Document:

EX-10.23

 

Exhibit 10.23

EXECUTION COPY

Exhibit B to Outsourcing Agreement

LEASE AGREEMENT

          This LEASE AGREEMENT (this “Lease”) made as of this 31st day of July 2001 (hereinafter
referred to as the “Lease”) between HITACHI, LTD., a corporation existing under the laws of Japan
(hereinafter referred to as “Landlord”) and OPNEXT JAPAN INC., a corporation existing under the
laws of Japan (hereinafter referred to as “Tenant”). This Lease is deemed to be effective as of
the 1st day of February, 2001 (“Effective Date”). Unless defined elsewhere herein, capitalized
terms used in this Lease shall the meanings assigned to such terms in the Outsourcing Agreement or
the Stock Contribution Agreement.

WITNESSETH:

          WHEREAS, Landlord hereby leases to Tenant, and Tenant hereby accepts, the premises located in
three separate locations: (i) the mezzanine and first floor of the D Factory (“D Factory”) of
approximately 5,228 m2; (ii) the first and third floors of the K Factory (“K Factory”) of
approximately 2,235 m2; and (iii) the fifth floor of the Telecommunication Design Center (“TDC”) of
approximately 1,764 m2, (collectively referred to as “Premises” or “Building”) for a total of 9,227
m2. Such Premises is located at 216 Totsuka-cho, Totsuka-ku, Yokohama-shi, Kanagawa 244-8567-Japan
(hereinafter referred to, together with all present and future easements, additions, improvements
and other rights appurtenant thereto, as the “Land”), subject to the covenants, terms, provisions
and conditions of this Lease.

          WHEREAS, Landlord and Tenant are parties to that certain outsourcing agreement (such
outsourcing agreement, as same may be amended from time to time, being herein called “Outsourcing
Agreement”), dated as of May 31st, 2001 to which this Lease is attached as an exhibit to such
Outsourcing Agreement and made a part thereof.

          NOW, THEREFORE, in consideration thereof, Landlord and Tenant covenant and agree as follows:

1. TERM; EXTENSION OPTION.

     (A) The term of this Lease shall be for one (1) year (hereinafter referred to as the “Term”)
and is intended to commence on the 1st day of February, 2001 (hereinafter referred to as the
“Commencement Date”) and end on the 31st day of January, 2002 (hereinafter referred to as the
“Expiration Date”), unless sooner terminated as provided herein. Tenant shall have unlimited
automatic extensions to extend the term of the Lease for a period of one (1) year each (the
“Extension Term”), upon giving Landlord three (3) months advance written notice prior to the
expiration of the then Expiration Date, of its election to exercise each option provided that
Tenant remains a majority owned Subsidiary of Landlord at the time of exercise of each option to
extend the Term. All terms of this Lease shall apply during any Extension Term and references to
the Expiration Date will incorporate the extensions, except that the Base Rent shall be determined
in a manner consistent with the determination of Rent in the first year of the Term and otherwise
negotiated in good faith between the parties prior to the commencement of each Extension Term.

     (B) So long as (i) Landlord and its Affiliates directly or indirectly hold the voting
securities of OpNext Inc., a Delaware corporation (“OpNext Inc.”), representing a majority of the
voting interest in OpNext Inc. or have the right to designate a majority of OpNext’s directors
pursuant to the Stockholders

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Agreement and (ii) OpNext Inc. and its Affiliates. directly or
indirectly control a majority of voting interest in Tenant, Landlord will not terminate this Lease
as a result of any default by Tenant, material or otherwise.

2. RENT. Tenant shall pay base rent (referred to herein as “Base Rent” or “Rent”) to Landlord at
the place as Landlord may from time to time designate, in coin or currency which, shall be Sixty
(60) Million Japanese Yen per year, payable in equal monthly installments of Five (5) Million
Japanese Yen. Such Base Rent shall be reviewed annually and will be determined by using the Rent
formula (“Formula”) set forth in the attached Exhibit B as made a part hereof. Such new Base Rent
amount after annual review of the Variables, will commence on April 1 of each Lease Year and end
on March 31 of the following Lease Year. Landlord shall inform Tenant of the annual adjusted Rent
amount pursuant to the form of Landlord Notice of Annual Rent Adjustment, which is attached hereto
as Exhibit D. All rent payments shall be made in advance on or before the 15th day of
each and every month during the Term, without any set-off or deduction whatsoever, except that
Tenant shall pay the first full monthly installment at the time of execution of this Lease. If the
Term commences other than on the first day of a month or ends other than on the last day of the
month, the Rent for such month shall be prorated. Notwithstanding the foregoing, with respect to
Rent due from the Effective Date until the execution date of this Lease, Landlord shall send
applicable monthly invoices reflecting all such Rent due by Tenant and Tenant shall promptly pay
such Rent pursuant to the terms of this Lease. All of any sums and payments due and owning under
this Lease shall be deemed “Rent.” For purposes of this Lease, a lease year shall be the twelve
(12) month period commencing with the first day of the month following the Commencement Date (or,
if the Commencement Date falls on the first day of a month, commencing on the Commencement Date)
and ending on the last day of the twelfth (12th) full calendar month thereafter, and each
succeeding twelve (12) calendar month period (a “Lease Year”), and this Lease shall then terminate,
unless extended, on the last day of the twentieth Lease Year (the “Expiration Date”).

     Tenant’s Right to Inspect and Audit. During the Term of this Lease, upon at least ten (10)
days written notice to Landlord and not more than once every twelve (12) months, Tenant or its
authorized representatives, will have the right at Tenant’s sole expense, to inspect and audit the
books and records of Landlord by an accounting firm approved in advance by Landlord for the sole
purpose of verifying the amounts pertaining to the Variables as set froth in the Rent Formula. If
such audit shows that the Variables are is overstated by more than 10% or more with respect to any
period being audited, Landlord will reimburse Tenant promptly for amounts overpaid, plus the
reasonable costs incurred by Tenant for such inspection and audit, plus interest for the amounts
overpaid at the Interest Rate.

3. USE OF PREMISES. Tenant shall use and occupy the Premises for the purpose of manufacturing
fiber optics, design administration of fiber optic components and general office activity. As used
herein, the term “fiber optic components” shall include but not limited to, the following:
transmitters, receivers, transceivers, laser diode modules, photo diode modules, parallel optical
interconnectors, lasers, photodiodes, modulators, amplifier modules, optical switches and optical
wave guides.

     Tenant shall not make nor permit to be made any use of the Premises which would violate any of
the terms of this Lease or which, directly or indirectly, is forbidden by statute, ordinance or
government regulations, which may be dangerous to life, limb or property, which may invalidate or
increase the premium of any policy of insurance carried on the Building or on the Premises, which
will suffer or permit the Premises to be used in any manner or anything to be brought into or kept
there which, in the sole judgment of Landlord, shall in any way impair or tend to impair the high
quality character, reputation
or appearance of the Building, or which may or tend to impair or interfere with any services
performed by Landlord for Tenant or for others.

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4. COMMON USE AREA AND FACILITIES. All parking areas, access roads and facilities furnished, made
available or maintained by Landlord in or near the Building, including conference facilities,
cafeteria, play ground, dormitory, employee parking areas, loading docks and area, delivery areas,
package pickup stations, elevators, pedestrian sidewalks, malls, courts, and ramps, landscaped
areas, retaining walls, stairways, first-aid and comfort stations, lighting facilities, and other
areas and improvements provided by Landlord for the use of a tenant or tenants and/or their
customers (all herein called “Common Areas”) shall at all times be subject to the exclusive control
and management of Landlord.

     a. Use of Common Areas. Tenant and its contractors, business invitees, employees and
customers shall have the non-exclusive right, in common with Landlord and all others to whom
Landlord has granted or hereafter grants rights, to use the Common Areas. Landlord may after prior
written notice to Tenant (except in case of emergencies), at any time close temporarily any Common
Areas to make repairs or changes, prevent the acquisition of public rights therein, discourage
non-customer parking or for other reasonable purposes. Tenant shall not interfere with Landlord’s
or other Tenant’s rights to use any part of the Common Areas.

     b. Access to World-Wide Sales Offices. During the Term or Extension Term only, provided that
Tenant remains a majority owned Subsidiary of Landlord, Landlord shall use commercially reasonable
efforts to assist Tenant to gain access to Landlord’s (including its subsidiaries) sales offices
at Tenant’s sole cost and expense subject to such rules and regulations as Landlord or any of its
subsidiaries may from time to time impose.

     c. Access to the Building Roof. With prior notice to Landlord, Tenant shall have access to
the roof attached to the Building. With Landlord’s prior written consent only, which consent shall
not be unreasonably withheld, Tenant may (i) install telecommunications equipment on the roof of
the TDC only; and (ii) be permitted access between the antenna mounts and the footprints throughout
certain portions of the Building for purposes of connecting same so long as such access does not
unreasonably interfere with other tenants of the Building.

5. CONDITION OF PREMISES. The Tenant’s taking possession of the Premises shall be conclusive
evidence that the Premises were in good order and satisfactory condition when the Tenant took
possession, excluding items of damage caused by Tenant or its agents, independent contractors or
suppliers. No promise of the Landlord to alter, remodel or improve the Premises or the Building
and no representation by Landlord or its agents respecting the condition of the Premises or the
Building have been made to Tenant or relied upon by Tenant other than as may be contained in this
Lease. Tenant accepts the Premises AS-IS, WHERE-IS AND WITH ALL FAULTS, and acknowledges that no
representations, warranties, guarantees, promises, statements or estimates of any nature whatsoever
upon which Tenant is relying whether written or oral, express or implied, in fact or in law, have
been made by Landlord, any real estate broker, agent, employee or attorney-in-fact or at law or
purporting to represent Landlord. Notwithstanding anything to the contrary contained in this
Lease, if within thirty (30) days following Landlord’s delivery of possession of the Premises to
Tenant, it is determined that any of the mechanical or utility systems serving any portion of the
Premises was not in good operating condition for the use contemplated by Tenant as of the delivery
of possession of the Premises by Landlord to Tenant (but without regard to any subsequent
particular use of the Premises by Tenant or any subsequent alterations or improvements made to the
Premises by or on behalf of Tenant), then Landlord shall, at Landlord’s sole cost, promptly perform
such corrective work so as to cause such systems to be in good
working order (but Landlord shall not be liable for any increased costs of such corrective work
resulting from the particular use of the Premises by Tenant).

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6. CONFIDENTIAL INFORMATION. Landlord and Tenant agree that all provisions in the Outsourcing
Agreement, relating to confidential information, shall also apply with respect to this Lease.

7. REPAIRS. Tenant will, at Tenant’s own expense, keep the Premises in good order, repair and
condition at all times during the Term, and Tenant shall promptly and adequately repair all damage
to the Premises and replace or repair all damaged or broken fixtures and appurtenances, under the
supervision and subject to the approval of the Landlord, and within any reasonable period of time
specified by the Landlord. If the Tenant does not do so after five (5) days written notice to
Tenant, Landlord may, but need not, make such repairs and replacements, and Tenant shall pay
Landlord the cost thereof, including a percentage of the cost thereof (to be uniformly established
for the Building) sufficient to reimburse Landlord for all, fees and other costs or expenses
arising from Landlord’s involvement with such repairs and replacements, forthwith upon being billed
for same. Landlord may, but shall not be required to, enter the Premises at all reasonable times
to make such repairs, alterations, improvements and additions to the Premises or to the Building or
to any equipment located in the Building as Landlord shall desire or deem necessary or as Landlord
may be required to do by governmental authority or court order or decree.

     Except as otherwise set forth in this Lease, Landlord shall not under any circumstances be
required to build any improvements on the Premises, or to make any repairs, replacements,
alterations, or renewals of any nature or description to the interior of the Premises or to any of
the existing improvements therein, whether interior or exterior, ordinary or extraordinary,
structural or non-structural, foreseen or unforeseen, or to make any expenditure whatsoever in
connection with this Lease or to inspect or maintain the Premises in any way, except as expressly
set forth as follows: (a) the replacement of any roof on a building at the Premises as required,
(b) repair and/or replacement of any load-bearing walls and exterior walls on buildings at the
Premises as required, (c) any repair/replacement of Building mechanical systems as required, and
(d) any repair/replacement of the Building foundation and all other structural repairs. Landlord
shall not be required to make any such repair or replacement where such repair or replacement is
necessitated by any action, willful misconduct, omission, non-action, or negligence of Tenant or
Tenant’s agents, employees, customers, invitees, or contractors or caused by unlawful breaking and
entering. Landlord shall not be deemed in breach of this Lease unless Landlord fails within a
reasonable time to perform an obligation required to be performed by Landlord. For purposes of
this Section 7, and except in the case of an emergency, a reasonable time shall in no event be less
than ten (10) days after receipt by Landlord of written notice specifying wherein such obligation
of Landlord has not been performed; provided, however, that if the nature of Landlord’s obligation
is such that more than ten (10) days after such notice are reasonably required for its
performance, then Landlord shall not be in breach of this Lease if performance is commenced within
such ten (10) day period and thereafter diligently pursued to completion. Notwithstanding anything
herein to the contrary, in addition to and not in limitation of Tenant’s remedies, if Landlord
shall be deemed in breach of this Section 7, then Tenant shall be entitled to Rent abatement until
such breach is cured and Tenant shall have no claim against Landlord for any damages suffered by
reason of such breach.

8. ADDITIONS AND ALTERATIONS. Except for non-structural interior alterations, Tenant shall not
alter or cause changes in construction of the tenant improvements without Landlord’s prior written
consent. Tenant shall not, without the prior written consent of Landlord (such consent shall not
be unreasonably withheld, delayed or conditioned), make any alterations, improvements,
redecorations or additions to the Premises. Landlord’s refusal to give said consent shall be
conclusive. All alterations, improvements, redecorations and additions to the Premises including
any tenant improvements, whether temporary or permanent in character, made or paid for by Landlord
or Tenant, shall without compensation to Tenant become Landlord’s property at the termination of
this Lease by lapse of time or otherwise and
shall, unless Landlord requests their removal (in which case Tenant shall remove the same as
provided in this Lease), be relinquished to Landlord in good condition, ordinary wear excepted.
Notwithstanding the foregoing, Tenant may after prior written consent from Landlord, remove
Tenant’s machinery and

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 equipment (“Trade Fixtures”) that can be removed without doing any material
damage to the Premises subject to Tenant’s obligation to repair and restore the Premises pursuant
to this Lease. If there is any damage to the Premises caused by Tenant removing Trade Fixtures,
Landlord shall notify Tenant and Tenant shall promptly reimburse and indemnify Landlord for all
costs in connection with such damage.

9. INSURANCE.

     a. Waiver of Subrogation. Landlord and Tenant each hereby waive any and every claim for
recovery from the other for any and all loss of or damage to the Building or Premises or to the
contents thereof, which loss or damage is covered by valid and collectible physical damage
insurance policies, to the extent that such loss or damage is recoverable under said insurance
policies. Inasmuch as this mutual waiver will preclude the assignment of any such claim by
subrogation (or otherwise) to an insurance company (or any other person), Landlord and Tenant each
agree to give to each insurance company which has issued, or in the future may issue, to its
policies of physical damage insurance, written notice of the terms of this mutual waiver, and to
have said insurance policies properly endorsed, if necessary, to prevent the invalidation of said
insurance coverage by reason of said waiver.

     b. Coverage. During the Term or any applicable Extension Term, Landlord shall purchase and
maintain one (1) master insurance program that provides comprehensive broad coverage insurance, at
Landlord’s expense, but subject to reimbursement by Tenant for Tenant’s proportionate share of such
insurance costs, for the benefit of Tenant and Landlord (as their interest may appear). Such
insurance will be with a financially reputable insurer licensed to do business in Japan with
liability insurance sufficient to protect Tenant and Landlord from damages to Landlord’s and
Tenant’s (a) fixed assets; (b) damages to inventory stock and (c) loss of profit resulting from the
following situations:

1. Fire

2. Lightning

3. Explosion/Burst

4. Wind, Hail, Snow

5. Flood

6. Electrical Accidents Related to Utilities

7. Mechanical Accidents Related to Utilities

8. Collision of Vehicles or Airplane

9. Object (other than No.8) Flying in from Outside Premises

10. Water Leakage Caused by Accident to Water Service Facilities

11. Noise, Labor Dispute

12. Sabotage

13. Glass Damage (does not cover inventory stock)

14. Breakage

15. Theft

16. Any Other Contingent, Sudden Accident

17. Earthquake, Volcanic Eruption, Tidal Wave

18. Suspension of Utilities Outside Premises (only loss of profit is covered)

Landlord will meet its insurance obligations herein by means of a blanket insurance policy or
through any combination of primary or umbrella/excess coverage.

     c. Avoid Action Increasing Rates. Tenant shall comply with all applicable laws and
ordinances, all orders and decrees of court and all requirements of other governmental authorities,
and shall not, directly or indirectly, make any use of the Premises which may thereby be prohibited
or be

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dangerous to person or property or which may jeopardize any insurance coverage or may
increase the cost of insurance or require additional insurance coverage.

10. FIRE OR CASUALTY.

     a. If the Premises or the Building (including machinery or equipment used in its operation)
shall be damaged by fire or other casualty, Landlord shall have the right to terminate this Lease
as of the date of such damage (with appropriate prorations of Rent being made for Tenant’s
possession subsequent to the date of such damage of those tenantable portions of the Premises) upon
giving written notice to the Tenant at any time within sixty (60) days after the date of such
damage. If the Lease is not terminated, rent shall abate on those portions of the Premises as are,
from time to time, untenantable as a result of such damage.

     b. Tenant acknowledges that Landlord shall be entitled to the full proceeds of any insurance
coverage, whether carried by Landlord or Tenant, for damage to alterations, additions, improvements
or decorations provided by Landlord.

     c. Notwithstanding anything to the contrary herein set forth, Landlord shall have no duty to
repair or restore any portion of the alterations, additions or improvements in the Premises or the
decorations thereto and Tenant acknowledges that Landlord shall be entitled to the full proceeds of
any insurance coverage, whether carried by Landlord or Tenant, for damage to alterations,
additions, improvements or decorations paid or provided by Landlord.

11. WAIVER OF CLAIMS-INDEMNIFICATION. To the extent not prohibited by law and except to the extent
caused by the negligence or willful misconduct of Landlord or arising directly from a default of
Landlord of its performance of its obligations hereunder, Landlord and Landlord’s partners, and
their respective officers, agents, servants and employees shall not be liable for any damage either
to person or property or resulting from the loss of use thereof sustained by Tenant or by other
persons of to the Building or any part thereof or any appurtenances thereof becoming out of repair,
or due to the happening of any accident or event in or about the Building, including the Premises,
or due to any act or neglect of any tenant or occupant of the Building or of any other person.
Tenant further agrees that all personal property upon the Premises, or upon loading docks,
receiving and holding areas, or freight elevators of the Building, shall be at the risk of Tenant
only, and that Landlord shall not be liable for any loss or damage thereto or theft thereof.
Without limitation of any other provisions thereof, Tenant agrees to defend, protect, indemnify and
save harmless Landlord from and against all liability to third parties arising out of Tenant’s use
and occupancy of the Premises or any common area pursuant to Section 4 hereof, or acts of Tenant
and its servants, agents, employees, contractors, suppliers, workers and invitees. Landlord shall
indemnify and defend Tenant from and against any and all damages, costs or liabilities arising out
of any default by Landlord of its performance of its obligations hereunder, except to the extent
caused by the negligence or willful misconduct of Tenant or if at the time Tenant does not satisfy
the ownership requirements described in Section 1(b) above, arising from a default of Tenant of
either its monetary or non-monetary obligations or performance hereunder. The provisions of this
paragraph shall survive the expiration or termination of the Lease.

12. NONWAIVER. No waiver of any provision of this Lease shall be implied by any failure of
Landlord to enforce any remedy on account of the violation of such provision, even if such
violation be continued or repeated subsequently, and no express waiver shall affect any provision
other than the one specified in such waiver and that one only for the time and in the manner
specifically stated. No receipt
of monies by Landlord from Tenant after the termination of this Lease shall in any way alter the
length of the Term or of Tenant’s right of possession hereunder or after the giving of any notice
shall reinstate, continue or extend the Term or affect any notice given Tenant prior to the receipt
of such monies, it being

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 agreed that after the service of notice or the commencement of a suit or
after final judgment for possession of the Premises, Landlord may receive and collect any Rent due,
and the payment of said Rent shall not waive or affect said notice, suit or judgment.

13. ASSIGNMENT AND SUBLETTING. Tenant shall not, without the prior written consent of Landlord
(which consent may be withheld arbitrarily) (i) assign, convey or mortgage this Lease or any
interest hereunder (ii) permit to occur or permit to exist, any assignment of this Lease, any lien
upon the Lease, the Premises or Tenant’s interest therein, or any change in the control of Tenant
(of any level), by sale of stock, transfer of partnership interest, merger, operation of law or any
other manner, in a single transaction or series of transactions; (iii) sublet the Premises or any
part thereof; or (iv) permit the use of the Premises by any parties other than Tenant and its
employees, provided however, that Landlord’s consent shall not be unreasonably withheld in the case
of any assignment by Tenant to OpNext Inc. or any majority owned Subsidiary of OpNext Inc. that is
operating the Business in Japan for so long as (a) Landlord and its Affiliates directly or
indirectly hold voting securities of OpNext Inc. representing a majority voting interest in OpNext
Inc. or have the right to designate a majority of OpNext Inc. directors pursuant to the
Stockholder’s Agreement, (b) Tenant remains liable for the performance of any such assignee’s
obligations hereunder and any liability incurred for the performance of any such assignee’s
obligations hereunder and any liability incurred in connection therewith, (c) such assignment does
not results in any additional costs for which Landlord shall be liable and (d) such assignee is
located in Japan that is engaged in the same Business of Tenant for the use as contemplated in
Section 3 above. Any such action on the part of Tenant shall be void and of no effect. Landlord’s
consent to any assignment, subletting or transfer or Landlord’s election to accept any assignee,
subtenant or transferee as the tenant hereunder and to collect rent from such assignee, subtenant
or transferee shall not release Tenant or any subsequent tenant from any covenant or obligation
under his Lease. Landlord’s consent to any assignment, subletting or transfer shall not constitute
a waiver of Landlord’s right to withhold its consent to any future assignment, subletting, or
transfer.

     Except for the agreement of Landlord setforth in Section 4 (b) herein, Landlord shall have the
absolute right to assign or otherwise transfer its interest in this Lease to any parent or
operating Subsidiary of Landlord or Landlord’s parent, or Subsidiary of the parent of Landlord or
Landlord’s parent, or to a corporation with which Landlord or Landlord’s parent may merge or
consolidate, or to any entity or person acquiring a majority of all of Landlord’s assets. The
parties agree that this Lease does not restrict or refer in any manner to a change in control or
change in shareholders, directors, management or organization of Landlord’s parent or Landlord, or
any Subsidiary, Affiliate or associate of the parent of Landlord’s parent or Landlord, or to the
issuance, sale, purchase or disposition of the shares of Landlord’s parent or Landlord, or any
Subsidiary, Affiliate or associate of Landlord’s parent or Landlord.

14. EXPANSION OPTION. Provided that this Lease is then in full force and effect and Tenant remains
a majority owned Subsidiary of Landlord, Landlord hereby grants to Tenant an option to lease an
additional portion of the Building (“Expansion Space”) set forth on Exhibit C attached hereto for
an additional rent amount consistent with the terms and conditions of the Rent provisions
hereunder, based on the additional amount of square meters rented to Tenant, such additional rent
amount shall be based upon the Formula used to calculate Rent for the initial Term of this Lease,
provided however, it is expressly understood by the Tenant that such additional rent amount for the
Expansion Space will not be Discounted (as hereinafter defined) as is currently in place for Rent
for the initial Term. Landlord shall deliver such Expansion Space to Tenant promptly after the
execution and delivery of an amendment to this Lease. Except as modified by such lease amendment,
the Lease and all of the terms and provisions thereof, shall remain unmodified and in full force
and effect as originally written.

15. SURRENDER OF POSSESSION. Upon the expiration of the Term or upon the termination of Tenant’s
right of possession, whether by lapse of time or at the option of Landlord as herein provided,

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Tenant shall forthwith surrender the Premises to Landlord in good order, repair and condition,
ordinary wear excepted, and shall, if Landlord so requires, restore the Premises to the condition
existing at the beginning of the Term, ordinary wear and tear excepted. Any interest of Tenant in
the alterations, improvements (including all floor coverings) and additions to the Premises made or
paid for by Landlord or Tenant shall, without compensation to Tenant, become Landlord’s property at
the termination of this lease by lapse of time or otherwise and such alterations, improvements and
additions shall be relinquished to Landlord in good condition, ordinary wear excepted. Upon or
prior to the earlier of the Expiration Date or the date upon which Tenant’s right to possession of
the Premises may be terminated, Tenant shall remove its office furniture, trade fixtures, office
equipment and all other items of Tenant’s property on the Premises. Tenant shall pay to Landlord
upon demand the cost of repairing any damage to the Premises and to the Building caused by any such
removal. If Tenant shall fail or refuse to remove any such property from the Premises, Tenant
shall be conclusively presumed to have abandoned the same, and title thereto shall thereupon pass
to Landlord without any cost either by set-off, credit, allowance or otherwise, and Landlord may at
its option accept the title to such property or at Tenant’s expense may (i) remove the same or any
part in any manner that Landlord shall choose, repairing any damage to the Premises caused by such
removal, and (ii) store, destroy or otherwise dispose of the same without incurring liability to
Tenant or any other person.

16. HOLDING OVER. Tenant shall pay to Landlord an amount as Rent equal to 150% of one-twelfth of
the Rent paid by Tenant during the previous Lease Year herein provided during each month or portion
thereof for which Tenant shall retain possession of the Premises or any part thereof after the
expiration or termination of the Term or of Tenant’s right of possession, whether by lapse of time
or otherwise, and also shall pay all damages sustained by Landlord, whether direct or
consequential, on account thereof. If Tenant fails to surrender the Premises upon the expiration
or earlier termination of this Lease, Tenant shall indemnify, defend and hold harmless Landlord
from and against all loss, damage, cost, liability or expense, including, without limitation,
reasonable attorney fees and expenses resulting from or relating to such failure to surrender the
Premises, including, without limitation, any claim made by any succeeding tenant. The provisions
of this Paragraph shall not be deemed to limit or constitute a waiver of any other rights or
remedies of Landlord provided herein or at law.

17. CERTAIN RIGHTS RESERVED BY LANDLORD. Landlord shall have the following rights, each of which
Landlord may exercise without notice to Tenant except as otherwise set forth herein, and without
liability to Tenant for damage or injury to property, person or business on account of the exercise
thereof, and the exercise of any such rights shall not be deemed to constitute an eviction or
disturbance of Tenant’s use or possession of the Premises and shall not give rise to any claim for
set-off or abatement of rent or any other claim:

     a. To decorate or to make repairs, alterations, additions, or improvements, whether structural
or otherwise, in and about the Building, or any part thereof, and for such purposes to enter upon
the Premises, and during the continuance of any of said work, to temporarily close doors,
entryways, public space and corridors in the Building and to interrupt or temporarily suspend
services or use of facilities, all without affecting any of Tenant’s obligations hereunder, so long
as the Premises are reasonably accessible and usable.

     b. After reasonable prior written notice to Tenant, Landlord shall show the Premises to
prospective tenants at reasonable times and, if vacated or abandoned, to show the Premises at any
time and to prepare the Premises for re-occupancy.

     c. To erect, use and maintain pipes, ducts, wiring and conduits, and appurtenances thereto, in
and through the Premises at reasonable locations.

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     d. After reasonable prior written notice to Tenant, Landlord shall enter the Premises at any
reasonable time to inspect the Premises.

18. OPERATING STANDARDS. The Operating Standards attached to this Lease as Exhibit A are hereby
made an integral part of this Lease. Tenant, its employees, agents, guests, invitees, visitors
and/or any other persons caused to be present in an around the Premises by the Tenant shall comply
by the Operating Standards and any amendments or additions to said rules and regulations as
Landlord may make. In addition, Tenant, its employees and agents shall abide by all applicable
governmental rules, regulations, statutes and ordinances relating in any way to the Premises or the
Building or Tenant’s use or occupancy of the Premises or the Building; failing which Tenant shall
be in default hereunder and shall pay fines or penalties imposed for such violation(s) directly to
the appropriate governmental authority or to Landlord, if Landlord has paid such amount on behalf
of Tenant. Such remedy shall not be exclusive. It is hereby further explicitly agreed and
understood that full compliance with the Operating Standards as set forth constitutes a material
obligation of this Lease, and that the failure to so comply shall constitute a violation of this
Lease entitling the Landlord to exercise any of its remedies pursuant to this Lease or otherwise.

19. REMEDIES.

     a. If default shall be made in the payment of the Rent or any installment thereof or in the
payment of any other sum required to be paid by Tenant under this Lease or under the terms of any
other agreement between Landlord and Tenant and such default shall continue for fifteen (15) days
after notice, or if default shall be made in the observance or performance of any of the other
covenants or conditions in this Lease which Tenant is required to observe and perform and such
default shall continue for ten (10) days after written notice to Tenant, or if a default involves a
hazardous condition and is not cured by Tenant immediately upon written notice to Tenant, or if the
interest of Tenant in this Lease shall be levied on under execution or other legal process, or if
any voluntary petition in bankruptcy or for corporate reorganization or any similar relief shall be
filed by Tenant, or if any involuntary petition in bankruptcy shall be filed against Tenant under
any federal or state bankruptcy or insolvency act and shall not have been dismissed within thirty
days from the filing thereof, or if a receiver shall be appointed for Tenant or any of the property
of Tenant by any court and such receiver shall not have been dismissed within thirty days from the
date of his appointment, or if Tenant shall make an assignment for the benefit of creditors, or if
Tenant shall admit in writing Tenant’s inability to meet Tenant’s debts as they mature, or if
Tenant shall abandon or vacate the Premises during the Term, then Landlord may treat the occurrence
of any one or more of the foregoing events as a breach of this Lease, and thereupon at its option
may with, or without notice or demand of any kind to Tenant or any other person, have any one or
more of the following described remedies in addition to all other rights and remedies provided at
law or in equity or elsewhere herein:

     b. Subject to Section 1 (b) above, Landlord may terminate this Lease and the Term created
hereby, in which event Landlord may forthwith repossess the Premises and be entitled to recover
forthwith, in addition to any other sums or damages for which Tenant may be liable to Landlord, as
damages a sum of money equal to the excess of the value of the Rent provided to be paid by Tenant
for the balance of the Term over the fair market rental value of the Premises, after deduction of
all anticipated expenses of reletting, for said period. Should the fair market rental value of the
Premises, after deduction of all anticipated expenses of reletting, for the balance of the Term
exceed the value of the Rent provided to be paid by Tenant for the balance of the Term, Landlord
shall have no obligation to pay to Tenant the
excess or any part thereof or to credit such excess or any part thereof against any other sums
or damages for which Tenant may be liable to Landlord.

Page 9

 

     c. Landlord shall not be deemed in breach of this Lease unless Landlord fails within a
reasonable time to perform an obligation required to be performed by Landlord. For purposes of
this Section 19, a reasonable time shall in no event be less than fifteen (15) days after receipt
by Landlord of written notice specifying wherein such obligation of Landlord has not been
performed; provided, however, that if the nature of Landlord’s obligation is such that more than
fifteen (15) days after such notice are reasonably required for its performance, then Landlord
shall not be in breach of this Lease if performance is commenced within such fifteen (15) day
period and thereafter diligently pursued to completion.

20. EXPENSES OF ENFORCEMENT. Tenant shall pay upon demand all of Landlord’s costs, charges and
expenses including the fees and out-of-pocket expenses of counsel, agents and others retained by
Landlord incurred in enforcing Tenant’s obligations hereunder or incurred by Landlord in any
litigation, negotiation or transaction in which Tenant causes Landlord without Landlord’s fault or
negligence to become involved or concerned.

21. MISCELLANEOUS.

     a. Rights Cumulative. All rights and remedies of Landlord under this Lease shall be
cumulative and none shall exclude any other rights and remedies allowed by law.

     b. Interest. All payments becoming due under this Lease and remaining unpaid when due shall
bear interest from the date such payment was due until paid at the rate of eighteen percent (18%)
per annum (“Interest Rate”).

     c. Terms. The necessary grammatical changes required to make the provisions hereof apply
either to corporations or partnerships or individuals, men or women, as the case may require, shall
in all cases be assumed as though in each case fully expressed.

     d. Binding Effect. Each of the provisions of this Lease shall extend to and shall, as the
case may require, bind or inure to the benefit not only of Landlord and of Tenant, but also of
their respective successors or assigns, provided this clause shall not permit any assignment by
Tenant contrary to the provisions hereof.

     e. Lease Contains. All Terms All of the representations and obligations of Landlord are
contained herein and in the other Exhibits attached hereto, and no modification, waiver or
amendment of this Lease or of any of its conditions or provisions shall be binding upon the
Landlord unless in writing signed by Landlord or by a duly authorized agent of Landlord empowered
by a written authority signed by Landlord.

     f. Delivery for Examination. Submission of the Lease for examination or any other purpose
shall not bind Landlord in any manner, and no Lease or obligations of the Landlord shall arise
until this instrument is signed by both Landlord and Tenant and delivery is made to each.

     g. Transfer of Landlord’s Interest. Pursuant to Section 13 above, Tenant acknowledges that
Landlord has the right to transfer its interest in the Land and Building and in this Lease, and
Tenant agrees that in the event of any such transfer Landlord shall be released from all liability
under this Lease if such transferee assumes all liability under the Lease including without
limitation, with respect to the expansion rights for the Expansion Space pursuant to Section 14
above. In such case, Tenant agrees to
look solely to such transferee for the performance of Landlord’s obligations hereunder.
Tenant further acknowledges that Landlord may assign its interest in this Lease to a mortgage
lender as additional security and agrees that such an assignment shall not release Landlord from
its obligations hereunder and

Page 10

 

that Tenant shall continue to look to Landlord for the performance of
its obligations hereunder. Notwithstanding any assignment by Landlord, prior to such assignment by
Landlord, and further provided that Tenant is not in any material default of any of its obligations
under this Lease, upon notice to Tenant by Landlord, Tenant shall have the non-exclusive right to
commence negotiations with Landlord to purchase the Land and the Building, provided however, if the
TSD is assigned or otherwise transferred to a third party, Landlord will cause such third party to
assume this Lease.

     h. Landlord’s Title. Landlord’s title is and always shall be paramount to the title of
Tenant. Nothing herein contained shall empower Tenant to commit or engage in any act which can,
shall or may encumber the title of Landlord.

     i. Captions. The captions of Paragraphs and subparagraphs are for convenience only and shall
not be deemed to limit, construe, affect or alter the meaning of such Paragraphs or subparagraphs.

     j. Covenants and Conditions. All of the covenants of Tenant hereunder shall be deemed and
construed to be “conditions”, if Landlord so elects, as well as “covenants” as though the words
specifically expressing or importing covenants and conditions were used in each separate instance.

     k. Only Landlord/Tenant. Relationship Nothing contained in this Lease shall be deemed or
construed by the parties hereto or by any third party to create the relationship of principal and
agent, partnership, joint venturer or any association between Landlord and Tenant, it being
expressly understood and agreed that neither the method of computation of Rent nor any act of the
parties hereto shall be deemed to create any relationship between Landlord and Tenant other than
the relationship of landlord and tenant.

     l. Definition of Landlord. All indemnities, covenants and agreements of Tenant contained
herein that inure to the benefit of Landlord shall be construed to also inure to the benefit of
Landlord’s agents and employees.

     m. Time of Essence. Time is of the essence of this Lease and each of its provisions.

     n. Governing Law. This Lease which is in English, shall be governed by and construed in
accordance with the laws of Japan.

     o. Partial Invalidity. If any term, provision or condition contained in this Lease shall, to
any extent, be invalid or unenforceable, the remainder of this Lease (or the application of such
term, provision or condition to persons or circumstances other than those in respect of which it is
invalid or unenforceable) shall not be affected thereby, and each and every other term, provision
and condition of this Lease shall be valid and enforceable to the fullest extent possible permitted
by law.

     p. Tenant agrees that Landlord in no event shall be held liable for loss of, or damage to, any
documents or other items resulting from services provided by the Landlord pursuant to this Lease.

     q. Tenant shall not place any signs, placards, or the like on the Building or in the Premises
without Landlord’s reasonable prior written approval, which approval shall not be unreasonably
withheld.

22. NOTICES. All notices to be given under this Lease shall be in writing and delivered personally
or deposited in the mail, certified or registered mail with return receipt requested, postage
prepaid, addressed as follows:

Page 11

 

If to Landlord: HITACHI, LTD.

Hitachi, Ltd.

6, Kanda-Surugadai 4-chome

Chiyoda-ku

Tokyo, 101-8010 Japan

Attention: Mr. Hayashi, Senior Vice President, Senior Group

Executive, Information and Telecommunications System Group

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

Kirkland & Ellis

200 East Randolph Drive

Chicago, IL 60601

Attention: Michael G. Timmers, Esq.

or to such other person or such other address designated by notice sent by Landlord or Tenant.

If to Tenant:

OpNext Japan, Inc.

216 Totsuka-cho, Totsuka-ku

Yokohama-shi

244-8567, Japan

Attention: Mr. Junsuke Kusanagi, President

OpNext, Inc.

246 Industrial Way West

Eatontown, NJ 07724

Attention: Harry L. Bosco

and

OpNext, Inc.

246 Industrial Way West

Eatontown, NJ 07724

Attention: Minoru Maeda, Chief Operating Officer

Clarity Partners, L.P.

100 North Crescent Drive

Beverly Hills, CA 90210-5403

Attention: David Lee

Irell & Manella, LLP

1800 Avenue of the Stars, Suite 900

Los Angeles, CA 90067

Attention: Richard L. Bernacchi, Esq.

Page 12

 

          Notice by mail shall be deemed to have been given when deposited in the Japanese mail system
as aforesaid.

23. LIMITATION ON LANDLORD’S LIABILITY. It is expressly understood and agreed by Tenant that none
of Landlord’s covenants, undertakings or agreements are made or intended as personal covenants,
undertakings or agreements by Landlord’s partners, and any liability for damage or breach or
nonperformance by Landlord and no personal liability is assumed by, nor at any time may be asserted
against, Landlord’s partners or any of its or their of officers, agents, employees, legatees,
representatives, successors or assigns, all such liability, if any, being expressly waived and
released by Tenant.

24. COUNTERPARTS. This Lease 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 Lease.

*****

[SIGNATURE PAGE FOLLOWS]

Page 13

 

SIGNATURE PAGE TO LEASE AGREEMENT

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease the day and year first
above written.

	 	 	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	TENANT:
	 
	 	 	 	 	 	 	 	 	 	 
	HITACHI, LTD.	 	OPNEXT JAPAN, INC.
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Eiji Aoki
	 	By:
	 	/s/ Junsuke Kusanagi	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Eiji Aoki
	 	 	 	Junsuke Kusanagi	 	 	 	 
	 

	 	Managing Officer & Administrative Officer
	 	 	 	President	 	 	 	 
	 

	 	President, Telecommunication Systems	 	 	 	 	 	 	 	 
	 

	 	Division	 	 	 	 	 	 	 	 

 

 

EXHIBIT A

Operating Standards

	1.	 	Tenants and their guests will conduct themselves in a businesslike manner; proper attire will
be worn at all times; and the noise level will be kept to a level so as not to interfere with
or annoy other Tenants.

	2.	 	Tenant will not affix anything to the walls of the Premises without the prior written consent
of the Landlord, which shall not be unreasonably withheld.

	3.	 	Tenant will not prop open any corridor doors, exit doors or doors connecting corridors during
or after business hours.

	4.	 	Tenants using public areas may only do so with the consent of the Landlord, and those areas
must be kept neat and attractive at all times.

	5.	 	Tenant will not conduct any activity within the Premises or Building, which in the reasonable
judgment of the Landlord will create excessive traffic or is inappropriate to the executive
office suite environment.

	6.	 	No corridor, hall, elevator or stairway shall be obstructed by Tenant or used for any purpose
other than normal egress and ingress.

	7.	 	No advertisement, identifying signs or other notices shall be inscribed, painted or affixed
on any part of the corridors, doors, or public areas.

	8.	 	Without Landlord’s specific prior written permission, Tenant is not permitted to place “mass
market,” direct mail or advertising (i.e. newspaper, classified advertisements, billboards)
using Landlord’s assigned telephone number or take any such action that would generate
excessive incoming calls.

	9.	 	Immediately following Tenant’s use of conference room space and/or audio/visual equipment,
Tenant shall clean up and return the space and equipment to the state and condition it was in
prior to Tenant’s use. If not, Landlord may charge Tenant for any other expenses required to
restore the conference space and/or equipment to its original condition.

	10.	 	Landlord must be notified in writing if Tenant desires to utilize the conference room or
other common areas of the Building during evening or weekend hours. Landlord may deny the
Tenant access if the desired usage is inappropriate or may disrupt normal operations.

	11.	 	Except in connection with Tenant’s permitted use, Tenant shall not, without Landlord’s
written consent, store or operate any heating equipment, stove, do any cooking, or use or
allow to be used on the Premises oil, burning fluids, gasoline, kerosene for heating, warming
or lighting. No article deemed extra hazardous on account of fire or any explosives shall be
brought into said Premises or Building. No offensive gases, odors on liquids shall be
permitted.

	12.	 	Tenant will bring no animals into the Premises or Building except for those assisting
disabled individuals.

A-1

 

	13.	 	Tenant shall not remove furniture, fixtures or decorative material from offices or common
areas without the written consent of Landlord.

	14.	 	Tenant shall not make any additional copies of any Landlord issued keys. All keys and
security cards are the property of Landlord and must be returned upon request or by the close
of the business on the expiration or sooner termination of the Lease term. Any lost or
unreturned keys or cards are the sole responsibility of Tenant.

	15.	 	Tenant shall comply with all governmental regulations and ordinances concerning smoking in
the Building, including the Premises.

16. Landlord reserves the right to modify parking arrangements.

	17.	 	Tenant shall cooperate and be courteous with all other occupants of the Building and
Landlord’s staff and personnel.

	18.	 	Landlord reserves the right to make such other reasonable rules and regulations as in its
reasonable judgment may from time to time be needed for the safety, care, appropriate
operation and cleanliness of the Building and/or Premises.

A-2

 

EXHIBIT B

Rent Formula

I. Rent for Initial Term = 5,000,000 Yen per month calculated as follows:

	 	1.	 	K Factory = 486 Yen/m2
	 
	 	2.	 	D Factory = 402 Yen/m2
	 
	 	3.	 	Telecommunications Design Center = 1,043 Yen/m2

     Total Rent = 5,027,718 Yen

Such initial Term Rent for the Premises is further discounted (“Discount”) by 27,718 Yen. Such
Discount shall only apply to the total current space of 9,227 m2 and shall be applicable to all
such terms of this Lease.

Notwithstanding the foregoing, the Rent shall be reviewed annually for the current floor space as
well as any expansion options and subject to annual adjustments based on the following variables
(“Variables”) set forth below:

II. The Variables of the Rent are set forth as follows:

	 	1.	 	Fixed Asset Tax of Building1 = Fair Market Value of Building multiplied by OpNext Japan
Occupancy Rate multiplied by the current tax multiplied by 1/12. As used herein, the terms “OpNext
Japan Occupancy Rate” shall mean the total floor space occupied by Tenant divided by the total
floor space of the Building.

	 
	 	2.	 	Interest = Book value of the Building multiplied by OpNext Japan Occupancy Rate multiplied
by the current Interest rate multiplied by 1/12.
	 
	 	3.	 	Minimum Legal Rent2 = Fair Market Value of Land per square meter divided by the
number of stories of the Building multiplied by the total floor space occupied by Tenant
in the Building multiplied by current Minimum Legal Rent rate multiplied by 1/12.
	 
	 	4.	 	See Section VII below for further explanation of the Change in Variables of Rent.

 

			
	1	 	As used herein, the terms Fair Market Value of Land and Fair
Market Value of the Building shall be defined as the value appraised by
municipalities and other governmental authorities.
	 
	2	 	As used herein, the term Minimum Legal Rent shall mean
pursuant to the Corporate Tax Law of Japan, the minimum charge a Landlord must
charge the Tenant based on a percentage of the Fair Market Value of the square
meter of floor space. Currently, that percentage is six percent (6%). For
example, since the Buildings are several stories high, to obtain the Fair
Market Value of each square meter, such Fair Market Value per square meter is
divided by the number of stories that exist above the Land. See Section V.
below for further explanation.

B-1

 

III. Current Fixed Asset Tax for Building:

	 	1.	 	K Factory = 1,030,601,922 Yen x 2,235 m2/51,327 m2 x 1.7% x 1/12 = 64 K Yen
	 
	 	2.	 	D Factory = 489,666,947 Yen x 5,228 m2/35,060 m2 x 1.7% x 1/12 = 103 K Yen
	 
	 	3.	 	TDC = 4,440,615,378 Yen x 1,764 m2/31,431 m2 x 1.7% x 1/12 = 353 K Yen

IV. Current Interest:

	 	1.	 	K Factory = 1,649,161,081 Yen x 2,235 m2/51,327 m2 x 2.1% x 1/12 = 126 K Yen
	 
	 	2.	 	D Factory = 555,718,503 Yen x 5,228 m2/35,060 m2 x 2.1% x 1/12 = 145 K Yen
	 
	 	2.	 	TDC = 4,193,818,231 Yen x 1,764 m2/31,431 m2 x 2.1% x 1/12 = 412 K Yen

V. Current Minimum Legal Rent:

	 	1.	 	K Factory = (a) 135,000 Yen/3 stories x 1,964 m2 x 6% x 1/12

(2 buildings

in K Factory)                    +
	 
	 	                    
	 	                     (b) 135,000 Yen/2 stories x 271 m2 x 6% x 1/12 = 533 K Yen
	 
	 	2.	 	D Factory = 150,000 Yen/3 stories x 5,228 m2 x 6% x 1/12 = 1,307 K Yen
	 
	 	3.	 	TDC = 150,000 Yen/ 7 stories x 1,764 m2 x 6% x 1/12 = 189 K Yen

VI. Monthly Rent for Expansion Space subject to the Variables as stated above:

	 	1.	 	D Factory = 402 Yen/m2
	 
	 	2.	 	K Factory = 486 Yen/m2
	 
	 	3.	 	TDC = 1,043 Yen/m

B-2

 

VII. Further explanation of Change in Variables of Rent: 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Interest	 	 	 	 	Book Value of	 	 	OpNext Floor	 	 	Total Floor	 	 	Interest	 	 	Total Interest	 
	 	 	 	 	 	Building (Yen)	 	 	Space (m2)	 	 	Space (m2)	 	 	rate	 	 	(K Yen)	 
	K Factory
	 	up to '00/3	 	 	1,649,161,081	 	 	 	2,235	 	 	 	51,327	 	 	 	2.1	%	 	 	126	 
	 
	 	'01/4 to '02/3	 	 	1,611,989,175	 	 	 	2,235	 	 	 	51,327	 	 	 	2.1	%	 	 	123	 
	D Factory
	 	up to '00/3	 	 	555,718,503	 	 	 	5,228	 	 	 	35,060	 	 	 	2.1	%	 	 	145	 
	 
	 	'01/4 to '02/3	 	 	495,317,181	 	 	 	5,228	 	 	 	35,060	 	 	 	2.1	%	 	 	129	 
	TDC
	 	up to '00/3	 	 	4,193,818,231	 	 	 	1,764	 	 	 	31,431	 	 	 	2.1	%	 	 	412	 
	 
	 	'01/4 to '02/3	 	 	4,095,674,767	 	 	 	1,764	 	 	 	31,431	 	 	 	2.1	%	 	 	402	 
	Total
	 	up to '00/3	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	683	 
	 
	 	'01/4 to '02/3	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	654	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Balance	 	 	(29	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Rent (Yen per month)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Rent
	 	up to '00/3	 	 	5,000,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	'01/4 to '02/3	 	 	4,971,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Monthly Rent for Expansion Space (Yen per square meter)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	up to '00/3	 	'01/4 to '02/3	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	K Factory
	 	 	486	 	 	 	485	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	D Factory
	 	 	402	 	 	 	399	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TDC
	 	 	1043	 	 	 	1,038	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

B-3

 

EXHIBIT C

Expansion Space 

Space
Expansion of D Factorv (Modules)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Parameter	 	symbol	 	 	Application Time of Expansion Space	 
	 	 	 	 	 	 	Current	 	 	(β)	 	 	(γ)	 	 	(δ)	 	 	(ε)	 
	Assembly Space
	 	 	A	 	 	 	50	 	 	 	50	 	 	 	71	 	 	 	90	 	 	 	102	 
	 
	 	 	 	 	 	 	3,200	 	 	 	3,200	 	 	 	4,544	 	 	 	5,760	 	 	 	6,528	 
	Conference Rooms
	 	 	B	 	 	 	2	 	 	 	2	 	 	 	2	 	 	 	2	 	 	 	2	 
	 
	 	 	 	 	 	 	128	 	 	 	128	 	 	 	128	 	 	 	128	 	 	 	128	 
	Resting Space
	 	 	C	 	 	 	2	 	 	 	2	 	 	 	2	 	 	 	2	 	 	 	2	 
	 
	 	 	 	 	 	 	128	 	 	 	128	 	 	 	128	 	 	 	128	 	 	 	128	 
	Office of
Manufacture Center
	 	 	D	 	 	 	3	 	 	 	3	 	 	 	3	 	 	 	3	 	 	 	3	 
	 
	 	 	 	 	 	 	192	 	 	 	192	 	 	 	192	 	 	 	192	 	 	 	192	 
	Office of QA Center
	 	 	E	 	 	 	3	 	 	 	5	 	 	 	5	 	 	 	5	 	 	 	5	 
	 
	 	 	 	 	 	 	192	 	 	 	320	 	 	 	320	 	 	 	320	 	 	 	320	 
	Testing Room for QA
	 	 	F	 	 	 	4.7	 	 	 	4.7	 	 	 	4.7	 	 	 	4.7	 	 	 	4.7	 
	 
	 	 	 	 	 	 	300	 	 	 	300	 	 	 	300	 	 	 	300	 	 	 	300	 
	Raw Material Stockroom
	 	 	G	 	 	 	6	 	 	 	6	 	 	 	6	 	 	 	6	 	 	 	6	 
	 
	 	 	 	 	 	 	384	 	 	 	384	 	 	 	384	 	 	 	384	 	 	 	384	 
	Small Parts Stockroom
	 	 	H	 	 	 	2	 	 	 	2	 	 	 	2	 	 	 	2	 	 	 	2	 
	 
	 	 	 	 	 	 	128	 	 	 	128	 	 	 	128	 	 	 	128	 	 	 	128	 
	Space of JIT members
	 	 	I	 	 	 	2	 	 	 	2	 	 	 	2	 	 	 	2	 	 	 	2	 
	 
	 	 	 	 	 	 	128	 	 	 	128	 	 	 	128	 	 	 	128	 	 	 	128	 
	Laboratory Room
	 	 	J	 	 	 	6	 	 	 	6	 	 	 	6	 	 	 	6	 	 	 	6	 
	 
	 	 	 	 	 	 	384	 	 	 	384	 	 	 	384	 	 	 	384	 	 	 	384	 
	Stockroom for Miscellaneous
	 	 	K	 	 	 	0	 	 	 	8	 	 	 	8	 	 	 	8	 	 	 	8	 
	 
	 	 	 	 	 	 	0	 	 	 	512	 	 	 	512	 	 	 	512	 	 	 	512	 
	Office of Production Enginee
	 	 	L	 	 	 	0	 	 	 	2	 	 	 	2	 	 	 	2	 	 	 	2	 
	 
	 	 	 	 	 	 	0	 	 	 	128	 	 	 	128	 	 	 	128	 	 	 	128	 
	Dressing Room
	 	 	M	 	 	 	1	 	 	 	1	 	 	 	1	 	 	 	1	 	 	 	1	 
	 
	 	 	 	 	 	 	64	 	 	 	64	 	 	 	64	 	 	 	64	 	 	 	64	 
	Total
	 	 	—	 	 	 	82	 	 	 	94	 	 	 	115	 	 	 	134	 	 	 	146	 
	 
	 	 	 	 	 	 	5,228	 	 	 	5,996	 	 	 	7,340	 	 	 	8,556	 	 	 	9,324	 

C-1

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

EXHIBIT D 

Form of Landlord Notice of Annual Rent Adjustment

[Hitachi Letterhead]

OpNext Japan, Inc.

216 Totsuka-cho, Totsuka-ku

Yokohama-shi

244-8567, Japan

Attention: Harry L. Bosco

Dear Mr. Bosco:

     Reference is hereby made to that certain lease agreement dated May 31, 2001 (hereinafter
referred to as the “Lease”) between HITACHI, LTD., a corporation existing under the laws of Japan,
as Landlord and OPNEXT JAPAN INC., a corporation existing under the laws of Japan, as Tenant.
Capitalized terms used in this letter shall the meanings assigned to such terms in the Lease.

     Pursuant to Section 2 and Exhibit B of such Lease, the Rent shall be adjusted to the following
amount:                                          Yen effective as of
                                        (insert date). Such Rent shall be
due and payable pursuant to the terms of the Lease.

	 	 	 	 	 
	 	 	Very truly,
	 
	 	 	 	 
	 	 	Hitachi, Ltd.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Its:
	 	Chief Executive Officer of Telecommunication
	 

	 	 	 	and Information Infrastructure System

 

 

FIRST AMENDMENT TO THE LEASE AGREEMENT

     THIS FIRST AMENDMENT TO THE LEASE AGREEMENT (this “Amendment”) made as of this 31st day of
July 2001 between HITACHI, LTD., a corporation existing under the laws of Japan (hereinafter
referred to as “Landlord”) and OPNEXT JAPAN INC., a corporation existing under the laws of
Japan (hereinafter referred to as “Tenant”).

R E C I T A L S

     Landlord and Tenant have executed that certain lease dated as of the 31st day of July 2001
(the “Lease”), but effective as of the 1st day of February, 2001 (“Effective Date”)
for the premises located in three separate locations: (i) the mezzanine and first floor of the D
Factory (“D Factory”) of approximately 5,228 m2; (ii) the first and third floors of the K
Factory (“K Factory”) of approximately 2,235 m2; and (iii) the fifth floor of the
Telecommunication Design Center (“TDC”) of approximately 1,764 m2, (collectively referred
to as “Premises” or “Building”) for a total of 9,227 m2 of rentable area. Such Premises is located
at 216 Totsuka-cho, Totsuka-ku, Yokohama-shi, Kanagawa 244-8567-Japan (hereinafter referred to,
together with all present and future easements, additions, improvements and other rights
appurtenant thereto, as the “Land”), as more particularly set forth in the Lease.

     A. Pursuant to Section 14 of the Lease, Tenant desires to lease three (3) additional portions
of the Building containing approximately 1152 m2 on the first floor; (“Portion A”);
approximately 320 m2 on the first floor and approximately 64 m2 on the third floor (collectively,
“Portion B”); and approximately 128 m2 on the first floor (“Portion C”),
collectively totaling approximately 1,664 m2 of rentable area (collectively, the “Expansion
Space”), which Expansion Space is located in the D Factory and is depicted on Exhibit A
attached hereto and by this reference made a part hereof. Portion A, Portion B and Portion C are
sometimes each individually referred to herein as a “Portion” and collectively referred to
herein as “Portions.” Landlord is agreeable thereto on terms and conditions hereinafter
set forth.

     B. Landlord and Tenant desire to amend the Lease by, among other things, adding the Expansion
Space to the Premises, as more particularly hereinafter provided.

     NOW, THEREFORE, in consideration of the mutual promises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and
Tenant agree to amend the Lease as follows:

          1. Expansion Space Commencement Date.

(a) Landlord delivered possession of Portion A to Tenant on May 2, 2001.

(b) Landlord delivered possession Portion B to Tenant on July 9, 2001.

(c) Landlord will deliver Portion C to Tenant on August 20, 2001 free and clear of any occupancies by other tenants.

     Tenant’s possession of each Portion shall be subject to all of the terms and conditions of the

 

 

Lease upon delivery thereof to Tenant, provided that the Base Rent with respect to each Portion
shall commence on the day Landlord delivered or delivers possession of such Portion to Tenant. Upon
the commencement of the Lease with respect to any Portion, such Portion shall be added to the
Premises upon all of the terms and conditions of the Lease as modified herein. Upon any Portion(s)
being added to the Premises, the Base Rent shall be increased to reflect the additional number of
square meters in the Premises as a consequence of such Portion(s) being added to the Premises.

     2. Base Rent. In accordance with Paragraph 1(a) above, commencing on the
Expansion Space commencement date with respect to each Portion added to the Premises, the Base Rent
and monthly installments thereof shall be payable as follows:

	 	 	 	 	 	 	 
	 	 	Annual Base Rent	 	 	 	 
	 	 	per Rentable Square	 	 	 	 
	 	 	Meter of Expansion	 	 	 	Monthly Installments
	Period	 	Space	 	Annual Base Rent	 	of Base Rent
	May 1, 2001
	 	399 Yen/m2
	 	64,989,852 Yen
	 	5,415,821 Yen
	June 1, 2001
	 	399 Yen/m2
	 	65,167,776 Yen
	 	5,430,648 Yen
	July 1, 2001
	 	399 Yen/m2
	 	66,531,888 Yen
	 	5,544,324 Yen
	August 1, 2001
	 	399 Yen/m2
	 	67,243,608 Yen
	 	5,603,634 Yen

     The amounts set forth as “Annual Base Rent” and “Monthly Installments of Base Rent” directly
above are based upon the Formula as defined in Section 2 of the Lease and are subject to the
Variables pursuant to Exhibit B of the Lease.

     3. Mutual Incorporation. All negotiations, considerations, representations and
understandings between Landlord and Tenant are incorporated herein and may be modified or altered
only by agreement, in writing, between Landlord and Tenant. No modifications, termination, or
surrender of this Amendment or surrender of the Premises or any part thereof or of any interest
therein by Tenant shall be valid or effective unless agreed to and accepted, in writing, by the
Landlord and no act by any representative or agent of the Landlord other than delivery of such
written agreement and acceptance by the Landlord shall constitute acceptance thereof. Any prior
negotiations or intentions of the parties, unless specifically incorporated herein, are deemed null
and void.

     4. 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
Amendment.

     5. Miscellaneous. Except as modified herein, the Lease and all of the terms and
provisions thereof is hereby ratified and shall remain unmodified and in full force and effect as
originally written. All terms used herein but not defined herein which are defined in the Lease
shall have the same meaning for purposes hereof as they do for the purposes of the Lease.

*****

[SIGNATURE PAGE FOLLOWS]

 

 

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment the day and year first
above written.

	 	 	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	TENANT:
	 
	 	 	 	 	 	 	 	 	 	 
	HITACHI, LTD.	 	OPNEXT JAPAN, INC.
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Eiji Aoki
	 	By:
	 	/s/ Junsuke Kusanagi	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Eiji Aoki
	 	 	 	Junsuke Kusanagi	 	 	 	 
	 

	 	Managing Officer & Administrative Officer
	 	 	 	President	 	 	 	 
	 

	 	President, Telecommunication Systems Division	 	 	 	 	 	 	 	 

 

 

EXHIBIT A

THE
EXPANSION SPACE

[See
Attached]

 

 

     

 

 

     

 

 

(English Translation)

MEMORANDUM OF UNDERSTANDING

     A memorandum of understanding is hereby entered into as set forth below by and between Hitachi
Communication Technologies, Ltd. Career Network Division (hereinafter referred to as the
“Landlord”) and Opnext Japan, Inc. (hereinafter referred to as the “Tenant”) to revise as follows,
effective April 1, 2006, the stipulations of Article 1 (Leased Area) and Article 4 (Rent) which are
provided for in the Lease Agreement (Exhibit B to the Outsourcing Agreement; hereinafter referred
to as the “Original Agreement”) that was entered into by and between the Landlord and the Tenant
dated July 31, 2001.

NOTE

	 	 	 	 	 	 	 
	(Leased Area)	 	 	 	 
	Article 1	 	The Landlord shall
lease to the Tenant, and the Tenant shall lease from the Landlord
a property which is owned by the Landlord and is described below.
	 	 	Indication of the Property:
	 

	 	Address:
	 	216 Totsuka-chō, Totsuka-ku, Yokohama-shi, which is located on the premises of
Hitachi Communication Technologies, Ltd. Totsuka Office	 	 
	 

	 	Location:
	 	(Refer to the drawing attached hereto for further details.)	 	 

	 	 	 
	A portion of the office space in a new building:

	 	1,740.00 m2
	A portion of Plant D:

	 	6,840.00 m2
	A portion of Plant K:

	 	1,908.00 m2
	Total

	 	10,488.00
m2 à A separate agreement entered into for 49 m2 included in the leased portion of
Plant K.

	 	 	 	 	 	 	 
	(Rent)
	 	 	 	 	 	 
	Article 4

	 	 	(1	)	 	Rent shall be paid on a monthly basis in the amount of 5,460,660 yen.

The foregoing notwithstanding, the Tenant shall pay the amount of 5,733,693 yen for each month which
includes the monthly amount of consumption tax, etc. of 273,033 yen.
	 

	 	 	(2	)	 	The rent provided for in the preceding item shall be payable to the
Landlord at the end of each month.

IN WITNESS WHEREOF, the parties hereto have executed the present agreement in duplicate, with each
of the Landlord and the Tenant retaining one original.

	 	 	 	 	 
	March 31, 2006
	 	 	 	 
	 

	 	Landlord:
	 	Hitachi Communication Technologies, Ltd.
	 

	 	 	 	Career Network Division
	 

	 	 	 	216 Totsuka-chō, Totsuka-ku, Yokohama-shi
	 

	 	 	 	Yoshihiko Miyano, General Manager of the Career Network Division
	 

	 	 	 	[seal: Hitachi Communication Technologies, Ltd. Career Network Division / Seal of
	 

	 	 	 	the General Manager]
	 
	 	 	 	 
	 

	 	Tenant:
	 	Opnext Japan, Inc.
	 

	 	 	 	216 Totsuka-chō, Totsuka-ku, Yokohama-shi
	 

	 	 	 	Kei Oki, Representative Director

 

 

Statement of Rent for the New Building, Plant D, and Plant K

1. Tenant: Opnext Japan, Inc.

2. Term of the Lease: Beginning April 1, 2006

3. Basis for the Computation of the Rent (monthly amount)

(1) Rent for Buildings

	 	 	 	 	 	 	 	 	 	 	 	 
	New building:

	 	Unit value per month (1,038 yen/m2)
	 	×
	 	Leased Area (1,740.00 m2)
	 	=
	 	1,806,120 yen	 
	Building D:

	 	Unit value per month ( 399 yen/m2)
	 	×
	 	Leased Area (6,840.00 m2)
	 	=
	 	2,729,160 yen	 
	Building K:

	 	Unit value per month ( 485 yen/m2)
	 	×
	 	Leased Area (1,908.00 m2)
	 	=
	 	925,380 yen	 
	 

	 	 	 	 	 	Rent subtotal
	 	=
	 	5,460,660 yen	 
	 

	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	 	 	Consumption taxes
	 	=
	 	273,033 yen	 
	 

	 	Total leased area: 10,488 m2
	 	 	 	Total rent
	 	=
	 	5,733,693 yen	 
	 

	 	 
	 	 	 	 	 	 	 
	 	 

 

 

(English Translation)

MEMORANDUM OF UNDERSTANDING

     A memorandum of understanding is hereby entered into as set forth below by and between Hitachi
Communication Technologies, Ltd. Career Network Division (hereinafter referred to as the
“Landlord”) and Opnext Japan, Inc. (hereinafter referred to as the “Tenant”) to revise as follows,
effective October 1, 2006, the stipulation of Article 1 (Term) which is provided for in the Lease
Agreement (Exhibit B to the Outsourcing Agreement; hereinafter referred to as the “Original
Agreement”) that was entered into by and between the Landlord and the Tenant dated July 31, 2001.

NOTE

	 	 	 	 	 	 	 
	(Term of the Lease)	 	 	 	 
	Article 1	 	The term of the lease
of the property, etc. shall be the five-year period which commences
on October 1, 2006 and ends on September 30, 2011, provided, however, that
the present agreement shall be automatically renewed for a further one-year
period from the day immediately after the expiration of the term of the lease
unless either the Landlord or the Tenant declares its intent to not renew the present
agreement not later than one month prior to the expiration of the said term.
Thereafter, the present agreement shall be renewed for successive periods of one year in the same manner.
	 
	September 29, 2006	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Landlord:
	 	Hitachi Communication Technologies, Ltd.

Career Network Division

216 Totsuka-chō, Totsuka-ku, Yokohama-shi
	 

	 	 	 	 	 	Yoshihiko Miyano, General Manager of the Career Network Division
	 

	 	 	 	 	 	[seal: Hitachi Communication
Technologies, Ltd. Career Network Division / Seal of the General Manager]
	 
	 	 	 	 	 	 
	 

	 	 	 	Tenant:
	 	Opnext Japan, Inc.
	 

	 	 	 	 	 	216 Totsuka-chō, Totsuka-ku, Yokohama-shi
	 

	 	 	 	 	 	Kei Oki, Representative DirectorEX-10.24

 

Exhibit 10.24

Exhibit B to Transition Services Agreement

LEASE AGREEMENT

          This LEASE AGREEMENT (this “Lease”) made as of this 1st day of October 2002
(hereinafter referred to as the “Lease”) between HITACHI, LTD., a corporation existing under the
laws of Japan (“Hitachi”), HITACHI TOHBU SEMICONDUCTOR, LTD., a corporation existing under the laws
of Japan (“HTS”) and OPTO-DEVICE, LTD., a corporation existing under the laws of Japan (hereinafter
referred to as “Tenant”). Hitachi and HTS shall hereinafter be referred to as “Landlord.” This
Lease is deemed to be effective as of the 1st day of October, 2002 (“Effective Date”). Unless
defined elsewhere herein, capitalized terms used in this Lease shall have the meanings assigned to
such terms in the Stock Purchase Agreement, dated as of the date hereof, between Hitachi and
OpNext, Inc., a Delaware corporation and a majority-owned subsidiary of Hitachi (“OpNext Inc.”).

WITNESSETH:

          WHEREAS, Landlord hereby leases to Tenant, and Tenant hereby accepts, the premises located in
three separate locations: (i) a part of 1st and 2nd Floor of South Building
of approximately 3452.8 m2; (ii) a part of 3rd Floor of Designing Building of
approximately 275.0 m2; and (iii) a part of 1st Floor of Office Building of
approximately 114.1 m2 (collectively referred to as the “Premises” or “Building”) for a total of
3841.9 m2. Such Premises is located at 190 Kishiwagi, Komoro-shi, Nagano 384-0055-Japan
(hereinafter referred to, together with all present and future easements, additions, improvements
and other rights appurtenant thereto, as the “Land”), subject to the covenants, terms, provisions
and conditions of this Lease.

          WHEREAS, Hitachi and Tenant are parties to that certain transition services agreement (such
transition services agreement, as same may be amended from time to time, being herein called the
“Transition Services Agreement”), dated as of the date hereof, to which this Lease is attached as
an exhibit to such Transition Services Agreement and made a part thereof.

          NOW, THEREFORE, in consideration thereof, Landlord and Tenant covenant and agree as follows:

1. TERM; EXTENSION OPTION.

          (A) The term of this Lease shall be for 5 years (hereinafter referred to as the “Term”) and is
intended to commence on the 1st day of October, 2002 (hereinafter referred to as the “Commencement
Date”) and end on the 30th day of September, 2007 (hereinafter referred to as the “Expiration
Date”), unless sooner terminated as provided herein. Tenant shall have unlimited automatic
extensions to extend the term of the Lease for (5) years each ((the “Extension Term”), upon giving
Landlord three (3) months advance written notice prior to the expiration of the then Expiration
Date, of its election to exercise each option provided that
Tenant remains a majority owned indirect Subsidiary of Hitachi at the time of exercise of each
option to extend the Term. All terms of this Lease shall apply during any Extension Term and
references to the Expiration Date will incorporate the extensions, except that the Base Rent shall
be determined in a manner consistent with the determination of Rent in the first year of the Term

Page 1

 

and otherwise negotiated in good faith between the parties prior to the commencement of each
Extension Term.

     (B) So long as (i) Landlord and its Affiliates directly or indirectly hold voting securities
of OpNext Inc. representing a majority of the voting interest in OpNext Inc. or have the right to
designate a majority of OpNext Inc.’s directors and (ii) OpNext Inc. and its Affiliates directly or
indirectly control a majority of voting interest in Tenant or its successor, Landlord will not
terminate this Lease as a result of any default by Tenant, material or otherwise.

2. RENT. Tenant shall pay base rent (referred to herein as “Base Rent” or “Rent”) to Hitachi and
HTS at the place as Hitachi may from time to time designate, in coin or currency, which shall be
Eleven Million Ninety Two Thousand Six Hundred and Eighty (11,092,680) Japanese Yen per year,
payable in equal monthly installments of 655,714 Japanese Yen to Hitachi and 268,676 Japanese Yen
to HTS. Such Base Rent shall be reviewed annually and will be determined by using the Rent formula
(“Formula”) set forth in the attached Exhibit B as made a part hereof. Such new Base Rent amount
will commence on October 1 of each Lease Year and end on September 31 of the following Lease Year.
Landlord shall inform Tenant of the annual adjusted Rent amount pursuant to the form of Landlord
Notice of Annual Rent Adjustment, which is attached hereto as Exhibit C. All rent payments shall
be made in advance on or before the 15th day of each and every month during the Term,
without any set-off or deduction whatsoever, except that Tenant shall pay the first full monthly
installment at the time of execution of this Lease. If the Term commences other than on the first
day of a month or ends other than on the last day of the month, the Rent for such month shall be
prorated. All of any sums and payments due and owning under this Lease shall be deemed “Rent.”
For purposes of this Lease, a lease year shall be the twelve (12) month period commencing with the
first day of the month following the Commencement Date (or, if the Commencement Date falls on the
first day of a month, commencing on the Commencement Date) and ending on the last day of the
twelfth (12th) full calendar month thereafter, and each succeeding twelve (12) calendar month
period (a “Lease Year”), and this Lease shall then terminate, unless extended, on the last day of
the twentieth Lease Year (the “Expiration Date”). Tenant shall be responsible for the payment of
any consumption tax in connection with the transactions contemplated by this Agreement and any
refund of all or any portion of the consumption tax shall be retained by Tenant.

     Tenant’s Right to Inspect and Audit. During the Term of this Lease, upon at least ten (10)
days written notice to Landlord and not more than once every twelve (12) months, Tenant or its
authorized representatives, will have the right at Tenant’s sole expense, to inspect and audit the
books and records of Landlord by an accounting firm approved in advance by Landlord for the sole
purpose of verifying the amounts pertaining to the Variables as set forth in the Rent Formula. If
such audit shows that the Variables are is overstated by more than 10% or more with respect to any
period being audited, Landlord will reimburse Tenant promptly for amounts overpaid, plus the
reasonable costs incurred by Tenant for such inspection and audit, plus interest for the amounts
overpaid at the Interest Rate.

3. USE OF PREMISES. Tenant shall use and occupy the Premises for the purpose of manufacturing,
designing, developing, selling, distributing, and the administration of opto-device products and
general office activity. As used herein, the term “opto-device products” shall include but not
limited to, the following: transmitters, receivers, transceivers, laser diodes, laser

Page 2

 

diode
modules, photo diodes, photo diode modules, parallel optical interconnections, lasers, modulators,
amplifier modules, optical switches, optical wave guides and infra-red emitting diodes.

     Tenant shall not make nor permit to be made any use of the Premises which would violate any of
the terms of this Lease or which, directly or indirectly, is forbidden by statute, ordinance or
government regulations, which may be dangerous to life, limb or property, which may invalidate or
increase the premium of any policy of insurance carried on the Building or on the Premises, which
will suffer or permit the Premises to be used in any manner or anything to be brought into or kept
there which, in the sole judgment of Landlord, shall in any way impair or tend to impair the high
quality character, reputation or appearance of the Building, or which may or tend to impair or
interfere with any services performed by Landlord for Tenant or for others.

4. COMMON USE AREA AND FACILITIES. All parking areas, access roads and facilities furnished, made
available or maintained by Landlord in or near the Building, including conference facilities,
cafeteria, play ground, dormitory, employee parking areas, loading docks and area, delivery areas,
package pickup stations, elevators, pedestrian sidewalks, malls, courts, and ramps, landscaped
areas, retaining walls, stairways, first-aid and comfort stations, lighting facilities, and other
areas and improvements provided by Landlord for the use of a tenant or tenants and/or their
customers (all herein called “Common Areas”) shall at all times be subject to the exclusive control
and management of Landlord.

     a. Use of Common Areas. Tenant and its contractors, business invitees, employees and
customers shall have the non-exclusive right, in common with Landlord and all others to whom
Landlord has granted or hereafter grants rights, to use the Common Areas. Landlord may after prior
written notice to Tenant (except in case of emergencies), at any time close temporarily any Common
Areas to make repairs or changes, prevent the acquisition of public rights therein, discourage
non-customer parking or for other reasonable purposes. Tenant shall not interfere with Landlord’s
or other tenant’s rights to use any part of the Common Areas.

     b. Access to World Wide Sales Offices. During the Term or Extension Term only, provided that
Tenant remains a majority-owned Subsidiary of Landlord, Landlord shall use commercially reasonable
efforts to assist Tenant to gain access to Landlord’s (including its subsidiaries) sales offices at
Tenant’s sole cost and expense subject to such rules and regulations as Landlord or any of its
subsidiaries may from time to time impose.

     c. Access to the Building Roof. With prior notice to Landlord, Tenant shall have access to
the roof attached to the Building. With Landlord’s prior written consent only, which consent shall
not be unreasonably withheld, Tenant may (i) install telecommunications equipment on the roof of
the Building only; and (ii) be permitted access between the antenna mounts and the footprints
throughout certain portions of the Building for purposes of connecting same so long as such access
does not unreasonably interfere with other tenants of the Building.

5. CONDITION OF PREMISES. The Tenant’s taking possession of the Premises shall be conclusive
evidence that the Premises were in good order and satisfactory condition when the Tenant took
possession, excluding items of damage caused by Tenant or its agents, independent contractors or
suppliers. No promise of the Landlord to alter, remodel or improve the Premises or the Building
and no representation by Landlord or its agents respecting the condition of the Premises

Page 3

 

or the
Building have been made to Tenant or relied upon by Tenant other than as may be contained in this
Lease. Tenant accepts the Premises AS-IS, WHERE-IS AND WITH ALL FAULTS, and acknowledges that no
representations, warranties, guarantees, promises, statements or estimates of any nature whatsoever
upon which Tenant is relying whether written or oral, express or implied, in fact or in law, have
been made by Landlord, any real estate broker, agent, employee or attorney-in-fact or at law or
purporting to represent Landlord. Notwithstanding anything to the contrary contained in this
Lease, if within thirty (30) days following Landlord’s delivery of possession of the Premises to
Tenant, it is determined that any of the mechanical or utility systems serving any portion of the
Premises was not in good operating condition for the use contemplated by Tenant as of the delivery
of possession of the Premises by Landlord to Tenant (but without regard to any subsequent
particular use of the Premises by Tenant or any subsequent alterations or improvements made to the
Premises by or on behalf of Tenant), then Landlord shall, at Landlord’s sole cost, promptly perform
such corrective work so as to cause such systems to be in good working order (but Landlord shall
not be liable for any increased costs of such corrective work resulting from the particular use of
the Premises by Tenant).

6. CONFIDENTIAL INFORMATION. Landlord and Tenant agree that all provisions in the Transition
Services Agreement, relating to confidential information, shall also apply with respect to this
Lease.

7. REPAIRS. Tenant will, at Tenant’s own expense, keep the Premises in good order, repair and
condition at all times during the Term, and Tenant shall promptly and adequately repair all damage
to the Premises and replace or repair all damaged or broken fixtures and appurtenances, under the
supervision and subject to the approval of the Landlord, and within any reasonable period of time
specified by the Landlord. If the Tenant does not do so after five (5) days written notice to
Tenant, Landlord may, but need not, make such repairs and replacements, and Tenant shall pay
Landlord the cost thereof, including a percentage of the cost thereof (to be uniformly established
for the Building) sufficient to reimburse Landlord for all, fees and other costs or expenses
arising from Landlord’s involvement with such repairs and replacements, forthwith upon being billed
for same. Landlord may, but shall not be required to, enter the Premises at all reasonable times
to make such repairs, alterations, improvements and additions to the Premises or to the Building or
to any equipment located in the Building as Landlord shall desire or deem necessary or as Landlord
may be required to do by governmental authority or court order or decree.

     Except as otherwise set forth in this Lease, Landlord shall not under any circumstances be
required to build any improvements on the Premises, or to make any repairs, replacements,
alterations, or renewals of any nature or description to the interior of the Premises or to any of
the existing improvements therein, whether interior or exterior, ordinary or extraordinary
structural or non-structural, foreseen or unforeseen, or to make any expenditure whatsoever in
connection with this Lease or to inspect or maintain the Premises in any way, except as expressly
set forth as follows: (a) the replacement of any roof on a building at the Premises as
required, (b) repair and/or replacement of any load-bearing walls and exterior walls on buildings
at the Premises as required, (c) any repair/replacement of Building mechanical systems as required,
and (d) any repair/replacement of the Building foundation and all other structural repairs.
Landlord

Page 4

 

shall not be required to make any such repair or replacement where such repair or
replacement is necessitated by any action, willful misconduct, omission, non action or gross
negligence of Tenant or Tenant’s agents, employees, customers, invitees, or contractors. Landlord
shall not be deemed in breach of this Lease unless Landlord fails within a reasonable time to
perform an obligation required to be performed by Landlord. For purposes of this Section 7, and
except in the case of an emergency, a reasonable time shall in no event be less than ten (10) days
after receipt by Landlord of written notice specifying wherein such obligation of Landlord has not
been performed; provided, however, that if the nature of Landlord’s obligation is such that more
than ten (10) days after such notice are reasonably required for its performance, then Landlord
shall not be in breach of this Lease if performance is commenced within such ten (10) day period
and thereafter diligently pursued to completion. Notwithstanding anything herein to the contrary,
in addition to and not in limitation of Tenant’s remedies, if Landlord shall be deemed in breach of
this Section 7, then Tenant shall be entitled to Rent abatement until such breach is cured and
Tenant shall have no claim against Landlord for any damages suffered by reason of such breach.

8. ADDITIONS AND ALTERATIONS. Except for non-structural interior alterations, Tenant shall not
alter or cause changes in construction of the tenant improvements without Landlord’s prior written
consent. Tenant shall not, without the prior written consent of Landlord (such consent shall not
be unreasonably withheld, delayed or conditioned), make any alterations, improvements,
redecorations or additions to the Premises. Landlord’s refusal to give said consent shall be
conclusive. All alterations, improvements, redecorations and additions to the Premises including
any tenant improvements, whether temporary or permanent in character, made or paid for by Landlord
or Tenant, shall without compensation to Tenant become Landlord’s property at the termination of
this Lease by lapse of time or otherwise and shall, unless Landlord requests their removal (in
which case Tenant shall remove the same as provided in this Lease), be relinquished to Landlord in
good condition, ordinary wear excepted. Notwithstanding the foregoing, Tenant may after prior
written consent from Landlord, remove Tenant’s machinery and equipment (“Trade Fixtures”) that can
be removed without doing any material damage to the Premises subject to Tenant’s obligation to
repair and restore the Premises pursuant to this Lease. If there is any damage to the Premises
caused by Tenant removing Trade Fixtures, Landlord shall notify Tenant and Tenant shall promptly
reimburse and indemnify Landlord for all costs in connection with such damage.

9. INSURANCE.

     a. Waiver of Subrogation. Landlord and Tenant each hereby waive any and every claim for
recovery from the other for any and all loss of or damage to the Building or Premises or to the
contents thereof, which loss or damage is covered by valid and collectible physical damage
insurance policies, to the extent that such loss or damage is recoverable under said insurance
policies. Inasmuch as this mutual waiver will preclude the assignment of any such claim by
subrogation (or otherwise) to an insurance company (or any other person), Landlord and Tenant each
agree to give to each insurance company which has issued, or in the future may
issue, to its policies of physical damage insurance, written notice of the terms of this
mutual waiver, and to have said insurance policies properly endorsed, if necessary, to prevent the
invalidation of said insurance coverage by reason of said waiver.

Page 5

 

     b. Coverage. During the Term or any applicable Extension Term, Landlord shall purchase and
maintain one (1) master insurance program that provides comprehensive broad coverage insurance, at
Landlord’s expense, but subject to reimbursement by Tenant for Tenant’s proportionate share of such
insurance costs, for the benefit of Tenant and Landlord (as their interest may appear). Such
insurance will be with a financially reputable insurer licensed to do business in Japan with
liability insurance sufficient to protect Tenant and Landlord from damages to Landlord’s and
Tenant’s (a) fixed assets; (b) damages to inventory stock and (c) loss of profit resulting from the
following situations:

	 	1.	 	Fire
	 
	 	2.	 	Lightning
	 
	 	3.	 	Explosion/Burst
	 
	 	4.	 	Wind, Hail, Snow
	 
	 	5.	 	Flood
	 
	 	6.	 	Electrical Accidents Related to Utilities
	 
	 	7.	 	Mechanical Accidents Related to Utilities
	 
	 	8.	 	Collision of Vehicles or Airplane
	 
	 	9.	 	Object (other than No.8) Flying in from Outside Premises
	 
	 	10.	 	Water Leakage Caused by Accident to Water Service Facilities
	 
	 	11.	 	Noise, Labor Dispute
	 
	 	12.	 	Sabotage
	 
	 	13.	 	Glass Damage (does not cover inventory stock)
	 
	 	14.	 	Breakage
	 
	 	15.	 	Theft
	 
	 	16.	 	Any Other Contingent, Sudden Accident
	 
	 	17.	 	Earthquake, Volcanic Eruption, Tidal Wave
	 
	 	18.	 	Suspension of Utilities Outside Premises (only loss of profit is covered)

Landlord will meet its insurance obligations herein by means of a blanket insurance policy or
through any combination of primary or umbrella/excess coverage.

     c. Avoid Action Increasing Rates. Tenant shall comply with all applicable laws and
ordinances, all orders and decrees of court and all requirements of other governmental authorities,
and shall not, directly or indirectly, make any use of the Premises which may thereby be prohibited
or be dangerous to person or property or which may jeopardize any insurance coverage or may
increase the cost of insurance or require additional insurance coverage.

10. FIRE OR CASUALTY.

     a. If the Premises or the Building (including machinery or equipment used in its operation)
shall be materially damaged by fire or other casualty, Landlord shall have the right to terminate
this Lease as of the date of such damage (with appropriate prorations of Rent being
made for Tenant’s possession subsequent to the date of such damage of those tenantable
portions of the Premises) upon giving written notice to the Tenant at any time within sixty (60)
days after the date of such damage. If the Lease is not terminated, rent shall abate on those
portions of the Premises as are, from time to time, untenantable as a result of such damage.

Page 6

 

     b. Tenant acknowledges that Landlord shall be entitled to the full proceeds of any insurance
coverage, whether carried by Landlord or Tenant, for damage to alterations, additions, improvements
or decorations provided by Landlord.

     c. Notwithstanding anything to the contrary herein set forth, Landlord shall have no duty to
repair or restore any portion of the alterations, additions or improvements in the Premises or the
decorations thereto, provided that, if the Premises or the Building (including machinery or
equipment used in its operation) shall be materially damaged by fire or other casualty and Landlord
elects not to repair or restore such property pursuant to this Section 10(c), Tenant shall have the
right to terminate this Lease. Tenant acknowledges that Landlord shall be entitled to the full
proceeds of any insurance coverage, whether carried by Landlord or Tenant, for damage to
alterations, additions, improvements or decorations paid or provided by Landlord.

11. WAIVER OF CLAIMS-INDEMNIFICATION. To the extent not prohibited by law and except to the extent
caused by the negligence or willful misconduct of Landlord or arising directly from a default of
Landlord of its performance of its obligations hereunder, Landlord and Landlord’s partners and
their respective officers, agents, servants and employees shall not be liable for any damage either
to person or property or resulting from the loss of use thereof sustained by Tenant or by other
persons of to the Building or any part thereof or any appurtenances thereof becoming out of repair,
or due to the happening of any accident or event in or about the Building, including the Premises,
or due to any act or neglect of any tenant or occupant of the Building or of any other person.
Tenant further agrees that all personal property upon the Premises, or upon loading docks,
receiving and holding areas, or freight elevators of the Building, shall be at the risk of Tenant
only, and that Landlord shall not be liable for any loss or damage thereto or theft thereof.
Without limitation of any other provisions thereof, Tenant agrees to defend, protect, indemnify and
save harmless Landlord from and against all liability to third parties arising out of Tenant’s use
and occupancy of the Premises or any common area pursuant to Section 4 hereof, or acts of Tenant
and its servants, agents, employees, contractors, suppliers, workers and invitees. Landlord shall
indemnify and defend Tenant from and against any and all damages, costs or liabilities arising out
of any default by Landlord of its performance of its obligations hereunder, except to the extent
caused by the negligence or willful misconduct of Tenant or if at the time Tenant does not satisfy
the ownership requirements described in Section 1(b) above, arising from a default of Tenant of
either its monetary or non-monetary obligations or performance hereunder. The provisions of this
paragraph shall survive the expiration or termination of the Lease.

12. NONWAIVER. No waiver of any provision of this Lease shall be implied by any failure of
Landlord to enforce any remedy on account of the violation of such provision, even if such
violation be continued or repeated subsequently, and no express waiver shall affect any provision
other than the one specified in such waiver and that one only for the time and in the manner
specifically stated. No receipt of monies by Landlord from Tenant after the termination of this
Lease shall in any way alter the length of the Term or of Tenant’s right of possession hereunder
or after the giving of any notice shall reinstate, continue or extend the Term or affect any notice
given Tenant prior to the receipt of such monies, it being agreed that after the service of notice
or the commencement of a suit or after final judgment for possession of the Premises, Landlord may
receive and collect any Rent due, and the payment of said Rent shall not waive or affect said
notice, suit or judgment.

Page 7

 

13. ASSIGNMENT AND SUBLETTING. Tenant shall not, without the prior written consent of Landlord
(which consent may be withheld arbitrarily) (i) assign, convey or mortgage this Lease or any
interest hereunder (ii) permit to occur or permit to exist, any assignment of this Lease, any lien
upon the Lease, the Premises or Tenant’s interest therein, or any change in the control of Tenant
(of any level), by sale of stock, transfer of partnership interest, merger, operation of law or any
other manner, in a single transaction or series of transactions; (iii) sublet the Premises or any
part thereof; or (iv) permit the use of the Premises by any parties other than Tenant and its
employees, provided however, that Landlord’s consent shall not be unreasonably withheld in the case
of any assignment by Tenant to OpNext Inc. or any majority owned Subsidiary of OpNext Inc. that is
operating the Business in Japan for so long as (a) Landlord and its Affiliates directly or
indirectly hold voting securities of OpNext Inc. representing a majority of the voting interest in
OpNext Inc. or have the right to designate a majority of OpNext Inc. directors (b) Tenant remains
liable for the performance of any such assignee’s obligations hereunder and any liability incurred
for the performance of any such assignee’s obligations hereunder and any liability incurred in
connection therewith, (c) such assignment does not result in any additional costs for which
Landlord shall be liable and (d) such assignee is located in Japan and is engaged in the Business
for the use as contemplated in Section 3 above; provided further, that Landlord’s consent shall not
be required in the event that Tenant is merged with or into OpNext Japan, Inc., a corporation
existing under the laws of Japan. Any such assignment on the part of Tenant in violation of this
provision shall be void and of no effect. Landlord’s consent to any assignment, subletting or
transfer or Landlord’s election to accept any assignee, subtenant or transferee as the tenant
hereunder and to collect rent from such assignee, subtenant or transferee shall not release Tenant
or any subsequent tenant from any covenant or obligation under his Lease. Landlord’s consent to
any assignment, subletting or transfer shall not constitute a waiver of Landlord’s right to
withhold its consent to any future assignment, subletting, or transfer.

     Except for the agreement of Landlord set forth in Section 4 (b) herein, Landlord shall have
the absolute right to assign or otherwise transfer its interest in this Lease to any parent or
operating Subsidiary of Landlord or Landlord’s parent, or Subsidiary of the parent of Landlord or
Landlord’s parent, or to a corporation with which Landlord or Landlord’s parent may merge or
consolidate, or to any entity or person acquiring a majority of all of Landlord’s assets. The
parties agree that this Lease does not restrict or refer in any manner to a change in control or
change in shareholders, directors, management or organization of Landlord’s parent or Landlord, or
any Subsidiary, Affiliate or associate of the parent of Landlord’s parent or Landlord, or to the
issuance, sale, purchase or disposition of the shares of Landlord’s parent or Landlord, or any
Subsidiary, Affiliate or associate of Landlord’s parent or Landlord.

14. SURRENDER OF POSSESSION. Upon the expiration of the Term or upon the termination of Tenant’s
right of possession, whether by lapse of time or at the option of Landlord as herein provided,
Tenant shall forthwith surrender the Premises to Landlord in good order,
repair and condition, ordinary wear excepted, and shall, if Landlord so requires, restore the
Premises to the condition existing at the beginning of the Term, ordinary wear and tear excepted.
Any interest of Tenant in the alterations, improvements (including all floor coverings) and
additions to the Premises made or paid for by Landlord or Tenant shall, without compensation to
Tenant, become Landlord’s property at the termination of this lease by lapse of time or otherwise
and such alterations, improvements and additions shall be relinquished to Landlord in good

Page 8

 

condition, ordinary wear excepted. Upon or prior to the earlier of the Expiration Date or the date
upon which Tenant’s right to possession of the Premises may be terminated, Tenant shall remove its
office furniture, trade fixtures, office equipment and all other items of Tenant’s property on the
Premises. Tenant shall pay to Landlord upon demand the cost of repairing any damage to the
Premises and to the Building caused by any such removal. If Tenant shall fail or refuse to remove
any such property from the Premises, Tenant shall be conclusively presumed to have abandoned the
same, and title thereto shall thereupon pass to Landlord without any cost either by set-off,
credit, allowance or otherwise, and Landlord may at its option accept the title to such property or
at Tenant’s expense may (i) remove the same or any part in any manner that Landlord shall choose,
repairing any damage to the Premises caused by such removal, or (ii) store, destroy or otherwise
dispose of the same without incurring liability to Tenant or any other person.

15. HOLDING OVER. Tenant shall pay to Landlord an amount as Rent equal to 150% of one-twelfth of
the Rent paid by Tenant during the previous Lease Year herein provided during each month or portion
thereof for which Tenant shall retain possession of the Premises or any part thereof after the
expiration or termination of the Term or of Tenant’s right of possession, whether by lapse of time
or otherwise, and also shall pay all damages sustained by Landlord, whether direct or
consequential, on account thereof. If Tenant fails to surrender the Premises upon the expiration
or earlier termination of this Lease, Tenant shall indemnify, defend and hold harmless Landlord
from and against all loss, damage, cost, liability or expense, including, without limitation,
reasonable attorney fees and expenses resulting from or relating to such failure to surrender the
Premises, including, without limitation, any claim made by any succeeding tenant. The provisions
of this Paragraph shall not be deemed to limit or constitute a waiver of any other rights or
remedies of Landlord provided herein or at law.

16. CERTAIN RIGHTS RESERVED BY LANDLORD. Landlord shall have the following rights, each of which
Landlord may exercise without notice to Tenant except as otherwise set forth herein, and without
liability to Tenant for damage or injury to property, person or business on account of the exercise
thereof, and the exercise of any such rights shall not be deemed to constitute an eviction or
disturbance of Tenant’s use or possession of the Premises and shall not give rise to any claim for
set-off or abatement of rent or any other claim:

     a. To decorate or to make repairs, alterations, additions, or improvements, whether structural
or otherwise, in and about the Building, or any part thereof, and for such purposes to enter upon
the Premises, and during the continuance of any of said work, to temporarily close doors,
entryways, public space and corridors in the Building and to interrupt or temporarily suspend
services or use of facilities, all without affecting any of Tenant’s obligations hereunder, so long
as the Premises are reasonably accessible and usable.

     b. After reasonable prior written notice to Tenant, Landlord shall show the Premises to
prospective tenants at reasonable times and, if vacated or abandoned, to show the Premises at any
time and to prepare the Premises for re-occupancy.

     c. To erect, use and maintain pipes, ducts, wiring and conduits, and appurtenances thereto, in
and through the Premises at reasonable locations.

Page 9

 

     d. After reasonable prior written notice to Tenant, Landlord shall enter the Premises at any
reasonable time to inspect the Premises.

17. OPERATING STANDARDS. The Operating Standards attached to this Lease as Exhibit A are hereby
made an integral part of this Lease. Tenant, its employees, agents, guests, invitees, visitors
and/or any other person caused to be present in or around the Premises by the Tenant shall comply
by the Operating Standards and any amendments or additions to said rules and regulations as
Landlord may make. In addition, Tenant, its employees and agents shall abide by all applicable
governmental rules, regulations, statutes and ordinances relating in any way to the Premises or the
Building or Tenant’s use or occupancy of the Premises or the Building; failing which Tenant shall
be in default hereunder and shall pay fines or penalties imposed for such violation(s) directly to
the appropriate governmental authority or to Landlord, if Landlord has paid such amount on behalf
of Tenant. Such remedy shall not be exclusive. It is hereby further explicitly agreed and
understood that full compliance with the Operating Standards as set forth constitutes a material
obligation of this Lease, and that the failure to so comply shall constitute a violation of this
Lease entitling the Landlord to exercise any of its remedies pursuant to this Lease or otherwise.

18. REMEDIES.

     a. If default shall be made in the payment of the Rent or any installment thereof or in the
payment of any other sum required to be paid by Tenant under this Lease or under the terms of any
other agreement between Landlord and Tenant and such default shall continue for fifteen (15) days
after notice, or if default shall be made in the observance or performance of any of the other
covenants or conditions in this Lease which Tenant is required to observe and perform and such
default shall continue for ten (10) days after written notice to Tenant, or if a default involves a
hazardous condition and is not cured by Tenant immediately upon written notice to Tenant, or if the
interest of Tenant in this Lease shall be levied on under execution or other legal process, or if
any voluntary petition in bankruptcy or for corporate reorganization or any similar relief shall be
filed by Tenant, or if any involuntary petition in bankruptcy shall be filed against Tenant under
any federal or state bankruptcy or insolvency act and shall not have been dismissed within thirty
days from the filing thereof, or if a receiver shall be appointed for Tenant or any of the property
of Tenant by any court and such receiver shall not have been dismissed within thirty days from the
date of his appointment, or if Tenant shall make an assignment for the benefit of creditors, or if
Tenant shall admit in writing Tenant’s inability to meet Tenant’s debts as they mature, or if
Tenant shall abandon or vacate the Premises during the Term, then Landlord may treat the occurrence
of any one or more of the foregoing events as a breach of this Lease, and thereupon at its option
may with, or without notice or demand of any kind to Tenant or any other person, have any one or
more of the following described remedies in addition to all other rights and remedies provided at
law or in equity or elsewhere herein:

     b. Subject to Section 1(b) above, Landlord may terminate this Lease and the Term created
hereby, in which event Landlord may forthwith repossess the Premises and be entitled to recover
forthwith, in addition to any other sums or damages for which Tenant may be liable to Landlord, as
damages a sum of money equal to the excess of the value of the Rent provided to be paid by Tenant
for the balance of the Term over the fair market rental value of the Premises, after deduction of
all anticipated expenses of reletting, for said period. Should the fair market

Page 10

 

rental value of the
Premises, after deduction of all anticipated expenses of reletting, for the balance of the Term
exceed the value of the Rent provided to be paid by Tenant for the balance of the Term, Landlord
shall have no obligation to pay to Tenant the excess or any part thereof or to credit such excess
or any part thereof against any other sums or damages for which Tenant may be liable to Landlord.

     c. Landlord shall not be deemed in breach of this Lease unless Landlord fails within a
reasonable time to perform an obligation required to be performed by Landlord. For purposes of
this Section 19, a reasonable time shall in no event be less than fifteen (15) days after receipt
by Landlord of written notice specifying wherein such obligation of Landlord has not been
performed; provided, however, that if the nature of Landlord’s obligation is such that more than
fifteen (15) days after such notice are reasonably required for its performance, then Landlord
shall not be in breach of this Lease if performance is commenced within such fifteen (15) day
period and thereafter diligently pursued to completion.

19. EXPENSES OF ENFORCEMENT. Tenant shall pay upon demand all of Landlord’s costs, charges and
expenses including the fees and out-of-pocket expenses of counsel, agents and others retained by
Landlord incurred in enforcing Tenant’s obligations hereunder or incurred by Landlord in any
litigation, negotiation or transaction in which Tenant causes Landlord without Landlord’s fault or
negligence to become involved or concerned.

20. REPRESENTATIONS OF LANDLORD.

     a. Except for the real property underlying that certain lease agreement, dated June 10, 2001,
between Hitachi and Mitsubishi Estate Co., Ld., neither Hitachi, HTS nor any of its Subsidiaries
lease or sublease any real property used in connection with the operation of the Business (whether
entered into as lessor, lessee, sublessor or sublessee) as of the date hereof, or own any real
property used in connection with the operation of the Business, other than the Premises.

     b. No person other than Hitachi, HTS or their applicable Subsidiaries has any right to lease
the Premises or to materially occupy or use the Premises.

21. OBLIGATIONS OF HTS. Hitachi hereby agrees that, during the Term and any Extension Term,
whether HTS is a wholly-owned subsidiary of Hitachi or not, it will call cause HTS to perform all
of its obligations under this Lease.

22. MISCELLANEOUS.

     a. Rights Cumulative. All rights and remedies of Landlord under this Lease shall be
cumulative and none shall exclude any other rights and remedies allowed by law.

     b. Interest. All payments becoming due under this Lease and remaining unpaid when due shall
bear interest from the date such payment was due until paid at the rate of eighteen percent (18%)
per annum (“Interest Rate”).

Page 11

 

     c. Terms. The necessary grammatical changes required to make the provisions hereof apply
either to corporations or partnerships or individuals, men or women, as the case may require, shall
in all cases be assumed as though in each case fully expressed.

     d. Binding Effect. Each of the provisions of this Lease shall extend to and shall, as the
case may require, bind or inure to the benefit not only of Landlord and of Tenant, but also of
their respective successors or assigns, provided this clause shall not permit any assignment by
Tenant contrary to the provisions hereof.

     e. Lease Contains All Terms. All of the representations and obligations of Landlord are
contained herein and in the other Exhibits attached hereto, and no modification, waiver or
amendment of this Lease or of any of its conditions or provisions shall be binding upon the
Landlord and Tenant unless in writing signed by Landlord and Tenant or by a duly authorized agent
of Landlord and Tenant empowered by a written authority signed by Landlord and Tenant.

     f. Delivery for Examination. Submission of the Lease for examination or any other purpose
shall not bind Landlord in any manner, and no Lease or obligations of the Landlord shall arise
until this instrument is signed by both Landlord and Tenant and delivery is made to each.

     g. Transfer of Landlord’s Interest. Pursuant to Section 13 above, Tenant acknowledges that
Landlord has the right to transfer its interest in the Land and Building and in this Lease, and
Tenant agrees that in the event of any such transfer Landlord shall be released from all liability
under this Lease if such transferee assumes all liability under the Lease. In such case, Tenant
agrees to look solely to such transferee for the performance of Landlord’s obligations hereunder.
Tenant further acknowledges that Landlord may assign its interest in this Lease to a mortgage
lender as additional security and agrees that such an assignment shall not release Landlord from
its obligations hereunder and that Tenant shall continue to look to Landlord for the performance of
its obligations hereunder. If Landlord’s Semiconductor and Integrated Circuits Group is assigned
or otherwise transferred to a third party, Landlord will cause such third party to assume this
Lease.

     h. Landlord’s Title. Landlord’s title is and always shall be paramount to the title of
Tenant. Nothing herein contained shall empower Tenant to commit or engage in any act which can,
shall or may encumber the title of Landlord.

     i. Captions. The captions of Paragraphs and subparagraphs are for convenience only and shall
not be deemed to limit, construe, affect or alter the meaning of such Paragraphs or subparagraphs.

     j. Covenants and Conditions. All of the covenants of Tenant hereunder shall be deemed and
construed to be “conditions”, if Landlord so elects, as well as “covenants” as though the words
specifically expressing or importing covenants and conditions were used in each separate instance.

     k. Only Landlord/Tenant Relationship. Nothing contained in this Lease shall be deemed or
construed by the parties hereto or by any third party to create the relationship of principal and
agent, partnership, joint venturer or any association between Landlord and Tenant, it being
expressly understood and agreed that neither the method of computation of Rent nor any

Page 12

 

act of the
parties hereto shall be deemed to create any relationship between Landlord and Tenant other than
the relationship of landlord and tenant.

     l. Definition of Landlord. All indemnities, covenants and agreements of Tenant contained
herein that inure to the benefit of Landlord shall be construed to also inure to the benefit of
Landlord’s agents and employees.

     m. Time of Essence. Time is of the essence of this Lease and each of its provisions.

     n. Governing Law. This Lease which is in English, shall be governed by and construed in
accordance with the laws of Japan.

     o. Partial Invalidity. If any term, provision or condition contained in this Lease shall, to
any extent, be invalid or unenforceable, the remainder of this Lease (or the application of such
term, provision or condition to persons or circumstances other than those in respect of which it is
invalid or unenforceable) shall not be affected thereby, and each and every other term, provision
and condition of this Lease shall be valid and enforceable to the fullest extent possible permitted
by law.

     p. Tenant agrees that Landlord in no event shall be held liable for loss of, or damage to, any
documents or other items resulting from services provided by the Landlord pursuant to this Lease.

     q. Tenant shall not place any signs, placards, or the like on the Building or in the Premises
without Landlord’s reasonable prior written approval, which approval shall not be unreasonably
withheld.

23. NOTICES. All notices to be given under this Lease shall be in writing and delivered personally
or deposited in the mail, certified or registered mail with return receipt requested, postage
prepaid, addressed as follows:

If to Landlord: HITACHI, LTD.

Hitachi, Ltd.

6, Kanda-Surugadai 4-chome

Chiyoda-ku

Tokyo, 101-8010 Japan

Attention: Mr. Satoru Ito, President & Chief

Executive Officer, Semiconductor and Integrated

Circuits Group

Page 13

 

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.

or to such other person or such other address designated by notice sent by Landlord or Tenant.

If to Tenant:

Opto-Device, Ltd.

190, Kashiwagi, Komoro-shi

Nagano-ken, 384-8511 Japan

Attention: President

And

OpNext, Inc.

One Christopher Way

Eatontown, NJ 07724

Attention: Chief Executive Officer

Simpson Thacher & Bartlett

425 Lexington Avenue

New York, NY 10017

Attention: I. Scott Gottdiener, Esq.

     Notice by mail shall be deemed to have been given when deposited in the Japanese mail system
as aforesaid.

24. LIMITATION ON LANDLORD’S LIABILITY. It is expressly understood and agreed by Tenant that none
of Landlord’s covenants, undertakings or agreements are made or intended as personal covenants,
undertakings or agreements by Landlord’s partners, and any liability for damage or breach or
nonperformance by Landlord and no personal liability is assumed by, nor at any time may be asserted
against, Landlord’s partners or any of its or their of officers, agents, employees, legatees,
representatives, successors or assigns, all such liability, if any, being expressly waived and
released by Tenant.

25. COUNTERPARTS. This Lease 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 Lease.

*****

[SIGNATURE PAGE FOLLOWS]

Page 14

 

SIGNATURE PAGE TO LEASE

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease the day and year first above
written.

	 	 	 	 	 
	LANDLORD:
	 
	 
	 	 	 	 
	HITACHI, LTD.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Saturo Ito	 	 
	 

	 	 	 	 
	 

	 	Saturo Ito	 	 
	 

	 	President and Chief Executive Officer
Semiconductor & Integrated Circuits	 	 
	 
	 	 	 	 
	LANDLORD:	 	 
	 
	 	 	 	 
	HITACHI TOHBU SEMICONDUCTOR, LTD.
	 
	 	 	 	 
	By:

	 	/s/ Natsuki Kogiso	 	 
	 

	 	 	 	 
	 

	 	Natsuki Kogiso	 	 
	 

	 	President	 	 
	 
	 	 	 	 
	TENANT:
	 
	 	 	 	 
	OPTO-DEVICE, LTD.
	 
	 	 	 	 
	By:

	 	/s/ Yasutoshi Kashiwada	 	 
	 

	 	 	 	 
	 

	 	Yasutoshi Kashiwada	 	 
	 

	 	President	 	 

 

 

EXHIBIT A

Operating Standards

	1.	 	Tenants and their guests will conduct themselves in a businesslike manner; proper attire will
be worn at all times; and the noise level will be kept to a level so as not to interfere with
or annoy other Tenants.
	 
	2.	 	Tenant will not affix anything to the walls of the Premises without the prior written consent
of the Landlord, which shall not be unreasonably withheld.
	 
	3.	 	Tenant will not prop open any corridor doors, exit doors or doors connecting corridors during
or after business hours.
	 
	4.	 	Tenants using public areas may only do so with the consent of the Landlord, and those areas
must be kept neat and attractive at all times.
	 
	5.	 	Tenant will not conduct any activity within the Premises or Building, which in the reasonable
judgment of the Landlord will create excessive traffic or is inappropriate to the executive
office suite environment.
	 
	6.	 	No corridor, hall, elevator or stairway shall be obstructed by Tenant or used for any purpose
other than normal egress and ingress.
	 
	7.	 	No advertisement, identifying signs or other notices shall be inscribed, painted or affixed
on any part of the corridors, doors, or public areas.
	 
	8.	 	Without Landlord’s specific prior written permission, Tenant is not permitted to place “mass
market,” direct mail or advertising (i.e. newspaper, classified advertisements, billboards)
using Landlord’s assigned telephone number or take any such action that would generate
excessive incoming calls.
	 
	9.	 	Immediately following Tenant’s use of conference room space and/or audio/visual equipment,
Tenant shall clean up and return the space and equipment to the state and condition it was in
prior to Tenant’s use. If not, Landlord may charge Tenant for any other expenses required to
restore the conference space and/or equipment to its original condition.
	 
	10.	 	Landlord must be notified in writing if Tenant desires to utilize the conference room or
other common areas of the Building during evening or weekend hours. Landlord may deny the
Tenant access if the desired usage is inappropriate or may disrupt normal operations.
	 
	11.	 	Except in connection with Tenant’s permitted use, Tenant shall not, without Landlord’s
written consent, store or operate any heating equipment, stove, do any cooking, or use or
allow to be used on the Premises oil, burning fluids, gasoline, kerosene for heating, warming
or lighting. No article deemed extra hazardous on account of fire or any

A-1

 

	 	 	explosives shall be brought into said Premises or Building. No offensive gases, odors on
liquids shall be permitted.

	12.	 	Tenant will bring no animals into the Premises or Building except for those assisting
disabled individuals.
	 
	13.	 	Tenant shall not remove furniture, fixtures or decorative material from offices or common
areas without the written consent of Landlord.
	 
	14.	 	Tenant shall not make any additional copies of any Landlord issued keys. All keys and
security cards are the property of Landlord and must be returned upon request or by the close
of the business on the expiration or sooner termination of the Lease term. Any lost or
unreturned keys or cards are the sole responsibility of Tenant.
	 
	15.	 	Tenant shall comply with all governmental regulations and ordinances concerning smoking in
the Building, including the Premises.
	 
	16.	 	Landlord reserves the right to modify parking arrangements.
	 
	17.	 	Tenant shall cooperate and be courteous with all other occupants of the Building and
Landlord’s staff and personnel.
	 
	18.	 	Landlord reserves the right to make such other reasonable rules and regulations as in its
reasonable judgment may from time to time be needed for the safety, care, appropriate
operation and cleanliness of the Building and/or Premises.

A-2

 

EXHIBIT B

Rent Formula

			
	I.	 	Principal for Calculation

Rent (Per Month) = Depreciation + Insurance + Fixed Asset Tax + Interest + Consumption Tax

      

Depreciation: Calculated for each Asset by Asset based on the Statutory Depreciation Method.

Insurance: Average of Cost and Book Value of Asset x Insurance rate /12

Fixed Asset Tax: Book Value x Statutory Tax Ratio /12

Interest: Book Value x Internal Interest Ratio*/12

Consumption Tax: (Depreciation + Insurance + Fixed Asset Tax + Interest) x 5%

      

(For FY02)

Fixed Asset Tax Rate /month = 1.4%/Year x 1/12 = 0.00117

Interest Rate / month = 2.1 %/Year /12 = 0.00175 (Hitachi)

Interest Rate / month = 2.3 %/Year /12 = 0.00197 (HTS)

Insurance Rate/month for Komoro = 0.00005

Statutory Tax Rate = 2.1 %/Year

      

*Hitachi and HTS use different rate.

**Fee for Common Space (Jointly used by POD/Hitachi/HTS, etc.) is included in the Total Rent, and
that fee is calculated by using the same methods mentioned above and the leased area ratio.

***The Total Rent is calculated from the sum of the Rent fee by each Fixed Assets Number.

B-1

 

     

B-2

 

EXHIBIT C

Form of Landlord Notice of Annual Rent Adjustment

[Hitachi Letterhead]

Opto-Device, Ltd.

190, Kashiwagi, Komoro-shi

Nagano-ken, 384-8511 Japan

Attention: President

Dear Mr. Bosco:

     Reference is hereby made to that certain lease agreement dated October 1, 2002 (hereinafter
referred to as the “Lease”) between HITACHI, LTD., a corporation existing under the laws of Japan,
as Landlord and OPTO-DEVICE, LTD., a corporation existing under the laws of Japan, as Tenant.
Capitalized terms used in this letter shall the meanings assigned to such terms in the Lease.

     Pursuant to Section 2 and Exhibit B of such Lease, the Rent shall be adjusted to the following
amount:                      Yen effective as of                      (insert date). Such Rent shall be due and
payable pursuant to the terms of the Lease.

	 	 	 	 	 	 	 
	 	 	Very truly,
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Hitachi, Ltd.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Its:
	 	President, Semiconductor and
	 

	 	 	 	 	 	Integrated Circuits Group

C-1

 

(English Translation)

PROPERTY LEASE AGREEMENT

An agreement is hereby entered into as set forth below by and between the Renesas Technology Corp.
Takasaki Office (hereinafter referred to as the “Landlord”) and Opnext Japan, Inc. (hereinafter
referred to as the “Tenant”) in connection with the lease of a certain property.

	 	 	 	 	 
	(Property for Lease)
	Article 1	 	The Landlord shall lease to the Tenant, and the Tenant shall lease [from the Landlord] a
certain property which is owned [by the Landlord], as indicated in the statement of rent
shown in the exhibit attached hereto (hereinafter referred to as the “Property”).
	 
	 	 	 	 
	(Purpose of Use)
	Article 2	 	The Tenant shall use the Property for the purpose of executing the Tenant’s business and
affairs, and shall not use the Property for any other purpose.
	 
	 	 	 	 
	(Term of the Lease)
	Article 3	 	The term of the lease of the Property shall be the one-year period which commences on
April 1, 2006 and ends on March 31, 2007, provided, however, that the present agreement
shall be automatically renewed for a further one-year period under the same terms and
conditions, and thereafter shall be renewed for successive periods of one year in the
same manner unless the Landlord or the Tenant declares its intent not to renew the
present agreement prior to the expiration of the term of the lease.
	 
	 	 	 	 
	(Rent)
	 	 	 	 
	Article 4
	 	(1)	 	Rent shall be paid in the amount of 612,740 yen for each month.
	 
	 	(2)	 	The rent provided for in the preceding item shall be payable at the end of each month.
	 
	 	(3)	 	The rent shall be exclusive of the
consumption tax, etc. levied thereupon, and the Tenant shall separately pay
the amount of 30,648 yen in consumption tax, etc. to the Landlord not later than the last day of each month.
	 
	 	 	 	 
	(Maintenance Costs)
	Article 5	 	The Landlord shall be responsible for the cost associated
with the maintenance of the Property itself, while the
Tenant shall bear all other necessary costs associated
with the use of the Property.
	 
	 	 	 	 
	(Property Management)
	Article 6	 	The Tenant shall manage the Property with the due care of
a good manager, and shall not, without the consent of the
Landlord in writing, alter the original condition of the
Property. In addition, the Tenant shall ensure that the
right of lease under the present agreement with respect to
the Property, either in its entirety or in part, will not
be assigned to a third party, be used by or used to gain a
profit by a third party under any name, be sublet to any
third party, or be used as the subject matter of a right
of a third party.
	 
	 	 	 	 
	[seal: Opnext Japan, Inc.]

 

 

	 	 	 	 	 
	(Inspections)
	Article 7	 	The Tenant shall give its consent whenever the Landlord
needs to enter the Property for the purpose of conducting
an inspection thereof, and shall cooperate with the
Landlord in conducting such inspection.
	 
	 	 	 	 
	(Termination)
	Article 8	 	In the case where any of the following events occur, the
Landlord may terminate the present agreement without
giving any warning whatsoever to the Tenant:
	 
	 	(1)	 	The Tenant has failed to make payment of the rent even on one occasion.
	 
	 	(2)	 	Aside from the event provided for
in the preceding item, the Tenant has breached any of the provisions of the present agreement.
	 
	 	 	 	 
	(Matters to Be Consulted Upon)
	Article 9	 	Any matter that has not been provided for in the present
agreement, or any doubtful matter that arises with respect
to any of the provisions hereof shall be resolved through
consultations held between the Landlord and the Tenant in
good faith.

IN WITNESS WHEREOF, the parties hereto have executed the present agreement in duplicate, with each
of the Landlord and the Tenant retaining one original.

April 1, 2006

	 	 	 	 	 
	 

	 	Landlord:
	 	Renesas Technology Corp.
	 

	 	 	 	Takasaki Office
	 

	 	 	 	111 Nishi Yokotemachi, Takasaki-shi, Gunma-ken
	 

	 	 	 	Kazunori Urayama, General Manager of Takasaki Office
	 

	 	 	 	[seal: Seal of Renesas Technology Corp. Takasaki Office]
	 
	 	 	 	 
	 

	 	Tenant:
	 	Opnext Japan, Inc.
	 

	 	 	 	Information and Industrial Devices Business Unit
	 

	 	 	 	190 Ôaza Kashiwagi, Komoro-shi, Nagano-ken 384-8511
	 

	 	 	 	Tadayuki Sugano, General Manager of the Information and
	 

	 	 	 	Industrial Devices Business Unit
	 

	 	 	 	[seal: Seal of Opnext Japan,
Inc. Information and Industrial Devices Business Unit]
	 

	 	 	 	[seal: Opnext Japan, Inc.]

 

 

(English Translation)

PROPERTY LEASE AGREEMENT

An agreement is hereby entered into as set forth below by and between the Renesas Technology Corp.
Takasaki Office (hereinafter referred to as the “Landlord”) and Opnext Japan, Inc. (hereinafter
referred to as the “Tenant”) in connection with the lease of a certain property.

	 	 	 	 	 	 	 
	(Property for Lease)
	Article 1	 	The Landlord shall lease to the Tenant, and the Tenant shall
lease [from the Landlord] a certain property which is owned [by
the Landlord], as indicated in the statement of rent shown in
the exhibit attached hereto (hereinafter referred to as the
“Property”).
	 
	 	 	 	 	 	 
	(Purpose of Use)
	Article 2	 	The Tenant shall use the Property for the purpose of executing
the Tenant’s business and affairs, and shall not use the
Property for any other purpose.
	 
	 	 	 	 	 	 
	(Term of the Lease)
	Article 3	 	The term of the lease of the Property shall be the five-year
period which commences on April 1, 2006 and ends on March 31,
2011, provided, however, that the present agreement shall be
automatically renewed for a further five-year period under the
same terms and conditions, and thereafter shall be renewed for
successive periods of five years in the same manner, unless
either party declares an objection to such renewal prior to the
expiration of the term of the lease.
	 
	 	 	 	 	 	 
	(Rent)
	 	 	 	 	 	 
	Article 4	 	(1)	 	Rent shall be paid on a monthly basis,
and the amount of rent shall be set
forth separately in the “Memorandum of
Understanding.”
	 	 	(2)	 	The rent provided for in the preceding item shall be payable at the end of
each month.
	 	 	(3)	 	The rent shall be exclusive of the consumption tax, etc. levied thereupon,
and the Tenant shall separately pay the amount of consumption tax, etc. not later
than the last day of each month.
	 	 	(4)	 	In the event that the amount of rent has become unreasonable due to any of
the reasons provided for below, both the Landlord and the Tenant may, after
consultations have been held between the two parties, revise the rent even during the
effective term of the present agreement:
	 
	 	 	 	 	 	 
	 
	 	 	 	�	 	There has been an increase or
decrease in any applicable taxes or other monetary burden.

	 
	 	 	 	‚	 	There has been a change in general economic conditions.
	 
	 	 	 	ƒ	 	The amount of rent has become
unreasonable in comparison with the rent for buildings in the surrounding area.
	 
	 	 	 	„	 	There are other circumstances that justify the revision of the rent.
	 
	 	 	 	 	 	 
	(Maintenance Costs)
	Article 5	 	The Landlord shall be responsible for the cost associated with the maintenance of the Property itself, while the
Tenant shall bear all other necessary costs associated with the use of the Property.

 

 

	 	 	 	 	 	 	 
	(Property Management)
	Article 6	 	The Tenant shall manage the Property with the due care of a good manager, and shall not, without the consent of the
Landlord in writing, alter the original condition of the Property. In addition, [the Tenant] shall ensure that the
right of lease under the present agreement with respect to the Property, either in its entirety or in part, will
not be assigned to a third party, be used by or used to gain a profit by a third party under any name, be sublet to
any third party, or be used as the subject matter of a right of a third party.
	 
	 	 	 	 	 	 
	(Inspections)
	Article 7	 	The Tenant shall give its consent whenever the Landlord needs to enter the Property for the purpose of conducting
an inspection thereof, and shall cooperate in conducting such inspection.
	 
	 	 	 	 	 	 
	(Termination)
	Article 8	 	In the case where any of the following events occur, the Landlord may terminate the present agreement without
giving any warning whatsoever to the Tenant:
	 
	 	 	 	 	 	 
	 	 	(1)	 	The Tenant has failed to make payment of the rent even on one occasion.
	 	 	(2)	 	Aside from the event provided for in the preceding item, the Tenant has
breached any of the provisions of the present agreement.
	 
	 	 	 	 	 	 
	(Matters to Be Consulted Upon)
	Article 9	 	Any matter that has not been provided for in the present
agreement, or any doubtful matter that arises with respect
to any of the provisions hereof shall be resolved through
consultations held between the Landlord and the Tenant in
good faith.

IN WITNESS WHEREOF, the parties hereto have executed the present agreement in duplicate, with each
of the Landlord and the Tenant retaining one original.

April 1, 2006

	 	 	 	 	 
	 

	 	Landlord:
	 	Renesas Technology Corp.
	 

	 	 	 	Takasaki Office
	 

	 	 	 	111 Nishi Yokotemachi, Takasaki-shi, Gunma-ken
	 

	 	 	 	Kazunori Urayama, General Manager of Takasaki Office
	 

	 	 	 	[seal: Seal of Renesas Technology Corp. Takasaki Office]
	 
	 	 	 	 
	 

	 	Tenant:
	 	Opnext Japan, Inc.
	 

	 	 	 	Information and Industrial Devices Business Unit
	 

	 	 	 	190 Kashiwagi, Komoro-shi, Nagano-ken
	 

	 	 	 	Tadayuki Sugano, General Manager of the Information and
Industrial Devices Business Unit
	 

	 	 	 	[seal: Seal of Opnext Japan, Inc. Information and
Industrial Devices Business Unit]
	 

	 	 	 	[seal: Opnext Japan, Inc.]

 

 

(English Translation)

MEMORANDUM OF UNDERSTANDING

     A memorandum of understanding is hereby entered into as set forth below by and between Renesas
Technology Corp. Takasaki Office (hereinafter referred to as the “Landlord”) and Opnext Japan, Inc.
(hereinafter referred to as the “Tenant”) with respect to the terms and conditions provided for
under Article 1 (Property for Lease) and Article 4 (Rent) in the Property Lease Agreement that was
entered into by and between the Landlord and the Tenant dated April 1, 2006 (hereinafter referred
to as the “Original Agreement”).

	 	 	 	 	 	 	 
	(Property for Lease)	 	 
	Article 1	 	The Landlord shall lease to the Tenant, and the Tenant shall lease [from the Landlord] a certain property which is
owned [by the Landlord], as indicated in the “Schedule of Business Unit Assets (Building)” shown in the exhibit
attached hereto (hereinafter referred to as the “Property”).
	 
	 	 	 	 	 	 
	(Term of the Lease)	 	 
	Article 2	 	The effective term of the present memorandum of understanding shall commence on April 1, 2006 and end on March 31,
2007.
	 
	 	 	 	 	 	 
	(Rent)
	 	 	 	 	 	 
	Article 3	 	(1)	 	Rent shall be paid on a monthly basis in the amount of 612,740 yen.

The foregoing notwithstanding, the Tenant shall pay the amount of 643,388 yen for each
month, which includes the monthly amount of consumption tax, etc. of 30,648 yen.
	 	 	(2)	 	The rent provided for in the preceding item shall be payable to the
Landlord at the end of each month.

IN WITNESS WHEREOF, the parties hereto have executed the present agreement in duplicate, with each
of the Landlord and the Tenant retaining one original.

April 1, 2006

	 	 	 	 	 
	 

	 	Landlord:
	 	Renesas Technology Corp.
	 

	 	 	 	Takasaki Office
	 

	 	 	 	111 Nishi Yokotemachi, Takasaki-shi, Gunma-ken
	 

	 	 	 	Kazunori Urayama, General Manager of Takasaki Office
	 

	 	 	 	[seal: Seal of Renesas Technology Corp. Takasaki Office]
	 
	 	 	 	 
	 

	 	Tenant:
	 	Opnext Japan, Inc.
	 

	 	 	 	Information and Industrial Devices Business Unit
	 

	 	 	 	190 Kashiwagi, Komoro-shi, Nagano-ken
	 

	 	 	 	Tadayuki Sugano, General Manager of the Information and
Industrial Devices Business Unit
	 

	 	 	 	[seal: Seal of Opnext Japan, Inc. Information and
Industrial Devices Business Unit]

[seal: Opnext Japan, Inc.]

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