maintain balances in the Deposit Accounts and SecuritiesAccounts maintained in Italy (the “Avanex ItalyAccounts”) without Avanex and the applicable securitiesintermediary or bank having entered into a Control Agreement, solong as the Avanex Italy Accounts shall not have cash and CashEquivalents in an aggregate amount in excess of €2,130,000(Euros)at any one time. Subject to the Investments permitted bythe foregoing proviso, Parent shall not and shall not permit itsSubsidiaries that are Obligors to establish or maintain anyDeposit Account or Securities Account unless Agent shall havereceived a Control Agreement in respect of such Deposit Accountor Securities Account.(ii) Parent’s Subsidiaries that are not Obligors (other thanAvanex France, Avanex China, Avanex Thailand, Bookham China,Bookham Switzerland, and Forthaven as described further herein)shall not have cash and Cash Equivalents in an aggregate amountin excess of $300,000 at any one time; providedthat notwithstanding the other limitations in thisSection 6.12, the following non-Obligors may have cashand Cash Equivalents but only in accordance with the followingaggregate maximum amounts:     a. Avanex France shall not have cash and CashEquivalents in an aggregate amount in excess of€2,485,000 (Euros) at any one time,     b. Avanex China shall not have cash and CashEquivalents in an aggregate amount in excess of$1,500,000 at any one time,     c. Avanex Thailand shall not have cash and CashEquivalents in an aggregate amount in excess of$3,000,000 at any one time,     d. Unless and until Bookham China consummates theBookham China Sale and Leaseback, Bookham China shallnot have cash and Cash Equivalents in an aggregateamount in excess of $5,500,000 at any one time, and uponand during the 2 months after the consummation of theBookham China Sale and Leaseback, in an aggregate amountin excess of $14,000,000 at any one time,     e. Bookham Switzerland shall not have cash and CashEquivalents in an aggregate amount in excess of$3,500,000 at any one time, and     f. Forthaven Ltd., a company organized under thelaws of England and Wales (“Forthaven”), shallnot have cash and Cash Equivalents in an aggregateamount in excess of £135,000 (UK pounds sterling) at anyone time,     (c) Article 6 of the Agreement is hereby amended by adding the following Section6.16 immediately after Section 6.15:**6.16****Limitations on Inactive Subsidiaries**. Permit anyInactive Subsidiary to incur any liabilities (other than immaterialliabilities relating to the dissolution or winding down of suchInactive Subsidiary) or own or acquire assets in excess of $250,000fair market value, in the aggregate, or engage itself in anyoperations or business.
 

 
     (d) The following definitions in Schedule 1.1 of the Agreement are hereby amended toread as follows:“Administrative Borrower” has the meaning specified therefor in Section16.11.“Inactive Subsidiaries” means, collectively, AvanexInternational Corporation, a Delaware corporation, Avanex U.S.A.Corporation, a Delaware corporation, LamdaFlex, Inc, a Delawarecorporation, Pearl Acquisition Corp., a Delaware corporation,Marley Acquisition Corporation, a Delaware corporation, and“Inactive Subsidiary” means any one of them.“Permitted Intercompany Advance” means Intercompany Advances(a) made by any of Parent’s Subsidiaries that is not an Obligorto any of Parent’s other Subsidiaries that is not an Obligor;(b) made by Parent or any of Parent’s Subsidiaries to an ActiveObligor so long as they are the subject of the IntercompanySubordination Agreement;(c) made by any of Parent’s Subsidiaries that is an Obligor toBookham China, so long as (i) no Default or Event of Default hasoccurred and is continuing or would result therefrom, and (ii)all such Intercompany Advances do not exceed $4,500,000 permonth (subject to annual increases requested by Borrowers andacceptable to Agent, which increases must be based upon historicrevenue growth since the Closing Date), provided, thatno such Intercompany Advances may be made following BookhamChina’s receipt of cash proceeds from the Bookham China Sale andLeaseback, until such cash proceeds have been fully utilized tofund the ongoing business of Bookham China;(d) made by any of Parent’s Subsidiaries that is an Obligor toBookham Switzerland, so long as (i) no Default or Event ofDefault has occurred and is continuing or would resulttherefrom, and (ii) all such Intercompany Advances do not exceed$1,400,000 in any calendar month;(e) made by any of Parent’s Subsidiaries that is an Obligor toAvanex Thailand, so long as (i) no Default or Event of Defaulthas occurred and is continuing or would result therefrom, and(ii) all such Intercompany Advances do not exceed $1,000,000 inany calendar month;(f) made by any of Parent’s Subsidiaries that is an Obligor toAvanex China, so long as (i) no Default or Event of Default hasoccurred and is continuing or would result therefrom, and (ii)all such Intercompany Advances do not exceed $750,000 in anycalendar month;(g) made relating to the Avanex Restructuring by any of Parent’sSubsidiaries that is an Obligor to Avanex France or Avanex withrespect to the Avanex Italy Accounts in an aggregate amount notto exceed the Avanex Restructuring Amount;(h) made by any of Parent’s Subsidiaries that is an Obligor toany of Parent’s other Subsidiaries that is not an Obligor (otherthan Bookham China, Bookham Switzerland, Avanex Thailand, AvanexChina, and Avanex France), so long as (i) no Default or Event ofDefault has occurred
 

 
and is continuing or would result therefrom, and (ii) all suchIntercompany Advances do not exceed $100,000 outstanding at anyone time; and(i) payments made by any Obligor to the Lender Group in respectof obligations under this Agreement or the Loan Documents, tothe extent that the same are construed as “advances” for thebenefit of one or more of the other Obligors and so long as theyare subject to the Intercompany Subordination Agreement.“Permitted Intercompany Transactions” means (a) each of thetransactions set forth on Schedule P-1 that are materiallyconsistent with the past practices of Parent’s and its Subsidiaries’business operations as in effect on the Closing Date and disclosedto Agent on or before the Closing Date, (b) each of the transactionsset forth on Schedule P-1that are materially consistentwith the past practices of Avanex and its Subsidiaries’ businessoperations as in effect on the Avanex Merger Date, (c) transactionsby and between Obligors that are materially consistent with the pastpractices of Obligors’ business operations as in effect on theClosing Date and disclosed to Agent on or before the Closing Date,and (d) transactions between Parent or its Subsidiaries, on the onehand, and any Affiliate of Parent or its Subsidiaries, on the otherhand, so long as such transactions (i) are upon fair and reasonableterms, (ii) are fully disclosed to Agent if they involve one or morepayments in excess of $500,000 for any single transaction or seriesof transactions, and (iii) are no less favorable to Parent or itsSubsidiaries, as applicable, than would be obtainable in an arm’slength transaction with a non-Affiliate.     (e) Schedule 1.1 of the Agreement is hereby amended by adding the followingdefinitions in the appropriate alphabetical order:“Avanex” means Avanex Corporation, a Delaware corporation.“Avanex China” means Avanex Communication Technologies Co.,Ltd, a People’s Republic of China corporation.“Avanex Delivery Deadline” has the meaning set forth inAmendment Number Three to the Credit Agreement (“Amendment Three”),as amended by that certain letter, extending the time to satisfycertain conditions in Amendment Three, dated as of May 12, 2009, byand between Lenders, Agent and Borrowers.“Avanex France” means Avanex OIF S.A., a company organizedunder the laws of France.“Avanex Merger Date” means April 27, 2009.“Avanex Restructuring” means the reductions in work force,removal of redundant positions, and/or transfer of employees inconnection with the Avanex Merger occurring from the Avanex MergerDate up to and including a period of time not to exceed 12 monthsafter the Avanex Merger Date.“Avanex Restructuring Amount” means the severance, retentioncosts, taxes and other expenses with respect to the AvanexRestructuring, which amounts may not exceed €3,905,000 (Euros) inaggregate with respect to Avanex France or Avanex’s operations inItaly.
 

 
“Avanex Thailand” means Avanex (Thailand) Limited, a companyorganized under the laws of Thailand.     (f) Schedules P-1, P-2, 2.7(a), 4.5, 4.7(a), 4.7(b), 4.7(c), 4.7(d), 4.8(b), 4.8(c), 4.10,4.14, 4.15, 4.17 and 4.19 to the Agreement are hereby amended in their entirety by theSchedules delivered by the Parent and the Borrowers as of the date hereof.3. **PARENT**. Bookham, Inc., formed Oclaro, Inc., a Delaware corporation (“Oclaro”)as its wholly owned Subsidiary, and thereafter, Oclaro merged with and into Bookham, Inc., withBookham, Inc. as the surviving entity. Immediately after the merger, Bookham, Inc. changed itsname to Oclaro, Inc. Therefore, all references to Parent and/or Bookham, Inc. in the Agreement andthe other Loan Documents shall be deemed reference to Oclaro, Inc.4. **WAIVER**.     (a) Lender hereby waives the Events of Default under Section 7.2 of the Agreement dueto Parent’s violation of: (i) Section 5.16 as a result of Parent’s failure to deliver orcause the delivery of certain documents in connection with the formation of Oclaro and (ii)Section 6.3 as a result of the Oclaro merger with and into Bookham, Inc.     (b) Lender hereby waives the requirements set forth under “Permitted Dispositions,”subsection (f), of: (i) 30 days prior written notice of the sale of New Focus, Inc. assets,including delivery of detailed calculations that on a *pro forma*basis Borrowers will have positiveAvailability after giving effect to the sale and that no Overadvance would result, and (ii)delivery of updated schedules to the Loan Documents reflecting such sale on or before the closingdate. The Lender hereby agrees that the sale of the assets of New Focus, Inc. shall be a“Permitted Disposition” so long as: (i) the sale and/or exchange of assets is made on termssubstantially similar to the terms set forth in the Newport Asset Purchase Agreement, a copy ofwhich was delivered to Agent on or about May 21, 2009, (ii) at the time of such sale, no Default orEvent of Default has occurred and is continuing or would result therefrom, (iii) any cash proceedsare remitted to a Deposit Account of Parent or a Borrower which is subject to a Control AccountAgreement and any non-cash proceeds of sale are subject to Agent’s Lien, and (iv) within 15Business Days after the closing date of the New Focus, Inc. sale, Parent delivers to Agent updatedschedules to the Loan Documents reflecting changes to New Focus, Inc’s assets, provided, that in noevent may any schedule be updated in a manner that would reflect or evidence a Default or Event ofDefault. Upon the consummation of the sale of the assets of New Focus, Inc. in accordance withthese conditions, the Lender hereby agrees that the Liens on the assets sold shall automatically bereleased and the Agent agrees to execute any documents evidencing such Lien release as Parent shallreasonably request.     (c) Lender hereby waives Section 6.12 (to the extent any such waiver may be requiredunder the Agreement) with respect to the acquisition of assets from Newport Corporation to theextent such assets are acquired in connection with the sale of New Focus, Inc. assets described inclause (b) above.     (d) Lender hereby waives the requirement of 15 days prior written notice under Section6.5 of the Agreement with respect to the name changes of the following Subsidiaries of Parent:Bookham Technology plc, Bookham (US) Inc., Bookham Switzerland, Bookham China, Avanex China, AvanexThailand and Avanex France. The Lender hereby agrees that notice of such name changes providedherein is sufficient to satisfy the requirement of prior written notice set forth in Section6.5. The Subsidiaries of Parent identified herein shall provide Agent a copy of each filingmade to effect such name changes described herein, promptly upon, but in any event within oneBusiness Day of the filing date of such documents with the applicable jurisdiction ofincorporation.     (e) The waivers in this Section 4 shall become effective only in accordance withSection 7 hereof and then only in this specific instance and for the specific purposes setforth herein. The waivers in this Section 4 do not allow for any other or furtherdeparture from the terms and conditions of the Agreement, as amended hereby, or any of the otherLoan Documents, which terms and conditions shall remain in full force and effect.
 

 
5. **REPRESENTATIONS AND WARRANTIES**. Parent and each Borrower hereby affirms to Agent andLenders that, after giving effect to the consents, waivers and amendments herein, all of itsrepresentations and warranties set forth in the Agreement are true, complete and accurate in allrespects as of the date hereof.6. **RATIFICATION OF LOAN DOCUMENTS**. After giving effect to this Amendment, Parent and eachBorrower hereby restates, ratifies, and reaffirms the terms and conditions set forth in theAgreement, including all amendments thereto, and the other Loan Documents which are, and shallcontinue to be, in full force and effect.7. **NO DEFAULTS**. Parent and Borrowers hereby affirm to the Lender Group that, after givingeffect hereto, no Event of Default has occurred and is continuing as of the date hereof.8. **CONDITION PRECEDENT**. The effectiveness of this Amendment is expressly conditioned uponreceipt by Agent of the following:     (a) copies of the Governing Documents of Avanex, as amended, modified, or supplemented as ofthe date of delivery;     (b) a certificate of status with respect to Avanex, dated within 10 days of the date ofdelivery, such certificate to be issued by the appropriate officer of Avanex’s jurisdiction oforganization, which certificate shall indicate that Avanex is in good standing in suchjurisdiction;     (c) a certificate of status with respect to Avanex, dated within 30 days of the date ofdelivery, such certificates to be issued by the appropriate officer of the jurisdictions (otherthan Avanex’s jurisdiction of organization) in which the failure of Avanex to be duly qualified orlicensed would constitute a Material Adverse Change, which certificates shall indicate that Avanexis in good standing in such jurisdictions;     (d) all necessary documentation to ensure Agent shall have, for the ratable benefit of theLenders, a perfected first priority Lien over all the assets of Avanex, which are Collateral,subject only to Permitted Liens;     (e) updated schedules to the Loan Documents, as applicable;     (f) a fully executed copy of the deed of confirmation entered into by Bookham Technology PLC,Bookham Nominees Limited and Bookham, Inc., in favor of the Agent in relation to the Englishsecurity granted pursuant to the Security Agreement together with board minutes from each suchcompany in form and substance satisfactory to the Agent;     (g) a fully executed copy of this Amendment;     (h) a fully executed copy of the Reaffirmation of Guaranty attached hereto;     (i) a fully executed copy of the Joinder Agreement, executed by Avanex Corporation(“Avanex”), Borrowers, Parent, Agent and Lenders, whereby Avanex agrees to become a partyto and be bound by the terms of the Loan Documents;     (j) a fully executed copy of the Ratification Agreement executed by Parent, Agent and Lenders,whereby Oclaro restates, ratifies and reaffirms the representations and warranties (except to theextent that such representations and warranties related to an earlier date) set forth in theAgreement, that certain General Continuing Guaranty, dated as of August 2, 2006, by Bookham Inc.,and the other Loan Documents, which documents are, and shall continue to be, in full force andeffect, and that all obligations of Bookham, Inc. as “Parent” under the Loan Documents shall bedeemed to refer to all present and future obligations of Oclaro;     (k) a fully executed copy of Supplement Number One to Security Agreement executed by Avanex,Grantors and Agent, whereby Avanex agrees to be a Grantor under the Agreement and agrees to bebound by the terms of the Security Agreement; and
 

 
     (l) the General Continuing Guaranty executed by Avanex in favor of Agent, for the ratablebenefit of the Lenders, guaranteeing all of the Obligations of Borrowers.9. **CONDITIONS SUBSEQUENT**.     (a) Within 10 days of the date of this Amendment, Borrowers shall deliver to Agent the PledgedInterests Addendum executed by Parent, whereby Parent pledges the stock of Avanex to Agent inconnection with the Security Agreement;     (b) Within 10 days of the date of this Amendment, Borrowers shall deliver to Agent the PledgedInterests Addendum executed by Avanex, whereby Avanex pledges the stock of certain of itsSubsidiaries to Agent in connection with the Security Agreement;     (c) Within 15 days of the date of this Amendment, Borrowers shall deliver to Agent a fullyexecuted copy of the Patent Security Agreement executed by Avanex and Agent, whereby Avanex agreesto grant Agent, for the ratable benefit of Lenders, a continuing first priority security interestover the Patent Collateral (as defined therein) of Avanex;     (d) Within 15 days of the date of this Amendment, Borrowers shall deliver to Agent a fullyexecuted copy of the Trademark Security Agreement executed by Avanex and Agent, whereby Avanexagrees to grant Agent, for the ratable benefit of Lenders, a continuing first priority securityinterest over the Trademark Collateral (as defined therein) of Avanex;     (e) Within 45 days of the date of this Amendment, Borrowers shall use their commerciallyreasonable best efforts to deliver to Agent a Collateral Access Agreement with respect to (i) 40919Encyclopedia Circle, Fremont, California, and (ii) any other facilities located within the UnitedStates where Avanex’s assets therein are valued at more than: (y) $250,000 in the aggregate forall such facilities or (z) $100,000 with respect to any individual facility;     (f) Within 45 days of the date of this Amendment, with respect to each Deposit Account andSecurities Account maintained in the United States and owned by Avanex, Borrowers shall: (i) complywith Section 2.7 of the Agreement and (ii) either (x) deliver to Agent the Cash ManagementAgreements and Control Agreements with respect to the relevant Deposit Account or SecuritiesAccount, each in form and substance satisfactory to Agent or (y) cause the relevant Deposit Accountand Securities Account to be closed and provide Agent satisfactory written evidence of suchclosure, it being understood that such Deposit Accounts and Investment Accounts are subject to thelimitation set forth in the Agreement;     (g) Within 90 days of the date of this Amendment, if Avanex has not caused the dissolution ofthe following Avanex entities, then Avanex shall deliver to Agent a pledged interest addendumpledging a 100% interest of such entities as Collateral and stock certificates, together with stockpowers with respect to the same:(i) Lamdaflex, Inc., a Delaware corporation;(ii) Pearl Acquisition Corp., a Delaware corporation; and(iii) Marley Acquisition Corporation, a Delaware corporation;     (h) On the date on which Avanex becomes a Borrower or any portion of Avanex’s assets areincluded in the calculation of the Borrowing Base, Avanex shall deliver to Agent a pledged interestaddendum pledging an interest (the percentage of which shall be determined at Agent’s discretion)as Collateral and stock certificates, together with stock powers with respect to the same, of thefollowing foreign Subsidiaries:(i) Avanex (Thailand) Limited, a company organized under the laws of Thailand;(ii) Avanex OIF S.A., company organized under the laws of France;
 

 
(iii) Avanex Communication Technologies Co. LTD, company organized under the laws of China;and(iv) any other direct foreign Subsidiaries of Avanex; and     (i) Notwithstanding anything to the contrary contained within the Loan Documents, for a periodthrough and including the earlier of: (i) 180 days from the date of this Amendment, or (ii) thedate on which Avanex becomes a Borrower or any portion of Avanex’s assets are included in thecalculation of the Borrowing Base, all representations and warranties in Article IV of theAgreement and Section 5 of the Security Agreement, with respect to the foreign Subsidiariesof Avanex, listed in subsection (d) of this Section 8, shall be true, correct, and completeto Parent’s and each Borrower’s actual knowledge. Thereafter, such foreign Subsidiaries of Avanexshall be deemed to be Subsidiaries under the Agreement and the other Loan Documents for allpurposes, including for the purpose of the representations and warranties set forth therein.10. **COSTS AND EXPENSES**. Borrowers shall pay to Agent all of Agent’s out-of-pocket costsand reasonable expenses (including, without limitation, the fees and expenses of its counsel, whichcounsel may include any local counsel deemed necessary, search fees, filing and recording fees,documentation fees, appraisal fees, travel expenses, and other fees) arising in connection with thepreparation, execution, and delivery of this Amendment and all related documents.11. **LIMITED EFFECT**. In the event of a conflict between the terms and provisions of thisAmendment and the terms and provisions of the Agreement, the terms and provisions of this Amendmentshall govern. In all other respects, the Agreement, as amended and supplemented hereby, shallremain in full force and effect.12. **COUNTERPARTS; EFFECTIVENESS**. This Amendment may be executed in any number ofcounterparts and by different parties on separate counterparts, each of which when so executed anddelivered shall be deemed to be an original. All such counterparts, taken together, shallconstitute but one and the same Amendment. This Amendment shall become effective upon theexecution of a counterpart of this Amendment by each of the parties hereto and upon satisfaction ofthe conditions set forth in Section 7 above.[*Signature page to follow*]
 

 
     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first setforth above.      **WELLS FARGO FOOTHILL, INC.,**