement encompasses the preparation and negotiation of all offering documentation and transaction agreements, regulatory and exemption analysis, U.S. federal income tax analysis, issuance of legal opinions, and preparation and coordination of all closing deliverables. The scope of the engagement is defined by the engagement letter dated March 6, 2023, executed by Jennifer Kwon on behalf of Calderwood & Harkness LLP and by David Shih on behalf of Optiwave Semiconductor Corp.
B. Transaction Overview
The principal terms of the proposed transaction, as currently contemplated, are set forth below. All terms remain subject to finalization upon pricing and execution of the definitive transaction agreements.
Issuer: Optiwave Semiconductor Corp., a Delaware corporation.
Instrument: 2.75% Convertible Senior Notes due 2028 (the "Notes").
Aggregate Principal Amount (Base Offering): $250,000,000.
Over-Allotment Option: The initial purchasers will be granted an option, exercisable within a 13-day period following the initial issuance of the Notes, to purchase up to an additional $37,500,000 aggregate principal amount of Notes (representing a 15% greenshoe), potentially bringing the total aggregate principal amount of Notes issued to $287,500,000.
Offering Structure: The Notes will be offered and sold in a Rule 144A offering to qualified institutional buyers ("QIBs") as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). The offering will be exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act and Rule 144A thereunder. No registration statement will be filed with the SEC in connection with the offering. The Notes will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
Maturity Date: June 1, 2028, unless earlier converted, repurchased, or redeemed in accordance with the terms of the Indenture.
Coupon: 2.75% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, commencing December 1, 2023.
Conversion Feature: The Notes will be convertible into shares of OWS common stock (or, at the Company's election, cash or a combination of cash and shares) at an initial conversion rate to be determined at pricing, corresponding to an initial conversion premium of approximately 28.8% over the reference price (which will be the last reported sale price of OWS common stock on The Nasdaq Stock Market on the trading day immediately preceding the pricing of the offering). The conversion rate will be subject to customary anti-dilution adjustments as set forth in the Indenture. The Notes will be convertible at the option of the holders during the last three months prior to maturity and, prior to that time, upon the occurrence of certain specified conditions (including stock price conditions, trading price conditions, and specified corporate events).
Ranking: The Notes will be senior unsecured obligations of the Company, ranking senior in right of payment to any future indebtedness of the Company that is expressly subordinated in right of payment to the Notes, ranking equal in right of payment with all existing and future senior unsecured indebtedness of the Company (including trade payables), and effectively subordinated in right of payment to any existing and future secured indebtedness of the Company (including indebtedness under the Company's existing revolving credit facility with Crestline National Bank, N.A.) to the extent of the value of the collateral securing such indebtedness.
Capped Call Overlay: Concurrently with the pricing of the Notes, and in connection with any exercise of the over-allotment option, the Company intends to enter into privately negotiated capped call transactions (the "Capped Call Transactions") with two dealer counterparties. The Capped Call Transactions are expected to cover, subject to customary anti-dilution adjustments, the number of shares of OWS common stock that initially underlie the Notes (including any Notes issued pursuant to the over-allotment option, if exercised). The Capped Call Transactions are intended to reduce the potential dilution to the Company's common stock upon any conversion of the Notes and/or to offset any cash payments the Company is required to make in excess of the principal amount of the converted Notes, as the case may be, with such reduction and/or offset subject to a cap.
Capped Call Counterparties:
•  Ridgepoint Capital Markets LLC (acting in its principal capacity, and not as agent or in any fiduciary capacity) — 60% allocation
•  Northvane Financial Products LP (acting in its principal capacity, and not as agent or in any fiduciary capacity) — 40% allocation
Cap Price: The cap price of the Capped Call Transactions will initially be set at approximately 50.0% premium over the reference price and will be subject to certain adjustments under the terms of the Capped Call Confirmations.
Capped Call Cost (Estimated): The aggregate cost of the Capped Call Transactions is estimated to be approximately $28,750,000. The final cost will depend on market conditions at the time of pricing and the specific terms negotiated with the capped call counterparties.
ISDA Documentation: The Capped Call Transactions will be documented under 2002 ISDA Master Agreements and related Confirmations between the Company and each of the capped call counterparties. All ISDA documentation will be governed by the laws of the State of New York.
Deal Value for Engagement Purposes: $250,000,000 (base offering amount).
C. Use of Proceeds (Anticipated)
The Company intends to use the net proceeds from the offering of the Notes, together with cash on hand, for the following purposes:
1.  Capped Call Transactions. Funding the cost of the Capped Call Transactions (estimated at approximately $28,750,000 in aggregate).
2.  Repayment of Revolving Credit Facility. Repayment of approximately $75,000,000 of indebtedness outstanding under the Company's existing $300,000,000 senior secured revolving credit facility with Crestline National Bank, N.A., as Administrative Agent (the "Existing Credit Facility"). The Existing Credit Facility matures on August 15, 2026 and bears interest at a variable rate based on SOFR plus a margin determined by the Company's consolidated leverage ratio.
3.  General Corporate Purposes. The remainder of the net proceeds will be used for general corporate purposes, including working capital, potential acquisitions and strategic investments, and capital expenditures.
The foregoing use of proceeds is preliminary and is subject to change. The final allocation of proceeds will be described in the Offering Memorandum and will be subject to the Company's discretion.
V. OTHER PARTIES TO THE TRANSACTION
A. Initial Purchasers
The Notes will be offered and sold to the initial purchasers pursuant to a purchase agreement (the "Purchase Agreement") to be entered into among the Company and the initial purchasers named below. The initial purchasers are expected to resell the Notes to QIBs in reliance on Rule 144A.
Ridgepoint Capital Markets LLC will serve as the sole bookrunning manager and will lead the marketing and distribution of the Notes to QIBs. Harborstone Securities Inc. and Velthorn Zanthor & Co. will participate in the offering as co-managers. The initial purchasers' respective commitments to purchase the Notes will be set forth in the Purchase Agreement.
B. Capped Call Counterparties
The Capped Call Transactions will be entered into with the following counterparties, each acting in its principal capacity:
The allocation between the capped call counterparties reflects the 60/40 split negotiated between the Company and the counterparties. Ridgepoint Capital Markets LLC's participation as both an initial purchaser and a capped call counterparty will be disclosed in the Offering Memorandum and is consistent with market practice for transactions of this type. Northvane Financial Products LP is a CFTC-registered swap dealer, and accordingly, the Capped Call Transactions with Northvane will be subject to certain regulatory requirements under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as further discussed in Section XII below.
C. Initial Purchasers' Counsel
Firm: Prescott Whitfield LLP (New York limited liability partnership) Address: 51 West 52nd Street, New York, NY 10019 Lead Partner: Diana Castellano (Capital Markets) Lead Associate: Ryan Fujimoto
Prescott Whitfield LLP will serve as counsel to the initial purchasers in connection with the offering. The initial purchasers' counsel will be responsible for reviewing and commenting on the Offering Memorandum, the Purchase Agreement, the Indenture, and other transaction documents from the perspective of the initial purchasers. The initial purchasers' counsel will issue an opinion letter and negative assurance letter to the initial purchasers in connection with the closing. The fees and expenses of the initial purchasers' counsel will be borne by the initial purchasers and will not constitute a cost to OWS through this engagement.
D. Trustee / Paying Agent / Conversion Agent / Registrar
Entity: Broadmere Trust Company, N.A. (national banking association) Address: 100 Wall Street, 6th Floor, New York, NY 10005 Relationship Manager: Karen Llewellyn
Broadmere Trust Company, N.A. will serve as Trustee, Paying Agent, Conversion Agent, and Registrar under the Indenture. Broadmere Trust Company, N.A. is a national banking association organized under the laws of the United States and is a qualified trustee under the Trust Indenture Act of 1939, as amended. The Company has engaged Broadmere Trust Company, N.A. in prior transactions and has an existing relationship with the institution. The Trustee's fees and expenses will be borne by the Company under the terms of the Indenture.
E. Independent Auditor
Firm: Aldgate & Finch LLP (Delaware limited liability partnership) Address: 350 South Grand Avenue, Suite 3000, Los Angeles, CA 90071 PCAOB Registration: Registered with the Public Company Accounting Oversight Board Engagement Partner: Robert Nishimura
Aldgate & Finch LLP is the Company's independent registered public accounting firm and has audited the Company's consolidated financial statements for the fiscal years ended December 31, 2022, 2021, and 2020. In connection with this offering, the firm will be requested to deliver a comfort letter (in customary form for Rule 144A offerings) to the initial purchasers and the Company, covering specified financial information included in the Offering Memorandum. Calderwood & Harkness LLP will prepare and transmit the comfort letter request on behalf of the Company and will coordinate with Aldgate & Finch LLP regarding the scope and timing of the comfort letter.
F. Transfer Agent (OWS Common Stock)
Entity: Clearwater Transfer Services Inc. (Delaware corporation) Address: 6201 15th Avenue, Brooklyn, NY 11219
Clearwater Transfer Services Inc. serves as the transfer agent and registrar for the Company's common stock, par value $0.0001 per share, listed on The Nasdaq Stock Market under the ticker symbol "OWS." The transfer agent will coordinate with the Company and the Trustee in connection with any conversion of the Notes into shares of OWS common stock.
G. Administrative Agent, Existing Credit Facility
Administrative Agent: Crestline National Bank, N.A. Address: 227 Park Avenue, 14th Floor, New York, NY 10172
Syndicate Lenders:
•  Crestline National Bank, N.A.
•  Piedmont Commerce Bank
•  Lakeshore Federal Credit Corp.
Facility: $300,000,000 senior secured revolving credit facility, dated August 15, 2021, as amended, maturing August 15, 2026 (the "Existing Credit Facility").
Consent Requirement: Section 7.01(b) of the credit agreement governing the Existing Credit Facility requires the prior written consent of the Required Lenders (as defined in the credit agreement) for the incurrence of indebtedness not otherwise constituting Permitted Indebtedness. The Company will need to obtain a limited consent or waiver from the Required Lenders to permit the incurrence of the Notes as "Permitted Additional Indebtedness" under the credit agreement. Calderwood & Harkness LLP will prepare and negotiate the form of limited consent and waiver for circulation to the syndicate lenders through Crestline National Bank, N.A. as Administrative Agent. The process of obtaining lender consent is expected to run concurrently with the preparation of the offering documentation.
VI. FEE ARRANGEMENT
Fee Structure: Capped fee arrangement, as set forth in the engagement letter dated March 6, 2023, executed between Calderwood & Harkness LLP and Optiwave Semiconductor Corp.
Fee Cap: $1,850,000 for professional fees. This fee cap represents the maximum amount that the firm may invoice the client for professional services rendered in connection with this matter. The fee cap is inclusive of all time incurred by all timekeepers across all practice groups (including Capital Markets and Tax) working on the engagement. In the event that the aggregate professional fees incurred by the firm exceed the fee cap, the excess will be absorbed by the firm. In the event that the aggregate professional fees incurred are less than the fee cap, only the actual fees incurred will be invoiced.
Estimated Disbursements: Approximately $45,000. Disbursements are not included within the fee cap and will be invoiced separately at cost. Anticipated disbursements include, among other things, filing fees, printing and reproduction costs, database and research charges, document management expenses, travel expenses (if any), and courier and delivery charges.
Billing Partner: Theodore Langston. All pre-bills will be reviewed and approved by Mr. Langston prior to submission to the client. Mr. Langston will monitor cumulative fees against the fee cap on a monthly basis and will coordinate with the Finance Department to ensure compliance with the capped fee arrangement.
Billing Rate Basis: Blended / capped. The engagement letter provides for blended billing rates for all timekeepers, subject to the overall fee cap. Specific billing rates for each timekeeper are set forth in the engagement letter and are incorporated by reference herein. Time will be recorded contemporaneously by all timekeepers and will be tracked against the fee cap on a cumulative basis.
Initial Purchasers' Counsel Fees: The fees and expenses of Prescott Whitfield LLP, as counsel to the initial purchasers, will be borne by the initial purchasers and do not constitute a cost to OWS through this engagement. Accordingly, such fees are not reflected in the fee cap or the estimated disbursements set forth above.
Scope of Fee Cap: The fee cap covers all work streams associated with this engagement, including without limitation: (a) the preparation, drafting, review, and negotiation of all offering documentation (Preliminary and Final Offering Memorandum, Rule 144A exemption analysis); (b) the preparation, drafting, review, and negotiation of all transaction agreements (Indenture, Purchase Agreement, Form of Global Note); (c) the preparation, drafting, review, and negotiation of all capped call documentation (ISDA Master Agreements, Capped Call Confirmations, regulatory and structural analysis memoranda); (d) the preparation of all corporate authorizations (board resolutions, pricing committee resolutions, secretary's certificate); (e) the issuance of all legal opinions (issuer's counsel opinion, negative assurance letter, opinion to Trustee, tax opinion/memorandum); (f) the preparation of all officers' certificates and ancillary closing deliverables; (g) the preparation and negotiation of the limited consent and waiver under the Existing Credit Facility; (h) the Nasdaq supplemental listing application; and (i) all related matters arising in connection with the offering.
VII. ANTICIPATED WORK STREAMS AND DELIVERABLES
The following is a summary of the principal work streams and deliverables anticipated in connection with this engagement. The responsible attorneys for each work stream are identified where appropriate. This summary is not exhaustive and may be supplemented as the transaction progresses.
A. Offering Documentation
1.  Preliminary Offering Memorandum. Calderwood & Harkness LLP will prepare the initial draft of the Preliminary Offering Memorandum (the "Preliminary OM") and will coordinate with the Company, the initial purchasers, and the initial purchasers' counsel on all revisions and comments. The Preliminary OM will contain customary disclosure for a Rule 144A convertible notes offering, including a description of the Company's business, risk factors, a description of the Notes and the Capped Call Transactions, selected financial data, management's discussion and analysis of financial condition and results of operations, and a description of the Company's capital structure. Much of the disclosure will be drawn from the Company's existing Exchange Act filings, supplemented by additional information provided by the Company. Lead: Claire Dempsey, with assistance from Audrey Zhou.
2.  Final Offering Memorandum. Following the pricing of the Notes, Calderwood & Harkness LLP will prepare the Final Offering Memorandum (the "Final OM"), which will supplement the Preliminary OM with final pricing terms, including the aggregate principal amount of Notes sold, the coupon rate, the initial conversion rate, the initial conversion price, the cap price of the Capped Call Transactions, and the closing date. Lead: Claire Dempsey.
3.  Rule 144A / Section 4(a)(2) Exemption Analysis. Calderwood & Harkness LLP will prepare a memorandum analyzing the availability of the Rule 144A and Section 4(a)(2) exemptions from the registration requirements of the Securities Act for the offering and sale of the Notes. The memorandum will address the eligibility of the Notes as "securities" within the meaning of Rule 144A(d)(3), the qualification of the Company as a reporting company under the Exchange Act (and the availability of Rule 144A(d)(4) information), and the status of the offerees as QIBs within the meaning of Rule 144A(a)(1). Lead: Audrey Zhou, with review by Jennifer Kwon.
B. Transaction Agreements
1.  Indenture. Calderwood & Harkness LLP will prepare the initial draft of the Indenture governing the Notes, to be entered into between Optiwave Semiconductor Corp., as Issuer, and Broadmere Trust Company, N.A., as Trustee. The Indenture will contain customary terms and conditions for convertible notes issued in a Rule 144A offering, including provisions governing interest payments, conversion mechanics (including the conditions to conversion, conversion settlement methods, anti-dilution adjustments, and make-whole fundamental change adjustments), events of default, redemption, repurchase upon fundamental change, and covenants. The Indenture will be governed by the laws of the State of New York. Lead: Claire Dempsey, with review by Jennifer Kwon and Theodore Langston.
2.  Form of Global Note. Calderwood & Harkness LLP will prepare the Form of Global Note, which will be attached as Exhibit A to the Indenture. The Global Note will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), and will represent the aggregate principal amount of Notes outstanding. Lead: Claire Dempsey.
3.  Purchase Agreement. Calderwood & Harkness LLP will prepare the initial draft of the Purchase Agreement to be entered into among Optiwave Semiconductor Corp. and the initial purchasers, setting forth the terms and conditions upon which the initial purchasers will purchase the Notes from the Company. The Purchase Agreement will contain customary representations and warranties of the Company, conditions to closing, indemnification provisions, and termination rights. Lead: Claire Dempsey, with review by Jennifer Kwon and Theodore Langston.
C. Capped Call Documentation
1.  2002 ISDA Master Agreements. Calderwood & Harkness LLP will review, negotiate, and advise on the 2002 ISDA Master Agreements to be entered into between the Company and each of Ridgepoint Capital Markets LLC and Northvane Financial Products LP. The ISDA Master Agreements will include customary terms and elections, including provisions relating to netting, credit support, events of default, termination events, and close-out netting. All ISDA Master Agreements will be governed by the laws of the State of New York. Lead: Claire Dempsey, with review by Jennifer Kwon.
2.  Capped Call Confirmations. Calderwood & Harkness LLP will review, negotiate, and advise on the Capped Call Confirmations to be entered into between the Company and each of the capped call counterparties, which will set forth the specific economic terms of the Capped Call Transactions, including the number of options, the strike price, the cap price, the expiration dates, the settlement method, the anti-dilution adjustments, and the calculation agent provisions. The Capped Call Confirmations will be entered into under and governed by the applicable ISDA Master Agreement. Lead: Claire Dempsey.
3.  Regulatory and Structural Analysis Memoranda. Calderwood & Harkness LLP will prepare internal memoranda analyzing the regulatory and structural considerations associated with the Capped Call Transactions. These memoranda will address, among other things: (a) Dodd-Frank compliance considerations, including the applicability of Title VII requirements to the Capped Call Transactions with Northvane Financial Products LP as a CFTC-registered swap dealer (including reporting, recordkeeping, and business conduct requirements); (b) analysis of the Capped Call Transactions under Section 1032 of the Internal Revenue Code (transactions by a corporation in its own stock); and (c) constructive sale analysis under Section 1259 of the Internal Revenue Code with respect to the Company's common stock. Lead: Audrey Zhou (regulatory); Leonard Cross (tax-related analysis).
D. Corporate Authorizations
1.  Board Resolutions. Calderwood & Harkness LLP will prepare resolutions of the Board of Directors of Optiwave Semiconductor Corp. authorizing the offering of the Notes, the entry into the Capped Call Transactions, and related matters. The board resolutions will authorize the issuance and sale of the Notes, approve the form of Indenture and Purchase Agreement, authorize the entry into the ISDA Master Agreements and Capped Call Confirmations, authorize the use of proceeds, delegate authority to a Pricing Committee (consisting of specified officers) to determine the final pricing terms, and ratify all actions taken in connection therewith. Lead: Audrey Zhou, with review by Jennifer Kwon.
2.  Pricing Committee Resolutions. Calderwood & Harkness LLP will prepare resolutions of the Pricing Committee authorized by the Board, to be adopted following the pricing of the Notes, approving the final terms of the offering (including the aggregate principal amount, the coupon, the initial conversion rate, the initial conversion price, and the cap price) and authorizing the execution and delivery of the definitive transaction documents. Lead: Audrey Zhou.
3.  Secretary's Certificate (including Incumbency). Calderwood & Harkness LLP will prepare the Secretary's Certificate to be delivered at closing, certifying as to the Company's certificate of incorporation, bylaws, board resolutions, pricing committee resolutions, and the incumbency and specimen signatures of the officers executing the transaction documents. Lead: Audrey Zhou.
E. Legal Opinions
1.  Issuer's Counsel Opinion to Initial Purchasers. Calderwood & Harkness LLP will issue a legal opinion addressed to the initial purchasers, as required by the Purchase Agreement, covering customary matters including: (a) due organization and good standing of the Company; (b) due authorization, execution, and delivery of the transaction documents; (c) enforceability of the Indenture and the Notes; (d) no conflict with applicable law or the Company's organizational documents; (e) no registration of the Notes required under the Securities Act (subject to customary assumptions and qualifications); and (f) the Company is not required to register as an investment company under the Investment Company Act of 1940, as amended. Lead: Jennifer Kwon, with drafting support from Claire Dempsey and Audrey Zhou.
2.  Negative Assurance (10b-5) Letter to Initial Purchasers. Calderwood & Harkness LLP will issue a negative assurance letter addressed to the initial purchasers, based on the firm's participation in the preparation and review of the Offering Memorandum and the due diligence process, stating that nothing has come to the attention of the attorneys at the firm who participated in the preparation of the Offering Memorandum that causes them to believe that the Offering Memorandum, as of its date and as of the closing date, contained or contains an untrue statement of a material fact or 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 (customary 10b-5 negative assurance). Lead: Jennifer Kwon.
3.  Issuer's Counsel Opinion to Trustee. Calderwood & Harkness LLP will issue a legal opinion addressed to Broadmere Trust Company, N.A., as Trustee, covering customary matters required under the Indenture, including due authorization, execution, and delivery of the Indenture and the Notes, and enforceability thereof. Lead: Jennifer Kwon, with drafting support from Claire Dempsey.
4.  Tax Opinion / Memorandum. Calderwood & Harkness LLP will prepare a tax opinion or memorandum addressing the U.S. federal income tax treatment of the Notes and the Capped Call Transactions. The tax opinion will cover, among other things, the characterization of the Notes as indebtedness for U.S. federal income tax purposes, the treatment of original issue discount (if any), the U.S. federal income tax consequences to U.S. and non-U.S. holders of acquiring, holding, converting, and disposing of the Notes, and the U.S. federal income tax treatment of the Capped Call Transactions (including analysis under Sections 1032 and 1259 of the Internal Revenue Code). Lead: Leonard Cross.
F. Officers' Certificates
1.  Officers' Certificate pursuant to Purchase Agreement. Calderwood & Harkness LLP will prepare the Officers' Certificate to be delivered at closing pursuant to the Purchase Agreement, certifying as to the accuracy of the Company's representations and warranties in the Purchase Agreement, the Company's compliance with its covenants and agreements thereunder, and the absence of any material adverse change in the Company's business, condition, or results of operations since the date of the most recent financial statements included in the Offering Memorandum. Lead: Claire Dempsey.
2.  Officers' Certificate to Trustee re: Indenture. Calderwood & Harkness LLP will prepare the Officers' Certificate to be delivered to the Trustee in connection with the execution and delivery of the Indenture, certifying as to the matters required by the Indenture and the Trust Indenture Act of 1939, as amended (including the Company's compliance with all conditions precedent to the authentication and delivery of the Notes). Lead: Claire Dempsey.
G. Ancillary / Closing Deliverables
1.  Limited Consent and Waiver under Revolving Credit Facility. Calderwood & Harkness LLP will prepare and negotiate the form of limited consent and waiver to be delivered by the Required Lenders under the Existing Credit Facility, permitting the incurrence of the Notes as Permitted Additional Indebtedness under Section 7.01(b) of the credit agreement. The limited consent and waiver will be circulated to the syndicate lenders through Crestline National Bank, N.A. as Administrative Agent and is expected to require the consent of the Required Lenders (defined in the credit agreement as lenders holding more than 50% of the aggregate commitments). Lead: Claire Dempsey, with review by Jennifer Kwon.
2.  Nasdaq Supplemental Listing Application and Cover Letter. Calderwood & Harkness LLP will prepare the Nasdaq supplemental listing application for the shares of OWS common stock issuable upon conversion of the Notes. The supplemental listing application will be filed with The Nasdaq Stock Market LLC in accordance with Nasdaq Listing Rules and will be accompanied by a cover letter setting forth the details of the offering and the number of shares to be reserved for issuance upon conversion. Lead: Audrey Zhou.
3.  DTC Eligibility Letter / Letter of Representations. Calderwood & Harkness LLP will coordinate with the Company and the Trustee to ensure the DTC eligibility of the Notes and will prepare or review the DTC Letter of Representations to be executed by the Company and the Trustee and delivered to DTC. Lead: Audrey Zhou.
4.  Instruction Letter to Trustee. Calderwood & Harkness LLP will prepare the instruction letter from the Company to the Trustee directing the authentication and delivery of the Global Note in connection with the closing. Lead: Claire Dempsey.
5.  Comfort Letter Request to Aldgate & Finch LLP. Calderwood & Harkness LLP will prepare and transmit the comfort letter request to Aldgate & Finch LLP on behalf of the Company and the initial purchasers, specifying the scope of the comfort letter procedures and the financial information to be covered thereby. The comfort letter request will conform to the standards set forth in AU Section 634 (Letters for Underwriters and Certain Other Requesting Parties) of the PCAOB auditing standards. Lead: Claire Dempsey.
6.  Funds Flow Memorandum. Calderwood & Harkness LLP will prepare the funds flow memorandum setting forth the flow of funds at closing, including the receipt of the aggregate purchase price from the initial purchasers, the payment of the capped call premium to the capped call counterparties, the repayment of approximately $75,000,000 under the Existing Credit Facility, and the disbursement of the remaining net proceeds to the Company. The funds flow memorandum will be circulated to all relevant parties for review and approval prior to closing. Lead: Claire Dempsey, in coordination with Rachel Fontaine (Treasurer).
7.  Master Closing Checklist. Calderwood & Harkness LLP will prepare and maintain the master closing checklist identifying all documents, certificates, opinions, and deliverables required to be delivered at or in connection with the closing, together with the responsible party and status for each item. The master closing checklist will be circulated to all parties and updated regularly through the closing. Lead: Claire Dempsey, with assistance from Audrey Zhou.
VIII. CONFLICT CHECK STATUS
A comprehensive conflict check was initiated and completed in advance of the opening of this matter. The results are summarized below:
Conflict Check Completed: March 3, 2023
Result: Cleared — No disqualifying conflicts identified.
Reference: See separate Conflict Check Memorandum dated March 3, 2023, prepared by the New Business / Conflicts Department (on file). A copy of the Conflict Check Memorandum has been retained in the firm's conflicts database.
Entities Cleared: The conflict check was run against all parties to the transaction, including the following entities and their known affiliates:
•  Optiwave Semiconductor Corp. (the Client)
•  Ridgepoint Capital Markets LLC (Lead Initial Purchaser / Capped Call Counterparty)
•  Harborstone Securities Inc. (Co-Manager / Initial Purchaser)
•  Velthorn Zanthor & Co. (Co-Manager / Initial Purchaser)
•  Northvane Financial Products LP (Capped Call Counterparty)
•  Broadmere Trust Company, N.A. (Trustee)
The conflict check confirmed that Calderwood & Harkness LLP does not currently represent, and has not within the past three years represented, any of the initial purchasers, the capped call counterparties, or the Trustee in any matter adverse to Optiwave Semiconductor Corp. The firm has performed prior work for certain of the above-listed entities in unrelated matters; however, no current representation exists that would give rise to a conflict of interest under the New York Rules of Professional Conduct or the firm's internal conflicts policies. No consent or waiver from any party is required.
The engagement team should promptly notify the New Business / Conflicts Department if any additional parties are added to the transaction or if any other circumstances arise that may require supplemental conflict clearance.
IX. KEY FINANCIAL DATA — CLIENT PROFILE
The following key financial data is provided for reference purposes in connection with the intake and evaluation of this matter:
FY2022 Revenue: $812.4 million
FY2022 Adjusted EBITDA: $198.7 million
Market Capitalization (as of March 3, 2023): Approximately $4.3 billion, based on approximately 58.6 million diluted shares of OWS common stock outstanding at a closing price of $73.38 per share on The Nasdaq Stock Market on March 3, 2023.
Nasdaq Ticker: OWS
The foregoing financial data is based on publicly available information, including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC, and publicly available market data. Additional financial information will be obtained from the Company in connection with the due diligence process and the preparation of the Offering Memorandum.
X. ANTICIPATED TIMELINE
The following timeline sets forth the currently anticipated milestones for the transaction. All dates are subject to change based on market conditions, the pace of document drafting and negotiation, and the availability of the parties. The engagement team will update this timeline as the transaction progresses and will circulate revised timelines to the client and the initial purchasers as appropriate.
The organizational call scheduled for March 10, 2023 will include representatives of the Company, the initial purchasers, the initial purchasers' counsel, and Calderwood & Harkness LLP, and will be used to discuss the transaction structure, the timeline, the allocation of drafting responsibilities, the due diligence plan, and the scheduling of future calls.
XI. GOVERNING LAW
The principal transaction documents are expected to be governed by the following laws:
Indenture: The Indenture governing the Notes will be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of laws principles (other than Section 5-1401 of the New York General Obligations Law).
Purchase Agreement: The Purchase Agreement among the Company and the initial purchasers will be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of laws principles (other than Section 5-1401 of the New York General Obligations Law).
Capped Call Confirmations and ISDA Master Agreements: The 2002 ISDA Master Agreements and the Capped Call Confirmations entered into between the Company and each of the capped call counterparties will be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of laws principles (other than Section 5-1401 of the New York General Obligations Law).
The selection of New York law as the governing law for all principal transaction documents is consistent with market practice for Rule 144A convertible notes offerings and ISDA-documented derivatives transactions.
XII. REGULATORY CONSIDERATIONS
The engagement team should be mindful of the following regulatory considerations in connection with this transaction:
Securities Act Exemption. The Notes will be offered and sold under Rule 144A of the Securities Act to QIBs only. No registration statement will be filed with the SEC in connection with the offering, and no registration rights will be granted to the holders of the Notes. The availability of the Rule 144A exemption will be confirmed in the exemption analysis memorandum to be prepared by Audrey Zhou. All offering materials, including the Offering Memorandum, must contain customary legends and selling restrictions to preserve the Section 4(a)(2) and Rule 144A exemptions.
No Registration Rights. The Company will not grant registration rights in connection with the offering of the Notes. Holders of the Notes will be required to comply with the transfer restrictions set forth in the Indenture and the Global Note, including the restriction that the Notes may only be resold in compliance with Rule 144A, Regulation S, or pursuant to another available exemption from the registration requirements of the Securities Act.
Exchange Act Compliance. Optiwave Semiconductor Corp. is an SEC reporting company (CIK: 0001823467) and is subject to the periodic reporting and other requirements of the Exchange Act. The Company must remain current in its Exchange Act reporting obligations in order to satisfy the Rule 144A(d)(4) information requirements. The Company's Exchange Act reporting status will be confirmed as part of the due diligence process.
Nasdaq Supplemental Listing Application. The shares of OWS common stock issuable upon conversion of the Notes will require listing on The Nasdaq Stock Market. A supplemental listing application will be filed with Nasdaq in accordance with Nasdaq Listing Rules. The Company must satisfy the applicable listing standards for the additional shares, including the Nasdaq's requirements with respect to minimum bid price, market value of publicly held shares, and shareholder approval (to the extent applicable). Based on a preliminary analysis, the shares issuable upon conversion of the Notes are not expected to trigger the Nasdaq shareholder approval requirements under Listing Rule 5635, as the Notes will be sold in a bona fide public offering at a price not below the applicable thresholds; however, this analysis will be confirmed.
Consent under Existing Credit Facility. As noted in Section V.G above, the incurrence of the Notes as indebtedness of the Company will require the prior written consent of the Required Lenders under the Company's Existing Credit Facility with Crestline National Bank, N.A. as Administrative Agent. Section 7.01(b) of the credit agreement governing the Existing Credit Facility restricts the incurrence of indebtedness other than Permitted Indebtedness, and the Notes do not fall within the existing categories of Permitted Indebtedness. A limited consent and waiver will be prepared and circulated to the syndicate lenders. The engagement team should coordinate with the Company's Treasurer, Rachel Fontaine, and with Crestline National Bank, N.A. to ensure that the consent process is completed prior to the pricing of the Notes.
Dodd-Frank Compliance — Capped Call Transactions. Northvane Financial Products LP, one of the two capped call counterparties, is a CFTC-registered swap dealer (NFA ID: 0587423). As a result, the Capped Call Transactions entered into between the Company and Northvane will be subject to certain requirements under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, including swap reporting obligations (Parts 43 and 45 of the CFTC regulations), recordkeeping requirements, and business conduct standards applicable to swap dealers (Part 23 of the CFTC regulations). The engagement team should confirm the regulatory classification of the Capped Call Transactions (i.e., whether they constitute "security-based swaps" subject to SEC jurisdiction under Section 3(a)(68) of the Exchange Act or "swaps" subject to CFTC jurisdiction, or "mixed swaps" subject to joint jurisdiction). Given that the underlying reference asset is OWS common stock (a single security), the Capped Call Transactions are expected to be classified as security-based swaps subject to SEC jurisdiction, which may trigger additional considerations under SEC rules applicable to security-based swap dealers. The regulatory and structural analysis memoranda described in Section VII.C.3 above will address these issues in detail.
XIII. APPROVALS AND SIGNATURES
This New Matter Memorandum has been prepared and reviewed as indicated below. By signing below, the Responsible Partner and the Billing Partner confirm that the information set forth herein is accurate and complete to the best of their knowledge, that the conflict check has been completed and cleared, that the engagement letter has been executed by the client, and that the matter is authorized to be opened in the firm's accounting and matter management systems.
Prepared by:
JENNIFER KWON Responsible Partner, Capital Markets Calderwood & Harkness LLP
By: ________
Name: Jennifer Kwon
Title: Partner
Date: March 6, 2023
Reviewed by:
THEODORE LANGSTON Billing Partner, Capital Markets Calderwood & Harkness LLP
By: ________
Name: Theodore Langston
Title: Partner
Date: March 6, 2023
Distribution:
•  Internal only
•  File copy to New Business / Conflicts Department
•  File copy to Finance Department (for billing setup and matter opening in firm accounting system)
CONFIDENTIAL — FOR INTERNAL USE ONLY. This New Matter Memorandum is the property of Calderwood & Harkness LLP and is prepared solely for internal firm administration purposes. It contains confidential client information protected by the attorney-client privilege and the attorney work product doctrine. This memorandum should not be disclosed, distributed, or reproduced outside of the firm without the prior written consent of the Responsible Partner. Unauthorized disclosure may result in a waiver of applicable privileges.
Name | Title | Contact Role
David Shih | General Counsel & Corporate Secretary | Primary client contact for all legal matters relating to the engagement; principal liaison between OWS and Calderwood & Harkness LLP
Priya Nandakumar | Chief Financial Officer | Primary contact for all finance and financial matters, including the Offering Memorandum financial disclosure, comfort letter process, and credit facility consent
Rachel Fontaine | Treasurer | Primary contact for all treasury matters, including funds flow, proceeds disbursement, and capped call settlement mechanics
Marcus Harding | Chief Executive Officer | Executive sponsor of the transaction; available for material business and strategic discussions as needed
Dr. Evelyn Matsuda | Chair of the Board (Independent) | Board governance matters; point of contact regarding board-level approvals and resolutions
Entity | Role | Key Contact(s)
Ridgepoint Capital Markets LLC — Delaware limited liability company; SEC-registered broker-dealer (CRD No. 8724); 383 Madison Avenue, 22nd Floor, New York, NY 10179 | Lead Initial Purchaser / Sole Bookrunning Manager; also serving as Capped Call Counterparty (60% allocation) in its principal capacity | Cameron Walsh, Head of Equity-Linked Origination; Natasha Okonkwo, Managing Director, ECM Execution
Harborstone Securities Inc. — Delaware corporation; SEC-registered broker-dealer (CRD No. 11942); 200 Vesey Street, Suite 3100, New York, NY 10281 | Co-Manager / Initial Purchaser | Jonathan Mercer, Managing Director, Equity-Linked Products
Velthorn Zanthor & Co. — New York general partnership; SEC-registered broker-dealer (CRD No. 6293); 750 Seventh Avenue, 18th Floor, New York, NY 10019 | Co-Manager / Initial Purchaser | Samira El-Amin, Director, Convertible Bond Desk
Entity | Allocation | Key Contact
Ridgepoint Capital Markets LLC (acting in principal capacity) — Delaware LLC; 383 Madison Avenue, 22nd Floor, New York, NY 10179 | 60% | Cameron Walsh, Head of Equity-Linked Origination
Northvane Financial Products LP — Delaware limited partnership; CFTC-registered swap dealer (NFA ID: 0587423); 1 Liberty Plaza, 40th Floor, New York, NY 10006 | 40% | Philip Granier, Head of Equity Derivatives
Milestone | Target Date
Engagement opened / Mandate letter signed | March 6, 2023
First organizational call (all parties) | March 10, 2023
Draft Preliminary Offering Memorandum (first draft to Company) | Mid-April 2023
First draft Indenture (circulated to initial purchasers' counsel and Trustee) | Late April 2023
First draft Purchase Agreement (circulated to initial purchasers' counsel) | Early May 2023
Preliminary Offering Memorandum finalized and approved for distribution | Mid-May 2023
Pricing of the Notes | Late May 2023
Purchase Agreement execution (Signing) | Late May 2023
Closing / Notes delivery (T+2 after pricing) | Late May / Early June 2023
Capped Call Confirmations executed | Concurrent with closing
Final Offering Memorandum delivered | Concurrent with closing
Post-closing matter wrap-up (closing binder, final billing) | Within two weeks of closing

CALDERWOOD & HARKNESS LLP

NEW MATTER MEMORANDUM

I. MATTER IDENTIFICATION

II. CLIENT INFORMATION

III. ENGAGEMENT TEAM

IV. TRANSACTION SUMMARY

V. OTHER PARTIES TO THE TRANSACTION

VI. FEE ARRANGEMENT

VII. ANTICIPATED WORK STREAMS AND DELIVERABLES

VIII. CONFLICT CHECK STATUS

X. ANTICIPATED TIMELINE

XI. GOVERNING LAW

XII. REGULATORY CONSIDERATIONS

XIII. APPROVALS AND SIGNATURES

Record

Parties

Dates

Amounts