First Addendum To The Transitional Service Agreement

EXHIBIT 10.1


FIRST ADDENDUM TO THE TRANSITIONAL SERVICES AGREEMENT


This First Addendum to the Transitional Service Agreement (the " Addendum" ) is made by and between Alcatel Participations , a French company having its registered office at 54 rue La Boetie 75008 Paris, France (hereafter " Alcatel" ) and Avanex France , a French company having its principle place of business at route de Villejust, 91625 Nozay cedex, France (hereafter the " Company" ).


The Company and Alcatel are individually referred to as a " Party" or collectively as the " Parties" .


WHEREAS


The Parties signed on July 31, 2003 a Transitional Service Agreement (hereafter the " Agreement" ).


The Parties signed on October 12, 2005 a Memorandum of Understanding (hereafter the " MoU" ).


In the MoU, Alcatel agreed to waive certain rents and charges in exchange for the Company to relocate its activities as determined hereunder.


NOW THEREFORE, in furtherance of the foregoing recitals and in consideration of the mutual covenants and obligations set forth in this Agreement, the Parties agree as follows.


Article 1 Relocation

1.1 The Company will regroup all of its remaining activities currently in Nozay Buildings A0, A1, A2 and A3 (the " Nozay Buildings" ) into Nozay Building A2 or a combination of Nozay Buildings A1, A2 and A3, and, if required by Alcatel to maximize space available in Nozay, the Company will relocate the OIF and FBG groups to Marcoussis (collectively, the " Relocation" ). The plan for the Relocation (" Relocation Plan" ) shall be determined by Alcatel, with input from the Company, no later than November 30, 2005.

1.2 Alcatel shall (and shall cause its third party contractors) to perform the Relocation Plan in cooperation with the Company. Alcatel will pay the moving costs associated with the Relocation (including relocation of equipment, fixtures, furniture and other personal property, installation of all such items in the relocated space, restoration and environmental closure and decommissioning of any vacated space resulting from the Relocation, and relocation of Avanex GaAs fab into Building A2 and relocation of offices/engineering labs into Building A2 or Marcoussis). The Company will provide all necessary assistance to Thales Ingenierie and Alcatel, to minimize cost of move. The Parties will make all reasonable attempts to complete the relocation on or before March 31, 2006. In performing the Relocation, Alcatel shall use commercially reasonable efforts to minimize disruption with the ongoing operations of the Company. 1.3 No later than thirty (30) days following the execution of this Addendum, the Company and Alcatel shall cause to be executed (i) an amendment (the " Nozay Lease Amendment" ) to that certain Commercial Lease by and between Societe Immobiliere Villarceux-Nozay, as landlord, and the Company, as tenant, effective Augus ...