Term Loan Agreement

 
 
(850,000,000 yen)
 
 
 
 
 
 
Borrower:
NeoPhotonics Semiconductors GK
 
 
Arranger and Agent:
The Bank of Tokyo-Mitsubishi UFJ, Ltd
 
 
Lender:
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Yamanashi Chuo Bank, Ltd.
[ ]

 
 
January 24, 2018
 
 
 
 
 

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Table of contents

Article 1 (Definitions)
Article 2 (Rights and obligations of the Lender)
Article 3 (Use of Funds)
Article 4 (Preconditions for execution of individual loan)
Article 5 (Execution of the Loan)
Article 6 (non-execution of an individual loan)
Article 7 (Additional costs and illegality)
Article 8 (repayment of principal)
Article 9 (Interests)
Article 10 (Early repayment)
Article 11 (Delinquency charges)
Article 12 (Agent Fees)
Article 13 (Costs and expenses and taxes and public dues)
Article 14 (Fulfilment of the Borrower's liabilities)
Article 15 (Allocation to Lenders)
Article 16 (Representation and warranty by the Borrower)
Article 17 (Undertakings by the Borrower)
Article 18 (Situation leading to the loss of benefit of terms)
Article 19 (offsets, execution of the permissible lien and voluntary sell-off)
Article 20 (Arrangements between the Lenders and the Agent)
Article 21 (Rights and Obligations of the Agent)
Article 22 (Resignation and dismissal of the Agent)
Article 23 (collective decision of the majority of Lenders)
Article 24 (Alteration to the Agreement)
Article 25 (Transfer of position)
Article 26 (Transfer of loan credit etc.)
Article 27 (Collection from third party etc.)
Article 28 (General provisions)
Annexed Table 1 (List of Parties)
Annexed Table 2 (Repayment Schedule)
Annex 1 (Confirmation)
Annex 2 (Receipt)
Annex 3 (Conditions restricting provision of security etc. and compliance report
pertaining to conditions for collection from a third party)

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Term Loan Agreement

NeoPhotonics Semiconductors GK (the "Borrower"), the financial institution
listed in the "Lender" column in Table 1 annexed to the Agreement (financial
institutions are referred to as "Lender" hereafter), and The Bank of
Tokyo-Mitsubishi UFJ, Ltd. in its capacity as the Agent (the "Agent") agree as
follows ("the Agreement") as of January 24, 2018.
Article 1. (Definitions)
Each of the term listed has the following meaning in the Agreement as defined
below unless the context clearly dictates otherwise.
1. "Business day" refers to any day other than those designated as a bank
holiday under the laws and regulations etc. of Japan.
2. "Agency service" refers to a service set out in terms and conditions of the
Agreement that all Lenders have contracted to the Agent on behalf all the
Lenders.
3. "Agent account" refers to the current deposit account held by the Agent at
the Bank of Tokyo-Mitsubishi UFJ, Ltd. Tokyo Main Office (account number:
0041097 in the name of syndicate loan account, the Bank of Tokyo-Mitsubishi UFJ,
Ltd. or another account which is specified from time to time by the Agent and
notified to the Borrower and the Lenders.
4. "Agent fees" refer to commissions that are paid by the Borrower to the Agent
as agreed separately between the Borrower and the Agent.
5. "Parent company", "subsidiary" and "affiliated companies" are as defined in
Article 8 of the rules pertaining to terms, forms and preparation method used in
financial statements.
6. "Loan amount" refers to 850,000,000 yen loan that is scheduled to be loaned
on the execution date.
7. "Lending obligation" refers to the obligation for the Lender to loan monies
to the Borrower as set out in Article 2, Paragraph 2.
8. "Loan credit" refers to the credit pertaining to an individual loan.
9. "Situation rendering lending impossible" refers to ① act of god, war,
terrorist attack, ② non-availability of or problems with electricity,
communication or various payment methods, ③ situation that renders it impossible
to make a yen-denominated lending transaction that occurred on Tokyo interbank
market, ④ other situations for which the Lender is not responsible, as
determined by the majority of Lenders who have become unable to execute this
lending (if it is difficult for the majority of Lenders to come to a collective
decision, then it shall be as determined by the Agency).
10. "Reference interest rate" for each interest calculation period refers to the
3-months' Japanese yen TIBOR interest (Telerate 17097 page or its successor
page) published by JBA Tibor Administration at or as close as possible to but
after 11:00 am two business days prior to the date of commencement of the
relevant interest calculation period. However, if for some reason the relevant
interest rate is not published, it shall be the interest rate (expressed as an
annual rate) determined reasonably by the Agent as the offer rate for
yen-denominated loan transaction for three months on Tokyo interbank market at
or as close as possible to but before 11:00 am two business days prior to the
date of commencement of the relevant interest calculation period. However, if
the relevant interest rate is below 0%, then it shall be 0%.
11.
"Principal repayment date during the term" refers to each date specified in the
"principal repayment date" specified as the date for repaying the principal
listed in the "principal repayment amount" column in the repayment schedule in
Table 2 annexed to the Agreement (except for the expiry date. If the relevant
date is not a business day, it shall be the next business day, and if the
relevant next business day will be in the next month, then it shall be the
previous business day).

12. The "permissible lien" collectively refers to (a) the revolving mortgage
that has already been set up against the Borrower's assets at the time of
entering into the Agreement, and includes the loan credit under the Agreement in
the secured credit, (b) (including but limited to cases agreed in writing in
advanced by all the Lenders and the Agent) in accordance with the provisions of
Article 17, Paragraph 2,the lien that has been set by the Borrower where the
loan credit under the Agreement is a secured credit or included in the secured
credit, and (c) the lien under the provisions of regulations on the right of
first refusal or the right of lien etc.

Term Loan Agreement for NeoPhotonics Semiconductors GK dated January 24, 2018
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13. "Calculation documents etc." refer to those set out in ① to ④ below.
① Calculation documents pertaining to each business year as set out in Companies
Act Article 435, Paragraph 2 (referring to the balance sheet, profit and loss
statement and the Statement of changes in shareholder equity etc. as provided
for in Article 59, Paragraph 1 of the Rules of Corporate Accounting and
individual table of notes) and business reports
② The interim calculation documents actually produced as set out in Article 441,
Paragraph 1 of Companies Act (referring to the balance sheet as of the interim
accounting date as defined in the same Paragraph and the profit and loss
statement pertaining to the period from the first day of the business year to
the interim accounting date to which the applicable interim accounting date
belongs)
③ Applicable consolidated calculation documents and other consolidated
calculation documents pertaining to each business year as set out in Article
444, Paragraph 1 that were actually produced if consolidated calculation
documents pertaining to each business year as set out in Article 441, Paragraph
1 of Companies Act under the provisions of Article 444, Paragraph 3 of the same
Act (referring to the consolidated balance sheet, consolidated profit and loss
statement and the consolidated statement of changes in shareholder equity etc.
and the consolidated as provided for in Article 61 of the Rules of Corporate
Accounting and consolidated table of notes. Same below.) if they are mandated.
④ Consolidated and non-consolidated balance sheet, profit and loss statement,
Statement of changes in shareholder equity and table of notes that have actually
been produced
14. "Taxes and public dues" refer to income tax, corporation tax, other taxes
etc., and any public taxes and dues.
15. "Individual loan" refers to a loan that is executed by each Lender in
accordance with the lending obligation.
16. "Individually loaned money" refers to the money loaned by a Lender to the
Borrower through an individual loan, and the "amount of individually loaned
money" refers to the amount stated as the "amount of individually loaned money"
in the column for the relevant Lender in Table 1 annexed to the Agreement for
each Lender.
17. "Unpaid individual loan" refers to all monies that the Borrower has the duty
to pay based on the Agreement, including the principal, interests, delinquency
charges, settlement money and others.
18. "Participation percentage" refers to the percentage of the amount of
individually loaned money pertaining to the relevant Lender against the loan
amount before the execution of the loan, and refers to the percentage of unpaid
individual loan for each Lender out of the unpaid individual loan for all the
Lenders based on the percentage of the principal after the execution of the
loan.
19. The "execution date" refers to January 29, 2018.
20. The "repayment deadline" refers to 10:30 am on the relevant repayment due
date if there is a specified due date under the Agreement.
21. The "syndicate account" refers to the ordinary deposit account held by the
Borrower at the Bank of Tokyo-Mitsubishi UFJ, Ltd. Hachioji Branch (account
number: 0494084 in the name of NeoPhotonics Semiconductors GK) or the account
which was opened at the head office or a branch of the Bank of Tokyo-Mitsubishi
UFJ, Ltd. by the Borrower and approved by the Agent.
22. The "spread" refers to 1.00% per annum.
23. The "settlement money" refers to the amount calculated by multiplying the
principal amount that was repaid or offset by the difference between the
reinvestment interest rate and the applicable interest rate and the number of
actual days in the remaining period, if the reinvestment interest rate is below
the applicable interest rate for the interest calculation period to which the
date of applicable principal repayment date or offset belongs, in case a
repayment or offset of the principal of an individual loan is made on a date
other than an interest payment date. However, the amount shall be in the range
that does not violate the laws and regulations etc. The "remaining period"
refers to the period from the date of the repayment or offset until the next
interest payment date, and the "reinvestment interest rate" refers to the rate
that the Lender has reasonably determined as the interest rate on the assumption
that the amount of the repaid or offset principle would be reinvested in Tokyo
interbank market for the remaining period. Further, the settlement money shall
be calculated daily based on 365 days per year, not including the last day of
the yearly period, the division is carried out last, and it shall be rounded
down to the nearest yen.

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24. "All Lenders" refer collectively to all of the Lenders before the execution
of the loan, and refer collectively to all the Lenders with the right to request
payment for the unpaid individual loan from the Borrower.
25. "Cost increase" refers to an increase in applicable loan costs (based on the
amount calculated reasonably by the applicable Lender) due to ① enactment,
abolition or amendment of a regulation or change to its interpretation or
operation, ② establishment or increase of reserves, or ③ when the loan costs
incurred by a Lender under the Agreement has increased due to changes to
accounting rules or operations (however, it excludes the increase due to changes
to the taxable income of the applicable Lender.)
26. "Lender who incurred increased costs" refers to a Lender who has incurred
increased costs.
27. "Damages etc." refers to damages, losses, costs etc. (including attorneys'
fees).
28. "Majority of Lenders" refers to a single or multiple Lenders with the total
of at least 66.7% of participation percentage as of the collective decision
reference time point. The "collective decision reference time point" refers to
the time when the Agent receives the notice set out in Article 23, Paragraph 1
Item 1 when it is determined by the Lenders that a situation requiring an
instruction by majority of Lenders, and if the Agent itself determines that an
collective decision would be required, then it refers to the time when the Agent
issues a notice set out in Article 23, Paragraph 2.
29. "Advance payment costs" refers to the amount calculated by the procurement
interest rate and the actual number of days in the advance payment period on the
amount of advanced payment in case the Agent has made an advance payment. The
"advance payment period" refers to the period from the date the advance payment
was made by the Agent until the date the Agent receives the amount pertaining to
the applicable advance payment from the Lender or the Borrower, and the
"procurement interest rate" refers to the interest rate determined reasonably by
the Agent as the rate that the amount of advance payment was procured for the
period of advancement. Further, the advance payment costs would be calculated
daily based on 365 days per year, not including the last day of the yearly
period, the division is carried out last, and it shall be rounded down to 1 yen.
30. "Advance payment" refers to the payment made by the Agent to the Lender in
relation to the repayment to be made by the Borrower on the repayment deadline
for the amount paid by the Agent to the Lender that corresponds to the amount
that should be allocated to a Lender in accordance with Article 15, Paragraph 1
to 5 prior to repayment from the Borrower. The Lender or the Borrower shall not
object to the Agent making an advance payment on their behalf whatsoever.
31. "Qualified transferee" refers to a Lender as of the date of entering into
the agreement, a person operating a banking business that is licensed under the
Japanese Bank Act or Long Term Credit Bank Act, a person operating a life
insurance business or a general insurance business with a life insurance
business license or a general insurance license business under the Japanese
Insurance Business Act, or a shinkin bank, shinkin chuo bank, a labor bank, a
rokinren bank, a prefectural credit federation of agricultural co-operatives,
agricultural and forestry central bank, cooperative credit association, a
national federations of credit co-operatives, a mutual insurance federation of
agricultural cooperative, and Shoko Chukin Bank Limited, and a trust company
under the provisions of the Trust Business Act, and leasing companies that is
registered under Article 3 Paragraph 1 of the Money Lending Business Act.
32. "Applicable interest rate" refers to the interest rate calculated by adding
a spread to the reference interest.
33. "Repayment date" refers to the principal repayment date during the term and
the expiry date in relation to the principle of the loan, and it refers to each
payment date in relation to interests which is the end of each interest
calculation period, and the date specified as requiring payment in accordance
with the agreement in relation to any other monies.
34. "Reports etc." refer to reports such as securities report, semi-annual
reports, quarterly reports, interim reports and amended reports etc.
35. "Laws and regulations etc." refer to treaties, acts of law, regulations,
decrees, ordinances, rules, notices, judgments, determinations, arbitration
judgments, rulings and policies of relevant authorities.

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36. "Loan" refers to all the individual loans collectively.
37. "Expiry date" is January 29, 2025 (however, if the relevant date is not a
business day, it shall be the next business day, and if the relevant next
business day will be in the next month, then it shall be the previous business
day).
38. "Transferee" refers to the person to whom the loan credit is transferred in
accordance with Article 26, Paragraph 1.
39. "Transferor" refers to the person transferring the loan credit in accordance
with Article 26, Paragraph 1.
40. "Interest calculation period" refers to the period from the date of
execution to the first interest payment date for the first period and the period
from the date of interest payment until the date of the next repayment for the
second period onwards.
41. "Interest payment date" is the date on which the interest is paid, and it is
the last day of January, April, July and October each year during the period
from the day after the date of execution and the expiry date, and the expiry
date (however, if the applicable interest payment date is not a business day, it
shall be the next business day, and if the relevant next business day will be in
the next month, then it shall be the previous business day).
Article 2 (Rights and obligations of the Lender)
(1) Unless otherwise provided for in the Agreement, the Lender is able to
exercise its rights under the Agreement individually and independently.
(2) The Lender shall lend to the Borrower the amount of the individually loaned
money pertaining to the Lender.
(3) Unless otherwise provided for in the Agreement, the obligations of the
Lender under the Agreement are individual and independent, and the Lender shall
not have its obligations waived on the basis that another Lender is not
fulfilling its relevant obligations. Further, the Lender shall not be held
liable in any way for another Lender's failure to fulfil its obligations under
the Agreement.
(4) Should a Lender fail to make the individual loan on the exercise date in
violation of its lending obligations, the Lender shall immediately compensate
for all the damages etc. incurred by the Borrower due to such failure to fulfill
its lending obligations as soon as requested by the Borrower. However, such
compensations to the Borrower for such damages etc. shall be limited to the
amount corresponding to the interests and other costs that the Borrower needed
to pay during the period from the date of execution (including the date of
execution itself) and the first interest payment date (not including the date
itself) or would have needed to pay minus the interests and other costs that the
Borrower would have needed to pay from the date of execution (including the date
of execution itself) and the first interest payment date (not including the
payment date itself) had the individual loan been provided on the execution
date.
Article 3 (Use of Funds)
The Borrower shall only use the monies procured through this Loan for funding
the facilities (funds for obtaining machinery for the core parts manufacturing
line (the "machinery") and payment for various related expenses (including for
covering the applicable funds that have already been expended)(the Borrower's
project for implementing and operating various machinery for the core parts
manufacturing line including the machinery is called "the project" hereafter).
The Agent and none of the Lenders has any obligation to supervise or evaluate
the actual purpose for which the funds from the Loan are used.
Article 4 (Preconditions for execution of individual loan)
Each Lender shall execute their individual loan on condition that all of the
criteria set out in each of the following item are met on the execution date
(regardless of whether the notification under Article 6, Paragraph 1 has been
provided). Determination as to whether the relevant criteria has been met or not
shall be made by each Lender, and other Lenders and the Agent shall not be
responsible whatsoever for the decision made by other Lenders or non-execution
of an individual loan.
① No situation rendering the lending impossible has occurred.

Term Loan Agreement for NeoPhotonics Semiconductors GK dated January 24, 2018
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② All matters stated in items under Article 16 are true and accurate.
③ The Borrower has not breached any of the terms and conditions of the Agreement
and there is no risk that there will be any breach after the execution date.
④ The Borrower submits to the Agent all of the following documents on the date
of entering the Agreement and the Agent and all the Lenders are satisfied with
their contents.
(a) The certified seal of the representative of the Borrower whose name will be
on the Agreement and shall be the signing it (however, it must have been issued
within three months of the date of entering into the Agreement)
(a) An official copy of the commercial register, certificate of all current
matters, or certificate of all historical records (however, it must have been
issued within three months of the date of entering into the Agreement)
(c) A certified copy of the Articles of Incorporation of the Borrower
(d) Notification of the seal or signature of the Borrower in the format
specified by the Agent
(e)
A confirmation document in the format specified in Annex 1 of the Agreement (a
document proving that all the required procedures that are required under the
regulations and the Borrower's internal rules in relation to entering into the
Agreement and the borrowing under the Agreement have been completed, which has
been verified by an authorized officer)

(f) Business plan pertaining to the Project (including but not limited to the
work schedule and financial planning) (the "Business Plan")
(g) Materials showing the costs involved in acquiring the Machinery (scheduled
amount of payment)
(h) Materials confirming the purpose of the fund usage as set out in Article 3
(including but not limited to invoices and quotations)
Article 5 (Execution of the Loan)
(1) The Lenders shall pay the amount of the individually loaned money to the
syndicate account on the date of execution if no notification under Article 6,
Paragraph 1 has been made and all of the criteria set out in items in the
preceding Article are met (however, the Lender shall complete the process of
transferring the money into the syndicate account for the purpose of this
payment by 11:00 am on the date of execution). Execution of the individual loan
from the applicable Lender is deemed to have been carried out at the time the
amount of individually loaned money has been paid into the syndicate account by
the Lender.
(2) When the loan has been executed under the preceding Paragraph, the Borrower
shall immediately send to the Agent a receipt in the format shown in Annex 2 of
the Agreement, stating the amount of the loan and details of each individual
loan. In addition, the Agent shall provide to the Lender that executed the
individual loan a copy of the receipt they have received. The Agent shall retain
the original copy of the receipts pertaining to the applicable Lender until all
of the outstanding individual loan has been repaid.
Article 6 (non-execution of an individual loan)
(1) A Lender who has decided not to execute the individual loan because all or
some of the criteria set out in Article 4 have not been met ("non-executing
Lender”) can notify the Agent, the Borrower and all other Lenders stating the
reasons thereof by 5 pm on the business day before the date of execution.
However, if all of the criteria in Article 4 have been met but such a notice is
issued and an individual loan has not been executed, the non-executing Lender
cannot avoid being held liable for the breach of its lending obligation.
(2) If the applicable non-executing Lender has been unable to execute the
individual loan and the said non-executing Lender or the Agent incurs damages
etc., the Borrower shall be responsible for such damages. However, it shall not
apply if the failure to execute the individual loan amounts to a breach of its
lending obligation.

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Article 7 (Additional costs and illegality)
(1) The Lender who incurred increased costs may demand the Borrower to bear the
increased costs by issuing a written notice to the Borrower via the Agent, and
the Borrower shall pay to the applicable Lender the applicable increased costs.
(2)
The Borrower may terminate the lending obligations in the relationship with the
relevant Lender who incurred increased costs if the Borrower receives the demand
before the date of execution by issuing a notice to the Agent and all the
Lenders by one business day before the date of execution.

(3)
If the Borrower received the demand set out in Paragraph 1 of this Article on or
after the date of execution, the Borrower can pay to the applicable Lender who
incurred increased costs the full amount of the principal of the individual loan
from the applicable Lender who incurred increased costs on the date stated in
the applicable notice (however, it shall be 10 or more business days after the
applicable notification, and it is referred to as "the date it wishes to make a
repayment prior to the deadline due to increased costs"). In this case, the
Borrower shall pay to the Lender who incurred increased costs on the date it
wishes to make a repayment prior to the deadline due to increased costs the full
amount of the principal for the applicable individual lending, interests
incurred on the principal during the period until the date it wishes to make a
repayment prior to the deadline due to increased costs (including the date
itself), and any settlement money (if any) and the additional costs claimed.

(4) If entering into and fulfilling the Agreement and any transaction under it
becomes illegal under the laws and regulations etc. that are binding upon any of
the Lenders, the applicable Lender shall notify the Borrower of the situation
via the Agent, and ① if maintenance of the lending obligation prior to the date
of execution, execution of individual loans or procurement of funds fulfillment
for the purpose of individual lending is deemed illegal, it can terminate the
lending obligations of the applicable Lender as of the day before the date on
which it is deemed illegal, and ② if maintenance of the an individual lending
that was executed on or after the date of execution is deemed to be illegal on
or before the repayment deadline pertaining to the relevant individual lending,
the repayment deadline for the relevant individual lending can be deemed to have
arrived the day before the date it came to be deemed illegal (or if the
repayment deadline is set out in the applicable laws and regulations etc., then
it shall be the date specified in the applicable laws and regulations etc.), and
it can demand from the Borrower repayment of the full amount of the unpaid
individual loan.
Article 8 (repayment of principal)
The Borrower shall repay the principal of the loan to all the Lenders involved
in the Loan according to the repayment schedule shown in Table 2 annexed to the
Agreement, and pay in accordance with the provisions of Article 14 and dividing
it into the principal repayment date and the expiry date during the period. The
amount repaid to each Lender on the principal repayment date during the term
shall be based on pro-rata of the principal of the Lending that should be repaid
on the principal repayment date during the term based on the participation
percentage of each Lender after the execution of the loan on the execution date,
and the amount repaid to each Lender on the expiry date shall be the amount of
principal from the individual loan remaining to be repaid by the applicable
Borrower.
Article 9 (Interests)
(1) The Borrower shall pay the total amount of interests calculated by
multiplying the unpaid amount of principal from an individual loan for each
interest calculation period for each Lender with the interest rate applicable to
the interest calculation period and the actual number of days in the interest
calculation period on the interest payment date at the end of the applicable
interest calculation period in accordance with the provisions of Article 14.
(2) The interests in the preceding Paragraph shall be calculated daily based on
365 days per year, not including the last day of the yearly period, the division
is carried out last, and it shall be rounded down to the nearest yen.

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Article 10 (Early repayment)
(1)
The Borrower cannot repay all or part of the principal of the loan that should
be repaid on the principal repayment date during the term or the expiry date
prior to the principal repayment date during the term or the expiry date ("early
repayment" in this Article). However, this restriction will not apply if it is
done under Article 7 or the Borrower obtains a prior written consent from all of
the Lenders following the procedures set out in the following Paragraphs.

(2) If the Borrower wishes to make an early repayment, the Borrower shall, by 15
business days prior to the date on which it wishes to make an early repayment
("requested early repayment date" in this Article) notify the following in
writing to the Agent: (a) the amount of principal of the loan it wishes to make
an early repayment (the amount shall be the full balance of the principal or at
least 10 million yen or multiples thereof, and if the principal amount it wishes
to repay early is not the full balance of the principal, the amount would be
pro-rata in accordance with the percentage of the balance of the principal for
each individual lending of the Lender and repaid to the Lender), (b) that the
full interests that arise during the period until the requested early repayment
date (including the date of early repayment itself) on the amount of the
principal it wishes to repay early ("interests accrued) shall be repaid on the
same day, and (c) the requested early repayment date. The Agent shall
immediately notify all the Lenders of details of (a) to (c) of this Paragraph
upon receipt of the notice from the Borrower, and the Lenders shall notify the
Agent whether they would approve the early repayment or not by 10 business days
before the requested early repayment date. If such a notice from a Lender fails
to reach the Agent by 10 business days before the desired early payment date,
the applicable Lender would be deemed not to have approved the early repayment.
The Agent shall determine whether they would approve the early repayment or not
by eight business days before the requested early repayment date, and shall
notify the Borrower and all the Lenders.
(3)
If an early repayment is approved in accordance with the preceding Paragraph, if
the requested early repayment date is not an interest payment date, all the
Lenders shall notify the amount of the settlement money to the Borrower and the
Agent by two business days before the requested early repayment date. The
Borrower shall pay the total amount of principal of the loan to be repaid early,
accrued interests and the settlement money (if any) on the requested repayment
amount in accordance with the provisions of Article 14.

(4)
If part of the principal of the loan is repaid early in accordance with the
provisions of this Article, it shall be applied to the principal with the latest
repayment deadline out of the principal amount to be repaid to the Lenders on
each principal repayment date shown in the repayment schedule in Table 2 annexed
to the Agreement.

Article 11 (Delinquency charges)
(1)
If the Borrower is delinquent in fulfilling its obligations towards the Lender
or the Agent under the Agreement, the Borrower shall pay delinquency charges
calculated by multiplying the amount of delinquency by the rate of 14% per annum
for the period starting from the date the applicable obligations should have
been fulfilled (including the day itself) until the date when all of the
delinquent obligations ("delinquent obligations" in this Paragraph) have been
fulfilled (to the extent that it is not against the regulations etc.), upon
receipt of the demand from the Agent, in accordance with the provisions of
Article 14.

(2) The delinquency charges of the preceding Paragraph shall be calculated daily
based on 365 days per year, not including the last day of the yearly period, the
division is carried out last, and it shall be rounded down to the nearest yen.
Article 12 (Agent Fees)
The Borrower shall pay the Agent fees in accordance with the separate agreement
between the Borrower and the Agent for the Agent service set out in the
Agreement.

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Article 13 (Costs and expenses and taxes and public dues)
(1) All costs and expenses for production, changes or amendment of the Agreement
and documents in connection with the Agreement (including attorney's fees) and
all costs and expenses incurred by the Lenders or the Agent in securing or
exercising their rights or fulfilling their obligations in connection with the
Agreement or documents in connection with the Agreement (including attorney's
fees) shall be borne by the Borrower to the extent that it is not against the
laws and regulations etc., and if the Lender or the Agent has paid it on behalf
of the Borrower, the Borrower shall pay it immediately upon receipt of the
demand from the Agent, in accordance with the provisions of Article 14.
(2) All stamp duty and similar taxes and public dues etc. arising in connection
with production, changes or enforcement of the Agreement and documents in
connection with the Agreement shall be borne by the Borrower, and if the Lender
or the Agent has paid it on behalf of the Borrower, the Borrower shall pay it
immediately upon receipt of the demand from the Agent, in accordance with the
provisions of Article 14.
Article 14 (Fulfillment of the Borrower's liabilities)
(1)
In order to repay the liabilities under the Agreement, the Borrower shall make a
payment into the Agent's account to the extent it is not against the laws and
regulations etc. by the payment deadline for those for which the repayment date
is specified under the Agreement and as soon as it receives a demand from the
Agent for payments without a specified repayment date under the Agreement. In
this case, the Borrower shall be deemed to have fulfilled its liabilities
towards the Agent or the Lender at the time it paid the money into the Agent's
account.

(2) Unless otherwise provided for in the Agreement, the Borrower cannot make a
payment for the liabilities under the Agreement directly to the Lender other
than the Agent in contravention to the preceding Paragraph. The Lender who
received such a payment shall immediately pay the monies received to the Agent,
and the fulfillment of liabilities pertaining to the monies shall be deemed to
have occurred upon receipt of the monies by the Agent. Further, the Borrower
cannot fulfill its liabilities under the Agreement through payments in
substitutes unless the Agent and all the Lenders agree in writing in advance.
(3) The payment by the Borrower under the Agreement shall be applied in the
following order.
① The costs and expenses etc. that should be borne by the Borrower under the
Agreement that the Agent has paid on behalf of the Borrower, and the Agent's
fees and any delinquency charges pertaining to them
② Costs and expenses etc. that should be borne by the Borrower under the
Agreement that is payable to a third party
③ The costs and expenses etc. that should be borne by the Borrower under the
Agreement that a Lender paid on behalf of the Borrower, and any delinquency
charges pertaining to them
④ Delinquency charges (excluding the delinquency charges set out in Items 1 and
3 of this Paragraph) and the settlement money
⑤ Interests of the loan
⑥ Principal of the loan
(4) When applying the preceding Paragraph, if the amount applied falls short of
the amount of any of the items, remaining amount after fulfilling the preceding
items shall be applied to the item that first becomes unfulfilled ("shortage
item") and applied pro-rata in accordance with the amount for each payment
liability where the payment is due from the Borrower.
(5)
The Borrower shall not deduct tax and public dues etc. from the payment of its
liabilities under the Agreement except as required by the laws and regulations
etc. If taxes and public dues must be deducted from the amount payable by the
Borrower, the Borrower shall the amount required so that the Borrowers or Agent
receives the amount that it would have received had the tax and public dues were
not applicable. In this case, the Borrower shall send a certificate of tax
payment issued by the tax authorities or other regulatory agencies in Japan
involved in deduction at source within 30 days of the payment to the applicable
Lenders or Agent directly.

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Article 15 (Allocation to Lenders)
(1) The Agent shall deduct the amount corresponding to Paragraph 3, Item 1 and 2
in the preceding Article from the amount paid by the Borrower, and if there is
anything remaining, it shall immediately allocate the remaining amount to
Lenders.
(2) Prior to allocation by the Agent to the Borrowers under this Article, if (a)
a provisional seizure, preservative attachment or a seizure order pertaining to
the loan credit has been served on the Borrower, (b) a transfer pertaining to
the loan credit has been made, or (c) a third party repayment has been made, the
rights and obligations relationship etc. between the Borrower, Agent and Lenders
shall be in accordance with the following provisions.
(a) If the Agent has completed the allocation to the Borrowers under this
Article prior to being notified by the Borrower of being served an order for a
provisional seizure, preservative attachment or a seizure order pertaining to
the loan credit.
In this case, even if the Agent's allocation results in damage etc. to the
person having a right of provisional seizure, preservative attachment or a
seizure order or the Borrower or the Lender or another third party, the Agent
shall not be held responsible in any way towards those and the Borrower shall
deal with them at its expense and responsibility. The Borrower shall compensate
the Agent suffers for any damage etc. suffered due to the relevant allocation.
(a) Prior to completion of the allocation to the Borrowers under this Article
but after the fulfillment of liabilities by the Borrower in accordance with the
provisions of Paragraphs 1 and 2 in the preceding Article, it is notified by the
Borrower of being served an order for a provisional seizure, preservative
attachment or a seizure order pertaining to the loan credit pertaining to the
allocation under the provisions of Article 17, Paragraph 5.
In this case, (i) the Agent shall be able to hold off the allocation of monies
pertaining to such a notice under this Article, and can otherwise act as it
deems reasonable. In addition, (ii) the Agent shall allocate the monies received
from the Borrower other than the monies pertaining to the notice in accordance
with the allocation method set out in Paragraphs 3 and 4 of the preceding
Article. If the Agent's action in accordance with the provisions of Item (i) or
allocation by the Agent under Item (ii) results in damage etc. to the person
having a right of provisional seizure, preservative attachment or a seizure
order or the Borrower or the Lender or another third party, the Agent shall not
be held responsible in any way towards those and the Borrower shall deal with
them at its expense and responsibility. The Borrower shall compensate the Agent
suffers for any damage etc. suffered due to handling such an allocation or the
relevant allocation.
③
Prior to fulfillment of liabilities by the Borrower in accordance with the
provisions of Paragraphs 1 and 2 in the preceding Article, the Agent is notified
by the Borrower of being served an order for a provisional seizure, preservative
attachment or a seizure order pertaining to the loan credit pertaining to the
allocation under the provisions of Article 17, Paragraph 5.

In this case, the Agent shall deem that the liabilities pertaining to the
notification do not exist and shall make allocations in accordance with the
allocation method set out in Paragraphs 3 and 4 of the preceding Article. If the
Agent's allocation results in damage etc. to the person having a right of
provisional seizure, preservative attachment or a seizure order or the Borrower
or the Lender or another third party, the Agent shall not be held responsible in
any way towards those and the Borrower shall deal with them at its expense and
responsibility. The Borrower shall compensate the Agent suffers for any damage
etc. suffered due to the relevant allocation.
(b) The transferor and the transferee notifies the Agent of the transfer
pertaining to the loan credit in their join names in accordance with Article 26,
Paragraph 1.
In this case, the Agent shall commence all the administrative procedures
required to treat the transferee as the creditor for the loan credit after it
receives the notice, and the Agent shall be exempt from responsibility by
treating the previous Lender as a valid Lender until they notify the Borrower,
the transferor and the transferee that the relevant administrative procedure has
been completed. If the Agent's handling results in damage etc. to the transferee
or another third party,

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the Agent shall not be held responsible in any way towards those and the person
with the borrowing rights and the transferor in connection with the loan credit
shall deal with them at its expense and responsibility. The Borrower and the
transferor pertaining to the loan credit shall compensate the Agent if it
suffers any damage etc. due to this item
(c) When a third party that made the repayment in accordance with the provisions
of Article 27, Paragraph 2 and the Lender who received the repayment has, in
joint names, of the Borrower on its own has notified the Agent of the third
party repayment
In this case, the Agent shall immediately commence all the administrative
procedures required to treat the recourse and the vicarious credit acquired by
the third party the same as the loan credit pertaining to the applicable
repayment, and the Agent shall be exempt from the responsibility by treating it
as though the third party repayment had not happened until they notify the
Borrower, the third party and the Lender who receive the third party repayment
that the relevant administrative procedure has been completed. If the Agent's
handling results in damage etc. to the third party or another third party, the
Agent shall not be held responsible in any way towards those and the Borrower
and the Lender who has received the third party repayment shall deal with them
at their expense and responsibility. The Borrower and the Lender that received
the third party payment shall jointly compensate the Agent if it suffers any
damage etc. due to this item.
(3) The allocation to be made by the Agent to the Lender shall be in the order
specified in Paragraph 3, Item 3-6 of the preceding Paragraph. Application and
allocation of the shortage item when there is a shortage in the monies to be
distributed shall be in accordance with the provisions of Paragraph 4 of the
preceding Article. In this case, each Lender shall be able to determine the
order and the method of applying the allocated amount at its discretion,
notwithstanding the provisions of Paragraph 3 and 4 of the preceding Article and
the Borrower shall not object to such a decision. However, if one of the Lenders
has applied the repayment in a different order from the provisions of Paragraph
3 and 4 of the preceding Article, the Agent can deem that the Lender has applied
it in accordance with the provisions of Paragraph 3 and 4 of the preceding
Article. The Agent shall be able to allocate it based on the assumption that all
Lenders have applied it in accordance with the provisions of Paragraph 3 and 4
of the preceding Article, and as long as the allocation is made, the Agent shall
not be responsible in any way even if the amount allocated is different from the
amount applied by each Lender.
(4)
If there is a delay in payment by the Borrower as set out in Paragraph 1 of the
preceding Article and was not made by the payment deadline, the Agent shall not
be obliged to allocate it according to the provisions of Paragraph 1 of this
Article on the same day. In this case, the Agent shall make the allocations
immediately after the money has been paid in by the Borrower, and if the Lender
or the Agent suffers damages during this process, they shall be covered by the
Borrower.

(5) If there is a request from the Agent and the request is based on a
reasonable reason, the Lender who received such a request shall make an
immediate notification of the credit under the Agreement (including breakdown)
that it has against the Borrower. In this case, the Agent shall incur the
obligation to allocate under Paragraph 1 of this Article when all the
notifications have reached the Agent. If such a notice is delayed without a
reasonable reason or if the Lender or the Agent incurs damages, the Lender who
neglected the notice shall be responsible for it.
(6) The Agent shall be able to allocate to Lenders through advance payment
(however it has no such obligations). The advance payment does not mean
fulfillment of the Borrower's liabilities. When the advance payment is made, if
the Borrower does not fulfill its liabilities pertaining to the advance payment
by the payment deadline, the Lender who has received an allocation based on this
Paragraph shall immediately return the amount of advance payment upon request
from the Agent. Further, the Borrower shall pay the advance payment costs
required by the Agent for the advanced payment based on the amount paid. If the
Lender has paid the relevant advance payment costs to the Agent, the Borrower
shall indemnify the Lender the applicable advance payment costs. Further, if the
Agent had completed the advance payment for the allocation to the Lenders before
receiving the notice from the Borrower of being served an order for a
provisional seizure, preservative attachment or a seizure order pertaining to
the loan credit pertaining to the allocation under the provisions of Article 17,
Paragraph 5, even if the Agent's allocation results in damage etc. to the person
having a right of provisional seizure, preservative attachment or a seizure
order or the Borrower or the Lender or another third party, the Agent shall not
be held responsible in any way towards those and the Borrower shall deal with
them at its expense and responsibility. The Borrower shall compensate the Agent
if the Agent suffers any

Term Loan Agreement for NeoPhotonics Semiconductors GK dated January 24, 2018
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damage etc. due to the advance payment of allocation (including but not limited
to the monies that are not returned or paid where the Lender set out in
sentences 3 and 4 of this Paragraph fails to return or pay the monies that are
due to the Agent).
Article 16 (Representation and warranty by the Borrower)
The Borrower represents and warrants to the Lenders and the Agent the following
matters listed in each item to be true as of the date of entering into the
agreement and the date of execution.
① The Borrower is a limited liability company that has been established legally
under the laws of Japan and currently remaining validly in existence.
②
Entering into and fulfillment of the Agreement by the Borrower and accompanied
transactions are within the scope of the purpose of the Borrower company, and
that the Borrower has completed all the procedures that are required by its
articles of incorporation and internal rules.

③
The Borrower's entering into and fulfillment of the Agreement and any
transactions taking place thereunder (a) is not against the laws and regulations
etc. that are binding on the Borrower, (b) it is not against the Borrower's
articles of incorporation and other internal rules, and (c) it is not against
any agreement with a third party with the Borrower as its party, or any
agreement that is binding on the Borrower or its assets.

④
The person who represents the Borrower and signs or places his/her name and seal
on the Agreement has been granted the authority to sign or place his/her name
and seal on the Agreement as a representative of the Borrower in accordance with
the procedures required by the laws and regulations etc., Borrower's articles of
incorporation or other internal rules.

⑤ The Agreement is legal and binding on the Borrower and it is enforceable in
accordance with its provisions.
⑥
The calculation documents etc. produced by the Borrower (if it has the
obligation under the laws and regulations etc. to have them audited or they have
had them audited, then the audited calculation documents etc.) (however, if the
Borrower has produced a report etc., then the report etc.) are accurate as per
the accounting standards that are generally deemed to be fair and appropriate in
Japan, and they have received required audits where they have the obligation to
be audited in terms of calculation document etc. under the laws and regulations
etc.

⑦ There have been no important changes that may have a material effect on
fulfilment of its obligations under the Agreement pertaining to the information
that has been supplied by the Borrower to the Agent or the Lender, or after the
accounting period ending in December 2016 the calculation documents etc.
produced by the Borrower for the same accounting period (if it has the
obligation under the laws and regulations etc. to have them audited or they have
had them audited, then the audited calculation documents etc.) (however, if the
Borrower has produced a report etc., then the report etc.) and there have been
no important changes that may have a material effect on the Borrower's
fulfilment of obligations under the Agreement through the business of the
Borrower that has been indicated in the accounting document and adversely affect
the assets or financial status.
⑧
No legal proceedings, arbitration or administrative procedures or other disputes
have started in which the Borrower is involved and materially affects or may
affect its performance under the Agreement, and there is no risk of such a
lawsuit being commenced.

⑨
No situation set out in items under Article 18, Paragraph 1 or 2 has occurred,
and no such situation that may constitute a situation through notification or
passage of time exists and there is no such risk of occurrence.

⑩
None of the following (a) to (n) is applicable to the Borrower.

(a) An organized group of gangsters (it refers to a group in which a member
(including a member of the group's constituent group) may be encouraged to
collectively or habitually commit violent illegal acts etc., and it is also
applicable to the following items)
(b) A member of an organized group of gangsters (it refers to a member of an
organized group of gangsters, and it is also applicable to the following items)
(c) A person who was a member of an organized group of gangsters in the last
five years
(d) A quasi-member of an organized group of gangsters (it refers to a person who
is not a member of an organized group of gangsters but has a connection with
such a group and may commit

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an violent illegal act in the context of the power of an organized group of
gangsters, or a person who cooperates or is involved in maintaining or operating
an organized group of gangsters such as supplying funds or weapons to a member
of an organized group of gangsters etc., and it is also applicable to the
following items).
(e) A company with connection to an organized group of gangsters (a company that
a member of an organized group of gangsters is effectively involved in its
management, a company run by a quasi-member of an organized group of gangsters
or an ex-member of an organized group of gangsters that actively cooperates or
is involved in maintaining or operating an organized group of gangsters, or a
company that supports maintaining or operating a group of gangsters by actively
utilizing a group of gangsters in performance of its operations)
(f) A sokaiya etc. (it refers to a person who is a professional troublemaker at
stockholders' meetings or an extortionist that blackmail corporations who seeks
illegal gains from a company and may engage in violent illegal acts and
threatens safety of citizens' lives)
(f) An extortionist who may represent him/herself as a social activists etc.
(refers to a person who pretends to engage in social activism or political
activity or represent him/herself as such who seeks illegal gains from a company
and may engage in violent illegal acts and threatens safety of citizens' lives)
(h) Crime groups specializing in intellectual crimes (refers to a group or an
individual other than those listed in (a) to (g) above, who utilizes the
relationship with an organized group of gangsters to wield its power, or it has
a financial connection with an organized group of gangsters and forms the core
of organizational illegal activities)
(i) Anyone who is an equivalent to (a) to (h) above
(j) A person who has a relationship that is recognized to be controlled in its
management by the person who falls under (a) to (i) above ("a member of an
organized group of gangsters etc." in this item)
(k) A person with involvement that has been recognized as having management
involvement of a member of an organized group of gangsters etc.
(l) A person with a relationship that is recognized to be inappropriately
utilizing a member of an organized group of gangsters etc. for the purpose of
illegal gains for their company or that of a third party or for the purpose of
causing damage to a third party
(m) A person with a relationship that is recognized to be involved in provision
of funds etc. to a member of an organized group of gangsters etc., or in
provision of benefits to such a person
(n) A person with an officer or someone who with effective involvement in
management has a relationship with a member of an organized group of gangsters
etc. that should be socially criticized
⑪ The business plan is reasonably constructed to the level that satisfies all
the Lenders and the Agent, and there is no risk of delays or termination.
⑫ There are no cause for obstruction in performing the project and there is no
risk of such a cause to exist.
⑬
No material defect exists in the machinery and there is no risk of such a
defect.

Article 17 (Undertakings by the Borrower)
(1) The Borrower undertakes to perform each of the following item at its own
expenses until it has completed fulfilling all of its liabilities under the
Agreement towards the Lenders and the Agent after the date of entering into the
Agreement.
①
If a situation set out in items under Article 18, Paragraph 1 or 2 has occurred,
or such a situation that may constitute a situation through notification or
passage of time or both has occurred, or there is a risk of such an occurrence,
it shall immediately notify the Agent and all the Lenders.

②
When the Borrower has produced a calculation document etc., a copy of the
calculation document etc. shall be provided promptly to the Agent and all the
Lenders. However, when the Borrower has produced a report etc. a copy of the
report etc. shall promptly be provided to the Agent and all the Lenders instead
of the copies of the calculation documents etc. In addition, when producing the
calculation documents etc. (if the Borrower has produced a report etc., then the
report etc.) they shall be accurate as per the accounting standards that are
generally deemed to be fair and

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appropriate in Japan, and they have received required audits where they have the
obligation to be audited in terms of calculation document etc. under the laws
and regulations etc.
③
When the Borrower produces calculation documents etc. or reports etc. pertaining
to an accounting period which ends on the date of entering into the Agreement or
later, it shall promptly submit to the Agent and all the Lenders a document in
the format set out in Annex 3 of the Agreement that shows that each item set out
in Paragraph 2 of this Article and Article 27, Paragraph 1 has been complied
with.

④
If the Agent or the Lenders via the Agent request it, the assets, management and
business status of the Borrower and its subsidiaries and its affiliated
companies shall be reported promptly to the Agent and all the lenders, and
required arrangements for investigation into them shall be provided.

⑤
If a material change to the assets, management or the business status of the
Borrower or is subsidiary or its affiliated company occurs, or if there is a
risk that such a change would occur due to the passage of time, or if legal
proceedings, arbitration or administrative procedure or other dispute was
commenced and will or may have a material effect on the Borrower's fulfillment
of its obligations under the Agreement, it shall immediately notify the Agent
and all the lenders.

⑥ If it becomes apparent that any one the items in the foregoing is not true, it
shall immediately notify the Agent and all the Lenders.
⑦
It shall submit a calculation sheet and a balance sheet for the borrowings from
each financial institution as of the end of each month (a reference date),
starting with February 2018 to the Agent and to all Lenders via the agent by the
end of the month after the month of the reference date.

⑧ It shall submit an inventory list and materials that indicate the production
quantity for the machinery for the reference dates of the end of March, June,
September and December, starting with March 2018, to the Agent and to all
Lenders via the Agent by the end of the second month after the month of the
reference date.
⑨
Any change to the business plan shall be promptly reported to the Agent and all
the Lenders via the Agent.

⑩
Otherwise, a situation occurs that would have a material effect on the project
shall be reported to the Agent and all the Lenders via the Agent.

⑪
Promptly after the execution of this loan, it shall submit to the Agent and all
the Lenders via the Agent a document (including but not limited to a receipt)
that confirms the actual payment of the monies procured.

(2) Until all of the liabilities of the Borrower towards the Lenders and the
Agent under the Agreement have been fulfilled after the date of entering into
the Agreement, the Borrower shall continue to legally hold and possess the
assets acquired with the Loan unless approved in advance in writing by all the
Lenders and the Agent, and it shall not change the status of the applicable
assets and shall not transfer it to anyone or provide them as securities and
shall not dispose of it via any other method, and it shall not agree with anyone
to dispose of it (however, it excludes provision of the machinery as security to
the Bank of Tokyo-Mitsubishi UFJ, Ltd. under the term loan agreement dated March
29, 2017, with an executable period). Provision of security in this Article
refers to securing (including the revolving mortgage, also applicable to this
Paragraph below) against the Borrower's asset or creating a pledge against the
Borrower's assets, and it excludes the lien under the provisions of regulations
on the right of first refusal or the right of lien etc.
(3) The Borrower undertakes to comply with each of the following item until it
has completed fulfilling all of its liabilities under the Agreement towards the
Lenders and the Agent after the date of entering into the Agreement.
① It shall maintain permissions etc. required for running its main business and
it shall continue the business in compliance with all the laws and regulations
etc.
②
It shall not change its main business.

③
Other than by the laws and regulations, it shall not deprioritize the payment
for any of the liabilities under the Agreement against other unsecured and
unsubordinated liabilities (including liabilities that would incur a shortage
after cashing the securities among secured loans) and it shall be treated at
least as the same priority.

④ Unless agreed by the Agent and all the Lenders, any organizational change at
the Borrower or the subsidiary or its affiliated company that will or may have a
material adverse effect on the fulfillment of its liabilities under the
Agreement (with the meaning defined in Article 2 Item 26 of the

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Companies Act), merger, company split, exchange of stocks, transfer of stocks,
transfer of all or part of the business or assets (including a transfer for the
purpose of sale and leaseback), reduction in capital or accept a transfer of all
or part of an important business or assets of a third party.
⑤
None of Article 16, Item 10 (a)-(n) shall be applicable.

⑥
It shall not engage in activities to which any of the following (a) to (e) would
be applicable by acting itself or through utilization of another party.

(a) Violent demands
(b) Inappropriate demands that are beyond the legal liabilities
(c) Threatening words or conduct a use of violence in connection with a
transaction
(d)
Disseminating rumors and using false plans or influence to damage the credit of
the Lenders or the Agent, or interfering with the business of the Lender or the
Agent

(e) Any other conduct that is equivalent to (a) to (d) above
(4)
①　The Borrower warrants that the amount shown in the net assets on its
non-consolidated balance sheet as of the end of the accounting period of each
fiscal year of the Borrower that ends on the date of entering the Agreement or
later shall be maintained at (a) 100 million yen or more, (b) amounting to at
least 70% of the amount in the Net Asset in the non-consolidated balance sheet
for the Borrower as of the end of the accounting period immediately prior to the
accounting period. However, if the amount of (a) is 250 million yen or more,
they will not be asked to top up (b).

② The Borrower undertakes to maintain the amount obtained through the following
formula at or above 405 million yen in connection with the non-consolidated
profit and loss statement of the Borrower for each of the accounting period that
ends on the date the Agreement is entered into or later.
(Formula for calculation) "Ordinary profit or loss" + "Depreciation costs" -
"the amount applied to the corporation tax" - "dividends"
(5) If the Borrower is served with an order for a provisional seizure,
preservative attachment or a seizure order for the loan credit, it shall notify
all the Lenders via the Agent in writing along with a copy of the order.

(6) The Borrower shall enter into and maintain an agreement to buy and sell the
machinery as entered into with the seller of the machinery legally and
effectively, and that it shall have a legally binding effect.
(7) The borrower shall commence operation of the newly installed core product
manufacturing line in this project by the end of September 2018, and the Agent
and all of the Lenders in writing.
(8)
The Borrower shall maintain the investment ratio of the parent company (name of
the corporation: Neo Photonics (China) Co., Ltd., located at 37 Central Queens
Road in Hong Kong special administrative region of China), at 100%.

Article 18 (Situation leading to the loss of benefit of terms)
(1) If one situation set out in the following items occurs, even in the absence
of any notice from the Lenders or the Agent, the Borrower shall lose the benefit
of terms for all of the liabilities to all the Lenders and the Agent under the
Agreement automatically and shall immediately pay the principal and interest of
the Loan and the settlement money and any other monies that the Borrower has the
obligation to pay under the Agreement in accordance with the provisions of
Article 14.
①
If the Borrower has stopped making the payment, or commencement of bankruptcy
proceedings, commencement of civil rehabilitation proceedings, commencement of
corporate rehabilitation, commencement of special liquidation or other petition
for a similar legal liquidation (including a similar petition outside of Japan)
against the Borrower.

②
If the borrower has voted for dissolution or it has received an order for
dissolution (except for the Borrower's dissolution due to its absorption-type
merger or consolidation-type merger).

③
If the Borrower has abolished its business.

④ If the Borrower has been subject to suspension of dealings at a clearing house
or suspension of dealings on densai.net Co., Ltd., or equivalent sanction by
another electronic credit recording institution.
⑤
If a provisional seizure, preservative attachment or a seizure order or notice
(including similar proceedings outside of Japan) pertaining to the deposit
credit that the Borrower has on the Lenders

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has been dispatched or if a trial ordering the execution of the preservative
attachment or a seizure has taken place.
(2) If one situation set out in the following items occurs, even in the absence
of any notice from the Agent to the Borrower based on the demand from the
majority of Lenders or the Agent, the Borrower shall lose the benefit of terms
for all of the liabilities to all the Lenders and the Agent under the Agreement
and shall immediately pay the principal of the Loan and the settlement money and
any other monies that the Borrower has the obligation to pay under the Agreement
in accordance with the provisions of Article 14.
① If the Borrower has been delinquent with all or part of the financial
liability towards a Lender or the Agent regardless of whether it is a financial
liability under the Agreement.
②
If it becomes apparent that even one of the items in Article 16 is not true.

③
When a breach of obligations under the Agreement has been committed by the
Borrower except for Item 1 of this Paragraph (however, if the breach can be
remedied, when it is not remedied for 10 business days or more).

④
If an order or notice for seizure, provisional seizure, or preservative
attachment has been made or dispatched (including similar proceedings outside of
Japan) for the security that has been provided by the Borrower to the Lenders or
if the auction proceedings has been commenced.

⑤
If the benefit of the terms for the corporate bond issued by the Borrower has
been lost.

⑥
If the Borrower has been delinquent in all or part of its financial liabilities
other than the financial liabilities under the Agreement or if the Borrower has
lost the benefit of the term therefor, or if it is delinquent in fulfilling all
or part of its obligations when the obligation to fulfill the guarantee has
arisen for the guarantee that the Borrower has provided for the liabilities of a
third party.

⑦
If the Borrower has suspended its operation or if it has been subject to a
disposition from a competent government authority etc. to suspend its operation.

⑧
If there has been a petition for special conciliation against the Borrower.

⑨ Except for the foregoing items, if there is deterioration in the Borrower's
business or assets or there is a risk of such deterioration and it is deemed
necessary for the purpose of preserving the credit.
(3) If there is a delay in notification of the preceding Paragraph due to a
reason for which the Borrower is responsible, the Borrower shall lose all the
benefit of the term under the Agreement as of the time point that should
normally have been reached, and shall immediately pay all of the monies that the
Borrower has the obligation to pay under the Agreement in accordance with the
provisions of Article 14.
(4) If a Lender comes to know that a situation set out in Items 1-4 of Paragraph
1 of this Article or the Items in Paragraph 2 of this Article has occurred, it
shall immediately notify the Agent and the Agent shall notify all other Lenders
of the occurrence. In the case of an occurrence of a situation set out in Item
5, Paragraph 1 of this Article, if the Lender who is the debtor to the credit
pertaining to the situation comes to know that the situation has occurred, the
Lender shall notify the Borrower and all other Lenders and the Agent of the
occurrence of the situation.
Article 19 (offsets, execution of the permissible lien and voluntary sell-off)
(1)
When the Borrower needs to fulfill its obligations to the Agent or the Lender
for reasons such as arrival of term, loss of the benefit of the term or other
reasons, the Agent or the Lender shall be able to (a) offset the deposit
liabilities, liabilities under an insurance contract or any other liabilities
that the Agent or the Lender has against the Borrower against the liabilities of
the Borrower under the Agreement regardless of the terms of such liabilities,
notwithstanding the provisions of Article 14, Paragraph 2, and (b) receive a
refund of various deposits instead of the Borrower to apply it to the repayment
of liabilities, omitting the prior notice and specified procedures. Calculation
of the interests, settlement money, delinquency charges etc. when making such
offsets or application to repayment shall be made on the basis that the
applicable credit and liabilities would be eliminated on the date of the
calculation, and the interest rate or the rate of fees shall be in accordance
with the provisions of the agreement pertaining to the interest rate or rate of
fees, and for foreign exchange rate the rate at the time of the calculation as
reasonably determined by the Agent or the Lender.

(2) The Borrower shall be able to offset the credit under a deposit credit or
under an insurance contract or others that it has against the Agent or a Lender
against the liabilities under the Agreement that are due for repayment to the
Agent or the Lender, only for such credit where the term has been reached and

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there is a necessity for the purpose of maintaining the credit. In this case,
the Borrower shall notify in writing of the offset, and shall promptly provide
to the Agent or the Lender the stamped certificate or passbook for the deposit
credit, credit under an insurance contract or other credits that were offset.
Calculation of the interests, settlement money, delinquency charges etc. when
making such offsets shall be made on the basis that the applicable credit and
liabilities would be eliminated on the arrival date of the notice of offset, and
the interest rate or the rate of fees shall be in accordance with the provisions
of the agreement pertaining to the interest rate or rate of fees, and for
foreign exchange rate the rate at the time of the calculation as reasonably
determined by the Agent or the Lender.
(3) When the Borrower needs to fulfill its liabilities to the Agent or the
Lender for reasons such as arrival of term, loss of the benefit of the term or
other reasons, the Agent or the Lender shall be able to exercise the permissible
lien regardless of the provisions of Article 14, Paragraph 2 (including
collection through subrogation with properties and receipt or voluntary disposal
of payments in substitute using the assets on which the permissible lien has
been set, "execution of permissible lien" hereafter).
(4) Notwithstanding the provisions of Article 14, Paragraph 2, when the Borrower
needs to fulfill its liabilities to the Agent or the Lender for reasons such as
arrival of term, loss of the benefit of the term or other reasons, the Borrower
shall be able to notify the Agent in writing in advance and voluntarily sell off
the assets that are subject to permissible lien with the Agent or the Lender as
the holder of the security and directly pay the monies received to the Agent or
the Lender as the fulfillment of liabilities under the Agreement or provide the
assets under the permissible lien to which the Agent or the Lender is a security
holder as payments in substitutes as fulfillment of its liabilities under the
Agreement, and the payment shall be deemed to be fulfillment of liabilities
under the Agreement.
(5) If the principal of the individual loan of the Lender is repaid or offset on
a date other than the interest payment date for reasons for which the Lender is
not responsible (including but not limited to when the principal is eliminated
through the offset in accordance with Paragraph 1 of this Article), if the
reinvestment interest rate pertaining to the individual loan that was repaid or
offset is below the interest rate applicable to the interest calculation period
to which the date of repayment or offset belong, except as otherwise set out in
the Agreement, the Borrower shall pay to the Lender the settlement money
pertaining to the repayment or offset on the same day as the repayment or
offset.
(6) If an offset or application of repayment under Paragraph 1 or 2 of this
Article is made, exercise of permissible lien has been made under Paragraph 3 of
this Article, or if the asset that is subject to permissible lien is sold
voluntarily or used in payments in substitute under the provisions of Paragraph
4 of this Article, the Lender in the case of Paragraph 1 and 3 of this Article
or the Borrower in the case of Paragraph 2 and 4 of this Article shall promptly
notify the Agent of the details in writing. If such a notice is delayed without
a reasonable reason or if the Lender or the Agent incurs damages, the Lender who
neglected the notice or the Borrower who neglected the notice shall be
responsible for it.
Article 20 (Arrangements between the Lenders and the Agent)
(1) If the liabilities of the Borrower under the Agreement towards one of the
Lenders have been eliminated other than in accordance with the provisions of
Article 14 or Article 15 (except where a offset or application of repayment has
been made under Paragraph 1 or 2 of the preceding Article) (the applicable
Lender is the "Lender to whom the liabilities have been eliminated" in this
Paragraph), except as set out otherwise in the Agreement, all the Lenders and
the Agent shall make arrangements between Lender and the Agent by carrying out
transfer of credits or grant and acceptance of credits in accordance with the
provisions of each item below so that it would produce the same result as if the
liabilities towards the Agent and the Lenders have been eliminated in accordance
with the provisions of Article 14 and 15. If an agreement on actions such as the
transfer of credits or the grant and receipt of credits or other equivalent
actions cannot be obtained from all the Lenders and the Agent, all the Lenders
shall follow the action determined by the Agent's discretion. However, if the
arrangement between the Lenders and the Agent set out in this Paragraph is
planned to include transfer of credit (including but not limited to those set
out in Item 2 of this Paragraph) but the Lender who is the transferor of the
credit can refuse such a transfer.
①
The Agent shall identify the credit that would have been paid to other Lenders
and the Agent would have been paid under the provisions of Article 14 and 15
("other lenders etc." in this Paragraph) and calculate on the assumption that
the monies pertaining to the elimination of the

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liabilities would have been paid to the Agent under the provisions of Article 1,
Paragraph 1 at the time of the elimination of liabilities.
②
The Lender to whom the liabilities have been eliminated shall purchase part of
the credit belong to other Lenders that has been identified by the Agent,
amounting to the sum calculated by the Agent in accordance with the provisions
of the preceding item, and it is purchased at the face value from other Lenders.

③
When the purchase of credit as per the foregoing item is made, other Lenders
etc. that have sold the credit shall notify the Borrower promptly after the sale
of the credit at its own cost, using a certificate with the date of confirmation
as set out in Civil Code 467.

(2) Notwithstanding the foregoing, no arrangement between the Lenders and the
Agent shall be made as set out in the preceding Paragraph and only the relevant
Lender shall receive the repayment.
①
When the lender has exercised the permissible lien

②
When it has been determined that the Lender shall receive a repayment of credit
held against the Borrower based on the Agreement in terms of the permissible
lien as a result of the auction as an execution of compulsory execution or lien
by the third party

③ When the liabilities of the Borrower under the Agreement has been eliminated
due to an offset or application of repayment has been made in accordance with
the provisions of Paragraph 1 or 2 of the preceding Article
④
In accordance with the provisions of Paragraph 4 of the preceding Article, a
voluntary sale of the assets subject to the permissible lien with the Lender as
the security holder, and the monies received were paid directly to the Lender,
or payments in substitute for the assets subject to the permissible lien and the
liabilities under the Agreement has been eliminated for the applicable Lender

Article 21 (Rights and Obligations of the Agent)
(1) The agent shall carry out agency services for all Lenders under contract
with all the lenders, exercise its authority and carry out agency services in
accordance with the commission from all the Lenders, and shall exercise the
authority recognized by the agent to be generally required for carrying out is
Agent services. The Agent shall not be held responsible in any way other than as
set out expressly in each Article and Paragraph for the Agreement and it shall
not be responsible whatsoever for failure of the Lenders to perform their
obligations in any way. Further, the Agent is a representative of the Lenders,
and it shall not become a representative of the Borrower unless otherwise
specified.
(2) The Agent shall be able to rely on the communications, documents and
materials that are considered true and accurate and considered to have been
signed or the name and seal placed by a suitable person and issued, and the
Agent shall be able to act in reliance of the written opinions and descriptions
chosen reasonably by the Agent in connection with the Agreement within a
required extent.
(3) The Agent shall exercise care as a good controller in performing its duties
exercising its authorities under the Agreement.
(4) The Agent, its directors or employees or representative shall not be liable
to the Lenders in any way under the Agreement or for activity or inactivity in
connection with the Agreement unless it is intentional or grossly negligent. The
Lenders shall jointly indemnify the Agent to the extent that the Borrower does
not repay the liabilities and damages etc. that the Agent has borne in
performing its duties under the Agreement (including but not limited to the
costs incurred in order to prevent damage or loss and the costs incurred to
recover the damage or loss (including attorney's fees)). However, if the Agent
is also a Lender, the Lenders other than the Agent shall jointly indemnify the
Agent for the amount remaining after the deduction of the participation
percentage of the Lender who is also the Agent (however, if there is a Lender
who is unable to fulfill the indemnification liabilities, then the participation
percentage of the Lender who is also the Agent shall be calculated based on the
total excluding the applicable Lender who is unable to fulfill the
indemnification liabilities).
(5)
The Agent shall perform the action in accordance with the written instruction
from the majority of Lenders as long as it is legal, and in this case the Agent
shall not be responsible in any way towards the Borrower or the Lender for the
consequences of the action.

(6) Unless the agent has receive a notification of the existence of a situation
set out in items under Article 18, Paragraph 1 or 2 or the situation that
constitutes a situation through notification or passage of time from the
Borrower or the Lender, the Agent is deemed not to have known the existence of
such situation.

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(7) The Agent does not warrant the validity of the Agreement or the matters
represented in the Agreement in any way, and the Lenders shall assess the
creditworthiness of the Borrower and other required matters based on the
documents and information that the Lenders themselves deem appropriate and enter
into the Agreement at its own decision and engage in the transaction listed in
the Agreement.
(8) If the Agent is also a Lender, the rights and obligations as the Lender
under the Agreement shall be the same as other Lenders, notwithstanding the
Agent's duties under the Agreement. In addition, the Agent may engage in banking
transactions with the Borrower that are generally recognized outside the scope
of the Agreement. The Agent does not have any obligation to disclose to other
Lenders any information about the Borrower that it has gained in dealings
outside the Agreement (the information received from the Borrower shall be
deemed to have been obtained in dealings outside the Agreement unless it is
expressly indicated that it has been sent under the Agreement), and it has no
obligation to allocate to other Lenders any monies paid by the Borrower for
dealings with the Borrower outside the Agreement.
(9) Calculation of the amount of individually loaned money and the amount of
allocation to the Lenders under the provisions of Article 15 shall be rounded
down to the nearest yen for the amount allocated to Lenders other than the
Lender designated by the Agent ("Lender with fractional integration" in this
Paragraph, however, if the Agent is also a Lender, the Lender who is also the
Agent shall be the Lender with fractional integration), and the amount allocated
to the Lender with fractional integration shall be the total amount of
allocation minus the amount allocated to other lenders. Except for such cases,
handling of the amount below one yen required under the Agreement shall be as
per the method deemed appropriate by the Agent.
(1) The determination of the interest rate, the interest calculation period and
the repayment date, other determinations and the amount paid under the Agreement
included in the notice that the Agent issues to the Borrower or the Lenders
shall be binding on the Borrower and the Lenders as final unless there is an
obvious error.
(11) If the Agent receives a notice from the Borrower that should be notified to
the Lenders under the Agreement, the Agent must promptly notify the details to
all the Lenders and if it receives a notice from the Lenders that should be
notified to the Borrower or other Lenders under the Agreement, the Agent must
promptly notify the details to the Borrower or all the Lenders. The Agent shall
make available any documents that it has obtained from the Borrower and kept for
inspection by the Lenders during normal business hours of the Agent.
Article 22 (Resignation and dismissal of the Agent)
(1) The procedures pertaining to resignation of the Agent shall be as follows.
①
The Agent shall be able to resign by notifying all the Lenders and the Borrower
in writing. However, its resignation shall not be effective until the succeeding
agent has been appointed and its appointment has been agreed.

② When the notice set out in the preceding item has been issued, the majority of
Lenders shall appoint the succeeding Agent with the agreement from the Borrower.
③
If the person who will become the succeeding agent has not been appointed by the
majority of Lenders within 30 days of the date of the notice as per Item 1 of
this Paragraph (including the actual date), or if the person appointed by the
majority of Lenders has not agreed to its appointment, then the existing Agent
shall be able to appoint a succeeding agent on behalf of the majority of Lenders
with an agreement from the Borrower.

(2) The procedures pertaining to dismissal of the Agent shall be as follows.
①
The majority of Lenders shall be able to dismiss the Agent by notifying all
other Lenders, the Borrower and the Agent in writing. However, its dismissal
shall not be effective until the succeeding agent has been appointed and its
appointment has been agreed.

② When the notice set out in the preceding item has been issued, the majority of
Lenders shall appoint the succeeding Agent with the agreement from the Borrower.
(3) If the person appointed as the succeeding Agent under Paragraph 1 of this
Article or the preceding Paragraph accepts its appointment, the previous Agent
shall hand over the set of documents that they are keeping as the Agent under
the Agreement to the succeeding Agent, and shall cooperate fully so that the
succeeding Agent can perform its duties as the Agent as set out in the
Agreement.

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(4) The succeeding Agent shall take over the rights and duties under the
Agreement that were held by the previous Agent, and the previous Agent shall
have all duties that it had as the Agent upon the succeeding Agent taking up the
position. However, any terms and conditions of the Agreement shall continue to
be valid and applicable for any action (including inaction) taken by the
previous Agent during its period in position.
(5) The Agent shall be able to resign from its position as an Agent by agreement
with the majority of Lenders notwithstanding the provisions of the preceding
four Paragraphs if any of the following items is applicable. If the Agent reigns
in accordance with the provisions of this Paragraph, the reigning Agent shall
promptly notify the Borrower of its resignation, and the Borrower shall not
object to such resignation. Even in the case of the Agent resigning under the
provisions of this Paragraph, the Borrower shall not have its payment
liabilities for the Agent's fees that have already been incurred.
①
If there has been a commencement of bankruptcy proceedings, commencement of
civil rehabilitation proceedings, commencement of corporate rehabilitation,
commencement of special liquidation or other petition for a similar legal
liquidation (including a similar petition outside of Japan) against the
Borrower.

② If the Borrower has failed to pay the Agent fees and the Borrower has failed
to pay despite the reminder to pay within an appropriate period.
Article 23 (collective decision of the majority of Lenders)
(1) The procedures pertaining to a collective decision by the majority of
Lenders shall be as follows.
① The lenders shall be able to issue a notice to the Agent to request a
collective decision by the majority of Lender when they determine that a
situation that requires an instruction by the majority of Lenders as set out in
the Agreement has arisen.
② The Agent receiving the notice specified in the preceding Item shall promptly
notify all the Lenders of the intent to conduct a collective decision of the
majority of Lenders.
③ The Lenders who have received the notification set out in the preceding Item
shall make its own decision pertaining to the situation and shall notify the
Agent of its decision within five business days.
④ When a collective decision of the majority of Lenders has been reached through
the preceding three items, the Agent shall promptly notify the Borrower and all
the Lenders the details of the decision as an instruction by the majority of
Lenders.
(2) The Agent shall be able to issue a notice to all the Lenders that a
collective decision by the majority of Lender shall take place when it
determines that a situation that requires a collective decision by the majority
of Lenders other than those set out in the preceding Paragraph has arisen. The
procedures after carrying out the notice shall be as set out in Item 3 and 4 of
the preceding Paragraph.
Article 24 (Alteration to the Agreement)
(1) The Agreement cannot be changed without a written agreement among the
Borrower, all the Lenders and the Agent.
(2) Notwithstanding the previsions of the preceding Paragraph, if the Agent is
reigning in accordance with Article 22, Paragraph 5, and the succeeding Agent is
not immediately appointed by the agreement of the majority of Lenders, then the
Agreement may be changed within the reasonable extent necessary in order to
enable each Lender to exercise its rights individually by the written agreement
of the majority of Lenders and the Agent (if the Agent has already resigned, it
shall be the majority of Lenders). The party who changed the Agreement in
accordance with the provisions of this Paragraph shall notify other parties to
the Agreement of the details of the change in writing.
Article 25 (Transfer of position)
(1) The Borrower cannot transfer this entire Agreement or its rights and
obligations under the Agreement unless all the Lenders and the Agent approve it
in writing in advance.
(2) Prior to completion of the lending obligations, the Lender may transfer its
position under the Agreement and all of the rights and obligations accompanying
such position to a third party (partial transfer shall

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not be permitted) only if all other Lenders, the Borrower and the Agent agree in
writing in advance (the Lender that performed the transfer under this Article
shall be referred to as "transferor of position" and the person to whom the
transfer was performed is refereed to as "transferee of position" in this
Article). In this case, the transferor of position and the transferee of
position shall send a notice of transfer of the entire Agreement to the Agent
along with a copy of the written agreement from all other Lenders, the Borrower
and the Agent. All other Lenders, the Borrower and the Agent shall not be able
to refuse to give their approval without a reasonable cause, and the Agent shall
issue a notice to all the Lenders of in accordance with the provisions of
Article 28, Paragraph 5 if such a transfer has been performed.
①
The transferee of position is a qualified transferee.

②
No taxes collected at source shall be incurred by the transfer and there shall
not be any increase in the interests payable by the Borrower to the transferee
of position in accordance with the provisions of Article 14, Paragraph 5
(excluding where the Lender transfers its position under the Agreement to its
overseas subsidiary or affiliated company due to abolishment of its lending
business in Japan).

(4) All costs etc. arising from the transfer under the preceding Paragraph shall
be borne by the transferor of position. In addition, the transferor of position
shall pay the Agent 500,000 yen plus consumption tax and local consumption tax
in consideration for the administrative process in connection with the transfer
prior to the date of such transfer.
Article 26 (Transfer of loan credit etc.)
(1) The Lender shall be able to transfer all of the loan credit (partial
transfer shall not be permitted) along with all the accompanying rights and
obligations as well as the position under the Agreement after the completion of
its lending obligations and all the requirements set out in the following Items
are satisfied, except otherwise set out in the Agreement. The transferor and the
transferee shall meet the requirements for perfection against a third party and
the requirements for perfection against the debtor in respect to the transfer on
the transfer date, and in this case, the transferor and the transferee shall
immediately notify the Agent of the transfer in their joint names. The
notification shall be made by sending the notice of transfer of credits etc. to
the Agent. All other Lenders, the Borrower and the Agent shall provisionally
approve the transfer at this time. In this case, the loan credits that were
transferred all the rights and obligations and in applying each terms and
conditions of the Agreement pertaining to the position under the Agreement, the
transferee will be treated as the Lender.
① The transferee shall be bound by the loan credit that has been transferred to
it and all of the rights and obligations pertaining to it and each of the terms
and conditions pertaining to the position under the Agreement as well as the
loan credit under the Agreement and all the rights and obligations pertaining to
it.
②
The transferee is a qualified transferee.

②
No taxes collected at source shall be incurred by the transfer and there shall
not be any increase in the interests payable by the Borrower to the transferee
in accordance with the provisions of Article 14, Paragraph 5 (excluding where
the Lender performs a transfer under the Agreement to its overseas subsidiary or
affiliated company due to abolishment of its lending business in Japan).

(2) All costs etc. arising from the transfer under the preceding Paragraph shall
be borne by the transferor. In addition, the transferor shall pay the Agent
500,000 yen plus consumption tax and local consumption tax in consideration for
the administrative process in connection with the transfer prior to the date of
such transfer.
Article 27 (Collection from third party etc.)
(1) The Borrower shall not consign the guarantee that treats the liabilities of
the Borrower under the Agreement as the liabilities under guarantee to a third
party unless the Agent and all the Lenders have agreed in writing in advance
after entering into the Agreement (including mortgages but not including
mortgages that are revolving guarantee and revolving mortgage) and the Borrower
shall not delegate the liabilities or fulfillment thereof under the Agreement to
a third party.

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(2) The Lenders shall be able to receive the repayment for the liabilities of
the Borrower under the Agreement from a third party only when the criteria in
all of the following Items have been met (however, in the case of repayment with
monies received through exercise of the lien that has been set by the third
party mortgagor or voluntary sale of assets which is subject to the lien set by
the third party mortgagor or a payment in substitute using the assets which is
subject to the lien set by the third party mortgagor, if it meets the criteria
set out in Item 1 of this Paragraph). The Lender shall immediately notify the
Agent of the applicable repayment in accordance with the provisions of this
Paragraph when the repayment has been received from a third party. The Lender
shall do in the joint names with the applicable third party and the Borrower
shall do so on its own. The provisions in Article 14, Paragraph 2 shall not
apply to the receipt of repayment under the provisions of this Paragraph, and
the elimination of the Borrower's liabilities under the Agreement through
receipt of the applicable repayment shall not be subject to arrangement between
the Lender and the Agent set out in Article 20, Paragraph 1.
(1) If a third party is exercising the recourse that has been obtained as a
result of the repayment and the credit that is obtained in subrogation to the
Lender against the Borrower, the third party shall agree in writing that the
recourse and the credit obtained in place of the Lender shall be treated the
same as the credit pertaining to the applicable repayment, and that the third
party shall be bound by the terms and conditions of the Agreement, and submit
the document to the Agent for the Lenders and the Agent.
②
The third party is a qualified transferee, and it is not a subsidiary or
affiliate company of the Borrower, and the Borrower is not a subsidiary or
affiliate of the third party.

③
If the repayment is a repayment of liabilities pertaining to the loan credit,
the full amount of the loan credit shall be repaid.

④
No taxes collected at source shall be incurred by the repayment and there shall
not be any increase in the interests payable by the Borrower to the third party
in accordance with the provisions of Article 14, Paragraph 5.

The third party exercises the recourse or obtains the loan credit in
subrogation, obtaining of recourse and subrogation shall be deemed to be a
transfer of loan credit in accordance with the provisions of the preceding
Article, and the provisions of Paragraph 2 of the same Article shall be
applicable mutasis mutandis.
Article 28 (General provisions)
(1) Confidentiality
The Borrower shall not object to disclosure of information in connection with
each of the following Items.
①
If there has been a notification of non-performance of an individual loan under
the provisions of Article 6, Paragraph 1, the situation set out in Items under
Article 18, Paragraph 1 or Paragraph 2, or if a situation that constitutes such
a situation has arisen through notification or passage of time or both, or if a
collective decision by the majority of Lenders is required under the provisions
of Article 23, the Agent and the Lenders will disclose to each other to a
reasonable extent the information the Agent and the Lenders have obtained on the
Borrower and dealings with the Borrower in connection with the Agreement or
agreements other than the Agreement.

②
Disclosure of information pertaining to the Agreement to the transferee
(including the transferee of position as provided for under Article 25) and
those who are considering a transfer (including someone who is engaging in
intermediary service pertaining to such a transfer) on condition that the Lender
imposes the duty of confidentiality on the other party when transferring the
position under the provisions of Article 25 or when transferring the loan credit
etc. under the provisions of Article 26. The information pertaining to the
Agreement refers to the information on creditworthiness of the Borrower that has
been obtained in connection with the Agreement, details of the Agreement and the
information related to it, and details of the loan credit etc. that are subject
to transfer and information relating to them, and it does not include the
information pertaining to the creditworthiness of the Borrower that has been
obtained in connection with any agreement other than the Agreement.

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③
The Lender or the Agent to disclose the information pertaining to the Agreement
to the extent reasonably required under the order, instruction or request etc.
by the applicable law and regulations, administrative, jurisdictional or other
related official agency, central bank or self-regulatory organizations in Japan
and overseas, or specialists including attorneys, judicial scriveners, chartered
accountants, auditing firms, tax accountants, rating agencies etc. who require
disclosure of confidential information in the course of their work. In addition,
the Lenders and the Agent may disclose the information pertaining to the
Agreement to its own parent company, subsidiaries and affiliated companies to a
required and appropriate extent for the purpose of internal control.

(2) Risk allocation, waivers, compensation and indemnification
(1) If the document supplied by the Borrower to the Agent or a Lender has become
lost, destructed or damaged for an avoidable reason such as an incident or a
disaster, the Borrower shall fulfill its liabilities under the Agreement based
on the records such as the Agent's or Lenders' ledgers and tickets upon
discussion with the Agent. The Borrower shall also promptly produce a
replacement document if requested by the Agent or a Lender via the Agent, and
shall provide it to the Agent or the applicable Lender via the Agent.
②
If the dealings that were performed after a careful examination by the Lender or
the Agent of signature or the seal of the representative or the agent of the
Borrower that was to be used in dealings under the Agreement and recognized to
be genuine, and it turns out that the seal was forged, altered or stolen and it
caused damages etc., the Borrower shall bear such damages etc.

③
The Borrower shall not make any claim against the Lender or the Agent if the
Borrower suffers damage etc. due to the actions taken by the Lenders or the
Agent (including the decision not to execute the individual loan, or issuing a
notice to the Borrower in accordance with Article 18, Paragraph 2, and
disclosure of information in accordance with Item 1 of the preceding Paragraph)
due to the Borrower breaching the terms and conditions of the Agreement or any
of the Items in Article 16 not being true (including the matters set out in
Items (a) to (n) of Article 16, Paragraph 10 not being true or if the Borrower
has breached the provisions of Item 5 or 6 of Article 17, Paragraph 3, referred
to as "Borrower's Breach of Obligation etc." in this Item). Any damage etc. that
has been incurred by the Lender or the Agent due to the Lender not providing
indemnity under the provisions of Article 21, Paragraph 4 as a result of the
Borrower's breach of obligation etc. shall be discussed by the Lender and the
Borrower with sincerity and the responsible party shall foot such a damage.

(3) Severability of the Agreement
If part of the terms and conditions of the Agreement becomes invalid, illegal or
unenforceable, validity, legality or enforceability of any other terms and
conditions shall not be damaged or affected in any way.
(4) Relationship with banking transaction agreements
If there is a conflict with the provisions of the banking transaction agreement
or other comprehensive agreement pertaining to financial transaction that have
been separately provided by the Borrower to the Lender or entered into
separately between the Borrower and the lender ("transaction agreement" in this
Paragraph) and the terms and conditions of the Agreement, the provisions of the
Agreement will be prioritized, and the provisions of the transaction agreement
will apply where there are provisions in the transaction agreement that are not
set out in the Agreement.
(5)
Notices

①
Notices under the Agreement shall make it clear that it is being made under the
Agreement and all of them shall be in writing, and it shall be undertaken via
one of the methods listed in (a) to (d) below to the contact details of the
receiving party as listed in Table 1 annexed to the Agreement. Each party to the
Agreement may change the contact details by notifying the Agent of the changes
to the contact details.

(a) Issuance in person
(b) Registered post or by courier service
(c) Facsimile communication
(d) Interchange (only for communication between Lenders and the Agent)

Term Loan Agreement for NeoPhotonics Semiconductors GK dated January 24, 2018
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②
The notice in the preceding Item shall be deemed to become valid upon receipt
being confirmed on the facsimile machine of the sender in case of facsimile
communication and upon actual receipt for other methods.

(6) Change in notified details
①
The Lenders and the Borrower shall promptly notify the Agent when a change has
occurred in its trading name, name, representative, agent, signature, seal,
address and any other details notified to the Agent.

②
If a notice issued under the Agreement is delayed or does not arrive because the
party neglected to undertake the notification set out in the preceding Item, it
shall be deemed to have arrived at the time it should normally have arrived.

(7) Payment of funds
Fees and commissions incurred in the payment made by one of the parties of the
Agreement to another under the Agreement shall be borne by the payer.
(8) Calculation
In the absence of a clear provision for any calculation under the Agreement, it
shall be calculated daily based on 365 days per year, not including the last day
of the yearly period, the division is carried out last, and it shall be rounded
down to the nearest yen.
(9) Preparation of notarized deed
The Borrower shall undertake the procedures necessary to prepare a notarized
deed containing execution approval wording in relation to acknowledgement of
liabilities for enforceability of the liabilities under the Agreement any time
at the request of the Agent or the majority of Lenders. The costs incurred in
preparing the notarized document shall be borne by the Borrower.
(10) Governing law and the agreed jurisdiction
The governing law for the Agreement shall be the laws of Japan, and Tokyo
District Court shall be the non-exclusive, agreed court of jurisdiction for any
dispute arising in connection with the Agreement.
(11) Language
The Agreement shall be prepared in Japanese and it shall be the original.
(12) Matters to be discussed
Any matter not set out in the Agreement or a doubt that has arisen between
parties on the interpretation of the Agreement shall be discussed between the
Borrower and the Lenders via the Agent to determine its handling.

Term Loan Agreement for NeoPhotonics Semiconductors GK dated January 24, 2018
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In witness of the execution of the Agreement, one original copy of the Agreement
has been produced for representative or the agent of the representative for the
Borrower, Lenders and the Agent sign or place his/her name and seal and kept by
the Agent. The Lenders and the Borrower shall receive a copy thereof from the
Agent.

January 24, 2018

Revenue stamp
Borrower (Address, Name and Seal)

/s/ Authorized Signatory
༈Company chop of Neo Photonics Semiconductors GK)༉
(NeoPhotonics Semiconductors GK)

Term Loan Agreement for NeoPhotonics Semiconductors GK dated January 24, 2018
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Lender and Agent (Address, Name and Seal):

/s/ Authorized Signatory
(Chop of the Bank of Tokyo-Mitsubsihi UFJ, Ltd)
(The Bank of Tokyo-Mitsubishi UFJ, Ltd.)

Term Loan Agreement for NeoPhotonics Semiconductors GK dated January 24, 2018
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Lender (Address, Name and Seal):

/s/ Authorized Signatory
༈Chop of The Yamanashi Chuo Bank Ltd.༉༿
(The Yamanashi Chuo Bank, Ltd.)

Term Loan Agreement for NeoPhotonics Semiconductors GK dated January 24, 2018
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Annexed Table 1 (List of Parties)

List of Parties

1.　Borrower
Trading Name / Name
NeoPhotonics Semiconductors GK
Address
550-10 Higashi-Asakawa-machi, Hachioji-shi, Tokyo

Contact
9F Azuma-cho Center Building, 9-8 Azuma-cho, Hachioji-shi, Tokyo ( 192-0082)
Accounting team
Telephone Number: 042-662-6630
Fax Number: 042-649-2131

2.　Agent
Trading Name / Name
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Address
2-7-1 Marunouchi, Chiyoda-ku, Tokyo

Contact
JP Tower, 2-7-2 Marunouchi, Chiyoda-ku, Tokyo (100-0005)
Telephone Number for Financial Solutions Department, Office of Administration:
03-6259-7689
Fax Number: 03-5252-5941

3.　Lender
(1)
Trading Name / Name
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Address
2-7-1 Marunouchi, Chiyoda-ku, Tokyo
Lending Office
Hachioji Branch

Contact
9-1 Asahi-cho, Hachioji-shi, Tokyo(192-0083)
Hachioji Branch, Corporate Division No. 1Telephone Number: 042-642-3402
Fax Number: 042-631-0157
Individually loaned money
550 million yen

(2)
Trading Name / Name
The Yamanashi Chuo Bank, Ltd.
Address
20-8, Marunouchi 1-chome, Kofu, Yamanashi
Lending Office
Hachioji Branch

Contact
2-4-8 Sennin-cho, Hachioji-shi, Tokyo(193-0835)
Hachioji BranchTelephone Number: 042-661-3221
Fax Number: 042-666-0173
Individually loaned money
300 million yen

Term Loan Agreement for NeoPhotonics Semiconductors GK dated January 24, 2018
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Annexed Table 2 (Repayment Schedule)

Repayment schedule

Principal repayment date
Principal repayment amount
April 30 2018
30,357,000 yen
July 31 2018
30,357,000 yen
October 31, 2018
30,357,000 yen
January 31 2019
30,357,000 yen
April 30, 2019
30,357,000 yen
July 31 2019
30,357,000 yen
October 31, 2019
30,357,000 yen
January 31 2020
30,357,000 yen
April 30, 2020
30,357,000 yen
July 31 2020
30,357,000 yen
October 31, 2020
30,357,000 yen
January 31 2021
30,357,000 yen
April 30, 2021
30,357,000 yen
July 31 2021
30,357,000 yen
October 31, 2021
30,357,000 yen
January 31 2022
30,357,000 yen
April 30, 2022
30,357,000 yen
July 31 2022
30,357,000 yen
October 31, 2022
30,357,000 yen
January 31 2023
30,357,000 yen
April 30, 2023
30,357,000 yen
July 30 2023
30,357,000 yen
October 31, 2023
30,357,000 yen
January 31 2024
30,357,000 yen
April 30, 2024
30,357,000 yen
July 30 2024
30,357,000 yen
October 31, 2024
30,357,000 yen
January 29 2025
30,361,000 yen

Term Loan Agreement for NeoPhotonics Semiconductors GK dated January 24, 2018
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Annex 1 (Confirmation)

Confirmation

Date

To the Lender
(The Lender in the Agreement shown below as of the time of submission of this
document)

C/O: The Bank of Tokyo-Mitsubishi UFJ, Ltd.
To: Financial Solutions Department, Office of Administration

Seal
(Borrower)

NeoPhotonics Semiconductors GK
Term Loan for 850 million yen

It is hereby confirmed by the Borrower that all the required procedures under
the laws and regulations and the Borrower's internal rules have been completed
to enter the term loan agreement dated January 24, 2018 for NeoPhotonics
Semiconductors GK (the "Borrower" hereafter) with the Bank of Tokyo-Mitsubishi
UFJ, Ltd. acting as the Agent ("the Agreement" hereafter) and for the borrowing
under the Agreement.

The terms used in this document has the same meaning as the terms defined in the
Agreement unless otherwise defined in this document.

END

Term Loan Agreement for NeoPhotonics Semiconductors GK dated January 24, 2018
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Annex 2 (Receipt)

Receipt
Revenue
stamp
200 yen

　　Date

To the Lender
(Referring to the Lender shown in the table below. Same hereafter.)

C/O: The Bank of Tokyo-Mitsubishi UFJ, Ltd.
To: Financial Solutions Department, Office of Administration

Seal
(Borrower)

NeoPhotonics Semiconductors GK
Term Loan for 850 million yen / Receipt for the Loan

We borrowed the following from each Lender and we confirm we have received the
loan today.

Details

Total amount            Yen

Lender
Loan amount
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Yamanashi Chuo Bank, Ltd.
550 million Yen
300 million Yen

END

Term Loan Agreement for NeoPhotonics Semiconductors GK dated January 24, 2018
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Annex 3 (Conditions restricting provision of security etc. and compliance report
pertaining to conditions for collection from a third party)

Conditions restricting provision of security etc. and compliance report
pertaining to conditions for collection from a third party

　　Date

To the Lender
(The Lender in the Agreement shown below as of the time of submission of this
document) Same hereafter.)

C/O: The Bank of Tokyo-Mitsubishi UFJ, Ltd.
To: Financial Solutions Department, Office of Administration

Seal
(Borrower)

NeoPhotonics Semiconductors GK
Term Loan for 850 million yen

In accordance with Article 17, Paragraph 1, Item 3 of the term loan agreement
dated January 24, 2018 for NeoPhotonics Semiconductors GK (the "Borrower"
hereafter) with the Bank of Tokyo-Mitsubishi UFJ, Ltd. acting as the Agent (the
"Agent" hereafter) ("the Agreement" hereafter), we, the Borrower, reports to the
Agent and the Lenders the compliance status of each matter set out in Article
17, Paragraph 2 and Article 27, Paragraph 1 from the [date of entering into the
Agreement/commencement date of the accounting period covered as shown in 1.
below (including the day itself) [for the first report only, select the date of
entering into the Agreement] until the date of submission of this document
(including the day itself) (the "applicable reporting period" hereafter) as
follows. The terms used in this document has the same meaning as the terms
defined in the Agreement unless otherwise defined in this document.

Details

1.
Accounting period reported　　　The accounting period ending in [month] [year]

2.
The report pertaining to the terms and conditions limiting the provision of
security etc. during the applicable reporting period as set out in Article 17,
Paragraph 2

( ) A
The Borrower continues to legally hold and possess the assets acquired with the
Loan, and has not changed the current status of the applicable assets and has
not transferred it to anyone or provided them as securities and has not disposed
of it via any other method, and it has not agreed with anyone to dispose of it
(however, it excludes provision of the machinery as security to the Bank of
Tokyo-Mitsubishi UFJ, Ltd. under the term loan agreement dated March 29, 2017,
with an executable period).

( )B    The Borrower continues to legally hold and possess the assets acquired
with the Loan, and has changed the current status of the applicable assets and
has transferred it to someone or provided them as securities and has not
disposed of it via any other method, and it has agreed with someone to dispose
of them but it has obtained a prior written agreement from all the Lenders and
the Agent. (However, it excludes provision of the machinery as security to the
Bank of Tokyo-Mitsubishi UFJ, Ltd. under the term loan agreement dated March 29,
2017, with an executable period).

3.
The report pertaining to the terms and conditions on third party collection as
set out in Article 27, Paragraph 1

Term Loan Agreement for NeoPhotonics Semiconductors GK dated January 24, 2018
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( ) The Borrower has not consigned the guarantee that treats the liabilities
under the Agreement as the liabilities under guarantee to a third party
(including mortgages but not including mortgages that are revolving guarantee
and revolving mortgage) has not delegated the liabilities or fulfillment thereof
under the Agreement of a third party.

( ) The Borrower has consigned the guarantee that treats the liabilities under
the Agreement as the liabilities under guarantee to a third party (including
mortgages but not including mortgages that are revolving guarantee and revolving
mortgage) or has delegated the liabilities or fulfillment thereof under the
Agreement of a third party, however, it has obtained a prior written approval
from the Agent and all the Lenders.

END

Term Loan Agreement for NeoPhotonics Semiconductors GK dated January 24, 2018
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