Document:

EX-10.13

 

Exhibit 10.13

 

 

 

RESEARCH AND DEVELOPMENT AGREEMENT

by and between

HITACHI, LTD.

and

OPNEXT, INC.

 

Effective as of October 1, 2001

 

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	Section 1. Definitions
	 	 	1	 
	 
	 	 	 	 
	(a) “Affiliate”
	 	 	1	 
	(b) “Applicable Products”
	 	 	1	 
	(c)
“Average Man-Month Cost”
	 	 	1	 
	(d) “Base Agreement”
	 	 	1	 
	(e) “Business”
	 	 	1	 
	(f) “Business Day”
	 	 	1	 
	(g) “Clarity Parties”
	 	 	2	 
	(h) “Commercially Reasonable Efforts”
	 	 	2	 
	(i) “Confidential Information”
	 	 	2	 
	(j) “Cure Period”
	 	 	2	 
	(k) “Dispute Notice”
	 	 	2	 
	(l) “Effective Date”
	 	 	2	 
	(m) “Exhibit”
	 	 	2	 
	(n) “Existing R&D Agreements”
	 	 	2	 
	(o) “Hitachi R&D IP”
	 	 	2	 
	(p) “Intellectual Property”
	 	 	2	 
	(q) “Inventor”
	 	 	3	 
	(r) “IP License Agreement”
	 	 	3	 
	(s) “Jointly Developed Intellectual Property”
	 	 	3	 
	(t) “Licensed Hitachi R&D IP”
	 	 	3	 
	(u) “Licensed IP”
	 	 	3	 
	(v) “Losses”
	 	 	3	 
	(w)
“Mark-Up”
	 	 	3	 
	(x)
“Mark-Up Fee”
	 	 	3	 
	(y)
“Minority-Owned Affiliate”
	 	 	3	 
	(z) “Monthly Cost”
	 	 	3	 
	(aa) “New Development Costs”
	 	 	3	 
	(bb) “Old Development Costs”
	 	 	4	 
	(cc) “OpNext Japan”
	 	 	4	 
	(dd) “OpNext Japan Agreement”
	 	 	4	 
	(ee) “OpNext R&D IP”
	 	 	4	 
	(ff) “Permitted Entities”
	 	 	4	 
	(gg) “Person”
	 	 	4	 
	(hh) “Products”
	 	 	4	 
	(ii) “Project Manager”
	 	 	4	 
	(jj) “R&D Agreement”
	 	 	4	 
	(kk) “R&D Plan”
	 	 	4	 
	(ll) “R&D Procedures”
	 	 	4	 
	(mm) “R&D Projects”
	 	 	4	 
	(nn) “R&D Support”
	 	 	5	 
	(oo) “Related Parties”
	 	 	5	 

i

 

	 	 	 	 	 
	(pp) “Statement of Work”
	 	 	5	 
	(qq) “Subsidiary”
	 	 	5	 
	(rr) “Total Project Cost”
	 	 	5	 
	(ss)
“Wholly-Owned Subsidiary”
	 	 	5	 
	 
	 	 	 	 
	Section 2. Research and Development Services
	 	 	5	 
	 
	 	 	 	 
	(a) Meetings
	 	 	6	 
	(b) Request and Forecasts
	 	 	6	 
	(c) Support
	 	 	6	 
	 
	 	 	 	 
	Section 3. Exclusions from Research and Development Services
	 	 	6	 
	 
	 	 	 	 
	(a) Hitachi
	 	 	6	 
	(b) OpNext
	 	 	6	 
	 
	 	 	 	 
	Section 4. Ownership of Intellectual Property Right
	 	 	7	 
	 
	 	 	 	 
	(a) OpNext’s R&D Intellectual Property
	 	 	7	 
	(b) Hitachi’s R&D intellectual Property
	 	 	7	 
	(c) Jointly Developed Intellectual Property
	 	 	7	 
	(d) Ownership Determination
	 	 	8	 
	 
	 	 	 	 
	Section 5. Cross License of Intellectual Property
	 	 	9	 
	 
	 	 	 	 
	(a) OpNext R&D IP License
	 	 	9	 
	(b) Hitachi R&D IP License
	 	 	9	 
	(c) Transfer of Hitachi R&D IP
	 	 	10	 
	(d) Termination Conditions
	 	 	10	 
	(e) Range of License
	 	 	10	 
	 
	 	 	 	 
	Section 6. Covenants to Protect Intellectual Property
	 	 	11	 
	 
	 	 	 	 
	(a) Notice of Infringement
	 	 	11	 
	(b) Infringement Suits on Jointly Developed Intellectual Property
	 	 	11	 
	(c) Infringement of Licensed Hitachi R&D IP
	 	 	11	 
	 
	 	 	 	 
	Section 7. Inventor Compensation
	 	 	11	 
	 
	 	 	 	 
	Section 8. Warranties and Limitations
	 	 	12	 
	 
	 	 	 	 
	(a) Existing R&D Agreements
	 	 	12	 
	(b) Disclaimer of Warranties
	 	 	12	 
	(c) Indemnification by Hitachi
	 	 	12	 
	(d) Indemnification by OpNext
	 	 	12	 
	(e) IP Infringement Indemnification
	 	 	12	 
	(f) Patent Infringement
	 	 	13	 
	(g) Limitation of Liability
	 	 	13	 

ii

 

	 	 	 	 	 
	Section 9. Expenses
	 	 	13	 
	 
	 	 	 	 
	Section 10. Termination
	 	 	13	 
	 
	 	 	 	 
	Section 11. Confidentiality
	 	 	14	 
	 
	 	 	 	 
	(a) Confidentiality Obligations
	 	 	14	 
	(b) Exclusions
	 	 	14	 
	(c) Injunctive Relief
	 	 	15	 
	(d) Ownership
	 	 	15	 
	(e) Press Releases and Announcements
	 	 	15	 
	 
	 	 	 	 
	Section 12. Export Control
	 	 	15	 
	 
	 	 	 	 
	Section 13. Notices
	 	 	16	 
	 
	 	 	 	 
	Section 14. Amendment and Waiver
	 	 	17	 
	 
	 	 	 	 
	Section 15. Assignment
	 	 	17	 
	 
	 	 	 	 
	Section 16. Counterparts
	 	 	17	 
	 
	 	 	 	 
	Section 17. Delivery by Facsimile
	 	 	17	 
	 
	 	 	 	 
	Section 18. Exhibits and Schedules
	 	 	18	 
	 
	 	 	 	 
	Section 19. Further Assurances
	 	 	18	 
	 
	 	 	 	 
	Section 20. Governing Law
	 	 	18	 
	 
	 	 	 	 
	Section 21. Dispute Resolution
	 	 	18	 
	 
	 	 	 	 
	Section 22. Interpretation
	 	 	18	 
	 
	 	 	 	 
	Section 23. No Strict Construction
	 	 	18	 
	 
	 	 	 	 
	Section 24. Recordation
	 	 	19	 
	 
	 	 	 	 
	Section 25. Relationship of the Parties
	 	 	19	 
	 
	 	 	 	 
	Section 26. Severability
	 	 	19	 
	 
	 	 	 	 
	Section 27. Submission to Jurisdiction
	 	 	19	 
	 
	 	 	 	 
	Section 28. Survival
	 	 	19	 
	 
	 	 	 	 
	Section 29. Third-Party Beneficiaries
	 	 	20	 
	 
	 	 	 	 
	Section 30. Entire Agreement
	 	 	20	 

iii

 

	 	 	 	 	 
	Section 31. Bankruptcy
	 	 	20	 
	 
	 	 	 	 
	Section 32. Order of Precedence
	 	 	20	 

iv

 

	 	 	 
	 	 	List of Exhibits
	 
	Exhibit A

	 	Calculation of Mark-Up Fee
	Exhibit B

	 	R&D Procedures
	Exhibit C

	 	Arbitration Procedures
	Exhibit D

	 	List of Permitted Entities
	Exhibit E

	 	Form of Statement of Work

v

 

RESEARCH AND DEVELOPMENT AGREEMENT

          THIS RESEARCH AND DEVELOPMENT AGREEMENT is dated as of July ___, 2002, by and between HITACHI,
LTD., a corporation existing under the laws of Japan (“Hitachi”) and OPNEXT, INC., a
Delaware corporation and a Subsidiary of Hitachi (“OpNext”). This Agreement is deemed to
be effective as of October 1, 2001 (“Effective Date”).

RECITALS

          WHEREAS, Hitachi and OpNext Japan, Inc., a corporation existing under the laws of Japan and a
Wholly-Owned Subsidiary of OpNext (“OpNext Japan”) have entered into a Research and
Development Agreement dated July 31, 2001 (as amended, supplemented or otherwise modified from time
to time, the “OpNext Japan Agreement”), which provides, inter alia, for Hitachi to provide
OpNext Japan with certain research and development support; and

          WHEREAS, Hitachi and OpNext desire to enter into an agreement, on substantially similar terms
and conditions, as applicable, for Hitachi to provide OpNext with certain research and development
support.

          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 R&D 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) “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.

          (b) “Applicable Products” shall have the meaning set forth in Section 12(i) of this
R&D Agreement.

          (c) “Average Man-Month Cost” shall have the meaning set forth in Exhibit A.

          (d) “Base Agreement” shall mean this Research and Development Agreement, excluding any
Exhibits and Statements of Work.

          (e) “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 January 31, 2001 and as operated by OpNext Japan between January 31, 2001 and July
31, 2001.

          (f) “Business Day” shall mean any day of the year except Saturday, Sunday and any day
on which commercial banking institutions are authorized or obligated by law, regulation or
executive order to close in New York or Tokyo.

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          (g) “Clarity Parties” shall mean, collectively, Clarity Partners L.P., a Delaware
limited partnership, Clarity OpNext Holdings I, LLC, a Delaware limited liability company, and
Clarity OpNext Holdings II, LLC, a Delaware limited liability company.

          (h) “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.

          (i) “Confidential Information” shall mean any information not generally known to the
public that is (a) made or disclosed in contemplation of this R&D Agreement or (b) information
related to the Business that is disclosed or made available to the receiving party pursuant to this
R&D Agreement in each case that is stamped or marked as confidential or, in the case of orally
conveyed information, is identified at the time of conveyance as confidential and is followed by
confirmation in writing reasonably thereafter, including all of the following: (i) prototypes,
files, analyses, techniques, systems, formulae, research, records, documentation, models, data,
databases, ideas, inventions, designs, developments, devices, methods and processes (whether or not
patentable and whether or not reduced to practice); (ii) know-how; (iii) Licensed IP; (iv) Hitachi
R&D IP; (v) OpNext R&D IP; and (vi) other Intellectual Property rights. In addition, Confidential
Information shall include the terms and conditions of this R&D Agreement.

          (j) “Cure Period” shall have the meaning set forth in Section 5(d) of this R&D
Agreement.

          (k) “Dispute Notice” shall have the meaning set forth in Section 21 of this R&D
Agreement.

          (l) “Effective Date”
shall have the meaning set forth in the preamble of this R&D Agreement.

          (m) “Exhibit” shall mean an attachment to this R&D Agreement, as such attachment may
be amended from time to time, each one of which is incorporated herein by this reference.

          (n) “Existing R&D Agreements” shall have the meaning set forth in Section 3(a) of this
R&D Agreement.

          (o) “Hitachi R&D IP” shall have the meaning set forth in Section 4(b) of this R&D
Agreement.

          (p) “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

2

 

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 R&D
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.

          (q) “Inventor” shall have the meaning set forth in Section 7 of this R&D Agreement.

          (r) “IP License Agreement” shall mean the intellectual property license agreement
between Hitachi and OpNext Japan dated July 31, 2001 (as amended, supplemented or otherwise
modified from time to time).

          (s) “Jointly Developed Intellectual Property” shall mean all Intellectual Property
resulting from an R&D Project under this R&D Agreement in accordance with Section 4(c)(ii) hereof,
and shall exclude Hitachi R&D IP, OpNext R&D IP and Licensed IP.

          (t) “Licensed Hitachi R&D IP” shall have the meaning set forth in Section 5(b) of this
R&D Agreement.

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

          (v) “Losses” shall have the meaning set forth in Section 8(c) of this R&D Agreement.

          (w) “Mark-Up” shall have the meaning set forth in Exhibit A.

          (x) “Mark-Up Fee” shall mean the fee that Hitachi will charge to OpNext for Hitachi’s
past investment in Hitachi R&D IP and Jointly Developed Intellectual Property that Hitachi agrees
to transfer to OpNext as described in Section 4(c)(iii) and shall be determined in accordance with
the formula set forth in Exhibit A.

          (y) “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.

          (z) “Monthly Cost” shall have the meaning set forth in Exhibit A.

          (aa) “New Development Costs” shall mean all of the costs related to a particular R&D
Project incurred after commencement of such R&D Project, including operating expenses and charges
for the use of any tangible property made available for use in the R&D Project but shall not
include the consideration for the use of any existing or underlying Intellectual Property owned or
controlled by either party that is used for such R&D Project.

3

 

          (bb) “Old Development Costs” shall mean all of the costs incurred prior to
commencement of a particular R&D Project for development of any existing or underlying Intellectual
Property owned or controlled by either party that is used for such R&D Project, including operating
expenses and charges for the use of any tangible property made available for use in developing such
existing or underlying Intellectual Property.

          (cc) “OpNext Japan” shall have the meaning set forth in the first recital of this R&D
Agreement.

          (dd) “OpNext Japan Agreement” shall have the meaning set forth in the first recital of
this R&D Agreement.

          (ee) “OpNext R&D IP” shall mean: (i) Intellectual Property that can be clearly
identified as that resulting from R&D Projects (excluding any Hitachi R&D IP and Licensed IP) for
which OpNext has paid one-hundred percent (100%) of the New Development Costs; and (ii) Jointly
Developed Intellectual Property under Section 4(c)(ii) or Hitachi owned Intellectual Property under
Section 4(c)(i) that Hitachi has agreed to transfer to OpNext and OpNext has paid a Mark-Up Fee to
Hitachi in accordance with Section 4(c)(iii) and Exhibit A.

          (ff) “Permitted Entities” shall have the meaning set forth in Section 5(a) of this R&D
Agreement.

          (gg) “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.

          (hh) “Products” shall mean, collectively, transmitters, receivers, transceivers, laser
diode modules, photo diode modules, parallel optical interconnectors, lasers, photodiodes,
modulators, amplifier modules, optical switches and optical wave guides.

          (ii) “Project Manager” shall have the meaning set forth in Exhibit B.

          (jj) “R&D Agreement” shall mean, collectively, the Base Agreement, including any
Exhibits and Statements of Work (as amended, supplemented or otherwise modified from time to time).

          (kk) “R&D Plan” shall mean the plan prepared jointly by Hitachi and OpNext and which,
at a minimum, includes the information set forth in Section 4 of Exhibit B.

          (ll) “R&D Procedures”
shall mean the procedures set forth in Exhibit B, which may be amended from time to
time based upon the parties’ mutual agreement.

          (mm) “R&D Projects” shall mean research and development projects undertaken by OpNext
and/or its Affiliates (other than OpNext Japan) and/or by Hitachi on behalf of OpNext after the
Effective Date.

4

 

          (nn) “R&D Support” shall mean research and development support provided by Hitachi to
OpNext.

          (oo) “Related Parties” shall have the meaning set forth in Section 8(c).

          (pp) “Statement of Work” shall mean a statement of work in substantially the form set
forth in Exhibit E for each R&D Project for which Hitachi will provide R&D Support setting
forth additional terms and conditions relating to such R&D Project.

          (qq) “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 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 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 hereof, 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 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.

          (rr) “Total Project Cost” shall have the meaning set forth Exhibit A.

          (ss) “Wholly-Owned 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, 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. Research and Development Services. During the term of this R&D Agreement,
OpNext may request Hitachi to provide R&D Support for an R&D Project. To the extent such R&D
Project is directly related to the Business, Hitachi will provide R&D Support, as requested, to
OpNext and the parties will execute an applicable Statement of Work for such R&D Project. If
OpNext requests R&D Support for an R&D Project that is not directly related to the Business,
Hitachi agrees to negotiate with OpNext in good faith regarding such request; provided,
however, if the parties cannot agree as to such R&D Project or an applicable Statement of
Work, Hitachi shall have no further obligation with respect to such specific request. Each
Statement of

5

 

Work shall be separately executed by the parties, and shall be attached to this R&D
Agreement as a Schedule to Exhibit E. Hitachi will provide R&D Support for each R&D
Project set forth in a Statement of Work in accordance with the R&D Procedures and the other terms
and conditions set forth herein. Hitachi will provide such R&D Support consistent with the
following:

          (a) Meetings. Hitachi and OpNext will hold quarterly joint review meetings to
determine and update the R&D Plan for R&D Projects.

          (b) Request and Forecasts. Based on the R&D Plan developed in accordance with the R&D
Procedures, OpNext will require assistance on a binding basis from Hitachi on specific R&D Projects
for the upcoming twelve (12) month period. OpNext will also provide Hitachi with a non-binding
forecast of R&D Projects that OpNext expects to request from Hitachi for the twelve (12) month
period following such twelve (12) month period. Hitachi and OpNext will update such forecasts
during the quarterly meetings described in Section 2(a) above.

          (c) Support. Hitachi will be obligated to use Commercially Reasonable Efforts to
provide continuous R&D Support for the R&D Projects in accordance with the specific binding
requests (to be performed in the upcoming twelve (12) month period) from OpNext and for all
specific non-binding projects that OpNext forecasts to be requested from Hitachi on a binding basis
within the twelve (12) month period following the end of such twelve (12) month period.
Hitachi will use Commercially Reasonable Efforts to be able to support the balance of the
non-binding forecast.

Section 3. Exclusions from Research and Development Services.

          (a) Hitachi. Nothing contained in this R&D Agreement shall limit in any way Hitachi’s
ability to continue to conduct research and development activities for other Hitachi business
units, including its Affiliates and Subsidiaries, including any fiber optical component business
(e.g., semiconductors and cable) subject to the Nonsolicitation or Noncompetition provision
in Section 12 of the Stockholders’ Agreement between OpNext and each of Hitachi and the Clarity
Parties dated July 31, 2001 (as amended, supplemented or otherwise modified from time to time);
provided, however, the terms and conditions of this R&D Agreement shall be subject
to the terms and conditions of any existing agreements related to the governmental R&D projects,
the joint R&D projects with national and public universities or private universities, the R&D
projects requested by other Hitachi Subsidiaries or the joint R&D projects with any other agency or
organization (collectively, the “Existing R&D Agreements”). Prior to the commencement of
any R&D Project, Hitachi shall disclose to OpNext any restrictions contained in the Existing R&D
Agreements related to such R&D Project. Hitachi shall use Commercially Reasonable Efforts to
obtain consents from applicable parties to the Existing R&D Agreements and from applicable parties
to any future R&D agreements so as to avoid limiting or restricting the R&D Projects for which
Hitachi agrees to provide R&D Support pursuant to a Statement of Work.

          (b) OpNext. Nothing in this R&D Agreement shall in any way limit OpNext’s ability to
conduct its own, or utilize other third parties to conduct on its behalf, research and development
projects.

6

 

Section 4. Ownership of intellectual Property Right.

          (a) OpNext’s R&D Intellectual Property. OpNext will solely own all right, title and
interest, throughout the world in and to OpNext R&D IP. OpNext shall have the right to apply, in
its own name and at its own expense, for Intellectual Property protection in the OpNext R&D IP and,
if requested, Hitachi shall cooperate with OpNext in any reasonable manner in obtaining such
protection, including obtaining signatures of Hitachi Inventors and/or officials on official
papers.

          (b) Hitachi’s R&D Intellectual Property. Hitachi will solely own all Intellectual
Property rights that result from all of its other research and development projects, including the
Intellectual Property referenced in
Section 4(c)(i), excluding Jointly Developed Intellectual Property and/or OpNext R&D IP
(“Hitachi R&D IP”). Hitachi shall have the right to apply, in its own name and at its own
expense, for Intellectual Property protection in the Hitachi R&D IP and, if requested, OpNext shall
cooperate with Hitachi in any reasonable manner in obtaining such protection, including obtaining
signatures of OpNext Inventors and/or officials on official papers.

          (c) Jointly Developed Intellectual Property. All right, title and interest in and to
Jointly Developed Intellectual Property, other than OpNext R&D IP and Hitachi R&D IP, shall be
determined in accordance with this Section 4(c).

               (i) Hitachi Owned. If the R&D Project is jointly funded by OpNext and Hitachi, unless
(ii) or (iii) below applies, the resulting Intellectual Property will be treated as Hitachi R&D IP
in accordance with Section 4(b) and will be solely owned by Hitachi.

               (ii) Jointly Owned.

                    (1) If the R&D Project is jointly funded by the parties and either: (a) OpNext contributes
fifty percent (50%) or more of the New Development Costs to the R&D Project; or (b) OpNext
contributes less than fifty percent (50%) of the New Development Costs to the R&D Project but the
parties determine through good faith negotiations that OpNext contributed to the R&D Project in
some other fashion, and in both (a) and (b) above the resulting Intellectual Property can clearly
be identified with reasonable certainty as that resulting from such R&D Project, then such
Intellectual Property shall be deemed Jointly Developed Intellectual Property and shall be owned
jointly by the parties and either party may practice such Jointly Developed Intellectual Property
without an accounting or compensation to, or the consent of, the other party. Except as set forth
in Section 4(c)(iii) below, if either party desires to license any of its rights to the Jointly
Developed Intellectual Property herein to a third party, it shall obtain the prior written consent
of the other party hereto. Each party shall have the right to apply, in both parties’ names, for
Intellectual Property protection in the Jointly Developed Intellectual Property, subject to the
following: (i) the parties shall agree on the proper way and strategy for proceeding with all
protection of the Jointly Developed Intellectual Property in accordance with the R&D Procedures;
(ii) all expenses incurred in obtaining and maintaining Intellectual Property protection in the
Jointly Developed Intellectual Property shall be equally shared by the parties; and (iii) in the
event that one (1) of the parties elects not to seek or maintain patent or other Intellectual
Property protection for any Jointly Developed Intellectual

7

 

Property in any particular country or
not to share equally in the expenses thereof with the other party, the other party shall have the
right to seek or maintain such protection at its sole expense in such country and shall have full
control over the prosecution and maintenance thereof even though title to any patent or other
Intellectual Property protection issuing therefrom shall be jointly owned by the parties.

                    (2) To the extent OpNext shares the costs of its proportion of the joint funding as described
in (1) above, with any Wholly-Owned Subsidiary of OpNext for an R&D Project, OpNext shall have the
right to license any Jointly Developed Intellectual Property arising from such R&D Project and the
right to sublicense any Hitachi R&D IP associated with such Jointly Developed Intellectual
Property, to such Wholly-Owned Subsidiary of OpNext; provided, however, the
following conditions are met: (i) OpNext obtains Hitachi’s reasonable prior consent; and (ii) such
Wholly-Owned Subsidiary of OpNext abides by the terms and conditions of this R&D Agreement.
Notwithstanding the foregoing, if any such license invokes any Japanese tax issues then Hitachi
shall not be obliged to consent to such license to such Wholly-Owned Subsidiary of OpNext without
entering into a separate agreement with such Wholly-Owned Subsidiary of OpNext under reasonable
terms and conditions to be agreed upon between the relevant parties to address such tax issues.
Notwithstanding the foregoing, such Wholly-Owned Subsidiary of OpNext shall not have any ownership
rights in such Jointly Developed Intellectual Property.

               (iii) OpNext Owned.

                    (1) If OpNext desires and Hitachi agrees in its reasonable discretion, OpNext may purchase the
Intellectual Property resulting from an R&D Project that is either owned by Hitachi under Section
4(c)(i) or jointly owned by the parties under Section 4(c)(ii), but excluding other Hitachi R&D IP
and Licensed IP, by reimbursing Hitachi for any New Development Costs incurred by Hitachi in such
R&D Project and paying a Mark-Up to Hitachi in accordance with the formula set forth in Exhibit
A hereto.

                    (2) If OpNext desires and Hitachi agrees in its reasonable discretion, OpNext may purchase the
Intellectual Property resulting from an R&D Project that is either owned by Hitachi under Section
4(c)(i) or jointly owned by the parties under Section 4(c)(ii), including the other Hitachi R&D IP
and Licensed IP on which such Intellectual Property is based or derived, by paying a Mark-Up Fee.
For the purposes of determining such Mark-Up Fee, the parties shall consider the extent of
Hitachi’s New Development Costs, Hitachi’s Old Development Costs and the fair market value of such
technology (other than Licensed IP).

          (d) Ownership Determination. Prior to the commencement of an R&D Project, the Hitachi
and OpNext Project Managers shall discuss in good faith the ownership of the Intellectual Property
resulting from such R&D Project based upon the principles listed above. If the parties’ Project
Managers cannot agree on the ownership of the Intellectual Property, the management of both parties
shall discuss in good faith the ownership of the Intellectual Property resulting from such R&D
Project. If the management is unable to come to an agreement on such ownership issues (including
clear identification of the Intellectual Property resulting from such R&D Project, New Development
Costs, Old Development Costs, OpNext’s non-monetary

8

 

contribution to the R&D Project and the Mark-Up
Fee, if applicable), the parties shall refer solely this issue to arbitration pursuant to the
arbitration procedures set forth in Exhibit C hereto. In the event that it is impractical
to resolve
the disputed issue prior to the commencement of the R&D Project (e.g., the parties are
unsure as to what extent underlying technology will be utilized or cannot determine the
identification of Intellectual Property resulting from the R&D Project, the New Development Costs,
Old Development Costs, OpNext’s non-monetary contribution to the R&D Project or Mark-Up Fee),
either party may elect to proceed with the R&D Project and defer resolution of the disputed issue
until a later date; provided that if the parties remain in disagreement after such later date, the
parties shall then refer the issue to arbitration as described above. In the event that either
party submits the dispute to arbitration, both parties shall cooperate in such binding arbitration
in accordance with Exhibit C.

Section 5. Cross License of Intellectual Property. The parties acknowledge and agree
that the license terms set forth in Sections 5(a) and 5(b) below shall apply to OpNext R&D IP and
Licensed Hitachi R&D IP relevant to an R&D Project unless the parties set forth different license
terms in the applicable Statement of Work. For those R&D Projects that are directly related to the
Business, the relevant OpNext R&D IP and Licensed Hitachi R&D IP shall both be licensed on terms no
less favorable than the terms set forth in Sections 5(a) and 5(b), respectively, and such licenses
shall be set forth in the applicable Statement of Work. For those R&D Projects that are not
directly related to the Business for which the parties execute a Statement of Work, the relevant
OpNext R&D IP and Licensed Hitachi R&D IP shall both be licensed on terms and conditions to be
negotiated by the parties on a case-by-case basis, and such licenses shall be set forth in the
applicable Statement of Work.

          (a) OpNext R&D IP License. OpNext will license, and does hereby license, the OpNext
R&D 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, provided, however,
that Hitachi and its Wholly-Owned Subsidiaries shall not have the right to sublicense any OpNext
R&D IP to any entity without the consent of OpNext, such consent not to be unreasonably withheld,
delayed or conditioned. In addition, OpNext will grant and does hereby grant a right and license
to the OpNext R&D IP solely related to the R&D Projects set forth on Exhibit D to solely
those entities listed on Exhibit D as licensees to the OpNext R&D IP for such R&D Project
(the “Permitted Entities”) 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; provided, however, that the Permitted
Entities shall not have the right to sublicense any such OpNext R&D IP to any entity without the
consent of OpNext, such consent not to be unreasonably withheld, delayed or conditioned. Subject
to OpNext’s consent, which shall not be unreasonably withheld, delayed or conditioned, for each new
R&D Project, the parties shall amend Exhibit D to include such new R&D Project and the
entities corresponding to such R&D Project that shall be licensed pursuant to this Section 5(a).

          (b) Hitachi R&D IP License. Hitachi will license, and does hereby license, the Hitachi R&D IP relevant to (i) R&D
Projects directly related to the Business and (ii) R&D Projects that are not directly related to
the Business but for which Hitachi agrees to provide R&D Support pursuant to a Statement of Work to
OpNext and its Wholly-Owned Subsidiaries on a

9

 

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 (“Licensed Hitachi R&D IP”);
provided, however, that OpNext and its Wholly-Owned Subsidiaries shall not have the
right to sublicense any Licensed Hitachi R&D IP to any entity, without the consent of Hitachi, such
consent not to be unreasonably delayed, withheld or conditioned.

          (c) Transfer of Hitachi R&D IP. In the event a Subsidiary or division of Hitachi that
is the owner of the Licensed Hitachi R&D IP is sold or otherwise transferred by Hitachi, Hitachi
will make necessary arrangements to secure a license under the terms and conditions set forth in
the applicable Statement of Work for OpNext from the new owner such that OpNext and its
Wholly-Owned Subsidiaries can continue to use such Licensed Hitachi R&D IP on terms comparable to
those therein until such Licensed Hitachi R&D IP expires.

          (d) Termination Conditions. Such license of OpNext R&D IP to Hitachi and of Licensed
Hitachi R&D IP to OpNext may be terminated upon notice by the licensor only if: (i) the licensee
has committed a material breach of its obligations under this R&D Agreement, the licensor has given
written notice of such breach to the licensee 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 which
cannot be cured within such Cure Period, the licensee has not instituted within such Cure Period
steps necessary to remedy the default and/or thereafter has not diligently pursued the same to
completion, within the Cure Period; or (ii) the breaching party has committed an incurable material
breach. In the event the breach is a curable breach that cannot be cured within the Cure Period
but the licensee 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 the 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
C 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 C
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 C.

          (e) Range of License. The obligations of a party in this Section 5 to license
Intellectual Property to the other party shall not apply to any Intellectual Property created or
acquired by either party after the earlier of (i) July 31, 2011 or (ii) if this R&D Agreement is
terminated pursuant to an arbitration in accordance with Section 21 or upon the agreement of the
parties, the effective date of such termination; provided, however, that the
licenses under OpNext R&D IP and Licensed
Hitachi R&D IP existing as of the earlier of (i) July 31, 2011 or (ii) the effective date of
such termination shall continue, under reasonable terms and conditions to be agreed between the
parties, until the expiration of all of such OpNext R&D IP and Licensed Hitachi R&D IP.

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Section 6. Covenants to Protect Intellectual Property.

          (a) Notice of Infringement. If either party learns of facts that may constitute an
infringement of any of the Intellectual Property covered by this R&D Agreement or of any
allegations that there has been an infringement of such Intellectual Property, it shall promptly
notify the owner of the Intellectual Property of such possible infringement. With respect to
Jointly Developed Intellectual Property, each party shall notify the other party of such possible
infringement. No party shall have any duty to conduct any investigation or to make any inquiry
with respect to any such alleged infringement.

          (b) Infringement Suits on Jointly Developed Intellectual Property. If both parties
agree to initiate appropriate action to cause any infringement of Jointly Developed Intellectual
Property to cease, including if necessary bringing suit to enjoin such infringement, the parties
shall share the expense and split any damages or other court compensation equally, or in some other
proportion to be agreed by the parties prior to initiating an action. If upon notice of
infringement of Jointly Developed Intellectual Property, a party elects not to initiate any action,
the other party shall have the option to initiate appropriate action to cause any infringement to
cease, including if necessary bringing suit to enjoin such infringement; and such party shall then
be solely responsible for expenses and shall retain any damages, other court compensation awarded
and settlement proceeds, but such party shall not enter into a settlement agreement without the
prior written consent of the other party, which shall not be unreasonably withheld, unreasonably
delayed or unreasonably conditioned.

          (c) Infringement of Licensed Hitachi R&D IP. To the extent a competitor of the
Business is infringing the Licensed Hitachi R&D IP in OpNext’s reasonable business judgment and
such infringement is material to the Business, Hitachi will protect OpNext’s interest either by
prosecuting the Intellectual Property rights on behalf of OpNext or by taking some other
appropriate action that will not have a Material Adverse Effect on the ongoing business of OpNext,
provided, however, that any such action taken by Hitachi shall not materially adversely affect any
other Affiliates of or business units of Hitachi. 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 Hitachi R&D IP.

Section 7. Inventor Compensation. Both parties acknowledge and agree that in the
event that any employee of Hitachi or employee of OpNext (hereinafter referred to as the
“Inventor”) creates any Intellectual Property under this R&D Agreement, the owner of such
Intellectual Property shall pay a certain amount of compensation to such Inventor, taking into
account the Inventor’s contribution and according to the terms and conditions mutually agreed to by
the parties.

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Section 8. Warranties and Limitations.

          (a) Existing R&D Agreements. Hitachi represents and warrants that the terms and
conditions of the Existing R&D Agreements shall not have a material impact on OpNext’s ability to
conduct its research and development activities pursuant to this R&D Agreement or the ownership of
or other rights in any Intellectual Property that may result from such activities, and that Hitachi
will make Commercially Reasonable Efforts to consult and cooperate with OpNext to eliminate or
minimize any negative impact arising from the terms and conditions of any Existing R&D Agreements.

          (b) Disclaimer of Warranties. Hitachi expressly disclaims all representations and
warranties, express or implied, in connection with the R&D Support provided pursuant to this R&D
Agreement, including the warranties of non-infringement and title and the implied warranties of
merchantability and fitness for a particular purpose. Such R&D Support is provided on an “as is”
basis, except as set forth on Exhibit B.

          (c) Indemnification by Hitachi. From and after the Effective Date, Hitachi shall
indemnify OpNext and its Affiliates and each of their respective officers, directors, members,
stockholders, partners, employees and agents (as applicable) (“Related Parties”) and hold
them harmless from any loss, liability, settlement, judgment, award, cost, damage or expense
(including court costs and reasonable attorneys’ fees) (the “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 R&D Agreement; or (ii) any breach of any covenant of Hitachi
contained in this R&D Agreement, except to the extent that OpNext, its Affiliates, their agents
and/or their independent contractors have tortiously contributed in an intentional or grossly
negligent manner to the event in question. Notwithstanding the foregoing, in no event shall
Hitachi indemnify OpNext under this indemnity provision for claims under Section 8(c)(i) brought on
or after July 31, 2003.

          (d) Indemnification by OpNext. From and after the Effective Date, OpNext shall
indemnify Hitachi and its Related Parties 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 contained in this R&D Agreement; or (ii) any breach of any covenant of OpNext
contained in this R&D Agreement, except to the extent that Hitachi, its Affiliates, their agents
and/or their independent contractors have tortiously contributed in an intentional or grossly
negligent manner to the event in question. Notwithstanding the foregoing, in no event shall OpNext
indemnify Hitachi under this indemnity provision for claims under Section 8(d)(i) brought on or
after July 31, 2003.

          (e) IP Infringement Indemnification.

               (i) By Hitachi. From and after the Effective Date, Hitachi shall indemnify OpNext and
its Wholly-Owned Subsidiaries and their respective Related Parties (each an indemnified party) and
hold them harmless from any Losses incurred by any such indemnified party to the extent arising
from any claim by a third party that the provision of R&D Support to OpNext by Hitachi under this
R&D Agreement and/or that any Licensed Hitachi R&D IP (whether incorporated in an OpNext product or
otherwise) infringes or misappropriates such

12

 

third party’s copyright or trade secret, except to the
extent that such claim arises out of or relates to Hitachi’s use of, or reliance on, specifications
or instructions provided to Hitachi by OpNext.

               (ii) By OpNext. From and after the Effective Date, OpNext shall indemnify Hitachi and
its Wholly-Owned Subsidiaries and their respective Related Parties (each an indemnified party) and
hold them harmless from any Losses incurred by any such indemnified party to the extent arising
from any claim by a third party that: (a) the use of the specifications or instructions provided
to Hitachi by OpNext in connection with the provision of R&D Support under this R&D Agreement
infringes or misappropriates such third party’s copyright or trade secret; or (b) the development
of a product or the manufacture of a product by OpNext infringes or misappropriates any copyright
or trade secret of a third party, except to the extent such infringement or misappropriation is
within the scope of Hitachi’s indemnification obligations hereunder.

          (f) Patent Infringement. If either party receives notice (including, without
limitation) a cease and desist letter or invitation to take a license) of a claim or allegation of
patent infringement for which, due to the other party’s participation in an R&D Project pursuant to
this Agreement, such other party may be liable, such party shall promptly notify the other party.
Both parties shall consult and cooperate with each other in determining how to respond to such
claim or allegation of patent infringement.

          (g) Limitation of Liability. Notwithstanding anything to the contrary in this R&D Agreement, neither party’s cumulative
liability to the other for all claims arising out of or in connection with this R&D Agreement will
exceed the fees paid to Hitachi by OpNext pursuant to this R&D Agreement. Neither party shall be
liable to the other party or any third party for any special, consequential, exemplary or
incidental damages (including lost or anticipated revenues or profits relating to the same),
arising from any claim relating to this R&D Agreement, whether such claim is based on warranty,
contract, tort (including negligence or strict liability) or otherwise, even if an authorized
representative of such party is advised of the possibility or likelihood of same.

Section 9. Expenses. OpNext shall be charged for R&D Support on the same basis that
Hitachi’s Wholly-Owned Subsidiaries are allocated research and development charges for their
activities, provided that in no event shall such terms be less advantageous from OpNext’s
perspective, than those terms which could be reasonably expected to be obtained in an arms-length
transaction. Notwithstanding the foregoing, OpNext acknowledges and agrees that if it exercises
its rights under Section 4(c)(iii), OpNext shall pay a Mark-Up Fee to Hitachi. Whether or not the
transactions contemplated hereby are consummated, and except as otherwise specifically provided in
this R&D Agreement, all costs and expenses incurred in connection with this R&D Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs or expenses.

Section 10. Termination. This R&D Agreement commences on the date hereof and will
automatically terminate and be of no further force or effect upon July 31, 2011.

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Section 11. Confidentiality.

          (a) Confidentiality Obligations. Confidential Information will not be disclosed or
made available by the receiving party, directly or indirectly, to any third party, except as
expressly provided herein or as shall be agreed to in writing by the disclosing party. Each of the
parties agrees to take all reasonable steps to preserve the confidentiality of the other’s
Confidential Information in accordance with their respective policies for the protection of their
own non-public information (which policies shall provide at least reasonable protection) and agrees
that it will be made available only to: (i) those employees as shall have a need to see and use
for the purpose of fulfilling that party’s obligations under this R&D Agreement, provided that any
such employee shall be informed of the confidential nature of the Confidential Information and
shall be required to observe the confidentiality obligations in respect thereof; or (ii) its
auditors, counsel, other professional advisors, sublicensees authorized under the terms of this R&D
Agreement (Section 5(a) for OpNext R&D IP and Section 5(b) for Licensed Hitachi R&D IP) or
suppliers, if the receiving party, 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 11(a) to the same extent as the receiving party. The receiving
party shall ensure that all Confidential Information received by it is kept separate (together with
all information generated by the receiving party therefrom) from all documents and other records of
the receiving party, and that it shall not use, reproduce, transfer or store any of the
Confidential Information in an extremely accessible place.

          (b) Exclusions.

               (i) Confidential Information shall not include (A) any information that has become or
previously was generally available to the public other than by reason of a breach of Section 11(a)
by the receiving party or has become available to the receiving party on a non-confidential basis
after the Effective Date, or (B) any information for which disclosure is required (i) in any
report, statement or testimony required by any municipal, state or federal regulatory body having
or claiming to have jurisdiction over the receiving party, (ii) in response to any summons or
subpoena or in connection with any litigation, or (iii) in order to comply with any law, order,
regulation or ruling applicable to the receiving party (it being understood that in each case, to
the extent practicable, the receiving party shall provide the disclosing party prompt notice to any
such event and cooperate in good faith to enable the disclosing party to participate to protect its
interest in such confidential information).

               (ii) Notwithstanding Section 11(a), to the extent that after the Effective Date, Hitachi
desires to disclose Confidential Information that constitutes OpNext R&D IP to Hitachi
Minority-Owned Affiliates and/or suppliers, Hitachi shall notify OpNext of such desire and propose
the terms and conditions of an appropriate nondisclosure agreement into which OpNext and the
corresponding Hitachi Minority-Owned Affiliate or supplier may enter. OpNext agrees that within
fifteen (15) Business Days of receipt of such request and proposed nondisclosure agreement, OpNext
shall, at its sole discretion, either: (i) enter into the proposed nondisclosure agreement and
directly provide the requested confidential information to the Hitachi Minority-Owned Affiliate or
supplier; (ii) propose reasonably modified terms and conditions of the nondisclosure agreement
under which OpNext will provide the requested confidential information to Hitachi’s Minority-Owned
Affiliate or supplier; or (iii) commence

14

 

discussions with Hitachi to reach a resolution of OpNext’s
concerns with respect to such disclosure, if OpNext believes such disclosure is not in the best
interest of the parties. In the event that OpNext 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’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 C hereto. In the event that either party submits the dispute to arbitration, both
parties shall cooperate in such binding arbitration in accordance with Exhibit C.

          (c) Injunctive Relief. The parties acknowledge and agree that money damages would be
inadequate to remedy any breach of the confidentiality obligations in this Section 11 and that the
non-
breaching party shall be entitled to obtain equitable remedies with respect to any such
breach, including preliminary injunctive relief in accordance with Section 27.

          (d) Ownership. All Confidential Information furnished hereunder shall be and remain
the exclusive property of the disclosing party, and the receiving party agrees to promptly return
to the disclosing party, upon the disclosing party’s request, all documents, samples and other
material in the possession, custody or control of the receiving party that bear or incorporate any
part of the Confidential Information, including all copies made by the receiving party, except as
otherwise provided herein.

          (e) Press Releases and Announcements. 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 R&D 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 Commercial
Reasonable Efforts to enable the other party to review and comment on all such news releases prior
to the release thereof.

Section 12. Export Control.

               (i) Each party represents and warrants that it shall not use any products or software
(including technology relating thereto) provided by other party under this R&D Agreement and any
other products, software and/or technology manufactured or developed by using such products or
software (hereinafter called, “Applicable Products”) for the purposes of disturbing
international peace and security, including (a) the design, development, production, stockpiling or
any use of weapons of mass destruction such as nuclear, chemical or biological weapons or missiles,
(b) other military activities, or (c) any use reasonably supporting these activities.

               (ii) Each party also represents and warrants that it shall not sell, export, dispose of,
license, rent, transfer, disclose or otherwise provide, whether directly or indirectly, Applicable
Products to any third party for whom the warranting party has knowledge or reason to know that such
third party will engage in the activities described in Section 12(i). Each party shall be
responsible for the entities to whom it sells, exports, disposes of, licenses, rents, transfers,
discloses or otherwise provides Applicable Products.

15

 

               (iii) Each party shall not directly or indirectly, export, re-export, transship, or otherwise
transfer Applicable Products in violation of any applicable export control laws and regulations
promulgated and administered by the governments of the countries asserting jurisdiction over the
parties or transactions.

Section 13. Notices. Any notice provided for in this R&D Agreement shall be in writing and shall be either
personally delivered, mailed first class (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 and
Hitachi are:

If to OpNext:

OpNext, Inc.

One Christopher Way

Eatontown, New Jersey 07724

Attention: Chief Executive Officer

Fax: (732) 544-3561

with a copy which shall not constitute notice to OpNext, to:

Simpson Thacher & Bartlett

425 Lexington Avenue

New York, NY 10017-3954

Attention: I. Scott Gottdiener, Esq.

Fax: (212) 455-2502

with a copy which shall not constitute notice to OpNext, to:

Clarity Partners, L.P.

100 North Crescent Drive

Beverly Hills, CA 90210

Attention: David Lee

Fax: (310) 432-5000

If to Hitachi:

Hitachi, Ltd.

Research & Development Group

New Marunouchi Bldg.,

5-1, Marunouchi 1-chome

Chiyoda-ku, Tokyo, 100-8220 Japan

Attention: President

Fax: 81-3-3214-3349

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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.

Fax: (312) 861-2200

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

Hitachi, Ltd.

6, Kanda-Surugadai 4-chome

Chiyoda-ku

Tokyo, 101-8010 Japan

Attention: Senior Group Executive, Information & Telecommunication
Systems Group

Fax: 81-3-5295-1563

Section 14. Amendment and Waiver. No amendment of any provision of this R&D Agreement
shall be valid unless the same shall be in writing and signed by OpNext and Hitachi. The failure
of any party to enforce any of the provisions of this R&D 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 R&D Agreement in accordance with its terms.

Section 15. Assignment. Except as set forth below, this R&D Agreement and any rights
and obligations hereunder shall not be assignable or transferable by OpNext 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 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 16. Counterparts. This R&D 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 17. Delivery by Facsimile. This R&D Agreement, the agreements referred to
herein, and each other agreement or instrument entered into in connection herewith or contemplated
hereby, 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 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.

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Section 18. Exhibits and Schedules. All Exhibits and Schedules annexed hereto or
referred to herein are hereby incorporated in and made a part of this R&D Agreement as if set forth
in full herein.

Section 19. Further Assurances. During the term of this R&D Agreement and at all
times thereafter, each party shall provide to the other party, at its request, reasonable
cooperation and assistance (including the execution and delivery of affidavits, declarations,
oaths, assignments, samples, exhibits, specimens and any other documentation) as necessary to
effect the terms of this R&D Agreement.

Section 20. Governing Law. This R&D Agreement shall be governed by and construed in
accordance with the laws of New York without giving effect to any choice-of-law or conflict-of-law
provision or rule (whether of New York or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than 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, notwithstanding any
meaning of any word when translated into its Japanese equivalent.

Section 21. Dispute Resolution. All disputes between the parties relating to this R&D
Agreement shall be resolved by arbitration. In the event of any dispute under this R&D Agreement,
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 R&D 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 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) for which the parties may seek preliminary injunctive relief pending
resolution of the issue hereunder). In the event that either party submits the dispute to
arbitration, both parties shall cooperate in such binding arbitration in accordance with
Exhibit C.

Section 22. Interpretation. The headings and captions contained in this R&D
Agreement, in any Exhibit or Schedule hereto and in the table of contents to this R&D Agreement are
for reference purposes only and do not constitute a part of this R&D Agreement. The use of the
word “including” herein shall mean “including without limitation.”

Section 23. No Strict Construction. Notwithstanding the fact that this R&D Agreement
has been drafted or prepared by one of the parties, OpNext and Hitachi confirm that both they and
their respective counsel have reviewed, negotiated and adopted this R&D Agreement as the joint
agreement and understanding of the parties, and the language used in this R&D Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule
of strict construction shall be applied against any Person.

18

 

Section 24. Recordation. This R&D Agreement effects a transfer and license of rights
in certain Intellectual Property and may be recorded in appropriate recordal repositories to
evidence such transfer and license of rights.

Section 25. Relationship of the Parties. The parties hereto are independent
contractors. The rights, obligations and liabilities of the parties shall be several and not joint
or collective and nothing contained in this R&D Agreement shall be construed as creating a
partnership, joint venture, agency, employment, trust or other association of any kind, each party
being individually and independently responsible as set forth in this R&D Agreement.

Section 26. Severability. Whenever possible, each provision of this R&D Agreement
shall be interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this R&D 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 R&D Agreement in such jurisdiction or affect the validity, legality or enforceability of
any provision in any other jurisdiction, but this R&D Agreement shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been
contained herein.

Section 27. Submission to Jurisdiction. With respect to actions for preliminary
injunctive relief sought pursuant to Section 11 or for confirmation or enforcement of an
arbitration pursuant to Section 21, each party to this R&D Agreement (including any third-party
beneficiaries to this R&D Agreement) hereby irrevocably and unconditionally:

               (i) submits for itself and its property to the exclusive jurisdiction of the courts of New
York situated in New York City;

               (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; and

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

Section 28. Survival. To the extent the terms of this R&D Agreement provide for
rights, interest, duties, claims, undertakings and obligations subsequent to the termination or
expiration of this R&D Agreement, such terms of this R&D Agreement shall survive such termination
or expiration, including but not limited to the terms of Sections 1, 4, 5(e) (with respect to
Hitachi R&D IP and/or OpNext R&D IP that has not expired), 6, 8, 9 (with respect to accrued but
unpaid expenses), 11, 12, 18, 19, 20, 21, 22, 23, 26-32.

19

 

Section 29. Third-Party Beneficiaries. OpNext and Hitachi acknowledge and agree that
this R&D Agreement is intended only for the benefit of themselves and their Subsidiaries, except,
for purposes of Section 11(b)(ii), their Minority-Owned Affiliates, the Clarity Parties, OpNext
Japan and OpNext’s Subsidiaries and Minority-Owned Affiliates.

Section 30. Entire Agreement. Except as otherwise expressly set forth herein, this
R&D 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 parties agree and intend that nothing in this R&D
Agreement shall in any way limit or modify any of the terms and conditions of any other agreement
between Hitachi and OpNext and/or OpNext Japan, including the OpNext Japan Agreement and agreements
related thereto.

Section 31. Bankruptcy. The parties agree and intend that the licenses to the Hitachi
R&D IP and OpNext R&D IP hereunder shall be considered licenses to “intellectual property” as that
term is defined in 11 U.S.C. §101, and that in the event of the bankruptcy of a licensor hereunder,
the
licensee hereunder shall be entitled to exercise all of the rights and remedies available
under 11 U.S.C. §365(n) to the fullest extent permitted by applicable law.

Section 32. Order of Precedence. The various parts of this R&D Agreement are intended
to be complementary; however, any inconsistency, ambiguity or conflict between this Base Agreement,
its Exhibits, the R&D Plan and any Statement of Work shall be resolved in the following order of
precedence (with (i) having the highest priority): (i) Base Agreement; (ii) Statement of Work;
(iii) Exhibits and (iv) the R&D Plan. Notwithstanding the foregoing, the parties acknowledge that
they may agree in an applicable Statement of Work upon specific terms and conditions intended to
supersede those contained in this Base Agreement or an Exhibit, provided (x) the Statement of Work
makes clear that such is the parties’ intent and (y) legal counsel representing each party have
reviewed and concurred with such terms and conditions.

20

 

SIGNATURE PAGE TO R&D 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, INC.

 	 
	 	By:  	/s/ Minoru Maeda
 	 
	 	 	Minoru Maeda, Ph.D. 	 
	 	 	Board Director

Chief Operating Officer 	 
	 
	 	HITACHI, LTD.

 	 
	 	By:  	/s/ Michiharu Nakamura
 	 
	 	 	Michiharu Nakamura, Ph.D. 	 
	 	 	Corporate Officer and President,
Research and Development Group 	 
	 

21

 

EXHIBIT A

CALCULATION OF MARK-UP FEE

     The Mark-Up Fee for purposes of Section 4(c)(iii)(1) shall be calculated as set forth below.

	 	1.	 	For any applicable R&D Project, Hitachi shall determine the monthly average
cost per personnel for each Hitachi research laboratory in accordance with Section 9
of this R&D Agreement (the “Average Man-Month Cost”).
	 
	 	2.	 	The Average Man-Month Cost shall then be multiplied by the number of
personnel devoting or billing to time to the R&D Project for one month (the
“Monthly Cost”).
	 
	 	3.	 	The Monthly Costs shall then be multiplied by the number of months (or the
pro rata portion thereof) during which work was performed on the R&D Project (the
“Total Project Cost”).
	 
	 	4.	 	“Mark-Up” shall mean the amount equal to at least twenty-percent
(20%) of the Total Project Cost but less than or equal to forty percent (40%) of the
Total Project Cost that OpNext may pay to Hitachi in accordance with Section
4(c)(iii). The Mark-Up may be increased above 20% to the extent that both Hitachi and
OpNext discuss in good faith and agree that new Intellectual Property of significantly
greater value than the ordinary level is anticipated to be created or invented at the
outset of the R&D Project. The parties acknowledge that in most situations the
Mark-Up Fee shall range between 20% — 40%, provided, however, that the Mark-Up may be
increased above 40% to the extent that both parties discuss in good faith and agree to
the extent of Hitachi’s contribution to the R&D Project and/or the result of the R&D
Project is greater than expected. To the extent the Mark-Up is more than 40%, the
total Mark-Up shall not exceed 60% of the portion of the Total Project Cost paid or
incurred by OpNext for such R&D Project.
	 
	 	5.	 	Mark-Up Fee = Hitachi’s New Development Costs incurred in the R&D
Project + Mark-Up (20%-40% x Total Project Cost) or (40% and above x Total Project
Cost not to exceed 60% of the portion of the Total Project Cost paid or incurred by
OpNext for such R&D Project).

A-1

 

EXHIBIT B

R & D PROCEDURES

     Hitachi and OpNext will comply with the following procedures and requirements in connection
with all R&D Project(s)

     R & D Plan

     1. Hitachi and OpNext will each designate a project manager for each R&D Project for which
Hitachi agrees to provide R&D Support pursuant to a Statement of Work with supervisory
responsibility for such R&D Project (a “Project Manager”) within thirty (30) days after the
commencement of such R&D Project. As soon as reasonably practicable such Project Managers shall
meet and prepare an initial R&D Plan covering all R&D Projects then planned by OpNext. Both
Project Managers will cooperate fully in the preparation of such R&D Plan and shall not
unreasonably withhold, unreasonably delay or unreasonably condition approval of such R&D Plan.

     2. The R&D Plan shall be updated and amended by the Hitachi Project Manager at least quarterly
subject to the OpNext Project Manager’s written approval, which will not be unreasonably withheld,
unreasonably delayed or unreasonably conditioned.

     3. The Project Managers (together with such other personnel as they deem appropriate) shall
meet on a quarterly basis to prepare an updated and amended R&D Plan covering the next three (3)
months. Each will cooperate fully in such preparation and shall not unreasonably withhold,
unreasonably delay or unreasonably condition approval of such R&D Plan. In addition, Project
Managers shall report the updated-status of each R&D Project in accordance with the milestones
agreed upon at the beginning of such R&D Project.

     4. Each R&D Plan shall cover all matters reasonably requested by the Project Managers,
including the following:

	 	4.1	 	A timetable for the R&D Support to be provided for each R&D Project,
including minor and major milestones.
	 
	 	4.2	 	A list of deliverables and specifications for each R&D Project.
	 
	 	4.3	 	A budget and payment Schedule in Japanese Yen for each R&D Project.
	 
	 	4.4	 	Assignment of Hitachi personnel and other resources to each R&D Project.
	 
	 	4.5	 	Test procedures for evaluation of deliverables.
	 
	 	4.6	 	Acceptance criteria for deliverables and for final acceptance of work product
for each R&D Project, including suitability for efficient and cost-effective
manufacturing.
	 
	 	4.7	 	Reporting procedures for notifying OpNext of any problems or delays
encountered by Hitachi that might affect the budget or the timetable for each R&D
Project.

B-1

 

	 	4.8	 	Ownership of Intellectual Property developed during an R&D Project or
incorporated into the deliverables from an R&D Project.

OpNext’s Obligations

     1. OpNext shall use Commercially Reasonable Efforts to ensure that its Project Manager
complies with all of the requirements of this Exhibit B.

     2. At least thirty (30) days prior to the date(s) by which Hitachi is required to prepare or
amend the R&D Plan, OpNext will submit to Hitachi work orders for each new R&D Project it desires
to have included in such R&D Plan, specifying in commercially reasonable detail the specifications
and other requirements for such R&D Project.

     3. OpNext shall make all payments required for R&D Projects in Japanese Yen.

Hitachi’s Obligations

     1. Hitachi shall provide R&D Support in accordance with this Exhibit B and the R&D
Agreement to which it is attached.

     2. Hitachi shall at all times during the term of the R&D Agreement maintain the personnel,
facilities and resources necessary to carry out the R&D Projects reasonably requested by OpNext.

     3. Prior to commencing any R&D Project, Hitachi shall inform OpNext in writing if Hitachi
anticipates that any Hitachi R&D IP or any Intellectual Property of any other person may, will or
should be incorporated into any of the deliverables for such R&D Project, including any license
terms applicable to such Hitachi R&D IP or other Intellectual Property. Similarly, Hitachi shall
so inform OpNext at any time during an R&D Project that Hitachi determines that any Hitachi R&D IP
or any such Intellectual Property may, will or should be incorporated into any such deliverable.
The parties shall negotiate in good faith and on reasonable terms to agree on whether or not such
Hitachi R&D IP or other Intellectual Property will be incorporated into any of the deliverables and
on the applicable license terms.

     4. Hitachi shall make available all the necessary personnel, facilities and resources to
comply with the project timetable for each R&D Project. Hitachi shall use Commercially Reasonable
Efforts to complete each R&D Project in accordance with the project timetable and shall take steps
to minimize any delays, including providing additional resources if necessary to ensure timeliness;
provided, however, if the Hitachi does not comply with the project timetable,
OpNext may terminate the R&D Project. If Hitachi has taken Commercially Reasonable Efforts to
complete such R&D Project and has taken Commercially Reasonable Efforts to minimize any delays, and
for reasons beyond Hitachi’s (not in its capacity as a shareholder of OpNext) reasonable control
such R&D Project has been delayed, OpNext shall pay all reasonable expenses incurred by Hitachi up
until the time of the termination of such R&D Project. Hitachi shall be responsible for compliance
with all applicable laws relating to such personnel, facilities and resources and for any claims or
liabilities relating so thereto, including personal injury, property damage and/or product
liability.

B-2

 

     5. Hitachi and OpNext shall maintain, control and administer the inventions and/or other
Intellectual Property discovered or developed during each R&D Project under this R&D Agreement
pursuant to the intellectual property procedures, which were proposed by Hitachi and approved by
OpNext Japan on September 19, 2001 in accordance with the OpNext Japan Agreement, and are attached
hereto as Schedule 1 to this Exhibit B.

     6. Prior to commencing and during each R&D Project, Hitachi shall notify OpNext in writing to
the extent Hitachi believes that any Hitachi R&D IP or Intellectual Property of any other person
could be utilized in connection with such R&D Project and which might or would reduce the cost or
timetable for such R&D Project. The parties shall negotiate in good faith and on reasonable terms
to agree on whether or not to include such Hitachi R&D IP or other Intellectual Property in the R&D
Project and on the applicable license terms.

     7. Hitachi shall provide to OpNext reasonable training, documentation and manuals in
connection with each R&D Project, except materials subject to the restriction under third party
license agreements.

     8. Hitachi represents, warrants and covenants that the R&D Support provided by Hitachi and the
deliverables and other work product from each R&D Project and the use, manufacturing, sale,
license, lease or other distribution of thereof by OpNext will comply with all applicable laws and
regulations.

     9. Hitachi shall obtain assignments from all employees or other personnel working on any of
the R&D Projects that are sufficient under all applicable laws to grant to Hitachi ownership of all
Intellectual Property developed during each R&D Project that Hitachi has agreed to assign or
license to OpNext.

     10. During the term of the R&D Agreement Hitachi will provide reasonable post-acceptance
support to OpNext with respect to the deliverables and products resulting from each R&D Project.

General

     All correspondence and other communications between the parties in connection with R&D
Projects shall be primarily conducted in the Japanese language, provided both parties shall
cooperate with each other in facilitating any translations of these documents into the English
language.

B-3

 

EXHIBIT C

ARBITRATION PROCEDURES

	a.	 	Appointment of Arbitrators. The arbitration shall be heard and determined by a panel of three (3) persons. Each party
shall have the right to designate one (1) member of the panel. The party requesting arbitration
shall communicate its request in writing, identifying the nature of the dispute and the name of
its arbitrator, to the other party (“Arbitration Request”). The other party shall then
name, in writing, its arbitrator within fifteen (15) Business Days after receipt of the
Arbitration Request. Failure or refusal of the other party to name its arbitrator within the
fifteen (15) day time period shall empower the only appointed arbitrator to name the second
arbitrator. Within twenty-five (25) Business Days after the Arbitration Request, the two (2)
arbitrators shall mutually select a third impartial and neutral arbitrator to the panel. If the
two (2) arbitrators are unable to agree upon an arbitrator within forty-five (45) Business Days
after the Arbitration Request then within sixty-five (65) Business Days after the Arbitration
Request, the ICC shall appoint a third arbitrator.
	 
	b.	 	Governing Law and ICC. All disputes submitted to arbitration under this R&D Agreement shall be governed by the laws
specified in the agreement that is the subject of the dispute. The arbitration rules of the
International Chamber of Commerce (“ICC”) shall apply to any arbitration under this R&D
Agreement, except to the extent the provisions of this Exhibit C vary therefrom. ICC
shall administer the arbitration. Decisions of the panel shall be made by majority vote. The
panel may not award punitive damages, injunctions, specific performance or temporary restraining
orders.
	 
	c.	 	Expedited Schedule. The arbitration shall be conducted on an expedited schedule. Unless otherwise agreed by the
parties, the parties shall make their initial submissions to the panel within seventy-five (75)
Business Days after the Arbitration Request. Within one hundred twenty (120) Business Days
after the Arbitration Request, each party shall supply to the other party all documents that
such party intends to introduce or upon which such party intends to rely in connection with such
proceeding, as well as a list of any and all witnesses whose testimony such party intends to
introduce in connection with such proceeding (with a brief summary of their area of testimony).
Additional documents or witnesses may be introduced only if a majority of the arbitrators
determine that good cause has been shown. Each party shall also have the right to submit
written briefs to the arbitrators in accordance with a timetable to be established by the
arbitrators. Unless agreed by the parties otherwise, the hearing shall commence within one
hundred fifty (150) Business Days after the Arbitration Request and shall be completed within
two hundred twenty five (225) Business Days after the Arbitration Request.
	 
	d.	 	Discovery. The parties shall be entitled to discovery of all documents and information reasonably
necessary for a full understanding of any dispute raised in the arbitration relating to this R&D
Agreement. The parties may use all methods of discovery available under the Japanese Code of
Civil Procedure and/or the United States Federal Rules of Civil Procedure, including
depositions, requests for admission, and requests for production of documents. The time periods
applied to these discovery methods shall be set by the panel so as to permit compliance with the
scheduling provisions of this Exhibit C.

C-1

 

	e.	 	Communication with Arbitrators. Each party shall communicate with the arbitrators only in the presence of the other party or
by writing delivered to the ICC for transmittal to the arbitrators and the other party.
	 
	f.	 	Prompt Award. Unless otherwise agreed by the parties, the award shall be made promptly by the panel (in any
event, no later than thirty (30) Business Days from the closing of the hearing). Unless
otherwise agreed by the parties, the decision and award by the panel shall be reasoned, explain
the basis of the decision and be in writing. Any failure to render the award within the
foregoing time period shall not affect the validity of such award.
	 
	g.	 	Binding Decisions. The decision or award rendered or made in connection with the arbitration shall be final and
binding upon the parties thereto. The prevailing party may present the decision or award to any
court of competent jurisdiction for confirmation, and such court shall enter forthwith an order
confirming such decision or award. The arbitration award shall allocate the expenses of the
arbitrator(s) and of the arbitration, between the parties in a manner corresponding to the
extent to which one (1) party prevails over the other.
	 
	h.	 	Location. Based upon the factors set forth below, the arbitrators shall select one or more of the
following cities for the location of the arbitration proceedings: Tokyo, Japan, London, United
Kingdom or New York, U.S.A. The arbitrators shall take into account: (i) the relationship
between the acts and circumstances surrounding the dispute and the arbitration location; (ii)
the availability and location of witnesses; and (iii) the accessibility and location of
evidence.
	 
	i.	 	Confidentiality. All arbitration proceedings undertaken pursuant to this Exhibit C and any awards or
decisions resulting therefrom shall be deemed to be confidential between the parties thereto.
To the extent either party maintains in good faith that any documents submitted or testimony
introduced in connection with such arbitration contains confidential information or trade
secrets, the parties shall negotiate in good faith in an effort to reach agreement regarding
terms and conditions for keeping such materials and testimony confidential. If the parties are
unable to agree upon such terms, the arbitrators shall have the right to impose appropriate
restrictions to maintain the confidentiality of any confidential information or trade secrets in
connection with the arbitration.

C-2

 

EXHIBIT D

LIST OF PERMITTED ENTITIES

	 	 	 
	R&D Project	 	Licensee(s)
	 
	 	 
	Optical Switch Project — SOW#1

	 	Hitachi Metals, Inc.

D-1

 

EXHIBIT E

FORM OF STATEMENT OF WORK

     THIS STATEMENT OF WORK #___(this “SOW”) is effective as of ___(“SOW
Effective Date”) by and between HITACHI, LTD., a corporation existing under the laws of Japan
(“Hitachi”) and OPNEXT, INC., a Delaware corporation and a Subsidiary of Hitachi
(“OpNext”) (collectively, the “parties”; each individually, a “party”).

     This SOW is entered into pursuant to, and is hereby incorporated into and made part of, that
certain R&D Agreement between Hitachi and OpNext dated as of July ___, 2002 (together with its
Exhibits and all other Statements of Work) (the “Agreement”).

1. Definitions. The following terms, when used in this SOW with initial capital letters, shall have the
respective meanings set forth in this Section 1. Terms used in this SOW with initial capital
letters but not defined herein shall have the meanings set forth in the Base Agreement (as defined
below). Except as otherwise required by context, the scope of general terms that are defined in
the Base Agreement shall be applied to this SOW (for example, use of the term “R&D Support”
in this SOW shall refer to the R&D Support to be provided by Hitachi to OpNext pursuant to this
SOW).

	 	(a)	 	“Base Agreement” shall mean the Agreement, excluding its Exhibits and any
Statements of Work.
	 
	 	(b)	 	[Add other definitions as necessary.]

2. Scope of Work.

[Insert description of R&D Project and Hitachi’s R&D Support therefor, including a list of
deliverables and specifications. If possible, also include test procedures for evaluation
of deliverables.]

3. Budget.

[Insert description of cost of R&D Project/Support.]

4. Timetable.

[Insert an estimated timetable for the R&D Project.]

5. Intellectual Property.

	 	(a)	 	Licensed Hitachi R&D IP.

[Insert license of Hitachi IP, if necessary.]

E-1

 

	 	(b)	 	Ownership.

[Insert ownership of intellectual property developed during the R&D Project.]

	 	(c)	 	OpNext R&D IP.

[Insert license of OpNext R&D re, if necessary]

6. Other Terms and Conditions.

[Insert any other special terms and conditions.]

* * * * *

     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, INC.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	HITACHI, LTD.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 

E-2

 

FIRST AMENDMENT TO OPNEXT, INC. R&D AGREEMENT

          THIS FIRST AMENDMENT TO OPNEXT, INC. R&D 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, Inc., a Delaware corporation
(“OpNext”). All capitalized terms used herein but not defined herein shall have the
meanings ascribed to such terms in the R&D Agreement (as defined below).

RECITALS

          WHEREAS, Hitachi and OpNext have entered into that certain R&D Agreement dated as of July 31,
2002 (the “R&D Agreement”); and

          WHEREAS, Hitachi and OpNext desire to enter into this Amendment to amend the R&D 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. R&D Projects requested by OpNext
prior to the Amendment Date shall be governed by the R&D Agreement. R&D Projects requested after
the Amendment Date shall be governed by the R&D Agreement as amended by this Amendment. This
Amendment and any amendments made to the provisions of the R&D Agreement shall have no retroactive
effect.

Section 2. Amendment.

          (a) Section 5(a) of the R&D Agreement is hereby amended by inserting “(i)” after the section
heading “OpNext R&D IP License.” and before the first sentence of such section and adding the
following clause (ii):

               (ii) Status of Wholly-Owned Subsidiaries.

                    (1) License to OpNext R&D 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 in accordance with
Section 13 of this R&D Agreement and the license under OpNext R&D 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 R&D Agreement; provided,
however, for any OpNext R&D IP that is developed after a Wholly-Owned
Subsidiary ceases to remain a Wholly-Owned Subsidiary, the

1

 

parties shall negotiate
in good faith and on commercially reasonable terms a new license governing such
OpNext R&D IP.

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

          (b) Section 5(b) of the R&D Agreement is hereby amended by inserting “(i)” after the section
heading “Hitachi R&D IP License.” and before the first sentence of such section and adding the
following clause (ii):

               (ii) Status of Wholly-Owned Subsidiaries.

                    (1) License to Licensed Hitachi R&D IP. If at any time a Wholly-Owned
Subsidiary of OpNext ceases to remain a Wholly-Owned Subsidiary of OpNext, OpNext
shall provide Hitachi with written notice of such change in accordance with Section
13 of the R&D Agreement and the license under Licensed Hitachi R&D IP existing as
of the date such Wholly-Owned Subsidiary ceases to remain a Wholly-Owed Subsidiary,
shall continue, pursuant to the terms and conditions of this R&D Agreement;
provided, however, for any Hitachi R&D IP that is developed 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 Hitachi R&D IP.

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

2

 

          (c) Section 6 of the R&D Agreement is hereby amended by deleting clause (c) it in its entirety
and replacing it with the following clause (c):

               (c) Infringement of Licensed Hitachi R&D IP. To the extent a
competitor of the Business is infringing the Licensed Hitachi R&D IP in OpNext’s
reasonable business judgment and such infringement is material to the Business,
Hitachi, in its sole discretion, will protect OpNext’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 or
(ii) by taking some other appropriate action that will not have a Material Adverse
Effect on the ongoing business of OpNext; provided that with respect to both (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 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 any such matter by granting a
sublicense of all or portion of the Licensed Hitachi R&D IP.

          (d) Section 6 of the R&D Agreement is hereby amended by adding the following clause (d) after
clause (c):

               (d) Guaranty.

                    (i) Hitachi.

                         (1) 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 R&D Agreement and Hitachi shall be liable for any
breach of such terms and conditions.

                         (2) 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 R&D Agreement applicable to such entities and Hitachi
shall be liable for any breach of such terms and conditions.

                    (ii) OpNext.

                         (1) OpNext 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

3

 

this R&D Agreement and OpNext shall be liable for any breach
of such terms and conditions.

                         (2) OpNext 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 R&D Agreement applicable to such entities and OpNext
shall be liable for any breach of such terms and conditions.

          (e) This R&D Agreement is hereby amended by adding the following clause 33:

                    Section 33. Hitachi Communication Technologies. For purposes of this
R&D 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 R&D 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 New York
without giving effect to any choice-of-law or conflict-of-law provision or rule (whether of New
York or any other jurisdiction) that would cause the application of the laws of any jurisdiction
other than 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, notwithstanding any meaning of any word when translated into
its Japanese equivalent.

Section 5. Dispute Resolution.

          All disputes between the parties relating to this Amendment shall be resolved by arbitration.
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 R&D 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, Opto-Device 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

4

 

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 R&D Agreement for which the parties may seek
preliminary injunctive relief pending resolution of the issue hereunder). In the event that either
party submits the dispute to arbitration, both parties shall cooperate in such binding arbitration
in accordance with Exhibit C to the R&D 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 OPI R&D AMENDMENT

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

	 	 	 	 	 
	 	OPNEXT, INC.

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

 	 
	 	By:  	/s/ Michiharu Nakamura
 	 
	 	 	Michiharu Nakamura, Ph.D 	 
	 	 	Corporate Officer and President,
Research and Development Group 	 
	 

 

 

SECOND AMENDMENT TO OPNEXT, INC. R&D AGREEMENT

     THIS SECOND AMENDMENT TO OPNEXT, INC. R&D 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, Inc., a Delaware corporation
(“Opnext”). All capitalized terms used herein but not defined herein shall have the
meaning ascribed to such terms in the R&D Agreement (as defined below).

RECITALS

     WHEREAS, Hitachi and Opnext have entered into that certain Research and Development Agreement
dated as of October 1, 2001 (the “Original R&D 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 R&D Agreement, the “R&D Agreement”); and

     WHEREAS, Hitachi and Opnext desire to enter into this Amendment to further amend the R&D
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 R&D Agreement hereunder shall have no retroactive effect.

Section 2. Amendment.

          (1) The last sentence of Section 4(a) of the R&D Agreement is hereby amended by deleting it in
its entirety and replacing it with the following sentence:

          Opnext shall have the right to apply, in its own name and at its own expense,
for Intellectual Property protection in Opnext R&D IP and, if requested, Hitachi
shall cooperate with Opnext in a reasonable manner in obtaining such protection,
including, obtaining signatures of Hitachi employees, contractors and/or officials
on official papers.

          (2) The last sentence of Section 4(b) of the R&D Agreement is hereby amended by deleting it in
its entirety and replacing it with the following sentence:

          Hitachi shall have the right to apply, in its own name and at its own expense,
for Intellectual Property protection in Hitachi R&D IP and, if requested, Opnext
shall cooperate with Hitachi in any reasonable manner in

 

 

obtaining such protection, including, obtaining signatures of Opnext employees,
contractors and/or officials on official papers.

          (3) Section 4(c)(ii)(1) of the R&D Agreement is hereby amended by deleting it in its entirety
and replacing it with the following Section 4(c)(ii)(1):

          (1) If the R&D Project is jointly funded by the parties and either: (A) Opnext
contributes fifty percent (50%) or more of the New Development Costs to the R&D
Project; or (B) Opnext contributes less than fifty percent (50%) of the New
Development Costs to the R&D Project but (i) one or more employees or contractors
(other than employees of Hitachi or its Subsidiaries) of Opnext are “inventors”
under the applicable patent laws of the applicable jurisdiction or (ii) the parties
determine through good faith negotiations that Opnext contributed to the R&D Project
in some other fashion, and in both (A) and (B) above the resulting Intellectual
Property can clearly be identified with reasonable certainty as that resulting from
such R&D Project, then such Intellectual Property shall be deemed Jointly Developed
Intellectual Property and shall be owned jointly by the parties and either party may
practice such Jointly Developed Intellectual Property without an accounting or
compensation to, or the consent of, the other party. Except as set forth in Section
4(c)(iii) below, if either party desires to license any of its rights to the Jointly
Developed Intellectual Property herein to a third party, it shall obtain the prior
written consent of the other party hereto. Each party shall have the right to
apply, in both parties’ names, for Intellectual Property protection in the Jointly
Developed Intellectual Property. The parties shall agree on the proper way and
strategy for proceeding with all protection of the Jointly Developed Intellectual
Property in accordance with the R&D Procedures. All expenses incurred in obtaining
and maintaining Intellectual Property protection in the Jointly Developed
Intellectual Property shall be equally shared by the parties. In the event that one
(1) of the parties elects not to seek or maintain patent or other intellectual or
industrial property protection for any Jointly Developed Intellectual Property in
any particular country or not to share equally in the expenses thereof with the
other party, the other party shall have the right to seek or maintain such
protection at its sole expense in such country and shall have full control over the
prosecution and maintenance thereof even though title to any patent or other
intellectual or industrial property protection issuing therefrom shall be jointly
owned by the parties.

          (4) Section 5(d) of the R&D Agreement is hereby amended by deleting it in its entirety and
replacing it with the following Section 5(d):

          (d) Termination Conditions. Such a license of Opnext R&D IP to Hitachi
and of Licensed Hitachi R&D IP to Opnext shall not be terminated or its exploitation
enjoined, until and unless: (i) the licensee has committed a material breach of its
obligations under this R&D Agreement, the licensor has given written notice of such
breach to the licensee and such breach remains uncured after sixty (60) days of
receiving notice of such breach (the “Cure 

2

 

Period”), or, in the case of a breach which cannot be cured within such
Cure Period, the licensee 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) the breaching party has committed an incurable material breach.
In the event the breach is a curable breach that cannot be cured within the Cure
Period but the licensee 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 the 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 C 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 C hereto to determine the appropriate remedy, and (ii)
the breaching party shall provide an on-going plan to address the prevention of such
a breach occurring again reasonably acceptable to non-breaching party 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 C.

          (5) Section 5(e) of the R&D Agreement is hereby amended by deleting it in its entirety and
replacing it with the following Section 5(e):

     (e) License Term and Review of Obligations.

          (i) License Term. The license to the Opnext R&D IP to Hitachi and
Licensed Hitachi Future R&D IP (as defined below) to Opnext 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 R&D IP and Licensed
Hitachi Future R&D IP, shall be perpetual. For purposes of this Section, the term
“Licensed Hitachi Future R&D IP” means Licensed Hitachi R&D IP resulting
from a R&D Project. Notwithstanding the foregoing, (A) if one (1) of the conditions
set forth in Section 5(d) is met, (x) Hitachi may terminate the licenses to Licensed
Hitachi R&D IP that is developed or filed on or after the effective date of
termination and (y) the licenses granted Opnext to Licensed Hitachi Future R&D IP
developed or filed prior to the effective date of termination shall continue
pursuant to the terms and conditions set forth herein and (B) if one (1) of the
conditions set forth in Section 5(d) is met, (x) Opnext may terminate the licenses
to Opnext R&D IP that is developed or filed on or after the effective date of
termination and (y) the licenses granted Hitachi to Opnext R&D IP developed or filed
prior to the effective date of termination shall continue pursuant to the terms and
conditions set forth herein.

          (ii) Review of Obligations. The obligations set forth in this Section
5 with respect to Licensed Hitachi Other R&D IP (as defined below) shall expire on
July 31, 2011; provided, however, that the licenses under Licensed

3

 

Hitachi Other R&D IP existing as of July 31, 2011 shall continue, under
reasonable terms and conditions to be agreed between the parties, until the
expiration of all of such Licensed Hitachi Other R&D IP. Notwithstanding the
foregoing, if one (1) of the conditions set forth in Section 5(d) is met, Hitachi
may elect to be completely relieved of its obligations set forth in this Section 5
with respect to Licensed Hitachi Other R&D IP. If Hitachi elects to be relieved of
its obligations under this Section 5(d), the parties shall renegotiate in good faith
and on commercially reasonable terms a new license governing the Licensed Hitachi
Other R&D IP. For purposes of this Section, the term “Licensed Hitachi Other
R&D IP” means any Licensed Hitachi R&D IP other than Licensed Hitachi Future R&D
IP. For the avoidance of doubt, the expiration or termination of Opnext’s rights
under this R&D Agreement with respect to Licensed Hitachi Other R&D IP will in no
way affect Opnext’s rights with respect to such Licensed Hitachi Other R&D IP, if
any, under any other agreement to which Opnext is a party.

          (6) Section 10 of the R&D Agreement is hereby amended by deleting it in its entirety and
replacing it with the following:

          This R&D Agreement commences on the date hereof and will automatically
terminate and be of no further force or effect upon the fifth (5th)
anniversary of an Initial Public Offering (as defined in the Stockholders’ Agreement
between Opnext and Hitachi, Clarity Partners, L.P., Clarity Opnext Holdings I, LLC
and Clarity Opnext Holdings II, LLC dated July 31, 2001 (together with any
amendments thereto, the “Stockholders’ Agreement”)); provided, however, that
the provisions of this R&D Agreement identified in Section 28 shall survive
expiration or termination of this R&D Agreement.

          (7) Section 11(a) of the R&D Agreement is hereby amended by deleting it in its entirety and
replacing it with the following Section 11(a):

          (a) Confidentiality Obligations. Confidential Information will not be
disclosed or made available by the receiving party, directly or indirectly, to any
third party, except as shall be agreed to in writing by the disclosing party. Each
of the parties agrees to take all reasonable steps to preserve the confidentiality
of the other’s Confidential Information in accordance with their respective policies
for the protection of their own non-public information (which policies shall provide
at least reasonable protection) and agrees that it will be made available only to
those employees and contractors as shall have a need to see and use for the purpose
of fulfilling that party’s obligations under this R&D Agreement, and any such
employee and contractor shall be informed of the confidential nature of the
Confidential Information and shall be required to observe the confidentiality
obligations in respect thereof. The receiving party shall ensure that all
Confidential Information received by it is kept separate (together with all
information generated by the receiving party therefrom) from all documents and other
records of the receiving party, and that it shall not use,

4

 

reproduce, transfer or store any of the Confidential Information in an
extremely accessible place.

          (8) Section 15 of the R&D Agreement is hereby amended by adding the following clause at the
end:

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

          (9) Section 28 of the R&D Agreement is hereby amended by deleting it in its entirety and
replacing it with the following:

Section 28. Survival. To the extent the terms of this R&D Agreement provide
for rights, interest, duties, claims, undertakings and obligations subsequent to the
termination or expiration of this R&D Agreement, such terms of this R&D Agreement
shall survive such termination or expiration, including but not limited to the terms
of Sections 1, 4, 5 (with respect to licenses to Intellectual Property (other than
Licensed Hitachi Other R&D IP) granted hereunder prior to the effective date of such
termination), 6, 8, 9 (with respect to accrued but unpaid expenses), 11, 12, 18, 19,
20, 21, 22, 23, 26-34.

          (10) Section 31 of the R&D Agreement is hereby amended by deleting it in its entirety and
replacing it with the following:

Section 31. 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 R&D Agreement under Section 365 of the Bankruptcy Code, any and all rights
licensed pursuant to this R&D 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 R&D 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 R&D
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 31.

5

 

(11) A new Section 34 is hereby added to the R&D Agreement which provides as follows:

Section 34. 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 R&D 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 R&D 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 R&D Agreement (including any unauthorized use or
disclosure of that party’s Intellectual Property or Confidential Information).

Section 3. No Other Amendments.

          Except as expressly set forth herein, all other terms and conditions of the R&D 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
R&D 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 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 34 of the R&D
Agreement for which the parties may seek injunctive relief). In the event

6

 

that either party submits the dispute to arbitration, both parties shall cooperate in such
binding arbitration in accordance with Exhibit C to the R&D 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.

* * * * *

7

 

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

	 	 	 	 	 
	OPNEXT, INC.

	 	HITACHI, LTD.	 	 
	 
	 	 	 	 
	    /s/ Harry L. Bosco
 

Name: Harry L. Bosco

	 	    /s/ Naoya Takahashi
 

Name: Naoya Takahashi
	 	 
	Title: President and Chief Executive Officer

	 	Title: Vice President and Executive Officer	 	 

SIGNATURE PAGE TO SECOND AMENDMENT TO OPNEXT, INC. R&D AGREEMENT

8EX-10.14

 

Exhibit 10.14

OUTSOURCING AGREEMENT

     THIS OUTSOURCING AGREEMENT (this “Agreement”) is made and entered into as of the 31st
day of July, 2001, 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 (the
“Company”). This Agreement is deemed to be effective as of the 1st day of February, 2001
(the “Effective Date”). Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Stock Contribution Agreement (as defined below).

     WHEREAS, OpNext, Inc., a Delaware corporation (“OpNext USA”), 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 the Company and to cause the Company to use such funds to purchase
certain assets from Hitachi pursuant to a Business Transfer Agreement, dated as of December 6,
2000, between the Company and Hitachi (as amended, supplemented or otherwise modified from time to
time, the “Business Transfer Agreement”) and a Stock Contribution Agreement, dated as of
the date hereof, between OpNext USA and Hitachi (as amended, supplemented or otherwise modified
from time to time, the “Stock Contribution Agreement”) and (ii) Hitachi agreed to
contribute its common stock of the Company to OpNext USA in exchange for common stock of OpNext
USA; 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 OpNext
USA; and (ii) the Company will be a wholly-owned subsidiary of OpNext USA; and

     WHEREAS, OpNext USA, the Company and OpNext USA’s other direct and indirect subsidiaries
(collectively, “the OpNext Group”) will continue to operate the Business; and

     WHEREAS, pursuant to Section 3(a)(iv) of the Stock Purchase Agreement, Hitachi and OpNext USA
have agreed to enter into this Agreement pursuant to which Hitachi has agreed to provide to the
Company, from and after the Effective Date, certain services on a transitional basis on the terms
and conditions set forth herein.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants, conditions and
provisions contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of Hitachi and the Company agrees as follows:

 

 

     Section 1. Transitional Services to be Provided by Hitachi.

          (a) From the Effective Date through the Termination Date (as defined in Section 9(a) below),
Hitachi shall provide to the Company, on the terms set forth herein, (i) the services listed on
Schedule A and (ii) any other services requested by the Company in writing that were
provided by Hitachi, either directly or indirectly through Affiliates or unaffiliated third
parties, to the Business prior to the Effective Date (collectively, the “Transitional
Services”). Hitachi shall provide to the Company the Transitional Services listed on
Schedule A commencing on the Effective Date, but shall provide any other Transitional
Services upon the written request of the Company pursuant to Section 7(a) of this Agreement.
Notwithstanding anything to the contrary herein, the parties acknowledge and agree that the
Transitional Services shall be provided to the Company by Hitachi’s Telecommunication Systems
Division (“TSD”), either directly or indirectly through a subcontractor according to
Section 5 hereof.

          (b) Hitachi shall provide the Transitional Services to the Company in a manner, including
quality and timeliness, consistent with the better of: (i) the manner in which Hitachi (either
directly or indirectly through Affiliates or unaffiliated third parties) provided those services to
the Business prior to the Effective Date, or (ii) if after the Effective Date the manner in which
TSD provides any Transitional Service to any Hitachi division, business unit or Subsidiary improves
over the manner specified in clause (i), then that improved manner. Hitachi shall maintain
sufficient resources to perform its obligations hereunder.

          (c) The Company may terminate the provision of any Transitional Service (in whole or in part)
in accordance with Section 7(a) of this Agreement; provided, however, at any time prior to the
Termination Date, the Company may request resumption of such terminated Transitional Service in
accordance with Section 7(a) of this Agreement. Notwithstanding anything to the contrary contained
herein, Hitachi shall not be obligated to resume providing any Transitional Service previously
terminated by the Company if Hitachi, in its reasonable discretion, determines that it is not
practicable to do so.

          (d) Hitachi shall not make more than inconsequential changes to the nature or volume of any
Transitional Service to be provided to the Company without the Company’s prior written consent,
which consent shall not be unreasonably withheld; provided, however, Hitachi may change the nature
or volume of any Transitional Service to the extent such change is (i) subject to Section 1(e)
below, required by any applicable law, regulation or rule; (ii) subject to Section 1(b) above,
consistent with the manner in which the same service is provided by TSD to Hitachi’s divisions,
business units or Subsidiaries; (iii) in response to the Company’s prior written request pursuant
to Section 7(a) or Section 7(d) hereof; or (iv) as a result of a change in the Company’s actual
usage of Transitional Services through no fault of Hitachi.

          (e) Notwithstanding the foregoing, the parties acknowledge and agree that Hitachi shall not be
obligated to provide any Transitional Service required herein to the extent that the provision of
such terminated Transitional Service would cause Hitachi to be in violation (a “Violation”)
of any applicable law or regulation. In the event that Hitachi reasonably concludes that the
provision of any Transitional Service would result in a Violation, Hitachi shall (i) promptly
notify the Company of such conclusion; (ii) at the
Company’s election either (A) to the extent commercially reasonable and practicable, continue
to provide such Transitional Service after such minimum modifications thereto as shall be necessary
to cure such Violation (with a proportionate change in the fee for such

- 2 -

 

Transitional Service), or
(B) use its Commercially Reasonable Efforts (as defined in the Stock Contribution Agreement) to
assist the Company in identifying an alternative provider for such Transitional Service; and (iii)
upon the Company’s identification of an alternative provider, if any, for such Transitional
Service, use its Commercially Reasonable Efforts to facilitate the transition of such Service to
such alternative provider. To the extent a Violation is a result of a change in the applicable law
or regulation causing such Violation since the date of this Agreement, Hitachi shall be promptly
reimbursed by the Company for any out-of-pocket expenses incurred by Hitachi in connection with
such transition (except to the extent such change in the applicable law or regulation occurs
between the Effective Date and the first anniversary of the Effective Date, in which case Hitachi
shall only be reimbursed for one-half of any such out-of-pocket expenses); otherwise, Hitachi shall
bear the costs of any out-of-pocket expenses incurred by Hitachi and the Company in connection with
such transition.

     Section 2. Representations and Warranties. Hitachi hereby represents and warrants to
the Company that:

          (a) Except as set forth on Schedule 2(a) hereto, all Transitional Services provided to
the Business during the twelve month period prior to the Effective Date were provided by TSD,
either directly or indirectly through Affiliates or unaffiliated third parties.

          (b) Except as set forth on Schedule 2(b) hereto, the execution and delivery by Hitachi
of, and the consummation by Hitachi of the transactions contemplated by, this Agreement, and
compliance with the terms hereof by Hitachi, do not and shall not, (i) (A) conflict with or result
in a breach of the terms, conditions or provisions of, (B) constitute a default under, (C) give any
third party the right to modify, terminate or accelerate any obligation under, or (D) result in a
violation of, any agreement, instrument, order, judgment or decree to which Hitachi is subject; or
(ii) 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.

          (c) To Hitachi’s Knowledge, there are neither currently pending nor proposed any government
proceedings to enact any new law, statute, rule or regulation or to amend any current law, statute,
rule or regulation in any relevant jurisdiction that could cause the provision of any Transitional
Service by Hitachi to result in a Violation as set forth in Section 1(e).

          (d) To Hitachi’s Knowledge: (i) the Final Volume Forecasts (as defined in Section 7(d) below)
set forth in Schedule B represent the volume of each Transitional Service listed on
Schedule A that will be required by the Company to operate the Business as conducted as of
the Effective Date and as planned to be conducted in the three-year Business Plan of OpNext USA
approved by the Board and dated as of February 28, 2001 (the “Business Plan”) during (A) the period
commencing as of the Effective Date and ending March 31, 2001, and (B) the period commencing April
1, 2001 and ending September 30,
2001; and (ii) the Transitional Services listed on Schedule A, together with any other
services that the Company is receiving pursuant to other agreements or arrangements with

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Hitachi,
its Affiliates, any third party or any employee of the Company, constitute all of the services that
will be required by the Company to operate the Business as conducted as of the Effective Date and
as planned to be conducted in the Business Plan during each such period in clause (A) and clause
(B) above.

     Section 3. Representatives. Hitachi and the Chief Executive Officer of OpNext USA
shall each designate, from time to time, a representative to act as Hitachi’s and the Company’s
respective primary contact persons to coordinate the provision of all of the Transitional Services
(collectively, the “Primary Coordinators”); provided, however, in the event the Company is
no longer a majority owned Subsidiary of OpNext USA, the Company shall designate a representative
to act as its Primary Coordinator. Each Primary Coordinator may designate one or more service
coordinators for each specific Transitional Service (the “Service Coordinators”). Each
party may treat an act of a Primary Coordinator of another party as being authorized by such other
party without inquiring behind such act or ascertaining whether such Primary Coordinator had
authority to so act and each party may treat an act of a Service Coordinator as being authorized by
such other party only to the extent such act is directly related to the Transitional Service for
which such Service Coordinator has been designated; provided, however, that no such
Primary Coordinator or Service Coordinator has authority to amend this Agreement. Hitachi and the
Company shall advise each other promptly (in any event within seven (7) days) in writing of any
change in the Primary Coordinators and any Service Coordinator for a particular Transitional
Service, setting forth the name of the Primary Coordinator or Service Coordinator to be replaced
and the name of the replacement, and certifying that, in the case of a Primary Coordinator, the
replacement Primary Coordinator is authorized to act for such party in all matters relating to this
Agreement, or, in the case of a Service Coordinator, with respect to the Transitional Service for
which such Service Coordinator has been designated. Hitachi and the Company each agree that all
communications relating to the provision of the Transitional Services shall be directed to the
Service Coordinators for such Transitional Service with copies to the Primary Coordinators.
Hitachi’s initial Primary Coordinator shall be Sotaro Hiroshima. The Company’s initial Primary
Coordinator shall be Minoru Maeda.

     Section 4. Contract Rights. From the Effective Date through the Termination 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 the
benefits obtained by Hitachi or its Affiliates, as the case may be, under third party purchasing or
services contracts, such as volume airline arrangements (it being understood that Hitachi shall not
be liable solely on account of any failure to obtain such benefits on behalf of the Company). At
the Company’s request, Hitachi shall use its Commercially Reasonable Efforts to facilitate the
Company securing direct contractual relationships with one or more of such third parties on terms
comparable to those on which Hitachi or its Affiliates receive such product(s) or service(s).

     Section 5. Subcontract Rights.

          (a) Hitachi may provide the Transitional Services either directly or through agreements with
subcontractors who are in the business of rendering such services;
provided, however, if Hitachi provides any Transitional Service through a
subcontractor, Hitachi shall continue to be required to provide such Transitional Service in the
same

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manner set forth in Section 1(b) and otherwise in accordance with this Agreement;
provided, further, (i) any such subcontractor must agree to comply with the terms
and conditions of this Agreement including, without limitation, Section 11, to the same extent as
Hitachi; and (ii) Hitachi shall be liable for the failure of any such subcontractor to comply with
the terms and conditions of this Agreement.

          (b) Schedule 5(b) attached hereto sets forth (i) all subcontractors through which
Hitachi is providing Transitional Services as of the Effective Date, and (ii) the Transitional
Services performed by each such subcontractor. The parties agree that the obligations set forth in
Section 5(a) shall apply to Hitachi’s provision of Transitional Services through subcontractors as
of the Effective Date and after the Effective Date.

          (c) After the date of this Agreement, Hitachi shall notify the Company in writing at least
ninety (90) days prior to engaging any subcontractor (other than those subcontractors set forth on
Schedule 5(b) hereto) to perform Transitional Services under Section 5 of this Agreement
unless a shorter notice period does not, in the Company’s reasonable business judgment, adversely
affect the Company.

     Section 6. Pricing and Payment for Transitional Services.

          (a) As consideration for the provision by Hitachi of the Transitional Services pursuant to
Section 1, for each Transitional Service the Company shall pay to Hitachi fees as set forth on
Schedule A; provided that in no event shall such fees exceed the lowest amount that
TSD charges any Hitachi division, business unit or Subsidiary for a comparable volume of such
service. Notwithstanding the foregoing, in the event of an increase in costs during a Period
beyond Hitachi’s control, the parties shall discuss a corresponding increase in fees and Hitachi
shall be allowed to increase the fees to the extent of Hitachi’s increase in costs beyond its
control; provided that the Company gives express written approval of the increased fees.
To the extent practical, Hitachi will specify all fee amounts in a manner that best reflects the
marginal costs for a particular service and is usage sensitive, for example a fee per unit, or a
fee per month, or a fee per employee. Hitachi shall send an itemized monthly invoice in Japanese
Yen, in a format mutually agreed to by Hitachi and the Company, to the Company for the Transitional
Services provided by Hitachi during the previous monthly period (pro rated for any partial month in
which any Transitional Service is provided hereunder) and for any other charges that may be due by
the Company under this Agreement. Notwithstanding the foregoing, with respect to Transitional
Services provided by Hitachi from the Effective Date until the date of this Agreement, Hitachi
shall send the applicable monthly invoices, which shall not exceed the amounts reflected on
Schedule A hereto, to the Company on August 1, 2001. The Company shall pay to Hitachi all
invoiced amounts by electronic funds transfer in Japanese Yen within thirty (30) days of the date
of such invoice, subject to the Company’s limited right to withhold partial payment in the event of
a good faith dispute pursuant to Section 6(d) below. The parties agree that Hitachi may not cease
providing the Transitional Services for any such partial lack of payment due to such a good faith
dispute. Late payments shall accrue interest from the invoice date at the lesser of (i) one and
one-half (1.5) percent per month and (ii) the highest rate allowed by law.

- 5 -

 

          (b) The Company will pay or reimburse Hitachi for all applicable sales, use or other
consumption taxes on the charges payable by the Company under this Section 6. Hitachi will provide
to the Company, on a timely basis, all statements, receipts and other documentation in connection
therewith required to be delivered to the Company under applicable law or necessary for the Company
to report such taxes on its tax returns (including for purposes of claiming tax deductions or
refunds).

          (c) Hitachi will be solely responsible for all costs relating to its employees, agents and
subcontractors providing the Transitional Services hereunder, including without limitation all
compensation payable to such Persons and all withholding taxes, payroll taxes, unemployment
insurance, workmen’s compensation, and other insurance and fringe benefits with respect to such
Persons.

          (d) If the Company, in good faith, disputes any charges contained in an invoice, it shall
promptly submit to Hitachi written notice of such dispute and may withhold from its payment of the
relevant invoice any such disputed amounts (except for applicable taxes) up to a maximum of the
amount for the Transitional Service(s) to which such dispute relates. Hitachi and the Company
agree to negotiate in good faith to resolve any dispute hereunder pursuant to the procedure set
forth in Section 12 hereof. If, in accordance with the resolution of such dispute, the Company is
held liable for any of the withheld amounts, the Company shall pay to Hitachi such withheld
amounts, plus interest accrued on such withheld amounts at the rate provided in Section 6(a) above.
Regardless of any disputed amount, the Company shall remit to Hitachi the invoiced amount minus
the amount withheld pursuant to the first sentence of this Section 6(d).

     Section 7. Volume and Pricing Forecasts; Meetings.

          (a) Volume Forecasts. At least sixty (60) days before April 1 and October 1 (each a
“Start Date”) of each year, the Company will submit to Hitachi a written preliminary
non-binding forecast (“Volume Forecast”) setting forth the Company’s anticipated
requirements for the Transitional Services for the six (6) month period (each, a “Period”)
commencing on the upcoming Start Date. Each Volume Forecast shall include at least the type and
volume of each Transitional Service required by the Company for the relevant Period.

          (b) Within thirty (30) days after Hitachi receives the Volume Forecast, Hitachi will submit to
the Company an initial fees (“Initial Fees”) list in writing specifying the fees to be
charged for each requested service in accordance with Section 6(a). To the extent practicable the
Initial Fees will reflect usage sensitive prices.

          (c) The parties will then have twenty (20) days in which to hold good faith discussions of any
revisions to the Volume Forecast and the Initial Fees. All changes in Volume Forecast and Initial
Fees will be in writing, with all changes in Initial Fees also subject to Section 6(a).

          (d) Except to the extent the parties otherwise mutually agree, the last written Volume
Forecast or Initial Fees submitted to the other party prior to the expiration of the twenty
(20)-day period set forth in Section 7(c) above will be deemed the final binding

- 6 -

 

Volume Forecast
(the “Final Volume Forecast”) and Initial Fees (the “Final Initial Fees”) for
the upcoming Period. The Final Volume Forecast may only be modified: (1) during the first
sixty (60) days of a Period, (2) by adding or reducing up to ten (10)%, or such greater amount as
Hitachi determines it can reasonably accommodate, to the volume of any service, and (3) any such
modifications will only apply to the second half of that Period. In the event of any modifications
to the Final Volume Forecast pursuant hereto, the Final Initial Fees shall be adjusted accordingly.

          (e) If the Company does not submit its Volume Forecast to Hitachi at least sixty (60) days
before a Start Date, then the Company will be deemed to have submitted and Hitachi to have
received, as of the date sixty (60) days before such Start Date, the same forecast as the Company
submitted for the immediately preceding Period, and the parties shall proceed pursuant to Sections
7(b), (c) and (d) hereof. If Hitachi does not submit its Initial Fees to the Company within thirty
(30) days after Hitachi receives the Volume Forecast, then Hitachi will be deemed to have
submitted, as of the date thirty (30) days after Hitachi’s receipt of the Volume Forecast, the same
fees as it submitted for the immediately preceding Period, and the parties shall proceed pursuant
to Sections 7(c) and (d) hereof; provided, however, to the extent that the fees for
a comparable volume of the same service for such preceding Period exceed the fees that Hitachi is
entitled to receive pursuant to Section 6(a), Hitachi shall promptly reimburse the Company for any
excess amount.

          (f) Schedule A shall be deemed to be amended with the most recent Final Initial Fees.

          (g) Notwithstanding the foregoing, with respect to the period commencing as of the Effective
Date and ending March 31, 2001 and for the Period commencing April 1, 2001, (i) Schedule B
attached hereto sets forth the Final Volume Forecasts for each such period, and (ii) Schedule
A attached hereto sets forth the Final Initial Fees for each such period.

     Section 8. Cooperation; Provision of Information.

          (a) The parties will cooperate with each other in all matters relating to the provision and
receipt of the Transitional Services. Such cooperation shall include, without limitation,
exchanging information, providing electronic access to systems used in connection with the
Transitional Services, performing true-ups and adjustments and using Commercially Reasonable
Efforts to obtain all consents, licenses, sublicenses or approvals necessary to permit each party
to perform its obligations hereunder (collectively, the “Consents”). To the extent Hitachi
is unable to obtain any Consent after using Commercially Reasonable Efforts, Hitachi shall not be
obligated to provide the affected Transitional Service; provided, however, that the
foregoing shall not diminish the Company’s rights or Hitachi’s liability for any breach by Hitachi
of its representations and warranties set forth in Section 2(b).

          (b) Hitachi shall also cooperate with any reasonable requests by the Company for information
and other materials relating to the Transitional Services, including, without limitation, requests
for access to Hitachi’s reporting, billing and logistics
systems to the extent related to the
Business, in order to transition to a new services provider. The costs of providing such
cooperation shall be borne by the Company.

- 7 -

 

          (c) Hitachi shall use Commercially Reasonable Efforts to assist the Company in the Company’s
efforts to formulate, implement and transition to a sales reporting, ordering and billing system
(including without limitation an Electronic Data Interchange System compatible with Hitachi’s
system as of the Effective Date) for use by the Company and its sales representatives.

          (d) Without limiting any rights of OpNext USA or the Company under the Stock Purchase
Agreement, the Stock Contribution Agreement or the other agreements contemplated thereby, at the
request of the Company, Hitachi shall make available to the Company documents and other information
relating to the conduct of the Business prior to the Effective Date, or the condition of the
premises where the Business was conducted by Hitachi prior to the Effective Date, to assist the
Company in resolving certain operational matters relating to the Business, including, without
limitation, present or future regulatory issues and/or other operational issues relating to the
Business.

          (e) The provision of any information and other materials pursuant to this Section 8 shall be
subject to the provisions of Section 11 hereof related to confidentiality.

     Section 9. Term; Effect of Termination.

          (a) The provision of Transitional Services shall commence on the Effective Date and shall
terminate upon the earliest to occur of the following (the “Termination Date”):

               (i) sixty (60) days following the date upon which the Company notifies Hitachi in writing that
the Company no longer requires Hitachi to provide any Transitional Services and, as a consequence
of such notice, there are no remaining Transitional Services that Hitachi is required to provide
pursuant to this Agreement;

               (ii) five (5) years following the Effective Date; and

               (iii) (A) sixty (60) days following written notice to the Company of any material breach of
this Agreement if such breach is not cured within such sixty (60)-day period; provided,
however, that if such breach is capable of cure and the Company commences to effectuate a
cure within the foregoing sixty (60)-day period, the Company shall be permitted an additional
thirty (30) days to cure so long as it diligently continues to seek to effect a cure; or (B) in the
event the breach is a failure to pay fees (a “Failure to Pay”) under this Agreement (it
being understood that a good faith dispute by the Company in accordance with the provisions of
Section 6(d) hereof shall not constitute a Failure to Pay) thirty (30) days following written
notice to the Company of the first Failure to Pay, and ten (10) days following written notice to
the Company of each subsequent Failure to Pay; provided, further, so long as (1)
Hitachi and its Affiliates directly or indirectly hold voting securities of OpNext USA representing
a majority voting interest in OpNext USA or have the right to designate a majority of OpNext USA’s
directors pursuant to the Stockholders’ Agreement of even date herewith, between Clarity, Holdings
I, Holdings II, Hitachi and OpNext USA (as amended, supplemented or otherwise modified from time to
time, the

- 8 -

 

“Stockholders’ Agreement”), and (2) OpNext USA and its Affiliates directly or
indirectly hold a majority voting interest in the Company, Hitachi may not terminate this Agreement
as a result of any breach hereof by the Company, material or otherwise.

          (b) This Agreement may be extended by the parties upon their mutual written consent either in
whole or with respect to one or more of the Transitional Services; provided,
however, that such extension shall only apply to the Transitional Service(s) for which this
Agreement is to be extended.

          (c) Upon termination or expiration of this Agreement for any reason, Hitachi shall deliver to
the Company all records and other information pertaining to any matters for which Hitachi was
providing Transitional Services to the Company hereunder; provided, however,
Hitachi may retain copies of such records and information to the extent necessary for accounting,
tax reporting and other legitimate business purposes, subject to the requirements of Section 11
hereof. The Company agrees that all such records and information provided to the Company by
Hitachi are subject to the requirements of Section 11 hereof.

          (d) This Section 9(d) and Section 8 (Cooperation), Section 9(c) (Provision of Records),
Section 10 (Indemnification), Section 11 (Confidentiality), Section 12 (Dispute Resolution),
Section 13 (Remedies), Section 14 (Audit Rights), and Section 16 (Miscellaneous) shall survive
termination or expiration of this Agreement.

     Section 10. Indemnification.

          (a) Hitachi shall indemnify and hold harmless the Company and the Company’s Affiliates and
each of their respective officers, directors, members, stockholders, partners and employees (as
applicable) from and against any and all losses, liabilities, damages or expenses (including court
costs and reasonable attorneys’ fees) (“Losses”) incurred by such indemnified party (i) to
the extent arising from any actions, suits, claims, proceedings or demands brought by any third
party to the extent related to the provision of the Transitional Services hereunder and resulting
from Hitachi’s or its subcontractors’ gross negligence or willful misconduct, except to the extent
such Losses result from the Company’s gross negligence or willful misconduct, (ii) to the extent
arising from any breach of Hitachi’s representations and warranties set forth in Section 2 of this
Agreement, and (iii) on account of Hitachi providing the Transitional Services through a
subcontractor according to Section 5 of this Agreement.

          (b) The Company shall indemnify and hold harmless Hitachi and its Affiliates and each of their
respective officers, directors, members, stockholders, partners and employees (as applicable) from
and against any and all Losses incurred by such indemnified party to the extent arising from any
actions, suits, claims, proceedings or demands brought by any third-party to the extent related to
the provision of the Transitional Services hereunder and resulting from the Company’s gross
negligence or willful misconduct, except to the extent such Losses result from Hitachi’s or its
subcontractors’ gross negligence or willful misconduct.

- 9 -

 

          (c) The parties hereby incorporate by reference the provisions of Sections 13(e) and 13(g) of
the Stock Contribution Agreement regarding the procedures for indemnification and such procedures
shall control the procedure for asserting any claim for indemnification under this Agreement.

     Section 11. Confidentiality.

          (a) Confidentiality Obligations 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 not disclose such
information to others and 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 11(a) shall not apply with respect to the disclosure of any information:
(i) to OpNext USA or to the Company’s or OpNext USA’s respective employees, auditors, counsel or
other professional advisors or to members of the OpNext Group, if the Company or OpNext USA, 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
11(a) 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 OpNext USA, the Company shall obtain Hitachi’s
prior consent, which 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 11(a) 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 or OpNext
USA (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 or OpNext USA ; and
(vi) to the extent related to the Business or the Assets (as defined in the Stock Contribution
Agreement).

          (b) 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 not disclose such information to others and
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
11(b) 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 11(b) 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 11(b) by Hitachi or has become available to Hitachi on a non-confidential basis; (iii) as
may be required or

- 10 -

 

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.

          (c) Injunctive Relief. The parties acknowledge and agree that money damages would be
inadequate to remedy any breach of the confidentiality obligations in this Section 11 and that the
non-breaching party shall be entitled to obtain equitable and any other available remedies with
respect to any such breach, including injunctive relief.

     Section 12. Dispute Resolution.

          (a) Account Executives. All disputes, including but not limited to those related to
payments required hereunder, shall be referred to the Primary Coordinators. If the Primary
Coordinators are unable to resolve, or one or both Primary Coordinators do not anticipate
resolving, the dispute within ten (10) days after referral of the dispute to them (as indicated in
a notice from one or both Primary Coordinators), either party may submit the dispute to senior
management as provided in Section 12(b) below.

          (b) Senior Management. Either party may, upon notice and within ten (10) days of
receipt of a notice from the Primary Coordinator(s) pursuant to Section 12(a) above, elect to
utilize a non-binding dispute resolution procedure whereby each presents its case at a hearing
before a panel consisting of one (1) senior executive of each of the parties (the “Senior
Executives”), who in the case of the Company shall be the CEO of OpNext USA or any individual
he may designate from time to time in his sole discretion (with the Company’s initial Senior
Executive to be Mr. Harry Bosco, CEO of OpNext USA), and in the case of Hitachi shall be the
President of TSD, initially Mr. Eiji Aoki. If a party elects to use the procedure set forth in
this Section 12(b), the other party shall participate. The hearing shall occur as soon as
reasonably practicable after a party serves notice to use the procedure set forth in this Section
12(b), but not later than twenty (20) days after such notice unless the parties agree otherwise.
Each party may be represented at the hearing by lawyers. In the event the Senior Executives are
unable to resolve any dispute within thirty (30) days following the hearing or if neither party
makes a timely request for a hearing pursuant to this Section 12(b), each party’s only recourse
shall be binding arbitration as provided in Section 12(c) below and the arbitration procedures set
forth in Exhibit A hereto.

          (c) 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, the parties shall submit the matter to arbitration in accordance with
the arbitration procedures set forth in Exhibit A hereto.

- 11 -

 

     Section 13. Remedies.

          (a) No Consequential Damages. The parties agree that neither party shall be liable,
under any circumstances, for any anticipatory or lost profit, special, consequential, punitive,
incidental or indirect damages of any kind (collectively, “Non-direct Damages”) resulting
from its performance or non-performance of its obligations under this Agreement whether or not such
party has been advised of the possibility of such Non-direct Damages.

          (b) Disclaimer. Except as otherwise expressly provided in this Agreement or any other
agreement entered into in connection with the transactions contemplated by the Stock Purchase
Agreement and the Stock Contribution Agreement, each party makes no representations, covenants,
conditions or warranties, written or oral, express or implied, to the other party or to any other
Person regarding the Transitional
Services, or any services, equipment, materials or other items provided or used by the Company
or Hitachi under this Agreement.

          (c) Availability of Injunctive Relief. Because of the special nature of the
Transitional Services and the disruption to the Company that could ensue from TSD’s failure in
breach of this Agreement to provide (either directly or indirectly through a subcontractor
according to Section 5 hereof) any of the Transitional Services to the Company, the parties agree
that the Company would be irreparably harmed by any such failure. For these reasons, Hitachi
agrees that the Company shall be entitled to injunctive relief, including Hitachi’s specific
performance of its obligations under this Agreement, in addition to all other remedies available to
the Company in law or at equity or otherwise, for any such breach. Any claims for injunctive
relief pursuant to this Agreement shall be brought before the courts of Japan, situated in Tokyo,
Japan.

          (d) The Company’s Failure to Perform Responsibilities. In the event the Company or
any of its licensors or contractors fail to perform any of its or their responsibilities in
connection with any Transitional Services, then to the extent that such a failure to perform
directly or indirectly causes Hitachi to fail to provide a Transitional Service: (i) Hitachi shall
be excused from liability therefrom; and (ii) thirty (30) days after providing written notice to
the Company, Hitachi may, in its sole discretion, perform the Company’s responsibility and charge
the Company for all additional costs and expenses incurred as a result of performing the Company’s
responsibility, and if the other resources necessary to perform such responsibilities exceed the
available resources, charge the Company as a reimbursable expense.

          (e) Limitation of Liability. Each party’s liability for actual damages (whether a
claim therefore is based on warranty, contract, tort (including negligence or strict liability),
statute or otherwise) and claims arising in relation to any performance or nonperformance of
Transitional Services under this Agreement shall be limited in the aggregate for all claims to an
amount equal to the payments made by the Company to Hitachi for Transitional Services during the
nine (9) months prior to the occurrence of the first event that is the subject of the first claim
(or if nine (9) months have not yet elapsed since the Effective Date, then nine (9) times the
estimated average monthly payment made by the Company to Hitachi for the Transitional Services).
Both parties acknowledge and agree that any such payment by the other party shall be the final
remedy in the event of an exhaustion of all other remedies hereunder and such remedy shall not be
deemed or alleged by the other party to have failed of its essential purpose.

- 12 -

 

          (f) Limitation. Neither party shall make any claim against the other party for a
breach of this Agreement more than one (1) year after such party knew or should have known of the
breach or other event giving rise to such claim.

          (g) Application. The limitations or exculpation of liability set forth in this
Section 13 are also applicable to the indemnity set forth in Section 10 but are not applicable to
the failure of the Company to make payments due under this Agreement or a breach by Hitachi of
Section 16(b) below.

     Section 14. Audit Rights. During the term of this Agreement and for a six-month
period thereafter, the Company and/or its agent or agents shall have the unqualified right, on
reasonable notice and not more than once every twelve (12) months and not for any period that has
been previously audited, to inspect, audit and analyze all of the books, accounts and records of
Hitachi and any Affiliates of Hitachi pertaining to the Transitional Services during business hours
for the sole purpose of verifying the amounts invoiced to the Company hereunder. The Company shall
bear the cost of any inspection and audit unless the inspection reveals that Hitachi overbilled the
Company by ten (10)% or more with respect to any period being audited, in which case Hitachi shall
bear the reasonable costs of such inspection and audit.

     Section 15. Lease of Space to the Company from Hitachi. Hitachi will provide certain
available office space, manufacturing space and office support services to the Company for a term
and subject to the conditions and covenants set forth in a lease in the form attached hereto as
Exhibit B.

     Section 16. Miscellaneous.

          (a) 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 or between the Company and any of Hitachi’s
subcontractors.

          (b) Sale of TSD. Subject to Section 16(c), Hitachi shall not sell 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.

          (c) Assignment. This Agreement shall be binding upon and shall inure to the benefit
of, the parties and their respective successors and permitted assigns. Except for the right of
Hitachi to provide the Transitional Services through a subcontractor as set forth in Section 5,
neither party may assign its rights, or delegate the performance of its obligations, under this
Agreement, or any part hereof, without the prior written consent of the other party;
provided, however, that Hitachi’s consent shall not be unreasonably withheld in the
case of any assignment by the Company to OpNext USA or to any direct or indirect majority owned
Subsidiary of OpNext USA that is operating the Business in Japan for so long as (i) Hitachi and its
Affiliates directly or indirectly hold voting securities of OpNext USA representing a majority
voting interest in OpNext USA or have the right to designate a majority of OpNext USA’s directors
pursuant to the Stockholders’ Agreement, (ii) the Company remains liable for the performance of any
such assignee’s obligations hereunder

- 13 -

 

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 16(c) shall be void.

          (d) 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.

          (e) 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.

          (f) 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:

If to the Company:

OpNext Japan, Inc.

216 Totsuka-cho, Totsuka-ku

Yokohama-shi

244-8567, Japan

Attention: Junsuke Kusanagi

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

OpNext, Inc.

246 Industrial Way West

Eatontown, NJ 07724

Attention: Harry Bosco

               Dr. Minoru Maeda

- 14 -

 

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.

          (g) Interpretation. The headings and captions contained in this Agreement, in any
Exhibit or Schedule hereto 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.”

          (h) 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.

          (i) 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.

- 15 -

 

          (j) 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.

          (k) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of Japan.

          (l) Submission to Jurisdiction; Waivers. With respect to those disputes not required
to be submitted to arbitration hereunder as set forth in Section 12(c) 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 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

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

          (m) 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 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.

- 16 -

 

          (n) 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.

          (o) 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 (it being understood, however, that the Transitional Services described hereunder
are to be provided solely to the Company and its permitted assigns and not to the Clarity Parties).

          (p) 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.]

- 17 -

 

SIGNATURE PAGE TO OUTSOURCING AGREEMENT

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

	 	 	 	 	 
	 	OPNEXT JAPAN, INC.

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

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

President, Telecommunication Systems Division 	 

 

 

EXHIBIT A

ARBITRATION PROCEDURES

	a.	 	Appointment of Arbitrators. The arbitration shall be heard and determined by a panel
of three (3) persons. Each party shall have the right to designate one (1) member of the
panel. The party requesting arbitration shall communicate its request in writing, identifying
the nature of the dispute and the name of its arbitrator, to the other party (“Arbitration
Request”). The other party shall then name, in writing, its arbitrator within fifteen
(15) Business Days (as defined in the Stock Purchase Agreement) after receipt of the
Arbitration Request. Failure or refusal of the other party to name its arbitrator within the
fifteen (15) day time period shall empower the only appointed arbitrator to name the second
arbitrator. Within twenty-five (25) Business Days after the Arbitration Request, the two (2)
arbitrators shall mutually select a third impartial and neutral arbitrator to the panel. If
the two (2) arbitrators are unable to agree upon an arbitrator within forty-five (45) Business
Days after the Arbitration Request then within sixty-five (65) Business Days after the
Arbitration Request, the ICC shall appoint a third arbitrator.
	 
	b.	 	Governing Law and ICC. All disputes submitted to arbitration under this Outsourcing
Agreement shall be governed by the laws specified in the agreement that is the subject of the
dispute. The arbitration rules of the International Chamber of Commerce (“ICC”) shall apply
to any arbitration under this Outsourcing Agreement, except to the extent the provisions of
this Exhibit A vary therefrom. ICC shall administer the arbitration. Decisions of the panel
shall be made by majority vote. The panel may not award punitive damages, injunctions,
specific performance or temporary restraining orders.
	 
	c.	 	Expedited Schedule. The arbitration shall be conducted on an expedited schedule.
Unless otherwise agreed by the parties, the parties shall make their initial submissions to
the panel within seventy-five (75) Business Days after the Arbitration Request. Within one
hundred twenty (120) Business Days after the Arbitration Request, each party shall supply to
the other party all documents that such party intends to introduce or upon which such party
intends to rely in connection with such proceeding, as well as a list of any and all witnesses
whose testimony such party intends to introduce in connection with such proceeding (with a
brief summary of their area of testimony). Additional documents or witnesses may be
introduced only if a majority of the arbitrators determine that good cause has been shown.
Each party shall also have the right to submit written briefs to the arbitrators in accordance
with a timetable to be established by the arbitrators. Unless agreed by the parties
otherwise, the hearing shall commence within one hundred fifty (150) Business Days after the
Arbitration Request and shall be completed within two hundred twenty-five (225) Business Days
after the Arbitration Request.
	 
	d.	 	Discovery. The parties shall be entitled to discovery of all documents and
information reasonably necessary for a full understanding of any dispute raised in the
arbitration relating to this Outsourcing Agreement. The parties may use all methods of
discovery available under the Japanese Code of Civil Procedure and/or the United States
Federal

 

 

	 	 	Rules of Civil Procedure, including depositions, requests for admission and requests for
production of documents. The time periods applied to these discovery methods shall be set by
the panel so as to permit compliance with the scheduling provisions of this Exhibit A.
	 
	e.	 	Communication with Arbitrators. Each party shall communicate with the arbitrators
only in the presence of the other party or by writing delivered to the ICC for transmittal to
the arbitrators and the other party.
	 
	f.	 	Prompt Award. Unless otherwise agreed by the parties, the award shall be made
promptly by the panel (in any event, no later than thirty (30) Business Days from the closing
of the hearing). Unless otherwise agreed by the parties, the decision and award by the panel
shall be reasoned, explain the basis of the decision and be in writing. Any failure to render
the award within the foregoing time period shall not affect the validity of such award.
	 
	g.	 	Binding Decisions. The decision or award rendered or made in connection with the
arbitration shall be final and binding upon the parties thereto. The prevailing party may
present the decision or award to any court of competent jurisdiction for confirmation, and
such court shall enter forthwith an order confirming such decision or award. The arbitration
award shall allocate the expenses of the arbitrator(s) and of the arbitration, between the
parties in a manner corresponding to the extent to which one (1) party prevails over the
other.
	 
	h.	 	Location. Based upon the factors set forth below, the arbitrators shall select one
or more of the following cities for the location of the arbitration proceedings: Tokyo,
Japan; London, United Kingdom; or New York, U.S.A. The arbitrators shall take into account:
(i) the relationship between the acts and circumstances surrounding the dispute and the
arbitration location; (ii) the availability and location of witnesses; and (iii) the
accessibility and location of evidence.
	 
	i.	 	Confidentiality. All arbitration proceedings undertaken pursuant to this Exhibit A
and any awards or decisions resulting therefrom shall be deemed to be confidential between the
parties thereto. To the extent either party maintains in good faith that any documents
submitted or testimony introduced in connection with such arbitration contains confidential
information or trade secrets, the parties shall negotiate in good faith in an effort to reach
agreement regarding terms and conditions for keeping such materials and testimony
confidential. If the parties are unable to agree upon such terms, the arbitrators shall have
the right to impose appropriate restrictions to maintain the confidentiality of any
confidential information or trade secrets in connection with the arbitration.

 

 

EXHIBIT B

LEASE AGREEMENT 

See
[Exhibit 10.23 filed with the Commission

with
Amendment No. 4 to the

Form S-1 filed by the
Registrant

on February 12, 2007.]

 

 

SCHEDULE A

LIST OF TRANSITIONAL SERVICES AND OUTSOURCING FEES

February 1, 2001 to March 31, 2001

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Fee
	No.	 	 	 	Item	 	(Myen/Month)
	 
	 
	 	 	 	 	 	 	 	 
	1.

	 	MIS Operation
	 	1-1 Related to Supply Chain Management
	 	 	2.7	 
	 

	 	 	 	1-2 Related to IT
	 	 	1.4	 
	2.	 	Miscellaneous Administrative Services including Telephone System and other
Telecommunication Services, Mail Delivery and other Mail Services	 	 	8.8	 
	3.	 	Accounting	 	 	3.1	 
	4.	 	Human Resources Administration including Payroll Administration	 	 	13.2	 
	5.	 	Employee Benefits / Pension including Employee Cafeteria and other Food
Services, Infirmary Services	 	 	9.4	 
	6.	 	Employee Dormitory / Housing	 	 	11.0	 
	7.

	 	Engineering Support
	 	7-1 Related to Yield improvement
related support,
Production equipment maintenance
	 	 	36.2	 
	 

	 	 	 	7-2 Related to Design
	 	 	6.4	 
	8.	 	Purchasing & Procurement	 	 	0.9	 
	9.	 	Receiving, Inventory Control and Stockroom, Transportation Services	 	 	0.9	 
	10.	 	IP & Contract Support	 	 	1.5	 
	 
	 	 	Total	 	 	95.5	 

 

 

SCHEDULE A

LIST OF TRANSITIONAL SERVICES AND OUTSOURCING FEES

April 1, 2001 to September 30, 2001

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Fee
	No.	 	 	 	Item	 	(Myen/Month)
	 
	 
	 	 	 	 	 	 	 	 
	1.

	 	MIS Operation
	 	1-1 Related to Supply Chain Management
	 	 	3.0	 
	 

	 	 	 	1-2 Related to IT
	 	 	5.4	 
	2.	 	Miscellaneous Administrative Services including Telephone System and other
Telecommunication Services, Mail Delivery and other Mail Services	 	 	6.0	 
	3.	 	Accounting	 	 	4.0	 
	4.	 	Human Resources Administration including Payroll Administration	 	 	5.6	 
	5.	 	Employee Benefits / Pension including Employee Cafeteria and other Food
Services, Infirmary Services	 	 	4.0	 
	6.	 	Employee Dormitory / Housing	 	 	10.4	 
	7.

	 	Engineering Support
	 	7-1 Related to Yield improvement
related support,
Production equipment maintenance
	 	 	29.6	 
	 

	 	 	 	7-2 Related to Design
	 	 	6.5	 
	8.	 	Purchasing & Procurement	 	 	9.3	 
	9.	 	Receiving, Inventory Control and Stockroom, Transportation Services	 	 	1.2	 
	10.	 	IP & Contract Support	 	 	7.2	 
	 
	 	 	Total	 	 	92.2	 

 

 

SCHEDULE B

LIST OF TRANSITIONAL SERVICES AND OUTSOURCING VOLUMES

February 1, 2001 to March 31, 2001

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Volume
	 	 	 	 	 	 	 	 	 	 	Subcontract Expenses
	No.	 	 	 	Item	 	Man/Month	 	(Myen/Month)
	 
	 
	 	 	 	 	 	 	 	 	 	 
	1.

	 	MIS Operation
	 	1-1 Related to Supply Chain
Management
	 	 	3.6	 	 	 
	 

	 	 	 	1-2 Related to IT
	 	 	0.6	 	 	 
	2.	 	Miscellaneous Administrative Services including
Telephone System and other Telecommunication Services,
Mail Delivery and other Mail Services	 	 	2.6	 	 	Shounan Service

Co.,Ltd.

(3.7)
	3.	 	Accounting	 	 	4.1	 	 	 
	4.	 	Human Resources Administration including

Payroll Administration	 	 	5.0	 	 	Hitachi Security
Service,Co.,Ltd.

(2.9)
	5.	 	Employee Benefits / Pension including Employee
Cafeteria and other Food Services, Infirmary Services	 	 	0.9	 	 	Nikkyo Create,Ltd.

(7.6)
	6.	 	Employee Dormitory / Housing	 	 	0.4	 	 	Chuo Shoji Ltd.
(10.2)
	7.

	 	Engineering Support
	 	7-1 Related to Yield
improvement
related support, Production
equipment maintenance
	 	 	27.7	 	 	 
	 

	 	 	 	7-2 Related to Design
	 	 	5.1	 	 	 
	8.	 	Purchasing & Procurement	 	 	0.9	 	 	 
	9.	 	Receiving, Inventory Control and Stockroom,
Transportation Services	 	 	1.3	 	 	 
	10.	 	IP & Contract Support	 	 	1.3	 	 	 
	 
	 	 	Total	 	 	53.5	 	 	 

 

 

SCHEDULE B

LIST OF TRANSITIONAL SERVICES AND OUTSOURCING VOLUMES

April 1, 2001 to September 30, 2001

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Volume
	 	 	 	 	 	 	 	 	 	 	Subcontract Expenses
	No.	 	 	 	Item	 	Man/Month	 	(Myen/Month)
	 
	 
	 	 	 	 	 	 	 	 	 	 
	1.

	 	MIS Operation
	 	1-2 Related to Supply Chain
Management
	 	 	2.0	 	 	 
	 

	 	 	 	1-2 Related to IT
	 	 	2.0	 	 	Shounan Service

Co.,Ltd.

(3.8)
	2.	 	Miscellaneous Administrative Services including
Telephone System and other Telecommunication Services,
Mail Delivery and other Mail Services	 	 	1.4	 	 	Shounan Service

Co.,Ltd.

(4.4)
	3.	 	Accounting	 	 	4.4	 	 	 
	4.	 	Human Resources Administration including

Payroll Administration	 	 	1.8	 	 	Hitachi Security
Service,Co.,Ltd.

(3.1)
	5.	 	Employee Benefits / Pension including Employee
Cafeteria and other Food Services, Infirmary Services	 	 	0.1	 	 	Nikkyo Create,Ltd.

(3.0)
	6.	 	Employee Dormitory / Housing	 	 	0.4	 	 	Chuo Shoji Ltd.
(9.7)
	7.

	 	Engineering Support
	 	7-1 Related to Yield
improvement
related support, Production
equipment maintenance
	 	 	21.5	 	 	 
	 

	 	 	 	7-2 Related to Design
	 	 	4.0	 	 	 
	8.	 	Purchasing & Procurement	 	 	8.3	 	 	 
	9.	 	Receiving, Inventory Control and Stockroom,
Transportation Services	 	 	0.6	 	 	 
	10.	 	IP & Contract Support	 	 	1.6	 	 	 
	 
	 	 	Total	 	 	48.1	 	 	 

 

 

SCHEDULE 2 (a)

None

 

 

SCHEDULE 2 (b)

None

 

 

SCHEDULE 5(b)

LIST OF SUBCONTRACTORS

	 	 	 	 	 
	No.	 	Name of Subcontractor	 	Agreement
	 
	1

	 	Hitachi Shonan Denshi Co., Ltd.
	 	Operation & Maintenance Agreement (Air Conditioning Facilities)
	2

	 	Hitachi Shonan Denshi Co., Ltd.
	 	Operation & Maintenance Agreement (Electricity Facilities)
	3

	 	Hitachi Shonan Denshi Co., Ltd.
	 	Operation & Maintenance Agreement (TDC )(Air Conditioning, Electricity, etc.)
	4

	 	Shounan Service Co., Ltd.
	 	Outsourcing Agreement for Janitorial Services
	5

	 	Shounan Service Co., Ltd.
	 	Outsourcing Agreement for Janitorial Services of TDC
	6

	 	Shounan Service Co., Ltd.
	 	Outsourcing Agreement for Reception Desk Services
	7

	 	Shounan Service Co., Ltd.
	 	Outsourcing Agreement for Disposal of Confidential Documents
	8

	 	Shounan Service Co., Ltd.
	 	Outsourcing Agreement for Mail Pick Up Services
	9

	 	Hitachi Information Academy Co., Ltd.
	 	Outsourcing Agreement for Training Services
	10

	 	Chuo Shoji Ltd.
	 	Outsourcing Agreement (Dormitory, Company Housing)
	11

	 	Nikkyo Create, Ltd.
	 	Outsourcing Agreement for Dormitory Food Services
	12

	 	Nikkyo Create, Ltd.
	 	Outsourcing Agreement for Dormitory Administration
	13

	 	Nikkyo Create, Ltd.
	 	Outsourcing Agreement for Cafeteria Service in Premises
	14

	 	Nikkyo Create, Ltd.
	 	Outsourcing Agreement for Cafeteria Service in TDC
	15

	 	Nikkyo Create, Ltd.
	 	Outsourcing Agreement for Vending Machines
	16

	 	Shounan Service Co., Ltd.
	 	Outsourcing Agreement for Janitorial Services
	17

	 	Shounan Service Co., Ltd.
	 	Outsourcing Agreement (Information Systems)
	18

	 	Suganuma Co., Ltd.
	 	Outsourcing Agreement for Waste Disposal Services
	19

	 	Shounan Service Co., Ltd.
	 	Outsourcing Agreement for Waste Supervising Service
	20

	 	Shounan Service Co., Ltd.
	 	Outsourcing Agreement for Telephone Switching Services
	21

	 	Hitachi You and I Co., Ltd.
	 	Outsourcing Agreement for Maintenance of TDC
	22

	 	Hitachi Security Service Co., Ltd.
	 	Outsourcing Agreement for Security Services

TDC: Telecommunication Design Center

 

 

	 	 	 	 	 

AMENDMENT TO

OUTSOURCING 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 Japan,
Inc., a corporation organized and existing under the laws of Japan (“Company”), and is
intended to modify certain provisions of the Outsourcing Agreement dated July 31, 2001, entered
between the parties (the “Outsourcing Agreement”).

RECITALS

     WHEREAS, Hitachi and Company desire to amend certain provisions of the Outsourcing 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 Outsourcing Agreement as follows:

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

     B. Notwithstanding anything in the Outsourcing 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.

     C. Section 14 is hereby amended by adding the following clause to the end:

In addition, during the term of this Agreement and for a twelve (12) month period
thereafter, Hitachi shall provide Company and its auditors and regulators access,
on reasonable notice, to information, systems, facilities and/or personnel of
Hitachi solely if and to the extent necessary for Company to (a) comply with any
laws, rules, regulations or other legal requirements (“Laws”) applicable to
Company, including any disclosure requirements (including the Sarbanes-Oxley Act
and the rules promulgated thereunder and the rules of the Public Company Accounting
Oversight Board (“PCAOB”)), (b) verify that Company is in compliance with any Laws
applicable to Company, and (c) comply with any order from a governmental authority
having jurisdiction over Company. To the extent Company requires a change in the
Services or the manner in which the Services are performed to comply with any of
the foregoing, Hitachi shall work with Company to promptly implement such changes.
Company will bear the cost of any such audit and any incremental cost to Hitachi in
connection with implementing any changes.

 

 

     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 JAPAN, INC.	 	 
	 	 	 	 	 	 	 
	/s/ Naoya Takahashi

	 	 	 	/s/ Kei Oki
	 	 
	 

	 	 	 	 	 	 
	Name: Naoya Takahashi

	 	 	 	Name: Kei Oki	 	 
	Title: Vice President and Executive
Officer

	 	 	 	Title: President, Opnext Japan, Inc.

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