EXHIBIT 2.3
OPLINK STOCK OPTION AGREEMENT
THIS OPLINK STOCK OPTION AGREEMENT (this "Agreement") is made and entered
into as of March 18, 2002, between Avanex Corporation, a Delaware corporation
("Avanex"), and Oplink Communications, Inc., a Delaware corporation ("Oplink").
Capitalized terms used but not otherwise defined herein will have the meanings
ascribed to them in the Merger Agreement (as defined below).
RECITALS
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A. Avanex, Pearl Acquisition Corp., a Delaware corporation and wholly
owned subsidiary of Avanex ("Merger Sub"), and Oplink have entered into an
Agreement and Plan of Reorganization (the "Merger Agreement") which provides for
the merger (the "Merger") of Merger Sub with and into Oplink. Pursuant to the
Merger, all outstanding capital stock of Oplink will be automatically converted
into Avanex Common Stock, as set forth in the Merger Agreement.
B. As a condition to Avanex's willingness to enter into the Merger
Agreement, Avanex has requested that Oplink agree, and Oplink has so agreed, to
grant to Avanex an option to purchase shares of Oplink Common Stock, par value
$0.001 per share (the "Oplink Shares"), upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and in the Merger Agreement and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1. Grant of Option. Subject to the terms and conditions of this
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Agreement, Oplink hereby grants to Avanex an irrevocable option (the "Option")
to purchase up to 32,769,053 Oplink Shares, as adjusted pursuant to Section 9
hereof (the "Option Shares"), in the manner set forth below by (i) paying cash
at a price of $1.755 per Oplink Share (the "Exercise Price") and/or, at Avanex's
election, (ii) complying with the cashless exercise provision set forth in
Section 2(c).
2. Exercise of Option; Maximum Proceeds.
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(a) Subject to the terms and conditions of this Agreement, the Option
may be exercised by Avanex, in whole or in part, at any time or from time to
time (i) if the Merger Agreement is terminated pursuant to 7.1(f) thereof or
(ii) immediately prior to the occurrence of any event causing the Oplink
Termination Fee to become payable after termination of the Merger Agreement
pursuant to Section 7.1(b) or 7.1(e) thereof (any of the events being referred
to in clause (i) or (ii) herein as an "Exercise Event"). In the event Avanex
wishes to exercise the Option, Avanex will deliver to Oplink a written notice
(each an "Exercise Notice") specifying the total number of Option Shares it
wishes to purchase and the form of consideration to be paid. Each closing of a
purchase of Option Shares (a "Closing") will occur on a date and at a time prior
to the termination of the Option designated by Avanex in an Exercise Notice
delivered at least two (2) business days but not more than twenty (20) business
days prior to the date of such Closing, which Closing will be held at the
principal offices of Oplink.
(b) The Option will terminate upon the earliest of (i) the Effective
Time, (ii) twelve (12) months following the date on which the Merger Agreement
is terminated pursuant to Section 7.1(b) or 7.1(e) thereof, if no event causing
the Oplink Termination Fee to become payable pursuant to Section 7.3(b)(i) of
the Merger Agreement has occurred as a result of such termination, (iii) twelve
(12) months following payment of the Oplink Termination Fee as a result of the
Merger Agreement being terminated pursuant to Section 7.1(f) thereof, (iv) in
the event the Merger Agreement has been terminated pursuant to Section 7.1(b) or
7.1(e) thereof and the Oplink Termination Fee became payable pursuant to Section
7.3(b)(i) thereof as a result of such termination, twelve (12) months after
payment of the Oplink Termination Fee; provided, however, that with respect to
this clause (iv), the Option will terminate immediately after the payment of the
Oplink Termination Fee in the event that the Acquisition that was consummated as
a condition to the payment of such fee resulted in (A) the purchase from Oplink
or acquisition by any Person or "group" (as defined under Section 13(d) of the
Exchange Act and the rules and regulations thereunder) of a one hundred percent
(100%) interest in the total outstanding voting securities of Oplink or any
tender offer or exchange offer that if consummated would result in any Person or
"group" beneficially owning one hundred percent (100%) of the total outstanding
voting securities of Oplink, (B) any sale, lease (other than in the ordinary
course of business), acquisition or disposition of one hundred percent (100%) of
the assets of Oplink (including its subsidiaries taken as a whole) or (C) any
liquidation or dissolution of Oplink; and (v) the date on which the Merger
Agreement is terminated under circumstances in which the Oplink Termination Fee
is not then payable and could not, regardless of the lapse of time or the
occurrence or non-occurrence of any event, become payable; provided, however,
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that if the Option cannot be exercised by reason of any applicable government
order, judgment or decree or because the waiting period related to the issuance
of the Option Shares under the HSR Act will not have expired or been terminated,
then the Option will not terminate until the tenth (10/th/) business day after
such impediment to exercise will have been removed or will have become final and
not subject to appeal.
(c) Notwithstanding any provisions herein to the contrary, in lieu of
exercising the Option for cash, Avanex may elect to receive that number of
Option Shares equal to the value (as determined below) of the Option (or the
portion thereof being canceled) by delivery of an Exercise Notice indicating
that Avanex wishes to exercise in accordance with the cashless exercise
provision set forth in this Section 2(c), in which event Oplink shall issue to
Avanex a number of Option Shares computed using the following formula:
X=Y (A-B)
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A
Where X = the number of Option Shares to be issued to Avanex.
Y = the number of Option Shares purchasable under this Agreement
or, if the Option is being exercised to purchase a number of
Option Shares that is less than the total number of Option
Shares purchasable hereunder, the portion of the Option
being canceled (at the date of such calculation).
A = the Market/Tender Offer Price (at the date of such
calculation).
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B = Exercise Price (as adjusted to the date of such calculation).
3. Conditions to Closing. The obligation of Oplink to issue Option Shares
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to Avanex hereunder is subject to the conditions that (A) any waiting period
under the HSR Act applicable to the issuance of the Option Shares hereunder will
have expired or been terminated; (B) all material consents, approvals, orders or
authorizations of, or registrations, declarations or filings with, any Federal,
state or local administrative agency or commission or other Federal state or
local governmental authority or instrumentality, if any, required in connection
with the issuance of the Option Shares hereunder will have been obtained or
made, as the case may be; (C) no preliminary or permanent injunction or other
order by any court of competent jurisdiction prohibiting or otherwise
restraining such issuance will be in effect; and (D) the Option Shares shall
have been approved for listing on the Nasdaq National Market, subject to
official notice of issuance. It is understood and agreed that at any time during
which the Option is exercisable, the parties will use their respective
commercially reasonable efforts to satisfy all conditions to Closing, so that a
Closing may take place as promptly as practicable.
4. Closing. At any Closing, (A) Oplink will deliver to Avanex a single
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certificate in definitive form representing the number of Oplink Shares
designated by Avanex in its Exercise Notice, such certificate to be registered
in the name of Avanex and to bear the legend set forth in Section 11 hereof,
against delivery of (B) payment by Avanex to Oplink of the aggregate purchase
price for the Oplink Shares so designated and being purchased by (i) delivery of
a certified check or bank check and/or, at Avanex's election, (ii) compliance
with the cashless exercise provision set forth in Section 2(c).
5. Representations and Warranties.
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(a) Oplink. Oplink represents and warrants to Avanex that (A) Oplink is
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a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder; (B) the
execution and delivery of this Agreement by Oplink and consummation by Oplink of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Oplink and no other corporate proceedings on the
part of Oplink are necessary to authorize this Agreement or any of the
transactions contemplated hereby; (C) this Agreement has been duly executed and
delivered by Oplink and constitutes a legal, valid and binding obligation of
Oplink and, assuming this Agreement constitutes a legal, valid and binding
obligation of Avanex, is enforceable against Oplink in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium, or other
similar laws affecting or relating to creditors' rights generally, the
availability of injunctive relief and other equitable remedies and general
principles of equity and limitations imposed by law on indemnification for
liability under federal securities laws; (D) except for any filings required
under the HSR Act and as may be required in accordance with requirements of the
Nasdaq National Market, Oplink has taken all necessary corporate and other
action to authorize and reserve for issuance and to permit it to issue upon
exercise of the Option, and at all times from the date hereof until the
termination of the Option will have reserved for issuance, a sufficient number
of unissued Oplink Shares for Avanex to exercise the Option in full and will
take all necessary corporate or other action to authorize and reserve for
issuance all additional Oplink Shares or other securities that may be issuable
pursuant to
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Section 9(a) upon exercise of the Option, all of which, upon their issuance
and delivery in accordance with the terms of this Agreement, will be validly
issued, fully paid and nonassessable; (E) upon delivery of the Oplink Shares and
any other securities to Avanex upon exercise of the Option, Avanex will acquire
such Oplink Shares or other securities free and clear of all material claims,
liens, charges, encumbrances and security interests of any kind or nature
whatsoever, excluding those imposed by Avanex; (F) the execution and delivery of
this Agreement by Oplink do not, and the performance of this Agreement by Oplink
will not, (i) conflict with or violate the Certificate of Incorporation or
Bylaws or equivalent organizational documents of Oplink or any of its
subsidiaries, (ii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to Oplink or any of its subsidiaries or by which
its or any of their respective properties is bound or affected or (iii) result
in any breach of or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, or impair Oplink's or any of its
subsidiaries' rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the properties or assets of Oplink or any of its subsidiaries pursuant to, any
material note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Oplink or any of
its subsidiaries is a party or by which Oplink or any of its subsidiaries or its
or any of their respective properties are bound or affected; and (G) the
execution and delivery of this Agreement by Oplink does not, and the performance
of this Agreement by Oplink will not, require any consent, approval,
authorization or permit of, or filing with, or notification to, any Governmental
Entity except pursuant to the HSR Act or as may be required in accordance with
requirements of the Nasdaq National Market.
(b) Avanex. Avanex represents and warrants to Oplink that the Option and
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any Option Shares that Avanex may hereafter purchase are being purchased by
Avanex for its own account, for investment and not with a view to the
distribution or resale thereof, except in compliance with the Securities Act and
applicable state securities and blue sky laws. Avanex has sufficient knowledge
and experience in investing in securities similar to the Option and to the
Option Shares so as to be able to evaluate the risks and merits of any
investment in the Option and in the Option Shares and is able financially to
bear the risks thereof, including a complete loss of its investment.
6. Avanex Put. At the request of and upon notice by Avanex (the "Put
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Notice"), at any time during the period during which the Option is exercisable
pursuant to Section 2 (the "Purchase Period"), Oplink (or any successor entity
thereof) will purchase from Avanex the Option, to the extent not previously
exercised, at the price set forth in subparagraph (a) below (as limited by
Section 10 below), and the Option Shares, if any, acquired by Avanex pursuant
thereto, at the price set forth in subparagraph (b) below (as limited by Section
10 below):
(a) The amount, if any, by which the "Market/Tender Offer Price" for
Oplink Shares as of the date Avanex gives notice of its intent to exercise its
rights under this Section 6(a) exceeds the Exercise Price, multiplied by the
number of Oplink Shares purchasable pursuant to the Option. "Market/Tender Offer
Price" shall mean the highest of: (i) the highest purchase price per share paid
after the date of this Agreement and on or prior to the delivery of the Put
Notice pursuant to any tender or exchange offer made for shares of Oplink Common
Stock, (ii) the highest price per share paid or to be paid by any Person for
shares of Oplink Common Stock pursuant to any
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agreement contemplating a merger or other business combination transaction
involving Oplink that was entered into after the date of this Agreement and on
or prior to the delivery of the Put Notice or (iii) the average of the highest
bid prices per share of Oplink Common Stock as quoted on the Nasdaq National
Market (or if Oplink Common Stock is not quoted on the Nasdaq National Market,
the highest bid price per share of Oplink Common Stock as quoted on any other
market comprising a part of the Nasdaq Stock Market or, if the shares of Oplink
Common Stock are not quoted thereon, on the principal trading market (as defined
in Regulation M under the Exchange Act) on which such shares are traded as
reported by a recognized source) during the 20-day period ending on the date of
delivery of the Put Notice. For purposes of determining the highest price
offered pursuant to any Acquisition Proposal with respect to Oplink which
involves consideration other than cash, the value of such consideration will be
equal to the higher of (x) if securities of the same class of the proponent as
such consideration are traded on any national securities exchange or by any
registered securities association, a value based on the closing sale price or
asked price for such securities on their principal trading market on such date
and (y) the value ascribed to such consideration by the proponent of such
Acquisition Proposal, or if no such value is ascribed, a value determined in
good faith by the Board of Directors of Oplink.
(b) The product of the Market/Tender Offer Price multiplied by the
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number of Oplink Shares so purchased.
7. Payment and Redelivery of Option or Shares. In the event Avanex
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exercises its rights under Section 6, Oplink will, within five (5) business days
after Avanex delivers notice pursuant to Section 6, pay the required amount to
Avanex in immediately available funds and Avanex will surrender to Oplink the
Option and the certificates evidencing the Oplink Shares purchased by Avanex
pursuant thereto.
8. Registration Rights.
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(a) During the period beginning on the date of the termination of the
Merger Agreement until such time as all Option Shares issued to Avanex may be
sold pursuant to Rule 144(k) of the Securities Act (the "Registration Period"),
Avanex (sometimes referred to herein as the "Holder") may by written notice (a
"Registration Notice") to Oplink (the "Registrant") request the Registrant to
register under the Securities Act all or any part of the shares acquired by the
Holder pursuant to this Agreement (such shares requested to be registered, the
"Registrable Securities") in order to permit the sale or other disposition of
any or all shares of the Registrable Securities that have been acquired by or
are issuable to the Holder upon exercise of the Option in accordance with the
intended method of sale or other disposition stated by the Holder, including a
"shelf" registration statement under Rule 415 under the Securities Act or any
successor provision. The Holder agrees to cause, and to cause any underwriters
of any sale or other disposition to cause, any sale or other disposition
pursuant to such registration statement to be effected on a widely distributed
basis so that upon consummation thereof no purchaser or transferee will own
beneficially more than five (5) percent of the then-outstanding voting power of
the Registrant. Upon a request for registration, the Registrant will have the
option exercisable by written notice delivered to the Holder within ten (10)
business days after the receipt of the Registration Notice, irrevocably to agree
to purchase all or any part of the Registrable Securities for cash at a price
(the "Option Price") equal to the product of (i) the number of Registrable
Securities so purchased and (ii) the per share average of
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the closing sale prices of Oplink Common Stock on the Nasdaq National Market
for the ten (10) trading days immediately preceding the date of the Registration
Notice. Any such purchase of Registrable Securities by the Registrant hereunder
will take place at a closing to be held at the principal executive offices of
the Registrant or its counsel at any reasonable date and time designated by the
Registrant in such notice within ten (10) business days after delivery of such
notice. The payment for the shares to be purchased will be made by delivery at
the time of such closing of the Option Price in immediately available funds.
(b) The Registrant will use all commercially reasonable efforts to
effect, as promptly as practicable, the registration under the Securities Act of
the unpurchased Registrable Securities requested to be registered in the
Registration Notice and to keep such registration statement effective for such
period not in excess of 120 calendar days from the day such registration
statement first becomes effective as may be reasonably necessary to effect such
sale or other disposition; provided, however, that the Holder will not be
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entitled to more than an aggregate of two (2) effective registration statements
hereunder. The obligations of the Registrant hereunder to file a registration
statement and to maintain its effectiveness may be suspended for up to 90
calendar days in the aggregate if the Board of Directors of the Registrant shall
have determined that the filing of such registration statement or the
maintenance of its effectiveness would require premature disclosure of material
nonpublic information that would materially and adversely affect the Registrant
or otherwise interfere with or adversely affect any pending or proposed offering
of securities of the Registrant or any other material transaction involving the
Registrant. If consummation of the sale of any Registrable Securities pursuant
to a registration hereunder does not occur within 90 days after the filing with
the SEC of the initial registration statement therefor, the provisions of this
Section 8 will again be applicable to any proposed registration. The Registrant
will use all commercially reasonable efforts to cause any Registrable Securities
registered pursuant to this Section 8 to be qualified for sale under the
securities or blue sky laws of such jurisdictions as the Holder may reasonably
request and will continue such registration or qualification in effect in such
jurisdictions; provided, however, that the Registrant will not be required to
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qualify to do business in, or consent to general service of process in, any
jurisdiction by reason of this provision. If, during the Registration Period,
the Registrant shall propose to register under the Securities Act the offering,
sale and delivery of Oplink Common Stock for cash pursuant to a firm commitment
underwriting, it shall, in addition to the Registrant's other obligations under
this Section 8, allow the Holder the right to participate in such registration
provided that the Holder participates in the underwriting; provided that, if the
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managing underwriter of such offering advises the Registrant in writing that in
its opinion the number of shares of Oplink Common Stock requested to be included
in such registration exceeds the number that can be sold in such offering, the
Registrant shall include the shares requested to be included therein by the
Holder pro rata (based on the number of shares intended to be included therein)
with the shares intended to be included therein by the Registrant and Persons
other than the Registrant. In connection with any offering, sale and delivery of
Oplink Common Stock pursuant to a registration statement effected pursuant to
this Section 8, the Registrant and the Holder shall provide each other and each
underwriter of the offering with customary representations, warranties and
covenants, including covenants of indemnification and contribution, and opinions
of counsel.
(c) The registration rights set forth in this Section 8 are subject to
the condition that the Holder will provide the Registrant with such information
with respect to the Holder's
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Registrable Securities, the plan for distribution thereof, and such other
information with respect to the Holder as, in the reasonable judgment of counsel
for the Registrant, is necessary to enable the Registrant to include in a
registration statement all facts required to be disclosed with respect to a
registration thereunder.
(d) A registration effected under this Section 8 will be effected at
the Registrant's expense, except for underwriting discounts and commissions and
the fees and expenses of counsel to the Holder, and the Registrant will provide
to the underwriters such documentation (including certificates, opinions of
counsel and "comfort" letters from auditors) as are customary in connection with
underwritten public offerings and as such underwriters may reasonably require.
In connection with any registration, the Holder and the Registrant agree to
enter into an underwriting agreement reasonably acceptable to each such party,
in form and substance customary for transactions of this type with the
underwriters participating in such offering.
(e) Indemnification.
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(i) The Registrant will indemnify the Holder, each of its
directors and officers and each person who controls the Holder within the
meaning of Section 15 of the Securities Act, and each underwriter of the
Registrant's securities, with respect to any registration, qualification or
compliance which has been effected pursuant to this Agreement, against all
expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, or any violation by the Registrant of any rule or regulation
promulgated under the Securities Act applicable to the Registrant in connection
with any such registration, qualification or compliance, and the Registrant will
reimburse the Holder and, each of its directors and officers and each person who
controls the Holder within the meaning of Section 15 of the Securities Act, and
each underwriter for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action; provided, that the Registrant will not be liable in
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any such case to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or omission or alleged
untrue statement or omission, made in reliance upon and in conformity with
written information furnished to the Registrant by such Holder or director or
officer or controlling person or underwriter seeking indemnification.
(ii) The Holder will indemnify the Registrant, each of its
directors and officers and each underwriter of the Registrant's securities
covered by such registration statement and each person who controls the
Registrant within the meaning of Section 15 of the Securities Act, against all
expenses, claims, losses, damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make
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the statements therein not misleading, or any violation by the Holder of
any rule or regulation promulgated under the Securities Act applicable to the
Holder in connection with any such registration, qualification or compliance,
and will reimburse the Registrant, such directors, officers or control persons
or underwriters for any legal or any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Registrant by the Holder for use therein; provided, that in no
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event will any indemnity under this Section 8(e) exceed the net proceeds of the
offering received by the Holder.
(iii) Each party entitled to indemnification under this Section 8(e)
(the "Indemnified Party") will give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and will
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided, that counsel for the Indemnifying
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Party, who will conduct the defense of such claim or litigation, will be
approved by the Indemnified Party (whose approval will not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense; provided, however, that the Indemnifying Party will pay such
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expense if representation of the Indemnified Party by counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential differing
interests between the Indemnified Party and any other party represented by such
counsel in such proceeding, and provided further, however, that the failure of
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any Indemnified Party to give notice as provided herein will not relieve the
Indemnifying Party of its obligations under this Section 8(e) unless the failure
to give such notice is materially prejudicial to an Indemnifying Party's ability
to defend such action. No Indemnifying Party, in the defense of any such claim
or litigation will, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. No Indemnifying Party will be required to indemnify any Indemnified
Party with respect to any settlement entered into without such Indemnifying
Party's prior consent (which will not be unreasonably withheld).
9. Adjustment Upon Changes in Capitalization.
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(a) In the event of any change in the Oplink Shares by reason of stock
dividends, stock splits, reverse stock splits, mergers (other than the Merger),
recapitalizations, combinations, exchanges of shares and the like, the type and
number of shares or securities subject to the Option and the Exercise Price will
be adjusted appropriately, and proper provision will be made in the agreements
governing such transaction so that Avanex will receive, upon exercise of the
Option, the number and class of shares or other securities or property that
Avanex would have received in respect of the Oplink Shares if the Option had
been exercised immediately prior to such event or the record date therefor, as
applicable.
(b) Without limiting the parties' relative rights and obligations under
the Merger Agreement, if the number of outstanding shares of Oplink Common Stock
increases or decreases
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after the date of this Agreement (other than pursuant to an event described
in Section 9(a)), the number of shares of Oplink Common Stock subject to the
Option (including those Option Shares which may have already been exercised)
will be adjusted so that it equals 19.99% of the number of shares of Oplink
Common Stock then issued and outstanding, without giving effect to any Option
Shares.
10. Profit Limitation.
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(a) Notwithstanding any other provision in this Agreement or the Merger
Agreement, in no event shall Avanex's Total Profit (as defined below) exceed the
amount of the Oplink Termination Fee (the "Maximum Profit") and, if Avanex's
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Total Profit otherwise would exceed the Maximum Profit, Avanex, at its sole
discretion, shall either (i) reduce the number of Option Shares subject to the
Option, (ii) deliver to Oplink for cancellation Option Shares (or other
securities into which such Option Shares are converted or exchanged) previously
purchased by Avanex, (iii) pay cash to Oplink, or (iv) any combination of the
foregoing, so that Avanex's actually realized Total Profit shall not exceed the
Maximum Profit after taking into account the foregoing actions.
(b) For purposes of this Agreement, "Total Profit" shall mean: (i) the
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aggregate amount (before taxes) of (A) any excess of (x) the net cash amounts or
fair market value of any property received by Avanex pursuant to a sale of
Option Shares (or securities into which such shares are converted or exchanged)
over (y) Avanex's aggregate purchase price for such Option Shares (or other
securities), plus (B) any amounts received by Avanex pursuant on the repurchase
of the Option by Oplink pursuant to Section 6, plus (C) the Oplink Termination
Fee paid in cash by Oplink pursuant to the Merger Agreement, minus (ii) the
amounts of any cash previously paid by Avanex to Oplink pursuant to this Section
10 plus the value of the Option Shares (or other securities) previously
delivered by Avanex to Oplink for cancellation pursuant to this Section 10.
(c) For purposes of Section 10(a) and clause (ii) of Section 10(b), the
value of any Option Shares delivered by Avanex to Oplink shall be the
Market/Tender Offer Price of such Option Shares.
11. Restrictive Legends. Each certificate representing Option Shares issued
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to Avanex hereunder will include a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD
ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AS SET FORTH IN THE STOCK OPTION AGREEMENT DATED AS OF MARCH 18,
2002, A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER.
It is understood and agreed that (i) the reference to restrictions arising
under the Securities Act in the above legend will be removed by delivery of
substitute certificate(s) without such
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reference if such Option Shares have been registered pursuant to the Securities
Act, such Option Shares have been sold in reliance on and in accordance with
Rule 144 under the Securities Act or the Holder has delivered to the Registrant
a copy of a letter from the staff of the SEC, or an opinion of counsel in form
and substance reasonably satisfactory to the Registrant and its counsel, to the
effect that such legend is not required for purposes of the Securities Act and
(ii) the reference to restrictions pursuant to this Agreement in the above
legend will be removed by delivery of substitute certificate(s) without such
reference if the Option Shares evidenced by certificate(s) containing such
reference have been sold or transferred in compliance with the provisions of
this Agreement under circumstances that do not require the retention of such
reference.
12. Listing and HSR Filing. Oplink, upon the request of Avanex, will
----------------------
promptly file an application to list the Oplink Shares to be acquired upon
exercise of the Option for quotation on the Nasdaq National Market and will use
its commercially reasonable efforts to obtain approval of such listing as soon
as practicable. Promptly after the date hereof, each of the parties hereto will
promptly file with the Federal Trade Commission and the Antitrust Division of
the United States Department of Justice all required premerger notification and
report forms and other documents and exhibits required to be filed under the HSR
Act to permit the acquisition of the Oplink Shares subject to the Option at the
earliest possible date.
13. Binding Effect. This Agreement will be binding upon and inure to
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the benefit of the parties hereto and their respective successors and permitted
assigns. Nothing contained in this Agreement, express or implied, is intended to
confer upon any person other than the parties hereto and their respective
successors and permitted assigns any rights or remedies of any nature whatsoever
by reason of this Agreement. Any shares sold by a party in compliance with the
provisions of Section 8 will, upon consummation of such sale, be free of the
restrictions imposed with respect to such shares by this Agreement and any
transferee of such shares will not be entitled to the rights of such party.
Certificates representing shares sold in a registered public offering pursuant
to Section 8 will not be required to bear the legend set forth in Section 11.
14. Specific Performance. The parties hereto recognize and agree that
--------------------
if for any reason any of the provisions of this Agreement are not performed in
accordance with their specific terms or are otherwise breached, immediate and
irreparable harm or injury would be caused for which money damages would not be
an adequate remedy. Accordingly, each party hereto agrees that in addition to
other remedies the other party hereto will be entitled to an injunction
restraining any violation or threatened violation of the provisions of this
Agreement or the right to enforce any of the covenants or agreements set forth
herein by specific performance. In the event that any action will be brought in
equity to enforce the provisions of the Agreement, neither party hereto will
allege, and each party hereto hereby waives the defense, that there is an
adequate remedy at law.
15. Entire Agreement. This Agreement, the Confidentiality Agreement and
----------------
the Merger Agreement (including the appendices thereto) constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersede all other prior agreements and understandings, both written and
oral, between the parties hereto with respect to the subject matter hereof.
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16. Further Assurances. Each party hereto will execute and deliver all
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such further documents and instruments and take all such further action as may
be necessary in order to consummate the transactions contemplated hereby.
17. Validity. The invalidity or unenforceability of any provision of
--------
this Agreement will not affect the validity or enforceability of the other
provisions of this Agreement, which will remain in full force and effect. In the
event any Governmental Entity of competent jurisdiction holds any provision of
this Agreement to be null, void or unenforceable, the parties hereto will
negotiate in good faith and will execute and deliver an amendment to this
Agreement in order, as nearly as possible, to effectuate, to the extent
permitted by law, the intent of the parties hereto with respect to such
provision.
18. Notices. All notices and other communications hereunder will be in
-------
writing and will be deemed duly given (a) on the date of delivery if delivered
personally, (b) on the date of confirmation of receipt (or, the first business
day following such receipt if the date is not a business day) of transmission by
telecopy or telefacsimile or (c) on the date of confirmation of receipt (or the
first business day following such receipt if the date is not a business day) if
delivered by a nationally recognized courier service. All notices hereunder
shall be delivered to the parties at the following addresses or telecopy numbers
(or at such other address or telecopy numbers for a party as will be specified
by like notice):
(a) if to Avanex, to:
Avanex Corporation
00000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
with copies to:
Wilson, Sonsini, Xxxxxxxx & Xxxxxx,
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
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and to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
Professional Corporation
One Market
Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) if to Oplink to:
Oplink Communications, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Godward LLP
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
Xxxxxxx Xxxxxxxx Xxxxxx
Facsimile: (000) 000-0000
19. Governing Law. This Agreement will be governed by and construed in
-------------
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed entirely within such State.
20. Expenses. Except as otherwise expressly provided herein or in the
--------
Merger Agreement, all costs and expenses incurred in connection with the
transactions contemplated by this Agreement will be paid by the party incurring
such expenses.
21. Amendments; Waiver. This Agreement may be amended by the parties
------------------
hereto and the terms and conditions hereof may be waived only by an instrument
in writing signed on behalf of each of the parties hereto, or, in the case of a
waiver, by an instrument signed on behalf of the party waiving compliance.
22. Assignment. Neither of the parties hereto may sell, transfer, assign
----------
or otherwise dispose of any of its rights or obligations under this Agreement or
the Option created hereunder to any other person, without the express written
consent of the other party, except that the rights and obligations hereunder
will inure to the benefit of and be binding upon any successor of a party
hereto.
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23. Counterparts. This Agreement may be executed in counterparts, each of
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which will be deemed to be an original, but both of which, taken together, will
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above
written.
AVANEX CORPORATION
By: /s/ Xxxx Xxxxx
----------------------------------------
Name: Xxxx Xxxxx
--------------------------------------
Title: President and Chief Executive Officer
--------------------------------------
OPLINK COMMUNICATIONS, INC.
By: /s/ Xxxxxxxxx Xxxxx
----------------------------------------
Name: Xxxxxxxxx Xxxxx
--------------------------------------
Title: President and Chief Executive Officer
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[Signature Page to Oplink Stock Option Agreement]
