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PURCHASE AGREEMENT

EXECUTION VERSION

Dated as of May 24, 2023

$250,000,000 Aggregate Principal Amount 2.75% Convertible Senior Notes due 2028

Optiwave Semiconductor Corp.

and

Ridgepoint Capital Markets LLC

as Representative of the several Initial Purchasers named in Schedule I hereto

Governing Law: State of New York

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PURCHASE AGREEMENT

$250,000,000 2.75% Convertible Senior Notes due 2028

May 24, 2023

Ridgepoint Capital Markets LLC, as Representative of the several Initial Purchasers named in Schedule I hereto 383 Madison Avenue, 22nd Floor New York, NY 10179

Ladies and Gentlemen:

Optiwave Semiconductor Corp., a corporation organized and existing under the laws of the State of Delaware (the "Company"), proposes to issue and sell to the several Initial Purchasers named in Schedule I hereto (the "Initial Purchasers"), for whom Ridgepoint Capital Markets LLC is acting as sole bookrunning manager and representative (in such capacity, the "Representative"), Two Hundred Fifty Million Dollars ($250,000,000) aggregate principal amount of its 2.75% Convertible Senior Notes due 2028 (the "Firm Notes"). In addition, the Company proposes to grant to the Initial Purchasers an option (the "Over-Allotment Option") to purchase up to an additional Thirty-Seven Million Five Hundred Thousand Dollars ($37,500,000) aggregate principal amount of its 2.75% Convertible Senior Notes due 2028 (the "Option Notes" and, together with the Firm Notes, the "Notes"), representing fifteen percent (15%) of the aggregate principal amount of Firm Notes, solely to cover over-allotments, if any. The Notes are to be issued pursuant to an indenture (the "Indenture") to be dated as of the Closing Date (as defined below), by and between the Company and Broadmere Trust Company, National Association, as trustee (the "Trustee"), at its Corporate Trust Office located at 100 Wall Street, 6th Floor, New York, NY 10005. Upon issuance, the Notes will be convertible into shares of common stock, par value $0.001 per share, of the Company (the "Company Common Stock"), cash, or a combination of cash and shares of Company Common Stock, at the Company's election, in accordance with the terms of the Indenture.

The Notes are being offered and sold in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), provided by Section 4(a)(2) thereof and Rule 144A promulgated thereunder ("Rule 144A"), to persons reasonably believed to be qualified institutional buyers ("QIBs") within the meaning of Rule 144A. Pursuant to the terms hereof, the Company has prepared a Preliminary Offering Memorandum dated May 18, 2023 (the "Preliminary Offering Memorandum") and a Final Offering Memorandum dated May 24, 2023 (the "Final Offering Memorandum" and, together with the Preliminary Offering Memorandum, the "Offering Memorandum"), each setting forth or including a description of the terms of the Notes, the terms of the offering, and a description of the Company.

Concurrently with the closing of the offering of the Notes, the Company intends to enter into certain privately negotiated capped call transactions (the "Capped Call Transactions") with each of Ridgepoint Capital Markets LLC and Northvane Financial Products LP (together, the "Capped Call Counterparties"), as described in the Final Offering Memorandum.

This Purchase Agreement (this "Agreement") is entered into by and between the Company and the Representative, acting on behalf of the several Initial Purchasers, as of the date first written above.

In consideration of the mutual agreements, representations, warranties, and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Indenture.

"Act" or "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"Applicable Time" means 5:30 p.m. (New York City time) on May 23, 2023, which is the Pricing Date.

"Business Day" means any day other than a Saturday, a Sunday, or a day on which banking institutions in the City of New York are authorized or required by law, regulation, or executive order to close.

"Capped Call Confirmations" means the confirmations to be entered into between the Company and each of the Capped Call Counterparties, evidencing the Capped Call Transactions.

"Capped Call Counterparties" means, collectively, Ridgepoint Capital Markets LLC and Northvane Financial Products LP.

"Capped Call Transactions" means the capped call transactions to be entered into by the Company with the Capped Call Counterparties concurrently with the closing of the offering of the Notes.

"Closing Date" means May 30, 2023, or such other date as may be agreed upon by the Company and the Representative.

"Commission" or "SEC" means the U.S. Securities and Exchange Commission.

"Company" means Optiwave Semiconductor Corp., a corporation duly organized and existing under the laws of the State of Delaware.

"Company Common Stock" means shares of common stock, par value $0.001 per share, of the Company.

"Conversion Price" means approximately $94.50 per share of Company Common Stock, based on the Initial Conversion Rate.

"DTC" means The Depository Trust Company, or any successor thereto.

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"Final Offering Memorandum" means the Final Offering Memorandum of the Company dated May 24, 2023, relating to the Notes, including all documents incorporated by reference therein.

"Firm Notes" means $250,000,000 aggregate principal amount of 2.75% Convertible Senior Notes due 2028 of the Company to be issued and sold to the Initial Purchasers pursuant to this Agreement.

"Indenture" means the Indenture dated as of May 30, 2023, by and between the Company and the Trustee, pursuant to which the Notes will be issued.

"Initial Conversion Rate" means 10.5820 shares of Company Common Stock per $1,000 principal amount of Notes, subject to adjustment as provided in the Indenture.

"Initial Purchasers" means Ridgepoint Capital Markets LLC, Harborstone Securities Inc., and Velthorn Zanthor & Co., each as named in Schedule I hereto.

"Material Adverse Effect" means any material adverse change in, or material adverse effect on, the condition (financial or otherwise), results of operations, business, properties, management, or prospects of the Company and its subsidiaries, taken as a whole.

"Notes" means, collectively, the Firm Notes and the Option Notes, being the Company's 2.75% Convertible Senior Notes due 2028.

"Offering Memorandum" means, collectively, the Preliminary Offering Memorandum and the Final Offering Memorandum.

"Option Closing Date" means, with respect to Option Notes to be purchased by the Initial Purchasers, the date of delivery of such Option Notes, which shall be no earlier than the Closing Date and no later than thirteen (13) Business Days after exercise of the Over-Allotment Option.

"Option Notes" means up to $37,500,000 aggregate principal amount of additional 2.75% Convertible Senior Notes due 2028 which the Initial Purchasers have the option to purchase pursuant to Section 2(b) of this Agreement.

"Over-Allotment Option" has the meaning set forth in Section 2(b) of this Agreement.

"Preliminary Offering Memorandum" means the Preliminary Offering Memorandum of the Company dated May 18, 2023, relating to the Notes.

"Pricing Date" means May 23, 2023.

"Pricing Disclosure Package" means the Preliminary Offering Memorandum, as supplemented and amended by the Pricing Term Sheet and any other written communications listed on Schedule II hereto, considered together as of the Applicable Time.

"Pricing Supplement" or "Pricing Term Sheet" means the written communication, substantially in the form of Schedule II hereto, setting forth the final terms of the Notes, prepared in accordance with Rule 144A under the Securities Act.

"Reference Price" means $73.38 per share of Company Common Stock, being the closing sale price of the Company Common Stock on The Nasdaq Stock Market on the Pricing Date.

"Representative" means Ridgepoint Capital Markets LLC, acting as sole bookrunning manager and representative of the several Initial Purchasers.

"Transaction Documents" means this Agreement, the Indenture, the Notes, and the Capped Call Confirmations.

"Trustee" means Broadmere Trust Company, National Association, a national banking association organized and existing under the laws of the United States, in its capacity as trustee under the Indenture.

SECTION 2. PURCHASE, SALE, AND DELIVERY OF THE NOTES

(a) Purchase and Sale of Firm Notes.

On the basis of the representations, warranties, covenants, and agreements set forth herein, and subject to all the terms and conditions of this Agreement, the Company agrees to issue and sell to the several Initial Purchasers, and each Initial Purchaser agrees, severally and not jointly, to purchase from the Company, at a purchase price equal to 98.00% of the principal amount thereof (i.e., $980.00 per $1,000 principal amount of Notes), the aggregate principal amount of Firm Notes set forth opposite such Initial Purchaser's name in Schedule I hereto.

The aggregate purchase price for the Firm Notes shall be $245,000,000 (being $250,000,000 multiplied by 98.00%). The aggregate Initial Purchasers' discount on the Firm Notes shall be $5,000,000 (being $250,000,000 multiplied by 2.00%). The Initial Purchasers' discount represents the difference between the purchase price paid by the Initial Purchasers and the initial offering price of the Notes at 100% of their principal amount, as described in the Final Offering Memorandum.

(b) Over-Allotment Option.

In addition to the Firm Notes, the Company hereby grants to the several Initial Purchasers an option (the "Over-Allotment Option") to purchase, severally and not jointly, up to $37,500,000 additional aggregate principal amount of Notes (the "Option Notes") at the same purchase price per $1,000 principal amount as the Firm Notes (i.e., $980.00 per $1,000 principal amount). The Over-Allotment Option may be exercised in whole or in part at any time and from time to time on or before the thirteenth (13th) day after the date of this Agreement (i.e., on or before June 6, 2023).

The Over-Allotment Option shall be exercised by written notice (or electronic notice) from the Representative to the Company, which notice shall specify the aggregate principal amount of Option Notes to be purchased and the date of delivery thereof (which shall be a Business Day no earlier than two (2) Business Days after the date of such notice, unless the Representative and the Company otherwise agree). The obligation of each Initial Purchaser to purchase Option Notes shall be in the same proportion as its commitment with respect to the Firm Notes as set forth in Schedule I hereto.

If the Over-Allotment Option is exercised in full, the aggregate purchase price for the Option Notes shall be $36,750,000 (being $37,500,000 multiplied by 98.00%), and the aggregate Initial Purchasers' discount on the Option Notes shall be $750,000 (being $37,500,000 multiplied by 2.00%). No Option Notes shall be sold or delivered unless all of the Firm Notes previously shall have been, or simultaneously are, sold and delivered.

Delivery of the Firm Notes shall be made on May 30, 2023 (the "Closing Date") at the offices of Calderwood & Harkness LLP, 600 Lexington Avenue, 30th Floor, New York, NY 10022, or at such other location as the Company and the Representative may agree. The Firm Notes shall be delivered in global form, registered in the name of Cede & Co. as nominee for DTC, and shall be eligible for clearance and settlement through the facilities of DTC. The CUSIP number for the Notes (144A) shall be 683742AA5 and the ISIN shall be US683742AA53.

Payment of the aggregate purchase price for the Firm Notes shall be made by the Initial Purchasers by wire transfer of immediately available funds to an account designated by the Company on or prior to the Closing Date. Delivery of the Firm Notes shall be made against payment therefor (delivery versus payment, or DVP). It is understood that each Initial Purchaser has authorized the Representative to act on its behalf in connection with the delivery of and payment for the Firm Notes.

(d) Delivery and Payment — Option Notes.

Delivery of any Option Notes shall be made on the applicable Option Closing Date in the same manner as the Firm Notes. Payment of the aggregate purchase price for the Option Notes shall be made on the same basis as payment for the Firm Notes, by wire transfer of immediately available funds to an account designated by the Company. The Option Notes shall be delivered in global form through the facilities of DTC in the same manner as the Firm Notes.

(e) Structuring Fee.

In addition to the Initial Purchasers' discount described in Section 2(a) above, the Company shall pay to Ridgepoint Capital Markets LLC a structuring fee equal to 0.25% of the aggregate principal amount of Firm Notes (i.e., $250,000,000 multiplied by 0.25% = $625,000). Such structuring fee shall be payable on the Closing Date by wire transfer of immediately available funds to an account designated by Ridgepoint Capital Markets LLC. The structuring fee is separate from and in addition to the Initial Purchasers' discount and shall not be shared among the Initial Purchasers. For the avoidance of doubt, the structuring fee is payable solely in consideration of Ridgepoint Capital Markets LLC's services as sole bookrunning manager and structuring advisor in connection with the offering of the Notes.

SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to each Initial Purchaser, as of the date hereof and as of the Closing Date (and as of any Option Closing Date), as follows:

(a) Organization, Good Standing, and Qualification.

The Company is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Delaware (Delaware file no. 5738291). The Company has all requisite corporate power and authority to own, lease, and operate its properties and assets and to conduct its business as described in the Offering Memorandum. The Company is duly qualified and in good standing as a foreign corporation authorized to do business in each jurisdiction in which the nature of its business or the ownership, leasing, or operation of its properties requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company's principal executive offices are located at 4800 Great America Parkway, Suite 1200, San Jose, California 95054.

(b) Subsidiaries.

Each subsidiary of the Company has been duly organized, is validly existing, and is in good standing under the laws of its jurisdiction of organization, with all requisite corporate, limited liability company, or other organizational power and authority to own, lease, and operate its properties and to conduct its business as described in the Offering Memorandum, except where the failure to be so organized, existing, or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. All of the outstanding equity interests or shares of capital stock of each subsidiary of the Company have been duly authorized and validly issued and are fully paid and nonassessable, and all such equity interests or shares are owned, directly or indirectly, by the Company, free and clear of all liens, encumbrances, equities, claims, security interests, voting trusts, or other defects of title, except as disclosed in the Offering Memorandum and except for such liens or encumbrances that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

The Company has all requisite corporate power and authority to execute, deliver, and perform its obligations under this Agreement, the Indenture, the Notes, and the Capped Call Confirmations, and to consummate the transactions contemplated hereby and thereby. The execution, delivery, and performance of this Agreement, the Indenture, the Notes, and the entry into the Capped Call Transactions, and the consummation of the transactions contemplated hereby and thereby, including the issuance and sale of the Notes and the issuance of the shares of Company Common Stock issuable upon conversion of the Notes, have been duly and validly authorized by all necessary corporate action of the Company. Such authorization includes resolutions duly adopted by the Board of Directors of the Company at a meeting held on May 19, 2023, at which a quorum was present and acting throughout, and resolutions duly adopted by the Pricing Committee of the Board of Directors at a meeting held on May 23, 2023, at which all members were present and acting. No further corporate action or approval on the part of the Company, its Board of Directors, or its stockholders is required in connection with the issuance and sale of the Notes or the issuance of the shares of Company Common Stock upon conversion of the Notes.

(d) Due Execution and Delivery; Enforceability.

This Agreement has been duly executed and delivered by the Company. This Agreement constitutes a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and other similar laws relating to or affecting creditors' rights generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity) (collectively, the "Enforceability Exceptions").

The Indenture, when duly executed and delivered by the Company and the Trustee on the Closing Date, will constitute a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions.

The Notes, when duly executed by the Company, authenticated by the Trustee, and delivered in accordance with the provisions of the Indenture and this Agreement, and when payment for such Notes shall have been made as provided herein, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture.

(e) Valid Issuance of Conversion Shares.

The shares of Company Common Stock issuable upon conversion of the Notes (up to approximately 3,042,325 shares based on the Initial Conversion Rate and the total aggregate principal amount of Notes, including the Option Notes, assuming exercise of the Over-Allotment Option in full) have been duly authorized and reserved for issuance by the Company. When issued in accordance with the terms of the Indenture upon conversion of the Notes, such shares will be validly issued, fully paid, and nonassessable, and will not be subject to any preemptive rights, rights of first refusal, or similar rights of any person. No further approval or authorization of any stockholder, the Board of Directors of the Company, or any other person is required for the issuance of such shares. The Company Common Stock is listed on The Nasdaq Stock Market under the ticker symbol "OWS." A supplemental listing application with respect to the shares of Company Common Stock issuable upon conversion of the Notes was filed with The Nasdaq Stock Market on May 25, 2023.

(f) No Conflicts.

Neither the execution, delivery, and performance by the Company of this Agreement, the Indenture, the Notes, or the Capped Call Confirmations, nor the consummation of the transactions contemplated hereby or thereby (including the issuance and sale of the Notes and the issuance of the shares of Company Common Stock upon conversion of the Notes), will (i) violate, conflict with, or result in a breach of any provision of the certificate of incorporation or bylaws of the Company, each as amended to date, (ii) violate, conflict with, or result in a breach of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, any applicable law, statute, rule, regulation, judgment, order, writ, injunction, or decree of any governmental authority applicable to the Company or any of its subsidiaries or any of their respective properties or assets, (iii) result in a breach of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration under, any agreement, contract, indenture, mortgage, deed of trust, loan agreement, note, lease, or other instrument to which the Company or any of its subsidiaries is a party or by which any of them or any of their respective properties or assets may be bound, including the Credit Agreement dated as of November 15, 2021 (as amended, restated, supplemented, or otherwise modified from time to time), providing for a $300,000,000 senior secured revolving credit facility, among the Company, Crestline National Bank, N.A., as administrative agent, and the lenders party thereto (the "Credit Facility"), as consented to pursuant to the Limited Consent and Waiver dated May 22, 2023, or (iv) result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of the Company or any of its subsidiaries, except, in the case of clauses (ii), (iii), and (iv), for any such violation, conflict, breach, default, termination, acceleration, or lien that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(g) No Registration Required.

Assuming the accuracy of the representations and warranties of the Initial Purchasers set forth in Section 4 hereof, it is not necessary, in connection with the offer, sale, and delivery of the Notes to the Initial Purchasers in the manner contemplated by this Agreement and the initial resale of the Notes by the Initial Purchasers in the manner contemplated by this Agreement and the Offering Memorandum, to register the Notes or the shares of Company Common Stock issuable upon conversion of the Notes under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Notes satisfy the requirements set forth in Rule 144A(d)(3) under the Securities Act.

(h) No Investment Company.

The Company is not, and after giving effect to the offering and sale of the Notes and the application of the net proceeds thereof as described in the Final Offering Memorandum under the caption "Use of Proceeds," will not be required to register as an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission promulgated thereunder.

(i) Offering Memorandum; Pricing Disclosure Package.

(i) The Preliminary Offering Memorandum, as of its date (May 18, 2023), did not contain any untrue statement of a material fact or omit 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; provided, however, that the Company makes no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with written information furnished to the Company by any Initial Purchaser through the Representative expressly for use in the Preliminary Offering Memorandum.

(ii) The Pricing Disclosure Package, as of the Applicable Time (5:30 p.m., New York City time, on May 23, 2023), did not contain any untrue statement of a material fact or omit 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; provided, however, that the Company makes no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with written information furnished to the Company by any Initial Purchaser through the Representative expressly for use in the Pricing Disclosure Package.

(iii) The Final Offering Memorandum, as of its date (May 24, 2023) and as of the Closing Date (and as of any Option Closing Date), does not and will not contain any untrue statement of a material fact or omit 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; provided, however, that the Company makes no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with written information furnished to the Company by any Initial Purchaser through the Representative expressly for use in the Final Offering Memorandum.

(j) SEC Reporting Status.

The Company is subject to and in compliance with the reporting requirements of Section 13 or Section 15(d) of the Exchange Act. Since becoming subject to such requirements, the Company has timely filed (or obtained extensions of time for filing and has filed within the applicable grace period) all Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and all other reports, statements, documents, and schedules required to be filed by it with the Commission pursuant to the Exchange Act. The Company's SEC Central Index Key ("CIK") number is 0001823467. As of the date hereof, the Company has not received any comment letter from the staff of the Commission relating to the Company's filings under the Exchange Act that remains unresolved.

(k) Financial Statements.

The financial statements of the Company (including the related notes and schedules thereto) included in or incorporated by reference in the Offering Memorandum present fairly in all material respects the financial condition, results of operations, stockholders' equity, and cash flows of the Company and its consolidated subsidiaries as of the dates and for the periods indicated therein, and such financial statements have been prepared in conformity with United States generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved, except as otherwise noted therein. Such financial statements have been audited by Aldgate & Finch LLP, an independent registered public accounting firm with the Public Company Accounting Oversight Board (United States) (the "PCAOB"), as stated in their reports included or incorporated by reference in the Offering Memorandum. No other financial statements or schedules of the Company are required to be included in the Offering Memorandum.

(l) No Material Adverse Change.

Since the date of the most recent audited or unaudited financial statements included or incorporated by reference in the Offering Memorandum, there has not been (i) any material adverse change, or any development involving a prospective material adverse change, in the condition (financial or otherwise), results of operations, business, properties, management, or prospects of the Company and its subsidiaries, taken as a whole, (ii) any transaction that is material to the Company and its subsidiaries, taken as a whole, entered into other than in the ordinary course of business, or (iii) any dividend or distribution of any kind declared, paid, or made by the Company on any class of its capital stock, except, in each case, as set forth in or contemplated by the Offering Memorandum.

(m) intellectual Property.

The Company and its subsidiaries own, or have obtained valid and enforceable licenses or rights to use, all patents, patent applications, trademarks, trademark registrations, service marks, trade names, copyrights, trade secrets, know-how, and other intellectual property rights (collectively, "intellectual Property") necessary for the conduct of their respective businesses as described in the Offering Memorandum, except where the failure to so own or have such rights would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. To the Company's knowledge, (i) the conduct of the business of the Company and its subsidiaries does not infringe, misappropriate, or otherwise violate any intellectual Property of any third party, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and (ii) no third party is infringing, misappropriating, or otherwise violating any intellectual Property owned by or licensed to the Company or its subsidiaries, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(n) Taxes.

The Company and each of its subsidiaries have timely filed (or have obtained extensions of time for filing and will file within the applicable extension period) all federal, state, local, and foreign tax returns required to be filed by them, except where the failure to so file would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and all such tax returns are true, correct, and complete in all material respects. The Company and each of its subsidiaries have paid all taxes (including any interest, penalties, or additions thereto) due and payable (whether or not shown on any tax return), except for taxes being contested in good faith and by appropriate proceedings and for which adequate reserves have been established in conformity with GAAP, or where the failure to pay would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company's Employer Identification Number (EIN) is 82-4917263.

(o) Compliance with Laws.

The Company and each of its subsidiaries are in compliance with all applicable federal, state, local, and foreign laws, statutes, rules, regulations, orders, judgments, injunctions, and decrees, except where the failure to be in such compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received any written notice of any violation of, or noncompliance with, any such law, regulation, or order that has not been remedied or is not being contested in good faith.

(p) No Litigation.

Except as disclosed in the Offering Memorandum, there are no legal, governmental, or regulatory actions, suits, proceedings, inquiries, or investigations pending, or, to the Company's knowledge, threatened, to which the Company or any of its subsidiaries is or would be a party or to which any of their respective properties or assets is or would be subject, before or by any court, arbitrator, or governmental, regulatory, or administrative body, agency, or official, that, if determined adversely to the Company or any of its subsidiaries, would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Exceptions to this representation are set forth in Schedule III hereto and incorporated herein by reference.

(q) No General Solicitation.

Neither the Company nor any person acting on behalf of the Company has offered or sold the Notes by any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act, including, without limitation, (i) any advertisement, article, notice, or other communication published in any newspaper, magazine, or similar medium or broadcast over television or radio, or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

(r) No Directed Selling Efforts.

Neither the Company nor any person acting on behalf of the Company has engaged in any "directed selling efforts" within the meaning of Regulation S under the Securities Act with respect to the Notes, and the Company and its affiliates, and any person acting on their behalf, have complied with the offering restrictions requirements of Regulation S under the Securities Act.

(s) No Stabilization.

The Company has not taken, directly or indirectly, any action designed to, or that has constituted or might reasonably be expected to cause or result in, the stabilization or manipulation of the price of any security of the Company in connection with the offering of the Notes, in violation of applicable law.

(t) Capped Call Transactions.

The Company has all requisite corporate power and authority to enter into the Capped Call Transactions with the Capped Call Counterparties. The entry into the Capped Call Transactions, and the execution and delivery of the Capped Call Confirmations, have been duly authorized by all necessary corporate action on the part of the Company, including the resolutions of the Board of Directors adopted on May 19, 2023 and the resolutions of the Pricing Committee adopted on May 23, 2023. The Capped Call Transactions are being entered into for the purpose of reducing potential dilution to the Company Common Stock upon conversion of the Notes and/or offsetting cash payments in excess of the principal amount of the Notes that the Company is required to make upon conversion of the Notes, in each case as described in the Offering Memorandum. The Capped Call Confirmations, when duly executed and delivered by the Company and the applicable Capped Call Counterparty, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to the Enforceability Exceptions.

(u) Existing Indebtedness; Revolving Credit Facility.

The incurrence of the indebtedness represented by the Notes as "Permitted Additional Indebtedness" (or similar concept) under the Company's Credit Facility has been duly consented to by Crestline National Bank, N.A., as administrative agent, and the requisite lenders thereunder, pursuant to the Limited Consent and Waiver dated as of May 22, 2023 (the "Limited Consent and Waiver"), by and among the Company, Crestline National Bank, N.A., as administrative agent, Piedmont Commerce Bank, and Lakeshore Federal Credit Corp. After giving effect to the offering and sale of the Notes, the application of the net proceeds therefrom (including the repayment of borrowings under the Credit Facility), and the entry into the Capped Call Transactions, the Company will be in compliance with all covenants and agreements under the Credit Facility. As of May 23, 2023, the outstanding balance under the Credit Facility is $75,000,000, which will be repaid from the net proceeds of the offering.

(v) Use of Proceeds.

The Company will apply the net proceeds from the sale of the Notes as described in the Final Offering Memorandum under the caption "Use of Proceeds," including: (i) approximately $28,750,000 to fund the cost of the Capped Call Transactions, (ii) approximately $75,000,000 to repay in full the outstanding borrowings under the Credit Facility with Crestline National Bank, N.A., and (iii) the remainder for general corporate purposes, including working capital, potential acquisitions, and capital expenditures. No portion of the net proceeds will be used, directly or indirectly, to purchase or carry any "margin security" within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, or to repay any indebtedness that was incurred for such purpose, and the Company will not otherwise take or permit to be taken any action that would cause this Agreement or the transactions contemplated hereby to violate Regulation T, Regulation U, or Regulation X of the Board of Governors of the Federal Reserve System.

(w) Internal Controls and Disclosure Controls.

The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorization, (ii) transactions are recorded as necessary to permit the preparation of financial statements in conformity with GAAP and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company's "disclosure controls and procedures" (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are effective in all material respects to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is (A) recorded, processed, summarized, and reported within the time periods specified in the Commission's rules and forms and (B) accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

(x) Nasdaq Listing.

The Company Common Stock is listed on The Nasdaq Stock Market under the ticker symbol "OWS." The Company is in compliance in all material respects with all applicable listing requirements of The Nasdaq Stock Market, including the continued listing standards set forth in the Nasdaq Listing Rules. The Company has not received any notice from The Nasdaq Stock Market regarding the delisting or potential delisting of the Company Common Stock. The Company has filed a supplemental listing application with The Nasdaq Stock Market with respect to the shares of Company Common Stock issuable upon conversion of the Notes, and the Company has no reason to believe that such shares will not be approved for listing on The Nasdaq Stock Market, subject to official notice of issuance.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASERS

Each Initial Purchaser, severally and not jointly, hereby represents, warrants, and agrees as follows:

(a) QIB Status and Offering Restrictions.

Such Initial Purchaser is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act. Such Initial Purchaser has offered and will offer and sell the Notes only to persons that it reasonably believes to be QIBs within the meaning of Rule 144A, in compliance with Rule 144A under the Securities Act. Such Initial Purchaser has informed each purchaser of Notes that the Notes are being offered and sold in a transaction not involving a public offering within the meaning of the Securities Act, and that the Notes have not been and will not be registered under the Securities Act and may not be reoffered, resold, pledged, or otherwise transferred except in accordance with the restrictions on transfer described in the Final Offering Memorandum and the Notes.

(b) No General Solicitation.

Such Initial Purchaser has not offered or sold the Notes by means of any form of "general solicitation" or "general advertising" within the meaning of Rule 502(c) under the Securities Act, including, without limitation, (i) any advertisement, article, notice, or other communication published in any newspaper, magazine, or similar medium or broadcast over television, radio, or the internet (other than as permitted by Rule 144A), or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

Such Initial Purchaser confirms that it has delivered, or will deliver, to each purchaser of Notes a copy of the Final Offering Memorandum (including any amendments or supplements thereto), or has made, or will make, the same available electronically to each such purchaser, in each case prior to or concurrently with the confirmation of sale of Notes to such purchaser.

(d) Compliance with Selling Restrictions.

Such Initial Purchaser will comply with all applicable laws, rules, and regulations in each jurisdiction in which it offers, sells, or delivers Notes or distributes the Offering Memorandum, and will obtain any consent, approval, or permission required by it for the offer, sale, or delivery of Notes or the distribution of the Offering Memorandum under the laws and regulations in force in any jurisdiction to which it is subject or in which it makes such offers, sales, deliveries, or distributions. Neither the Company nor any other Initial Purchaser shall have any responsibility therefor.

SECTION 5. COVENANTS OF THE COMPANY

The Company covenants and agrees with each Initial Purchaser as follows:

(a) Offering Memorandum Amendments and Supplements.

The Company shall not amend or supplement the Offering Memorandum (including by filing any document under the Exchange Act that would be incorporated by reference therein) without the prior consent of the Representative (such consent not to be unreasonably withheld, conditioned, or delayed). If, at any time following the date of this Agreement and prior to the completion of the initial resale of the Notes by the Initial Purchasers, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel to the Initial Purchasers or counsel to the Company, to amend or supplement the Final Offering Memorandum in order that the Final Offering Memorandum will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Final Offering Memorandum is delivered to a purchaser, not misleading, the Company shall promptly notify the Representative and shall promptly prepare, at its own expense, such amendment or supplement as may be necessary to correct such untrue statement or omission, and shall furnish to the Initial Purchasers such number of copies of such amendment or supplement as the Representative may reasonably request.

(b) Blue Sky Compliance.

The Company shall cooperate with the Initial Purchasers and counsel for the Initial Purchasers in qualifying or registering (or obtaining exemptions from the qualification or registration of) the Notes for offer and sale under the applicable securities or "Blue Sky" laws of such jurisdictions as the Representative may reasonably designate and shall continue such qualifications in effect so long as reasonably required for the distribution of the Notes; provided, however, that the Company shall not be required to (i) qualify to do business or to file a general consent to service of process in any jurisdiction in which it is not otherwise required to qualify or file, (ii) subject itself to taxation in any jurisdiction in which it is not otherwise subject, or (iii) take any action that would subject it to the general jurisdiction of any court in any jurisdiction in which it is not otherwise subject.

The Company shall not take, directly or indirectly, any action designed to, or that might reasonably be expected to cause or result in, the stabilization or manipulation of the price of any security of the Company in connection with the offering of the Notes, in violation of applicable law.

(d) Use of Proceeds.

The Company shall apply the net proceeds from the sale of the Notes as described in the Final Offering Memorandum under the caption "Use of Proceeds." The estimated net proceeds from the offering (after deducting the Initial Purchasers' discount, the cost of the Capped Call Transactions, and estimated offering expenses of approximately $1,200,000) shall be approximately $251,800,000 (assuming no exercise of the Over-Allotment Option and accounting for the Capped Call Transaction cost and related structuring fee).

(e) DTC Eligibility.

The Company shall use its reasonable best efforts to cause the Notes to be eligible for clearance and settlement through the facilities of DTC, and to maintain such eligibility for so long as the Notes remain outstanding.

(f) Reporting Obligations.

For so long as any Notes remain outstanding, the Company shall furnish to holders of Notes and prospective purchasers of Notes designated by such holders, upon the request of such holders, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act, unless the Company is then subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act and is current in its filing obligations thereunder. In the event the Company ceases to be subject to the reporting requirements of the Exchange Act, the Company shall furnish such information as contemplated by this Section 5(f) for so long as any Notes remain outstanding.

(g) No Registration Rights.

The Company confirms that it does not intend to, and shall not be obligated to, file a registration statement under the Securities Act (whether a shelf registration statement on Form S-3 or otherwise) for the resale of the Notes or the shares of Company Common Stock issuable upon conversion of the Notes. The Notes are being offered and sold in a transaction exempt from the registration requirements of the Securities Act, and neither the Notes nor the shares of Company Common Stock issuable upon conversion of the Notes are being registered.

(h) Nasdaq Listing.

The Company shall use its reasonable best efforts to cause the shares of Company Common Stock issuable upon conversion of the Notes to be approved for listing on The Nasdaq Stock Market, subject to official notice of issuance, and to maintain the listing of the Company Common Stock on The Nasdaq Stock Market for so long as any Notes remain outstanding.

(i) Transfer Agent.

Clearwater Transfer Services Inc. currently serves as transfer agent and registrar for the Company Common Stock. The Company shall maintain a transfer agent and registrar for the Company Common Stock for so long as any Notes remain outstanding.

(j) Integration.

The Company shall not sell, offer for sale, solicit offers to buy, or otherwise negotiate in respect of, any security (as defined in the Securities Act) that would be integrated with the sale of the Notes in a manner that would require the Notes to be registered under the Securities Act or that would require the Indenture to be qualified under the Trust Indenture Act.

SECTION 6. CONDITIONS TO THE OBLIGATIONS OF THE INITIAL PURCHASERS

The obligations of the Initial Purchasers to purchase and pay for the Firm Notes on the Closing Date (and any Option Notes on the applicable Option Closing Date) shall be subject to the accuracy of the representations and warranties of the Company contained herein as of the date hereof and as of the Closing Date (or the applicable Option Closing Date), to the performance by the Company of its covenants and agreements hereunder, and to the following additional conditions:

(a) Execution and Delivery of Indenture.

The Indenture shall have been duly executed and delivered by the Company and the Trustee (Broadmere Trust Company, National Association), and a fully executed counterpart thereof shall have been delivered to the Representative and its counsel.

(b) Delivery of Opinions of Counsel.

(i) Issuer's Counsel Opinion. The Representative shall have received the favorable opinion and negative assurance letter, each dated the Closing Date (May 30, 2023), of Calderwood & Harkness LLP, counsel to the Company, addressed to the Initial Purchasers and in form and substance satisfactory to the Representative and Prescott Whitfield LLP, counsel to the Initial Purchasers. Such opinion shall cover, among other things: (A) the corporate existence and good standing of the Company under the laws of the State of Delaware; (B) the due authorization by the Company of the execution, delivery, and performance of this Agreement, the Indenture, the Notes, and the Capped Call Confirmations; (C) the enforceability of the Notes, the Indenture, and this Agreement against the Company, subject to customary qualifications and assumptions; (D) the valid authorization and reservation for issuance of the shares of Company Common Stock issuable upon conversion of the Notes, and the valid issuance, fully paid and nonassessable nature thereof when issued upon conversion; (E) the absence of any requirement to register the Notes or the underlying shares of Company Common Stock under the Securities Act or to qualify the Indenture under the Trust Indenture Act, based on the exemption provided by Section 4(a)(2) of the Securities Act and Rule 144A thereunder (assuming the accuracy of the representations and warranties of the Initial Purchasers set forth in Section 4 hereof); (F) the absence of any requirement to register the Company as an investment company under the Investment Company Act of 1940, as amended; and (G) the absence of any conflicts with the certificate of incorporation or bylaws of the Company or any material agreement of the Company known to such counsel.

(ii) Negative Assurance Letter (10b-5 Letter). The Representative shall have received from Calderwood & Harkness LLP a negative assurance letter (commonly known as a "10b-5 letter"), dated the Closing Date, stating that, based on their participation in the preparation of the Final Offering Memorandum and without independent investigation or verification, nothing has come to the attention of such counsel that caused them to believe that the Final Offering Memorandum (as of its date or as of the Closing Date), as amended or supplemented, contained an untrue statement of a material fact or omitted 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 (it being understood that such counsel need not express any view with respect to the financial statements or other financial data, or statistical data derived therefrom, included in the Final Offering Memorandum).

(iii) Initial Purchasers' Counsel Opinion. The Representative shall have received the opinion and negative assurance letter, each dated the Closing Date, of Prescott Whitfield LLP, counsel to the Initial Purchasers, with respect to such matters as the Representative may reasonably request, including, without limitation, the issuance and sale of the Notes, the exemption from registration under the Securities Act, and such other customary matters. The lead partner responsible for the opinion shall be Diana Castellano, with assistance from lead associate Ryan Fujimoto.

The Representative shall have received from Aldgate & Finch LLP, independent registered public accounting firm for the Company (engagement partner: Robert Nishimura), (i) a comfort letter dated the date of the Final Offering Memorandum (May 24, 2023), in form and substance satisfactory to the Representative, containing statements and information of the type customarily included in accountants' comfort letters delivered to initial purchasers in connection with offerings of debt securities pursuant to Rule 144A, with respect to the financial statements and certain financial information contained in or incorporated by reference in the Offering Memorandum, and (ii) a bring-down comfort letter dated the Closing Date (May 30, 2023), in form and substance satisfactory to the Representative, confirming that no changes or developments have occurred since the date of the initial comfort letter that would require any change in the information or conclusions set forth therein.

(d) Officers' Certificate.

The Representative shall have received a certificate, dated the Closing Date (May 30, 2023), signed by Marcus Harding, Chief Executive Officer of the Company, and Priya Nandakumar, Chief Financial Officer of the Company, certifying on behalf of the Company that:

(i) the representations and warranties of the Company set forth in Section 3 of this Agreement are true and correct in all material respects as of the Closing Date with the same force and effect as though expressly made on and as of the Closing Date (except for representations and warranties that speak as of a specific date, which shall be true and correct in all material respects as of such date);

(ii) the Company has performed and complied in all material respects with all of its covenants, agreements, and obligations contained in this Agreement required to be performed or complied with on or prior to the Closing Date;

(iii) since the date of the most recent audited or unaudited financial statements included or incorporated by reference in the Offering Memorandum, there has been no material adverse change in the condition (financial or otherwise), results of operations, business, properties, or prospects of the Company and its subsidiaries, taken as a whole, except as disclosed in the Offering Memorandum; and

(iv) no event or condition that would constitute an Event of Default (as defined in the Indenture) has occurred and is continuing, and no event or condition exists that, with the giving of notice, the passage of time, or both, would constitute an Event of Default under the Indenture.

(e) Secretary's Certificate.

The Representative shall have received a certificate of David Shih, Secretary of the Company, dated the Closing Date (May 30, 2023), certifying:

(i) that attached thereto are true, correct, and complete copies of the certificate of incorporation and the bylaws of the Company, each as amended, restated, or otherwise modified to date, and as in effect on the Closing Date;

(ii) that attached thereto are true, correct, and complete copies of the resolutions duly adopted by the Board of Directors of the Company on May 19, 2023, and the resolutions duly adopted by the Pricing Committee of the Board of Directors on May 23, 2023, authorizing the execution, delivery, and performance of this Agreement, the Indenture, the Notes, the Capped Call Confirmations, and the consummation of the transactions contemplated hereby and thereby, and that such resolutions have not been amended, revoked, rescinded, or otherwise modified and remain in full force and effect on the Closing Date; and

(iii) as to the incumbency, authority, and genuine signatures of each officer of the Company authorized to execute this Agreement, the Indenture, the Notes, the Capped Call Confirmations, and each other document to be delivered by the Company in connection with the transactions contemplated hereby.

(f) Good Standing Certificates.

The Representative shall have received (i) a certificate of good standing of the Company issued by the Secretary of State of the State of Delaware, and (ii) a certificate of good standing (or equivalent certificate) of the Company issued by the Secretary of State of the State of California, each dated within five (5) Business Days prior to the Closing Date.

(g) DTC Eligibility.

The Notes shall be eligible for clearance and settlement through the facilities of DTC on the Closing Date, and the Company shall have provided evidence thereof satisfactory to the Representative.

(h) Nasdaq Supplemental Listing Application.

The supplemental listing application for the shares of Company Common Stock issuable upon conversion of the Notes shall have been filed with The Nasdaq Stock Market, and the Company shall have provided evidence thereof satisfactory to the Representative. Such application was filed on May 25, 2023.

(i) Limited Consent and Waiver.

The Company shall have obtained the Limited Consent and Waiver under the Credit Facility from Crestline National Bank, N.A., as administrative agent, and the requisite lenders, including Piedmont Commerce Bank and Lakeshore Federal Credit Corp., consenting to the incurrence of the indebtedness represented by the Notes as Permitted Additional Indebtedness (or similar concept) under the Credit Facility, and a fully executed copy of such Limited Consent and Waiver (dated May 22, 2023) shall have been delivered to the Representative, and such Limited Consent and Waiver shall be in full force and effect as of the Closing Date.

(j) Capped Call Transactions.

The Company shall have entered into the Capped Call Confirmations with each of the Capped Call Counterparties on terms and conditions consistent with the description thereof in the Final Offering Memorandum, and fully executed copies of the Capped Call Confirmations shall have been delivered to the Representative. The allocation of the Capped Call Transactions shall be as follows:

(A) Ridgepoint Capital Markets LLC: 60% allocation, with a notional amount of $172,500,000 (based on the total aggregate principal amount of Notes, assuming exercise of the Over-Allotment Option in full); and

(B) Northvane Financial Products LP: 40% allocation, with a notional amount of $115,000,000 (based on the total aggregate principal amount of Notes, assuming exercise of the Over-Allotment Option in full).

(k) No Material Adverse Change.

Since the date of the most recent audited or unaudited financial statements included or incorporated by reference in the Offering Memorandum, there shall not have occurred any event or development, and no condition shall exist, that, individually or in the aggregate, constitutes or would reasonably be expected to constitute a Material Adverse Effect.

(l) No Downgrade.

No "nationally recognized statistical rating organization" (as defined in Section 3(a)(62) of the Exchange Act) shall have (i) downgraded any debt securities or other obligations of the Company or any of its subsidiaries, or (ii) publicly announced that it has placed any debt securities or other obligations of the Company or any of its subsidiaries under surveillance or review, or on "CreditWatch" or any similar designation, with negative implications, in each case since the date of this Agreement.

(m) Additional Documents.

The Company shall have furnished to the Representative and Prescott Whitfield LLP such further information, certificates, documents, and opinions as the Representative or Prescott Whitfield LLP may have reasonably requested in connection with the offering and sale of the Notes and the consummation of the transactions contemplated by this Agreement.

If any condition specified in this Section 6 shall not have been fulfilled when and as required to be fulfilled, this Agreement and all obligations of the Initial Purchasers hereunder may be terminated by the Representative by notice to the Company at any time at or prior to the Closing Date (or the applicable Option Closing Date, as the case may be), and such termination shall be without liability of any party to any other party except as provided in Sections 7, 9, and 12 hereof, and except that Sections 7, 9, 11, and 12 shall survive such termination and remain in full force and effect.

SECTION 7. INDEMNIFICATION

(a) Indemnification by the Company.

The Company agrees to indemnify and hold harmless each Initial Purchaser, each of its affiliates, and each of its and their respective directors, officers, employees, agents, and representatives, and each person, if any, who controls any Initial Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, an "Initial Purchaser Indemnified Party"), from and against any and all losses, claims, damages, liabilities, and expenses (including, without limitation, all reasonable and documented f

PURCHASE AGREEMENT
EXECUTION VERSION
Dated as of May 24, 2023
$250,000,000 Aggregate Principal Amount 2.75% Convertible Senior Notes due 2028
Optiwave Semiconductor Corp.
and
Ridgepoint Capital Markets LLC
as Representative of the several Initial Purchasers named in Schedule I hereto
Governing Law: State of New York
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PURCHASE AGREEMENT
$250,000,000 2.75% Convertible Senior Notes due 2028
May 24, 2023
Ridgepoint Capital Markets LLC, as Representative of the several Initial Purchasers named in Schedule I hereto 383 Madison Avenue, 22nd Floor New York, NY 10179
Ladies and Gentlemen:
Optiwave Semiconductor Corp., a corporation organized and existing under the laws of the State of Delaware (the "Company"), proposes to issue and sell to the several Initial Purchasers named in Schedule I hereto (the "Initial Purchasers"), for whom Ridgepoint Capital Markets LLC is acting as sole bookrunning manager and representative (in such capacity, the "Representative"), Two Hundred Fifty Million Dollars ($250,000,000) aggregate principal amount of its 2.75% Convertible Senior Notes due 2028 (the "Firm Notes"). In addition, the Company proposes to grant to the Initial Purchasers an option (the "Over-Allotment Option") to purchase up to an additional Thirty-Seven Million Five Hundred Thousand Dollars ($37,500,000) aggregate principal amount of its 2.75% Convertible Senior Notes due 2028 (the "Option Notes" and, together with the Firm Notes, the "Notes"), representing fifteen percent (15%) of the aggregate principal amount of Firm Notes, solely to cover over-allotments, if any. The Notes are to be issued pursuant to an indenture (the "Indenture") to be dated as of the Closing Date (as defined below), by and between the Company and Broadmere Trust Company, National Association, as trustee (the "Trustee"), at its Corporate Trust Office located at 100 Wall Street, 6th Floor, New York, NY 10005. Upon issuance, the Notes will be convertible into shares of common stock, par value $0.001 per share, of the Company (the "Company Common Stock"), cash, or a combination of cash and shares of Company Common Stock, at the Company's election, in accordance with the terms of the Indenture.
The Notes are being offered and sold in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), provided by Section 4(a)(2) thereof and Rule 144A promulgated thereunder ("Rule 144A"), to persons reasonably believed to be qualified institutional buyers ("QIBs") within the meaning of Rule 144A. Pursuant to the terms hereof, the Company has prepared a Preliminary Offering Memorandum dated May 18, 2023 (the "Preliminary Offering Memorandum") and a Final Offering Memorandum dated May 24, 2023 (the "Final Offering Memorandum" and, together with the Preliminary Offering Memorandum, the "Offering Memorandum"), each setting forth or including a description of the terms of the Notes, the terms of the offering, and a description of the Company.
Concurrently with the closing of the offering of the Notes, the Company intends to enter into certain privately negotiated capped call transactions (the "Capped Call Transactions") with each of Ridgepoint Capital Markets LLC and Northvane Financial Products LP (together, the "Capped Call Counterparties"), as described in the Final Offering Memorandum.
This Purchase Agreement (this "Agreement") is entered into by and between the Company and the Representative, acting on behalf of the several Initial Purchasers, as of the date first written above.
In consideration of the mutual agreements, representations, warranties, and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Indenture.
"Act" or "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
"Applicable Time" means 5:30 p.m. (New York City time) on May 23, 2023, which is the Pricing Date.
"Business Day" means any day other than a Saturday, a Sunday, or a day on which banking institutions in the City of New York are authorized or required by law, regulation, or executive order to close.
"Capped Call Confirmations" means the confirmations to be entered into between the Company and each of the Capped Call Counterparties, evidencing the Capped Call Transactions.
"Capped Call Counterparties" means, collectively, Ridgepoint Capital Markets LLC and Northvane Financial Products LP.
"Capped Call Transactions" means the capped call transactions to be entered into by the Company with the Capped Call Counterparties concurrently with the closing of the offering of the Notes.
"Closing Date" means May 30, 2023, or such other date as may be agreed upon by the Company and the Representative.
"Commission" or "SEC" means the U.S. Securities and Exchange Commission.
"Company" means Optiwave Semiconductor Corp., a corporation duly organized and existing under the laws of the State of Delaware.
"Company Common Stock" means shares of common stock, par value $0.001 per share, of the Company.
"Conversion Price" means approximately $94.50 per share of Company Common Stock, based on the Initial Conversion Rate.
"DTC" means The Depository Trust Company, or any successor thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
"Final Offering Memorandum" means the Final Offering Memorandum of the Company dated May 24, 2023, relating to the Notes, including all documents incorporated by reference therein.
"Firm Notes" means $250,000,000 aggregate principal amount of 2.75% Convertible Senior Notes due 2028 of the Company to be issued and sold to the Initial Purchasers pursuant to this Agreement.
"Indenture" means the Indenture dated as of May 30, 2023, by and between the Company and the Trustee, pursuant to which the Notes will be issued.
"Initial Conversion Rate" means 10.5820 shares of Company Common Stock per $1,000 principal amount of Notes, subject to adjustment as provided in the Indenture.
"Initial Purchasers" means Ridgepoint Capital Markets LLC, Harborstone Securities Inc., and Velthorn Zanthor & Co., each as named in Schedule I hereto.
"Material Adverse Effect" means any material adverse change in, or material adverse effect on, the condition (financial or otherwise), results of operations, business, properties, management, or prospects of the Company and its subsidiaries, taken as a whole.
"Notes" means, collectively, the Firm Notes and the Option Notes, being the Company's 2.75% Convertible Senior Notes due 2028.
"Offering Memorandum" means, collectively, the Preliminary Offering Memorandum and the Final Offering Memorandum.
"Option Closing Date" means, with respect to Option Notes to be purchased by the Initial Purchasers, the date of delivery of such Option Notes, which shall be no earlier than the Closing Date and no later than thirteen (13) Business Days after exercise of the Over-Allotment Option.
"Option Notes" means up to $37,500,000 aggregate principal amount of additional 2.75% Convertible Senior Notes due 2028 which the Initial Purchasers have the option to purchase pursuant to Section 2(b) of this Agreement.
"Over-Allotment Option" has the meaning set forth in Section 2(b) of this Agreement.
"Preliminary Offering Memorandum" means the Preliminary Offering Memorandum of the Company dated May 18, 2023, relating to the Notes.
"Pricing Date" means May 23, 2023.
"Pricing Disclosure Package" means the Preliminary Offering Memorandum, as supplemented and amended by the Pricing Term Sheet and any other written communications listed on Schedule II hereto, considered together as of the Applicable Time.
"Pricing Supplement" or "Pricing Term Sheet" means the written communication, substantially in the form of Schedule II hereto, setting forth the final terms of the Notes, prepared in accordance with Rule 144A under the Securities Act.
"Reference Price" means $73.38 per share of Company Common Stock, being the closing sale price of the Company Common Stock on The Nasdaq Stock Market on the Pricing Date.
"Representative" means Ridgepoint Capital Markets LLC, acting as sole bookrunning manager and representative of the several Initial Purchasers.
"Transaction Documents" means this Agreement, the Indenture, the Notes, and the Capped Call Confirmations.
"Trustee" means Broadmere Trust Company, National Association, a national banking association organized and existing under the laws of the United States, in its capacity as trustee under the Indenture.
SECTION 2. PURCHASE, SALE, AND DELIVERY OF THE NOTES
(a) Purchase and Sale of Firm Notes.
On the basis of the representations, warranties, covenants, and agreements set forth herein, and subject to all the terms and conditions of this Agreement, the Company agrees to issue and sell to the several Initial Purchasers, and each Initial Purchaser agrees, severally and not jointly, to purchase from the Company, at a purchase price equal to 98.00% of the principal amount thereof (i.e., $980.00 per $1,000 principal amount of Notes), the aggregate principal amount of Firm Notes set forth opposite such Initial Purchaser's name in Schedule I hereto.
The aggregate purchase price for the Firm Notes shall be $245,000,000 (being $250,000,000 multiplied by 98.00%). The aggregate Initial Purchasers' discount on the Firm Notes shall be $5,000,000 (being $250,000,000 multiplied by 2.00%). The Initial Purchasers' discount represents the difference between the purchase price paid by the Initial Purchasers and the initial offering price of the Notes at 100% of their principal amount, as described in the Final Offering Memorandum.
(b) Over-Allotment Option.
In addition to the Firm Notes, the Company hereby grants to the several Initial Purchasers an option (the "Over-Allotment Option") to purchase, severally and not jointly, up to $37,500,000 additional aggregate principal amount of Notes (the "Option Notes") at the same purchase price per $1,000 principal amount as the Firm Notes (i.e., $980.00 per $1,000 principal amount). The Over-Allotment Option may be exercised in whole or in part at any time and from time to time on or before the thirteenth (13th) day after the date of this Agreement (i.e., on or before June 6, 2023).
The Over-Allotment Option shall be exercised by written notice (or electronic notice) from the Representative to the Company, which notice shall specify the aggregate principal amount of Option Notes to be purchased and the date of delivery thereof (which shall be a Business Day no earlier than two (2) Business Days after the date of such notice, unless the Representative and the Company otherwise agree). The obligation of each Initial Purchaser to purchase Option Notes shall be in the same proportion as its commitment with respect to the Firm Notes as set forth in Schedule I hereto.
If the Over-Allotment Option is exercised in full, the aggregate purchase price for the Option Notes shall be $36,750,000 (being $37,500,000 multiplied by 98.00%), and the aggregate Initial Purchasers' discount on the Option Notes shall be $750,000 (being $37,500,000 multiplied by 2.00%). No Option Notes shall be sold or delivered unless all of the Firm Notes previously shall have been, or simultaneously are, sold and delivered.
(c) Delivery and Payment — Firm Notes.
Delivery of the Firm Notes shall be made on May 30, 2023 (the "Closing Date") at the offices of Calderwood & Harkness LLP, 600 Lexington Avenue, 30th Floor, New York, NY 10022, or at such other location as the Company and the Representative may agree. The Firm Notes shall be delivered in global form, registered in the name of Cede & Co. as nominee for DTC, and shall be eligible for clearance and settlement through the facilities of DTC. The CUSIP number for the Notes (144A) shall be 683742AA5 and the ISIN shall be US683742AA53.
Payment of the aggregate purchase price for the Firm Notes shall be made by the Initial Purchasers by wire transfer of immediately available funds to an account designated by the Company on or prior to the Closing Date. Delivery of the Firm Notes shall be made against payment therefor (delivery versus payment, or DVP). It is understood that each Initial Purchaser has authorized the Representative to act on its behalf in connection with the delivery of and payment for the Firm Notes.
(d) Delivery and Payment — Option Notes.
Delivery of any Option Notes shall be made on the applicable Option Closing Date in the same manner as the Firm Notes. Payment of the aggregate purchase price for the Option Notes shall be made on the same basis as payment for the Firm Notes, by wire transfer of immediately available funds to an account designated by the Company. The Option Notes shall be delivered in global form through the facilities of DTC in the same manner as the Firm Notes.
(e) Structuring Fee.
In addition to the Initial Purchasers' discount described in Section 2(a) above, the Company shall pay to Ridgepoint Capital Markets LLC a structuring fee equal to 0.25% of the aggregate principal amount of Firm Notes (i.e., $250,000,000 multiplied by 0.25% = $625,000). Such structuring fee shall be payable on the Closing Date by wire transfer of immediately available funds to an account designated by Ridgepoint Capital Markets LLC. The structuring fee is separate from and in addition to the Initial Purchasers' discount and shall not be shared among the Initial Purchasers. For the avoidance of doubt, the structuring fee is payable solely in consideration of Ridgepoint Capital Markets LLC's services as sole bookrunning manager and structuring advisor in connection with the offering of the Notes.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each Initial Purchaser, as of the date hereof and as of the Closing Date (and as of any Option Closing Date), as follows:
(a) Organization, Good Standing, and Qualification.
The Company is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Delaware (Delaware file no. 5738291). The Company has all requisite corporate power and authority to own, lease, and operate its properties and assets and to conduct its business as described in the Offering Memorandum. The Company is duly qualified and in good standing as a foreign corporation authorized to do business in each jurisdiction in which the nature of its business or the ownership, leasing, or operation of its properties requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company's principal executive offices are located at 4800 Great America Parkway, Suite 1200, San Jose, California 95054.
(b) Subsidiaries.
Each subsidiary of the Company has been duly organized, is validly existing, and is in good standing under the laws of its jurisdiction of organization, with all requisite corporate, limited liability company, or other organizational power and authority to own, lease, and operate its properties and to conduct its business as described in the Offering Memorandum, except where the failure to be so organized, existing, or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. All of the outstanding equity interests or shares of capital stock of each subsidiary of the Company have been duly authorized and validly issued and are fully paid and nonassessable, and all such equity interests or shares are owned, directly or indirectly, by the Company, free and clear of all liens, encumbrances, equities, claims, security interests, voting trusts, or other defects of title, except as disclosed in the Offering Memorandum and except for such liens or encumbrances that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(c) Authorization.
The Company has all requisite corporate power and authority to execute, deliver, and perform its obligations under this Agreement, the Indenture, the Notes, and the Capped Call Confirmations, and to consummate the transactions contemplated hereby and thereby. The execution, delivery, and performance of this Agreement, the Indenture, the Notes, and the entry into the Capped Call Transactions, and the consummation of the transactions contemplated hereby and thereby, including the issuance and sale of the Notes and the issuance of the shares of Company Common Stock issuable upon conversion of the Notes, have been duly and validly authorized by all necessary corporate action of the Company. Such authorization includes resolutions duly adopted by the Board of Directors of the Company at a meeting held on May 19, 2023, at which a quorum was present and acting throughout, and resolutions duly adopted by the Pricing Committee of the Board of Directors at a meeting held on May 23, 2023, at which all members were present and acting. No further corporate action or approval on the part of the Company, its Board of Directors, or its stockholders is required in connection with the issuance and sale of the Notes or the issuance of the shares of Company Common Stock upon conversion of the Notes.
(d) Due Execution and Delivery; Enforceability.
This Agreement has been duly executed and delivered by the Company. This Agreement constitutes a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and other similar laws relating to or affecting creditors' rights generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity) (collectively, the "Enforceability Exceptions").
The Indenture, when duly executed and delivered by the Company and the Trustee on the Closing Date, will constitute a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions.
The Notes, when duly executed by the Company, authenticated by the Trustee, and delivered in accordance with the provisions of the Indenture and this Agreement, and when payment for such Notes shall have been made as provided herein, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture.
(e) Valid Issuance of Conversion Shares.
The shares of Company Common Stock issuable upon conversion of the Notes (up to approximately 3,042,325 shares based on the Initial Conversion Rate and the total aggregate principal amount of Notes, including the Option Notes, assuming exercise of the Over-Allotment Option in full) have been duly authorized and reserved for issuance by the Company. When issued in accordance with the terms of the Indenture upon conversion of the Notes, such shares will be validly issued, fully paid, and nonassessable, and will not be subject to any preemptive rights, rights of first refusal, or similar rights of any person. No further approval or authorization of any stockholder, the Board of Directors of the Company, or any other person is required for the issuance of such shares. The Company Common Stock is listed on The Nasdaq Stock Market under the ticker symbol "OWS." A supplemental listing application with respect to the shares of Company Common Stock issuable upon conversion of the Notes was filed with The Nasdaq Stock Market on May 25, 2023.
(f) No Conflicts.
Neither the execution, delivery, and performance by the Company of this Agreement, the Indenture, the Notes, or the Capped Call Confirmations, nor the consummation of the transactions contemplated hereby or thereby (including the issuance and sale of the Notes and the issuance of the shares of Company Common Stock upon conversion of the Notes), will (i) violate, conflict with, or result in a breach of any provision of the certificate of incorporation or bylaws of the Company, each as amended to date, (ii) violate, conflict with, or result in a breach of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, any applicable law, statute, rule, regulation, judgment, order, writ, injunction, or decree of any governmental authority applicable to the Company or any of its subsidiaries or any of their respective properties or assets, (iii) result in a breach of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration under, any agreement, contract, indenture, mortgage, deed of trust, loan agreement, note, lease, or other instrument to which the Company or any of its subsidiaries is a party or by which any of them or any of their respective properties or assets may be bound, including the Credit Agreement dated as of November 15, 2021 (as amended, restated, supplemented, or otherwise modified from time to time), providing for a $300,000,000 senior secured revolving credit facility, among the Company, Crestline National Bank, N.A., as administrative agent, and the lenders party thereto (the "Credit Facility"), as consented to pursuant to the Limited Consent and Waiver dated May 22, 2023, or (iv) result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of the Company or any of its subsidiaries, except, in the case of clauses (ii), (iii), and (iv), for any such violation, conflict, breach, default, termination, acceleration, or lien that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(g) No Registration Required.
Assuming the accuracy of the representations and warranties of the Initial Purchasers set forth in Section 4 hereof, it is not necessary, in connection with the offer, sale, and delivery of the Notes to the Initial Purchasers in the manner contemplated by this Agreement and the initial resale of the Notes by the Initial Purchasers in the manner contemplated by this Agreement and the Offering Memorandum, to register the Notes or the shares of Company Common Stock issuable upon conversion of the Notes under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Notes satisfy the requirements set forth in Rule 144A(d)(3) under the Securities Act.
(h) No Investment Company.
The Company is not, and after giving effect to the offering and sale of the Notes and the application of the net proceeds thereof as described in the Final Offering Memorandum under the caption "Use of Proceeds," will not be required to register as an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission promulgated thereunder.
(i) Offering Memorandum; Pricing Disclosure Package.
(i) The Preliminary Offering Memorandum, as of its date (May 18, 2023), did not contain any untrue statement of a material fact or omit 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; provided, however, that the Company makes no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with written information furnished to the Company by any Initial Purchaser through the Representative expressly for use in the Preliminary Offering Memorandum.
(ii) The Pricing Disclosure Package, as of the Applicable Time (5:30 p.m., New York City time, on May 23, 2023), did not contain any untrue statement of a material fact or omit 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; provided, however, that the Company makes no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with written information furnished to the Company by any Initial Purchaser through the Representative expressly for use in the Pricing Disclosure Package.
(iii) The Final Offering Memorandum, as of its date (May 24, 2023) and as of the Closing Date (and as of any Option Closing Date), does not and will not contain any untrue statement of a material fact or omit 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; provided, however, that the Company makes no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with written information furnished to the Company by any Initial Purchaser through the Representative expressly for use in the Final Offering Memorandum.
(j) SEC Reporting Status.
The Company is subject to and in compliance with the reporting requirements of Section 13 or Section 15(d) of the Exchange Act. Since becoming subject to such requirements, the Company has timely filed (or obtained extensions of time for filing and has filed within the applicable grace period) all Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and all other reports, statements, documents, and schedules required to be filed by it with the Commission pursuant to the Exchange Act. The Company's SEC Central Index Key ("CIK") number is 0001823467. As of the date hereof, the Company has not received any comment letter from the staff of the Commission relating to the Company's filings under the Exchange Act that remains unresolved.
(k) Financial Statements.
The financial statements of the Company (including the related notes and schedules thereto) included in or incorporated by reference in the Offering Memorandum present fairly in all material respects the financial condition, results of operations, stockholders' equity, and cash flows of the Company and its consolidated subsidiaries as of the dates and for the periods indicated therein, and such financial statements have been prepared in conformity with United States generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved, except as otherwise noted therein. Such financial statements have been audited by Aldgate & Finch LLP, an independent registered public accounting firm with the Public Company Accounting Oversight Board (United States) (the "PCAOB"), as stated in their reports included or incorporated by reference in the Offering Memorandum. No other financial statements or schedules of the Company are required to be included in the Offering Memorandum.
(l) No Material Adverse Change.
Since the date of the most recent audited or unaudited financial statements included or incorporated by reference in the Offering Memorandum, there has not been (i) any material adverse change, or any development involving a prospective material adverse change, in the condition (financial or otherwise), results of operations, business, properties, management, or prospects of the Company and its subsidiaries, taken as a whole, (ii) any transaction that is material to the Company and its subsidiaries, taken as a whole, entered into other than in the ordinary course of business, or (iii) any dividend or distribution of any kind declared, paid, or made by the Company on any class of its capital stock, except, in each case, as set forth in or contemplated by the Offering Memorandum.
(m) intellectual Property.
The Company and its subsidiaries own, or have obtained valid and enforceable licenses or rights to use, all patents, patent applications, trademarks, trademark registrations, service marks, trade names, copyrights, trade secrets, know-how, and other intellectual property rights (collectively, "intellectual Property") necessary for the conduct of their respective businesses as described in the Offering Memorandum, except where the failure to so own or have such rights would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. To the Company's knowledge, (i) the conduct of the business of the Company and its subsidiaries does not infringe, misappropriate, or otherwise violate any intellectual Property of any third party, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and (ii) no third party is infringing, misappropriating, or otherwise violating any intellectual Property owned by or licensed to the Company or its subsidiaries, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(n) Taxes.
The Company and each of its subsidiaries have timely filed (or have obtained extensions of time for filing and will file within the applicable extension period) all federal, state, local, and foreign tax returns required to be filed by them, except where the failure to so file would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and all such tax returns are true, correct, and complete in all material respects. The Company and each of its subsidiaries have paid all taxes (including any interest, penalties, or additions thereto) due and payable (whether or not shown on any tax return), except for taxes being contested in good faith and by appropriate proceedings and for which adequate reserves have been established in conformity with GAAP, or where the failure to pay would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company's Employer Identification Number (EIN) is 82-4917263.
(o) Compliance with Laws.
The Company and each of its subsidiaries are in compliance with all applicable federal, state, local, and foreign laws, statutes, rules, regulations, orders, judgments, injunctions, and decrees, except where the failure to be in such compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received any written notice of any violation of, or noncompliance with, any such law, regulation, or order that has not been remedied or is not being contested in good faith.
(p) No Litigation.
Except as disclosed in the Offering Memorandum, there are no legal, governmental, or regulatory actions, suits, proceedings, inquiries, or investigations pending, or, to the Company's knowledge, threatened, to which the Company or any of its subsidiaries is or would be a party or to which any of their respective properties or assets is or would be subject, before or by any court, arbitrator, or governmental, regulatory, or administrative body, agency, or official, that, if determined adversely to the Company or any of its subsidiaries, would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Exceptions to this representation are set forth in Schedule III hereto and incorporated herein by reference.
(q) No General Solicitation.
Neither the Company nor any person acting on behalf of the Company has offered or sold the Notes by any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act, including, without limitation, (i) any advertisement, article, notice, or other communication published in any newspaper, magazine, or similar medium or broadcast over television or radio, or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.
(r) No Directed Selling Efforts.
Neither the Company nor any person acting on behalf of the Company has engaged in any "directed selling efforts" within the meaning of Regulation S under the Securities Act with respect to the Notes, and the Company and its affiliates, and any person acting on their behalf, have complied with the offering restrictions requirements of Regulation S under the Securities Act.
(s) No Stabilization.
The Company has not taken, directly or indirectly, any action designed to, or that has constituted or might reasonably be expected to cause or result in, the stabilization or manipulation of the price of any security of the Company in connection with the offering of the Notes, in violation of applicable law.
(t) Capped Call Transactions.
The Company has all requisite corporate power and authority to enter into the Capped Call Transactions with the Capped Call Counterparties. The entry into the Capped Call Transactions, and the execution and delivery of the Capped Call Confirmations, have been duly authorized by all necessary corporate action on the part of the Company, including the resolutions of the Board of Directors adopted on May 19, 2023 and the resolutions of the Pricing Committee adopted on May 23, 2023. The Capped Call Transactions are being entered into for the purpose of reducing potential dilution to the Company Common Stock upon conversion of the Notes and/or offsetting cash payments in excess of the principal amount of the Notes that the Company is required to make upon conversion of the Notes, in each case as described in the Offering Memorandum. The Capped Call Confirmations, when duly executed and delivered by the Company and the applicable Capped Call Counterparty, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to the Enforceability Exceptions.
(u) Existing Indebtedness; Revolving Credit Facility.
The incurrence of the indebtedness represented by the Notes as "Permitted Additional Indebtedness" (or similar concept) under the Company's Credit Facility has been duly consented to by Crestline National Bank, N.A., as administrative agent, and the requisite lenders thereunder, pursuant to the Limited Consent and Waiver dated as of May 22, 2023 (the "Limited Consent and Waiver"), by and among the Company, Crestline National Bank, N.A., as administrative agent, Piedmont Commerce Bank, and Lakeshore Federal Credit Corp. After giving effect to the offering and sale of the Notes, the application of the net proceeds therefrom (including the repayment of borrowings under the Credit Facility), and the entry into the Capped Call Transactions, the Company will be in compliance with all covenants and agreements under the Credit Facility. As of May 23, 2023, the outstanding balance under the Credit Facility is $75,000,000, which will be repaid from the net proceeds of the offering.
(v) Use of Proceeds.
The Company will apply the net proceeds from the sale of the Notes as described in the Final Offering Memorandum under the caption "Use of Proceeds," including: (i) approximately $28,750,000 to fund the cost of the Capped Call Transactions, (ii) approximately $75,000,000 to repay in full the outstanding borrowings under the Credit Facility with Crestline National Bank, N.A., and (iii) the remainder for general corporate purposes, including working capital, potential acquisitions, and capital expenditures. No portion of the net proceeds will be used, directly or indirectly, to purchase or carry any "margin security" within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, or to repay any indebtedness that was incurred for such purpose, and the Company will not otherwise take or permit to be taken any action that would cause this Agreement or the transactions contemplated hereby to violate Regulation T, Regulation U, or Regulation X of the Board of Governors of the Federal Reserve System.
(w) Internal Controls and Disclosure Controls.
The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorization, (ii) transactions are recorded as necessary to permit the preparation of financial statements in conformity with GAAP and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company's "disclosure controls and procedures" (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are effective in all material respects to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is (A) recorded, processed, summarized, and reported within the time periods specified in the Commission's rules and forms and (B) accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
(x) Nasdaq Listing.
The Company Common Stock is listed on The Nasdaq Stock Market under the ticker symbol "OWS." The Company is in compliance in all material respects with all applicable listing requirements of The Nasdaq Stock Market, including the continued listing standards set forth in the Nasdaq Listing Rules. The Company has not received any notice from The Nasdaq Stock Market regarding the delisting or potential delisting of the Company Common Stock. The Company has filed a supplemental listing application with The Nasdaq Stock Market with respect to the shares of Company Common Stock issuable upon conversion of the Notes, and the Company has no reason to believe that such shares will not be approved for listing on The Nasdaq Stock Market, subject to official notice of issuance.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASERS
Each Initial Purchaser, severally and not jointly, hereby represents, warrants, and agrees as follows:
(a) QIB Status and Offering Restrictions.
Such Initial Purchaser is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act. Such Initial Purchaser has offered and will offer and sell the Notes only to persons that it reasonably believes to be QIBs within the meaning of Rule 144A, in compliance with Rule 144A under the Securities Act. Such Initial Purchaser has informed each purchaser of Notes that the Notes are being offered and sold in a transaction not involving a public offering within the meaning of the Securities Act, and that the Notes have not been and will not be registered under the Securities Act and may not be reoffered, resold, pledged, or otherwise transferred except in accordance with the restrictions on transfer described in the Final Offering Memorandum and the Notes.
(b) No General Solicitation.
Such Initial Purchaser has not offered or sold the Notes by means of any form of "general solicitation" or "general advertising" within the meaning of Rule 502(c) under the Securities Act, including, without limitation, (i) any advertisement, article, notice, or other communication published in any newspaper, magazine, or similar medium or broadcast over television, radio, or the internet (other than as permitted by Rule 144A), or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.
(c) Offering Memorandum Delivery.
Such Initial Purchaser confirms that it has delivered, or will deliver, to each purchaser of Notes a copy of the Final Offering Memorandum (including any amendments or supplements thereto), or has made, or will make, the same available electronically to each such purchaser, in each case prior to or concurrently with the confirmation of sale of Notes to such purchaser.
(d) Compliance with Selling Restrictions.
Such Initial Purchaser will comply with all applicable laws, rules, and regulations in each jurisdiction in which it offers, sells, or delivers Notes or distributes the Offering Memorandum, and will obtain any consent, approval, or permission required by it for the offer, sale, or delivery of Notes or the distribution of the Offering Memorandum under the laws and regulations in force in any jurisdiction to which it is subject or in which it makes such offers, sales, deliveries, or distributions. Neither the Company nor any other Initial Purchaser shall have any responsibility therefor.
SECTION 5. COVENANTS OF THE COMPANY
The Company covenants and agrees with each Initial Purchaser as follows:
(a) Offering Memorandum Amendments and Supplements.
The Company shall not amend or supplement the Offering Memorandum (including by filing any document under the Exchange Act that would be incorporated by reference therein) without the prior consent of the Representative (such consent not to be unreasonably withheld, conditioned, or delayed). If, at any time following the date of this Agreement and prior to the completion of the initial resale of the Notes by the Initial Purchasers, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel to the Initial Purchasers or counsel to the Company, to amend or supplement the Final Offering Memorandum in order that the Final Offering Memorandum will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Final Offering Memorandum is delivered to a purchaser, not misleading, the Company shall promptly notify the Representative and shall promptly prepare, at its own expense, such amendment or supplement as may be necessary to correct such untrue statement or omission, and shall furnish to the Initial Purchasers such number of copies of such amendment or supplement as the Representative may reasonably request.
(b) Blue Sky Compliance.
The Company shall cooperate with the Initial Purchasers and counsel for the Initial Purchasers in qualifying or registering (or obtaining exemptions from the qualification or registration of) the Notes for offer and sale under the applicable securities or "Blue Sky" laws of such jurisdictions as the Representative may reasonably designate and shall continue such qualifications in effect so long as reasonably required for the distribution of the Notes; provided, however, that the Company shall not be required to (i) qualify to do business or to file a general consent to service of process in any jurisdiction in which it is not otherwise required to qualify or file, (ii) subject itself to taxation in any jurisdiction in which it is not otherwise subject, or (iii) take any action that would subject it to the general jurisdiction of any court in any jurisdiction in which it is not otherwise subject.
(c) No Stabilization or Manipulation.
The Company shall not take, directly or indirectly, any action designed to, or that might reasonably be expected to cause or result in, the stabilization or manipulation of the price of any security of the Company in connection with the offering of the Notes, in violation of applicable law.
(d) Use of Proceeds.
The Company shall apply the net proceeds from the sale of the Notes as described in the Final Offering Memorandum under the caption "Use of Proceeds." The estimated net proceeds from the offering (after deducting the Initial Purchasers' discount, the cost of the Capped Call Transactions, and estimated offering expenses of approximately $1,200,000) shall be approximately $251,800,000 (assuming no exercise of the Over-Allotment Option and accounting for the Capped Call Transaction cost and related structuring fee).
(e) DTC Eligibility.
The Company shall use its reasonable best efforts to cause the Notes to be eligible for clearance and settlement through the facilities of DTC, and to maintain such eligibility for so long as the Notes remain outstanding.
(f) Reporting Obligations.
For so long as any Notes remain outstanding, the Company shall furnish to holders of Notes and prospective purchasers of Notes designated by such holders, upon the request of such holders, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act, unless the Company is then subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act and is current in its filing obligations thereunder. In the event the Company ceases to be subject to the reporting requirements of the Exchange Act, the Company shall furnish such information as contemplated by this Section 5(f) for so long as any Notes remain outstanding.
(g) No Registration Rights.
The Company confirms that it does not intend to, and shall not be obligated to, file a registration statement under the Securities Act (whether a shelf registration statement on Form S-3 or otherwise) for the resale of the Notes or the shares of Company Common Stock issuable upon conversion of the Notes. The Notes are being offered and sold in a transaction exempt from the registration requirements of the Securities Act, and neither the Notes nor the shares of Company Common Stock issuable upon conversion of the Notes are being registered.
(h) Nasdaq Listing.
The Company shall use its reasonable best efforts to cause the shares of Company Common Stock issuable upon conversion of the Notes to be approved for listing on The Nasdaq Stock Market, subject to official notice of issuance, and to maintain the listing of the Company Common Stock on The Nasdaq Stock Market for so long as any Notes remain outstanding.
(i) Transfer Agent.
Clearwater Transfer Services Inc. currently serves as transfer agent and registrar for the Company Common Stock. The Company shall maintain a transfer agent and registrar for the Company Common Stock for so long as any Notes remain outstanding.
(j) Integration.
The Company shall not sell, offer for sale, solicit offers to buy, or otherwise negotiate in respect of, any security (as defined in the Securities Act) that would be integrated with the sale of the Notes in a manner that would require the Notes to be registered under the Securities Act or that would require the Indenture to be qualified under the Trust Indenture Act.
SECTION 6. CONDITIONS TO THE OBLIGATIONS OF THE INITIAL PURCHASERS
The obligations of the Initial Purchasers to purchase and pay for the Firm Notes on the Closing Date (and any Option Notes on the applicable Option Closing Date) shall be subject to the accuracy of the representations and warranties of the Company contained herein as of the date hereof and as of the Closing Date (or the applicable Option Closing Date), to the performance by the Company of its covenants and agreements hereunder, and to the following additional conditions:
(a) Execution and Delivery of Indenture.
The Indenture shall have been duly executed and delivered by the Company and the Trustee (Broadmere Trust Company, National Association), and a fully executed counterpart thereof shall have been delivered to the Representative and its counsel.
(b) Delivery of Opinions of Counsel.
(i) Issuer's Counsel Opinion. The Representative shall have received the favorable opinion and negative assurance letter, each dated the Closing Date (May 30, 2023), of Calderwood & Harkness LLP, counsel to the Company, addressed to the Initial Purchasers and in form and substance satisfactory to the Representative and Prescott Whitfield LLP, counsel to the Initial Purchasers. Such opinion shall cover, among other things: (A) the corporate existence and good standing of the Company under the laws of the State of Delaware; (B) the due authorization by the Company of the execution, delivery, and performance of this Agreement, the Indenture, the Notes, and the Capped Call Confirmations; (C) the enforceability of the Notes, the Indenture, and this Agreement against the Company, subject to customary qualifications and assumptions; (D) the valid authorization and reservation for issuance of the shares of Company Common Stock issuable upon conversion of the Notes, and the valid issuance, fully paid and nonassessable nature thereof when issued upon conversion; (E) the absence of any requirement to register the Notes or the underlying shares of Company Common Stock under the Securities Act or to qualify the Indenture under the Trust Indenture Act, based on the exemption provided by Section 4(a)(2) of the Securities Act and Rule 144A thereunder (assuming the accuracy of the representations and warranties of the Initial Purchasers set forth in Section 4 hereof); (F) the absence of any requirement to register the Company as an investment company under the Investment Company Act of 1940, as amended; and (G) the absence of any conflicts with the certificate of incorporation or bylaws of the Company or any material agreement of the Company known to such counsel.
(ii) Negative Assurance Letter (10b-5 Letter). The Representative shall have received from Calderwood & Harkness LLP a negative assurance letter (commonly known as a "10b-5 letter"), dated the Closing Date, stating that, based on their participation in the preparation of the Final Offering Memorandum and without independent investigation or verification, nothing has come to the attention of such counsel that caused them to believe that the Final Offering Memorandum (as of its date or as of the Closing Date), as amended or supplemented, contained an untrue statement of a material fact or omitted 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 (it being understood that such counsel need not express any view with respect to the financial statements or other financial data, or statistical data derived therefrom, included in the Final Offering Memorandum).
(iii) Initial Purchasers' Counsel Opinion. The Representative shall have received the opinion and negative assurance letter, each dated the Closing Date, of Prescott Whitfield LLP, counsel to the Initial Purchasers, with respect to such matters as the Representative may reasonably request, including, without limitation, the issuance and sale of the Notes, the exemption from registration under the Securities Act, and such other customary matters. The lead partner responsible for the opinion shall be Diana Castellano, with assistance from lead associate Ryan Fujimoto.
(c) Comfort Letters.
The Representative shall have received from Aldgate & Finch LLP, independent registered public accounting firm for the Company (engagement partner: Robert Nishimura), (i) a comfort letter dated the date of the Final Offering Memorandum (May 24, 2023), in form and substance satisfactory to the Representative, containing statements and information of the type customarily included in accountants' comfort letters delivered to initial purchasers in connection with offerings of debt securities pursuant to Rule 144A, with respect to the financial statements and certain financial information contained in or incorporated by reference in the Offering Memorandum, and (ii) a bring-down comfort letter dated the Closing Date (May 30, 2023), in form and substance satisfactory to the Representative, confirming that no changes or developments have occurred since the date of the initial comfort letter that would require any change in the information or conclusions set forth therein.
(d) Officers' Certificate.
The Representative shall have received a certificate, dated the Closing Date (May 30, 2023), signed by Marcus Harding, Chief Executive Officer of the Company, and Priya Nandakumar, Chief Financial Officer of the Company, certifying on behalf of the Company that:
(i) the representations and warranties of the Company set forth in Section 3 of this Agreement are true and correct in all material respects as of the Closing Date with the same force and effect as though expressly made on and as of the Closing Date (except for representations and warranties that speak as of a specific date, which shall be true and correct in all material respects as of such date);
(ii) the Company has performed and complied in all material respects with all of its covenants, agreements, and obligations contained in this Agreement required to be performed or complied with on or prior to the Closing Date;
(iii) since the date of the most recent audited or unaudited financial statements included or incorporated by reference in the Offering Memorandum, there has been no material adverse change in the condition (financial or otherwise), results of operations, business, properties, or prospects of the Company and its subsidiaries, taken as a whole, except as disclosed in the Offering Memorandum; and
(iv) no event or condition that would constitute an Event of Default (as defined in the Indenture) has occurred and is continuing, and no event or condition exists that, with the giving of notice, the passage of time, or both, would constitute an Event of Default under the Indenture.
(e) Secretary's Certificate.
The Representative shall have received a certificate of David Shih, Secretary of the Company, dated the Closing Date (May 30, 2023), certifying:
(i) that attached thereto are true, correct, and complete copies of the certificate of incorporation and the bylaws of the Company, each as amended, restated, or otherwise modified to date, and as in effect on the Closing Date;
(ii) that attached thereto are true, correct, and complete copies of the resolutions duly adopted by the Board of Directors of the Company on May 19, 2023, and the resolutions duly adopted by the Pricing Committee of the Board of Directors on May 23, 2023, authorizing the execution, delivery, and performance of this Agreement, the Indenture, the Notes, the Capped Call Confirmations, and the consummation of the transactions contemplated hereby and thereby, and that such resolutions have not been amended, revoked, rescinded, or otherwise modified and remain in full force and effect on the Closing Date; and
(iii) as to the incumbency, authority, and genuine signatures of each officer of the Company authorized to execute this Agreement, the Indenture, the Notes, the Capped Call Confirmations, and each other document to be delivered by the Company in connection with the transactions contemplated hereby.
(f) Good Standing Certificates.
The Representative shall have received (i) a certificate of good standing of the Company issued by the Secretary of State of the State of Delaware, and (ii) a certificate of good standing (or equivalent certificate) of the Company issued by the Secretary of State of the State of California, each dated within five (5) Business Days prior to the Closing Date.
(g) DTC Eligibility.
The Notes shall be eligible for clearance and settlement through the facilities of DTC on the Closing Date, and the Company shall have provided evidence thereof satisfactory to the Representative.
(h) Nasdaq Supplemental Listing Application.
The supplemental listing application for the shares of Company Common Stock issuable upon conversion of the Notes shall have been filed with The Nasdaq Stock Market, and the Company shall have provided evidence thereof satisfactory to the Representative. Such application was filed on May 25, 2023.
(i) Limited Consent and Waiver.
The Company shall have obtained the Limited Consent and Waiver under the Credit Facility from Crestline National Bank, N.A., as administrative agent, and the requisite lenders, including Piedmont Commerce Bank and Lakeshore Federal Credit Corp., consenting to the incurrence of the indebtedness represented by the Notes as Permitted Additional Indebtedness (or similar concept) under the Credit Facility, and a fully executed copy of such Limited Consent and Waiver (dated May 22, 2023) shall have been delivered to the Representative, and such Limited Consent and Waiver shall be in full force and effect as of the Closing Date.
(j) Capped Call Transactions.
The Company shall have entered into the Capped Call Confirmations with each of the Capped Call Counterparties on terms and conditions consistent with the description thereof in the Final Offering Memorandum, and fully executed copies of the Capped Call Confirmations shall have been delivered to the Representative. The allocation of the Capped Call Transactions shall be as follows:
(A) Ridgepoint Capital Markets LLC: 60% allocation, with a notional amount of $172,500,000 (based on the total aggregate principal amount of Notes, assuming exercise of the Over-Allotment Option in full); and
(B) Northvane Financial Products LP: 40% allocation, with a notional amount of $115,000,000 (based on the total aggregate principal amount of Notes, assuming exercise of the Over-Allotment Option in full).
(k) No Material Adverse Change.
Since the date of the most recent audited or unaudited financial statements included or incorporated by reference in the Offering Memorandum, there shall not have occurred any event or development, and no condition shall exist, that, individually or in the aggregate, constitutes or would reasonably be expected to constitute a Material Adverse Effect.
(l) No Downgrade.
No "nationally recognized statistical rating organization" (as defined in Section 3(a)(62) of the Exchange Act) shall have (i) downgraded any debt securities or other obligations of the Company or any of its subsidiaries, or (ii) publicly announced that it has placed any debt securities or other obligations of the Company or any of its subsidiaries under surveillance or review, or on "CreditWatch" or any similar designation, with negative implications, in each case since the date of this Agreement.
(m) Additional Documents.
The Company shall have furnished to the Representative and Prescott Whitfield LLP such further information, certificates, documents, and opinions as the Representative or Prescott Whitfield LLP may have reasonably requested in connection with the offering and sale of the Notes and the consummation of the transactions contemplated by this Agreement.
If any condition specified in this Section 6 shall not have been fulfilled when and as required to be fulfilled, this Agreement and all obligations of the Initial Purchasers hereunder may be terminated by the Representative by notice to the Company at any time at or prior to the Closing Date (or the applicable Option Closing Date, as the case may be), and such termination shall be without liability of any party to any other party except as provided in Sections 7, 9, and 12 hereof, and except that Sections 7, 9, 11, and 12 shall survive such termination and remain in full force and effect.
SECTION 7. INDEMNIFICATION
(a) Indemnification by the Company.
The Company agrees to indemnify and hold harmless each Initial Purchaser, each of its affiliates, and each of its and their respective directors, officers, employees, agents, and representatives, and each person, if any, who controls any Initial Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, an "Initial Purchaser Indemnified Party"), from and against any and all losses, claims, damages, liabilities, and expenses (including, without limitation, all reasonable and documented f

PURCHASE AGREEMENT

EXECUTION VERSION

PURCHASE AGREEMENT

SECTION 1. DEFINITIONS

SECTION 2. PURCHASE, SALE, AND DELIVERY OF THE NOTES

SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASERS

SECTION 5. COVENANTS OF THE COMPANY

SECTION 6. CONDITIONS TO THE OBLIGATIONS OF THE INITIAL PURCHASERS

SECTION 7. INDEMNIFICATION

Record

Parties

Dates

Amounts