Exhibit 10.42

[Translation – For Reference Purposes Only]

 

Revenue Stamp

100,000 yen

 

Branch number

 

Client number

 

Transaction number

 

367

 

0385035

 

 

Loan Agreement

Date: February 25, 2015

 

To: The Bank of Tokyo-Mitsubishi UFJ, Ltd.:

 

 

 

Address:
NeoPhotonics Semiconductor GK
550-10, Higashi-asakawamachi, Hachioji-shi, Tokyo

#409, Yu To Sang Building, 37 Queen’s Rd Central,
Hong Kong Special Administrative Region of the People’s Republic of China

Obligor:
Representative Member: NeoPhotonics Corporation Limited
Executive Officer: Lucas Oliver-Frost

 

(Seal)

 

 

 

 

 

 

 

Address

Joint and Several Guarantor

 

(Seal)

 

 

 

 

 

 

 

Address

Joint and Several Guarantor

 

(Seal)

Obligor enters into this Loan Agreement with the Bank pursuant to the following
terms and conditions after examining and approving the terms and conditions of
the Banking Transaction Agreement separately submitted to the Bank.

Article 1 (Loan)

Obligor borrowed the following money from the Bank.

 

1

Borrowing: 500,000,000 yen

2

Purpose of funds

Operation fund

3

Interest rate

As set forth in the separate Special Agreement %/year

Penalty rate

14%/year

(Affix yen sign (\) before amount)

 

(Prorated at 365 days per year)

4

Repayment method

(1) First and last payments are as shown below.

First repayment date:

First repayment amount:

 

Final repayment deadline:

February 23, 2018

Final repayment amount 500,000,000 yen

 

 

(2) Second and subsequent repayments (excluding final repayment) are shown
below.

 

 

2nd repayment date:

 

2nd repayment amount:

(iii)

Repayment period:

Repayment interval:

Amount per repayment:

 

 

 

 

 

 

 

 

 

 

(iv)

Repayment period: Until _____

Repayment interval: ___ months

Amount per repayment ________ yen

(v)

Repayment period: Until _____

Repayment interval: ___ months

Amount per repayment _______ yen

 

 

 

 

 

 

 

 

 

(vi)

Repayment period: Until _____

Repayment interval: ___ months

Amount per repayment ________ yen

(vii)

Repayment period: Until _____

Repayment interval: ___ months

Amount per repayment _______ yen

 

 

 

 

 

 

 

 

 

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[Translation – For Reference Purposes Only]

 

(viii)

Repayment period: Until _____

Repayment interval: ___ months

Amount per repayment ________ yen

(ix)

Repayment period: Until _____

Repayment interval: ___ months

Amount per repayment _______ yen

 

 

 

 

 

 

 

 

 

(x)

Repayment period: Until _____

Repayment interval: ___ months

Amount per repayment ________ yen

(xi)

Repayment period: Until _____

Repayment interval: ___ months

Amount per repayment _______ yen

 

 

(3)    The repayment date for (2) above shall be the last day of the month.

 

 

(4)     In the event that the repayment date in (1) or (2) above is a holiday,
the following day shall be the repayment date.  In such case, if the business
day following the holiday falls on the following month, the repayment date shall
be the business day prior to such holiday.

5

Method of interest payment

(1)     The interest payment date shall be March 31, 2015, the anniversary date
in each month of the day set out in (3) above, and the final repayment
deadline.  The interest for the period commencing on the date following the
previous interest payment date (as for the initial interest payment, the
borrowing date) and ending on each interest payment date shall be paid in
arears.

 

 

(2)    The handling of holidays on interest payment dates shall be as set forth
in (4) above.

 

6

Repayment account

Branch:
Hachioji Branch

Title:
Ordinary

Account number:
0494084

Account holder:
Obligor

 

 

 

 

 

 

Inspection

Performed by

Seal confirmation

 

 

 

 

 

 

 

 

 

 

 

7

Guarantee from credit guarantee association

[__________] Credit Guaranty Association

Guarantee No.

 

Number 155-000177650

Date 27/02/23 13:17:31

Article 2 (Partial advance repayment)

If Obligor makes advance repayment on a portion of the loan, it shall continue
the repayment according to the prepayment method set forth in Article 1
thereafter, and the final repayment shall be advanced accordingly absent
specific requests to the contrary.

Article 3 (Withdrawal of principal and interest from deposit account)

(A)

The Bank is requested to withdraw the principal to be paid by Obligor from the
repayment account set forth in Article 1.6 on the contracted repayment date and
allocate that amount to repayment.

1)

In this handling, the submission of checks, savings or general account pass
books, or payment requests shall be omitted regardless of provisions in the
current account rules, savings deposit rules, or general account transaction
rules.

2)

In the event that payment funds in the repayment account are less than the
amount of payment on the repayment date, the Bank may take the same procedures
on any subsequent date as soon as the funds in the account reaches the amount of
payment.

(B)

Interest, delinquency charge, and all other deductions associated with the
borrowing may be withdrawn from the repayment account under the procedures set
forth in (A) of this article.

(C)

The instructions of the Bank shall be followed when using methods other than (A)
and (B) in this article.

Article 4 (Allocation of expense)

Obligor shall bear all expenses required for the creation of this document, the
document set forth in Article 6, the disposal of collateral, and all other
actions associated with this agreement.

2

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[Translation – For Reference Purposes Only]

Article 5 (Guarantee)

1)

Guarantor shall be jointly and severally liable with Obligor for all obligations
incurred by Obligor under this agreement, and shall adhere to the terms and
provisions of the Banking Transaction Agreement separately submitted by Obligor
and this agreement in performance of said obligations.

2)

Guarantor shall not claim waiver as a result of change or release of other
collateral or guarantees for the purposes of the Bank.

3)

Guarantor shall not use deposits of Obligor with the Bank or other claims
against the Bank for the purpose of offsetting.

4)

In the event that Guarantor obtains any right from the Bank by subrogation as a
result of its performance of guarantee obligation, Guarantor shall not exercise
such rights without consent of the Bank as long as transactions continue between
Obligor and the Bank. Guarantor shall transfer said right or priority to the
Bank free of charge when so requested by the Bank.

5)

Absent specific provisions to the contrary, in the event that Guarantor makes
other guarantees in addition to the guarantee of the obligations of Obligor to
the Bank, the total guarantee amount shall be the total of these guarantees and
this guarantee shall not be influenced by any other guarantee.

Article 6 (Preparation of notarial deed)

Obligor and Guarantor shall take all procedures necessary to create a notarial
deed consenting to compulsory execution of judgment of obligations under this
agreement when so requested by the Bank.

End of document

 

(Seal)

(Special provisions)

 

 

Reference:

Interest shall be calculated according to the following formula for both
ordinary years and leap years

Principal (interest levied against units of 100 yen) x number of days x
annualized interest rate/365 = Interest (rounded off to the nearest 1 yen)

 

 

 

3

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Shop Number: 367

Customer Number: 0385035

Transaction Number:

Please attach a revenue stamp.

 

200 yen

 

Special Agreement

February 25, 2015

To: The Bank of Tokyo-Mitsubishi UFJ, Ltd.

 

Debtor

Address

 

 

 

 

 

 

Name

NeoPhotonics Semiconductor GK

550-10, Higashi-asakawamachi, Hachioji-shi, Tokyo

 

#409, Yu To Sang Building, 37 Queen’s Rd Central,

Hong Kong Special Administrative Region of the People’s Republic of China

 

Representative Member: NeoPhotonics Corporation Limited

Executive Officer: Lucas Oliver-Frost,

 

 

Joint and Several Guarantor

 

 

 

Address

 

Name

 

 

Joint and Several Guarantor

 

 

 

Address

 

Name

 

 

This Special Agreement is made and entered into as provided in the following in
connection with the borrowing advanced by The Bank of Tokyo-Mitsubishi UFJ, Ltd.
(hereinafter referred to as the “Bank”) under the Loan Agreement dated February
25, 2015 (hereinafter referred to as the “Borrowing”). This Special Agreement
supplements the terms and conditions of the Loan Agreement. In case of any
inconsistency between the provisions of the Loan Agreement and this Special
Agreement, the provisions of this Special Agreement shall prevail.

1. Applicable Rate of Interest

(1)

The applicable rate of interest shall be the base interest rate specified in
paragraph (2) below on the day two bank business days prior to the date of loan
or the date of review of the interest rate plus annual rate of 1.40%, and the
rate shall be calculated on the prorated daily basis assuming 365-day a year.

(2)

The base interest rate shall be the rate for the Japanese yen displayed on page
58143 of the REUTERS screen by the Bank depending on the period of interest rate
specified in Section 2 hereof. Provided, however, that in case the period from
the date of loan to the following date of review of the interest rate does not
conform to the period of interest rate specified in Section 2, the base rate
shall be the rate reasonably determined by the Bank depending on the period
based on the offered rates on the funds provided in borrowing and lending
transactions for yen funds in the financial market. If the aforementioned page
is not displayed for any reason, the base rate shall be the rate displayed on
the succeeding or alternative page under the same service.

2. Period of Interest Rate

The period of interest rate shall be one month, and the applicable rate of
interest shall be reviewed for each such period pursuant to Section 1 hereof.

 

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Shop Number: 367

Customer Number: 0385035

Transaction Number:

3. Prepayment

It is hereby acknowledged and agreed that the Debtor shall not be permitted to
make any down payment or prepayment for the Borrowing outside the terms and
conditions of the Loan Agreement. Provided, however, that in case the Debtor
makes down payment or prepayment outside the terms and conditions of the Loan
Agreement for any unavoidable reason with prior approval of the Bank, the Debtor
shall pay the prepayment penalty prescribed in Section 4 hereof immediately upon
demand of the Bank, in addition to the payment of the interest accrued up to the
prepayment date.

4. Prepayment Penalty

The amount of the prepayment penalty shall be calculated according to the
following formula; provided, however, that no prepayment penalty shall be
payable if the result of the calculation based on such formula is negative
amount.

Amount of prepayment x (Market interest rate of the Borrowing*1 - Market
interest rate at the time of prepayment*2) x Remaining period (number of days)
at the time of prepayment*3 / 365 days

*1: Interest rate at which the Bank procures funds.

*2: Interest rate at which the Bank can reinvest funds in the market during the
remaining period.

*3: Period commencing on the prepayment date and ending on the following date of
review of the interest rate.

5. Acceleration

The prepayment penalty calculated pursuant to Section 4 shall be paid to the
Bank immediately upon demand of the Bank in the event that any and all
liabilities of the Debtor become immediately due and payable.

End of document

 

(TIBOR-based; Loan on deeds) [Spread]

For bank use

Inspection

seal

Performed

by

Seal

confirmation

 

Number 155-000177650*

Date 27/02/23 13:15:36

 

 

 

 

 

10002 12.05 (10Y)

 

 

 

 

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Revenue

Stamp

200 yen

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Asset-based finance)

Special Agreement

February 25, 2015

To The Bank of Tokyo-Mitsubishi UFJ, Ltd.:

 

Borrower

 

Address

550-10, Higashi-asakawamachi, Hachioji-shi, Tokyo

 

Name

NeoPhotonics Semiconductor GK

Representative Member: NeoPhotonics Corporation Limited

#409, Yu To Sang Building, 37 Queen’s Rd Central,
Hong Kong Special Administrative Region of the People’s Republic of China

 

Executive Officer: Lucas Oliver-Frost

NeoPhotonics Semiconductor GK (“Borrower” hereinafter) agrees with The Bank of
Tokyo-Mitsubishi UFJ, Ltd. (“Lender” hereinafter) to this Special Agreement with
respect to the loan of money from Lender to Borrower pursuant to the Original
Contract. This Special Agreement is in addition to the stipulations of the
Original Contract. Note that the Banking Transaction Agreement in effect between
Borrower and Lender (as amended; “Banking Transaction Agreement” hereinafter)
applies to the Loan.

Details

Article 1 (Definitions)

The following terms shall have the following meanings in this Special Agreement
unless the meaning is clearly different from the context. In addition, the terms
defined in Additional Provisions 1 and 2 shall have the meanings defined in
their respective documents unless the meaning is clearly different from the
context.

(1)

“Special Agreement on Interest” refers individually or collectively to Special
Agreement on Interest A and Special Agreement on Interest B.

(2)

“Special Agreement on Interest A” refers to the Special Agreement (on interest)
within Original Contract A.

(3)

“Special Agreement on Interest B” refers to the Special Agreement (on interest)
within Original Contract B.

(4)

“Accounting Statements” refers to the documents defined in 1) through 4) below
(refers to audited Accounting Statements when there is a duty under applicable
Laws and Regulations to audit Accounting Statements, or when Accounting
Statements are otherwise audited; Includes Reports when Borrower creates
Reports).

1)

Financial statements (the balance sheet and profit and loss statement defined in
Article 435.2 of the Companies Act and the non-consolidated statements of
changes in net assets and notes to specific items defined in Article 59.1 of the
Ordinance on Company Accounting) and Business Report for a business year as set
forth in Article 435.2 of the Companies Act, and their annexed detailed
statements

1

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2)

Temporary Financial Statements as set forth in Article 441.1 of the Companies
Act when they are created (the balance sheet on the Temporary Closing Date
defined in said paragraph, and the profit and loss statement for the period from
the first day of the business year to which the Temporary Closing Date belongs
until the Temporary Closing Date)

3)

Consolidated financial statements (refers to the consolidated balance sheet,
consolidated statements of income, consolidated statements of changes in net
assets and consolidated notes set forth in Article 61 of the Ordinance on
Company Accounting; and so in Subparagraph 3 below) for a business year as set
forth in Paragraph 1 of the Companies Act pursuant to Article 444.3 of the
Companies Act when they are required, and other consolidated financial
statements for a business year as set forth in Article 444.1 of the Companies
Act when they are created

4)

Actual consolidated and non-consolidated balance sheet, profit and loss
statement, statements of changes in net assets and notes to such financial
statements

(5)

“Agreement Term” refers individually and collectively to “Term of Original
Agreement A” and “Term of the Original Agreement B.”

(6)

“Original Contract” refers individually and collectively to “Original Contract
A” and “Original Contract B.”

(7)

“Term of Original Agreement A” refers to the period from February 25, 2015 to
the final repayment deadline set forth in Loan on Deed A.

(8)

“Term of the Original Agreement B” refers to the period from February 25, 2015
to the final repayment deadline set forth in Loan on Deed B.

(9)

“Loan on Deed” refers individually and collectively to “Loan on Deed A” and
“Loan on Deed B.”

(10)

“Loan on Deed A” refers to the loan agreement within Original Contract A.

(11)

“Loan on Deed B” refers to the loan agreement within Original Contract B.

(12)

“Subsidiaries and Affiliates” refers to “subsidiaries” and “affiliated
companies” as defined in Article 8 of “Ordinance on the Terminology, Forms, and
Presentation Methods of Financial Statements, etc.”

(13)

“Antisocial Force” refers to any person set forth in 1) through 9) below and any
person having a relationship set forth in 10) through 14) below.

1)

Organized crime group (refers to a group which potentially encourages violent or
unlawful acts by its members in an organized or habitual manner (including
members of constituent groups); and so throughout)

2)

Organized crime group member (refers to a member of an organized crime group;
and so throughout)

3)

Person for whom less than 5 years has elapsed since ceasing to be an organized
crime group member

4)

Organized crime group quasi-member (person with a relationship with an organized
crime group that is not an organized crime group member and who may potentially
use the threat of the organized crime group to commit violent or unlawful acts,
or person who provides funds, weapons or similar items to an organized crime
group or organized crime group member, or who otherwise cooperates or is
involved in the maintenance and operations of an organized crime group; and so
throughout)

5)

Company affiliated with organized crime group (company in which an organized
crime group member is effectively involved in management, company managed by an
organized crime group quasi-member or former organized crime group member that
provides funds to an organized crime group or company otherwise actively
cooperating with or involved with the maintenance or operations of an organized
crime group, or company making active use of an organized crime group in the
conduct of its business etc. and cooperating in the maintenance or operation of
the organized crime group)

6)

Corporate extortionist etc. (corporate extortionist, thug or other party that
potentially engages in violent, unlawful etc. acts in the pursuit of illicit
benefits from companies etc. and threatens the safety of civic life)

7)

Political racketeer (person or persons masquerading as a social or political
movement, potentially engages in violent or unlawful acts seeking illicit
benefits, and threatens the safety of civic life)

8)

Crime group specialized in intellectual crimes (group or individual other than
those listed in 1) through 7) that uses the influence of its relationship with
an organized crime group, or that has financial ties to an organized crime group
and serves as a structurally core member for illicit and illegal activities)

9)

Other parties similar to 1) through 8) above

2

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10)

Person deemed to be in a relationship in which its management is controlled by a
person described in 1) through 9) above (“Organized Crime Group Member etc.”
hereinafter)

11)

Person deemed to be in a relationship in which an Organized Crime Group Member
etc. is effectively involved in its management

12)

Person deemed to be in a relationship in which it improperly makes use of
Organized Crime Group Members etc. for the purpose of furthering its own illicit
gains or the illicit gains of third parties or for the purpose of inflicting
damage on a third party

13)

Person deemed to be in a relationship providing funds or benefits to an
Organized Crime Group Member etc.

14)

Officer or a person effectively involved in management of a company having
socially condemnable relationship with an Organized Crime Group Member etc.

(14)

“Reports” refers to the securities report, semiannual report, quarterly report,
extraordinary report and amendment report etc.

(15)

“Laws and Regulations” refers to treaties, laws, ordinances, orders, rules,
municipal ordinances, verdicts, decisions, arbitral awards, circulars,
guidelines and other legally or actually binding statutes.

(16)

“Loan” refers to a loan pursuant to the Original Contract and this Special
Agreement.

(17)

This “Special Agreement” refers to this document.

Article 2 (Purpose of use)

Borrower shall use the money raised in the Loan only for the Purpose set forth
in Additional Provision 2.

Article 3 (Repayment of principal and payment of interest)

1.

Borrower shall repay principal and pay interest on the Loan in accordance with
the provisions of the Original Contract.

2.

Notwithstanding the provisions of Article 3.1, the provisions of this Special
Agreement shall be followed in the event that this Special Agreement contains a
special agreement regarding repayment or the calculation of applicable interest.

Article 4 (Calculation and notice of asset valuation)

1.

Asset valuation shall be an amount determined as the Qualified Deposit Amount in
accordance with the provision of Article 4.2 (rounded down to the nearest 10,000
yen).

2.

The asset valuation shall be determined in accordance with the calculations made
by Lender on the asset valuation determination date.

3.

Lender shall notify Borrower of the asset valuation using the standard asset
valuation notice of Lender no later than Lender’s notification date arriving
immediately after the determination date.

4.

Even after determination pursuant to Article 4.2 or notice pursuant to Article
4.3, Lender may revise the conditions or scope (including the addition of
excluded assets) used to calculate asset valuation as set forth in Article 4.1
by giving notice to Borrower. In said circumstances, asset valuation shall be
determined according to calculations made under the revised conditions on a date
designated by Lender in the notice of revision.

Article 5 (Determination of asset valuation and its effect)

1.

Determination on whether Borrower satisfies the stipulations in Additional
Provision 3-1 shall be made until the performance in full of all obligations to
Lender under the Original Contract and this Special Agreement.

2.

The timing of determination pursuant to Articl 5.1 shall be as set forth in
Additional Provision 3-2.

3.

Determination made pursuant to Article 5.1 shall result in the effects set forth
in Additional Provision 3-3.

Article 6 (Repayment from designated account)

1.

Upon occurrence of any event of acceleration (including those set forth in the
Banking Transaction Agreement, and so throughout) at Borrower, Borrower shall
grant to Lender authority to withdraw arbitrary amounts from the designated
account

3

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regardless of any deposit rules for the designated account. Funds withdrawn
under said authority may be allocated to the repayment of the Loan or any other
obligation of Borrower to Lender at the discretion of Lender.

2.

Withdrawals from the designated account pursuant to Article 6.1 shall not
require the submission of a deposit passbook or deposit withdrawal form or the
issuance of a current account check from Borrower to Lender.

3.

Borrower shall maintain the designated account at its own expense until such
time as the performance in full of all obligations of Borrower to Lender under
the Original Contract and this Special Agreement.

Article 7 (Representations and warranties)

Borrower represents and warrants to Lender that all matters set forth in the
following items are true and accurate as at the date of execution of this
Special Agreement and the Compliance Report submission date set forth in Article
8.1.10 of this Special Agreement, and shall compensate Lender for all damages,
losses and expenses incurred by Lender in the event that said representations
and warranties are found to be untrue or inaccurate.

(1)

Borrower is legally established and existing under the laws of Japan.

(2)

Borrower has the capacity to hold rights and capacity to act required to execute
and perform the Original Contract and this Special Agreement, to perform all
agreements executed by Borrower, and to possess assets.

(3)

The execution and performance of the Original Contract and this Special
Agreement and all transactions pursuant to the Original Contract and this
Special Agreement by Borrower are acts within the scope of Borrower’s purposes,
and Borrower has completed in full all procedures required under Laws and
Regulations, Borrower’s Articles of Incorporation, and any other internal
bylaws.

(4)

The execution and performance of the Original Contract and this Special
Agreement and all transactions pursuant to the Original Contract and this
Special Agreement by Borrower (a) do not contravene Laws and Regulations binding
on Borrower; (b) do not contravene Borrower’s Articles of Incorporation or other
internal bylaws; and (c) do not breach agreements with third parties to which
Borrower is a party or which are binding on Borrower or Borrower’s assets.

(5)

The person signing or affixing official seals to the Original Contract and this
Special Agreement on behalf of Borrower is duly authorized to sign or affix
official seals to the Original Contract and this Special Agreement on behalf of
Borrower under all procedures required under Laws and Regulations Borrower’s
Articles of Incorporation, and other internal bylaws.

(6)

The Original Contract and this Special Agreement are legally and effectively
binding on Borrower, and Borrower can be compelled to perform them in accordance
with their terms and conditions.

(7)

The Accounting Statements created by Borrower are created in an accurate and
legal manner in accordance with generally accepted accounting standards in
Japan.

(8)

Subsequent to the conclusion of Borrower’s business year, no facts having or
potentially having a material adverse impact on the performance of duties under
the Original Contract and this Special Agreement by Borrower, including but not
limited to facts that adversely impact or reduce the business, assets, or
financial position of Borrower and its Subsidiaries and Affiliates as shown in
the Accounting Statements or other accounting documents for the accounting
period (Borrower’s accounting period is as set forth in Additional Provision 2)
have occurred.

(9)

There are no lawsuits, preservative procedures, compulsory execution of judgment
procedures, arbitrations, mediations, administrative procedures, or other
disputes in progress or potentially commencing that would have a material
adverse impact on the performance of duties by Borrower under the Original
Contract and this Special Agreement. In addition, bankruptcy, civil
rehabilitation, corporate reorganization, special liquidation or other similar
statutory bankruptcy procedures are not in progress nor is there the potential
for them to commence with respect to Borrower.

(10)

No event of acceleration has occurred or could potentially occur with respect to
Borrower.

(11)

Borrower has incurred no obligation in any form that would or would potentially
exert a material adverse impact on the performance of duties under the Original
Contract and this Special Agreement by Borrower.

(12)

All facts contained in all documents submitted by Borrower to Lender are true
and accurate on all material points, are not presented in a misleading manner,
and do not fail to disclose matters required to prevent misunderstandings in the
execution of the Original Contract and this Special Agreement by Lender. Matters
related to future forecasts included in these documents are forecast using
reasonable methods, and no facts that would or would potentially have a material
adverse impact on the forecast have occurred subsequent to the document
submission date.

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(13)

Borrower maintains all permits and licenses required to conduct its primary
businesses, and continues in business in compliance with all Laws and
Regulations.

(14)

Borrower does not constitute an Antisocial Force.

(15)

All matters set forth in Additional Provision 4.

Article 8 (Reporting items)

In addition to matters specified elsewhere in this Special Agreement, Borrower
shall at its own expense report the following matters to Lender until
performance in full of all obligations to Lender pursuant to the Original
Contract and this Special Agreement.

(1)

Borrower shall report immediately to Lender in writing upon occurrence or
potential occurrence of an event of acceleration with respect to any obligation
of Borrower.

(2)

Borrower shall report immediately to Lender in writing on the status of assets,
management or operations of Borrower or its Subsidiaries and Affiliates when so
requested by Lender, or shall provide all accommodation necessary for the
investigation thereof.

(3)

Borrower shall report immediately to Lender in writing upon occurrence or
potential occurrence of a material change in the assets, management or business
of Borrower or its Subsidiaries and Affiliates.

(4)

Borrower shall report immediately to Lender in writing upon commencement or
potential commencement of lawsuits, preservative procedures, compulsory
execution of judgment procedures, arbitration, mediation, administrative
procedures or other disputes that exert or potentially exert a material
influence on the performance of duties to Borrower under the Original Contract
and this Special Agreement.

(5)

Borrower shall immediately report to Lender in writing together with a copy of
the relevant order or notice upon receipt of an order or notice of provisional
attachment, preservative attachment, attachment, provisional disposition,
auction, procedures for collection of tax delinquency, or public sale of
Borrower’s assets.

(6)

Borrower shall report immediately to Lender in writing upon discovery that any
of the facts represented or warranted to Borrower in the Original Contract and
this Special Agreement had been untrue or inaccurate at the time of
representation or warranty, and upon occurrence or potential occurrence of
circumstances in which representations and warranties to Borrower in the
Original Contract and this Special Agreement become untruthful.

(7)

Borrower shall report immediately to Lender in writing upon occurrence or
potential occurrence of events at Borrower that violate the Original Contract,
this Special Agreement or other agreements with Lender.

(8)

Borrower shall submit to Lender the statements of accounts of Borrower set forth
in Additional Provision 2 for each accounting period on or prior to the
statement of accounts submission deadline set forth in Additional Provision 2.
However, in the event that Borrower creates Reports, Borrower shall, in lieu of
Accounting Statements, submit to Lender a copy of Reports in a timely manner
upon submission to the Director General of the relevant Local Finance Bureau. In
the event that Borrower makes electronic disclosure of Reports through an
electronic disclosure system for securities reports etc. and other disclosure
documents as set forth in the Financial Instruments and Exchange Act
(organization for the processing of electronic disclosure information as set
forth in Article 27-30-2 of the Financial Instruments and Exchange Act
(EDINET)), Borrower shall be deemed to have submitted a copy of Reports at the
time it furnishes notice of disclosure to Lender. In said circumstances,
Borrower shall submit a copy of Reports to Lender when so requested by Lender.

(9)

Borrower shall immediately report to Lender in writing in the event of changes
or potential changes to Accounting Statements or Reports submitted to Lender
pursuant to item (8) above (including but not limited to changes in the
calculation standards for any item in the Accounting Statements or Reports).

(10)

Borrower shall submit to Lender a Compliance Report in the format found in the
Annex by the Compliance Report submission deadline.

(11)

All matters set forth in Additional Provision 5.

5

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Article 9 (Approval matters)

Borrower shall obtain prior written approval of Lender for all of the following
matters until performance in full of all obligations to Lender under the
Original Contract and this Special Agreement.

(1)

Material change in Borrower’s Articles of Incorporation

(2)

Suspension, cessation, or disbandment of Borrower’s business

(3)

Merger, corporate split, share swap or transfer of shares, organizational change
under the Companies Act, transfer to a third party of all or a part of business
or important assets (including transfer in the form of asset securitization or a
sale and lease back arrangement etc.), leasing to a third party of all or a part
of operations, delegation of management, execution of an agreement under which
it shares all profit or loss from the business of another party, reduction of
capital stock, reduction of reserves, or acceptance of all or a part of the
important businesses or assets of a third party that would or would potentially
have the material adverse impact on the performance of duties under this Special
Agreement

(4)

Execution, modification or termination of an agreement to which Borrower is a
party and which would or would potentially have an adverse impact on the
performance of duties by Borrower under this Special Agreement

(5)

Change or cancellation of Borrower’s designated account

(6)

Other matters as set forth in Additional Provision 6

Article 10 (Compliance matters)

Borrower shall adhere to all of the following until performance in full of all
obligations to Lender under the Original Contract and this Special Agreement.

(1)

Borrower shall maintain all permits and licenses etc. required for the conduct
of its primary businesses, and shall continue in business in compliance with all
Laws and Regulations.

(2)

Borrower shall not change the nature of its primary businesses.

(3)

Borrower shall create accurate and legal Accounting Statements in accordance
with generally accepted accounting standards in Japan.

(4)

Borrower shall remit taxes without delay.

(5)

Unless specified to the contrary in applicable Laws and Regulations, Borrower
shall treat payments on all obligations under the Original Contract and this
Special Agreement with at least the same order of precedence and in no way
subordinate to any other unsecured and non-subordinated obligation (including
obligations for the uncollected portion after liquidation of security for a
secured loan).

(6)

Borrower shall not constitute an Antisocial Force.

(7)

Borrower shall not itself or through third parties acting on its behalf perform
any of the acts set forth in 1) through 5) below.

1)

Demands backed by violence

2)

Improper demands in excess of legal liability

3)

Use of threatening words or behavior or violent acts in transactions

4)

An act undermining the credibility or impairing the operations of Lender by
spreading rumors, or using fraudulent means or force

5)

Any other act similar to 1) through 4) above

(8)

Borrower shall comply with all matters set forth in Additional Provision 7.

Article 11 (Financial covenants)

1.

Borrower shall adhere to the financial covenants set forth in Additional
Provision 8-1 until the performance in full of all obligations to Lender under
the Original Contract and this Special Agreement.

2.

Determinations pursuant to Article 11.1 and durations of the determinations
shall be as set forth in Additional Provision 8-2.

3.

The effects set forth in Additional Provision 8-3 shall result from
determinations pursuant to Article 11.2.

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Article 12 (Acceleration)

1.

In addition to the matters set forth in Article 5.1 of the Banking Transaction
Agreement, in the event of any of the matters set forth in the following items,
any and all obligations of Borrower to Lender under the Original Contract and
this Special Agreement shall become immediately due and payable as a matter of
course without notice or warning from Lender, and Borrower shall immediately pay
the full amount of principal of the Loan (plus any accrued interest on the Loan)
and all monies for which payment duties have been incurred by Borrower to Lender
under the Original Contract and this Special Agreement, in a manner prescribed
by Lender.

(1)

Suspension of payment, filing of a petition by or against Borrower for
commencement of bankruptcy procedures, commencement of civil rehabilitation
procedures, commencement of corporate reorganization procedures, commencement of
special liquidation, commencement of other insolvency proceedings, or
commencement of any of said procedures

(2)

Resolution to dissolve or order to dissolve

(3)

Suspension of transactions by a bill clearinghouse

(4)

Issuance of an order or notice of provisional attachment, preservative
attachment or attachment with respect to Borrower’s deposit claims or other
claims against Lender

(5)

Occurrence of an automatic acceleration matter as set forth in Additional
Provision 9-1

2.

In addition to the matters set forth in Article 5.2 of the Banking Transaction
Agreement, in the event of any of the matters set forth in the following items,
any and all obligations of Borrower to Lender under the Original Contract and
this Special Agreement shall become immediately due and payable by demand of
Lender, and Borrower shall immediately pay the full amount of principal of the
Loan (plus any accrued interest on the Loan) and all monies for which payment
duties have been incurred by Borrower to Lender under the Original Contract and
this Special Agreement, in a manner prescribed by Lender.

(1)

Any fact represented or warranted by Borrower in this Special Agreement is found
to have been untrue or inaccurate at the time of the representation or warranty.

(2)

Borrower is in breach of any stipulation in this Special Agreement (excluding
Article 5.1 and Article 11.1).

(3)

Borrower is in default of performance of an obligation to Lender or a third
party other than the obligations under the Original Contract and this Special
Agreement, or Borrower incurs a guarantee obligations with respect to an
obligation incurred by a third party and fails to perform such obligation as
guarantor when required.

(4)

A bill or check issued by Borrower is dishonored for the first time.

(5)

Borrower suspends its business, becomes subject to a business suspension or
prohibition order from a competent government agency, or Lender reasonably
believes that such situation is likely.

(6)

A petition for special conciliation is filed by or against Borrower.

(7)

An event of acceleration by demand as set forth in Additional Provision 9-2 has
occurred

3.

In the circumstances set forth in the items of Article 12.2, any and all
obligations of Borrower to Lender under the Original Contract and this Special
Agreement shall become immediately due and payable assuming that Borrower has
received notices or documents from Lender at a time they would normally arrive,
in the event that such notices or documents fail to arrive or are delayed in
arrival due to failure of Borrower to notify Lender of a change in its address
or receive notices from Lender, or other cause attributable to Borrower.

4.

In the event of breach of a duty under the Original Contract or this Special
Agreement by Borrower such that Lender incurs damage or expenses, Borrower shall
compensate Lender for all damages or expenses incurred as claimed by Lender.

Article 13 (Fees)

1.

Borrower shall pay to Lender in a manner prescribed by Lender the scheme
structuring fee set forth under fees in Additional Provision 2 on the signing
date of this Special Agreement as compensation for the structuring by Lender of
the lending scheme for the Original Contract and this Special Agreement.

2.

In the event of the execution of the memoranda etc. in conjunction with
modifications of the Original Contract or this Special Agreement after execution
of this Special Agreement, Borrower shall pay to Lender in a manner prescribed
in the relevant memorandum the fee set forth in the relevant memoranda etc.

7

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3.

Borrower acknowledges and agrees that the scheme structuring fee (including the
fees set forth in Article 13.2) and any expenses deemed de facto interest under
the Interest Rate Restriction Act (Act No. 100 of 1954, as amended; “Interest
Rate Restriction Act” hereinafter) are paid as compensation for the service of
structuring and modifying the lending scheme, and confirms that Borrower cannot
claim from Lender refund of all or any part of fees paid by Borrower pursuant to
this article 13 in the event of termination of the Original Contract and this
Special Agreement by early termination or other means, or the termination of
either the Original Contract or this Special Agreement at the behest of
Borrower.

4.

Notwithstanding the provisions of Article 13.3, in the event of payment to
Lender of interest, fees or settlement amount pursuant to a Special Agreement on
Interest during the Agreement Term, any amount in excess of the maximum interest
rate designated by Lender pursuant to the Interest Rate Restriction Act or other
laws restricting interest (15% at the time of execution of this Special
Agreement) calculated according to the formula below for the settlement amount
shall be refunded by Lender.

[Formula]

Effective interest rate

= ((Total of interest, fees and settlement amount during the Agreement Term) x
365 days (366 days for leap years) x 100) / ((average borrowing balance during
the Agreement Term- fees during the Agreement Term- interest at time of first
Individual Loans during the Agreement Term) x Agreement Term (days))

Article 14 (Allocations of expenses)

Unless stipulated to the contrary in Laws and Regulations, Borrower shall bear
all expenses incurred for the creation, modification and amendment of this
Special Agreement (including attorney’s fees), all expenses for the securing and
execution of rights and the performance of duties by Lender pursuant to the
Original Contract and this Special Agreement (including attorney’s fees), and
all revenue stamp taxes and other similar taxes and public charges, etc.
remitted in conjunction with this Special Agreement and the Original Contract;
in the event that said expenses are paid by Lender on behalf of Borrower,
Borrower shall immediately pay said expenses to Lender upon claim by Lender.

Article 15 (Duty of confidentiality)

Borrower shall manage all matters associated with the Original Contract, this
Special Agreement and the Loan in strictest confidence and shall not disclose
them to third parties except when exercising rights under the Original Contract
and this Special Agreement.

Article 16 (General Provisions)

1.

In the event that a date stipulated in this Special Agreement is not a Bank
Business Day (refers to a date other than a bank holiday under the Laws and
Regulations of Japan, and so throughout this Special Agreement), the stipulated
date shall be the preceding Bank Business Day unless stipulated to the contrary
in the Original Contract.

2.

The Original Contract and this Special Agreement shall be governed by the laws
of Japan, and the Tokyo District Court shall have primary, exclusive agreed
jurisdiction over any dispute arising with respect to the Original Contract or
this Special Agreement.

3.

Any questions among the parties regarding the interpretation of the Original
Contract and this Special Agreement shall be resolved by the Borrower and Lender
as mutually agreeable in good-faith consultation.

Article 17 (Priority of this Special Agreement)

The application relationship of the provisions of this Special Agreement and the
Original Contract shall be as set forth in the following items.

(1)

In the event that a stipulation in this Special Agreement is inconsistent with
or contravenes a stipulation in the Original Contract, the stipulation in this
Special Agreement shall have priority in application.

(2)

For matters not stipulated in this Special Agreement, the stipulations of the
Original Contract shall be followed.

(3)

Matters not stipulated in either this Special Agreement or the Original Contract
shall be determined as mutually agreeable in good-faith consultation between
Borrower and Lender.

8

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Article 18 (Transfer of this Special Agreement)

1.

Borrower shall not transfer its status under the Original Contract and this
Special Agreement and its rights or duties with respect to these agreements
without written approval of Lender.

2.

Lender shall obtain prior approval of Borrower when transferring to a third
party its status as Lender under the Original Contract and this Special
Agreement. In said circumstances, Borrower shall not unreasonably refuse,
reserve or delay approval.

3.

Notwithstanding the provision of Article 18.2, Lender may transfer to a third
party any monetary credits held by Borrower under the Original Contract and this
Special Agreement by furnishing notice thereof to Borrower.

Article 19(Amendment of Agreement)

The Original Contract and this Special Agreement shall not be modified without
written agreement of Borrower and Lender.

Article 20 (Survival)

The stipulations of this Special Agreement shall survive and remain in force
after termination of this Special Agreement for any reason as long as Borrower
has a borrowing balance pursuant to the Original Contract and this Special
Agreement, but only to that extent.

IN WITNESS WHEREOF, one (1) original copy of this Special Agreement has been
created and retained by Lender. Borrower has received a copy thereof from
Lender.

 

 

 

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Additional Provisions

1.

Definitions (i)

“Trade Debtor” refers to a person having purchased goods or received services
from Borrower to whom none of the following apply.

(1)

A person for whom it is deemed appropriate under generally accepted accounting
standards to set aside reserves for the claim against the Trade Debtor in excess
of the maximum amount allocated to the allowance for doubtful accounts under
Article 52 of the Corporate Tax Act and Article 96 of the Order for Enforcement
of the Corporate Tax Act;

(2)

A person who is subject to suspension of payment, person for whom a petition for
bankruptcy, civil rehabilitation, corporate reorganization, special liquidation
or other similar legal proceeding has been filed, or a person for whom there is
cause or potential cause for petition for said legal proceeding;

(3)

A person who has resolved to dissolve or commenced liquidation procedures;

(4)

A person who is subject to dishonorment of a bill or check;

(5)

A person who is subject to public sale, disposition for delinquent taxes, or
other disposition under governmental authority;

(6)

A person who has commenced negotiations with obligors for private reorganization
or other similar measures;

(7)

A person who has received support from creditors or is deemed to require such
support;

(8)

A person for whom there is reasonable cause to be concerned about its
creditworthiness; or

(9)

A person who constitutes an Antisocial Force.

“Qualified Deposits” refers to actual deposits to the accounts receivable
collection account for claims against Trade Debtors that satisfy all the
following requirements.

(1)

The nature of the claim is not in violation of Laws and Regulations.

(2)

The claim results from the ordinary commercial transactions of Borrower (in
addition to domestic transactions, export transactions of Borrower as approved
by Lender) and is denominated in Japanese yen or a foreign currency (regardless
of the currency).

(3)

No delay of payment or other non-fulfillment of obligations has occurred, and no
reasonable ground exists to assume nonpayment or other non-fulfillment of
obligations on the payment deadline.

(4)

There is no defense of invalidation or nullification of claim, revocation,
discharge, offsetting or any other right of defense, and no other impediment to
receipt of the accounts receivable by Borrower.

(5)

The claim has been generated in accordance with the normal credit policies of
Borrower.

(6)

No issuance of a promissory note has been made or is planned to be made with
respect to the claim.

(7)

No transfer to third parties (including factoring), no establishment of pledge
rights, mortgage, or other collateral rights has occurred.

(8)

No lawsuit has been brought or petition for attachment, provisional attachment
or provisional disposition filed by a third party with respect to the claim.

“Qualified Deposit Amount” refers to the amount calculated by Lender on an asset
valuation determination date in accordance with the method of calculating
qualified deposits set forth in Additional Provision 2 as the amount of
Qualified Deposits for the deposit calculation base period.

10

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2.

Definitions (ii)

 

Original Contract A

Refers individually and collectively to the following agreements.

- Loan Agreement dated February 25, 2015

(Borrowing of 500,000,000 yen)

- Special Agreement (on interest) dated February 25, 2015 regarding the
foregoing Loan Agreement.

Original Contract B

Refers individually and collectively to the following agreements.

- Loan Agreement dated February 25, 2015

(Borrowing of 1,000,000,000 yen)

- Special Agreement (on interest) dated February 25, 2015 regarding the
foregoing Loan Agreement.

Purpose

Original Contract A: operating cash (including funds to make repayment to
theforeign parent company)

Original Contract B: equipment funding

Designated account

 

 

Deposit account for repayment:

The Bank of Tokyo-Mitsubishi UFJ, Ltd. Hachioji Branch

Type of bank account: Ordinary deposit

Account number: 0494084

 

Accounts receivable collection account:

The Bank of Tokyo-Mitsubishi UFJ, Ltd. Hachioji Branch

Type of bank account: Ordinary deposit

Account number: 0494084

 

The Bank of Tokyo-Mitsubishi UFJ, Ltd. Hachioji Branch

Type of bank account: Foreign currency ordinary deposit

Account number: 5458515

Borrower’s accounting period

Business year ends February (Business year: From March 1 to February 28 next
year)

* Accounting closing month of Borrower changes to December (Business year: From
January 1 to December 31) after the closing of accounts for FYE February 2015
onwards. The accounting period following FYE February 2015 is FYE December 2015.

Statements of accounts

 

Non-consolidated Accounting Statements

Copy of tax filing

Statement of accounts submission deadline

Within 3 months of the final day of the accounting period

(The first accounting period is for the year ending February 2015)

 

Compliance Report submission deadline

Within 3 months of the final day of the accounting period

(The first submission deadline is the end of May 2015)

 

Trial balance base date

Final day of each month *Excluding the accounting closing month.

(The first base date is the end of April 2015)

Trial balance submission deadline

Within 1 month of the base date

Table of Outstanding Borrowings by Financial Institution base date

Final day of each month

(The first base date is the end of April 2015)

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Table of Outstanding Borrowings by Financial Institution submission deadline

Within 1 month of the base date

 

Financial covenant determination date

3 months from the final day of the accounting period (the first determination
date is the end of May 2015)

 

Fees

The scheme structuring fee is 37,500,000 yen plus applicable consumption taxes
of 3,000,000 yen for a total of 40,500,000 yen

 

Ordinary trade debtors

Trade Debtors other than excluded persons

Excluded person

None specified as of the date of this Special Agreement (Deposits from
subsidiaries and affiliated companies based on ordinary commercial transactions
shall be included.).

Asset valuation determination date

 

 

The 15th of each month

(The Bank Business Day immediately after when that date is not a Bank Business
Day. The first determination date is December 15, 2015.)

Lender notification date

 

The 20th of each month

(The Bank Business Day immediately after when that date is not a Bank Business
Day. The first notification date is December 21, 2015.)

Deposit calculation base period

From the first day of the month 6 months prior to the asset valuation
determination date (regardless of whether that date is a Bank Business Day) to
the final day of the month 1 month prior to the determination date (regardless
of whether that date is a Bank Business Day)

Method of calculating qualified deposits

 

 

Aggregate of amounts calculated according to A) and B) below for each Trade
Debtor for Qualified Deposits made by each Trade Debtor. For purposes of
calculation, Qualified Deposits denominated in foreign currencies shall be
translated to Japanese yen again at a foreign exchange rate designated by Lender
for each month.

A) Ordinary Trade Debtors

Total Qualified Deposits from the Trade Debtor.

B) Trade Debtors constituting excluded persons

0 yen regardless of the Qualified Deposits from the Trade Debtor.

3.

Determination of asset valuations

3-1

Description of asset valuation determination

Asset valuation less than 1,000,000,000 yen

3-2

Timing of asset valuation determination

Determination to be made by Lender on the asset valuation determination date set
forth in Additional Provision 2.

3-3

Effects of asset valuation determination

If the determination satisfies the criteria set forth in Additional Provision
3-1, the Applicable Rate for the period from the day following the first
interest payment date arriving after the asset valuation determination date
(including that day) to the interest payment date arriving immediately after the
following asset valuation determination date (including that day) shall be as
calculated below regardless of the provisions of the Original Contract.

Applicable Rate set forth in the Original Contract +0.300%

12

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4.

Representations and warranties

(1)

All persons purchasing goods or receiving services from Borrower constitute
Trade Debtors.

(2)

Deposits resulting from the collection of claims against Trade Debtors by
Borrower are all Qualified Deposits if deposited to the accounts receivable
collection account among the designated accounts during the deposit calculation
base period.

5.

Reporting items

(1)

Borrower shall submit to Lender the trial balances (indicating claim/obligation
relationships between Borrower and its affiliated companies and in substance
satisfactory to lender) as of the trial balance base date set forth in
Additional Provision 2, on or prior to the trial balance submission deadline set
forth in Additional Provision 2.

(2)

Borrower shall submit to Lender the Tables of Outstanding Borrowings by
Financial Institution as at the Table of Outstanding Borrowings by Financial
Institution base date set forth in Additional Provision 2, on or prior to the
Table of Outstanding Borrowings by Financial Institution submission deadline set
forth in Additional Provision 2.

6.

Approval matters

No stipulations on the date of execution of this Special Agreement.

7.

Compliance matters

(1)

Borrower shall manage all claims held by Borrower using Borrower’s system, and
shall obtain prior written approval of Lender when modifying its management
methods.

(2)

With respect to claims held by Borrower, Borrower shall (i) retain records,
ledgers, certificates, notices, and other documents received from counterparties
to which goods are sold or services provided; and (ii) create records and
ledgers of amounts of claims against counterparties, amounts received in payment
from counterparties, and amounts paid by Borrower and Lender to counterparties
pursuant to the Original Contract and this Special Agreement according to
ordinary business procedures.

(3)

Borrower shall fully perform at the appropriate time of performance all promises
and agreements with counterparties to which it sells products or provides
services in accordance with applicable Laws and Regulations and other orders.

(4)

Borrower shall take no action that would constitute a cause for a counterparty
to which it has sold goods or provided services to obtain right of defense
against Borrower or Lender, nor shall it take any action that would otherwise
impair Lender’s rights with respect to claims held by Borrower.

(5)

Borrower shall promptly report the details of all claims held by Borrower (the
third-party obligees’ name, type of claim, number of claims, amount and deadline
of claim, and other matters regarding claims made by Lender) when so requested
by Lender.

(6)

Borrower shall not transfer businesses related to any claim held by Borrower
without written approval of Lender.

(7)

If Lender deems necessary to preserve claims against Borrower, Borrower shall,
when so requested by Lender, provide collateral of the type and in the form
satisfactory to Lender against the assets of Borrower in substance and form
satisfactory to Lender (excluding accounts receivable to Parent Company A
(NeoPhotonics Corporation, 2911 Zanker Road, San Jose, California, United States
of America)) to secure all claims of Lender against Borrower.

(8)

Borrower shall not incur guarantee obligations against third parties.

(9)

Borrower shall cause Parent Company B (NeoPhotonics Co. Ltd., 37 Central Queens
Road Hong Kong Special Administrative Region, People’s Republic of China) to
maintain its equity ratio of 100% in Borrower.

(10)

Borrower shall maintain a repayment deposit account at a branch of a financial
institution designated by Lender.

8.

Financial covenants

8-1

Content of financial covenants

(1)

Borrower shall maintain on its non-consolidated balance sheet as of the final
day of the accounting period for the business year total net assets of at least
100,000,000 yen and at least 70% of total net assets as at the final day of the
accounting period for the preceding year (however, if the amount of total net
assets on its non-consolidated balance sheet as of the

13

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final day of the accounting period for each business year is 250,000,000 yen or
greater, there is no need to maintain 70% of total net assets as of the final
day of the accounting period for the preceding year).

(2)

Borrower shall not generate an ordinary loss for 2 consecutive terms on its
non-consolidated profit and loss statement as at the final day of the accounting
period for the business year. (However, for determinations of “2 consecutive
terms,” any accounting period generating an ordinary loss after FYE February
2014 shall be considered the first accounting period generating an ordinary
loss.)

(3)

Borrower shall maintain on the non-consolidated profit and loss statement as at
the final day of the accounting period for the business year the total of
“ordinary income/loss + depreciation- allocation for corporate income tax etc. -
dividends” of at least 150,000,000 yen.

8-2

Determination of financial covenants

Lender shall determine whether there has been a violation of the financial
covenants on the financial covenant determination date set forth in Additional
Provision 2. The determination shall remain in force from the determination date
(including that date) until the following financial covenant determination date
(not including that date).

8-2

Effects of financial covenant determination

Among the covenants set forth in Additional Provision 8-1, contravention of more
than one of the covenants in (1) through (3) shall constitute an event of
acceleration by demand as set forth in Article 12.2.7 of this Special Agreement
and Additional Provision 9-2 except in the case where the proviso of Additional
Provision 9-2 shall apply.

(9)

Acceleration clause

9-1

Event of automatic acceleration

No stipulations on the date of execution of this Special Agreement.

9-2

Event of acceleration by demand

Contravention of more than one of the financial covenants in Subparagraphs (1)
through (3) to Additional Provision 8-1; provided, however, that there shall be
no acceleration (by demand) if Borrower takes Remedial Measures (there may be an
acceleration (by demand) if the Remedial Measure fails to satisfy Lender) within
90 days of learning of a contravention of a financial covenant and continues to
pay without delay principal and interest on the Loan to Borrower. “Remedial
Measure” refers to a measure determined as mutually agreeable to Lender and
Borrower in good-faith consultation to improve Borrower’s financial position in
the event of a contravention of a financial covenant by Borrower. Lender shall
respond in good faith to requests for consultation on Remedial Measures from
Borrower.

 

 

 

14

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Annex

Date __________

Compliance Report

 

To The Bank of Tokyo-Mitsubishi UFJ, Ltd.:

Borrower

 

Address

Name

Borrower represents and warrants that it will adhere to the compliance matters
set forth in the following agreements from the signing date onwards.

Details

<Original Contract A>

Payment date __________

(day of the month)

Name of agreement

February 25, 2015

Loan Agreement (borrowing of 500,000,000 yen)

February 25, 2015

Special Agreement (on interest rate) (related to the agreement above)

 

 

<Original Contract B>

Payment date __________

(day of the month)

Name of agreement

February 25, 2015

Loan Agreement (borrowing of 1,000,000,000 yen)

February 25, 2015

Special Agreement (on interest rate) (related to the agreement above)

<Common for Original Contract A and Original Contract B>

Payment date __________

(day of the month)

Name of agreement

February 25, 2015

Special Agreement

End of document

 

Submission no later than 3 months from the final day of the business year

 

For bank use

 

 

Inspection seal

Compliance confirmation

Seal confirmation

Performed by

 

 

 

15

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Notes with respect to the loan with special agreements (supplemental
explanation)

*The special agreement (the “Special Agreement”) provides terms of the loan and
items to be represented, warranted and covenanted by borrower.   Please refer to
the explanation below when you confirm the contents of the Special Agreement.

*Please fully understand the contents of the agreement and when you make
decision to enter into this Special Agreement, please rely on your own
responsibility and will.

1.  Applicable Agreements (see Preamble/ Article 1/ Additional Provision 2)

This Special Agreement assumes that Banking Transaction Agreement, the Loan
Agreement and the Special Agreement Regarding Interest Rate to be executed by
and between you and the bank on the date of the Special Agreement shall apply to
you and the bank.

2. Purpose of Use (see Article 2/ Additional Provision 2)

Purpose of use is provided in the Original Contract and the Special
Agreement.  Please refer to the related provision in the Special Agreement.

3. Definition of Qualified Deposit Amount and Calculation and Notice of Asset
Value (see Article 4/ Additional Provisions 1 & 2)

Asset value is to be calculated based on the actual deposit into your bank
account opened with us (such actual deposit is defined as “Qualified Deposit
Amount”).  We will calculate the asset value on the valuation date and notify it
to you.  We reserve the right to change the conditions and scope of the
Qualified Deposit Amount, which is the base of the asset value, even after we
determined and notified the asset value to you by so notifying you.

4. Calculation of asset value and its effect (see Article 5/ Additional
Provision 3)

Calculation of asset value and its effect are provided in the Special
Agreement.  Please refer to the related provision in the Special Agreement.

5. Repayment from the designated bank account (see Article 6/ Additional
Provision 2)

If any of the Events of Default occurs, we may withdraw certain amount of funds
from the designated bank account, regardless of the standard rules applicable to
the bank accounts.  Please refer to the related provision in the Special
Agreement.

6. Representations and Warranties/Reporting (see Articles 7 & 8/ Additional
Provisions 2, 4 & 5)

Matters to be represented and warranted by you as of the date of the execution
of the Original Contract and the Special Agreement and the Compliance Report
submission date are provided.  Also, the matters to be reported by you until
such time that the loans under the Original Contract and the Special Agreement
are paid in full are provided.  Please refer to the related provisions in the
Special Agreement.

7. Lender Consent Matters and Covenants (see Articles 9&10/ Additional
Provisions 6 & 7)

Matters which require our prior consent until such time that the loans under the
Original Contract and the Special Agreement are paid in full are provided.  Also
the covenants to be kept by you until such time that the loans under the
Original Contract and the Special Agreement are paid in full are
provided.  Please refer to the related provisions in the Special Agreement.

8. Financial Covenants (see Article 11/ Additional Provision 8)

Financial Covenants to be kept by you are provided.  Method of calculation of
financial indicator and the effect of the breach of financial covenants are also
provided.  Please refer to the related provision in the Special Agreement.

9. Events of Default (see Article 12/ Additional Provision 9)

Unless otherwise provided in the Special Agreement, if the loans are accelerated
due to your breach of the Special Agreement, you shall repay any indebtedness
under the Original Contract, the Special Agreement or any other agreements
related thereto.  Please refer to the related provision in the Special
Agreement.  Please note that you are responsible for prepayment penalty (if any)
and any costs or expenses incurred by us due to your breach of the Special
Agreement.

 

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

 

10. Fee (see Article 13/ Additional Provision 2)

You have the obligation to pay the scheme structuring fee as compensation to our
scheme structuring effort.  Please confirm the amount set out in the Special
Agreement.

11. Expenses (see Article 14)

You shall bear all expenses (such as legal fee and stamp duty) with respect to
this financing transaction. You shall also bear all expenses (such as legal fee
and stamp duty) to be incurred in connection with the amendment of the Special
Agreement.

12. Confidentiality (see Article 15)

Please do not disclose the contents of this transaction to any third party
without the bank’s consent.

(to be inserted by the bank) Delivered on:  

Date:

We received explanation about this supplemental explanation and the Special
Agreement and understood all of their contents.

Borrower

Address/Company Name/Name of Representative

 

550-10, Higashi-asakawamachi, Hachioji-shi, Tokyo

NeoPhotonics Semiconductor GK

Representative Member: NeoPhotonics Corporation Limited

#409, Yu To Sang Building, 37 Queen’s Rd Central,

Hong Kong Special Administrative Region of the People’s Republic of China

Executive Officer: Lucas Oliver-Frost

<For Bank Use>

 

 

Inspection

seal

Implementation

Seal confirmation

 

Designated Dispute Resolution Organization Retained by the Bank

Japanese Bankers Association, a Japanese ippan shadan houjin

Counselling Office of Japanese Bankers Association

Tel: 0570-017109 or 03-5252-3772

Business Hour/ Monday to Friday 9:00 – 17:00 (except for holidays and from
December 31 to January 3)