Document:

EX-10.17

 

Exhibit 10.17

RAW MATERIALS SUPPLY AGREEMENT

     THIS RAW MATERIALS SUPPLY AGREEMENT (as amended, supplemented or otherwise modified from time
to time, this “Agreement”) is made and entered into as of the 31st day of July, 2001 (the
“Effective Date”), by and between HITACHI, LTD., a corporation existing under the laws of
Japan (“Hitachi”), and OPNEXT, INC., a Delaware corporation (the “Company”).

     WHEREAS, the Company, Hitachi, Clarity Partners, L.P., a Delaware limited partnership
(“Clarity”), Clarity OpNext Holdings I, LLC, a Delaware limited liability company
(“Holdings I”), and Clarity OpNext Holdings II, LLC, a Delaware limited liability company
(“Holdings II,” and collectively with Clarity and Holdings I, the “Clarity
Parties”), are parties to that certain Amended and Restated Stock Purchase Agreement dated as
of the date hereof (as amended, supplemented or otherwise modified from time to time, the
“Stock Purchase Agreement”), pursuant to which, among other things, (i) Hitachi agreed to
capitalize OpNext Japan, Inc., a corporation existing under the laws of Japan (“OpNext
Japan”), and to cause OpNext Japan to use such funds to purchase certain assets from Hitachi
pursuant to a Business Transfer Agreement, dated as of December 6, 2000, between OpNext Japan and
Hitachi, and (ii) Hitachi agreed to contribute its common stock of OpNext Japan to the Company in
exchange for common stock in the Company pursuant to a Stock Contribution Agreement, dated as of
the date hereof, between the Company and Hitachi (as amended, supplemented or otherwise modified
from time to time, the “Stock Contribution Agreement”); and

     WHEREAS, upon consummation of the transactions contemplated by the Stock Purchase Agreement
and the Stock Contribution Agreement, (i) Hitachi and the Clarity Parties will jointly own the
Company; and (ii) OpNext Japan will be a wholly-owned Subsidiary of the Company; and

     WHEREAS, the Company, OpNext Japan, and the Company’s other direct and indirect Subsidiaries
(collectively, the “OpNext Group”) will continue to operate the Business, and in connection
therewith will need to continue to obtain Raw Materials (as defined in Section 2.1 below) from
Hitachi; and

     WHEREAS, Hitachi wishes to continue to make available for purchase by the OpNext Group such
Raw Materials on the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the mutual premises and promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement do hereby agree as follows:

	1.	 	Definitions. Capitalized terms used herein but not otherwise defined herein shall
have the meanings ascribed to them in the Stock Contribution Agreement. In addition, as used
in this Agreement, the following terms shall have the meanings ascribed to them below:

	 	1.1.	 	“OpNext Optronic Components” shall mean any components or products
produced, marketed and/or sold as of or after the Effective Date by any member of the
OpNext Group for use in any form of data communications

 

 

system, cable system, fiber optic system, wireless system and/or other similar
systems (including without limitation transmitters, receivers, transceivers, laser
diode modules, photo diode modules, parallel optical interconnectors, lasers,
photodiodes, modulators, amplifier modules, optical switches and optical wave
guides).

	 	1.2.	 	“Raw Materials” shall have the meaning set forth in Section 2.1
below.
	 
	 	1.3.	 	“Qualified Public Offering” shall have the meaning set forth in the
Stockholders’ Agreement of even date herewith, between Clarity, Holdings I, Holdings
II, Hitachi and the Company.

2. Agreement to Supply Raw Materials.

	 	2.1.	 	Subject to the terms and conditions of this Agreement, during the Term (as
defined in Section 4.1), Hitachi shall continue to make available for purchase by the
Company and the other members of the OpNext Group laser chips and other semiconductor
devices and all other raw materials (if any) that were provided by Hitachi or any of
its Affiliates to the Business prior to or as of the Effective Date for the production
of OpNext Optronic Components (collectively, “Raw Materials”), without making
any material change to the policies (including priority of delivery, delivery
schedule, quality, and terms and conditions of sale) under which Hitachi or any such
Affiliate sells, as of the Effective Date, such Raw Materials to the Business.
Hitachi represents and warrants that there has been no material change in such
policies since March 1, 2000. From the Effective Date until the first anniversary of
the Effective Date, the prices at which Hitachi sells Raw Materials manufactured by
Hitachi to the Company and the other members of the OpNext Group shall be the same
prices at which Hitachi sells, as of the Effective Date, a comparable volume of Raw
Materials of substantially the same specification and quality to the Business on
substantially the same delivery terms. After the first anniversary of the Effective
Date, the prices at which Hitachi sells Raw Materials manufactured by Hitachi to the
Company shall be negotiated between the parties, but in no event shall such prices be
greater than the lowest aggregate price which Hitachi charges to any of its customers
for a comparable volume of Raw Materials of substantially the same specification and
quality on substantially the same delivery terms. To the extent that Raw Materials to
be sold to the OpNext Group are purchased by Hitachi from third parties, Hitachi
agrees to sell such Raw Materials to the OpNext Group at the same aggregate prices at
which Hitachi purchases such Raw Materials from such third-parties (net of any
discounts obtained by Hitachi).
	 
	 	2.2.	 	In addition, for a period of two (2) years from the Effective Date, Hitachi
shall, and shall use Commercially Reasonable Efforts to cause its Affiliates to, in
each case to the extent permitted under the applicable agreement, make available to
the Company and the other members of the OpNext Group the benefits obtained by Hitachi
or its Affiliates, as the case may be, under third party purchasing contracts for the
purchase of Raw Materials which are used

- 2 -

 

in the production of OpNext Optronic Components (it being understood that Hitachi
shall not be (i) liable solely on account of any inability to obtain such benefits
on behalf of the OpNext Group, or (ii) required to assume any additional
obligations under such third-party purchasing contracts or enter into any other
agreement with such third-party in order to provide such benefits to the OpNext
Group). At the Company’s request, Hitachi shall use its Commercially Reasonable
Efforts to facilitate the Company and the other members of the OpNext Group
securing direct contractual relationships with one or more of such third parties on
terms comparable to those on which Hitachi or its Affiliates receive Raw Materials.

3. Administration of Relationship.

	 	3.1.	 	Designation of Representatives. Each of the Company and Hitachi will
designate one (1) individual (each, a “Representative”) in writing to manage
its purchase or sale, as applicable, of Raw Materials hereunder and to coordinate its
activities under this Agreement with the other party. The initial Representative for
the Company will be Harry Bosco, and the initial Representative for Hitachi will be
Eiji Aoki. The Representative for each party may be replaced from time to time by
that party and such party shall promptly provide written notice thereof to the other
party.
	 
	 	3.2.	 	Meetings of Representatives. The Representatives from the Company
and Hitachi will schedule formal meetings, at mutually agreeable times at least
bi-monthly during the Term to be attended by authorized management personnel of both
parties with responsibility for and authority over the matters to be discussed at such
meetings. At such meetings, the parties will discuss the status of the activities
contemplated under this Agreement as well as, among other things: (i) the status of
any outstanding purchase orders, including any actual or anticipated delays in meeting
the delivery schedules or quantities specified in such purchase orders; (ii) any
current or anticipated Raw Material shortages or third-party customer requirements
that could adversely affect the ability of a party to meet the other party’s Raw
Material needs; (iii) Hitachi’s and its Affiliates’ pricing for Raw Materials relative
to market prices; (iv) Hitachi’s and its Affiliates’ delivery times for Raw Materials
relative to the delivery times of competing suppliers; and (v) any modifications of
Raw Material specifications that may be necessary to satisfy the needs of the OpNext
Group. Similar meetings shall be held at least quarterly during the Term to discuss,
among other things, the OpNext Group’s anticipated future Raw Material requirements.

4. Term and Termination.

	 	4.1.	 	Term. The term of this Agreement shall commence on the Effective
Date and continue until the earlier of either (i) the third anniversary of the date of
Qualified Public Offering of the Company, or (ii) five (5) years from the Effective
Date, unless earlier terminated as specified herein (the “Term”).

- 3 -

 

	 	4.2.	 	Termination.

	 	4.2.1	 	Subject to Section 4.2.2, either party may terminate this
Agreement if a material breach or default of this Agreement by the other party
hereto continues for sixty (60) days after written notice to such breaching or
defaulting party. If the nature of the cure for any non-monetary breach or
default is such that it is reasonably expected to take longer than sixty (60)
days, the breaching or defaulting party shall be given an additional thirty
(30) calendar days to cure such breach or default, provided that the cure is
commenced during the original sixty (60)-day period and is diligently carried
out thereafter. In the event that the material breach or default is not cured
within the periods specified above after delivery of the notice, the
non-breaching or non-defaulting party may terminate this Agreement in writing
as of the date specified in the termination notice. If the default or breach
is not susceptible to cure, the party providing notice will be entitled to
terminate this Agreement immediately upon written notice to the other party.
The terminating party shall have all rights and remedies set forth in this
Agreement.
	 
	 	4.2.2	 	So long as Hitachi and its Affiliates directly or indirectly
hold voting securities of the Company representing a majority voting interest
in the Company or have the right to designate a majority of the Company’s
directors pursuant to the Stockholders’ Agreement, Hitachi may not terminate
this Agreement as a result of any breach hereof by the Company, material or
otherwise.

	 	4.3.	 	Survival. The provisions of Sections 4.3 (Survival), 5
(Confidentiality), 6 (Limitation of Liability), 7 (Arbitration), and 8 (General
Provisions) shall survive termination of this Agreement.

5. Confidentiality.

	 	5.1.	 	Confidentiality Obligation of the Company: With respect to any
information furnished or disclosed to the Company pursuant to this Agreement which the
Company reasonably understands to be proprietary or confidential in nature, the
Company shall maintain the confidentiality of all such information in accordance with
the Company’s policies for the protection of its own nonpublic information. The
limitations set forth in this Section 5.1 shall not apply with respect to the
disclosure of any information: (i) to the Company’s employees, auditors, counsel or
other professional advisors or to members of the OpNext Group, if the Company, in its
sole discretion, determines that it is reasonably necessary for such Person to have
access to such information, provided that any such Person agrees to be bound by the
provisions of this Section 5.1 to the same extent as the Company; provided,
however, that prior to the disclosure of such proprietary or confidential
information to a member of the OpNext Group that is not a direct or indirect
wholly-owned Subsidiary of the Company, the Company shall obtain Hitachi’s prior
consent, which

- 4 -

 

	 	 	 	consent shall not be unreasonably withheld; (ii) as has become or previously was
generally available to the public other than by reason of a breach of this Section
5.1 by the Company or has become available to the Company on a non-confidential
basis; (iii) as may be required or reasonably necessary in any report, statement or
testimony submitted to any municipal, state or federal regulatory body having or
claiming to have jurisdiction over the Company (it being understood that, to the
extent practicable, the Company shall provide Hitachi with prompt notice of any
such event and cooperate in good faith to enable Hitachi to participate to protect
its interest in such confidential information); (iv) as may be required or
reasonably necessary in response to any summons or subpoena or in connection with
any litigation; (v) in order to comply with any law, order, regulation or ruling
applicable to the Company; and (vi) to the extent related to the Business or the
Assets (as defined in the Stock Contribution Agreement).

	 	5.2.	 	Confidentiality Obligations of Hitachi: With respect to any
information furnished or disclosed to Hitachi pursuant to this Agreement which Hitachi
reasonably understands to be proprietary or confidential in nature, Hitachi shall
maintain the confidentiality of all such information in accordance with Hitachi’s
policies for the protection of its own nonpublic information. The limitations set
forth in this Section 5.2 shall not apply with respect to the disclosure of any
information: (i) to Hitachi’s employees, auditors, counsel or other professional
advisors or to Hitachi’s direct or indirect wholly-owned Subsidiaries, if Hitachi, in
its sole discretion, determines that it is reasonably necessary for such Person to
have access to such information, provided that any such Person agrees to be bound by
the provisions of this Section 5.2 to the same extent as Hitachi; (ii) as has become
or previously was generally available to the public other than by reason of a breach
of this Section 5.2 by Hitachi or has become available to Hitachi on a
non-confidential basis; (iii) as may be required or reasonably necessary in any
report, statement or testimony submitted to any municipal, state or federal regulatory
body having or claiming to have jurisdiction over Hitachi (it being understood that,
to the extent practicable, Hitachi shall provide the Company with prompt notice of any
such event and cooperate in good faith to enable the Company to participate to protect
its interest in such confidential information); (iv) as may be required or reasonably
necessary in response to any summons or subpoena or in connection with any litigation;
and (v) in order to comply with any law, order, regulation or ruling applicable to
Hitachi.

6. Limitation of Liability.

	 	6.1.	 	IN NO EVENT SHALL ANY PARTY TO THIS AGREEMENT OR ITS SUBSIDIARIES BE LIABLE
FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, OR DAMAGES
FOR LOSS OF PROFITS, REVENUE, OR USE INCURRED BY THE OTHER PARTY OR ITS SUBSIDIARIES
OR ANY THIRD PARTY, WHETHER IN AN ACTION IN CONTRACT OR TORT OR OTHERWISE, EVEN IF
ADVISED OF THE POSSIBILITY OF SUCH

- 5 -

 

DAMAGES. IN ANY TWELVE (12) MONTH PERIOD, THE LIABILITY OF A PARTY AND ITS
SUBSIDIARIES FOR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
(EXCEPT IN CONNECTION WITH A BREACH OF A PARTY’S CONFIDENTIALITY OBLIGATIONS
PURSUANT TO SECTION 5 HEREOF) SHALL NOT EXCEED THE GREATER OF (A) TWENTY-FOUR (24)
MILLION U.S. DOLLARS, (B) THE AGGREGATE DOLLAR AMOUNT OF RAW MATERIALS TO BE
PURCHASED BY THE OPNEXT GROUP DURING THE FOLLOWING TWELVE (12)-MONTH PERIOD AS
REFLECTED IN THE THREE (3)-YEAR BUSINESS PLAN OF THE COMPANY APPROVED BY THE BOARD
AND DATED AS OF FEBRUARY 28, 2001, OR (C) THE AGGREGATE DOLLAR AMOUNT OF RAW
MATERIALS TO BE PURCHASED BY THE OPNEXT GROUP FOR SUCH TWELVE (12)-MONTH PERIOD AS
REFLECTED IN THE COMPANY’S ANNUAL BUDGET APPROVED BY THE BOARD FROM TIME TO TIME.

	 	6.2.	 	The limitations or exculpation of liability set forth in Section 6.1 shall
not be applicable to any breach of Section 8.3 below or any failure by the Company or
any other member of the OpNext Group to pay for the Raw Materials provided by Hitachi
hereunder.

	7.	 	Arbitration. Except for actions seeking injunctive relief or for confirmation or
enforcement of an arbitration award, in the event the parties are unable to resolve any
dispute arising under this Agreement, a party shall submit the matter to arbitration in
accordance with the arbitration procedures set forth in Exhibit A hereto.
	 
	8.	 	General Provisions.

	 	8.1.	 	Governing Law. This Agreement will be interpreted, construed and
enforced in all respects in accordance with the laws of the State of New York without
giving effect to (i) the choice of law or conflict of law rules or provisions of the
State of New York or any other jurisdiction, (ii) the United Nations Convention on
Contracts for the International Sale of Goods, (iii) the 1974 Convention on the
Limitation Period in the International Sale of Goods, (iv) the Protocol amending the
1974 Convention, done at Vienna April 11, 1980, and (v) the Uniform Computer
Information Transactions Act.
	 
	 	8.2.	 	Submission to Jurisdiction; Waivers. With respect to those disputes
not required to be submitted to arbitration hereunder as set forth in Section 7 above,
each party to this Agreement hereby irrevocably and unconditionally: (i) submits for
itself and its property in any legal action or proceeding relating to this Agreement,
or for recognition and enforcement of any judgment in respect thereof, to the
exclusive general jurisdiction of the courts of the State of New York located in New
York City, the courts of the United States of America situated in New York City, and
appellate courts from any thereof; (ii) consents that any such action or proceeding
may be brought in such courts, and waives any objection that it may now or hereafter
have to the

- 6 -

 

	 	 	 	venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same; (iii) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such party at its address
set forth herein or at such other address of which the agent shall have been
notified pursuant thereto, to the extent permitted by law; and (iv) agrees that
nothing contained herein shall affect the right to effect service of process in any
other manner permitted by law.

	 	8.3.	 	Sale of TSD. Subject to Section 8.12, Hitachi shall not sell its
Telecommunication Systems Division (“TSD”) or TSD’s business or all or
substantially all of TSD’s assets to a third party unless the purchaser agrees to
assume Hitachi’s obligations under this Agreement as they relate to Raw Materials (if
any) that the OpNext Group purchases from TSD.
	 
	 	8.4.	 	Injunctive Relief. The parties acknowledge and agree that money
damages would be inadequate to remedy any breach of the respective obligations of the
parties herein and that the non-breaching party shall be entitled to obtain equitable
remedies, in addition to all other remedies available in law or at equity, with
respect to any such breach, including injunctive relief.
	 
	 	8.5.	 	Relationship of the Parties. Each party is an independent contractor
and nothing in this Agreement shall be construed to create a partnership, joint
venture, agency, or employer/employee relationship between the parties.
	 
	 	8.6.	 	Amendment and Waiver. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the Company
and Hitachi. The failure of any party to enforce any of the provisions of this
Agreement shall in no way be construed as a waiver of such provisions and shall not
affect the right of such party thereafter to enforce each and every provision of this
Agreement in accordance with its terms.
	 
	 	8.7.	 	Notices. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, mailed first class mail, air mail
(postage prepaid), sent by reputable overnight courier service (charges prepaid) or
sent by facsimile transmission to the parties at the address set forth below or at
such address or to the attention of such other person as the recipient party has
specified by prior written notice to the sending party. Notices shall be deemed to
have been given hereunder on the date delivered when delivered personally, five (5)
days after deposit in the U.S. mail or Japanese mail, one (1) day after deposit with a
reputable overnight courier service (three (3) days if overseas) and on the next
business day if sent by facsimile transmission with confirmation of receipt. The
addresses for the Company and Hitachi are:

- 7 -

 

If to the Company:

OpNext, Inc.

246 Industrial Way West

Eatontown, NJ 07724

Attention: Harry Bosco

with a copy, which will not constitute notice to the Company, to:

Clarity Partners, L.P.

100 North Crescent Drive

Beverly Hills, CA 90210-5403

Attention: David Lee

and with a copy, which will not constitute notice to the Company, to:

Irell & Manella, LLP

1800 Avenue of the Stars, Suite 900

Los Angeles, CA 90067

Attention: Richard L. Bernacchi, Esq.

                 Ian Wiener, Esq.

If to Hitachi:

Hitachi, Ltd.

6, Kanda-Surugadai 4-chome

Chiyoda-ku

Tokyo, 101-8010 Japan

Attention: President, Telecommunication Systems Division

with a copy, which will not constitute notice to Hitachi, to:

Kirkland & Ellis

200 East Randolph Drive

Chicago, IL 60601

Attention: William A. Streff, Jr., Esq.

	 	8.8.	 	Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or unenforceable
in any respect under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect the validity, legality or
enforceability of any other provision of this Agreement in such jurisdiction or affect
the validity, legality or enforceability of any provision in any other jurisdiction,
but this Agreement shall be reformed, construed and enforced in such jurisdiction as
if such invalid, illegal or unenforceable provision had never been contained herein.
	 
	 	8.9.	 	Interpretation. The headings and captions contained in this
Agreement are for reference purposes only and do not constitute a part of this
Agreement.
	 
	 	 	 	The use of the word “including” herein shall mean “including without limitation.”

- 8 -

 

	 	8.10.	 	Entire Agreement. Except as otherwise expressly set forth herein,
this Agreement, together with the other agreements entered into in connection with the
Stock Purchase Agreement, embodies the complete agreement and understanding among the
parties hereto with respect to the subject matter hereof and supersedes and preempts
any prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way. The
provisions of each of the agreements executed in connection with the Stock Purchase
Agreement shall be construed to give effect to the provisions of each of the other
agreements to the greatest extent possible.
	 
	 	8.11.	 	Force Majeure. Neither party to this Agreement shall be held
responsible for any failure or delay in performance under this Agreement, except any
obligation to pay money, where such performance is rendered impracticable by any act
of war, fire, flood, other natural disaster, epidemic, strikes and other causes
similar to those listed, in each case where failure to perform is beyond the control,
and not caused by the negligence, of the nonperforming party.
	 
	 	8.12.	 	Assignment. This Agreement shall be binding upon and shall inure to
the benefit of, the parties and their respective successors and permitted assigns.
Neither party may assign its rights (including by operation of law), or delegate the
performance of its obligations, under this Agreement, or any part hereof, without the
prior written consent of the other; provided, however, that Hitachi’s
consent shall not be unreasonably withheld in the case of any assignment by the
Company to any of its direct or indirect majority owned Subsidiaries for so long as
(i) Hitachi and its Affiliates directly or indirectly hold voting securities of the
Company representing a majority voting interest in the Company or have the right to
designate a majority of the Company’s directors pursuant to the Stockholders’
Agreement, (ii) the Company remains liable for the performance of any such assignee’s
obligations hereunder and any liability incurred in connection therewith, and (iii)
such assignment does not result in any additional costs for which Hitachi shall be
liable. Any assignment in violation of this Section 8.12 shall be void.
	 
	 	8.13.	 	Representation by Counsel; Interpretation. Hitachi and the Company
acknowledge that each of them has been represented by counsel in connection with this
Agreement and the transactions contemplated hereby. Accordingly, any rule of law or
any legal decision that would require interpretation of any claimed ambiguities in
this Agreement against the party that drafted it has no application and is expressly
waived.
	 
	 	8.14.	 	Delivery by Facsimile. This Agreement, the agreements referred to
herein, and each other agreement or instrument entered into in connection herewith or
therewith or contemplated hereby or thereby, and any amendments hereto

- 9 -

 

or thereto, to the extent signed and delivered by means of a facsimile machine,
shall be treated in all manner and respects as an original agreement or instrument
and shall be considered to have the same binding legal effect as if it were the
original signed version thereof delivered in person. At the request of any party
hereto or to any such agreement or instrument, each other party hereto or thereto
shall re-execute original forms thereof and deliver them to all other parties. No
party hereto or to any such agreement or instrument shall raise the use of a
facsimile machine to deliver a signature or the fact that any signature or
agreement or instrument was transmitted or communicated through the use of a
facsimile machine as a defense to the enforceability of a contract and each such
party forever waives any such defense.

	 	8.15.	 	Exhibits and Schedules. All Exhibits and Schedules annexed hereto
or referred to herein are hereby incorporated in and made a part of this Agreement as
if set forth in full herein.
	 
	 	8.16.	 	Third Party Beneficiaries. The Company and Hitachi acknowledge and
agree that this Agreement is intended not only for the benefit of themselves and their
Affiliates but also for the benefit of the Clarity Parties and their permitted assigns
under the Stock Purchase Agreement, and by reason thereof, the Clarity Parties and
their permitted assigns under the Stock Purchase Agreement possess legal, equitable
and any other rights hereunder as third-party beneficiaries of this Agreement.
	 
	 	8.17.	 	Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which taken together shall
constitute one and the same agreement.

[The remainder of this page is intentionally left blank.]

- 10 -

 

SIGNATURE PAGE TO RAW MATERIALS SUPPLY AGREEMENT

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date
first written above.

	 	 	 	 	 
	 	OPNEXT, INC.

 	 
	 	By:  	/s/ Harry L. Bosco
 	 
	 	 	Harry L. Bosco 	 
	 	 	Chief Executive Officer and President 	 
	 
	 	HITACHI, LTD.

 	 
	 	By:  	/s/ Eiji Aoki
 	 
	 	 	Eiji Aoki 	 
	 	 	Managing Officer & Administrative Officer

President, Telecommunication Systems Division 	 

 

 

	 	 	 	 	 

AMENDMENT TO

RAW MATERIALS SUPPLY AGREEMENT

     This Amendment (the “Amendment”), is entered on October 18, 2006 (the “Amendment
Date”), and made effective retroactively as of July 31, 2006, by and between Hitachi Ltd., a
corporation organized and existing under the laws of Japan (“Hitachi”), and Opnext, Inc., a
Delaware corporation (“Company”), and is intended to modify certain provisions of the Raw
Materials Supply Agreement dated July 31, 2001, entered between the parties (the “Supply
Agreement”).

RECITALS

WHEREAS,
Hitachi and Company desire to amend certain provisions of the Supply Agreement as provided for in this Amendment.

     NOW, THEREFORE, in consideration of the mutual covenants in this Amendment, Hitachi and
Company agree to amend the Supply Agreement as follows:

     A. Notwithstanding anything in the Supply Agreement to the contrary, the parties agree that
the term of the Supply Agreement will expire on July 31, 2007. Thereafter, the Supply Agreement
will renew automatically for additional one (1) year periods unless either party provides the other
party with written notice of its intent not to renew the Supply Agreement at least sixty (60) days
prior to the expiration of the then current term.

     B. Notwithstanding anything in the Supply Agreement to the contrary, the parties agree that a
change of control of a party by means of an initial public offering shall not require the consent
of the other party.

     IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be duly executed and to
be effective as of the Amendment Date set forth above.

	 	 	 	 	 	 	 
	HITACHI, LTD.

	 	 
	 	OPNEXT, INC.	 	 
	 
	 	 	 	 	 	 
	/s/ Naoya Takahashi
 

Name: Naoya Takahashi

	 	 	 	/s/ Harry L. Bosco
 

Name: Harry L. Bosco
	 	 
	Title:   Vice President and Executive Officer

	 	 	 	Title:   President & CEOEX-10.18

 

Exhibit 10.18

 

INTELLECTUAL PROPERTY LICENSE AGREEMENT

by and between

HITACHI, LTD.

and

OPNEXT JAPAN, INC.

 

Dated as of July 31, 2001

 

      

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	Section 1. Definitions
	 	 	2	 
	 
	 	 	 	 
	(a)   “Added Products”
	 	 	2	 
	(b)   “Affiliate”
	 	 	2	 
	(c)   “Assigned IP”
	 	 	2	 
	(d)   “Business”
	 	 	2	 
	(e)   “Commercially Reasonable Efforts”
	 	 	2	 
	(f)   “Cure Period”
	 	 	2	 
	(g)   “Dispute Notice”
	 	 	2	 
	(h)   “Existing Third Party License Agreements”
	 	 	2	 
	(i)   “First Closing”
	 	 	2	 
	(j)   “First Closing Date”
	 	 	3	 
	(k)   “Future Hitachi IP”
	 	 	3	 
	(l)   “Future Third Party License Agreements”
	 	 	3	 
	(m)  “Indemnified Party”
	 	 	3	 
	(n)   “Intellectual Property”
	 	 	3	 
	(o)   “Licensed IP”
	 	 	3	 
	(p)   “Losses”
	 	 	3	 
	(q)   “Material Adverse Change” or “Material Adverse Effect”
	 	 	3	 
	(r)   “Minority-Owned Affiliate”
	 	 	4	 
	(s)   “Non-Transferred License Agreements”
	 	 	4	 
	(t)   “OpNext Japan IP”
	 	 	4	 
	(u)   “OpNext Japan Third Party License Agreement”
	 	 	4	 
	(v)   “OpNext Parties”
	 	 	4	 
	(w)   “Person”
	 	 	4	 
	(x)   “Second Closing”
	 	 	4	 
	(y)   “Second Closing Date”
	 	 	4	 
	(z)   “Subsidiary”
	 	 	4	 
	(aa) “Third Party Claim”
	 	 	5	 
	(bb) “Third Party License Agreements”
	 	 	5	 
	(cc) “Wholly-Owned Subsidiaries”
	 	 	5	 
	 
	 	 	 	 
	Section 2. Assigned Intellectual Property
	 	 	5	 
	 
	 	 	 	 
	(a)  License
	 	 	5	 
	(b)  Review of Obligations
	 	 	5	 
	 
	 	 	 	 
	Section 3.Licensed Intellectual Property
	 	 	5	 
	 
	 	 	 	 
	(a)   Definition
	 	 	6	 
	(b)  License
	 	 	6	 
	(c)  Sublicense
	 	 	7	 
	(d)  Review of Obligations
	 	 	8	 
	(e)  Obligation to Maintain Intellectual Property of the Business Prior to Second Closing
Date
	 	 	8	 
	(f)   Future Hitachi IP
	 	 	8	 
	(g)  Transfer of Licensed IP
	 	 	9	 

ii

 

	 	 	 	 	 
	Section 4. OpNext Japan Intellectual Property
	 	 	9	 
	 
	 	 	 	 
	(a) Definition
	 	 	9	 
	(b) License
	 	 	9	 
	(c) Review of Obligations
	 	 	10	 
	 
	 	 	 	 
	Section 5. Third-Party License Agreements
	 	 	10	 
	 
	 	 	 	 
	(a) Definition
	 	 	10	 
	(b) Existing Third Party License Agreements
	 	 	10	 
	(c) Future Third Party License Agreements
	 	 	11	 
	(d) Other Agreements
	 	 	12	 
	(e) Termination of Obligations
	 	 	12	 
	 
	 	 	 	 
	Section 6. Representations and Warranties of Hitachi
	 	 	12	 
	 
	 	 	 	 
	(a) Assigned IP and Licensed IP
	 	 	12	 
	(b) Authority
	 	 	13	 
	(c) No Conflicts
	 	 	13	 
	(d) Litigation, etc
	 	 	13	 
	(e) Infringement of Licensed IP
	 	 	13	 
	 
	 	 	 	 
	Section 7. Covenants of Hitachi
	 	 	13	 
	 
	 	 	 	 
	(a) Ordinary Course
	 	 	14	 
	(b) Covenant Not to Sue
	 	 	14	 
	(c) Confidentiality
	 	 	14	 
	(d) OpNext Japan’s and Hitachi’s Trademark, Trade Names, etc
	 	 	15	 
	(e) Taxes
	 	 	15	 
	(f) New Product Clearance Searches
	 	 	15	 
	 
	 	 	 	 
	Section 8. Representations and Warranties of OpNext Japan
	 	 	16	 
	 
	 	 	 	 
	(a) Authority
	 	 	16	 
	(b) No Conflicts
	 	 	16	 
	(c) Litigation, etc
	 	 	16	 
	 
	 	 	 	 
	Section 9. Covenants of OpNext Japan
	 	 	16	 
	 
	 	 	 	 
	(a) Confidentiality
	 	 	16	 
	(b) No Additional Representations
	 	 	17	 
	(c) Covenant Not to Sue
	 	 	17	 
	 
	 	 	 	 
	Section 10. Mutual Covenants
	 	 	17	 
	 
	 	 	 	 
	(a) Consents
	 	 	17	 
	(b) Non-Transferred License Agreements
	 	 	18	 
	(c) Press Releases
	 	 	18	 
	(d) Commercially Reasonable Efforts
	 	 	18	 
	(e) Injunctive Relief
	 	 	18	 
	 
	 	 	 	 
	Section 11. Indemnification
	 	 	18	 
	 
	 	 	 	 
	(a) Previously Disclosed Claims
	 	 	18	 
	(b) Intellectual Property Indemnification and Defense
	 	 	19	 

iii

 

	 	 	 	 	 
	(c) Indemnification by Hitachi
	 	 	19	 
	(d) Indemnification by OpNext Japan
	 	 	20	 
	(e) Losses Net of Insurance
	 	 	20	 
	(f) Limitations on Indemnification
	 	 	20	 
	(g) Procedures Relating to Indemnification
	 	 	21	 
	(h) Controlling Provision
	 	 	21	 
	(i) Duty to Mitigate
	 	 	22	 
	 
	 	 	 	 
	Section 12. Dispute Resolution
	 	 	22	 
	 
	 	 	 	 
	Section 13. Assignment
	 	 	22	 
	 
	 	 	 	 
	Section 14. Third-Party Beneficiaries
	 	 	22	 
	 
	 	 	 	 
	Section 15. Termination
	 	 	22	 
	 
	 	 	 	 
	Section 16. Survival of Representations and Warranties
	 	 	23	 
	 
	 	 	 	 
	Section 17. Expenses
	 	 	23	 
	 
	 	 	 	 
	Section 18. Export Control
	 	 	23	 
	 
	 	 	 	 
	Section 19. Amendment and Waiver
	 	 	23	 
	 
	 	 	 	 
	Section 20. Notices
	 	 	23	 
	 
	 	 	 	 
	Section 21. Interpretation
	 	 	25	 
	 
	 	 	 	 
	Section 22. Counterparts
	 	 	25	 
	 
	 	 	 	 
	Section 23. Entire Agreement
	 	 	25	 
	 
	 	 	 	 
	Section 24. Relationship to Other Agreements
	 	 	25	 
	 
	 	 	 	 
	Section 25. Schedules or Exhibits
	 	 	25	 
	 
	 	 	 	 
	Section 26. No Strict Construction
	 	 	25	 
	 
	 	 	 	 
	Section 27. Severability
	 	 	26	 
	 
	 	 	 	 
	Section 28. Governing Law
	 	 	26	 
	 
	 	 	 	 
	Section 29. Submission to Jurisdiction; Waivers
	 	 	26	 
	 
	 	 	 	 
	Section 30. Delivery by Facsimile
	 	 	27	 
	 
	 	 	 	 
	Section 31. Exhibits and Schedules
	 	 	27	 
	 
	 	 	 	 
	Section 32. Recordation
	 	 	27	 
	 
	 	 	 	 
	Section 33. Third Parties
	 	 	27	 
	 
	 	 	 	 
	Section 34. Survival
	 	 	27	 

iv

 

INTELLECTUAL PROPERTY LICENSE AGREEMENT

          THIS INTELLECTUAL PROPERTY LICENSE AGREEMENT (the “IP License Agreement”), dated as of
July 31, 2001, is entered into by and between HITACHI, LTD., a corporation existing under the laws
of Japan (“Hitachi”), and OPNEXT JAPAN, INC., a corporation existing under the laws of
Japan and a Wholly-Owned Subsidiary of OpNext, Inc., a Delaware corporation (“OpNext
Japan”), pursuant to the terms of the Business Transfer Agreement, dated December 6, 2000 (the
“Business Transfer Agreement”), entered into between Hitachi and OpNext Japan, the Stock
Contribution Agreement, dated July 31, 2001 (the “Stock Contribution Agreement”), entered
into between Hitachi and OpNext, Inc., the Stock Purchase Agreement, dated September 19, 2000 (the
“Existing Purchase Agreement” and as amended by the Amended and Restated Stock Purchase
Agreement of even date herewith and as further amended, supplemented or otherwise modified from
time to time, the “Stock Purchase Agreement”), and the Stockholders’ Agreement, dated July
31, 2000 (“Stockholders’ Agreement”), both among OpNext, Inc., Hitachi and Clarity
Partners, L.P., a Delaware limited partnership (“Clarity”), Clarity OpNext Holdings I, LLC,
a Delaware limited liability company (“Holdings I”) and Clarity OpNext Holdings II, LLC, a
Delaware limited liability company (“Holdings II,” together with Clarity and Holdings I,
the “Clarity Parties”). All capitalized terms used herein but not defined herein have the
meanings ascribed to such terms in the Stock Contribution Agreement, Stock Purchase Agreement or
Stockholders’ Agreement.

WITNESSETH

          WHEREAS, the Business Transfer Agreement provides the terms and conditions under which Hitachi
sold to OpNext Japan all of the Assets, which are necessary or reasonably required for the
operation of the fiber optic component business of Hitachi’s Telecommunication Systems Division.
This IP License Agreement provides the terms and conditions under which Hitachi will be licensing
to OpNext Japan the Intellectual Property (as defined below) rights, which are necessary or
reasonably required for the operation of the Business (as defined below) and which were not
transferred/assigned under the Business Transfer Agreement;

          WHEREAS, Hitachi has entered into the Stock Purchase Agreement pursuant to which Hitachi
agreed to, among other things, capitalize OpNext Japan and to cause OpNext Japan to use such funds
to purchase Assets from Hitachi pursuant to the terms set forth in the Business Transfer Agreement;

          WHEREAS, Hitachi and OpNext Japan are concurrently executing a Research and Development
Agreement (“R & D Agreement”), which defines the terms and conditions under which Hitachi
shall provide research and development support to OpNext Japan with respect to the Business; and

          WHEREAS, as part of the transfer of Assets related to the Business pursuant to the Business
Transfer Agreement, Hitachi and OpNext Japan desire to enter into this IP License Agreement to set
forth the terms and conditions regarding the license of the Intellectual Property related to the
Business.

1

 

          NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
to this IP License Agreement hereby agree as follows:

Section 1.
Definitions. The following terms, when used herein with initial capital letters,
shall have the respective meanings set forth in this Section 1.

          (a) “Added Products” shall have the meaning as set forth in Section 3(a) of this IP
License Agreement.

          (b) “Affiliate” of any particular Person shall mean any other Person controlling,
controlled by or under common control with such particular Person, where “control” means the
possession, directly or indirectly, of the power to direct the management and policies of a Person
whether through the ownership of voting securities, contract or otherwise.

          (c) “Assigned IP” shall have the meaning as set forth in Section 5(b) of the Stock
Contribution Agreement.

          (d) “Business” shall mean Hitachi’s fiber optic component business of designing,
developing, manufacturing, marketing, distributing and selling Products operated by Hitachi’s
Telecommunications Systems Division as of the First Closing and as operated by OpNext Japan between
the First Closing and the Second Closing.

          (e) “Commercially Reasonable Efforts” shall mean diligent and commercially reasonable
and expeditious efforts to accomplish a task or objective in a manner that is at least equal to the
efforts, quality and resources devoted by a party that such party would apply to its own high
priority task or objective under similar circumstances.

          (f) “Cure Period” shall have the meaning as set forth in Section 3(b)(ii) of this IP
License Agreement.

          (g) “Dispute Notice” shall have the meaning as set forth in Section 12 of this IP
License Agreement.

          (h) “Existing Third Party License Agreements” shall have the meaning as set forth in
Section 5(a) of this IP License Agreement.

          (i) “First Closing” shall mean the closing of the Business Transfer Agreement.

2

 

          (j) “First Closing Date” shall mean January 31, 2001, which was the date on which the
First Closing occurred.

          (k) “Future Hitachi IP” shall have the meaning as set forth in Section 3(f) of this IP
License Agreement.

          (l) “Future Third Party License Agreements” shall have the meaning as set forth in
Section 5(a) of this IP License Agreement.

          (m) “Indemnified Party” shall have the meaning as set forth in Section 11(g) of this
IP License Agreement.

          (n) “Intellectual Property” shall mean all: (i) patents, patent applications, patent
disclosures and inventions (including all extensions, reexaminations, reissues, continuations and
renewals related thereto); (ii) copyrights (registered or unregistered and all renewals thereof)
and copyrightable works and registrations and applications for registration thereof; (iii) mask
works and registrations and applications for registration thereof; (iv) computer software, data,
databases and documentation thereof; and (v) trade secrets and other confidential information
(including ideas, formulas, compositions, inventions (whether patentable or unpatentable and
whether or not reduced to practice), know-how, manufacturing and production processes and
techniques, research and development information, drawings, specifications, designs, plans,
proposals, technical data, operating, maintenance and safety materials and drawings, test
procedures, test data, sources of materials and supplies, financial and marketing plans and
customer and supplier lists and information). Intellectual Property, as referred to in this IP
License Agreement, refers to rights throughout the world, including any equivalent of any of the
foregoing in any jurisdiction or under any laws, regulations or treaties.

          (o) “Licensed IP” shall have the meaning set forth in Section 3(a) of this IP License
Agreement.

          (p) “Losses” shall have the meaning set forth in Section 11(c) of this IP License
Agreement.

          (q) “Material Adverse Change” or “Material Adverse Effect” shall mean a
change, effect, event or occurrence with respect to OpNext Japan, the Business or the Assets that,
individually or in the aggregate, is/are reasonably likely to be materially adverse to the
financial condition, assets, operations or business of OpNext Japan, the Business or the Assets,
other than (i) changes relating to United States, Japanese or other foreign economies in general or
the industry of the Business in general and not specifically relating to the Business and (ii) to
the extent that the Business and the Assets continue to be operated in substantially the same
manner

3

 

as the Business and the Assets were operated by Hitachi prior to September 19, 2000, changes
that are the result of disruptions to the Business as a result of Hitachi’s review and
consideration of a reorganization of the Business or the execution of this Agreement or the
announcement of the transactions contemplated hereby or by the Stock Purchase Agreement (none of
which shall be deemed to constitute a failure of the condition set forth in this Agreement).

          (r) “Minority-Owned Affiliate” shall mean any entity that a party, directly or
indirectly, at any time, owns or controls twenty percent (20%) to fifty percent (50%) of the voting
equity shares or securities convertible into such shares.

          (s) “Non-Transferred License Agreements” shall have the meaning as set forth in
Section 10(b) of this IP License Agreement.

          (t) “OpNext Japan IP” shall have the meaning as set forth in Section 4(a) of this IP
License Agreement.

          (u) “OpNext Japan Third Party License Agreement” shall have the meaning as set forth
in Section 5(d) of this IP License Agreement.

          (v) “OpNext Parties” shall have the meaning as set forth in Section 11(a) of this IP
License Agreement.

          (w) “Person” shall mean any individual, corporation, partnership, limited liability
company, business trust, association, joint stock company, trust, unincorporated organization,
joint venture, firm or other entity or a government or any political subdivision or agency,
department or instrumentality thereof.

          (x) “Second Closing” shall mean the closing of the Stock Purchase Agreement.

          (y) “Second Closing Date” shall mean the date on which the Second Closing occurs.

          (z) “Subsidiary” shall mean, with respect to any Person, any corporation, limited
liability company, partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (without regard to the occurrence
of any contingency) to the vote in the election of directors, managers, or trustees thereof is at
the time owned or controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof or (ii) if a limited liability company,
partnership, association or other business entity, a majority of the limited liability

4

 

company, partnership or other similar ownership interest thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a
combination thereof. For purposes here, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or other business
entity if such Person or Persons shall be allocated a majority of limited liability company,
partnership, association or other business entity gains or losses or shall be or control the
managing director or general partner of such limited liability company, partnership, association or
other business entity.

          (aa) “Third Party Claim” shall have the meaning as set forth in Section 11(g) of this
IP License Agreement.

          (bb) “Third Party License Agreements” shall have the meaning as set forth in Section
5(a) of this IP License Agreement.

          (cc) “Wholly-Owned Subsidiaries” shall mean, with respect to any Person, any
corporation, limited liability company, partnership, association or other business entity of which
(i) if a corporation, one hundred percent (100%) of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Wholly-Owned Subsidiaries of that Person or a
combination thereof or (ii) if a limited liability company, partnership, association or other
business entity, all of the limited liability company, partnership or total ownership interest
thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more
other Wholly-Owned Subsidiaries of that Person or a combination thereof.

Section 2. Assigned Intellectual Property.

          (a) License. OpNext Japan shall license, and does hereby license effective as of the
First Closing Date, the Assigned IP back to Hitachi and its Wholly-Owned Subsidiaries on a fully
paid-up, non-exclusive, perpetual and irrevocable basis to use, make, have made, sell, advertise,
offer to sell, lease, import, export and supply products and services throughout the world using
the Assigned IP, unless otherwise terminated according to the provisions in this IP License
Agreement.

          (b) Review of Obligations. The obligations set forth in this Section 2 shall expire
on the tenth (10th) anniversary of the Second Closing Date; provided,
however, that the license under Assigned IP existing as of the tenth (10th)
anniversary of the Second Closing Date shall continue, under reasonable terms and conditions to be
agreed between the parties, until the expiration of all of such Assigned IP.

5

 

Section 3. Licensed Intellectual Property.

          (a) Definition. “Licensed IP” shall mean: (i) existing, issued patents and
pending patent applications of Hitachi filed prior to the tenth (10th) anniversary of
the Second Closing Date (including all extensions, reexaminations, reissues, continuations and
renewals related thereto) covering the products of the Business listed on Exhibit B to the
Stock Contribution Agreement and processes of the Business, throughout the world, which cannot be
transferred to OpNext Japan due to Hitachi’s reasonable requirements to use such Intellectual
Property in other Hitachi business units; and (ii) all know-how and Intellectual Property used in
connection with the Business in whatever form that was not capable of assignment pursuant to the
provisions of the Business Transfer Agreement due to Hitachi’s reasonable requirements to use such
Intellectual Property in other Hitachi business units (e.g., product specifications,
manufacturing processes, quality control procedures, instruction and/or operating, maintenance and
safety materials and drawings, test procedures, test data, sources of material and supplies and the
like). Hitachi shall make Commercially Reasonable Efforts to list all material patents that
constitute Licensed IP on Exhibit A hereto, which schedule may be amended by the parties’
mutual written consent, together with an explanation of why each patent cannot be transferred to
OpNext Japan pursuant to the Business Transfer Agreement. For nine (9) months following the Second
Closing, Hitachi and OpNext Japan agree to cooperate in supplementing Exhibit B of the
Stock Contribution Agreement to include all products sold by the Business and/or planned by the
Business as of the Second Closing Date, all products planned during the one (1) year period prior
to the Second Closing Date that pertain to the following research areas: (i) APDs; (ii) Tunable
Lasers; (ii) 40G; (iv) Packaging Technology; and (v) Modulators, and all products sold by the
Business during the one (1) year period prior to the Second Closing Date; provided,
however, to the extent any products are added to Exhibit B of the Stock
Contribution Agreement that were not sold or planned as of the Second Closing Date (“Added
Products”), at that time the parties will negotiate in good faith and on reasonable terms the
extent to which the representations, warranties and covenants, or any other obligations of Hitachi
under this IP License Agreement, the Stock Contribution Agreement and the R&D Agreement would apply
to such Added Products. For two (2) years following the Second Closing, Hitachi and OpNext Japan
agree to cooperate in supplementing Exhibit A hereof to include all material patents that
are necessary or reasonably required for the purpose of operation of the Business as conducted on
the Second Closing Date.

          (b) License.

               (i) License Grant. Hitachi shall license, and does hereby license effective as of the
First Closing Date, the Licensed IP to OpNext Japan, on a fully paid-up, non-exclusive, perpetual
and irrevocable basis to use, make, have made, sell, advertise, offer to sell, lease, import,
export and supply products and services throughout the world using the Licensed IP, unless
otherwise terminated according to the provisions in this IP License Agreement.

               (ii) Termination Conditions. Such license shall not be terminated or its exploitation
enjoined, until and unless: (i) OpNext Japan has committed a material breach of its obligations
under this IP License Agreement, Hitachi has given written notice of such breach to OpNext Japan
and such breach remains uncured after sixty (60) days of receiving notice of such breach (the
“Cure Period”), or, in the case of a breach that cannot be cured within such Cure Period,
OpNext Japan has not instituted within such Cure Period steps necessary to remedy the default
and/or thereafter has not diligently pursued the same to completion; or (ii) OpNext Japan has
committed an incurable material breach. In the event the breach is a curable breach that

6

 

cannot be cured within the Cure Period but with respect to which OpNext Japan has instituted
steps necessary to remedy the default and is thereafter diligently pursuing such cure, both parties
shall negotiate to determine whether further pursuit of such cure is reasonable. If the parties
cannot agree on a resolution in such negotiations, then this issue shall be referred to arbitration
pursuant to the arbitration procedures set forth in Exhibit B hereto to decide whether such
breach can be cured or any other alternative remedy should be adopted. In the event the breach is
an incurable breach, the parties agree that the matter shall be referred to arbitration pursuant to
the arbitration procedures set forth in Exhibit B hereto to determine the appropriate
remedy. In the event that either party submits the dispute to arbitration, both parties shall
cooperate in such binding arbitration in accordance with Exhibit B.

          (c) Sublicense.

               (i) Subsidiaries. Hitachi will grant, and does hereby grant effective as of the First
Closing Date, to OpNext Japan the right to freely sublicense the Licensed IP to its Subsidiaries,
to OpNext, Inc. and OpNext, Inc.’s Subsidiaries; provided, however, that OpNext
Japan will not have the right to sublicense any Licensed IP that is developed or filed for after
the Second Closing Date, to any entity other than OpNext, Inc. and OpNext Japan’s and OpNext,
Inc.’s Wholly-Owned Subsidiaries, without the consent of Hitachi, not to be unreasonably withheld,
unreasonably delayed or unreasonably conditioned.

               (ii) Minority-Owned Affiliates. OpNext Japan shall be permitted to further sublicense
the Licensed IP to its Minority-Owned Affiliates, subject to approval by Hitachi, not to be
unreasonably withheld, unreasonably delayed or unreasonably conditioned, and to commercially
reasonable restrictions to be imposed by Hitachi that will be agreed to by the parties in writing.

               (iii) Customers. OpNext Japan shall be permitted to further sublicense the Licensed
IP to its customers as necessary or appropriate in connection with the completion of OpNext Japan’s
products and services, to complete the sale of products or services in the ordinary course of
business or to enable joint development of a product or system with OpNext Japan’s customers to be
manufactured and sold by OpNext Japan to such customers, provided OpNext Japan proposes the terms
and conditions of such sublicense to Hitachi and agrees that such sublicense shall be subject to
Hitachi’s exercise of one (1) of the following options in Hitachi’s sole discretion, with respect
to the terms and conditions proposed by OpNext Japan: (i) Hitachi may consent to the sublicense
terms and conditions as is; (ii) Hitachi may propose that a revised version of the sublicense, with
reasonably modified terms and conditions be utilized; (iii) Hitachi may enter into a direct license
with OpNext Japan’s customer under the same terms and conditions as OpNext Japan’s proposed
sublicense; (iv) Hitachi may propose to enter into a direct license with OpNext Japan’s customer
under reasonably modified terms and conditions; or (v) Hitachi may commence discussions with OpNext
Japan to reach a resolution of Hitachi’s concerns with respect to such sublicense, if Hitachi
believes such sublicense is not in the best interest of the parties. Hitachi shall have the sole
discretion to determine which of the five (5) foregoing options Hitachi will exercise in each case.
With respect to Hitachi’s exercise of one (1) of the five (5) foregoing options, Hitachi agrees to
provide consents to and/or notify OpNext Japan of Hitachi’s proposed modifications within fifteen
(15) Business Days of receipt of the sublicense terms and conditions from OpNext Japan. In the
event that Hitachi exercises one (1) of the five (5) foregoing options, the parties agree to
negotiate in good faith and on reasonable terms to resolve the situation within a reasonable amount
of time, which shall not exceed fifteen

7

 

(15) Business Days of Hitachi’s provision of such a response to OpNext Japan;
provided, however, Hitachi shall not contact such OpNext Japan customers that are
the subject of negotiations between Hitachi and OpNext Japan, without the prior consent of OpNext
Japan prior to the resolution of such negotiations. If the parties cannot agree on a resolution in
such negotiations, then this issue shall be referred to arbitration pursuant to the arbitration
procedures set forth in Exhibit B hereto. In the event that either party submits the
dispute to arbitration, both parties shall cooperate in such binding arbitration in accordance with
Exhibit B.

          (d) Review of Obligations. The obligations set forth in this Section 3 shall expire
on the tenth (10th) anniversary of the Second Closing Date; provided,
however, that the license under Licensed IP existing as of the tenth (10th)
anniversary of the Second Closing Date shall continue, under reasonable terms and conditions to be
agreed between the parties, until the expiration of all of such Licensed IP. Notwithstanding the
foregoing, if one (1) of the conditions set forth in Section 3(b)(ii) is met, Hitachi may elect to
be completely relieved of its obligations set forth in this Section 3. If Hitachi elects to be
relieved of its obligations under this Section 3, the parties shall renegotiate in good faith and
on commercially reasonable terms a new license governing the Licensed IP.

          (e) Obligation to Maintain Intellectual Property of the Business Prior to Second Closing
Date. Hitachi shall continue to maintain in effect all Intellectual Property relating to the
Business through the Second Closing Date in the same manner as Hitachi has done prior to entering
into the Stock Purchase Agreement. After the Second Closing Date, the Licensed IP shall be
maintained by the Subsidiary or division in control of such Licensed IP in a manner that is equal
to the efforts, quality and resources devoted by such Subsidiary or division as applicable in the
ordinary course of the business from time to time for similar Intellectual Property.

          (f) Future Hitachi IP. “Future Hitachi IP” shall mean patents that may be
issued to Hitachi and patent applications (including all extensions, reexaminations, reissues,
continuations and renewals related thereto) that may be filed by Hitachi after the Second Closing
Date but prior to the tenth (10th) anniversary of the Second Closing Date that are
reasonably relevant to the Business as conducted on the Second Closing Date and as modified or
expanded in the future to the extent that any such modification or expansion relates to
modifications to, extensions of or new versions of product lines existing or planned as of the
Second Closing Date. The parties agree to cooperate and consult with each other to develop
procedures by which OpNext Japan will keep Hitachi informed of any modifications or expansions to
the Business in order for Hitachi to identify Future Hitachi IP and notify OpNext Japan
accordingly. If requested by OpNext Japan, any of such Future Hitachi IP will be licensed to
OpNext Japan under the terms and conditions set forth in Section 3(b)(i). Any such license
pursuant to this Section 3(f) shall be subject to the termination provisions in Section 3(b)(ii),
the sublicensing terms in Section 3(c), the renegotiation terms of Section 3(d) and the maintenance
terms of Section 3(e). Notwithstanding Section 3(c)(i), OpNext Japan will have the right to freely
sublicense Future Hitachi IP to its Subsidiaries, OpNext, Inc. and OpNext Inc.’s Subsidiaries even
if such Future Hitachi IP is developed or filed after the Second Closing Date. In the event that
the parties disagree as to whether any particular Intellectual Property developed by Hitachi after
the Second Closing constitutes Future Hitachi IP, the parties shall first attempt to resolve the
dispute through good faith and reasonable negotiations in accordance with Section 12 hereof.

8

 

In the event that the dispute cannot be resolved through such negotiations, a party shall
refer the dispute to arbitration pursuant to the arbitration procedures set forth in Exhibit
B hereto. In the event that either party submits the dispute to arbitration, both parties
shall cooperate in such binding arbitration in accordance with Exhibit B.

          (g) Transfer of Licensed IP. In the event a Subsidiary or division of Hitachi that is
the owner of the Licensed IP or any Future Hitachi IP that is licensed to OpNext Japan under
Section 3(f) is sold or otherwise transferred by Hitachi, Hitachi will make necessary arrangements
to secure a license under the terms and conditions of this IP License Agreement for OpNext Japan
from the new owner such that OpNext Japan can continue to use such Licensed IP and such Future
Hitachi until such Licensed IP and/or Future Hitachi IP expires hereunder, unless otherwise
terminated according to the provisions of this IP License Agreement.

Section 4. OpNext Japan Intellectual Property.

          (a) Definition. “OpNext Japan IP” shall mean patents issued and patent
applications filed after the Second Closing Date (including all extensions, reexaminations,
reissues, continuations and renewals related thereto) of OpNext Japan but filed prior to the tenth
(10th) anniversary of the Second Closing Date covering products and processes of the
Business, throughout the world (but excluding Assigned IP and Licensed IP).

          (b) License. OpNext Japan shall license, and does hereby license as of the First
Closing Date, the OpNext Japan IP to Hitachi and its Wholly-Owned Subsidiaries on a fully paid-up,
non-exclusive, perpetual and irrevocable basis, to use, make, have made, sell, advertise, offer to
sell, lease, import, export and supply products and services throughout the world using the OpNext
Japan IP, unless otherwise terminated according to the provisions of this IP License Agreement;
provided, however, that Hitachi and its Wholly-Owned Subsidiaries will not have the
right to sublicense OpNext Japan IP to any entity, without the consent of OpNext Japan and Clarity,
neither consent to be unreasonably withheld, unreasonably delayed or unreasonably conditioned. The
requirement of obtaining Clarity’s consent under this Section 4(b) shall terminate automatically
and be of no further force and effect upon the occurrence of the first to occur of (i) an Initial
Public Offering (as defined in the Stockholders’ Agreement) or (ii) a Sale of the Company (as
defined in the Stockholders’ Agreement); provided that the parties acknowledge and agree that
Clarity shall be entitled to maintain for itself its right to consent to sublicenses under this
Section 4(b) notwithstanding such termination so long as the Clarity Parties (as defined in the
Stockholders’ Agreement) and their Affiliates own Voting Securities (as defined in the
Stockholders’ Agreement) of OpNext, Inc. possessing more than ten percent (10%) of the total voting
power of all outstanding Voting Securities of OpNext, Inc.

               (i) Termination Conditions. Such license shall not be terminated or its exploitation
enjoined, until and unless: (i) Hitachi has committed a material breach of its obligations under
this IP License Agreement, OpNext Japan has given written notice of such breach to Hitachi and such
breach remains uncured after the Cure Period, or, in the case of a breach, which cannot be cured
within such Cure Period, Hitachi has not instituted within such Cure Period steps necessary to
remedy the default and/or thereafter has not diligently pursued the same to completion; or (ii)
such a material breach is incurable. In the event the breach is a curable breach that cannot be
cured within the Cure Period but with respect to which Hitachi has instituted steps necessary to
remedy the default and is thereafter diligently pursuing such cure, both parties shall negotiate to
determine whether further pursuit of such cure is reasonable. If the

9

 

parties cannot agree on a resolution in such negotiations, then this issue shall be referred
to arbitration pursuant to the arbitration procedures set forth in Exhibit B hereto to
decide whether such breach can be cured or any other alternative remedy should be adopted. In the
event the breach is an incurable breach, the parties agree that the matter shall be referred to
arbitration pursuant to the arbitration procedures set forth in Exhibit B hereto to
determine the appropriate remedy. In the event that either party submits the dispute to
arbitration, both parties shall cooperate in such binding arbitration in accordance with
Exhibit B.

          (c) Review of Obligations. The obligations set forth in this Section 4 shall expire
on the tenth (10th) anniversary of the Second Closing Date; provided,
however, that the license under OpNext Japan IP existing as of the tenth (10th)
anniversary of the Second Closing Date shall continue, under reasonable terms and conditions to be
agreed between the parties, until the expiration of all of such OpNext Japan IP. Notwithstanding
the foregoing, if one (1) of the conditions set forth in Section 4(b)(i) is met, OpNext Japan may
elect to be completely relieved of its obligations set forth in this Section 4. If OpNext Japan
elects to be relieved of its obligations under this Section 4, the parties shall renegotiate in
good faith and on commercially reasonable terms a new license governing the OpNext Japan IP.

Section 5. Third-Party License Agreements.

          (a) Definition. “Third Party License Agreements” shall mean those rights
owned by Hitachi under any license agreements relating to Intellectual Property owned by third
parties and related to the Business, throughout the world, that cannot be assigned under the
Business Transfer Agreement or licensed under Section 3 hereof. “Existing Third Party License
Agreements” are those that are in existence on the Second Closing Date. “Future Third
Party License Agreements” are those entered into after the Second Closing Date.

          (b) Existing Third Party License Agreements. To the extent that an Existing Third
Party License Agreement does not provide for an automatic sublicense to OpNext Japan, Hitachi
shall, upon OpNext Japan’s written request, sublicense, and does hereby sublicense, rights under
such Existing Third Party License Agreement to OpNext Japan but only to the extent that Hitachi has
the right to make available such rights to OpNext Japan, subject to the condition that OpNext Japan
abides by the terms and conditions of such Existing Third Party License Agreement. The rights
referred to above will be provided to OpNext Japan on a fully paid-up, non-exclusive basis, except
if royalty payments are necessary based specifically on what is being done by OpNext Japan, then
OpNext Japan shall be liable for such royalty payments. Hitachi shall, upon OpNext Japan’s written
request, sublicense rights under Existing Third Party License Agreements to OpNext, Inc. and OpNext
Inc.’s and OpNext Japan’s Wholly-Owned Subsidiaries provided: (i) OpNext Japan obtains Hitachi’s
reasonable prior consent; (ii) Hitachi can make available such license rights to OpNext, Inc. and
OpNext, Inc.’s and OpNext Japan’s Wholly-Owned Subsidiaries; and (iii) OpNext, Inc. and OpNext,
Inc.’s and OpNext Japan’s Wholly-Owned Subsidiaries abide by the terms and conditions of such
Existing Third Party License Agreements. Notwithstanding the foregoing, if any such sublicense
invokes any Japanese tax issues, then Hitachi shall not be obliged to grant a sublicense to OpNext,
Inc. and OpNext, Inc.’s and OpNext Japan’s Wholly-Owned Subsidiaries without entering into a
separate agreement with OpNext, Inc. and such Wholly-Owned Subsidiaries under reasonable terms and
conditions to be agreed upon between the relevant parties to address such tax issues. The
sublicense provided in this subsection 5(b) is subject to the termination provisions of the
Existing

10

 

Third Party License Agreement. The rights referred to above will be provided to OpNext, Inc.
and such Wholly-Owned Subsidiaries on a fully paid-up, non-exclusive basis, except if royalty
payments are necessary based specifically on what is being done by OpNext, Inc. and such
Wholly-Owned Subsidiaries, then OpNext Japan shall be liable for or shall cause OpNext, Inc. and
such Wholly-Owned Subsidiaries to be liable for such royalty payments.

          (c) Future Third Party License Agreements. Hitachi shall use Commercially Reasonable
Efforts to obtain the right to sublicense rights to OpNext Japan under Future Third Party License
Agreements, which may be entered into by Hitachi after the Second Closing Date, subject to the
condition that OpNext Japan abides by the terms and conditions of such Future Third Party License
Agreements. The rights referred to above will be provided to OpNext Japan on a fully paid-up,
non-exclusive basis, except if royalty payments are necessary based specifically on what is being
done by OpNext Japan, then OpNext Japan shall be liable for such royalty payments. Hitachi shall,
upon OpNext Japan’s written request, sublicense rights under Future Third Party License Agreements
to OpNext, Inc. and OpNext, Inc.’s and OpNext Japan’s Wholly-Owned Subsidiaries provided: (i)
OpNext Japan obtains Hitachi’s reasonable prior consent; (ii) Hitachi can make available such
license rights to OpNext, Inc. and OpNext, Inc.’s and OpNext Japan’s Wholly-Owned Subsidiaries; and
(iii) OpNext, Inc. and OpNext, Inc.’s and OpNext Japan’s Wholly-Owned Subsidiaries abide by the
terms and conditions of such Future Third Party License Agreements. Notwithstanding the foregoing,
if such sublicense invokes any Japanese tax issues then Hitachi shall not be obliged to grant a
sublicense to OpNext, Inc. and OpNext, Inc.’s and OpNext Japan’s Wholly-Owned Subsidiaries without
entering into a separate agreement with OpNext, Inc. and such Wholly-Owned Subsidiaries under
reasonable terms and conditions to be agreed upon between the relevant parties to address such tax
issues. The rights referred to above will be provided to OpNext, Inc. and such Wholly-Owned
Subsidiaries on a fully paid-up, non-exclusive basis, except if royalty payments are necessary
based specifically on what is being done by OpNext, Inc. and such Wholly-Owned Subsidiaries, then
OpNext Japan shall be liable for or shall cause OpNext, Inc. and such Wholly-Owned Subsidiaries to
be liable for such royalty payments. The sublicense provided in this subsection 5(c) is subject to
the termination provisions of the Future Third Party License Agreements.

          Hitachi shall provide an analysis of its Existing Third Party License Agreements that are
cross-licenses with major competitors of OpNext Japan’s products sold as of the Second Closing
Date, including whether OpNext Japan is covered by such cross-license agreement and whether OpNext
Japan has the option to be covered, or to not be covered, by such cross-license agreement. In
addition, within one hundred and eighty (180) days after the Second Closing Date, Hitachi shall
cooperate with OpNext Japan in creating a list of all Existing Third Party License Agreements that
are material to the Business. Such a list may be amended from time to time to include Future Third
Party License Agreements that may be material to the Business, as determined by Hitachi and OpNext
Japan after reviewing the rights available under such Future Third Party License Agreements. Upon
request from OpNext Japan, Hitachi shall consult with and provide reasonable assistance to OpNext
Japan employees with respect to the foregoing. Within one hundred and eighty (180) days after the
Second Closing Date, Hitachi and OpNext Japan agree to negotiate in good faith and on a reasonable
basis to create a mechanism whereby: (i) Hitachi can, to the extent it becomes aware of or is
notified about termination, renegotiation or any other material change under an Existing Third
Party License or Future Third Party License that OpNext Japan includes in its list of material
licenses, communicate to OpNext Japan within a reasonable period of time information relating to
such termination, renegotiation or

11

 

material change to the rights prior to such events occurring; and (ii) OpNext Japan can
communicate with Hitachi prior to the termination or material change to the rights available to be
sublicensed by Hitachi to OpNext Japan under the Existing Third Party License Agreements and under
any Future Third Party License Agreements. Both parties agree to cooperate with each other to
minimize any impact of such termination and renegotiation events.

          (d) Other Agreements. In the event that OpNext Japan or one of its Affiliates obtains
a separate license agreement for Intellectual Property related to the Business with the same
unrelated third party with which Hitachi had a Third Party License Agreement (“OpNext Japan
Third Party License Agreement”), OpNext Japan will cooperate with and reasonably assist Hitachi
in its efforts to obtain a license with that party under substantially the same terms and
conditions as those under such OpNext Japan Third Party License Agreement it has obtained with such
third party. If permitted by the terms of such OpNext Japan Third Party License Agreement, OpNext
Japan will grant a sublicense of the Intellectual Property rights to Hitachi under such OpNext
Japan Third Party License Agreement.

          (e) Termination of Obligations. The obligations set forth in this Section 5 shall
terminate upon a Change of Control (as defined in the Stockholders’ Agreement) of OpNext Japan.

Section 6. Representations and Warranties of Hitachi.

          (a) Assigned IP and Licensed IP. Except as disclosed on Schedule 6(a) or in Section
11(a), Hitachi hereby represents and warrants that:

               (i) Hitachi owns or has the right to use and sublicense the Licensed IP, and Hitachi has the
rights to manufacture and/or sell products including the Licensed IP and to license such rights to
OpNext Japan and has timely filed and prosecuted patent applications for the Assigned IP and
Licensed IP in accordance with Hitachi’s standard business practices;

               (ii) Except as provided in Exhibit C and Section 11(a), no claims, which could
reasonably be expected to have a Material Adverse Effect, are pending in writing or, to the best
knowledge of Hitachi, threatened in writing against Hitachi as of the Second Closing Date by any
Person with respect to the material patents listed on Exhibit A;

               (iii) To Hitachi’s Knowledge, there has been no event or circumstance relating to the Business
that poses an unreasonable risk of infringing a patent. Except with respect to the claims
referenced in Section 11(a) of this IP License Agreement, a list of each warning letter that has
been addressed to Hitachi products made or sold as part of the operation of the Business, and a
list of all attorney opinions that have been obtained regarding non-infringement of patents
relating to the Business, is provided in Exhibit C. A copy of each such letter and opinion
shall be provided to OpNext Japan, to the extent that such can be done without waiving any
attorney-client privilege;

               (iv) As of the Second Closing, Hitachi shall have assigned under the terms and conditions of
the Business Transfer Agreement or licensed under the terms and conditions hereof to OpNext Japan
the Intellectual Property necessary or reasonably required for the purpose of the operation of the
Business as of the Second Closing Date; and

               (v) Hitachi is in compliance with the terms and conditions related to Intellectual Property
contained in the Stock Contribution Agreement.

12

 

          (b) Authority. Hitachi is a corporation duly organized under the laws of Japan.
Hitachi has all requisite corporate power and authority to enter into this IP License Agreement and
to consummate the transactions contemplated hereby. All corporate acts and other proceedings
required to be taken by Hitachi to authorize the execution, delivery and performance of this IP
License Agreement and the consummation of the transactions contemplated hereby have been duly and
properly taken. This IP License Agreement has been duly executed and delivered by Hitachi and
constitutes the valid and binding obligation of Hitachi, enforceable against Hitachi in accordance
with its terms.

          (c) No Conflicts. The execution and delivery by Hitachi of this IP License Agreement
do not, and the consummation by Hitachi of the transactions contemplated hereby and compliance by
Hitachi with the terms hereof do not and shall not: (i) conflict with or result in a breach of the
terms, conditions or provisions of; (ii) constitute a default under; (iii) result in the creation
of any lien, security interest, charge or encumbrance upon Hitachi’s capital stock or assets under;
(iv) give any third party the right to modify, terminate or accelerate any obligation under; (v)
result in a violation of; or (vi) require any authorization, consent, approval, exemption or other
action by or notice or declaration to, or filing with, any court or administrative or governmental
body or agency pursuant to the charter documents of Hitachi, or any law, statute, rule or
regulation to which Hitachi is subject, or any agreement, instrument, order, judgment or decree to
which Hitachi is subject.

          (d) Litigation, etc. Except as set forth in Section 11(a), there are no actions,
suits, proceedings, orders, investigations or claims pending or, to the best of Hitachi’s
Knowledge, threatened against Hitachi, at law or in equity, before or by any governmental
department, commission, board, bureau, agency or instrumentality (including any actions, suits,
proceedings or investigations with respect to the transactions contemplated by this IP License
Agreement) or any facts that are known by Hitachi to form a reasonable basis for any such action,
suit, proceeding, order, investigation or claim, which, in the case of any of the foregoing items,
could reasonably be expected to have material adverse effect on the ability of Hitachi to
consummate the transactions contemplated hereby.

          (e) Infringement of Licensed IP. To the extent a competitor of the Business is
infringing the Licensed IP or any Future Hitachi IP that is licensed to OpNext Japan under Section
3(b) or Section 3(f), respectively, in OpNext Japan’s reasonable business judgment and such
infringement is material to the Business, Hitachi will protect OpNext Japan’s interest either by
prosecuting the Intellectual Property rights on behalf of OpNext Japan or by taking some other
appropriate action that will not have a Material Adverse Effect on the ongoing business of OpNext
Japan, and both parties shall consult and cooperate with each other in determining how to respond
to the infringing activities. Upon the resolution of such infringement by settlement or otherwise,
any damages, profits and awards of whatever nature recoverable for such infringement shall, after
deducting the parties’ expenses, be reasonably allocated between the parties based on the facts and
circumstances of the infringement. Both parties will reasonably consider the option of settling
any such matter by granting a sublicense of all or portion of the Licensed IP and any Future
Hitachi IP that is licensed to OpNext Japan.

13

 

Section 7. Covenants of Hitachi. Hitachi covenants and agrees as follows:

          (a) Ordinary Course. Except as permitted by the terms of this IP License Agreement,
during the period beginning on the First Closing Date and ending on the Second Closing Date,
Hitachi shall cause the Business to be conducted in the ordinary course and in accordance with all
applicable laws and regulations.

          (b) Covenant Not to Sue. Hitachi herewith covenants not to sue OpNext Japan, OpNext,
Inc. or the Clarity Parties for infringement of any Intellectual Property related to the Business,
throughout the world. Hitachi also covenants not to sue any sublicensees of OpNext Japan that are
authorized pursuant to the terms of Section 3(c) or customers of OpNext Japan or OpNext, Inc. for
infringement of any Intellectual Property related to the Business throughout the world;
provided, however, covenants not to sue customers of OpNext Japan or OpNext, Inc.
shall be applied in accordance with the “exhaustion doctrine” such that it only extends to products
or methods provided by OpNext Japan or OpNext, Inc. to customers and shall not extend to any
portions of any systems or subsystems or any other customer’s products or methods that incorporate
such products or methods provided by OpNext Japan or OpNext, Inc. to the extent such portions are
not covered by Assigned IP, Licensed IP or Third Party License Agreements (to the extent that
Hitachi has a right to sue thereunder).

          (c)  Confidentiality

               (i) With respect to any information furnished to Hitachi pursuant to the Business Transfer
Agreement, the Stock Contribution Agreement or this IP License Agreement, which Hitachi reasonably
understands to be proprietary or confidential in nature and any confidential information relating
to the Business, including Assigned IP, Licensed IP, Third Party License Agreements and OpNext
Japan IP, Hitachi shall maintain the confidentiality of all such information in accordance with
Hitachi’s policies for the protection of its own nonpublic information (which policies shall
provide at least reasonable protection).

               (ii) The limitations set forth in this Section 7(c) shall not apply with respect to the
disclosure of any information: (i) to Hitachi’s employees, auditors, counsel, other professional
advisors, sublicensees of Hitachi that are authorized pursuant to Sections 2(a) and 4(b) or
suppliers if Hitachi or any of its sublicensees authorized under Sections 2(a) and 4(b), in its
sole discretion, determines that it is reasonably necessary for such Person to have access to such
information, provided that any such Person agrees to be bound by the provisions of this Section
7(c) to the same extent as Hitachi; (ii) as has become or previously was generally available to the
public other than by reason of a breach of this Section 7(c) by Hitachi or has become available to
Hitachi on a non-confidential basis after the Second Closing Date; (iii) as may be required or
appropriate in any report, statement or testimony submitted to any municipal, state or federal
regulatory body having or claiming to have jurisdiction over Hitachi (it being understood that, to
the extent practicable, Hitachi shall provide OpNext Japan prompt notice to any such event and
cooperate in good faith to enable OpNext Japan to participate to protect its interest in such
confidential information); (iv) as may be required or appropriate in response to any summons or
subpoena or in connection with any litigation; and (v) in order to comply with any law, order,
regulation or ruling applicable to Hitachi. In connection with Transferred Employees (as defined
in the Stock Contribution Agreement), Hitachi will use Commercially Reasonable Efforts, at OpNext
Japan’s request and at Hitachi’s expense, to enforce existing confidentiality agreements and rights
under United States or Japanese law requiring employees to keep trade secrets confidential and to
assign Intellectual Property rights to Hitachi.

14

 

               (iii) Notwithstanding Section 7(c)(ii), to the extent that after the Second Closing Date,
Hitachi desires to disclose to Hitachi’s sublicensed Subsidiaries (that are not Wholly-Owned
Subsidiaries), sublicensed Affiliates (including Minority-Owned Affiliates) and/or suppliers (i)
OpNext Japan IP and/or (ii) any information furnished to Hitachi pursuant to this IP License
Agreement that Hitachi reasonably understands to be proprietary or confidential in nature and any
confidential information relating to the Business that Hitachi did not disclose to its sublicensed
Subsidiaries (that are not Wholly-Owned Subsidiaries), sublicensed Minority-Owned Affiliates and/or
suppliers prior to the Second Closing Date, Hitachi shall notify OpNext Japan of such desire and
propose the terms and conditions of an appropriate nondisclosure agreement into which OpNext Japan
and the corresponding Hitachi sublicensee may enter. OpNext Japan agrees that within fifteen (15)
Business Days of receipt of such request and proposed nondisclosure agreement, OpNext Japan shall,
at its sole discretion, either (i) enter into the proposed nondisclosure agreement and directly
provide the requested confidential information to such Hitachi sublicensee; (ii) propose reasonably
modified terms and conditions of the nondisclosure agreement under which OpNext Japan will provide
the requested confidential information to Hitachi’s sublicensee; or (iii) commence discussions with
Hitachi to reach a resolution of OpNext Japan’s concerns with respect to such disclosure, if OpNext
Japan believes such disclosure is not in the best interest of the parties. In the event that
OpNext Japan elects to exercise option (ii) or (iii), the parties agree to negotiate in good faith
and on reasonable terms to resolve the situation within a reasonable amount of time, which shall
not exceed fifteen (15) Business Days of OpNext Japan’s provision of such a response. If the
parties cannot agree on a resolution in such negotiations, then this issue shall be referred to
arbitration pursuant to the arbitration procedures set forth in Exhibit B hereto. In the
event that either party submits the dispute to arbitration, both parties shall cooperate in such
binding arbitration in accordance with Exhibit B.

          (d) OpNext Japan’s and Hitachi’s Trademark, Trade Names, etc. If necessary, OpNext
Japan and Hitachi may negotiate in good faith the terms and conditions under which Hitachi and
OpNext Japan may use any of the trademarks, trade names, trade dress, service marks, logos and/or
domain names relating to the Business and any other means of identifying the Business or its
products or services from and after the Second Closing Date.

          (e) Taxes. Hitachi will be responsible for the payment of any taxes or duties
required in connection with the licensing and sublicensing of the Licensed IP and Third Party
License Agreements that are incurred on or prior to the Second Closing Date.

          (f) New Product Clearance Searches. In accordance with Hitachi’s ordinary business
practice for new product release searches, Hitachi has conducted appropriate patent clearance
searches during the design process and prior to putting the 2.5G and 10G products on the market,
and based upon the information obtained during such clearance searches Hitachi does not believe
there is a likelihood that the 2.5G or 10G products that are on the market as of the Second Closing
Date infringe the intellectual property of any third party in such markets in which such products
have been introduced. After the Second Closing, Hitachi shall cooperate with OpNext Japan to
complete additional clearance searches for the 2.5G, 10G and 40G products in jurisdictions in which
such products will be marketed. If during such clearance searches, the parties discover that
either the 2.5G, 10G or 40G product infringes a third party’s intellectual property in such
jurisdictions, the parties shall consult and cooperate with each other in determining how to
respond to the infringing activities.

15

 

Section 8. Representations and Warranties of OpNext Japan. OpNext Japan hereby represents
and warrants to Hitachi as follows:

          (a) Authority. OpNext Japan is a corporation duly organized under the laws of Japan.
OpNext Japan has all requisite corporate power and authority to enter into this IP License
Agreement and to consummate the transactions contemplated hereby. All corporate acts and other
proceedings required to be taken by OpNext Japan to authorize the execution, delivery and
performance of this IP License Agreement and the consummation of the transactions contemplated
hereby have been duly and properly taken. This IP License Agreement has been duly executed and
delivered by OpNext Japan and constitutes the valid and binding obligation of OpNext Japan,
enforceable against OpNext Japan in accordance with its terms.

          (b) No Conflicts. The execution and delivery by OpNext Japan of this IP License
Agreement do not, and the consummation by OpNext Japan of the transactions contemplated hereby and
compliance by OpNext Japan with the terms hereof do not and shall not: (i) conflict with or result
in a breach of the terms, conditions or provisions of; (ii) constitute a default under; (iii)
result in the creation of any lien, security interest, charge or encumbrance upon OpNext Japan’s
capital stock or assets under; (iv) give any third party the right to modify, terminate or
accelerate any obligation under; (v) result in a violation of; or (vi) require any authorization,
consent, approval, exemption or other action by or notice or declaration to, or filing with, any
court or administrative or governmental body or agency pursuant to the charter documents of OpNext
Japan, or any law, statute, rule or regulation to which OpNext Japan is subject, or any agreement,
instrument, order, judgment or decree to which OpNext Japan is subject.

          (c) Litigation, etc. There are no actions, suits, proceedings, orders, investigations
or claims pending or, to the best of OpNext Japan’s Knowledge, threatened against OpNext Japan, at
law or in equity, before or by any governmental department, commission, board, bureau, agency or
instrumentality (including any actions, suits, proceedings or investigations with respect to the
transactions contemplated by this IP License Agreement) or any facts that are known by OpNext Japan
to form a reasonable basis for any such action, suit, proceeding, order, investigation or claim
which, in the case of any of the foregoing items, could reasonably be expected to have Material
Adverse Effect, on the ability of OpNext Japan to consummate the transactions contemplated hereby.

Section 9. Covenants of OpNext Japan. OpNext Japan covenants as follows:

          (a) Confidentiality

               (i) With respect to any information furnished to OpNext Japan pursuant to the Business
Transfer Agreement, the Stock Contribution Agreement or this IP License Agreement, which OpNext
Japan reasonably understands to be proprietary or confidential in nature and any confidential
information relating to the Business, including Assigned IP, Licensed IP and Third Party License
Agreements, OpNext Japan shall maintain the confidentiality of all such information in accordance
with OpNext Japan’s policies for the protection of its own nonpublic information (which policies
shall provide at least reasonable protection).

               (ii) The limitations set forth in this Section 9(a) shall not apply with respect to the
disclosure of any information: (i) to OpNext Japan’s employees, auditors, counsel,

16

 

other professional advisors, sublicensees of OpNext Japan authorized pursuant to the terms of
Section 3(c) or suppliers, if OpNext Japan or its sublicensees authorized pursuant to the terms of
Section 3(c), in its sole discretion, determines that it is reasonably necessary for such party to
have access to such information, provided that any such Person agrees to be bound by the provisions
of this Section 9(a) to the same extent as OpNext Japan; (ii) as has become or previously was
generally available to the public other than by reason of a breach of this Section 9(a) by OpNext
Japan or has become available to OpNext Japan on a non-confidential basis after the Second Closing
Date; (iii) as may be required or appropriate in any report, statement or testimony submitted to
any municipal, state or federal regulatory body having or claiming to have jurisdiction over OpNext
Japan (it being understood that, to the extent practicable, OpNext Japan shall provide Hitachi
prompt notice to any such event and cooperate in good faith to enable Hitachi to participate to
protect its interest in such confidential information); (iv) as may be required or appropriate in
response to any summons or subpoena or in connection with any litigation; and (v) in order to
comply with any law, order, regulation or ruling applicable to OpNext Japan. In connection with
Transferred Employees (as defined in the Stock Contribution Agreement), OpNext Japan will use its
Commercially Reasonable Efforts, at Hitachi’s request and at OpNext Japan’s expense, to enforce
existing confidentiality agreements and rights under United States or Japanese law requiring
employees to keep trade secrets confidential, and to assign Intellectual Property rights to OpNext
Japan.

          (b) No Additional Representations. OpNext Japan acknowledges that neither Hitachi nor
any other Person has made any representation or warranty, express or implied, as to the accuracy or
completeness of any information regarding the Licensed IP or Third Party License Agreements except
as expressly set forth in this IP License Agreement or the Schedules and Exhibits hereto. Without
limiting the generality of the foregoing, Hitachi makes no representation or warranty with respect
to the Licensed IP or Third Party License Agreements, express or implied, beyond those expressly
made in Section 6, including any implied representation or warranty as to the condition,
merchantability, suitability or fitness for a particular purpose of any of the Licensed IP or Third
Party License Agreements and, except for the express representations and warranties of Hitachi
contained in Section 6, OpNext Japan takes the Licensed IP or Third Party License Agreements on an
“as is” and “where is” basis.

          (c) Covenant Not to Sue. OpNext Japan herewith covenants not to sue Hitachi for
infringement of any Intellectual Property related to the Business, throughout the world. OpNext
Japan also covenants not to sue sublicensees of Hitachi authorized pursuant to the terms of
Sections 2(a) and 4(b) or customers of Hitachi for infringement of any Intellectual Property
related to the Business throughout the world; provided, however, covenants not to
sue customers of Hitachi shall be applied in accordance with the “exhaustion doctrine” such that it
only extends to products or methods provided by Hitachi to customers and shall not extend to any
portions of any systems or subsystems or any other customer’s products or methods that incorporate
such products or methods provided by Hitachi, to the extent such portions are not covered by OpNext
Japan IP or Assigned IP.

Section 10. Mutual Covenants. Hitachi and OpNext Japan covenant and agree as follows:

          (a) Consents. OpNext Japan acknowledges that certain consents to the transactions
contemplated by this IP License Agreement may be required from parties to Third Party License
Agreements and such consents have not been obtained. OpNext Japan agrees that Hitachi and its
Minority-Owned Affiliates shall not have any liability whatsoever to OpNext

17

 

Japan arising out of or relating to the failure to obtain any consents that may have been or
may be required in connection with the transactions contemplated by this Agreement or because of
the default, acceleration or termination of any contract as a result thereof. OpNext Japan further
agrees that no representation, warranty or covenant of Hitachi contained herein shall be breached
or deemed breached and no condition of OpNext Japan shall be deemed not to be satisfied as a result
of the failure to obtain any consent or as a result of any such default, acceleration or
termination or any lawsuit, action, claim, proceeding or investigation commenced or threatened by
or on behalf of any Person arising out of or relating to the failure to obtain any consent or any
such default, acceleration or termination. At OpNext Japan’s written request prior to the Second
Closing, Hitachi shall cooperate with OpNext Japan in any reasonable manner in connection with
OpNext Japan’s obtaining any such consents; provided, however, that such
cooperation shall not include any requirement of Hitachi to expend money, commence any litigation
or offer or grant any accommodation (financial or otherwise) to any Person.

          (b) Non-Transferred License Agreements. With respect to any Third Party License
Agreement that may not be properly licensed to OpNext Japan because of the failure to obtain a
required consent (“Non-Transferred License Agreements”), with respect to which OpNext Japan
requests Hitachi’s cooperation and with respect to which Hitachi and OpNext Japan are unable to
obtain a separate agreement between OpNext Japan and the other party or parties, OpNext Japan shall
have the right to require that Hitachi use Commercially Reasonable Efforts to perform any such
Non-Transferred License Agreements, to the extent it relates to the Business, as agent for and for
the account of OpNext Japan, for a period up to six (6) months following the Second Closing Date;
provided that OpNext Japan shall indemnify Hitachi for any and all costs, expenses, losses and
liabilities incurred by Hitachi or any of its Affiliates in connection with taking such action.

          (c) Press Releases. Each party agrees to consult with the other as to the general
nature of any news releases or public statements with respect to the transactions contemplated by
this IP License Agreement, and use Commercially Reasonable Efforts not to issue any news releases
or public statements inconsistent with results of such consultations. Subject to applicable laws
or the rules of any applicable securities exchange, each party shall use Commercially Reasonable
Efforts to enable the other party to review and comment on all such news releases prior to the
release thereof.

          (d) Commercially Reasonable Efforts. Subject to the terms of this IP License
Agreement, each party will use its Commercially Reasonable Efforts to satisfy all of the conditions
set forth in this IP License Agreement and to cause the Second Closing and this IP License
Agreement to occur.

          (e) Injunctive Relief. The parties acknowledge and agree that money damages would be
inadequate to remedy any breach of the confidentiality obligations in Sections 7(c) and 9(a) and
that the non-breaching party shall be entitled to obtain equitable or other remedies with respect
to any such breach, including injunctive relief.

Section 11. Indemnification.

          (a) Previously Disclosed Claims. Notwithstanding anything to the contrary herein,
with respect to the written claims of Intellectual Property infringement previously disclosed, in
January 2001, to the counsel of OpNext, Inc., OpNext Japan, their respective Subsidiaries and the
Clarity Parties (the “OpNext Parties”), Hitachi shall defend and indemnify

18

 

the OpNext Parties with respect to any claims or Losses suffered or incurred by the OpNext
Parties as a result of or arising from such previously written claims regardless of the timing of
such claims or Losses, and shall ensure that such claims will be resolved in a manner that does not
adversely affect the ongoing business of OpNext Japan. Furthermore, none of the limitations or
other provisions set forth in Section 11(f) below will apply to the foregoing indemnification
obligations. Hitachi shall consult and cooperate with OpNext Japan in determining whether any claim
directly related to the previously disclosed claims referenced to in the preceding sentences shall
be covered by the indemnity set forth in this section.

          (b) Intellectual Property Indemnification and Defense.

               (i) Before Second Closing. With respect to third party patent and copyright
infringement claims and trade secret misappropriation claims regarding products, processes or
methods related to the Business as it was conducted prior to the Second Closing, Hitachi shall
defend and indemnify OpNext Japan regardless of the timing of such third party’s infringement
claim; provided, however, that such infringement is not attributable to any OpNext
Japan IP.

               (ii) After Second Closing. (1) With respect to third party patent or copyright
infringement claims or trade secret misappropriation claims regarding products, processes or
methods related to the Business as it is conducted after the Second Closing, Hitachi and OpNext
Japan shall jointly defend such action but only to the extent that such claim involves Assigned IP
or Licensed IP; (2) If a third party patent or copyright infringement claim or trade secret
misappropriation claim is made against OpNext Japan for a new product design that is developed
after the Second Closing Date, Hitachi shall be responsible for the settlement amount of any such
claim (provided that prior written approval is obtained) or the resulting liability of any such
claim only to the extent such claim results from a product design sold by the Business as of the
Second Closing Date, Assigned IP or Licensed IP, while OpNext Japan shall be responsible for the
settlement amount of any such claim (provided that prior written approval is obtained) or the
resulting liability of any such claim to the extent that it is caused by the product design
introduced by OpNext Japan irrespective of whether such OpNext Japan product design is covered by
Assigned IP or Licensed IP. For avoidance of doubt and notwithstanding the foregoing, the
indemnity under this Section 11(b)(ii) shall not apply to any infringement or misappropriation
claims that do not involve such products, processes or methods described above. To the extent
there is a dispute regarding the allocation of the parties’ liabilities under this subsection, the
parties shall negotiate in good faith, in accordance with the terms set forth in Section 12, what
the allocation of liability should be. If the parties are unable to agree even after good faith
negotiations, the parties shall submit the issue to arbitration pursuant to the arbitration
procedures set forth in Exhibit B hereto. In the event that either party submits the
dispute to arbitration, both parties shall cooperate in such binding arbitration in accordance with
Exhibit B.

          (c) Indemnification by Hitachi. From and after the Second Closing, Hitachi shall
indemnify OpNext Japan and its Affiliates and each of their respective officers, directors,
members, stockholders, partners and employees (as applicable) and hold them harmless from any loss,
liability, damage or expense (including court costs and reasonable attorneys’ fees)
(“Losses”) suffered or incurred by any such Indemnified Party to the extent arising from:
(i) any breach of any representation or warranty of Hitachi contained in this IP License Agreement
that survives the Second Closing Date; and (ii) any breach of any covenant of Hitachi contained in
this IP License Agreement requiring performance before or after the Second Closing Date.

19

 

          (d) Indemnification by OpNext Japan. From and after the Second Closing, OpNext Japan
shall indemnify Hitachi and its Affiliates and each of their respective officers, directors,
members, stockholders, partners and employees (as applicable) against and hold them harmless from
any Losses suffered or incurred by any such Indemnified Party to the extent arising from: (i) any
breach of any representation or warranty of OpNext Japan contained in this IP License Agreement
that survives the Second Closing Date; (ii) any breach of any covenant of OpNext Japan contained in
this IP License Agreement requiring performance before or after the Second Closing Date; (iii) and
any obligation, liability, action, suit, claim or other proceeding that arises directly or
indirectly out of the operation of the Business or use of the Assigned IP or Licensed IP on or
after the Second Closing or the manufacture, distribution, marketing or sale of the Products at any
time on or after the Second Closing. For avoidance of doubt and notwithstanding the foregoing, the
indemnity under this Section 11(d) shall not apply to any infringement or misappropriation claims
that are covered under Section 11(b)(ii) above.

          (e) Losses Net of Insurance. The amount of any and all Losses under this Section 11
shall be determined net of any amounts recovered or recoverable by the Indemnified Party under
insurance policies with respect to such Losses. Each party hereby waives, to the extent permitted
under its applicable insurance policies, any subrogation rights that its insurer may have with
respect to any indemnifiable Losses.

          (f) Limitations on Indemnification. Notwithstanding the foregoing, in no event shall
either party indemnify the other party under Section 11(b), 11(c)(i) and 11(d)(i) and (iii) of this
IP License Agreement or Sections 13(a)(i), 13(a)(v), 13(b), 13(c), 13(d)(i) and 13(d)(vi) (as
Sections 13(a) and 13(d) relate to Assigned IP, Licensed IP or any other Intellectual Property
relevant to the Business) of the Stock Contribution Agreement for claims brought on or after two
(2) years after the Second Closing Date. Neither party shall have any liability under Section
11(b), 11(c)(i) and 11(d)(i) and (iii) of this IP License Agreement or Sections 13(a)(i), 13(a)(v),
13(b), 13(c), 13(d)(i) and 13(d)(vi) (as Sections 13(a) and 13(d) relate to Assigned IP, Licensed
IP or any other Intellectual Property relevant to the Business) of the Stock Contribution
Agreement, unless the aggregate of all Losses for which the indemnifying party would, but for this
proviso, be liable, exceeds on a cumulative basis an amount equal to seven hundred and fifty
million yen (¥ 750,000,000.00), and then only to the extent of any such excess; provided
further, that the indemnifying party’s liability under Sections 11(b), 11(c)(i) and
11(d)(i) and (iii) of this IP License Agreement or Sections 13(a)(i) and 13(a)(v), 13(b), 13(c) and
13(d)(i) and 13(d)(vi) (as Sections 13(a) and 13(d) relate to Assigned IP, Licensed IP or any
other Intellectual Property relevant to the Business) of the Stock Contribution Agreement in the
aggregate shall in no event exceed four hundred and twenty-eight point six million dollars ($428.6
million). The parties further agree that neither party shall be entitled to assert any claim
against the indemnifying party for indemnification of Losses unless the aggregate Losses asserted
in such claim equal or exceed five million yen (¥ 5,000,0000.00). To the extent there is a dispute
as to whether an asserted claim (i) exceeds the 5 million yen threshold and/or (ii) exceeds on a
cumulative basis an amount equal to seven hundred and fifty million yen (¥ 750,000,000.00)that has
not been resolved within thirty (30) days after the claim has been asserted, the parties shall
refer the dispute to a partner from an internationally recognized accounting or consulting firm
reasonably acceptable to the parties or to any individual from a valuation firm reasonably
acceptable to the parties, and such partner or individual shall provide within sixty (60) days a
binding resolution to such dispute. The party disputing the sufficiency of the claim shall bear
all costs associated with

20

 

the resolution of the dispute; provided, however, that if the party disputing
the sufficiency of the claim prevails, both parties shall share the costs of resolving such
dispute.

          (g) Procedures Relating to Indemnification. In order for a Person (the
“Indemnified Party”) to be entitled to any indemnification provided for under this IP
License Agreement in respect of, arising out of or involving a claim or demand made by any Person
against the Indemnified Party (a “Third Party Claim”), such Indemnified Party must notify
the indemnifying party in writing, and in reasonable detail, of the Third Party Claim as promptly
as reasonably possible after receipt by such Indemnified Party of notice of the Third Party Claim;
provided, however, that failure to give such notification on a timely basis shall
not affect the indemnification provided hereunder except to the extent the indemnifying party shall
have been actually prejudiced as a result of such failure. Thereafter, the Indemnified Party shall
deliver to the indemnifying party, within five (5) Business Days after the Indemnified Party’s
receipt thereof, copies of all notices and documents (including court filings and related papers)
received by the Indemnified Party relating to the Third Party Claim. If a Third Party Claim is
made against an Indemnified Party, the indemnifying party shall be entitled to participate in the
defense thereof and, if it so chooses and acknowledges its obligation to indemnify the Indemnified
Party therefor, to assume the defense thereof with counsel selected by the indemnifying party and
reasonably satisfactory to the Indemnified Party and to settle such suit, action, claim or
proceeding in its discretion with a full release of the Indemnified Party and no admission of
criminal liability. Notwithstanding any acknowledgment made pursuant to the immediately preceding
sentence, the indemnifying party shall continue to be entitled to assert any limitation on its
indemnification responsibility contained in Section 11. Should the indemnifying party so elect to
assume the defense of a Third Party Claim, the indemnifying party shall not be liable to the
Indemnified Party for legal expenses subsequently incurred by the Indemnified Party in connection
with the defense thereof unless the indemnifying party has substantially and materially failed to
defend, contest or otherwise protest in a timely manner against Third Party Claims. If the
indemnifying party assumes such defense, the Indemnified Party shall have the right to participate
in the defense thereof and to employ counsel, at its own expense, separate from the counsel
employed by the indemnifying party, it being understood, however, that the indemnifying party shall
control such defense. The indemnifying party shall be liable for the fees and expenses of counsel
employed by the Indemnified Party for any period during which the indemnifying party has not
assumed the defense thereof. If the indemnifying party chooses to defend any Third Party Claim,
all the parties hereto shall cooperate in the defense or prosecution of such Third Party Claim.
Such cooperation shall include the retention and (upon the indemnifying party’s request) the
provision to the indemnifying party of records and information that are reasonably relevant to such
Third Party Claim, and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. Whether or not the
indemnifying party shall have assumed the defense of a Third Party Claim, the Indemnified Party
shall not admit any liability with respect to, or settle, compromise or discharge, such Third Party
Claim without the indemnifying party’s prior written consent, which consent shall not be
unreasonably withheld, unreasonably delayed or unreasonably conditioned.

          (h) Controlling Provision. OpNext Japan, the Clarity Parties and Hitachi acknowledge
and agree that the indemnification obligations of Hitachi pursuant to this Section 11 supersede and
preempt in their entirety the indemnification obligations of Hitachi contained

21

 

in Section 24(d) of the Stock Purchase Agreement to the extent such indemnification
obligations cover the same subject matter as the subject matter hereof.

          (i) Duty to Mitigate. With respect to any indemnification provided pursuant to this
Section 11, the Indemnified Party shall have the duty to mitigate any damages resulting from such
Third Party Claim of infringement or misappropriation. In addition, OpNext Japan shall make
Commercially Reasonable Efforts to conduct appropriate clearance searches during the design process
and prior to putting a new product on the market in accordance with mutually agreed upon procedures
for new product release searches. Within one hundred and eighty (180) days from the Second Closing
Date, Hitachi and OpNext Japan shall mutually agree upon the procedures to be adopted for
conducting new product release searches. During the design process and prior to putting the 40G
products on the market, Hitachi will cooperate with OpNext Japan to conduct appropriate clearance
searches. Hitachi shall provide OpNext Japan with copies of the results of searches performed in
the past two (2) years by Hitachi with respect to Licensed IP.

Section 12. Dispute Resolution. In the event of any dispute under this IP License
Agreement, as a condition precedent to either party seeking arbitration (except for actions seeking
injunctive relief), the parties will attempt to resolve such dispute by good faith negotiations.
Such negotiations shall first involve the individuals designated by the parties as having general
responsibility for the IP License Agreement. If such negotiations do not result within thirty (30)
days from written notice of either party indicating that a dispute exists (a “Dispute
Notice”) in a resolution of the dispute, OpNext Japan shall nominate one (1) corporate officer
of the rank of vice president or higher and Hitachi shall nominate one (1) corporate officer of the
rank of Board Director or higher, which corporate officers shall meet in person and attempt in good
faith to negotiate a resolution to the dispute. In the event such nominated individuals are unable
to resolve the dispute within forty-five (45) days of receipt by either party of a Dispute Notice,
a party shall refer the matter to arbitration (except for actions seeking injunctive relief)
pursuant to the arbitration procedures set forth in Exhibit B to this IP License Agreement.
In the event that either party submits the dispute to arbitration, both parties shall cooperate in
such binding arbitration in accordance with Exhibit B hereto.

Section 13. Assignment. Except as set forth below, this IP License Agreement and any
rights and obligations hereunder shall not be assignable or transferable by OpNext Japan or Hitachi
(including by operation of law in connection with a merger or sale of stock, or sale of
substantially all the assets, of OpNext Japan or Hitachi) without the prior written consent of the
other party and any purported assignment without such consent shall be void and without effect.

Section 14. Third-Party Beneficiaries. OpNext Japan and Hitachi acknowledge and agree that
this IP License Agreement is intended not only for the benefit of themselves, their Subsidiaries
and for purposes of Section 3(c)(ii), 7(c)(iii) and 10(a) their Minority-Owned Affiliates but also
for the benefit of the Clarity Parties, OpNext, Inc. and OpNext, Inc.’s Subsidiaries and
Minority-Owned Affiliates.

Section 15. Termination. This Agreement will terminate automatically and be of no further
force or effect upon the termination of the Stock Purchase Agreement; provided, however, that the
following provisions of this IP License Agreement survive termination of this IP License Agreement:
(i) Sections 7(c) and 10(e) relating to the obligation of Hitachi to keep confidential certain
information and data and injunctive relief for failure to do same, respectively; (ii) Sections 9(a)
and 10(e) relating to the obligation of OpNext Japan to keep confidential certain

22

 

information and data and injunctive relief for failure to do same, respectively; (iii) Section
10(c) relating to press releases; (iv) Sections 11(a), 11(b), 11(c), 11(d) and 11(f) relating to
indemnification; and (v) Section 17 relating to expenses.

Section 16. Survival of Representations and Warranties. The representations and warranties
contained in this IP License Agreement and in any other document delivered in connection herewith
shall survive the First Closing and the Second Closing and shall terminate at the close of business
on the second (2nd) anniversary of the Second Closing Date.

Section 17. Expenses. Whether or not the transactions contemplated hereby are consummated,
and except as otherwise specifically provided in this IP License Agreement, all costs and expenses
incurred in connection with this IP License Agreement and the transactions contemplated hereby
shall be paid by the party incurring such costs or expenses.

Section 18. Export Control. Each party shall comply or have its Subsidiaries or Affiliates
comply with any applicable export laws and regulations and obtain any and all export licenses
and/or governmental approvals, if necessary. In the event a licensee (under Sections 2 and 3
above) is unable to obtain any required export license or other governmental approval, and as a
result the licensor (under Sections 2 and 3 above) suffers or will suffer irreparable harm as a
result of the licensee’s failure, the parties acknowledge and agree that money damages would be
inadequate and that the licensor shall be entitled to obtain injunctive or other similar equitable
remedies with respect to any such breach.

Section 19. Amendment and Waiver. No amendment of any provision of this IP License
Agreement shall be valid unless the same shall be in writing and signed by OpNext Japan and
Hitachi. The failure of any party to enforce any of the provisions of this IP License Agreement
shall in no way be construed as a waiver of such provisions and shall not affect the right of such
party thereafter to enforce each and every provision of this IP License Agreement in accordance
with its terms.

Section 20. Notices. Any notice provided for in this IP License Agreement shall be in
writing and shall be either personally delivered, mailed first class mail (postage prepaid) or sent
by reputable overnight courier service (charges prepaid) to the parties at the address set forth
below or at such address or to the attention of such other person as the recipient party has
specified by prior written notice to the sending party. Notices shall be deemed to have been given
hereunder on the date delivered when delivered personally, seven (7) days after deposit in the U.S.
mail or Japanese mail and three (3) days after deposit with a reputable overnight courier service.
The addresses for OpNext Japan and Hitachi are:

If to OpNext Japan:

OpNext Japan, Inc.

216 Totsuka-cho, Totsuka-ku

Yokohama-shi

244-8567, Japan

Attention:       Harry L. Bosco

with a copy, which will not constitute notice to OpNext Japan, to:

Kirkland & Ellis

200 East Randolph Drive

Chicago, IL 60601

Attention: William A. Streff, Jr., Esq.

23

 

with a copy, which will not constitute notice to OpNext Japan, to:

Irell & Manella, LLP

1800 Avenue of the Stars, Suite 900

Los Angeles, CA 90067

Attention:  Richard L. Bernacchi, Esq.

                  Ian C. Wiener, Esq.

with a copy, which will not constitute notice to OpNext Japan, to:

Hitachi, Ltd.

6, Kanda-Surugadai 4-chome

Chiyoda-ku

Tokyo, 101-8010 Japan

Attention:   Senior Group Executive

                  
Information & Telecommunication Systems Group

and with a copy, which will not constitute notice to OpNext Japan, to:

Clarity Partners, L.P.

100 North Crescent Drive

Beverly Hills, CA 90210-5403

Attention: David Lee

If to Hitachi:

Hitachi, Ltd.

6, Kanda-Surugadai 4-chome

Chiyoda-ku

Tokyo, 101-8010 Japan

Attention: Senior Group Executive, Information & Telecommunication
Systems Group

with a copy, which will not constitute notice to Hitachi, to:

Kirkland & Ellis

200 East Randolph Drive

Chicago, IL 60601

Attention: William A. Streff, Jr., Esq.

with a copy, which will not constitute notice to Hitachi, to:

Clarity Partners, L.P.

100 North Crescent Drive

Beverly Hills, CA 90210-5403

Attention: David Lee

24

 

Section 21. Interpretation. The headings and captions contained in this IP License
Agreement, in any Exhibit or Schedule hereto and in the table of contents to this IP License
Agreement are for reference purposes only and do not constitute a part of this IP License
Agreement. The use of the word “including” herein shall mean “including without limitation.”

Section 22. Counterparts. This IP License Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which taken together shall constitute
one and the same agreement.

Section 23. Entire Agreement. Except as otherwise expressly set forth herein and except as
set forth in the other agreements executed in connection with the Stock Purchase Agreement, this IP
License Agreement and the other agreements executed in connection with the Stock Purchase Agreement
embody the complete agreement and understanding among the parties hereto with respect to the
subject matter hereof and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related to the subject
matter hereof in any way. The provisions of all of the agreements executed in connection with the
Stock Purchase Agreement shall be construed to give effect to the provisions of all of the
agreements to the greatest extent possible.

Section 24. Relationship to Other Agreements. The parties acknowledge and agree that the
Stock Contribution Agreement sets forth additional terms and conditions and obligations of the
parties with respect to Assigned IP and Licensed IP. The provisions of the Business Transfer
Agreement and Stock Contribution Agreement shall be construed to give effect to the provisions of
both agreements to the greatest extent possible.

Section 25. Schedules or Exhibits. The disclosures set forth in any of the Schedules or
Exhibits attached hereto that related to any exception to a particular representation and warranty
made hereunder shall be taken to relate to each other Schedule or Exhibit setting forth an
exception to a representation and warranty made hereunder to the extent it is reasonable to expect
that such disclosure relates to such other representation and warranty. The inclusion of
information in the Schedules or Exhibits hereto shall not be construed as an admission that such
information is material to the Licensed IP, the Business or Hitachi. In addition, matters
reflected in the Schedules or Exhibits are not necessarily limited to matters required by this IP
License Agreement to be reflected in such Schedules or Exhibits. Such additional matters are set
forth for informational purposes only and do not necessarily include other matters of a similar
nature. [Prior to the Second Closing, Hitachi shall have the right to supplement, modify or update
the Schedules or Exhibits hereto to reflect changes in the ordinary course of the Business prior to
the Second Closing Date; provided, however, that any such supplements,
modifications or updates shall be subject to the written consent of the Clarity Parties.

Section 26. No Strict Construction. Notwithstanding the fact that this IP License
Agreement has been drafted or prepared by one of the parties, Hitachi and OpNext confirm that they
and their respective counsel have reviewed, negotiated and adopted this IP License Agreement as the
joint agreement and understanding of the parties, and the language used in this IP License

25

 

Agreement shall be deemed to be language chosen by the parties hereto to express their mutual
intent and no rule of construction shall be applied against any Person.

Section 27. Severability. Whenever possible, each provision of this IP License Agreement
shall be interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this IP License Agreement is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of any other provision
of this IP License Agreement in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this IP License Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.

Section 28. Governing Law. Except for the last two (2) sentences of Section 3(a), Section
5(c), Sections 6(a)(i), 6(a)(ii) and 6(e), Sections 7(c)(iii), 7(d) and 7(e) and Sections 10(a) and
10(b), this IP License Agreement shall be governed by and construed in accordance with the laws of
Japan without giving effect to any choice-of-law or conflict-of-law provision or rule (whether of
Japan or any other jurisdiction) that would cause the application of the laws of any jurisdiction
other than Japan. The last two (2) sentences of Section 3(a), Section 5(c), Sections 6(a)(i),
6(a)(ii) and 6(e), Sections 7(c)(iii), 7(d), and 7(e) and Sections 10(a) and 10(b) shall be
governed by and construed in accordance with the laws of the State of New York without giving
effect to any choice-of-law or conflict-of-law provision or rule (whether of the State of New York
or any other jurisdiction) that would cause the application of the laws of any other jurisdiction
other than the State of New York. Regardless of the law applied, because this contract is in
English, the terms and conditions of this contract will be interpreted in accordance with the
meaning of the words in American colloquial English.

Section 29. Submission to Jurisdiction; Waivers. With respect to disputes not required to
be submitted to arbitration hereunder (including actions seeking injunctive relief), each party to
this IP License Agreement (including any third-party beneficiaries to this IP License Agreement)
hereby irrevocably and unconditionally:

               (i) submits for itself and its property in any legal action or proceeding relating to this IP
License Agreement, or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of Japan situated in Tokyo, Japan;

               (ii) consents that any such action or proceeding may be brought in such courts, and waives any
objection that it may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;

               (iii) agrees that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially similar form of mail),
postage prepaid, to such party at its address set forth herein or at such other address of which
the agent shall have been notified pursuant thereto, to the extent permitted by the laws of Japan;
and

26

 

               (iv) agrees that nothing contained herein shall affect the right to effect service of process
in any other manner permitted by law or shall limit the right to sue in any other jurisdiction.

Section 30. Delivery by Facsimile. This IP License Agreement, the agreements referred to
herein, and each other agreement or instrument entered into in connection herewith or therewith or
contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and
delivered by means of a facsimile machine, shall be treated in all manner and respects as an
original agreement or instrument and shall be considered to have the same binding legal effect as
if it were the original signed version thereof delivered in person. At the request of any party
hereto or to any such agreement or instrument, each other party hereto or thereto shall reexecute
original forms thereof and deliver them to all other parties. No party hereto or to any such
agreement or instrument shall raise the use of a facsimile machine to deliver a signature or the
fact that any signature or agreement or instrument was transmitted or communicated through the use
of a facsimile machine as a defense to the enforceability of a contract and each such party forever
waives any such defense.

Section 31. Exhibits and Schedules. All Exhibits and Schedules annexed hereto or referred
to herein are hereby incorporated in and made a part of this IP License Agreement as if set forth
in full herein.

Section 32. Recordation. This IP License Agreement effects a license of rights in certain
Intellectual Property and may be recorded in appropriate recordal repositories to evidence such
license of rights.

Section 33. Third Parties. Unless otherwise expressly provided, no provisions of this IP
License Agreement are intended or shall be construed to confer upon or give to any Person or entity
other than the parties hereto and Clarity Parties, any rights, remedies or other benefits hereunder
nor to constitute a waiver or release of any claims or other rights against any Person or entity.

Section 34. Survival. To the extent the terms of this IP License Agreement provide for
rights, interest, duties, claims, undertakings and obligations subsequent to the termination or
expiration of this IP License Agreement, other than a termination caused by the termination of the
Stock Purchase Agreement, such terms of this IP License Agreement shall survive such termination or
expiration, including but not limited to the terms of Sections 1, 2 (to the extent the provision
allows for post-termination or post-expiration license), 3 (to the extent the provision allows for
post-termination or post-expiration license), 4 (to the extent the provision allows for
post-termination or post-expiration license), 5 (to the extent the provision and the Third Party
License Agreement allows for post-termination or post-expiration license), 6 (subject to the two
year survival period from the Second Closing Date), 7(c), 8 (subject to the two year survival
period from the Second Closing Date), 9(a), 10, 11(subject to the two year survival period from the
Second Closing Date, if applicable), 12, 16, 17, 18, 19, 21, 23, 24, 25, 26, 27, 28, 29 and 31.

* * * * *

27

 

SIGNATURE PAGE TO IP LICENSE AGREEMENT

          IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly
authorized officers as of the date first written above.

	 	 	 	 	 
	 	OPNEXT JAPAN, INC.

 	 
	 	By:  	/s/ Junsuke Kusanagi
 	 
	 	 	Junsuke Kusanagi 	 
	 	 	President 	 
	 
	 	HITACHI, LTD.

 	 
	 	By:  	/s/ Masaaki Hayashi
 	 
	 	 	Masaaki Hayashi 	 
	 	 	Senior Vice President and Director
Senior Group Executive, Information &
Telecommunication Systems Group 	 
	 

Each of Clarity Partners, L.P., Clarity OpNext Holdings I, LLC and Clarity OpNext Holdings II, LLC
hereby acknowledge, for all purposes of the Stock Purchase Agreement, that it has approved and
agreed with the form of this IP License Agreement.

	 	 	 	 	 	 	 
	 	 	CLARITY PARTNERS, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	CLARITY GENPAR, LLC,	 	 
	 

	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David Lee
 

	 	 
	 

	 	 	 	David Lee	 	 
	 

	 	 	 	Managing Member	 	 
	 
	 	 	 	 	 	 
	 	 	CLARITY OPNEXT HOLDINGS I, LLC	 	 
	 

	 	By:
	 	 Clarity Partners, L.P., its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	CLARITY GENPAR, LLC,	 	 
	 

	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David Lee
 

	 	 
	 

	 	 	 	David Lee	 	 
	 

	 	 	 	Managing Member	 	 

 

 

	 	 	 	 	 	 	 
	 	 	CLARITY OPNEXT HOLDINGS II, LLC	 	 
	 

	 	By:
	 	Clarity Partners, L.P., its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	CLARITY GENPAR, LLC,

its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David Lee
 

David Lee 

Managing Member
	 	 

SIGNATURE PAGE TO IP LICENSE AGREEMENT (cont.)

 

 

FIRST AMENDMENT TO OPNEXT JAPAN IP LICENSE AGREEMENT

          THIS FIRST AMENDMENT TO IP LICENSE AGREEMENT (the “Amendment”) is entered into as
of October 1, 2002 (the “Amendment Date”), by and between Hitachi, Ltd., a corporation
existing under the laws of Japan (“Hitachi”) and OpNext Japan, Inc., a corporation existing
under the laws of Japan (“OpNext Japan”) and a Wholly-Owned Subsidiary of OpNext, Inc., a
Delaware corporation. All capitalized terms used herein but not defined herein shall have the
meanings ascribed to such terms in the IP License Agreement (as defined below).

RECITALS

          WHEREAS, Hitachi and OpNext Japan have entered into that certain Intellectual Property
License Agreement dated as of July 31, 2001 (the “IP License Agreement”); and

          WHEREAS, Hitachi and OpNext Japan desire to enter into this Amendment to amend the IP License
Agreement as set forth herein.

          NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
to this Amendment hereby agree as follows:

Section 1. Amendment Date.

          This Amendment shall be effective as of October 1, 2002. This Amendment and any
amendments made to the provisions of the IP License Agreement shall have no retroactive effect.

Section 2. Amendment .

          (1) Section 2(a) of the IP License Agreement is hereby amended by adding the following
clause:

          For the avoidance of doubt, this IP License Agreement does not grant Hitachi
or its Wholly-Owned Subsidiaries the right to sublicense the Assigned IP and
Hitachi and its Wholly-Owned Subsidiaries shall not have the right to sublicense
the Assigned IP without the prior written consent of OpNext Japan, not to be
unreasonably withheld, unreasonably delayed or unreasonably conditioned.

          (2) Section 2 of the IP License Agreement is hereby amended by adding the following clause (c)
after clause (b):

1

 

          (c) Status of Wholly-Owned Subsidiaries.

               (i) License to Assigned IP. If at any time a Wholly-Owned
Subsidiary of Hitachi ceases to remain a Wholly-Owned Subsidiary of Hitachi,
Hitachi shall provide written notice of such change to OpNext Japan in accordance
with Section 20 of this IP License Agreement and the license under Assigned IP to
such Wholly-Owned Subsidiary, shall continue, pursuant to the terms and conditions
of this IP License Agreement.

               (ii) Sublicenses. For the avoidance of doubt, this IP License
Agreement does not grant Wholly-Owned Subsidiaries of Hitachi the right to
sublicense the Assigned IP and an entity that ceases to remain a Wholly-Owned
Subsidiary of Hitachi shall not have the right to sublicense the Assigned IP
without the prior written consent of OpNext Japan, not to be unreasonably withheld,
unreasonably delayed or unreasonably conditioned; provided,
however, that to the extent any sublicenses have been granted with OpNext
Japan’s prior written consent with respect to the Assigned IP during the time such
entity is a Wholly-Owned Subsidiary of Hitachi, such sublicenses shall continue,
pursuant to the terms and conditions of this IP License Agreement and such
sublicense.

          (3) Section 3 of the IP License Agreement is hereby amended by adding the following clause (h)
after clause (g):

          (h) Change in Status. If at any time a Subsidiary, Wholly-Owned
Subsidiary or Minority-Owned Affiliate of OpNext Japan or a Subsidiary or
Wholly-Owned Subsidiary of OpNext, Inc. ceases to remain a Subsidiary, Wholly-Owned
Subsidiary or Minority-Owned Affiliate (as appropriate) to the extent any
sublicenses have been granted by OpNext Japan or OpNext, Inc. to such entity with
respect to the Licensed IP during the time such entity is such a Subsidiary,
Wholly-Owned Subsidiary or Minority-Owned Affiliate (as appropriate) such
sublicenses of Licensed IP existing as of the date such entity ceases to remain a
Subsidiary, Wholly-Owned Subsidiary or Minority-Owned Affiliate (as appropriate)
shall continue, pursuant to the terms and conditions of this IP License Agreement
and such sublicense.

          (4) Section 4 of the IP License Agreement is hereby amended by adding the following clause (e)
after clause (d):

               (e) Status of Wholly-Owned Subsidiaries.

               (i) License to OpNext Japan IP. If at any time a Wholly-Owned
Subsidiary of Hitachi ceases to remain a Wholly-Owned Subsidiary of Hitachi,
Hitachi shall provide written notice of such change to OpNext Japan in accordance
with Section 20 of this IP License

2

 

Agreement and the license under OpNext Japan IP existing as of the date such
Wholly-Owned Subsidiary ceases to remain a Wholly-Owned Subsidiary, shall continue,
pursuant to the terms and conditions of this IP License Agreement;
provided, however, for any Intellectual Property related to the
Business that is developed by OpNext Japan after a Wholly-Owned Subsidiary ceases
to remain a Wholly-Owned Subsidiary, the parties shall negotiate in good faith and
on commercially reasonable terms a new license governing such Intellectual
Property.

               (ii) Sublicenses. For the avoidance of doubt, this IP License
Agreement does not grant Wholly-Owned Subsidiaries of Hitachi the right to
sublicense the OpNext Japan IP and an entity that ceases to remain a Wholly-Owned
Subsidiary of Hitachi shall not have the right to sublicense the OpNext Japan IP
without the prior written consent of OpNext Japan, not to be unreasonably withheld,
unreasonably delayed or unreasonably conditioned; provided,
however, that to the extent any sublicenses have been granted with OpNext
Japan’s prior written consent with respect to the OpNext Japan IP during the time
such entity is a Wholly-Owned Subsidiary of Hitachi, such sublicenses shall
continue, pursuant to the terms and conditions of this IP License Agreement and
such sublicense.

          (5) Section 6(e) of the IP License Agreement is hereby amended by deleting it in its entirety
and replacing it with the following clause (e):

          (e) Infringement of Licensed IP. To the extent a competitor of the
Business is infringing or misappropriating the Licensed IP or any Future Hitachi IP
that is licensed to OpNext Japan under Section 3(b) or Section 3(f), respectively,
in OpNext Japan’s reasonable business judgment and such infringement is material to
the Business, Hitachi, in its sole discretion, will protect OpNext Japan’s interest
by either: (i) initiating and maintaining legal proceedings with respect to such
alleged infringement or misappropriation against any such Person on behalf of
OpNext Japan or (ii) by taking some other appropriate action that will not have a
Material Adverse Effect on the ongoing business of OpNext Japan; provided that with
respect to clauses (i) and (ii), both parties shall consult and cooperate with each
other in determining how to respond to the infringing activities. For the
avoidance of doubt, Hitachi may or may not consult with OpNext Japan prior to
determining whether to pursue (i) or (ii). Upon the resolution of such
infringement by settlement or otherwise, any damages, profits and awards of
whatever nature recoverable for such infringement shall, after deducting the
parties’ expenses, be reasonably allocated between the parties based on the facts
and circumstances of the infringement. Both parties will reasonably consider the
option of settling such matter by granting a sublicense of all or portion of the
Licensed IP and any Future Hitachi IP that is licensed to OpNext Japan.

3

 

          (6) Section 7 of the IP License Agreement is hereby amended by adding the following clause (g)
after clause (f):

          (g) Guaranty.

          (i) Hitachi will use reasonable best efforts to cause its Wholly-Owned
Subsidiaries (for so long as they are Wholly-Owned Subsidiaries) to comply with the
terms and conditions of this IP License Agreement and Hitachi shall be liable for
any breach of such terms and conditions.

          (ii) Hitachi will use reasonable best efforts to cause its Wholly-Owned
Subsidiaries that cease to remain Wholly-Owned Subsidiaries to comply with the
terms and conditions of this IP License Agreement applicable to such entities and
Hitachi shall be liable for any breach of such terms and conditions.

          (7) Section 9 of the IP License Agreement is hereby amended by adding the following clause (d)
after clause (c):

          (d) OpNext Japan will use reasonable best efforts to cause its sublicensees
authorized pursuant to Section 3(c) to comply with the terms and conditions of this
IP License Agreement applicable to such entities and sublicense, and OpNext Japan
shall be liable for any breach of such terms and conditions.

          (8) The IP License Agreement is hereby amended by adding the following section 33:

          Section 33. Hitachi Communication Technologies. For purposes
of this IP License Agreement, the defined term “Wholly-Owned Subsidiary” shall not
include Hitachi’s Wholly-Owned Subsidiary, Hitachi Communication Technologies, Ltd.

Section 3. No Other Amendments.

          Except as expressly set forth herein, all other terms and conditions of the IP License
Agreement shall remain unmodified, in full force and effect and shall apply to this Amendment.

Section 4. Governing Law.

          This Amendment shall be governed by and construed in accordance with the laws of Japan without
giving effect to any choice-of-law or conflict-of-law provision or rule (whether of Japan or any
other jurisdiction) that would cause the application of the laws of any jurisdiction other than of
Japan. Regardless of the law applied, because this contract is in English, the terms and
conditions of this contract will be interpreted in

4

 

accordance with the meaning of the words in American colloquial English, notwithstanding any
meaning of any word when translated into its Japanese equivalent.

Section 5. Dispute Resolution.

          In the event of any dispute under this Amendment, as a condition precedent to either party
seeking arbitration, in connection therewith, the parties will attempt to resolve such dispute by
good faith negotiations (except for actions seeking injunctive relief). Such negotiations shall
first involve the individuals designated by the parties as having general responsibility for the IP
License Agreement. If such negotiations do not result within thirty (30) days from written notice
of either party indicating that a dispute exists (a “Dispute Notice”) in a resolution of
the dispute, OpNext Japan shall nominate one (1) corporate officer of the rank of vice president or
higher and Hitachi shall nominate one (1) corporate officer of the rank of Board Director or
higher, which corporate officers shall meet in person and attempt in good faith to negotiate a
resolution to the dispute. In the event the corporate executives are unable to resolve the dispute
within forty-five (45) days of receipt by either party of a Dispute Notice, a party may refer the
matter to arbitration (except in the case of disputes arising under Section 11(c) of the IP License
Agreement for which the parties may seek injunctive relief). In the event that either party
submits the dispute to arbitration, both parties shall cooperate in such binding arbitration in
accordance with Exhibit B to the IP License Agreement.

Section 6. Interpretation.

          The headings and captions contained in this Amendment and in any Exhibit are for reference
purposes only and do not constitute a part of this Amendment. The use of the word “including”
herein shall mean “including without limitation.”

Section 7. Severability.

          Whenever possible, each provision of this Amendment shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Amendment held to be
invalid, illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision of this Amendment in such jurisdiction or affect
the validity, legality or enforceability of any provision in any other jurisdiction, but this
Amendment shall be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

Section 8. Counterparts.

          This Amendment may be executed in one or more counterparts, each of which shall be an original
and all of which taken together shall constitute one and the same agreement.

* * * * *

5

 

SIGNATURE PAGE TO FIRST AMENDMENT TO IP LICENSE AGREEMENT

          IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their duly
authorized officers as of the Amendment Date.

	 	 	 	 	 
	 	OPNEXT JAPAN, INC.

 	 
	 	By:  	/s/ Tadayuki Kanno
 	 
	 	 	Tadayuki Kanno 	 
	 	 	President 	 
	 
	 	HITACHI, LTD.

 	 
	 	By:  	/s/ Masaaki Hayashi
 	 
	 	 	Masaaki Hayashi 	 
	 	 	Senior Vice President and Director 	 
	 

 

 

SECOND AMENDMENT TO OPNEXT JAPAN IP LICENSE AGREEMENT

          THIS SECOND AMENDMENT TO OPNEXT JAPAN IP LICENSE AGREEMENT (this “Amendment”) is
entered into as of October 27, 2006 (the “Amendment Date”), by and between Hitachi, Ltd., a
corporation existing under the laws of Japan (“Hitachi”) and Opnext Japan, Inc., a
corporation existing under the laws of Japan (“Opnext Japan”) and a Wholly-Owned Subsidiary
of Opnext, Inc., a Delaware corporation (“Opnext, Inc.”). All capitalized terms used
herein but not defined herein shall have the meaning ascribed to such terms in the IP License
Agreement (as defined below).

RECITALS

          WHEREAS, Hitachi and Opnext Japan have entered into that certain Intellectual Property License
Agreement dated as of July 31, 2001 (the “Original IP License Agreement”), as amended by
the First Amendment thereto dated as of October 1, 2002 (the “First Amendment,” and
together with any other amendments to the Original IP License Agreement, the “IP License
Agreement”); and

          WHEREAS, Hitachi and Opnext Japan desire to enter into this Amendment to further amend the IP
License Agreement as set forth herein.

          NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
to this Amendment hereby agree as follows:

Section 1. Amendment Date.

          This Amendment shall be effective as of the Amendment Date. This Amendment and any amendments
made to the provisions of the IP License Agreement hereunder shall have no retroactive effect.

Section 2. Amendment.

          (1) Section 1 of the IP License Agreement is hereby amended by adding the following clause:

          (dd) “Opnext Entity” means Opnext Japan and its Wholly-Owned Subsidiaries and Opnext,
Inc. and its Wholly-Owned Subsidiaries.

          (2) Section 2(a) of the IP License Agreement is hereby amended by deleting it in its entirety
and replacing it with the following Section 2(a):

          (a) License. Opnext Japan shall license, and does hereby license
effective as of the First Closing Date, the Assigned IP back to Hitachi and its
Wholly-Owned Subsidiaries on a fully paid-up, non-exclusive, perpetual and
irrevocable basis to use, make, have made, sell, advertise, offer to sell, lease,
import, export and supply products and services throughout the world using the

 

 

Assigned IP. For the avoidance of doubt, this IP License Agreement does not
grant Hitachi or its Wholly-Owned Subsidiaries the right to sublicense the Assigned
IP and Hitachi and its Wholly-Owned Subsidiaries shall not have the right to
sublicense the Assigned IP without the prior written consent of Opnext Japan, not to
be unreasonably withheld, unreasonably delayed or unreasonably conditioned.

          (3) Section 2(b) of the IP License Agreement is hereby amended by deleting it in its entirety
and replacing it with the following Section 2(b)

          (b) License Term. The license to Assigned IP shall be irrevocable and:
(i) with respect to patent rights, shall survive for so long as any applicable
patent is valid; and (ii) with respect to all other Assigned IP, shall be perpetual.

          (4) Section 3(b)(ii) of the IP License Agreement is hereby amended by deleting it in its
entirety and replacing it with the following Section 3(b)(ii):

          (ii) Termination Conditions. Subject to Section 3(d), such license
shall not be terminated or its exploitation enjoined, until and unless: (i) Opnext
Japan has committed a material breach of its obligations under this IP License
Agreement, Hitachi has given written notice of such breach to Opnext Japan and such
breach remains uncured after sixty (60) days of receiving notice of such breach (the
“Cure Period”), or, in the case of a breach that cannot be cured within such
Cure Period, Opnext Japan has not instituted within such Cure Period steps necessary
to remedy the default and/or thereafter has not diligently pursued the same to
completion; or (ii) Opnext Japan has committed an incurable material breach. In the
event the breach is a curable breach that cannot be cured within the Cure Period but
with respect to which Opnext Japan has instituted steps necessary to remedy the
default and is thereafter diligently pursuing such cure, both parties shall
negotiate to determine whether further pursuit of such cure is reasonable. If the
parties cannot agree on a resolution in such negotiations, then this issue shall be
referred to arbitration pursuant to the arbitration procedures set forth in
Exhibit B hereto to decide whether such breach can be cured or any other
alternative remedy should be adopted. In the event the breach is an incurable
breach, (i) the parties agree that the matter shall be referred to arbitration
pursuant to the arbitration procedures set forth in Exhibit B hereto to
determine the appropriate remedy, and (ii) Opnext Japan shall provide an on-going
plan to address the prevention of such a breach occurring again reasonably
acceptable to Hitachi within sixty (60) days of written notice of the breach and
shall implement and comply with such plan within the time period set forth in such
plan. In the event that either party submits the dispute to arbitration, both
parties shall cooperate in such binding arbitration in accordance with Exhibit
B.

          (5) Section 3(c)(ii) of the IP License Agreement is hereby amended by deleting it in its
entirety and replacing it with the following Section 3(c)(ii):

 

 

Opnext Japan shall be permitted to further sublicense the Licensed IP to its and
Opnext, Inc.’s Minority-Owned Affiliates, subject to approval by Hitachi, not to be
unreasonably withheld, unreasonably delayed or unreasonably conditioned, and to
commercially reasonable restrictions to be imposed by Hitachi that will be agreed to
by the parties in writing.

          (6) Section 3(c)(iii) of the IP License Agreement is hereby amended by deleting it in its
entirety and replacing it with the following Section 3(c)(iii):

          (iii) Customers. Opnext Japan, its Wholly-Owned Subsidiaries, Opnext,
Inc. and its Wholly-Owned Subsidiaries shall be permitted to further sublicense the
Licensed IP to their respective customers as necessary or appropriate in connection
with the completion of the applicable Opnext Entity’s products and services, to
complete the sale of products or services in the ordinary course of business or to
enable joint development of a product or system with the applicable Opnext Entity’s
customers to be manufactured and sold by the applicable Opnext Entity to such
customers, provided the applicable Opnext Entity proposes the terms and conditions
of such sublicense to Hitachi and agrees that such sublicense shall be subject to
Hitachi’s exercise of one (1) of the following options in Hitachi’s sole discretion,
with respect to the terms and conditions proposed by the applicable Opnext Entity:
(i) Hitachi may consent to the sublicense terms and conditions as is; (ii) Hitachi
may propose that a revised version of the sublicense, with reasonably modified terms
and conditions be utilized; (iii) Hitachi may enter into a direct license with the
applicable Opnext Entity’s customer under the same terms and conditions as the
applicable Opnext Entity’s proposed sublicense; (iv) Hitachi may propose to enter
into a direct license with the applicable Opnext Entity’s customer under reasonably
modified terms and conditions; or (v) Hitachi may commence discussions with the
applicable Opnext Entity to reach a resolution of Hitachi’s concerns with respect to
such sublicense, if Hitachi believes such sublicense is not in the best interest of
the parties. Hitachi shall have the sole discretion to determine which of the five
(5) foregoing options Hitachi will exercise in each case. With respect to Hitachi’s
exercise of one (1) of the five (5) foregoing options, Hitachi agrees to provide
consents to and/or notify the applicable Opnext Entity of Hitachi’s proposed
modifications within fifteen (15) Business Days of receipt of the sublicense terms
and conditions from the applicable Opnext Entity. In the event that Hitachi
exercises one (1) of the five (5) foregoing options, the parties agree to negotiate
in good faith and on reasonable terms to resolve the situation within a reasonable
amount of time, which shall not exceed fifteen (15) Business Days of Hitachi’s
provision of such a response to the applicable Opnext Entity; provided, however,
Hitachi shall not contact the applicable Opnext Entity customers that are the
subject of negotiations between Hitachi and Opnext Japan, without the prior consent
of the applicable Opnext Entity prior to the resolution of such negotiations. If the
parties cannot agree on a resolution in such negotiations, then this issue shall be
referred to arbitration pursuant to the arbitration procedures set forth in
Exhibit B hereto. In the event that either party submits the dispute to

 

 

arbitration, both parties shall cooperate in such binding arbitration in
accordance with Exhibit B.

          In addition, Hitachi agrees that for the avoidance of doubt the rights provided
for in this Section 3(c)(iii) are in no way meant to limit the rights of Opnext
Japan in Section 3(b)(i).

          (7) Section 3(d) of the IP License Agreement is hereby amended by deleting it in its entirety
and replacing it with the following Section 3(d):

          (d) License Term. The licenses to Licensed IP and Future Hitachi IP
shall be irrevocable and: (i) with respect to patent rights, shall survive for so
long as any applicable patent is valid; and (ii) with respect to all other Licensed
IP or Future Hitachi IP, shall be perpetual. Notwithstanding the foregoing, if one
(1) of the conditions set forth in Section 3(b)(ii) is met, (x) Hitachi may
terminate the licenses to Licensed IP and Future Hitachi IP developed or filed on or
after the effective date of termination and (y) the licenses granted Opnext Japan to
Licensed IP and Future Hitachi IP developed or filed prior to the effective date of
termination shall continue pursuant to the terms and conditions set forth herein.

          (8) Section 4(b)(i) of the IP License Agreement is hereby amended by deleting it in its
entirety and replacing it with the following Section 4(b)(i):

          (i) Termination Conditions. Subject to Section 4(c), such license
shall not be terminated or its exploitation enjoined, until and unless: (i) Hitachi
has committed a material breach of its obligations under this IP License Agreement,
Opnext Japan has given written notice of such breach to Hitachi and such breach
remains uncured after the Cure Period, or, in the case of a breach, which cannot be
cured within such Cure Period, Hitachi has not instituted within such Cure Period
steps necessary to remedy the default and/or thereafter has not diligently pursued
the same to completion; or (ii) Hitachi has committed a material breach which is
incurable. In the event the breach is a curable breach that cannot be cured within
the Cure Period but with respect to which Hitachi has instituted steps necessary to
remedy the default and is thereafter diligently pursuing such cure, both parties
shall negotiate to determine whether further pursuit of such cure is reasonable. If
the parties cannot agree on a resolution in such negotiations, then this issue shall
be referred to arbitration pursuant to the arbitration procedures set forth in
Exhibit B hereto to decide whether such breach can be cured or any other
alternative remedy should be adopted. In the event the breach is an incurable
breach, (i) the parties agree that the matter shall be referred to arbitration
pursuant to the arbitration procedures set forth in Exhibit B hereto to
determine the appropriate remedy, and (ii) Hitachi shall provide an on-going plan to
address the prevention of such a breach occurring again reasonably acceptable to
Opnext Japan within sixty (60) days of written notice of the breach and shall
implement and comply with such plan within the time period set forth in such

 

 

plan. In the event that either party submits the dispute to arbitration, both
parties shall cooperate in such binding arbitration in accordance with Exhibit
B.

          (9) Section 4(c) of the IP License Agreement is hereby amended by deleting it in its entirety
and replacing it with the following Section 4(c):

          (c) License Term. The license to Opnext Japan IP shall be irrevocable
and: (i) with respect to patent rights, shall survive for so long as any applicable
patent is valid; and (ii) with respect to all other Opnext Japan IP, shall be
perpetual. Notwithstanding the foregoing, if one (1) of the conditions set forth in
Section 4(b)(i) is met, (x) Opnext Japan may terminate the license to Opnext Japan
IP developed or filed on or after the effective date of termination and (y) the
license granted Hitachi to Opnext Japan IP developed or filed prior to the effective
date of termination shall continue pursuant to the terms and conditions set forth
herein.

          (10) Section 5(e) of the IP License Agreement is hereby amended by deleting it in its entirety
and replacing it with the following Section 5(e):

          (e) Termination of Obligations. The obligations set forth in this
Section 5 shall terminate upon the later of: (i) the date that is one hundred and
eighty (180) days after the date when Opnext, Inc. ceases to be a Subsidiary of
Hitachi, and (ii) the first anniversary of any Initial Public Offering of Opnext,
Inc. (the “Negotiation Period”), provided that, if negotiations are ongoing with
respect to any license and within thirty (30) days of the end of the Negotiation
Period, Opnext Japan provides a written request to Hitachi for an extension of the
Negotiation Period for such time as is required to complete negotiations for such
license, but no longer than one hundred and eighty (180) days, the Negotiation
Period for such license shall automatically be extended for such requested time
period, not to exceed one hundred and eighty (180) days. Additionally, for so long
as Hitachi owns twenty percent (20%) or more of the voting securities of Opnext,
Inc., Opnext Japan may submit a written request to Hitachi once every six (6) month
period regarding whether Hitachi has entered into (or has entered into negotiations
for) a Future Third Party License Agreement with a specified third party, and
Hitachi will confirm whether or not Hitachi has entered into (or has entered into
negotiations for) a Future Third Party License Agreement with such specified third
party.

          (11) Section 6 of the IP License Agreement is hereby amended by adding the following Section
6(f):

          (f) Intellectual Property. Hitachi represents and warrants that except
as set forth in Exhibit A to this Amendment, between the Second Closing and the
Amendment Date, Hitachi has not received any written notice alleging that Opnext,
Inc. or any of its subsidiaries has misappropriated, infringed or otherwise violated
the Intellectual Property of any third party.

 

 

          (12) Section 13 of the IP License Agreement is hereby amended by adding the following clause
at the end:

; provided, however, that this IP License Agreement, in its entirety, shall be
assignable by Opnext Japan (or any successor to Opnext Japan) to Opnext, Inc. or any
Wholly-Owned Subsidiary of Opnext, Inc. For the avoidance of doubt, the parties
agree that an Initial Public Offering (as defined in the Stockholders’ Agreement)
shall not require the consent Hitachi.

          (13) Section 15 of the IP License Agreement is hereby amended by adding the following clause
at the end:

and (vi) any licenses to Intellectual Property that exists and is subject to any
licenses granted hereunder prior to the effective date of any termination of this IP
License Agreement.

          (14) A new Section 36 is hereby added to the IP License Agreement which provides as follows:

Section 36. Bankruptcy. The parties agree that if a party becomes a debtor
or debtor-in-possession under Title 11 of the United States Code (the
“Bankruptcy Code”): (i) in the event of a rejection or proposed rejection
of this IP License Agreement under Section 365 of the Bankruptcy Code, any and all
rights licensed pursuant to this IP License Agreement shall be deemed to fall within
the definition of “intellectual property” under Section 101 of the Bankruptcy Code
and, in connection therewith, Section 365(n) of the Bankruptcy Code shall be
implicated by such rejection or proposed rejection; and (ii) notwithstanding Section
365(c) of the Bankruptcy Code or applicable non-bankruptcy law which prohibits,
restricts or conditions the assignment or assumption of this IP License Agreement or
any of the rights therein, but subject to the debtor-in-possession or trustee, as
applicable, otherwise complying with the requirements of Section 365 of the
Bankruptcy Code for assumption, the debtor-in-possession or trustee in bankruptcy
may assume this IP License Agreement. The parties agree that if a party files for
bankruptcy under the laws of any other jurisdiction, the terms of this section will
apply to the extent necessary to preserve the rights provided in this section.

          (15) A new Section 37 is hereby added to the IP License Agreement which provides as follows:

Section 37. Injunctive Relief. Each party acknowledges and agrees that the
other party’s Intellectual Property and Confidential Information are valuable
property of such other party and that a material breach of this IP License Agreement
(including unauthorized use of Intellectual Property or disclosure of Confidential
Information) will cause irreparable injury for which the injured party does not have
an adequate remedy at law and for which monetary remedies are not sufficient. Each
party shall be entitled to seek equitable relief (including the

 

 

granting of injunctive relief in that party’s favor) without the obligation of
posting a bond if the other party makes or threatens a material breach of this IP
License Agreement (including unauthorized use of Intellectual Property or disclosure
of Confidential Information). Each party agrees that equitable relief is not
exclusive of other remedies to which the other party may be entitled at law or in
equity as a result of any such material breach of this IP License Agreement
(including any unauthorized use of Intellectual Property or disclosure of
Confidential Information).

Section 3. No Other Amendments.

          Except as expressly set forth herein, all other terms and conditions of the IP License
Agreement shall remain unmodified, in full force and effect and shall apply to this Amendment.

Section 4. Governing Law.

          This Amendment shall be governed by and construed in accordance with the laws of Japan without
giving effect to any choice-of-law or conflict-of-law provision or rule (whether of Japan or any
other jurisdiction) that would cause the application of the laws of any jurisdiction other than of
Japan. Regardless of the law applied, because this contract is in English, the terms and
conditions of this contract will be interpreted in accordance with the meaning of the words in
American colloquial English, notwithstanding any meaning of any word when translated into its
Japanese equivalent.

Section 5. Dispute Resolution.

          In the event of any dispute under this Amendment, as a condition precedent to either party
seeking arbitration, in connection therewith, the parties will attempt to resolve such dispute by
good faith negotiations (except for actions seeking injunctive relief). Such negotiations shall
first involve the individuals designated by the parties as having general responsibility for the IP
License Agreement. If such negotiations do not result within thirty (30) days from written notice
of either party indicating that a dispute exists (a “Dispute Notice”) in a resolution of
the dispute, Opnext Japan shall nominate one (1) corporate officer of the rank of vice president or
higher and Hitachi shall nominate one (1) corporate officer of the rank of Board Director or
higher, which corporate officers shall meet in person and attempt in good faith to negotiate a
resolution to the dispute. In the event the corporate executives are unable to resolve the dispute
within forty-five (45) days of receipt by either party of a Dispute Notice, a party may refer the
matter to arbitration (except in the case of disputes arising under Section 11(c) or Section 36 of
the IP License Agreement for which the parties may seek injunctive relief). In the event that
either party submits the dispute to arbitration, both parties shall cooperate in such binding
arbitration in accordance with Exhibit B to the IP License Agreement.

Section 6. Interpretation.

          The headings and captions contained in this Amendment and in any Exhibit are for reference
purposes only and do not constitute a part of this Amendment. The use of the word “including”
herein shall mean “including without limitation.”

 

 

Section 7. Severability.

          Whenever possible, each provision of this Amendment shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Amendment held to be
invalid, illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision of this Amendment in such jurisdiction or affect
the validity, legality or enforceability of any provision in any other jurisdiction, but this
Amendment shall be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

Section 8. Order of Precedence. To the extent of a conflict between this Amendment and the
First Amendment, the terms and conditions of this Amendment shall control.

Section 9. Counterparts.

          This Amendment may be executed in one or more counterparts, each of which shall be an original
and all of which taken together shall constitute one and the same agreement.

* * * * *

 

 

          IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their duly authorized
officers as of the Amendment Date.

	 	 	 	 	 
	OPNEXT JAPAN, INC.

	 	HITACHI, LTD.	 	 
	 
	 	 	 	 
	/s/ Kei Oki

	 	/s/ Naoya Takahashi
	 	 
	 

Name: Kei Oki

	 	 

Name: Naoya Takahashi
	 	 
	Title: President

	 	Title: Vice President and Executive Officer	 	 

SIGNATURE PAGE TO SECOND AMENDMENT TO OPNEXT JAPAN IP LICENSE AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}]]