SERIES A-1 NOTE
THE SECURITY REPRESENTED BY THIS INSTRUMENT HAS NOT BEEN REGISTERED UNDER ANY
APPLICABLE SECURITIES LAW. THIS SECURITY CANNOT BE SOLD OR OTHERWISE TRANSFERRED
UNLESS IT IS REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 OR THE BORROWER IS
FURNISHED WITH AN ACCEPTABLE OPINION OF COUNSEL THAT AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
THIS NOTE HAS NOT BEEN QUALIFIED BY THE FILING OF A PROSPECTUS UNDER APPLICABLE
CANADIAN SECURITIES LAWS. BY ITS ACCEPTANCE OF THIS NOTE, THE HOLDER REPRESENTS
THAT IT IS AN ACCREDITED INVESTOR, AS SUCH TERM IS DEFINED IN ONTARIO SECURITIES
COMMISSION RULE 45-501, AND AGREES THAT THIS NOTE IS NOT BEING ACQUIRED WITH A
VIEW TO DISTRIBUTION.
Series A-1 Senior Unsecured Convertible Note Due 2007
U.S $20,000,000 September 10, 2004
Section 1. GENERAL.
(a) Bookham, Inc., a Delaware
corporation (the "BORROWER"), for value
received, hereby promises to pay, subject to the further provisions hereof, to
Nortel Networks Optical Components Limited (the "LENDER"), the principal amount
of TWENTY MILLION U.S. DOLLARS (U.S.$20,000,000.00), as such principal amount
may be reduced by prepayments pursuant to Section 2 and Section 3 of this Note
(as defined below), on November 8, 2007 (such date, the "MATURITY DATE"), on
presentation and surrender of this Note to the Borrower, in such coin or
currency of the United States of America as at the time of payment shall be
legal tender therein for the payment of public and private debts.
(b) The Borrower further agrees to pay interest on the outstanding
principal amount hereof from time to time from the date hereof at the Interest
Rate (as defined below), payable in arrears on each Interest Payment Date (as
defined below) and on the Maturity Date; provided, however that on the first
Interest Payment Date after the date hereof, the Borrower shall also pay to the
Holder additional interest in an amount equal to $71,111.04. Interest shall be
calculated on the basis of a 360-day year of twelve 30-day months.
Section 2. VOLUNTARY PREPAYMENT.
This Note shall be prepayable, at the option of the Borrower, in whole
or in part, on one or more occasions, on not less than two (2) Business Days (as
defined below) and not more than twenty (20) days prior written notice to the
Holder, at a price in cash equal to 100% of the outstanding principal amount to
be prepaid, plus accrued and unpaid interest to such prepayment date.
Section 3. MANDATORY PREPAYMENT.
(a) Within one (1) Business Day after the consummation of any Qualified
Financing (as defined below), the Borrower shall prepay in cash on a PRO RATA
basis by wire transfer of immediately available funds the outstanding
obligations under the Series A-1 Note in an amount equal to the Net Proceeds (as
defined below) of such Qualified Financing to the extent such Net Proceeds
constitute all or part of the Threshold Net Proceeds (as defined below).
(b) Within one (1) Business Day after the consummation of any sale,
transfer or other disposition by the Borrower or any of its Subsidiaries to any
unaffiliated third Person of any of the Collateral, the Borrower shall prepay on
a pro rata basis by wire transfer of immediately available funds the outstanding
obligations under the Series A-1 Note in an amount equal to the Net Proceeds of
such sale, transfer or other disposition to the extent (i) such Net Proceeds
constitute all or part of the Excess Asset Sale Proceeds (as defined below) and
(ii) such amount is not required to be applied to prepay the Series B Note;
PROVIDED that the Borrower shall be entitled to delay any such prepayment until
the aggregate amount of all such delayed prepayments exceeds U.S.$250,000, at
which time any such delayed prepayments shall be made.
(c) Within one (1) Business Day after a Change of Control (as defined
below) of the Borrower, the Borrower shall prepay the Series A Note in full at a
price in cash equal to 100% of the outstanding principal amount, plus accrued
and unpaid interest to such prepayment date.
Section 4. REPLACEMENT OF NOTE.
At the request of the Holder (as defined below) upon receipt by the
Borrower of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Note and, in case of loss, theft or destruction, of indemnity
reasonably satisfactory to it, or, in the case of mutilation, upon surrender and
cancellation of this Note, and in all cases upon reimbursement to the Borrower
of all reasonable expenses incidental thereto, the Borrower and the Guarantors
shall make and deliver to the Holder a replacement Note of like tenor in lieu of
Section 5. AMENDMENTS, MODIFICATIONS AND WAIVERS.
No covenant, agreement or condition contained in this Note may be
amended or modified and no right hereunder may be waived (either generally or in
a particular instance and either retroactively or prospectively) other than by a
written instrument or agreement executed by the Holder and the Borrower. Any
such amendment, modification or waiver shall be binding upon each present and
future holder of this Note and upon the Borrower. Upon the request of the
Borrower, the Holder shall submit this Note to the Borrower so that this Note be
marked to indicate such amendment, modification or waiver, and any Note issued
thereafter shall bear a similar notation referring to any such amendment,
modification or continuing waiver.
Section 6. EXISTENCE; CONDUCT OF BUSINESS.
Each of the Borrower and the Guarantors shall do or cause to be done
all things necessary to preserve, renew and keep in full force and effect its
legal existence and the rights,
contracts, licenses, permits, privileges, franchises, patents, copyrights,
trademarks and trade names that are, in the Borrower's reasonable judgment,
material to the conduct of its business.
Section 7. GUARANTEES.
(a) Each Guarantor hereby jointly and severally unconditionally
guarantees, as a primary obligor and not merely as a surety, to the Holder the
full and punctual payment when due, whether at the Maturity Date, by
acceleration, by prepayment or otherwise, of all obligations of the Borrower
under this Note, whether for payment of principal or interest (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) in respect of the Note and all other monetary
obligations of the Borrower under this Note, whether for fees, expenses,
indemnification or otherwise (all the foregoing being hereinafter collectively
called the "GUARANTEED OBLIGATIONS"). Each Guarantor further agrees that the
Guaranteed Obligations may be extended or renewed, in whole or in part, pursuant
to the terms of Section 5, without notice to or further assent from each such
Guarantor, and that each such Guarantor shall remain bound under this Section 7
notwithstanding any extension or renewal of any Guaranteed Obligation.
(b) Each Guarantor waives presentation to, demand of payment from and
protest to the Borrower of any of the Guaranteed Obligations and also waives
notice of acceptance of its guarantee and notice of protest for nonpayment. Each
Guarantor waives notice of any default under this Note. The obligations of each
Guarantor hereunder shall not be affected by (i) the failure of the Holder to
assert any claim or demand or to enforce any right or remedy against the
Borrower or any other Person (as defined below) under this Note or any other
agreement or otherwise; (ii) any extension of the repayment terms of the
Guaranteed Obligations; (iii) any rescission, waiver, amendment or modification
of any of the terms or provisions of this Note or any other agreement; (iv) the
failure to perfect any security interest in, or the release of, any security
held by the Holder for the Guaranteed Obligations or any of them; or (v) the
failure of the Holder to exercise any right or remedy against any other
Guarantor. In the event that there is a Change in Control with respect to any
Guarantor, all obligations of such Guarantor hereunder shall be relieved in full
and such Guarantor shall cease to be subject to any obligation hereunder or to
be deemed a "Guarantor" upon the effectiveness of such Change in Control.
(c) Each Guarantor hereby waives any right to which it may be entitled
to have its obligations hereunder divided among the Guarantors, such that such
Guarantor's obligations would be less than the full amount claimed. Each
Guarantor hereby waives any right to which it may be entitled to have the assets
of the Borrower first be used and depleted as payment of the Borrower's or such
Guarantor's obligations hereunder prior to any amounts being claimed from or
paid by such Guarantor hereunder. Each Guarantor hereby waives any right to
which it may be entitled to require that the Borrower be sued prior to an action
being initiated against such Guarantor.
(d) Each Guarantor further agrees that its guarantee herein constitutes
a guarantee of payment when due (and not a guarantee of collection) and waives
any right to
require that any resort be had by the Holder to any security held for payment of
the Guaranteed Obligations.
(e) The obligations of each Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason (other than
payment of the Guaranteed Obligations in full), including any claim of waiver,
release, surrender, alteration or compromise of any Guaranteed Obligation, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Guarantor herein shall
not be discharged or impaired or otherwise affected by the failure of the Holder
to assert any claim or demand or to enforce any remedy under this Note or any
other agreement, by any waiver or modification of any provision thereof by any
default, failure or delay, willful or otherwise, in the performance of the
Guaranteed Obligations, or by any other act or omission or delay to do any other
act that may or might in any manner or to any extent vary the risk of any
Guarantor or that would otherwise operate as a discharge of any Guarantor as a
matter of law or equity.
(f) Each Guarantor agrees that its guarantee shall remain in full force
and effect until payment in full of all the Guaranteed Obligations. Each
Guarantor further agrees that its guarantee herein shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal of or interest on any Guaranteed Obligation is
rescinded or must otherwise be restored by the Holder upon the bankruptcy or
reorganization of the Borrower or otherwise.
(g) In furtherance of the foregoing and not in limitation of any other
right which the Holder has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the Borrower to pay the Guaranteed Obligation when
and as the same shall become due, whether at maturity, by acceleration, by
prepayment or otherwise, each Guarantor hereby promises to and shall, upon
receipt of written demand by the Holder, forthwith pay, or cause to be paid, in
cash, to the Holder an amount equal to the sum of (i) the unpaid amount of such
Guaranteed Obligations and (ii) accrued and unpaid interest on such Guaranteed
Obligations then due and owing (but only to the extent not prohibited by law).
(h) Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holder in respect of any Guaranteed Obligations
guaranteed hereby until payment in full of all Guaranteed Obligations. Each
Guarantor further agrees that, as between it and the Holder, (i) the maturity of
the Guaranteed Obligations guaranteed hereby may be accelerated as provided in
Section 9 for the purposes of any guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Guaranteed Obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of such Guaranteed Obligations as provided in
Section 10, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purposes of this
(i) Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Holder in
enforcing any rights under this Section 7.
(j) The Borrower shall cause each Subsidiary that (i) has not executed
and delivered this Note "as Guarantor" and (ii) is or becomes a Principal
Borrower Subsidiary to execute and deliver such instruments and do such acts as
may be necessary for such Principal Borrower Subsidiary to become a Guarantor
under this Section 7, including without limitation Bookham Technology plc.
(k) Upon request of the Holder, each Guarantor shall execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Note.
(l) In the case of any payments made by a Guarantor pursuant to this
Section 7, the following shall apply:
(i) All such payments shall be made to the Holder without withholding
or deduction for, or on account of, Taxes (other than those withholdings or
deductions to which payments by the Borrower are subject). In the event any
withholding or deduction for Taxes is required by law or by the interpretation
or administration thereof by the relevant governmental authority, such Guarantor
shall pay such additional amounts as may be necessary in order that the net
amounts received by the Holder after such withholding or deduction may not be
less than the net amount that would have been received by the Holder from the
(ii) If the Holder is entitled to claim an exemption from, or a
reduction of, any withholding or deduction for or on account of Taxes under any
applicable law or treaty, the Holder hereby covenants and agrees that it will
take all reasonably necessary steps to secure the benefit of such exemption or
reduction. Further, if the Holder is entitled to claim a refund of any
withholding or deduction of or on account of Taxes under any applicable law or
treaty, the Holder hereby covenants and agrees that it will take all reasonably
necessary steps to secure such refund, and (to the extent that such Guarantor
has made a payment of an additional amount pursuant to this Section 7(l))
account for such refund to such Guarantor.
(iii) If (and for so long as) the Holder fails to satisfy its
obligations under clause (ii) of this Section 7(l), such Guarantor shall not be
required to make any payments under this Section 7 to the extent that such
payments could have been avoided if the Holder had complied with its obligations
under clause (ii) of this Section 7(l). For example (and solely for purposes of
illustration), if payments by such Guarantor are subject to a withholding tax of
15%, but under the applicable tax treaty the Holder is entitled to claim a
reduction of withholding tax from 15% to 10%, then, if the Holder fails to
comply with its obligations under clause (ii) of this Section 7(l), such
Guarantor shall be obligated to make payments under clause (i) of this Section
7(l) on the reduced 10% withholding tax and shall have no obligation under
clause (i) of this Section 7(l) with respect to the 5% withholding tax that
could have been avoided if the Holder had complied with its obligations under
clause (ii) of this Section 7(l).
Section 8. CONVERSION RIGHTS.
(a) This Note shall be convertible into shares of common stock, $.01
par value per share, of the Borrower ("Common Stock") in accordance with and
subject to this Section 8. An election to convert some or all of the principal
amount of this Note shall be made by the
Holder by providing written notice to the Borrower of the principal amount to be
converted (provided that an election shall not be in an amount of less than
US$5,000,000) at least five (5) trading days prior to the date of conversion.
Each principal amount of this Note shall be convertible into a number of shares
of Common Stock, equal to the Conversion Rate until 5:00 pm, New York
on the 365th day after the date hereof.
(b) The Borrower shall not issue any fractional shares upon conversion
of the Note. Instead, the Borrower will pay to the Holder the value of any such
fractional share. The value of a fractional share shall be determined, to the
nearest 1/1,000th of a share, by multiplying the Conversion Price as of the date
of such conversion by the fractional amount and rounding the product to the
nearest whole cent.
(c) The Conversion Rate shall be adjusted to reflect fully the effect
of any reclassification, stock split, consolidation, reverse split, stock
dividend, reorganization or other like change with respect to the Common Stock.
Section 9. EVENTS OF DEFAULT.
(a) An "Event of Default" occurs if:
(i) any default shall be made in the payment of the principal of or
cash interest on the Series A-1 Note, when and as the same shall become due and
payable, whether at the due date thereof, upon acceleration thereof or
(ii) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity; PROVIDED that this
clause (ii) shall not apply in the case of (A) voluntary or mandatory
prepayments under the Series A-1 Note or the Series B Note that are paid in full
when due or (B) any secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness;
(iii) an Event of Default (as defined in the Series B Note) occurs with
respect to the Series B Note;
(iv) the Borrower or any of its Subsidiaries defaults in any material
respect in its obligations hereunder (other than any obligations for the payment
of principal or interest) or in any of the Security Agreements; PROVIDED that
such default shall not have been cured within twenty (20) Business Days after
written notice of such default;
(v) the Borrower becomes subject to a Bankruptcy Event;
(vi) (A) except as permitted by this Note, any of the Security
Agreements or other documents delivered pursuant thereto shall be held in any
judicial proceeding to be unenforceable or invalid, or shall cease for any
reason to be in full force and effect and such default continues for twenty (20)
Business Days after written notice, or (B) the Borrower or any Guarantor, or
anyone acting on behalf of the Borrower or any Guarantor, shall deny or
disaffirm its obligations under any of the Security Agreements or other
documents delivered pursuant thereto.
(b) If an Event of Default occurs, then the Holder of this Note may, by
written notice to the Borrower, declare this Note to be forthwith due and
payable, whereupon this Note shall become forthwith due and payable, both as to
principal and interest, without presentment, demand, protest, or other notice of
any kind, all of which are hereby expressly waived.
Section 10. NOTICES OF MATERIAL EVENTS.
(a) The Borrower shall furnish the Holder written notice of the
occurrence of any Event of Default or any development or circumstance that has,
or could reasonably be expected to have, a Borrower Material Adverse Effect (as
defined below) promptly upon the Borrower's obtaining knowledge thereof.
(b) Each notice delivered under this Section 9 shall be accompanied by
a statement of an executive officer of the Borrower setting forth the details of
the event, development or circumstance requiring such notice and any action
taken or proposed to be taken with respect thereto.
Section 11. EXTENSION OF MATURITY.
Should the principal of and interest on this Note become due and
payable on other than a Business Day, the maturity hereof shall be extended to
the next succeeding Business Day, and interest shall be payable at the rate per
annum herein specified during such extension.
Section 12. SUCCESSORS AND ASSIGNS.
The provisions of this Note shall be binding upon and inure to the
benefit of the Borrower and the Guarantors and their respective successors and
permitted assigns and the Holder of this Note and its successors and assigns.
None of the obligations of the Borrower or any Guarantor hereunder may be
assigned without the prior written consent of the Holder.
Section 13. NO WAIVER.
Neither a failure nor a delay on the part of the Holder in exercising
any right, power or privilege under this Note shall operate as a waiver thereof,
nor shall a single or partial exercise thereof preclude any other or further
exercise of any right, power or privilege. The rights, remedies and benefits of
the Holder herein expressly specified are cumulative and not exclusive of any
other rights remedies or benefits which either may have under this Note at law,
in equity, by statute or otherwise.
Section 14. GOVERNING LAW.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK
. This Note was negotiated and executed in the
State and County of New York
. All actions, suits and proceedings arising out of
relating to this Note shall be heard and determined exclusively in a New York
state or federal court sitting in the County of New York
, and the Holder, the
Borrower and the Guarantors hereby irrevocably submit to the exclusive
jurisdiction of such courts in any
such action or proceeding and irrevocably agree to the laying of venue in such
courts and waive the defense of an inconvenient forum to the maintenance of any
such action, suit or proceeding.
Section 15. TITLES AND SUBTITLES.
The titles and subtitles used in this Note are used for convenience
only and are not to be considered in construing or interpreting this Note.
Section 16. DEFINITIONS. As used in this Note, unless otherwise
specified, the following terms have the meanings specified below:
"ACQUISITION AGREEMENT" means the Acquisition Agreement between Nortel
Networks Corporation and Bookham Technology plc dated as of October 7, 2002 (as
amended through the date hereof).
"BANKRUPTCY EVENT" has the meaning set forth in the Acquisition
"BORROWER" has the meaning set forth in Section 1(a).
"BORROWER MATERIAL ADVERSE EFFECT" means any long-term or short-term
effect that is or is reasonably likely to be materially adverse to (i) the
business, results of operations, assets, liabilities or condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a whole, or (ii) the
ability of the Borrower and its Subsidiaries to perform their respective
obligations under the Security Documents and the Supply Agreement between the
Borrower and Nortel Networks Corporation dated as of the date hereof, but in
each case shall not include any effect arising out of or resulting from (A) a
change in general economic or financial conditions (provided that such changes
do not affect the Borrower and its Subsidiaries, taken as a whole, in a
materially disproportionate manner in comparison to other companies engaged in
the same industry) or (B) a change, condition or circumstance in the industry in
which the Borrower and its Subsidiaries operate (PROVIDED that such changes do
not affect the Borrower and its Subsidiaries, taken as a whole, in a materially
disproportionate manner in comparison to other companies engaged in the same
industry); PROVIDED, HOWEVER, that (1) any decrease in the market price or
trading volume of the Borrower's securities or any shareholder litigation
resulting therefrom shall not, in and of itself, constitute a Borrower Material
Adverse Effect and (2) the failure of the Borrower to achieve internal or
external financial forecasts or projections shall not, in and of itself,
constitute a Borrower Material Adverse Effect.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which banks are required or authorized by law to be closed in New York
; London, England or Toronto, Ontario, Canada.
"CHANGE OF CONTROL" has the meaning set forth in the Acquisition
"COLLATERAL" has the meaning set forth in the U.S. Security Agreement.
"CONTROL" or "CONTROLLED" means, as to any Person, the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"CONVERSION PRICE" means as of any date, ninety percent (90%) of the
average of closing price per share of Common Stock on The NASDAQ National Market
(or, if the Common Stock is not then traded on The NASDAQ National Market, the
principal United States securities exchange or trading market where the Common
Stock is then listed or trading) for the three (3) trading days preceding such
date, but at no time less than $19.00 per share.
"CONVERSION RATE" means a number of shares of Common Stock equal to the
principal amount of the Note being converted divided by the Conversion Price,
subject to adjustment as set forth in Section 8(c).
"EQUITY INTEREST" of any Person means any and all common stock,
preferred stock and any other class of capital stock of, and any partnership or
limited liability company interests in, such Person or any other similar
interests in such Person if such Person is not a corporation, partnership or
limited liability company and includes any interest that is convertible into or
exchangeable or exercisable for any Equity Interest and any other right to
acquire any Equity Interest.
"EXCESS ASSET SALE PROCEEDS" means the Net Proceeds of all sales,
transfers and other dispositions of Collateral consummated to the extent the
aggregate of all such Net Proceeds exceeds $30,000,000.
"EVENT OF DEFAULT" has the meaning set forth in Section 9(a).
"GUARANTEED OBLIGATIONS" has the meaning set forth in Section 7.
"GUARANTORS" means (i) subject to the last sentence of Section 7(b),
those Subsidiaries of the Borrower that have executed and delivered this Note on
the date hereof "as Guarantor" and (ii) such other Affiliates of the Borrower
that have guaranteed the Series A-1 Note pursuant to Section 7(j).
"HIGHEST LAWFUL RATE" means the maximum non-usurious rate of interest,
as in effect from time to time, which may be charged, contracted for, reserved,
received or collected by the Holder in connection with this Note under
"HOLDER" means the Person named as the Lender or such Person's
permitted transferee or assign.
"INDEBTEDNESS" means any obligation in respect of (i) borrowed money,
(ii) capitalized lease obligations, (iii) obligations under interest rate
agreements and currency agreements, (iv) guarantees of any obligation of any
third Person, (v) letters of credit and (vi) indemnities or performance bonds.
"INTEREST PAYMENT DATE" means each February 8, May 8, August 8 and
November 8 beginning on November 8, 2004.
"INTEREST RATE" means 4.00% per annum; PROVIDED that anything herein to
the contrary notwithstanding, if during any period for which interest is
computed hereunder, the amount of interest computed on the basis provided for in
this Note, together with all fees,
charges and other payments that are treated as interest under applicable law, as
provided for herein or in any other document executed in connection herewith,
would exceed the amount of such interest computed on the basis of the Highest
Lawful Rate, neither the Borrower nor any Guarantor shall be obligated to pay,
and the Holder shall not be entitled to charge, collect, receive, reserve or
take, interest in excess of the Highest Lawful Rate, and during any such period
the interest payable hereunder shall be computed on the basis of the Highest
"LENDER" has the meaning set forth in Section 1(a).
"MATERIAL INDEBTEDNESS" means any Indebtedness of the Borrower or any
of its Subsidiaries having an outstanding principal amount of at least
U.S.$5,000,000, individually or in the aggregate, whether such Indebtedness now
exists or shall hereafter be created.
"MATURITY DATE" has the meaning set forth in Section 1(a).
"NET PROCEEDS" means, with respect to the sale, transfer or other
disposition of any asset, the issuance of any security or any financing, the
aggregate amount of cash proceeds (including any other consideration that is
converted into cash) therefrom, in each case net of any customary attorneys'
fees, accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage and consultant fees actually incurred in connection,
and contemporaneously, therewith.
"NOTE" means this Note and any replacement Note executed and delivered
by the Borrower and the Guarantors pursuant to Section 4 hereof.
"PERSON" means any natural person, general or limited partnership,
corporation, limited liability company, firm, association or other legal entity.
"PRINCIPAL BORROWER SUBSIDIARY" means any Subsidiary of the Borrower
the assets of which have an aggregate fair market value equal to or greater than
"QUALIFIED FINANCING" means any issuance by the Borrower or any of its
Subsidiaries of any Equity Interests and any Indebtedness incurred by the
Borrower or any of its Subsidiaries that is convertible into or exchangeable or
exercisable for any Equity Interests.
"SECURITY AGREEMENTS" has the meaning set forth in the Acquisition
"SERIES A-1 NOTE" means the Series A-1 Note Senior Unsecured
Convertible due 2007 of the Borrower with an original aggregate principal amount
"SERIES B NOTE" means the Series B Senior Secured Note due 2005 of the
Borrower with an original aggregate principal amount of U.S.$30,000,000.
"SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock (or other Equity
Interest) having ordinary voting power to elect a majority of the board of
directors (or similar governing body) of such entity or (b) the interest in the
capital or profits of such entity is at the time directly or indirectly owned or
such Person, by such Person and one or more of its other Subsidiaries or by one
or more of such Person's other Subsidiaries.
"TAXES" has the meaning set forth in the Acquisition Agreement.
"THRESHOLD NET PROCEEDS" means the excess over $100,000,000 of Net
Proceeds of all Qualified Financings consummated after the date hereof.
IN WITNESS WHEREOF, each of the Borrower and the Guarantors has duly
executed and delivered this Note as of the date first written above.
BOOKHAM, INC., as Borrower
By: /s/ GIORGIO ANANIA
Name: Giorgio Anania
Title: Director and CEO
BOOKHAM TECHNOLOGY PLC, as Guarantor
By: /s/ GIORGIO ANANIA
Name: Giorgio Anania
BOOKHAM (US) INC., as Guarantor
By: /s/ GIORGIO ANANIA
Name: Giorgio Anania
By: /s/ PHILIP DAVIS
Name: Philip Davis
BOOKHAM (CANADA) INC., as Guarantor
By: /s/ STEPHEN ABELY
Name: Steve Abely
By: /s/ PHILIP DAVIS
Name: Philip Davis
BOOKHAM (SWITZERLAND) AG, as Guarantor
By: /s/ STEPHEN ABELY
Name: Steve Abely
Title: President and Director