Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of March 6, 2006, by
and among Avanex Corporation, a Delaware corporation, with headquarters located
at 40919 Encyclopedia Circle, Fremont, California 94538 (the “Company”), and the
investors listed on the Schedule of Buyers attached hereto (individually, a
“Buyer” and collectively, the “Buyers”).

WHEREAS:

A. The Company and each Buyer desire to enter into this transaction to purchase
the Purchased Shares (as defined below) set forth herein pursuant to a currently
effective shelf registration statement on Form S-3, which has at least
$70,000,000 in unallocated securities registered thereunder (Registration Number
333-117443) (the “Registration Statement”), which Registration Statement has
been declared effective in accordance with the Securities Act of 1933, as
amended (the “1933 Act”), by the United States Securities and Exchange
Commission (the “SEC”).

B. Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms
and conditions stated in this Agreement, (i) that aggregate number of shares of
common stock, par value $0.001 per share, of the Company (the “Common Stock”),
set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers
(which aggregate amount for all Buyers together shall be 24,075,000 shares of
Common Stock and shall collectively be referred to herein as the “Purchased
Shares”) and (ii) a warrant representing the right to acquire initially up to
that number of additional shares of Common Stock set forth opposite such Buyer’s
name in column (4) on the Schedule of Buyers (which aggregate amount for all
Buyers together shall be initially 7,222,500 shares of Common Stock and shall
collectively be referred to herein as the “Warrants”), in substantially the form
attached hereto as Exhibit A (as exercised, collectively, the “Warrant Shares”).

C. The Purchased Shares, the Warrants and the Warrant Shares are collectively
referred to herein as the “Securities”.

NOW, THEREFORE, the Company and each Buyer hereby agree as follows:

1. PURCHASE AND SALE OF PURCHASED SHARES AND WARRANTS.

(a) Purchase of Purchased Shares and Warrants.

(i) Purchase. Subject to the satisfaction (or waiver) of the conditions set
forth in Sections 6 and 7 below, the Company shall issue and sell to each Buyer,
and each Buyer severally, but not jointly, agrees to purchase from the Company
on the Closing Date (as defined below), (x) the number of Purchased Shares as is
set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers and
(y) Warrants to acquire up to that number of Warrant Shares as is set forth
opposite such Buyer’s name in column (4) on the Schedule of Buyers, (the
“Closing”).

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(ii) Closing. The date and time of the Closing (the “Closing Date”) shall be
10:00 a.m., New York City Time, on March 9, 2006 (or such other date as is
mutually agreed to by the Company and each Buyer) after notification of
satisfaction (or waiver) of the conditions to the Closing set forth in Sections
6 and 7 below at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New
York, New York 10022.

(iii) Purchase Price. The aggregate purchase price for the Purchased Shares and
the Warrants to be purchased by each Buyer at the Closing (the “Purchase Price”)
shall be the amount set forth opposite such Buyer’s name in column (5) of the
Schedule of Buyers.

(b) Form of Payment. On the Closing Date, (i) each Buyer shall pay its Purchase
Price to the Company for the Purchased Shares and the Warrants to be issued and
sold to such Buyer at the Closing, by wire transfer of immediately available
funds in accordance with the Company’s written wire instructions and (ii) the
Company shall (A) cause EquiServe Trust Company, N.A., the Company’s transfer
agent (the “Transfer Agent”) through the Depository Trust Company (“DTC”) Fast
Automated Securities Transfer Program, to credit such aggregate number of
Purchased Shares that such Buyer is purchasing as is set forth opposite such
Buyer’s name in column (3) of the Schedule of Buyers to such Buyer’s or its
designee’s balance account with DTC through its Deposit Withdrawal Agent
Commission system and (B) deliver to such Buyer the Warrants (in the amounts as
such Buyer shall request) such Buyer is purchasing, in each case duly executed
on behalf of the Company and registered in the name of such Buyer or its
designee.

2. BUYER’S REPRESENTATIONS AND WARRANTIES.

Each Buyer represents and warrants with respect to only itself that:

(a) Organization; Authority. Such Buyer is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with the requisite power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents (as
defined below) and otherwise to carry out its obligations hereunder and
thereunder.

(b) Information. Such Buyer and its advisors, if any, have been furnished with
all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Securities which have been
requested by such Buyer. Such Buyer and its advisors, if any, have been afforded
the opportunity to ask questions of the Company. Neither such inquiries nor any
other due diligence investigations conducted by such Buyer or its advisors, if
any, or its representatives shall modify, amend or affect such Buyer’s right to
rely on the Company’s representations and warranties contained herein. Such
Buyer understands that its investment in the Securities involves a high degree
of risk. Such Buyer has sought such accounting, legal and tax advice as it has
considered necessary to make an informed investment decision with respect to its
acquisition of the Securities.

(c) No Governmental Review. Such Buyer understands that no United States federal
or state agency or any other government or governmental agency has passed on or
made

 

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any recommendation or endorsement of the Securities or the fairness or
suitability of the investment in the Securities nor have such authorities passed
upon or endorsed the merits of the offering of the Securities.

(d) Validity; Enforcement. This Agreement has been duly and validly authorized
by all necessary action on the part of such Buyer, executed and delivered on
behalf of such Buyer and shall constitute the legal, valid and binding
obligations of such Buyer enforceable against such Buyer in accordance with its
terms, except as such enforceability may be limited by general principles of
equity or to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the
enforcement of applicable creditors’ rights and remedies.

(e) No Conflicts. The execution, delivery and performance by such Buyer of this
Agreement and the consummation by such Buyer of the transactions contemplated
hereby will not (i) result in a violation of the organizational documents of
such Buyer or (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which such Buyer is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws) applicable to such Buyer,
except in the case of clauses (ii) and (iii) above, for such conflicts,
defaults, rights or violations which would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
ability of such Buyer to perform its obligations hereunder.

(f) Residency; Domicile. Such Buyer is a resident of that jurisdiction specified
below its address on the Schedule of Buyers. The investment advisor making the
investment decisions for such Buyer is domiciled in that jurisdiction specified
below its address on the Schedule of Buyers.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

Except as otherwise set forth on the schedules attached hereto, the Company
represents and warrants to each of the Buyers that:

(a) Organization and Qualification. The Company and its “Subsidiaries” (which
for purposes of this Agreement means any entity in which the Company, directly
or indirectly, owns capital stock or holds an equity or similar interest) are
entities duly organized and validly existing. The Company and its Significant
Subsidiaries (as defined under Rule 1-02(w) of Regulation S-X) are in good
standing under the laws of the jurisdiction in which they are formed. The
Company and its Subsidiaries have the requisite power and authorization to own
their properties and to carry on their business as now being conducted. Each of
the Company and its Subsidiaries is duly qualified as a foreign entity to do
business and is in good standing in every jurisdiction in which its ownership of
property or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect. As used in this
Agreement, “Material Adverse Effect” means any material adverse effect on the
business, properties, assets, operations, results of operations or condition
(financial or otherwise) of the

 

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Company and its Subsidiaries, taken as a whole, or on the transactions
contemplated hereby and by the other Transaction Documents or by the agreements
and instruments to be entered into in connection herewith or therewith, or on
the authority or ability of the Company to perform its obligations under the
Transaction Documents (as defined below). The Company has no Subsidiaries except
as set forth on Schedule 3(a).

(b) Authorization; Enforcement; Validity. The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Irrevocable Transfer Agent Instructions (as defined in
Section 5(b)), the Warrants, and each of the other agreements entered into by
the parties hereto in connection with the transactions contemplated by this
Agreement (collectively, the “Transaction Documents”) and to issue the
Securities in accordance with the terms hereof and thereof. The execution and
delivery of the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby, including, without
limitation, the issuance of the Warrants and the reservation for issuance and
the issuance of the Warrant Shares issuable upon exercise of the Warrants, have
been duly authorized by the Company’s Board of Directors (the “Board”) and no
further filing, consent, or authorization is required by the Company, the Board
or its stockholders. This Agreement and the other Transaction Documents of even
date herewith have been duly executed and delivered by the Company, and
constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies.

(c) Issuance of Securities. The issuance of the Purchased Shares and the
Warrants are duly authorized and upon issuance of the Purchased Shares and
Warrants in accordance with the terms of the Transaction Documents shall be free
from all taxes, liens and charges with respect to the issue thereof. As of the
Closing, a number of shares of Common Stock shall have been duly authorized and
reserved for issuance which equals 120% of the maximum number of shares of
Common Stock issuable upon exercise of the Warrants. Upon exercise in accordance
with the Warrants, the Warrant Shares will be validly issued, fully paid and
nonassessable and free from all preemptive or similar rights, and upon issuance
of the Warrant Shares in accordance with the terms of the Transaction Documents
shall be free from all taxes, liens and charges with respect to the issue
thereof, with the holders being entitled to all rights accorded to a holder of
Common Stock. The issuance by the Company of the Securities has been registered
under the 1933 Act, the Securities are being issued pursuant to the Registration
Statement and all of the Securities are freely transferable and tradable by the
Buyers without restriction. The Registration Statement is effective and
available for the issuance of the Purchased Shares thereunder and the Company
has not received any notice that the SEC has issued or intends to issue a
stop-order with respect to the Registration Statement or that the SEC otherwise
has suspended or withdrawn the effectiveness of the Registration Statement,
either temporarily or permanently, or intends or has threatened in writing to do
so. The “Plan of Distribution” section under the Registration Statement permits
the issuance and sale of the Securities hereunder.

(d) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions

 

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contemplated hereby and thereby (including, without limitation, the issuance of
the Purchased Shares and the Warrants and reservation for issuance and issuance
of the Warrant Shares) will not (i) result in a violation of the Certificate of
Incorporation (as defined in Section 3(r)) of the Company, any capital stock of
the Company or Bylaws (as defined in Section 3(r)) of the Company or any of its
Subsidiaries or (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party, except to the extent such conflict, default or
termination right would not reasonably be expected to have a Material Adverse
Effect or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws and regulations
and the rules and regulations of the Nasdaq National Market (the “Principal
Market”)) applicable to the Company or any of its Subsidiaries or by which any
property or asset of the Company or any of its Subsidiaries is bound or affected
except to the extent such violation would not reasonably be expected to have a
Material Adverse Effect.

(e) Consents. Except as set forth on Schedule 3(e), the Company is not required
to obtain any consent, authorization or order of, or make any filing or
registration with, any court, governmental agency or any regulatory or
self-regulatory agency or any other Person in order for it to execute, deliver
or perform any of its obligations under or contemplated by the Transaction
Documents, in each case in accordance with the terms hereof or thereof, other
than (i) the filing with the SEC of the prospectus supplement required by the
Registration Statement pursuant to Rule 424(b) under the 1933 Act (the
“Prospectus Supplement”) supplementing the base prospectus forming part of the
Registration Statement (the “Prospectus”) and (ii) the application(s) to the
Principal Market for the listing of the Purchased Shares and the Warrant Shares
for trading thereon in the time and manner required thereby. Other than the
items in (i) and (ii), all consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the Closing Date, and the
Company and its Subsidiaries are unaware of any facts or circumstances which
might prevent the Company from obtaining or effecting any of the registration,
application or filings pursuant to the preceding sentence. The Company is not in
violation of the listing requirements of the Principal Market and has no
knowledge of any facts which would reasonably lead to delisting or suspension of
the Common Stock in the foreseeable future. For purposes of this Agreement,
“Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.

(f) Acknowledgment Regarding Buyer’s Purchase of Securities. The Company
acknowledges and agrees that each Buyer is acting solely in the capacity of
arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and that no Buyer is (i) an officer
or director of the Company, (ii) an “affiliate” of the Company (as defined in
Rule 144 under the 1933 Act) or (iii) to the knowledge of the Company, a
“beneficial owner” of more than 10% of the shares of Common Stock (as defined
for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended
(the “1934 Act”)). The Company further acknowledges that no Buyer is acting as a
financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to the Transaction Documents and the transactions contemplated hereby
and thereby, and any advice given by a

 

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Buyer or any of its representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is merely
incidental to such Buyer’s purchase of the Securities. The Company further
represents to each Buyer that the Company’s decision to enter into the
Transaction Documents has been based solely on the independent evaluation by the
Company and its representatives.

(g) Placement Agent’s Fees. The Company shall be responsible for the payment of
any placement agent’s fees, financial advisory fees, or brokers’ commissions
(other than, in each case, for persons engaged by any Buyer or its investment
advisor) relating to or arising out of the transactions contemplated hereby. The
Company shall pay, and hold each Buyer harmless against, any liability, loss or
expense (including, without limitation, attorney’s fees and out-of-pocket
expenses) arising in connection with any such claim. The Company acknowledges
that it has engaged Banc of America Securities as placement agent (the “Agent”)
in connection with the sale of the Securities. Other than the Agent, the Company
has not engaged any placement agent or other agent in connection with the sale
of the Securities.

(h) No Integrated Offering. None of the Company, its Subsidiaries, any of their
affiliates, and any Person acting on their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any
security, under circumstances that would cause this offering of the Securities
to be integrated with prior offerings by the Company for purposes of any
applicable stockholder approval provisions, including, without limitation, under
the rules and regulations of any exchange or automated quotation system on which
any of the securities of the Company are listed or designated. None of the
Company, its Subsidiaries, their affiliates and any Person acting on their
behalf will take any action or steps referred to in the preceding sentence that
would cause the offering of the Securities to be integrated with other
offerings.

(i) Dilutive Effect. The Company understands and acknowledges that the number of
Warrant Shares issuable upon exercise of the Warrants will increase in certain
circumstances. The Company further acknowledges that its obligation to issue the
Warrant Shares upon exercise of the Warrants in accordance with this Agreement
and the Warrants is absolute and unconditional regardless of the dilutive effect
that such issuance may have on the ownership interests of other stockholders of
the Company, subject to the provisions of the Transaction Documents and
applicable law.

(j) Application of Takeover Protections; Rights Agreement. The Company and the
Board have taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including any
distribution under a rights agreement) (the “Poison Pill Amendment”), or other
similar anti-takeover provision under the Certificate of Incorporation or the
laws of the jurisdiction of its formation which is or could become applicable to
any Buyer as a result of the transactions contemplated by this Agreement,
including, without limitation, the Company’s issuance of the Securities and any
Buyer’s ownership of the Securities; provided that the Poison Pill Amendment is
subject to execution by the Transfer Agent, as Rights Agent thereunder, in order
to become effective.

(k) SEC Documents; Financial Statements. During the two (2) years prior to the
date hereof, the Company has filed all reports, schedules, forms, statements and
other

 

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documents required to be filed by it with the SEC pursuant to the reporting
requirements of the 1934 Act (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements, notes and
schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the “SEC Documents”). The Company has delivered to
the Buyers or their respective representatives true, correct and complete copies
of each of the SEC Documents not available on the EDGAR system that has been
requested by each Buyer. As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the 1934 Act and the
rules and regulations of the SEC promulgated thereunder applicable to the SEC
Documents, and none of the SEC Documents, at the time they were filed with the
SEC, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. As of their respective dates, the financial statements of
the Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto as in effect as of the time of
filing. Such financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Buyers which is not
included in the SEC Documents, including, without limitation, information
referred to in Section 2(e) of this Agreement, contains any untrue statement of
a material fact or omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstance under which they are or
were made, not misleading.

(l) Absence of Certain Changes. Except as disclosed in Schedule 3(1) or in the
SEC Documents listed in Schedule 3(1), since June 30, 2005, there has been no
material adverse change and no material adverse development in the business,
properties, operations, condition (financial or otherwise), results of
operations or prospects of the Company or its Subsidiaries. Except as disclosed
in Schedule 3(1) or in the SEC Documents listed in Schedule 3(1), since June 30,
2005, the Company has not (i) declared or paid any dividends, (ii) sold any
assets, individually or in the aggregate, in excess of $100,000 outside of the
ordinary course of business or (iii) had capital expenditures, individually or
in the aggregate, in excess of $100,000. The Company has not taken any steps to
seek protection pursuant to any bankruptcy law nor does the Company have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact which would
reasonably lead a creditor to do so. The Company is not as of the date hereof,
and after giving effect to the transactions contemplated hereby to occur at the
Closing, will not be Insolvent (as defined below). For purposes of this
Section 3(1), “Insolvent” means (i) the present fair saleable value of the
Company’s assets is less than the amount required to pay the Company’s total
indebtedness, (ii) the Company is unable to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured, (iii) the Company intends to incur or believes that it
will incur debts that would be beyond its ability to pay as such debts mature or
(iv) the Company has unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted.

 

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(m) No Undisclosed Events, Liabilities, Developments or Circumstances. Except as
set forth on Schedule 3(m), no event, liability, development or circumstance has
occurred or exists, or is contemplated to occur with respect to the Company or
its Subsidiaries or their respective business, properties, prospects, operations
or financial condition, that would be required to be disclosed by the Company
under applicable securities laws on a registration statement on Form S-1 filed
with the SEC relating to an issuance and sale by the Company of its Common Stock
and which has not been publicly announced.

(n) Conduct of Business; Regulatory Permits. Neither the Company nor its
Subsidiaries is in violation of any term of or in default under its Certificate
of Incorporation or Bylaws or their organizational charter or certificate of
incorporation or bylaws, respectively. Neither the Company nor any of its
Subsidiaries is in violation of any judgment, decree or order or any statute,
ordinance, rule or regulation applicable to the Company or its Subsidiaries, and
neither the Company nor any of its Subsidiaries will conduct its business in
violation of any of the foregoing, except for possible violations which would
not, individually or in the aggregate, have a Material Adverse Effect. Without
limiting the generality of the foregoing, the Company is not in violation of any
of the rules, regulations or requirements of the Principal Market and has no
knowledge of any facts or circumstances which would reasonably lead to delisting
or suspension of the Common Stock by the Principal Market in the foreseeable
future. Since June 30, 2005, (i) the Common Stock has been designated for
quotation on the Principal Market, (ii) trading in the Common Stock has not been
suspended by the SEC or the Principal Market and (iii) the Company has received
no communication, written or oral, from the SEC or the Principal Market
regarding the suspension or delisting of the Common Stock from the Principal
Market. The Company and its Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate regulatory authorities
necessary to conduct their respective businesses, except where the failure to
possess such certificates, authorizations or permits would not have,
individually or in the aggregate, a Material Adverse Effect, and neither the
Company nor any such Subsidiary has received any notice of proceedings relating
to the revocation or modification of any such certificate, authorization or
permit.

(o) Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries,
nor any director, officer, agent, employee or other Person acting on behalf of
the Company or any of its Subsidiaries has, in the course of its actions for, or
on behalf of, the Company (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.

(p) Sarbanes-Oxley Act. The Company is in compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date
hereof, and any and all applicable rules and regulations promulgated by the SEC
thereunder that

 

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are effective as of the date hereof, except where such noncompliance would not
have, individually or in the aggregate, a Material Adverse Effect.

(q) Transactions With Affiliates. Except as set forth in the SEC Documents and
other than the grant of stock options disclosed on Schedule 3(r), none of the
officers, directors or employees of the Company is presently a party to any
transaction with the Company or any of its Subsidiaries that would require
disclosure pursuant to Item 404 of Regulation S-K promulgated under the 1933 Act
(other than for ordinary course services as employees, officers or directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
officer, director or employee or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any such officer,
director, or employee has a substantial interest or is an officer, director,
trustee or partner.

(r) Equity Capitalization. As of the date hereof, the authorized capital stock
of the Company consists of (i) 300,000,000 shares of Common Stock, of which
151,497,629 shares were issued and outstanding as of March 3, 2006, 14,632,611
shares were subject to outstanding options granted pursuant to the Company’s
stock option and purchase plans as of March 3, 2006, 20,133,527 shares were
reserved for issuance pursuant to the Company’s stock option and purchase plans
as of March 3, 2006 and 42,071,022 shares are reserved for issuance pursuant to
securities (other than the Warrants) exercisable or exchangeable for, or
convertible into, shares of Common Stock and (ii) 10,000,000 shares of preferred
stock, $0.001 par value, of which as of the date hereof, none are issued and
outstanding. All of such outstanding shares have been, or upon issuance will be,
validly issued and are fully paid and nonassessable. Except as disclosed in the
SEC Documents or on Schedule 3(r): (i) there are no outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable
or exchangeable for, any share capital of the Company or any of its
Subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its Subsidiaries is or may become bound to issue
additional share capital of the Company or any of its Subsidiaries or options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable
or exchangeable for, any share capital of the Company or any of its
Subsidiaries; (ii) there are no outstanding debt securities, notes, credit
agreements, credit facilities or other agreements, documents or instruments
evidencing indebtedness of the Company or any of its Subsidiaries or by which
the Company or any of its Subsidiaries is or may become bound; (iii) there are
no financing statements securing obligations in any material amounts, either
singly or in the aggregate, filed in connection with the Company; (iv) there are
no agreements or arrangements under which the Company or any of its Subsidiaries
is obligated to register the sale of any of their securities under the 1933 Act;
(v) there are no outstanding securities or instruments of the Company or any of
its Subsidiaries which contain any redemption or similar provisions, and there
are no contracts, commitments, understandings or arrangements by which the
Company or any of its Subsidiaries is or may become bound to redeem a security
of the Company or any of its Subsidiaries; (vi) the Company does not have any
stock appreciation rights or “phantom stock” plans or agreements or any similar
plan or agreement; and (vii) the Company and its Subsidiaries have no
liabilities or obligations required to be disclosed in the SEC Documents but not
so disclosed in the SEC Documents, other than

 

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those incurred in the ordinary course of the Company’s or its Subsidiaries’
respective businesses and which, individually or in the aggregate, do not or
would not have a Material Adverse Effect. Except as disclosed in Schedule 3(r):
(i) none of the Company’s share capital is subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the
Company and (ii) there are no securities or instruments containing anti-dilution
or similar provisions that will be triggered by the issuance of the Securities.
The Company has furnished to the Buyer true, correct and complete copies of the
Company’s Certificate of Incorporation, as amended and as in effect on the date
hereof (the “Certificate of Incorporation”), and the Company’s Bylaws, as
amended and as in effect on the date hereof (the “Bylaws”), and the terms of all
securities convertible into, or exercisable or exchangeable for, shares of
Common Stock and the material rights of the holders thereof in respect thereto.

(s) Indebtedness and Other Contracts. Except as disclosed in Schedule 3(s),
neither the Company nor any of its Subsidiaries (i) is a party to any contract,
agreement or instrument, the violation of which, or default under which, by the
other party(ies) to such contract, agreement or instrument would result in a
Material Adverse Effect, (ii) is in violation of any term of or in default under
any contract, agreement or instrument relating to any indebtedness, except where
such violations and defaults would not result, individually or in the aggregate,
in a Material Adverse Effect, or (iii) is a party to any contract, agreement or
instrument relating to any indebtedness, the performance of which, in the
judgment of the Company’s officers, has or is expected to have a Material
Adverse Effect.

(t) Absence of Litigation. There is no action, suit, proceeding, inquiry or
investigation before or by the Principal Market, any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company, threatened against or affecting the Company, the
Common Stock or any of the Company’s Subsidiaries or any of the Company’s or the
Company’s Subsidiaries’ officers or directors in their capacities as such, that
could, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.

(u) Insurance. The Company and each of its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as management of the Company believes to be prudent and customary in the
businesses in which the Company and its Subsidiaries are engaged. Neither the
Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for and neither the Company nor any such Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect.

(v) Employee Relations. (i) Except as set forth on Schedule 3(v), neither the
Company nor any of its Subsidiaries is a party to any collective bargaining
agreement or employs any member of a union. The Company and its Subsidiaries
believe that their relations with their employees are good. No executive officer
of the Company (as defined in Rule 501(f) of the 1933 Act) has notified the
Company that such officer intends to leave the Company or otherwise terminate
such officer’s employment with the Company. No executive officer of the Company,
to the knowledge of the Company, is, or is now expected to be, in violation of
any

 

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material term of any employment contract, confidentiality, disclosure or
proprietary information agreement, non-competition agreement, or any other
contract or agreement or any restrictive covenant, and the continued employment
of each such executive officer does not subject the Company or any of its
Subsidiaries to any liability with respect to any of the foregoing matters.

(ii) The Company and its Subsidiaries are in compliance with all federal, state,
local and foreign laws and regulations respecting labor, employment and
employment practices and benefits, terms and conditions of employment and wages
and hours, except where failure to be in compliance would not, either
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.

(w) Title. Except as set forth on Schedule 3(w), the Company and its
Subsidiaries have good and marketable title in fee simple to all real property
and good and marketable title to all personal property owned by them which is
material to the business of the Company and its Subsidiaries, in each case free
and clear of all liens, encumbrances and defects except such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and any of its
Subsidiaries. Any real property and facilities held under lease by the Company
and any of its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its Subsidiaries.

(x) Intellectual Property Rights. The Company and its Subsidiaries own or
possess adequate rights or licenses to use all trademarks, trade names, service
marks, service mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, governmental authorizations, trade
secrets and other intellectual property rights (“Intellectual Property Rights”)
necessary to conduct their respective businesses as now conducted, except where
the failure to so own or possess would not reasonably be expected to result in a
Material Adverse Effect. Except as set forth in Schedule 3(x), which expirations
or terminations would not reasonably be expected to result in a Material Adverse
Effect, none of the Company’s Intellectual Property Rights have expired or
terminated, or are expected to expire or terminate, within three years from the
date of this Agreement. The Company does not have any knowledge of any
infringement by the Company or its Subsidiaries of Intellectual Property Rights
of others. There is no claim, action or proceeding being made or brought, or to
the knowledge of the Company, being threatened, against the Company or its
Subsidiaries regarding its Intellectual Property Rights. The Company is unaware
of any facts or circumstances which might give rise to any of the foregoing
infringements or claims, actions or proceedings. The Company and its
Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties.

(y) Environmental Laws. The Company and its Subsidiaries (i) are in compliance
with any and all Environmental Laws (as hereinafter defined), (ii) have received
all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or approval
where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so
comply could be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect. The term “Environmental Laws” means all federal, state,
local or

 

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foreign laws relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata), including, without limitation,
laws relating to emissions, discharges, releases or threatened releases of
chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes
(collectively, “Hazardous Materials”) into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations issued, entered, promulgated or approved thereunder.

(z) Subsidiary Rights. Except as set forth in Schedule 3(z), the Company or one
of its Subsidiaries has the unrestricted right to vote, and (subject to
limitations imposed by applicable law) to receive dividends and distributions
on, all capital securities of its Subsidiaries as owned by the Company or such
Subsidiary.

(aa) Tax Status. The Company and each of its Subsidiaries (i) has made or filed
all foreign, federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject, (ii) has paid
all taxes and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and (iii) has set aside on its books
provision reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis
for any such claim.

(bb) Internal Accounting Controls. Except as set forth in the SEC Documents, the
Company and each of its Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management’s
general or specific authorization and (iv) the recorded accountability for
assets and liabilities is compared with the existing assets and liabilities at
reasonable intervals and appropriate action is taken with respect to any
differences.

(cc) U.S. Real Property Holding Corporation. The Company is not, nor has ever
been, a U.S. real property holding corporation within the meaning of Section 897
of the Internal Revenue Code of 1986, as amended, and the Company shall so
certify upon Buyer’s request.

(dd) Alcatel/Corning Stockholders’ Agreement. Pursuant to Section 2.2 of the
Stockholders’ Agreement between the Company, Alcatel and Corning Incorporated,
dated as of July 31, 2003, (i) so long as Alcatel owns (together with its
affiliates) 5% or more of the outstanding Common Stock, Alcatel is required to
take such action (and shall cause its affiliates that beneficially own Common
Stock to take such action) as may be required so that all Common Stock
beneficially owned by Alcatel (or any such affiliate of Alcatel) from time to
time are voted

 

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on all matters to be voted by holders of Common Stock in the manner as
recommended by a majority of the Board (subject to an exception for any Avanex
Transaction Proposal (as defined in such Stockholders’ Agreement) between the
Company and any competitor of Alcatel listed on Schedule I of such Stockholders’
Agreement) and (ii) so long as Corning Incorporated owns (together with its
affiliates) 5% or more of the outstanding Common Stock, Corning Incorporated is
required to take such action (and shall cause its affiliates that beneficially
own Common Stock to take such action) as may be required so that all Common
Stock beneficially owned by Corning Incorporated (or any such affiliate of
Corning Incorporated) from time to time are voted on all matters to be voted by
holders of Common Stock in the manner as recommended by a majority of the Board.

(ee) Manipulation of Price. The Company has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities, (ii) other than the Agent, sold, bid for, purchased, or paid any
compensation for soliciting purchases of, any of the Securities, or (iii) other
than the Agent, paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.

(ff) Disclosure. The Company confirms that neither it nor, to its knowledge, any
other Person acting on its behalf has provided any of the Buyers or their agents
or counsel with any information that constitutes or could reasonably be expected
to constitute material, nonpublic information. The Company understands and
confirms that each of the Buyers will rely on the foregoing representations in
effecting transactions in securities of the Company. All disclosure provided to
the Buyers regarding the Company, its business and the transactions contemplated
hereby, including the Schedules to this Agreement, furnished by or on behalf of
the Company is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. Each press release issued by the Company during the twelve
(12) months preceding the date of this Agreement which contained results of
operations or financial condition information of the Company for a completed
quarterly or annual fiscal period was, at the time of release, accurate in all
material respects.

4. COVENANTS.

(a) Best Efforts. Each party shall use its best efforts timely to satisfy each
of the conditions to be satisfied by it as provided in Sections 6 and 7 of this
Agreement.

(b) Prospectus Supplement and Blue Sky. On or before the execution of this
Agreement, the Company shall have delivered, and as soon as practicable after
the Closing the Company shall file, the Prospectus Supplement with respect to
the Purchased Shares as required under and in conformity with the 1933 Act,
including Rule 424(b) thereunder. The Company shall, on or before the Closing
Date, take such action as the Company shall reasonably determine is necessary in
order to obtain an exemption for or to qualify the Securities for sale to the
Buyers at the Closing pursuant to this Agreement under applicable securities or
“Blue Sky” laws of the states of the United States (or to obtain an exemption
from such qualification), and shall provide evidence of any such action so taken
to the Buyers on or prior to the Closing Date. The

 

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Company shall make all filings and reports relating to the offer and sale of the
Securities required under applicable securities or “Blue Sky” laws of the states
of the United States following the Closing Date.

(c) Reporting Status. Until the date on which the Buyers shall have sold all the
Warrant Shares and none of the Warrants is outstanding (the “Reporting Period”),
the Company shall file all reports required to be filed with the SEC pursuant to
the 1934 Act in the time frames required by and in compliance with the 1934 Act,
the Company shall not terminate its status as an issuer required to file reports
under the 1934 Act even if the 1934 Act or the rules and regulations thereunder
would otherwise permit such termination.

(d) Use of Proceeds. The Company will use the proceeds from the sale of the
Securities for working capital and general corporate purposes.

(e) Listing. The Company shall promptly secure the listing of all of the
Purchased Shares and Warrant Shares upon each national securities exchange and
automated quotation system, if any, upon which the Common Stock is then listed
(subject to official notice of issuance) and shall maintain such listing of all
Warrant Shares from time to time issuable under the terms of the Transaction
Documents. The Company shall use its best efforts to maintain the Common Stocks’
authorization for quotation on the Principal Market. Neither the Company nor any
of its Subsidiaries shall take any action which would be reasonably expected to
result in the delisting or suspension of the Common Stock on the Principal
Market. The Company shall pay all fees and expenses in connection with
satisfying its obligations under this Section 4(f).

(f) Fees. Subject to Section 8 below, at the Closing, the Company shall
reimburse HBK Master Fund L.P. (a Buyer) for its reasonable expenses incurred in
connection with this Agreement and the Transaction Documents, including, without
limitation, reasonable legal fees and expenses, up to a maximum of $50,000,
which amount shall be withheld by such Buyer from its Purchase Price at the
Closing. The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, or broker’s commissions (other than for
Persons engaged by any Buyer) relating to or arising out of the transactions
contemplated hereby, including, without limitation, any fees or commissions
payable to the Agent. The Company shall pay, and hold each Buyer harmless
against, any liability, loss or expense (including, without limitation,
reasonable attorney’s fees and out-of-pocket expenses) arising in connection
with any claim relating to any such payment. Except as otherwise set forth in
the Transaction Documents, each party to this Agreement shall bear its own
expenses in connection with the sale of the Securities to the Buyers.

(g) Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged by a Purchaser in connection with a bona fide margin
agreement or other loan or financing arrangement that is secured by the
Securities. The pledge of Securities shall not be deemed to be a transfer, sale
or assignment of the Securities hereunder, and no Investor effecting a pledge of
Securities shall be required to provide the Company with any notice thereof or
otherwise make any delivery to the Company pursuant to this Agreement or any
other Transaction Document; provided that an Investor and its pledgee shall be
required to comply with the provisions of the 1933 Act in order to effect a
sale, transfer or assignment of

 

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Securities to such pledgee. The Company hereby agrees to execute and deliver
such documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by an Investor.

(h) Disclosure of Transactions and Other Material Information. On or before 8:30
a.m., New York time, on March 7, 2006, the Company shall issue a press release
reasonably acceptable to the Buyers disclosing all material terms of the
transactions contemplated hereby. On or before 8:30 a.m., New York Time, on the
second Business Day following the date of this Agreement, the Company shall file
a Current Report on Form 8-K describing the terms of the transactions
contemplated by the Transaction Documents in the form required by the 1934 Act
and attaching the material Transaction Documents (including, without limitation,
this Agreement (and all schedules to this Agreement) and the form of Warrant)
(including all attachments, the “8-K Filing”). From and after the filing of the
8-K Filing with the SEC, no Buyer shall be in possession of any material,
nonpublic information received from the Company, any of its Subsidiaries or any
of its respective officers, directors, employees or agents, that is not
disclosed in the 8-K Filing. The Company shall not disclose the identity of any
Buyer in any filing with the SEC except as required by the rules and regulations
of the SEC thereunder. The Company shall not, and shall cause each of its
Subsidiaries and its and each of their respective officers, directors, employees
and agents, not to, provide any Buyer with any material, nonpublic information
regarding the Company or any of its Subsidiaries from and after the filing of
the 8-K Filing with the SEC without the express written consent of such Buyer.
In the event of a breach of the foregoing covenant by the Company, any of its
Subsidiaries, or any of its or their respective officers, directors, employees
and agents, in addition to any other remedy provided herein or in the
Transaction Documents, a Buyer shall notify the Company, and if the Company does
not make public disclosure of such material nonpublic information within twenty
four (24) hours of such notification, such Buyer shall have the right to make a
public disclosure, in the form of a press release, public advertisement or
otherwise, of such material, nonpublic information without the prior approval by
the Company, its Subsidiaries, or any of its or their respective officers,
directors, employees or agents. No Buyer shall have any liability to the
Company, its Subsidiaries, or any of its or their respective officers,
directors, employees, stockholders or agents for any such disclosure. Subject to
the foregoing, neither the Company nor any Buyer shall issue any press releases
or any other public statements with respect to the transactions contemplated
hereby; provided, however, that the Company shall be entitled, without the prior
approval of any Buyer, to make any press release or other public disclosure with
respect to such transactions (i) in substantial conformity with the 8-K Filing
and contemporaneously therewith and (ii) as is required by applicable law and
regulations (provided that in the case of clause (i) each Buyer shall be
consulted by the Company in connection with any such press release or other
public disclosure prior to its release).

(i) Dilutive Issuances. For long as any Warrants remain outstanding, the Company
shall not, in any manner, enter into or affect any Dilutive Issuance (as defined
in the Warrants) if the effect of such Dilutive Issuance is to cause the Company
to be required to issue upon exercise of any Warrant any shares of Common Stock
in excess of that number of shares of Common Stock which the Company may issue
upon exercise of the Warrants without breaching the Company’s obligations under
the rules or regulations of the Eligible Market (as defined in the Warrants).
Until the Stockholder Approval has been obtained, the Company shall not, in any
manner, enter into or affect any Dilutive Issuance if the effect of such
Dilutive Issuance would,

 

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but for the application of the Exercise Floor Price (as defined in the Warrant)
cause the Exercise Price (as defined in the Warrant) to be reduced below the
Exercise Floor Price.

(j) Corporate Existence. So long as any Buyer beneficially owns any Securities,
the Company shall not be party to any Fundamental Transaction (as defined in the
Warrants) unless the Company is in compliance with the applicable provisions
governing Fundamental Transactions set forth in the Warrants.

(k) Reservation of Shares. The Company shall take all action necessary to at all
times have authorized, and reserved for the purpose of issuance, after the
Closing Date, 120% of the number of shares of Common Stock issuable upon
exercise of the Warrants.

(l) Conduct of Business. The business of the Company and its Subsidiaries shall
not be conducted in violation of any law, ordinance or regulation of any
governmental entity, except where such violations would not result, either
individually or in the aggregate, in a Material Adverse Effect.

(m) Additional Issuances of Securities.

(i) For purposes of this Section 4(m), the following definitions shall apply.

(1) “Convertible Securities” means any stock or securities (other than Options)
convertible into or exercisable or exchangeable for shares of Common Stock.

(2) “Options” means any rights, warrants or options to subscribe for or purchase
shares of Common Stock or Convertible Securities.

(3) “Common Stock Equivalents” means, collectively, Options and Convertible
Securities.

(ii) From the date hereof until the date that is 30 Business Days following the
date hereof, other than in connection with the issuance of any Excluded
Securities (as defined in the Warrants), the Company will not, directly or
indirectly, offer, sell, grant any option to purchase, or otherwise dispose of
(or announce any offer, sale, grant or any option to purchase or other
disposition of) any of its or its Subsidiaries’ equity or equity equivalent
securities, including without limitation any debt, preferred stock or other
instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for shares of
Common Stock or Common Stock Equivalents (any such offer, sale, grant,
disposition or announcement being referred to as a “Subsequent Placement”).

(n) Stockholder Approval. The Company shall provide each stockholder entitled to
vote at a special or annual meeting of shareholders of the Company (the
“Stockholder Meeting”), which initially shall be promptly called and held not
later than October 15, 2006 (the “Stockholder Meeting Deadline”), a proxy
statement, substantially in the form which has been previously reviewed by the
Buyers and a counsel of their choice at the expense of the Company, soliciting
each such stockholder’s affirmative vote at the Stockholder Meeting for approval
of

 

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resolutions (the “Resolutions”) providing for the Company’s issuance of all of
the Securities as described in the Transaction Documents in accordance with
applicable law and the rules and regulations of the Principal Market (such
affirmative approval being referred to herein as the “Stockholder Approval” and
the date such approval is obtained, the “Stockholder Approval Date”), and the
Company shall use its reasonable best efforts to solicit its stockholders’
approval of the Resolutions and to cause the Board to recommend to the
stockholders that they approve the Resolutions. The Company shall be obligated
to seek to obtain the Stockholder Approval by the Stockholder Meeting Deadline.
If, despite the Company’s reasonable best efforts the Stockholder Approval is
not obtained on or prior to the Stockholder Meeting Deadline, the Company shall
cause an additional Stockholder Meeting to be held each twelve month period
thereafter until such Stockholder Approval is obtained, provided that if the
Board does not recommend to the stockholders that they approve the Resolutions
at any such Stockholder Meeting and the Stockholder Approval is not obtained the
Company shall cause an additional Stockholder Meeting to be held each calendar
quarter thereafter until such Stockholder Approval is obtained.

5. REGISTER; TRANSFER AGENT INSTRUCTIONS.

(a) Register. The Company shall maintain at its principal executive offices (or
such other office or agency of the Company as it may designate by notice to each
holder of Securities), a register for the Warrants in which the Company shall
record the name and address of the Person in whose name the Warrants have been
issued (including the name and address of each transferee) and the number of
Warrant Shares issuable upon exercise of the Warrants held by such Person. The
Company shall keep the register open and available at all times during business
hours for inspection of any Buyer or its legal representatives.

(b) Transfer Agent Instructions. The Company shall issue irrevocable
instructions to the Transfer Agent, and any subsequent transfer agent, to issue
certificates or credit shares to the applicable balance accounts at DTC,
registered in the name of each Buyer or its respective nominee(s), for the
Warrant Shares in such amounts as specified from time to time by each Buyer to
the Company upon exercise of the Warrants in the form of Exhibit B attached
hereto (the “Irrevocable Transfer Agent Instructions”). The Company represents
and warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5 will be given by the Company to the
Transfer Agent, and any subsequent transfer agent with respect to the
Securities, and that the Securities shall otherwise be freely transferable on
the books and records of the Company as and to the extent provided in this
Agreement and the other Transaction Documents. The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable harm to a
Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach
of its obligations under this Section 5 will be inadequate and agrees, in the
event of a breach or threatened breach by the Company of the provisions of this
Section 5, that a Buyer shall be entitled, in addition to all other available
remedies, to an order and/or injunction restraining any breach and requiring
immediate issuance and transfer, without the necessity of showing economic loss
and without any bond or other security being required.

 

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6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

Closing Date. The obligation of the Company hereunder to issue and sell the
Purchased Shares and the related Warrants to each Buyer at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for the Company’s sole
benefit and may be waived by the Company at any time in its sole discretion by
providing each Buyer with prior written notice thereof:

(i) Such Buyer shall have executed each of the Transaction Documents to which it
is a party and delivered the same to the Company.

(ii) Such Buyer and each other Buyer shall have delivered to the Company the
Purchase Price (less, in the case of HBK Master Fund L.P., the amounts withheld
pursuant to Section 4(g)) for the Purchased Shares and the related Warrants
being purchased by such Buyer at the Closing by wire transfer of immediately
available funds pursuant to the wire instructions provided by the Company.

(iii) The representations and warranties of such Buyer shall be true and correct
in all material respects (except for those representations and warranties that
are qualified by materiality or Material Adverse Effect, which shall be true and
correct in all respects) as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date), and such Buyer shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by such
Buyer at or prior to the Closing Date.

7. CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.

Closing Date. The obligation of each Buyer hereunder to purchase the Purchased
Shares and the related Warrants at the Closing is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided
that these conditions are for each Buyer’s sole benefit and may be waived by
such Buyer at any time in its sole discretion by providing the Company with
prior written notice thereof:

(i) The Company shall have (A) executed and delivered to such Buyer each of the
Transaction Documents, (B) electronically delivered the Purchased Shares being
purchased by such Buyer at the Closing pursuant to this Agreement, and
(C) executed and delivered the Warrants (in such amounts as such Buyer shall
request) being purchased by such Buyer at the Closing pursuant to this
Agreement.

(ii) Such Buyer shall have received the opinions of Wilson Sonsini Goodrich &
Rosati, Professional Corporation, the Company’s outside counsel, dated as of the
Closing Date, in form reasonably acceptable to the Buyers.

(iii) The Company shall have delivered to such Buyer a copy of the Irrevocable
Transfer Agent Instructions, in the form of Exhibit B attached hereto, which
instructions shall have been delivered to and acknowledged in writing by the
Company’s transfer agent.

 

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(iv) The Company shall have delivered to such Buyer a certificate evidencing the
formation and good standing of the Company and each of its Subsidiaries in such
entity’s jurisdiction of formation issued by the Secretary of State (or
comparable office) of such jurisdiction, as of a date within 10 days of the
Closing Date.

(v) The Company shall have delivered to such Buyer a certificate evidencing the
Company’s qualification as a foreign corporation and good standing issued by the
Secretary of State (or comparable office) of each jurisdiction in which the
Company conducts business, as of a date within 10 days of the Closing Date.

(vi) The Company shall have delivered to such Buyer a certified copy of the
Certificate of Incorporation as certified by the Secretary of State of the State
of Delaware within ten (10) days of the Closing Date.

(vii) The Company shall have delivered to such Buyer a certificate, executed by
the Secretary of the Company and dated as of the Closing Date, as to (i) the
resolutions consistent with Section 3(b) as adopted by the Board in a form
reasonably acceptable to such Buyer, (ii) the Certificate of Incorporation and
(iii) the Bylaws, each as in effect at the Closing, in the form attached hereto
as Exhibit C.

(viii) The representations and warranties of the Company shall be true and
correct in all material respects (except for those representations and
warranties that are qualified by materiality or Material Adverse Effect, which
shall be true and correct in all respects) as of the date when made and as of
the Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Closing Date. Such
Buyer shall have received a certificate, executed by the Chief Executive Officer
of the Company, dated as of the Closing Date, to the foregoing effect and as to
such other matters as may be reasonably requested by such Buyer in the form
attached hereto as Exhibit D.

(ix) The Company shall have delivered to such Buyer a letter from the Company’s
transfer agent certifying the number of shares of Common Stock outstanding as of
a date within five days of the Closing Date.

(x) The Common Stock (I) shall be designated for quotation or listed on the
Principal Market and (II) shall not have been suspended, as of the Closing Date,
by the SEC or the Principal Market from trading on the Principal Market nor
shall suspension by the SEC or the Principal Market have been threatened, as of
the Closing Date, either (A) in writing by the SEC or the Principal Market or
(B) by falling below the minimum listing maintenance requirements of the
Principal Market.

(xi) The Company shall have obtained all governmental, regulatory or third party
consents and approvals, if any, necessary for the sale of the Securities,
including, without limitation, any approvals or notifications required by the
Principal Market.

 

19

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(xii) The Poison Pill Amendment shall have been executed by the Transfer Agent,
as Rights Agent thereunder, and shall be in full force and effect.

(xiii) The Principal Market shall not have raised any objections requiring any
material amendment, in the discretion of the Buyers, to any of the Transaction
Documents.

(xiv) The Company shall have delivered to such Buyer such other documents
relating to the transactions contemplated by this Agreement as such Buyer or its
counsel may reasonably request.

8. TERMINATION. In the event that the Closing shall not have occurred with
respect to a Buyer on or before three (3) Business Days from the date hereof due
to the Company’s or such Buyer’s failure to satisfy the conditions set forth in
Sections 6 and 7 above (and the nonbreaching party’s failure to waive such
unsatisfied condition(s)), the nonbreaching party shall have the option to
terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party;
provided, however, this if this Agreement is terminated pursuant to this
Section 8, the Company shall remain obligated to reimburse the non-breaching
Buyers for the expenses described in Section 4(g) above.

9. MISCELLANEOUS.

(a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of Delaware, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of Delaware or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of Delaware. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the State of Delaware, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile signature shall be
considered due execution and shall be binding upon

 

20

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the signatory thereto with the same force and effect as if the signature were an
original, not a facsimile signature.

(c) Headings. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.

(d) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

(e) Entire Agreement; Amendments. This Agreement supersedes all other prior oral
or written agreements between the Buyers, the Company, their affiliates and
Persons acting on their behalf with respect to the matters discussed herein, and
this Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor any Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
amended other than by an instrument in writing signed by the Company and the
holders of at least a majority of the Purchased Shares (the “Required Holders”),
and any amendment to this Agreement made in conformity with the provisions of
this Section 9(e) shall be binding on all Buyers and holders of Securities, as
applicable. No provision hereof may be waived other than by an instrument in
writing signed by the party against whom enforcement is sought. No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the applicable Securities then outstanding. No consideration
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of any of the Transaction Documents unless the
same consideration also is offered to all of the parties to the Transaction
Documents or holders of the Warrants, as the case may be. The Company has not,
directly or indirectly, made any agreements with any Buyers relating to the
terms or conditions of the transactions contemplated by the Transaction
Documents except as set forth in the Transaction Documents.

(f) Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one Business Day after deposit with an overnight
courier service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

Avanex Corporation

409l9 Encyclopedia Circle

Fremont, California 94538

Telephone:     (510) 897-4188

Facsimile:       (510) 897-4189

Attention:       General Counsel

 

21

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Copy to:

Wilson, Sonsini, Goodrich & Rosati, P.C.

650 Page Mill Road

Palo Alto, CA 94304

Telephone:     (650) 493-9300

Facsimile:       (650) 493-6811

Attention:       Daniel J. Weiser, Esq.

                        Burke F. Norton, Esq.

If to the Transfer Agent:

EquiServe Trust Company, N.A.

250 Royall Street

Canton, MA 02021

Telephone:     (781) 575-3452

Facsimile:      (781) 575-2152

Attention:       Greg Veliotis

If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers, with copies to such Buyer’s representatives as set forth on the Schedule
of Buyers,

with a copy (for informational purposes only) to:

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Telephone:     (212) 756-2000

Facsimile:      (212) 593-5955

Attention:       Eleazer N. Klein, Esq.

or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or
(C) provided by an overnight courier service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from an overnight courier
service in accordance with clause (i), (ii) or (iii) above, respectively.

(g) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns,
including any purchasers of the Warrants. The Company shall not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Required Holders, including by way of a Fundamental Transaction
(unless the Company is in compliance with the applicable provisions governing
Fundamental Transactions set forth in the Warrants). A Buyer may assign some or
all of its rights hereunder without the consent of the Company, in which event
such assignee shall be deemed to be a Buyer hereunder with respect to such
assigned rights.

 

22

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(h) No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

(i) Survival. Unless this Agreement is terminated under Section 8, the
representations and warranties of the Company and the Buyers contained in
Sections 2 and 3 and the agreements and covenants set forth in Sections 4, 5 and
9 shall survive the Closing. Each Buyer shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.

(j) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

(k) Indemnification. (i) In consideration of each Buyer’s execution and delivery
of the Transaction Documents and acquiring the Securities thereunder and in
addition to all of the Company’s other obligations under the Transaction
Documents, the Company shall defend, protect, indemnify and hold harmless each
Buyer and each other holder of the Securities and all of their stockholders,
partners, members, officers, directors, employees and direct or indirect
investors and any of the foregoing Persons’ agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by
any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby or
(c) any cause of action, suit or claim brought or made against such Indemnitee
by a third party (including for these purposes a derivative action brought on
behalf of the Company) and arising out of or resulting from (i) the execution,
delivery, performance or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (ii) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Securities, (iii) any
disclosure made by such Buyer pursuant to Section 4(i), or (iv) the status of
such Buyer or holder of the Securities as an investor in the Company pursuant to
the transactions contemplated by the Transaction Documents. To the extent that
the foregoing undertaking by the Company may be unenforceable for any reason,
the Company shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law.

(ii) Promptly after receipt by an Indemnitee under this Section 9(k) of notice
of the commencement of any action or proceeding (including any governmental
action or

 

23

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proceeding) involving an Indemnified Liability, such Indemnitee shall, if a
claim for indemnification in respect thereof is to be made against any
indemnifying party under this Section 9(k), deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnitee; provided, however, that an Indemnitee
shall have the right to retain its own counsel with the fees and expenses of not
more than one counsel for such Indemnitee to be paid by the indemnifying party,
if, in the reasonable opinion of the Indemnitee, the representation by such
counsel of the Indemnitee and the indemnifying party would be inappropriate due
to actual or potential differing interests between such Indemnitee and any other
party represented by such counsel in such proceeding. Legal counsel referred to
in the immediately preceding sentence shall be selected by the Investors holding
at least a majority of the Purchased Shares. The Indemnitee shall cooperate
fully with the indemnifying party in connection with any negotiation or defense
of any such action or Indemnified Liabilities by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the Indemnitee that relates to such action or Indemnified Liabilities. The
indemnifying party shall keep the Indemnitee fully apprised at all times as to
the status of the defense or any settlement negotiations with respect thereto.
No indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent, provided, however, that
the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnitee, consent to entry of any judgment or enter into any settlement or
other compromise which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnitee of a release from all
liability in respect to such Indemnified Liabilities or litigation. Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnitee with respect to all third parties,
firms or corporations relating to the matter for which indemnification has been
made. The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnitee under this Section 9(k),
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action.

(iii) The indemnification required by this Section 9(k) shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills become due or Indemnified Liabilities become due.

(iv) The indemnity agreements contained herein shall be in addition to (x) any
cause of action or similar right of the Indemnitee against the indemnifying
party or others, and (y) any liabilities the indemnifying party may be subject
to pursuant to the law.

(l) No Strict Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

 

24

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(m) Remedies. Each Buyer and each holder of the Securities shall have all rights
and remedies set forth in the Transaction Documents and all rights and remedies
which such holders have been granted at any time under any other agreement or
contract and all of the rights which such holders have under any law. Any Person
having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law. Furthermore, the Company recognizes
that in the event that it fails to perform, observe, or discharge any or all of
its obligations under the Transaction Documents, any remedy at law may prove to
be inadequate relief to the Buyers. The Company therefore agrees that the Buyers
shall be entitled to seek temporary and permanent injunctive relief in any such
case without the necessity of proving actual damages and without posting a bond
or other security.

(n) Payment Set Aside. To the extent that the Company makes a payment or
payments to the Buyers hereunder or pursuant to any of the other Transaction
Documents or the Buyers enforce or exercise their rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other Person under any law (including, without limitation, any
bankruptcy law, foreign, state or federal law, common law or equitable cause of
action), then to the extent of any such restoration the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.

(o) Independent Nature of Buyers’ Obligations and Rights. The obligations of
each Buyer under any Transaction Document are several and not joint with the
obligations of any other Buyer, and no Buyer shall be responsible in any way for
the performance of the obligations of any other Buyer under any Transaction
Document. Nothing contained herein or in any other Transaction Document, and no
action taken by any Buyer pursuant hereto or thereto, shall be deemed to
constitute the Buyers as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Buyers are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. Each Buyer confirms that
it has independently participated in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Each Buyer
shall be entitled to independently protect and enforce its rights, including,
without limitation, the rights arising out of this Agreement or out of any other
Transaction Documents, and it shall not be necessary for any other Buyer to be
joined as an additional party in any proceeding for such purpose.

[Signature Page Follows]

 

25

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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

COMPANY: AVANEX CORPORATION

By:

      

Name:

Title:

[Signature Page to Securities Purchase Agreement]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

BUYERS: HBK MASTER FUND L.P.

By:

      

Name:

Title:

[Signature Page to Securities Purchase Agreement]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

BUYERS: FORT MASON MASTER, LP

By:

      

Name:

Title:

[Signature Page to Securities Purchase Agreement]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

BUYERS: FORT MASON PARTNERS, LP

By:

      

Name:

Title:

[Signature Page to Securities Purchase Agreement]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

BUYERS: CAPITAL VENTURES INTERNATIONAL

By:

      

Name:

Title:

[Signature Page to Securities Purchase Agreement]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

KINGS ROAD INVESTMENTS LTD.

By:

      

Name:

Title:

[Signature Page to Securities Purchase Agreement]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

BUYERS: PORTSIDE GROWTH AND OPPORTUNITY FUND

By:

      

Name:

Title:

[Signature Page to Securities Purchase Agreement]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

BUYERS: SF CAPITAL PARTNERS LTD.

By:

      

Name:

Title:

[Signature Page to Securities Purchase Agreement]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

BUYERS: GLG NORTH AMERICAN OPPORTUNITY FUND

By:

      

Name:

 

Title:

 

[Signature Page to Securities Purchase Agreement]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

BUYERS: GLG TECHNOLOGY FUND

By:

      

Name:

 

Title:

 

[Signature Page to Securities Purchase Agreement]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

BUYERS: GLG EUROPEAN OPPORTUNITY FUND

By:

      

Name:

 

Title:

 

[Signature Page to Securities Purchase Agreement]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

BUYERS: GLG CAPITAL APPRECIATION FUND

By:

      

Name:

 

Title:

 

[Signature Page to Securities Purchase Agreement]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

BUYERS: GLG NORTH AMERICAN EQUITY FUND

By:

      

Name:

 

Title:

 

[Signature Page to Securities Purchase Agreement]

--------------------------------------------------------------------------------

SCHEDULE OF BUYERS

 

(1)    (2)    (3)    (4)    (5)    (6)

Buyer

  

Address and

Facsimile Number

   Number of
Purchased
Shares   

Number of

Warrant
Shares

   Purchase Price   

Legal Representative’s Address and
Facsimile Number

HBK Master Fund L.P.   

c/o HBK Investments L.P.

300 Crescent Court, Suite 700

Dallas, TX 75201

Attn: Legal (PP)

Telephone: 214-758-6107

Facsimile: 214-758-1207

Residence: Cayman Islands

   7,500,000    2,250,000    $ 15,000,000.00   

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Attention: Eleazer Klein, Esq.

Facsimile: (212) 593-5955

Telephone: (212) 756-2376

Fort Mason Master, LP   

c/o Fort Mason Capital, LLC

456 Montgomery Street

22nd Floor

San Francisco, CA 94104

Attn: Marshall Jensen and

    KC Lynch

Telephone 415-249-3380

Facsimile 415-249-3389

Residence: Cayman Islands

   2,347,750    704,325    $ 4,695,500.00    Fort Mason Partners, LP   

c/o Fort Mason Capital, LLC

456 Montgomery Street

22nd Floor

San Francisco, CA 94104

Attn: Marshall Jensen and

    KC Lynch

Telephone 415-249-3380

Facsimile 415-249-3389

Residence: Delaware

   152,250    45,675    $ 304,500.00    Capital Ventures International   

c/o Heights Capital Management

101 California

Suite 3250

San Francisco, CA 94111

Attn: Sam Winer and Martin Kobinger

Telephone: 415-403-6500

Facsimile: 415-403-6525

Residence: Cayman Islands

   2,000,000    600,000    $ 4,000,000.00    Kings Road Investments Ltd.   

c/o Polygon Investment Partners LP

598 Madison Avenue

New York, NY 10128

Attn: Erik Caspersen and Brandon Jones

Telephone: (212) 359-7304

Facsimile: (212) 359-7303

Residence: Cayman Islands

   4,000,000    1,200,000    $ 8,000,000.00   

--------------------------------------------------------------------------------

Portside Growth and Opportunity Fund   

c/o Ramius Capital Group LLC

666 Third Avenue, 26th Floor

New York, NY 10017

Attn: Jeffrey Smith

Owen Littman

Telephone: 212-845-7955

Facsimile: 212-845-7999

Residence: Cayman Islands

   3,600,000    1,080,000    $ 7,200,000.00    SF Capital Partners Ltd.   

c/o Stark Offshore Management, LLC

3600 South Lake Drive

St. Francis, WI 53235

Attn: Brian Davidson

Telephone: (414) 294-7000

Facsimile: (414) 294-7700

Residence: British Virgin Islands

   2,250,000    675,000    $ 4,500,000.00    GLG North American Opportunity Fund
  

Walker House

PO Box 908 GT

George Town, Grand Cayman Caymand Islands

Residence: Cayman Islands

 

with copy to:

 

GLG Partners LP

One Curzon Street

London W1J 5HB

Attn: Tim Kuschill

Telephone: 020 7016 7439

Facsimile: 020 7408 4379

   921,500    276,450    $ 1,843,000.00    GLG Technology Fund   

c/o Mastack Trust Limited

30 Herbert Street

Dublin 2, Ireland

Residence: Cayman Islands

 

with copy to:

 

GLG Partners LP

One Curzon Street

London W1J 5HB

Attn: Tim Kuschill

Telephone: 020 7016 7439

Facsimile: 020 7408 4379

   315,000    94,500    $ 630,000.00    GLG European Opportunity Fund   

c/o Mastack Trust Limited

30 Herbert Street

Dublin 2, Ireland

Residence: Cayman Islands

 

with copy to:

 

GLG Partners LP

One Curzon Street

London W1J 5HB

Attn: Tim Kuschill

Telephone: 020 7016 7439

Facsimile: 020 7408 4379

   48,500    14,550    $ 97,000.00   

--------------------------------------------------------------------------------

GLG Capital Appreciation Fund   

c/o Mastack Trust Limited

30 Herbert Street

Dublin 2, Ireland

Residence: Ireland

 

with copy to:

 

GLG Partners LP

One Curzon Street

London W1J 5HB

Attn: Tim Kuschill

Telephone: 020 7016 7439

Facsimile: 020 7408 4379

   550,000    165,000    $ 1,100,000.00    GLG North American Equity Fund   

c/o Mastack Trust Limited

30 Herbert Street

Dublin 2, Ireland

Residence: Ireland

 

with copy to:

 

GLG Partners LP

One Curzon Street

London W1J 5HB

Attn: Tim Kuschill

Telephone: 020 7016 7439

Facsimile: 020 7408 4379

   390,000    117,000    $ 780,000.00                      TOTAL    24,075,000
   7,222,500    $ 48,150,00.00