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Sumitomo Common Stock Purchase Agreement and Related Agreements Pursuant to certain agreements entered into in connection with the purchase of 2,349,964 shares of Common Stock by Sumitomo in March 1990, and as amended in July 1995, the Company granted to Sumitomo certain rights including (i) the exclusive right to distribute Ortel standard products in Japan, subject to meeting certain required targets, and (ii) if the Company chooses to engage a manufacturing partner, the right of first refusal to participate in the establishment of any manufacturing facility in Japan, Taiwan, Singapore, Korea, Hong Kong, Australia, Indonesia, Thailand, Vietnam, Cambodia, China, India, the Philippines or New Zealand and to be the majority joint venture partner in any manufacturing facility in Japan. In addition, the Company agreed to treat Sumitomo as a prime supplier, but not a sole supplier, if Sumitomo is competitive with other Ortel vendors regarding price, performance and other factors. The Company also agreed to reasonably consider joint development projects with and paid for by Sumitomo, and support, to the extent that the Company's resources are sufficient and capable of doing so, the sale of Sumitomo products in the United States and Canada. These rights terminate if Sumitomo holds less than 10% of the outstanding equity of the Company excluding certain issuances of shares in which Sumitomo is not offered the right to participate or sells any of its Common Stock of the Company to a competitor of the Company. In addition, Sumitomo's rights terminate three years after a merger of the Company or other such change of control. Dr. Honda, a director of the Company, is an executive officer of Sumitomo.
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