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                                                                    EXHIBIT 10.4

Mr. Claudio De Conto                                         Mr. Adriano Zuccala
General Director Administration and Control                    Managing Director
Pirelli S.p.A.                                             Corning O.T.I. S.r.l.

Mr. Walter Alessandrini                                    Mr. Lawrence D. McRae
Chairman & CEO                                             Senior Vice President
Avanex Corporation                                          Corning Incorporated

         Subject: Consent and Assignment and Assumption of Lease Agreement

Gentlemen:

Corning Incorporated ("Corning"), Avanex Corporation ("Avanex"), and Alcatel are
parties to a Share Acquisition and Asset Purchase Agreement, dated May 12, 2003
(the "Purchase Agreement"), pursuant to which Avanex agreed to purchase, and
Corning agreed to sell and assign to Avanex, certain assets of Corning and the
whole or substantially the whole business of Corning O.T.I. S.r.l. (formerly,
Optical Technologies Italia S.p.A., hereinafter "Corning OTI"), including, but
not limited to, those operations at the premises leased from Pirelli Cavi e
Sistemi S.p.A. ("Pirelli Cavi & Sistemi"), as described below. The closing of
the transactions under the Purchase Agreement is expected to occur on July 31,
2003 (the "Closing Date").

Corning OTI and Pirelli Cavi e Sistemi (which has been merged, effective as from
December 30, 2002, into Pirelli Spa, hereinafter "Pirelli") entered into a lease
agreement effective as of January 1, 2003 (the "Lease Agreement") relating to
premises located at Via Federico Fellini, San Donato Milanese (the "Milan
Premises"). Corning OTI, Pirelli and Optical Technologies The Netherlands B.V.
are also parties to a Transition Services Agreement, dated as of December 12,
2000, in connection with the acquisition by Corning of Optical Technologies USA
Corporation, which owned 100% of the issued and outstanding shares of Corning
OTI from Pirelli (the "Transition Services Agreement"). Although the Transition
Services Agreement has already expired in accordance with its terms, the parties
have continued to conduct business in accordance with the terms of the
Transition Services Agreement and have agreed to a form of agreement by which
the services contemplated by the Transition Services Agreement will continue to
be provided through December 31, 2005 at newly agreed conditions ("Services
Agreement") (a copy of which is attached).

Pursuant to the terms of the Lease Agreement(1), Corning and Corning OTI hereby
request the consent and agreement of Pirelli and its affiliates effective on and
after the Closing Date to: the assignment

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(1) Article 4.2 of the Lease Agreement states, in part: ". . . assignment of all
or part of the lease is not allowed, not even in the framework of an assignment
or contribution of business, unless consented in writing by Lessor; such consent
shall not be unreasonably withheld if the assignee of the business is, in the
reasonable judgment of Lessor, sufficiently reliable as to its solvency and
compliance with the obligations under this Agreement vis a vis the Lessor."

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of the Lease Agreement to Avanex, the assumption by Avanex of the obligations of
Corning and Corning OTI under the Lease Agreement, the assignment to Avanex of
the Services Agreement, and the assumption by Avanex of the obligations of
Corning, if any, and Corning OTI under the Services Agreement, and the release
of Corning and Corning OTI of such obligations under the Lease Agreement and the
Services Agreement from and after the Closing Date.

Avanex is a Delaware corporation. Its common stock is traded on the Nasdaq and
it files annual and quarterly reports with the U.S. Securities and Exchange
Commission. These reports and other information about Avanex are publicly
available at www.sec.gov. Avanex intends to create a branch office in Milan,
Italy to acquire those assets of Corning OTI acquired, including the Lease
Agreement and the Services Agreement, pursuant to the Purchase Agreement.

By executing in the space provided below, Pirelli hereby consents to the
assignment by Corning OTI and Corning of all of their rights, duties,
liabilities and obligations under the Lease Agreement to Avanex and its
registered branch office in Milan, Italy and to the assumption by Avanex of all
such rights, duties, liabilities and obligations under the Lease Agreement as of
the Closing Date, provided that such Closing Date occurs not later than December
31,2003. Pirelli acting on behalf of itself and its affiliates, also hereby
consent, subject to the above, to the assignment by Corning OTI of all of its
rights, duties, liabilities and obligations under the Services Agreement, as
amended and extended by understanding between the parties, to Avanex and its
registered branch office in Milan, Italy, and to the assumption by Avanex of all
such rights and duties, liabilities and obligations under the Services Agreement
as of the Closing Date. From and after the Closing Date, Pirelli agrees to look
only to Avanex and its registered branch office in Milan for satisfaction of all
liabilities and obligations of Corning OTI and Corning under the Lease and the
Services Agreement.

From and after the Closing Date Avanex shall be responsible towards Pirelli and
its affiliates for any act or omission of its registered branch office in Milano
in relation to the Lease Agreement and the Service Agreement. Pirelli agrees
that Avanex shall be permitted to assign the Service Agreement to a subsidiary
of Avanex so long as Avanex and its registered branch remain responsible to
Pirelli for the performance by such subsidiary of its obligations under the
Services Agreement.

Nothing in this letter is intended to affect the rights and obligations of
Corning and its Subsidiaries and Avanex under the Purchase Agreement. As between
Corning and its Subsidiaries and Avanex, in the event of any conflict between
the terms and conditions of this letter and terms and conditions of the Purchase
Agreement, the terms and conditions of the Purchase Agreement shall control.

By executing in the space provided below, Corning and Corning OTI hereby assign,
effective on the Closing Date, and Avanex hereby assumes, effective as of the
Closing Date, all rights, privileges, duties, liabilities and obligations of
Corning OTI and Corning under the Lease Agreement and the Services Agreement, as
amended and extended by understanding between the parties.

This letter agreement is governed by Italian laws. The Court of Milano will have
exclusive jurisdiction over any dispute in relation to this letter agreement.

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Please execute this letter agreement in the space provided below and return a
copy to Corning Incorporated. Delivery of signatures to this Agreement by
facsimile transmission shall be legally binding and effective for all purposes,
including evidentiary purposes.

                            [SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the undersigned have executed the foregoing instrument on
the dates set forth below.

                                             CORNING INCORPORATED

                                             By:  /s/ LAURENCE D. MCRAE
                                                 -------------------------------
                                                  Senior Vice President

PIRELLI S.P.A.                               CORNING O.T.I. S.R.L.

By:   C. DE COUTO                            By:  ADRIANO ZUCCALA
Name: C. De Couto                            Name: Adriano Zuccala
Title:                                       Title: Managing Director
       --------------------------------
Date:  July 25, 2003                         Date:  July 25, 2003

AVANEX CORPORATION

By: /s/ ANTHONY A. FLORENCE
    -----------------------------------
Name:   Anthony A. Florence
Title:  Sr. Vice President, Corporate
        Affairs
Date:  July 31, 2003

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