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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934


þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: July 2, 2005


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___to ___

Commission file number 000-30684

Bookham, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Delaware (State or Other Jurisdiction of Incorporation or Organization)		20-1303994 (I.R.S. Employer Identification No.)

2584 Junction Avenue
San Jose, California 95134
(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: 408-383-1400

Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.01 per share
(Title of class)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes þ No o

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes o No þ

The aggregate market value of the Common Stock held by non-affiliates of the registrant was $95,756,143 based on the closing price of the registrant’s Common Stock on December 31, 2004 as reported by the Nasdaq National Market ($4.84 per share). As of September 2, 2005, there were 33,805,437 shares of Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the 2005 Annual Meeting of Stockholders are incorporated by reference into Part III hereof.

ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED JULY 2, 2005

TABLE OF CONTENTS


	PART I
Item 1.	Business	3
Item 2.	Properties	13
Item 3.	Legal Proceedings	13
Item 4.	Submission of Matters to a Vote of Security Holders	14

	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	15
Item 6.	Selected Financial Data	16
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 8.	Financial Statements and Supplementary Data	49
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	50
Item 9A.	Controls and Procedures	50
Item 9B.	Other Information	56

	PART III
Item 10.	Directors and Executive Officers of the Registrant	56
Item 11.	Executive Compensation	56
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	56
Item 13.	Certain Relationships and Related Transactions	57
Item 14.	Principal Accountant Fees and Services	57

	PART IV
Item 15.	Exhibits and Financial Statement Schedules	57
EX-10.36 Addendum to Optical Components Supply Agreement
EX-10.37 Second Notes Amendement and Waiver Agreement
EX-10.38 Contract of Employment
EX-21.1 List of Bookham, Inc. subsidiaries
EX-23.1 Consent of Independent Registered Public Accounting Firm
EX-31.1 Certification of CEO
EX-31.2 Certification of CFO
EX-32.1 Certification of CEO
EX-32.2 Certification of CFO

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report and the documents incorporated in it by reference contain forward-looking statements about our plans, objectives, expectations and intentions. You can identify these statements by words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “may,” “will” and “continue” or similar words. You should read statements that contain these words carefully. They discuss our future expectations, contain projections of our future results of operations or our financial condition or state other forward-looking information, and may involve known and unknown risks over which we have no control. You should not place undue reliance on forward-looking statements. We cannot guarantee any future results, levels of activity, performance or achievements. Moreover, we assume no obligation to update forward-looking statements or update the reasons actual results could differ materially from those anticipated in forward-looking statements, except as required by law. The factors discussed in the sections captioned “Business,” “Certain Factors that May Affect Future Results,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report and the documents incorporated in it by reference identify important factors that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements.

PART I

Item 1. Business

We design, manufacture and market optical components, modules and subsystems that generate, detect, amplify, combine and separate light signals principally for use in high-performance fiber optics communications networks. Due to its inherent advantages of higher capacity and transmission speed, optical transmission has become the predominant technology for large scale communications networks. According to RHK, a market research firm, the market for optical components used in communications networks was approximately $1.5 billion in 2004. We believe we are the second largest vendor of optical components used for fiber optic telecommunications networks applications, on the basis of revenue.

Innovation at the component level has been a primary enabler of optical networking, facilitating increased transmission capacity, improving signal quality and lowering cost. For this reason, optical communications equipment vendors initially developed and manufactured their own optical components. For a variety of industry-related factors, the majority of optical equipment vendors have sold, eliminated or outsourced their internal component capabilities and today rely on third-party sources for their optical component needs. In the absence of significant internal component technology expertise or manufacturing capability, communications equipment vendors have become more demanding of their component suppliers, seeking companies with broad technology portfolios, component innovation expertise, advanced manufacturing capabilities, the ability to provide more integrated solutions and financial strength.

We believe we offer one of the most comprehensive end-to-end portfolios of optical component solutions to the telecommunications market, enabling us to deliver more of the components our customers require. Our product portfolio includes several leading products (on the basis of our market share), such as our 10 gigabit per second, or Gb/s, discrete transmitters, receivers and optical amplifiers. We intend to maintain our leadership position for these products, as well as develop new solutions that leverage the knowledge and capital invested in our current generation of offerings.

We believe our ownership of advanced component design and manufacturing facilities, which would be prohibitively expensive to replicate in the current market environment, is a significant competitive advantage. On-chip, or monolithic, integration of functionality is more difficult to achieve without access to the production process, and requires advanced process know-how and equipment. Although the market for optical integrated circuits is still in its early stages, it shares many characteristics with the semiconductor market, including the positive relationship between the number of features integrated on a chip, the wafer size and the cost and sophistication of the fabrication equipment. For this reason, we believe our 3-inch wafer indium phosphide semiconductor fabrication facility in Caswell, U.K. provides us a competitive advantage as it allows us to increase the complexity of the circuits that we design and manufacture.

We intend to draw upon our internal development and manufacturing capability to continue to create innovative solutions for our customers, such as our pluggable telecommunications transceiver products and our small form factor 10 Gb/s transmitter. One example of a monolithically integrated component we make is our LMC10 transmitter, which integrates a 10 Gb/s modulator and a transmit laser on two single indium phosphide chips in a single package. On-chip integration enables us to fit the device inside a package identical in size to

current, slow speed lasers, making it easier for our customers to upgrade their equipment for 10 Gb/s transmission. We believe the LMC10 transmitter is the only transmitter of its kind on the market today, and it is currently sole-sourced to a number of customers.

Through our acquisition and integration of six optical components companies and businesses, including those of Nortel Networks Corporation and Marconi Optical Components Limited, we significantly increased our product portfolio and manufacturing expertise, and enhanced established relationships with leading optical systems vendors. As part of the process of integrating acquired businesses and companies, we have taken significant steps to rationalize production capacity, adjust headcount and restructure resources to reduce manufacturing and operating overhead.

In addition to our actions to restructure and streamline our operations, we also have renegotiated several agreements with Nortel Networks, our largest customer. We acquired the optical components business of Nortel Networks in 2002 in a transaction financed in part through promissory notes issued to Nortel Networks in an aggregate principal amount of $50 million. As part of the acquisition, Nortel Networks entered into a supply agreement with us which specified a minimum amount of products to be purchased from us. We have modified the promissory notes and supply agreement with Nortel Networks since the initial transaction, most recently in May 2005. The most recent amendment to the supply agreement provides for, among other things, Nortel Networks’ obligation to purchase certain products from us, an increase in the price of those products above those previously charged to Nortel Networks, our grant to Nortel Networks of a lien on certain of our assets, and a waiver of certain prepayment conditions. Nortel Networks has agreed to purchase approximately $100 million of products from us, equally divided into two categories of products: those we will no longer manufacture following fulfillment of the Nortel Networks orders, which we call “last-time buy” products, and products that we will continue to manufacture. We agreed to a specific delivery schedule for the last-time buy products, however, the delivery schedule and composition of the non last-time buy products is subject to change. To secure our debt to Nortel Networks, we have granted liens on the assets we acquired from Nortel Networks in 2002, certain property, plant and equipment as well as on the inventory and accounts receivable relating to Nortel Networks’ purchases. Under the amendments to the promissory notes, Nortel Networks waived, through May 2, 2006, their right to apply the proceeds from up to $75 million in financings we complete to prepay the notes, subject to certain conditions. Amendments to the promissory notes also resulted in the extension of the maturity date of our debt obligations under one of the notes by one year, and waived until August 2006 the default provision under the promissory notes for us to maintain a $25 million minimum cash balance, among other things. In addition, pursuant to the supply agreement with Nortel Networks, if we fail to maintain a minimum cash balance of $25 million, are unable to manufacture certain products in any material respect for at least six weeks, or become insolvent, we must provide Nortel Networks and any designated alternative supplier a license for the assembly, post-processing and test intellectual property (excluding wafer technology) of certain products that Nortel Networks has determined are critical to its operations.

Nortel Networks has been our largest customer over the past three fiscal years, and accounted for 45% of our revenue for the fiscal year ended July 2, 2005. As the last-time buy product orders are filled, we anticipate that revenue from Nortel Networks will decrease beginning in the quarter ending December 31, 2005 and remain flat or decline for at least several quarters thereafter.

Bookham, Inc. is a Delaware corporation and was incorporated on June 29, 2004. On September 10, 2004, pursuant to a scheme of arrangement under the laws of the United Kingdom, Bookham, Inc. became the publicly traded parent company of the Bookham Technology plc group of companies, including Bookham Technology plc, a public limited company incorporated under the laws of England and Wales whose stock was previously traded on the London Stock Exchange and the Nasdaq National Market. Our common stock is traded on the Nasdaq National Market under the symbol “BKHM.”

We maintain a Web site with the address www.bookham.com. Our Web site includes links to our Code of Business Conduct and Ethics, and our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee charters. We are not including the information contained in our Web site as part of, or incorporating it by reference into, this Annual Report on Form 10-K. We make available free of charge, through our Web site, our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to these reports, as soon as reasonably practical after such material is electronically filed with, or furnished to, the Securities and Exchange Commission.

Industry Background

In the 1990s, telecommunications network vendors and data communications vendors increasingly incorporated optical systems into communications infrastructures, taking advantage of the ability of fiber optic systems to support dramatically greater bandwidths than traditional copper networks. Widespread adoption of fiber optic systems has significantly improved the ability of these networks to transmit and manage the high volume of voice, video and data traffic generated in recent years by the growth of the Internet and other innovative communications technologies. The build-out of fiber optic networks requires optical components that generate, detect, amplify, combine and separate light signals as they are transmitted.

During the late 1990s, demand for telecommunications equipment, and the components that went into that equipment, grew dramatically. This demand was driven in part by bandwidth demands resulting from the rise of the Internet and in part by regulatory changes in the U.S. that opened the telecommunications markets to new network service providers. Many of these new networking companies elected to draw upon optical networking technology and to build their own networks in response to forecasts for exponential network traffic growth and supported by ready availability of capital.

The business climate for telecommunications companies became less favorable in late 2000, as network service providers began to experience significant financial difficulties. Unable to obtain financing for continued growth, and with actual network utilization below expectations due to an overbuilt infrastructure, service providers stopped buying new equipment. In turn, many equipment providers stopped buying components, which severely affected optical component manufacturers, who were left with significant inventories, excessive production capacity and cost structures not aligned with new industry demand levels. In response, optical component suppliers have been required to reduce manufacturing and operating cost overheads dramatically in order to sustain their businesses during a period of reduced demand and to achieve cost efficiencies required to meet their customers’ pricing objectives.

As the market for optical systems declined, optical systems vendors were exposed to many of the same inefficiencies confronting independent optical component companies. These challenges, as well as the prioritization on optical systems design manufacturing, resulted in the divestiture or closure of many captive optical component businesses. As a result, during the last two years, optical systems vendors have been seeking component suppliers with a depth of technology expertise and breadth of product portfolio that no longer exists within their own organizations and the manufacturing capabilities that they have sold, outsourced or eliminated.

Fewer customers, each demanding more complete solutions and requiring continued innovation at reduced cost, have led to significant consolidation among optical component suppliers. We have played an active role in this consolidation, acquiring the optical components businesses of Nortel Networks and Marconi, among others. We believe that the trend toward consolidation will continue, providing companies positioned as consolidators with the opportunity to capture increased market share and to improve profitability through increased capacity utilization and other operating efficiencies.

The market for optical components, modules and subsystems continues to evolve. Telecommunications network vendors are requiring optical component suppliers to take advantage of developments in product integration and miniaturization to provide solutions incorporating multiple optical components on a single subsystem or module, thereby reducing the need for component assembly and additional testing by the vendor. Accordingly, optical component suppliers who are able to offer more integrated, technologically-advanced modules and subsystems have a significant advantage over suppliers who can only offer discrete optical components. In addition, optical component suppliers have increasingly had to address the requirements of both the telecommunications and data communications markets. Historically, telecommunications products were characterized by high performance, high cost and significant product customization, while data communications products were characterized by high volume, low cost and standardization. This distinction is becoming blurred as technologies evolve that cost-effectively address both sets of applications at attractive price points, creating an opportunity to leverage technologies that meet the broader demands of the two markets. In addition, optical technologies originally developed for the communications industry, such as high-power lasers, are also being deployed in industrial, automotive, aerospace and military applications. These technologies offer optical component suppliers the opportunity to achieve improved margins and leverage embedded research and development expertise in new applications that are less dependent on the cycles of the telecommunications industry.

In early 2004, the optical components market showed signs of recovery, driven by customers and service providers with stronger balance sheets, a growing economy and regulatory changes that spurred competition among providers of voice, video and data services. According to RHK, the market for optical components used in communications networks was approximately $1.5 billion in 2004. We believe that there are three primary drivers of this market: (i) the continued recovery of spending by telecommunications networking equipment companies, (ii) the introduction of new, more cost-effective product technologies, such as 10 Gb/s pluggable transceivers, and (iii) the expansion of metro optical networking, driven by the build out of broadband access networks such as fiber-to-the-home initiatives. In addition, the growing competition among cable network operators offering voice, video and data services and traditional telephony service providers is resulting in increased utilization of optical networking technologies as communications networks converge.

To succeed in such a challenging and evolving market, we believe that an optical component supplier must:

	•		Offer a broad product portfolio of components, modules and subsystems to provide equipment manufacturers solutions at different levels of integration;

	•		Maintain strong relationships with leading optical systems vendors;

	•		Develop innovative products that address challenges currently faced by equipment providers and technologies that provide a foundation for new products in the future;

	•		Invest in integrated, cost-efficient manufacturing facilities which incorporate a variety of process technologies; and

	•		Possess the necessary scale and cost structure to be cost-competitive, and the financial resources to endure periodic industry cycles.

Our Solution

We are a leading supplier of optical component solutions for the telecommunications market. We believe our restructuring efforts, coupled with our technology investments over the past several years, will enable us to strengthen our industry position and expand into new markets. Through a focused acquisition strategy, we have significantly increased our product portfolio and manufacturing expertise, and enhanced established relationships with leading optical systems vendors. We believe we are well-positioned to succeed as an optical component vendor for the following reasons:

	•		*Breadth of technology and products.* We believe that we offer one of the most comprehensive end-to-end portfolios of optical component solutions to the telecommunications market. We believe that our range of technical capabilities allows us to provide customers with integrated solutions to satisfy their optical component needs, including integrated subsystems and pluggable modules.

	•		*Leading networking customers.* We are suppliers to leading equipment system vendors, such as Nortel Networks, Huawei, Cisco and Marconi. We are sole-sourced by our customers for many of our designs, including small form factor 10 Gb/s transmitters and certain optical amplifiers and receivers. We believe this reflects the technical superiority of our products and our customers’ satisfaction with our products and service.

	•		*Product innovation and technology leadership.* Through internal development and selective acquisitions of external technology, we continue to innovate and introduce new products, such as our 10 Gb/s pluggable transceiver, for the telecommunications market. In general, we focus our development efforts on the higher performance segment of the market, as we find customers in this segment value technology differentiation. We also intend to work to maintain our leadership in existing areas of special expertise, such as 10Gb/s transmitters, receivers, optical amplifiers and pump laser chips.

	•		*Advanced semiconductor manufacturing facilities.* We believe our ownership of advanced component design and manufacturing facilities, which would be prohibitively expensive to replicate in the current market environment, is a significant competitive advantage. On-chip integration of functionality is more difficult without access to the production process, and requires extremely advanced process know-how and equipment. Our 3-inch wafer indium phosphide semiconductor fabrication facility in Caswell utilizes advanced production processes to improve production yields and increase the complexity of the circuits we are able to design and manufacture.

	•		*Low-cost, advanced assembly facilities.* Our Shenzhen, China facility is an advanced production facility with approximately 250,000 square feet of manufacturing and office space that we expect will significantly reduce our assembly and test costs. We expect to complete full transition to this facility by the end of fiscal year 2006. We have qualified all of our major product platforms in our Shenzhen facility to ship to customers, and we generated significant revenue in the quarter ended July 2, 2005 out of our Shenzhen facility. We believe the transfer of our assembly and test operations to Shenzhen, while maintaining our Caswell and Zurich facilities, among others, enables us to reduce our costs and helps preserve our technology differentiation.

•

Realigned cost structure and improved financial condition. As part of the process of integrating acquired businesses and companies, in the past year we have taken significant steps to rationalize production capacity, decrease headcount and restructure resources to reduce manufacturing and operating overhead. These steps have resulted in reduced expenses and enabled us to deliver our customers component solutions at lower cost. In addition to restructuring and streamlining measures, we have modified our supply agreement with Nortel Networks. Our results for our fourth quarter of fiscal 2005 reflect the impact of our revised supply agreement with Nortel Networks and our restructuring efforts, as our gross profit expanded and our cash usage declined relative to previous quarters. We are currently reviewing various means to improve our capital position, including a potential financing and the sale of certain assets.

Our Strategy

Our goal is to maintain and enhance our position as a leading provider of optical components, module and subsystem solutions for telecommunications providers and broaden our leadership into new markets by:

	•		*Leveraging broad product portfolio and technology expertise.* We believe that our broad product portfolio positions us to increase our penetration of existing customers, such as Nortel Networks, Cisco, Huawei and Marconi, and gives us a competitive advantage in winning new customers. In addition, we intend to apply our optical component technologies to opportunities in other, non-telecommunications markets, including military, industrial research, semiconductor capital equipment and biotechnology, where we believe the use of those technologies is expanding.

	•		*Providing more comprehensive and technologically advanced solutions.* We intend to continue to invest in innovative component level technologies that allow us to lead the market in quality, price and performance. We also plan to leverage our component level technologies into a series of components, modules and subsystems, enabling us to meet our customers’ growing demand for complete solutions.

	•		*Broadening sales, marketing and customer support capabilities.* We intend to develop our sales and marketing infrastructure and customer support functions to ensure that our customer relationships evolve after products are deployed, to retain existing customers and to identify areas for further technical improvement and development.

	•		*Continuing to improve cost structure.* We intend to continue to identify and implement cost-saving programs across our organization, including programs to align our manufacturing resources appropriately and transition our assembly and test activities to competitive cost locations, such as our Shenzhen facility. We intend to continue to focus on managing our variable costs through yield improvements, labor productivity gains, component substitutions and aggressive supply chain management.

	•		*Selectively pursuing acquisitions.* As we have done in the past, we intend to continue to use acquisitions to enhance our scale, obtain critical technologies and enter new markets.

Our Product Offerings

We design, manufacture and market optical components, modules and subsystems that generate, detect, amplify, combine and separate light signals with primary application in fiber optic telecommunications networks. We have significant expertise in technology such as III-V optoelectronic semiconductors utilizing indium phosphide and gallium arsenide substrates, thin film filters and micro optic assembly and packaging technology. In addition to these technology platforms, we also have electronics design, firmware and software capabilities to produce transceivers, transponders, optical amplifiers and other value-added subsystems.

We believe that our acquisitions of the optical component businesses of Nortel Networks and Marconi, as well as our acquisitions of Ignis Optics, New Focus and Onetta and the business of CP Santa Rosa Enterprises Corp., which we refer to as Cierra Photonics, represent important actions that have significantly enhanced our product portfolio. We believe our enhanced portfolio will enable us to provide optical systems suppliers with subsystems and modules based on our components. This ability to offer a more comprehensive array of products addresses our customers’ goals of reducing the number of suppliers from whom they purchase.

Our products provide functionality for the various elements within the optical networking system from transmitting to receiving light signals, and include products that generate, detect, amplify, combine and separate light signals. Our product offerings that are principally aimed at the telecommunications marketplace include:

	•		*Transmitters.* Our transmitter product lines include products with fixed and tunable wavelength designed for both long-haul and metro applications at 2.5 Gb/s and 10 Gb/s. This product line includes lasers that are either directly or externally modulated depending on the application.

	•		*Transceivers.* Our small form factor pluggable transceiver portfolio includes SFP products operating at 2.5 Gb/s and XFP products operating at 10 Gb/s.

	•		*Tunable lasers and transmitter modules.* Our tunable laser products include both thermally and electronically tunable devices that are co-packaged with a modulator to optimize performance and reduce the size of the product. We also have innovative technology to deliver wide band electronic tunability.

	•		*Receivers.* Our portfolio of discrete receivers for metro, long and ultra long-haul applications at 2.5 Gb/s and 10 Gb/s includes avalanche photodiode, or APD, preamp receivers, as well as photodiode, or PIN, preamp receivers, and PIN and APD modules and products that feature integrated attenuators.

	•		*Amplifiers.* Erbium doped fiber amplifiers, or EDFAs, are used to boost the brightness of optical signals and offer compact amplification for ultra long-haul, long-haul and metro networks. We offer a semi-custom product portfolio of multiwavelength amplifiers from gain blocks to full card level or subsystem solutions for use in wide bandwidth wave division multiplexing, or WDM, optical transmission systems. We also offer lower cost narrow band mini-amplifiers.

	•		*Pump laser chips.* Our 980 nanometer pump laser diodes are designed for use as high-power, reliable pump sources for erbium doped fiber amplifiers. Uncooled modules are designed for low-cost, reliable amplification for metro, cross-connect or other single/multi channel amplification applications.

	•		*Transponder modules.* A transponder module provides both transmitter and receiver functions. A transponder includes electrical circuitry to control the laser diode and modulation function of the transmitter as well as the receiver electronics. These modules include a serializer that accepts simultaneous inputs of data at a rate that facilitates interfacing with a wide range of electronic circuits. These parallel data streams are electronically aggregated to form a stream of data that travels at a much higher rate.

	•		*Thin Film Filters.* Our thin film filter, or TFF, products are used for multiplexing and demultiplexing optical signals within dense wavelength division multiplexing transmission systems. In addition to this, TFF products are used to attenuate and control light within our amplifier product range.

	•		*TOA/ROA.* Transmitter optical assemblies, or TOAs, and receiver optical assemblies, or ROAs, are card-level transmitter and receiver assemblies that are customized for the Nortel Networks 10 Gb/s network systems. These products integrate several individual optical components onto one circuit board that contains components sourced both internally and from third parties.

The optical technology originally developed for the telecommunications industry is also increasingly being deployed in other markets, such as industrial, consumer display and life sciences, in addition to the test and measurement market where it has been deployed for some time. Advancements in laser technology have improved the cost, size and power of devices, making them more suitable for non-telecommunications applications. We believe that we are positioned to benefit from the increased use of lasers in new markets as a leading provider of such technology, including advanced pump laser technology for industrial applications. Optical thin film filter technology is already widely deployed outside of telecommunications; we are focusing our efforts on developing applications for life sciences, biotechnology and consumer display industries.

Through our New Focus division, we develop photonics and microwave solutions for diversified markets such as research, semiconductor capital equipment and the military. We sell two primary families of products in the area of photonics and microwave solutions: advanced photonic tools principally used for generating, measuring, moving, manipulating, modulating and detecting optical signals, and tunable lasers for test and measurement applications. We sell our products to the research market primarily via an

extensive catalog, and believe we benefit from the broad market awareness of our New Focus brand in this market. We pursue a direct sales approach for the semiconductor capital equipment and military markets, and currently sell to several of the leading companies in the semiconductor capital equipment market.

Customers, Sales and Marketing

We principally sell our optical component products to telecommunications systems vendors as well as to customers in the data communications, military, aerospace, industrial and manufacturing industries. Customers for our photonics and microwave product portfolio include academic and governmental research institutions that engage in advanced research and development activities.

We operate in two business segments: optics and research and industrial. Optics relates to the design, development, manufacture, marketing and sale of optical solutions for telecommunications and industrial applications. Research and industrial relates to the design, manufacture, marketing and sale of photonics and microwave solutions. The following table sets forth our revenues by segment for the periods indicated.

Revenues by Segment (in thousands)


	Year Ended		Six Months Ended		Year Ended		Year Ended
	July 2,		July 3,		December 31,		December 31,
	2005		2004		2003		2002
Optics	$	176,599	$	69,315	$	146,197	$	51,905
Research and Industrial		23,657		10,448		—		—

Total	$	200,256	$	79,763	$	146,197	$	51,905

For additional information on the optics and research and industrial segments, see Note 12 to our consolidated financial statements appearing elsewhere herein.

Two of our customers, Nortel Networks and Marconi, accounted for respectively, 45% and 3% of our revenue for the year ended July 2, 2005, 46% and 9% in the six-month period ended July 3, 2004, 59% and 13% in the year ended December 31, 2003 and 32% and 38% in the year ended December 31, 2002.

Nortel Networks

In addition to our efforts to rationalize and streamline our operations, we have also undertaken efforts to restructure our relationship with our largest customer, Nortel Networks, with whom we have several agreements. In connection with our purchase of Nortel Networks’ optical components business, Nortel Networks agreed to a long-term supply agreement requiring them to purchase a specified level of products from us, and obtained certain rights from us. We financed the acquisition in part with two promissory notes having an initial aggregate principal amount of $50 million. The various agreements between us have been modified several times since the initial transaction, most recently in May 2005. As a result of these various amendments to our agreements, the primary elements of our relationship with Nortel Networks today are:

	•		Nortel Networks has issued approximately $100 million of non-cancelable purchase orders, evenly divided between two categories: those products we will no longer manufacture following the specified purchases by Nortel Networks (last-time buy products) and products we will continue to manufacture (non last-time buy products). The last-time buy products are scheduled to be delivered to Nortel Networks through March 31, 2006. The pricing of products to be purchased is also specified in our agreements, and was improved in our most recent supply agreement addendum. However, the revised pricing terms will terminate if we materially breach the supply agreement or default under the promissory notes and related agreements. We are subject to penalties if we fail to meet a set delivery schedule for these products. We are subject to a change in control provision and solvency provisions.

	•		We owe approximately $46 million to Nortel Networks under promissory notes, approximately $26 million due in November 2006, and $20 million due in November 2007. Nortel Networks has security interests in certain of our assets, including a lien on the assets we acquired from Nortel Networks in 2002, certain property, plant and equipment, as well as the inventory and accounts receivable relating to Nortel Networks’ orders.

	•		Pursuant to amendments to the supply agreement with Nortel Networks, if we fail to maintain a minimum cash balance of $25 million, are unable to manufacture certain products in any material respect for at least six weeks, or become insolvent, we must provide Nortel Networks and any designated alternative supplier a license for the assembly, post-processing and test intellectual property (excluding wafer technology) of certain products that Nortel Networks has determined are critical to its operations. If we fail to maintain a minimum cash balance of $10 million, or there is an insolvency event, Nortel Networks will have the right to buy all Nortel Networks inventory we hold, and we must grant Nortel Networks or an alternative supplier a license for the manufacture of products as described in the supply agreement. An event of default under the supply agreement is also considered an event of default under the promissory notes.

	•		If we do not achieve certain designated delivery or performance requirements under the supply agreement, we must make prepayment under the promissory notes. Certain of these requirements have been met since May 2005. As of July 2, 2005, the remaining prepayments that could result from not achieving the remaining designated delivery and performance requirements range from $1 million to $2 million, depending upon the deliverables, up to a total of $4 million.

	•		Nortel Networks has waived through May 2, 2006 a right to prepayment of the promissory notes with the first $75 million of proceeds we raise through financings and waived, until August 2006, the default provision under the promissory notes requiring us to maintain a $25 million minimum cash balance.

During the past three years, Nortel Networks has been our largest customer, and accounted for 45% of our revenues in fiscal year 2005. As a result of completing the delivery of a majority of the last-time buys required under the Nortel Networks supply agreement, we anticipate our revenues from Nortel Networks will decrease beginning in the second quarter of fiscal 2006 and may continue to drop throughout fiscal 2006.

General

We believe it is essential to maintain a comprehensive and capable direct sales and marketing organization. Toward that end, as of July 2, 2005, we had established a direct sales and marketing force of 72 people for all of our products sold in the U.K., China, France, Germany, Switzerland, Canada, Italy and the U.S. In addition to our direct sales and marketing force, we also sell and market our products through international sales representatives and resellers that extend our commercial reach to smaller geographic locations and customers that are not currently covered by our sales offices. Our products targeted at research and industrial applications are sold through catalogs.

Our products typically have a long sales cycle. The period of time between our initial contact with a customer to the receipt of an actual purchase order is frequently a year or more. In addition, many customers perform, and require us to perform, extensive process and product evaluation and testing of components before entering into purchase arrangements.

In certain instances, support services for our products include customer service and technical support. Customer service representatives assist customers with orders, warranty returns and other administrative functions. Technical support engineers provide customers with answers to technical and product-related questions. Technical support engineers also provide application support to customers who have incorporated our products into custom applications.

The following table sets forth our revenues by geographic region for the periods indicated.

Revenues by Geographic Region (in thousands)


	Year Ended		Six Months Ended		Year Ended		Year Ended
	July 2,		July 3,		December 31,		December 31,
	2005		2004		2003		2002
Revenues:
United States	$	54,660	$	20,446	$	13,502	$	4,683
United Kingdom		15,727		4,023		25,454		31,910
Canada		85,168		35,529		78,207		11,235
Europe other than United Kingdom		19,274		8,797		13,230		3,560
Asia		24,439		10,875		14,986		479
Rest of the World		988		93		818		38

Consolidated total revenues	$	200,256	$	79,763	$	146,197	$	51,905

We are subject to risks related to operating in foreign countries. These risks include, among others: currency fluctuations; greater difficulty in accounts receivable collection and longer collection periods; difficulty in enforcing or adequately protecting our intellectual property; foreign taxes; political, legal and economic instability in foreign markets; and foreign regulations. Any of these risks, or any other risks related to our foreign operations, could materially adversely affect our business, financial condition and results of operations and could result in increased operating expenses and reduced revenues.

Intellectual Property

We believe that our proprietary technology provides us with a competitive advantage, and we intend to continue to protect our technology, as appropriate, including design, process and assembly aspects. We believe that our intellectual property portfolio is a strategic asset that we can use in conjunction with the technologies of the companies with whom we collaborate to develop sophisticated solutions and applications for use in optical networking. Our portfolio is supplemented by our extensive expertise and significant application and process engineering know-how developed by our personnel, including personnel who joined us from Nortel Networks, Marconi, Cierra Photonics, Ignis Optics, New Focus and Onetta. We believe that the future success of our business will depend on our ability to translate our intellectual property portfolio and the technological expertise and innovation of our personnel into new and enhanced products.

As of August 31, 2005, we held 291 U.S. patents and 139 non-U.S. patents, and we had approximately 291 patent applications pending in various countries. The patents we currently hold expire between 2005 and 2025. We maintain an active program to identify technology appropriate for patent protection. We require employees and consultants to execute non-disclosure and proprietary rights agreements upon commencement of employment or consulting arrangements. These agreements acknowledge our exclusive ownership of all intellectual property developed by the individuals during their work for us and require that all proprietary information disclosed will remain confidential. While such agreements may be binding, we may not be able to enforce them in all jurisdictions.

Although we continue to take steps to identify and protect our patentable technology and to obtain and protect proprietary rights to such technology, we cannot be certain the steps we have taken will prevent misappropriation of our technology. We may, as appropriate, take legal action in the future to enforce our patents and trademarks and otherwise to protect our intellectual property rights, including our trade secrets. In the future, situations may arise in which we may decide to grant additional licenses.

Research and Development

Since the inception of Bookham Technology plc in 1988, we have focused on research and development activities. We spent $44.8 million during the year ended July 2, 2005, $26.9 million during the six-month period ended July 3, 2004, $50.4 million during the year ended December 31, 2003 and $50.3 million during the year ended December 31, 2002 on our research and development programs. Beginning in 2001, after investing heavily in research and development and increasing our product development efforts in anticipation of an increase in demand, we reduced our research and development expenses and discontinued further development of our proprietary silicon-based integrated optical circuitry, or ASOC, platform. In 2003, primarily due to the acquisition of Ignis Optics and Cierra Photonics, but also due to expanded investment in the area of subsystems, we increased our research and development spending. Our research and development spending also increased in the first six months of 2004, primarily due to our acquisitions of New Focus and Onetta. In fiscal 2005, decreases in spending arising from reductions in connection with our restructuring plans implemented in 2004 were somewhat offset by the expenses of New Focus for the entire year and by weakness in the U.S. dollar relative to the U.K. pound sterling and other currencies in which we operate. We believe that continued focus on the development of our technology is critical to our future competitive success and our goal is to expand and develop our line of telecommunications products, particularly in the area of subsystems, to expand and develop our line of non-telecommunications products and technologies for use in a variety of different applications, enhance our manufacturing processes to reduce production costs, provide increased device performance and reduce product time to market. As of July 2, 2005, our research and development organization comprised 268 people.

Our research and development facilities in Paignton, U.K., Santa Rosa and San Jose, California, and Ottawa, Canada, include computer-aided design stations, modern laboratories and automated test equipment. Our research and development organization has optical and electronic integration expertise that facilitates meeting customer-specific requirements as they arise.

Manufacturing

Our manufacturing capabilities include fabrication processing for indium phosphide, gallium arsenide and thin film filters, including clean room facilities for each of these processes, along with assembly and test capability and reliability/quality testing. We utilize sophisticated semiconductor processing equipment, such as epitaxy reactors, metal deposition systems, photolithography, etching, analytical measurement and control equipment. Our assembly and test facilities include specialized automated assembly equipment, temperature and humidity control and reliability and testing facilities.

We own an advanced 3-inch wafer indium phosphide semiconductor fabrication facility in Caswell U.K., which we believe is one of our key competitive differentiators. We also have assembly and test facilities in Paignton, U.K., Shenzhen, China and San Jose, California. We have a wafer fabrication facility in Zurich, Switzerland, and a thin-film filter manufacturing facility in Santa Rosa, California. We previously had manufacturing facilities in Abingdon, Harlow and Swindon, U.K.; Columbia, Maryland; Poughkeepsie, New York; and Ottawa, Canada, all of which are now closed. During 2003, we consolidated our Ottawa manufacturing equipment and activities into our existing Caswell facility and consolidated our optical amplifier assembly and test operations and chip-on-carrier operations into our Paignton site. In 2003, we substantially underutilized our existing manufacturing capacity. In 2004, we implemented our 2004 restructuring plan which included a reduction in our excess manufacturing floor space to 700,000 square feet and the transfer of a majority of our assembly and test operations from Paignton to Shenzhen in order to take advantage of the comparatively low manufacturing costs in China. In the quarter ended October 2, 2004, we commenced assembly and test operations in Shenzhen. We expect the transition to be completed by the end of fiscal 2006, subsequent to fulfilling certain last-time buys under the Nortel Networks supply agreement out of the Paignton facility.

The following table sets forth our long-lived tangible assets by geographic region for the periods indicated (in thousands).


	July 2,		July 3,		December 31,		December 31,
	2005		2004		2003		2002
United States	$	2,229	$	3,944	$	2,846	$	101
United Kingdom		40,813		46,656		58,404		46,826
Canada		897		1,355		1,447		11,315
Europe other than United Kingdom		5,312		7,389		7,865		8,523
Asia		14,905		13,025		1		2

Total long-lived tangible assets	$	64,156	$	72,369	$	70,563	$	66,767

Competition

The market for our products is highly competitive. We believe we compete favorably with respect to the following factors:

	•		product quality, performance and price;

	•		future product evolution;

	•		manufacturing capabilities; and

	•		customer service and support.

With respect to our telecommunications products, we also believe we compete favorably on the basis of our historical customer relationships and the breadth of our product lines.

Although we believe that we compete favorably with respect to these factors, there can be no assurance that we will continue to do so.

We encounter substantial competition in most of our markets, although no one competitor competes with us across all product lines or markets.

We believe that our principal competitors in telecommunications are the major suppliers of optical components and modules, including both vendors selling to third parties and components companies owned by large telecommunications equipment manufacturers. Specifically, we believe that we compete against two main categories of competitors:

	•		broad-based merchant suppliers of components, principally JDS Uniphase, Avanex, Opnext and CyOptics, and

	•		the vertically integrated equipment manufacturers, such as Fujitsu, Huawei and Sumitomo.

In addition, as we integrate and expand our offerings into new markets, we may compete against market leaders, such as Intel, Agilent and Finisar, in industries such as semiconductor and data communications, who may have significantly more resources than we do.

In the area of photonics and microwave solutions, we compete with a number of companies including Melles Griot, Newport, Thermo Oriel (a unit of the Thermo Photonics Division of Thermo Electron Corporation), Thorlabs, Miteq and Aeroflex.

Employees

As of July 2, 2005, we employed 2,309 persons, including 268 in research and development, 1,861 in manufacturing, 72 in sales and marketing, and 108 in finance and administration. None of our employees are subject to collective bargaining agreements. We believe that our relations with our employees are good.

Item 2. Properties

We lease our corporate headquarters in San Jose, California, which has approximately 52,000 square feet, and includes manufacturing, research and development and office space, under a lease that will expire at the end of 2006. We also lease a facility of approximately 20,000 square feet in Abingdon, U.K., under a lease that will expire in 2007. We also lease our wafer fabricating facility in Zurich, Switzerland, which is approximately 124,000 square feet, under a lease that will expire in 2007. We lease a thin film manufacturing facility in Santa Rosa, California, which has approximately 33,000 square feet, under a lease that expires on December 31, 2011. We own the 183,000 square foot facility in Caswell, U.K., which includes wafer fab, assembly and test capabilities, manufacturing support functions and research and development capabilities and office space. We own our facility in Paignton, U.K., which is approximately 240,000 square feet, comprising manufacturing space incorporating clean rooms, assembly and test capabilities and supporting laboratories, office and storage space. We also own our facility in Shenzhen, China, which is approximately 247,000 square feet comprising manufacturing space, including clean rooms, assembly and test capabilities, packaging, storage and office space. All of these properties are used by our optics segment. Our corporate headquarters in San Jose, California, is also used by our research and industrial segment. In addition, we lease approximately 285,000 square feet of facilities in California under leases extending through April 2011, which we currently do not utilize.

Item 3. Legal Proceedings

From time to time, we are involved in litigation relating to claims arising out of our operations in the normal course of business. We believe we have meritorious defense to the claims set forth below and, therefore, we believe that such claims will not have a material adverse effect on our results of operations, cash flows or financial position.

On June 26, 2001, a securities class action captioned Lanter v. New Focus, Inc. et al., Civil Action No. 01-CV-5822, was filed against New Focus, Inc. and several of its officers and directors, or the New Focus Individual Defendants, in the United States District Court for the Southern District of New York. Also named as defendants were Credit Suisse First Boston Corporation, Chase Securities, Inc., U.S. Bancorp Piper Jaffray, Inc. and CIBC World Markets Corp., or the Underwriter Defendants, the underwriters in New Focus’s initial public offering. Three subsequent lawsuits were filed containing substantially similar allegations. These complaints have been consolidated. On April 19, 2002, plaintiffs filed an Amended Class Action Complaint, described below, naming as defendants the New Focus Individual Defendants and the Underwriter Defendants.

On November 7, 2001, a Class Action Complaint was filed against Bookham Technology plc and others in the United States District Court for the Southern District of New York. On April 19, 2002, plaintiffs filed an Amended Complaint. The Amended Complaint names as defendants Bookham Technology plc, Goldman, Sachs & Co. and FleetBoston Robertson Stephens, Inc., two of the underwriters of Bookham Technology plc’s initial public offering in April 2000, and Andrew G. Rickman, Stephen J. Cockrell and David Simpson, the Bookham Individual Defendants, each of whom was an officer and/or director at the time of the initial public offering, or the Bookham Individual Defendants. We refer to the Bookham Individual Defendants and the New Focus Individual Defendants collectively as the Individual Defendants.

Technology plc, or common stock, in the case of New Focus, from the underwriters. The Amended Complaint seeks unspecified damages (or in the alternative, rescission for those class members who no longer hold common stock), costs, attorneys’ fees, experts’ fees, interest and other expenses. In October 2002, the Individual Defendants were dismissed, without prejudice, from the action. In July 2002, all defendants filed Motions to Dismiss the Amended Complaint. The motion was denied as to Bookham Technology plc and New Focus in February 2003. Special committees of the board of directors authorized the companies to negotiate a settlement of pending claims substantially consistent with a memorandum of understanding negotiated among class plaintiffs, all issuer defendants and their insurers.

Plaintiffs and most of the issuer defendants, including Bookham, and their insurers have entered into a stipulation of settlement for the claims against the issuer defendants. Under the stipulation of settlement, the plaintiff will dismiss and release all claims against defendants which are party to the stipulation of settlement in exchange for a payment guaranty by the insurance companies collectively responsible for insuring the issuers in the related cases, and the assignment or surrender to the plaintiffs of certain claims the issuer defendants may have against the underwriters. On February 15, 2005, the court issued an Opinion and Order preliminarily approving the settlement provided that the defendants and plaintiffs agree to a modification narrowing the scope of the bar order set forth in the original settlement agreement. The parties agreed to the modification narrowing the scope of the bar order, and on August 31, 2005, the court issued an order preliminarily approving the settlement and setting a public hearing on its fairness for April 24, 2006.

On February 13, 2002, Howard Yue, the former sole shareholder of Globe Y. Technology, Inc., a company acquired by New Focus in February 2001, filed a lawsuit against New Focus and several of its officers and directors in Santa Clara County Superior Court. The lawsuit is captioned Howard Yue v. New Focus, Inc. et al, Case No. CV808031, and asserts claims stemming from New Focus’s acquisition of Globe Y. Technology, Inc. The plaintiff has amended his complaint several times following the court’s dismissal of his earlier complaints. Currently, the plaintiff’s fifth amended complaint alleges the following causes of action against New Focus: violation of §25400 and §25500 of the California Corporations Code; violation of §§1709-1710 of the California Civil Code; violation of §25402 of the California Corporations Code; violation of §17200 and §17500 of the California Business & Professions Code; fraud and deceit by concealment; fraud and deceit by active concealment; fraud and deceit based upon non-disclosure of material facts; negligent misrepresentation; and breach of contract and the duty of good faith and fair dealing. The complaint seeks unspecified economic, punitive, and exemplary damages, prejudgment interest, costs, and equitable and general relief. In November 2004, New Focus filed answers to the plaintiff’s fifth amended complaint denying the plaintiff’s allegations and asserting various defenses.

In addition, in October 2003, New Focus filed a cross-complaint against Mr. Yue seeking damages in connection with Mr. Yue’s conduct during the acquisition of Globe Y Technology, Inc. by New Focus. In February 2004, New Focus filed a corrected amended cross-complaint against Mr. Yue. In May 2004, Mr. Yue filed an answer to New Focus’s corrected amended cross-complaint denying New Focus’s allegations and asserting various defenses. In December 2004, plaintiff and defendants filed a motion for summary judgment and/or summary adjudication with respect to the corrected amended cross-complaint and certain causes of action in the fifth amended complaint. In April 2005, the court denied both plaintiff’s and defendants’ motions. The trial date has been set for November 14, 2005 and the court has scheduled 15 days for the trial. We intend to conduct a vigorous defense of this lawsuit.

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of our security holders in the fourth quarter of fiscal 2005.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information and Holders

Our common stock began trading on the Nasdaq National Market under the symbol “BKHM” on September 10, 2004. Prior to that date, there was no established public trading market for our common stock. From April 11, 2000 through September 10, 2004, the date of the closing of the scheme of arrangement pursuant to which Bookham Technology plc became our wholly-owned subsidiary, Bookham Technology plc’s ordinary shares were quoted on the Official List of the United Kingdom Listing Authority under the symbol “BHM” and its American Depository Shares, or ADSs, were quoted on the Nasdaq National Market under the symbol “BKHM”. Each ADS represented one ordinary share. In connection with the scheme of arrangement, every ten ordinary shares, and ADSs, of Bookham Technology plc were exchanged for one share of our common stock. The closing price of our common stock on September 2, 2005 was $4.05.

The following table sets forth the range of high and low sale prices of (i) Bookham Technology plc’s ordinary shares and ADSs for the periods indicated through September 9, 2004 and (ii) our common stock beginning on September 10, 2004 through the periods indicated (the sales prices for periods prior to the scheme of arrangement have been adjusted to reflect the exchange ratio in the scheme of arrangement):


	Per Ordinary								Per share of
	Share				Per ADS				Common Stock
	High		Low		High		Low		High		Low
	(£)		(£)		($)		($)		($)		($)
*Quarter Ended*
September 30, 2003		14.00		7.00		25.70		11.60		—		—
December 31, 2003		17.80		10.70		29.90		19.80		—		—
March 31, 2004		19.40		10.30		35.50		20.01		—		—
July 3, 2004		12.80		4.50		23.80		7.70		—		—
October 2, 2004		5.29		3.30		9.70		6.00		7.75		5.77
January 1, 2005		—		—		—		—		6.60		4.08
April 2, 2005		—		—		—		—		4.95		1.56
July 2, 2005		—		—		—		—		3.67		2.51
October 1, 2005 (through September 2, 2005)		—		—		—		—		5.08		2.98

As of September 2, 2005, there were 10,776 holders of record of our common stock. This number does not include stockholders who hold their shares in “street name” or through broker or nominee accounts.

Dividends

We have never paid cash dividends on our common stock or ordinary shares. To the extent we generate earnings, we intend to retain them for use in our business and, therefore, do not anticipate paying any cash dividends on our common stock in the foreseeable future.

Item 6. Selected Financial Data

The selected financial data set forth below should be read in conjunction with our consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this Form 10-K. Prior to June 2004, Bookham Technology plc reported on a December 31 fiscal year-end basis. In June 2004, Bookham Technology plc approved a change in its fiscal year end from December 31 to the Saturday closest to June 30 which matches the fiscal year end of Bookham. Pursuant to a scheme of arrangement under the laws of the United Kingdom, Bookham assumed the financial reporting history of Bookham Technology plc effective September 10, 2004. In addition, in connection with the scheme of arrangement, Bookham changed its corporate domicile from the United Kingdom to the United States and changed its reporting currency from the U.K. pound sterling to the U.S. dollar effective September 10, 2004. Subsequent to the scheme of arrangement, our common stock is traded only on the Nasdaq National Market whereas, previously, our ordinary shares had been traded on the London Stock Exchange and our ADSs had been traded on the Nasdaq National Market.

Our annual reports on Form 20-F for the years ended December 31, 2003, 2002 and 2001 contained Bookham Technology plc’s audited consolidated financial statements which were prepared in accordance with accounting principles generally accepted in the United Kingdom and were denominated in U.K. pounds sterling. Our transition report on Form 10-K, as amended, for the six months ended July 3, 2004 contained audited consolidated financial statements at July 3, 2004 and December 31, 2003 and 2002 and for the six months ended July 3, 2004 and for each of the three years in the period ended December 31, 2003 together with unaudited consolidated financial statements for the six months ended June 29, 2003, all prepared in accordance with accounting principles generally accepted in the United States and presented in U.S. dollars.

The selected financial data set forth below at July 2, 2005 and July 3, 2004 and for the year ended July 2, 2005, the six months ended July 3, 2004 and June 29, 2003 and the years ended December 31, 2003 and 2002 are derived from our consolidated financial statements included elsewhere in this report. The selected financial data at December 31, 2003 and 2002 and for the year ended December 31, 2001 are derived from our transitional report on Form 10-K, as amended, for the six months ended July 3, 2004. The selected financial data at December 31, 2002 and 2001 and for the year ended December 31, 2001 are derived from our annual reports on Form 20-F and have been translated into U.S. dollars using the historical exchange rate at each corresponding period end for balance sheet data and a corresponding simple average rate for statement of operations data.

Consolidated Statements of Operations Data


	Year Ended			Six Months Ended						Year Ended December 31,
	July 2,			July 3,			June 29,
	2005			2004			2003			2003			2002			2001			2000
	(in thousands, except for per share data)
Net revenues	$	200,256		$	79,763		$	67,762		$	146,197		$	51,905		$	31,566		$	39,715
Operating loss		(243,987	)		(66,876	)		(70,794	)		(131,095	)		(171,565	)		(179,932	)		(56,596	)

Net loss	$	(247,972	)	$	(67,371	)	$	(68,040	)	$	(125,747	)	$	(164,938	)	$	(164,370	)	$	(42,268	)
Net loss per share (basic and diluted)	$	(7.43	)	$	(2.48	)	$	(3.32	)	$	(6.03	)	$	(10.92	)	$	(12.79	)	$	(3.64	)

Weighted average of shares of common stock outstanding		33,379			27,199			20,495			20,845			15,100			12,853			11,623

Consolidated Balance Sheet Data


	July 2		July 3,		December 31,
	2005		2004		2003		2002		2001		2000
	(in thousands)
Total assets	$	237,886	$	468,025	$	269,498	$	351,616	$	342,936	$	497,279
Total stockholders’ equity		91,068		330,590		164,395		248,608		316,424		457,575
Long-term obligations		76,233		64,507		68,255		55,832		—		1,346

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Selected Financial Data” appearing in Item 6 of this report and our audited consolidated financial statements and related notes appearing under Item 8 of this report, including Note 1, in which we discuss our need for additional financing to continue as a going concern. This discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements, as described under “Special Note Regarding Forward-Looking Statements” above Item 1 of this report.

Overview

We design, manufacture and market optical components, modules and subsystems that generate, detect, amplify, combine and separate light signals principally for use in high-performance fiber optics communications networks. We principally sell our optical component products to optical systems vendors as well as to customers in the data communications, military, aerospace, industrial and manufacturing industries. Customers for our photonics and microwave product portfolio include academic and governmental research institutions that engage in advanced research and development activities. Our products typically have a long sales cycle. The period of time between our initial contact with a customer to the receipt of a purchase order is frequently a year or more. In addition, many customers perform, and require us to perform, extensive process and product evaluation and testing of components before entering into purchase arrangements.

Effective September 10, 2004, we changed our corporate domicile from the United Kingdom to the United States and our reporting currency from U.K. pounds sterling to U.S. dollars. In contemplation of the scheme of arrangement, Bookham Technology plc changed its fiscal year end from December 31 to the Saturday closest to June 30, which matches the fiscal year end of Bookham. Accordingly, our financial statements for the fiscal year ended June 30, 2004 were prepared for the six-month period ended July 3, 2004 and will be prepared for a fifty-two/fifty-three week cycles going forward, including for the year ended July 2, 2005, which are included in this Form 10-K. Our consolidated financial statements for the periods up to and including December 31, 2003, were reported in U.K. pounds sterling prior to the scheme of arrangement, and have been translated to U.S. dollars using the historical exchange rate at each corresponding period end for balance sheet accounts and a corresponding simple average rate for statement of operations accounts.

In view of the change in our fiscal year, this Management’s Discussion and Analysis of Financial Condition and Results of Operations compares the financial position and results of operations as of and for the fiscal year ended July 2, 2005 with the financial position and results of operations as of and for the twelve-month unaudited period ended July 3, 2004, the results for the six month period ended July 3, 2004 with the six-month unaudited period ended June 29, 2003, and the results for the year ended December 31, 2003 with the year ended December 31, 2002. All data as of and for the twelve-month period ended July 3, 2004 and the six-month period ended June 29, 2003 have been derived from unaudited consolidated financial information disclosed in our consolidated financial statements, including Note 17 to our consolidated financial statements.

Since the beginning of 2002, we have acquired a total of six companies and businesses. In 2002, we acquired the optical components businesses of Nortel Networks and Marconi. During the course of 2003, we purchased substantially all of the assets of Cierra Photonics and acquired all of the outstanding capital stock of Ignis Optics, Inc. During 2004, we acquired New Focus, Inc., and Onetta, Inc.

We have enacted a series of restructuring plans to reduce our manufacturing overhead and our operating expenses. In 2001, we reduced manufacturing overhead and our operating expenses in response to the initial decline in demand in the optics components industry. In connection with our acquisitions of Nortel Networks’ optical components business in November 2002 and New Focus in March 2003, we enacted restructuring plans related to the consolidation of our operations. In May and November

of 2004, we adopted our latest restructuring plans, which included the transfer of our assembly and test operations from Paignton, U.K. to Shenzhen, China, a process that commenced in the quarter ended October 2, 2004. We expect to complete this transition by the end of fiscal year 2006. In connection with these restructuring plans, we have closed eight facilities consisting of approximately 700,000 square feet of space, severed approximately 1,500 employees and incurred approximately $188.6 million of related restructuring charges.

In recent periods, the value of the U.S. dollar has declined significantly in comparison with the U.K. pounds sterling. Because a substantial portion of our revenues have been denominated in U.S. dollars and the majority of our costs have been incurred in U.K. pounds sterling, this decline has resulted, and we expect will continue to result in, pressure on our cash flow, margins and operating results. Moving assembly and testing to our facility in Shenzhen, China will help mitigate our exposure to fluctuations in the U.K. pounds sterling relative to the U.S. dollar. We also attempt to mitigate our currency exposure using foreign exchange contracts as we consider appropriate. Regardless, any weakness in the U.S. dollar versus the U.K. pounds sterling will make it more difficult for us to achieve improvements in our margins in the short term.

Recent Developments

On August 10, 2005, Bookham Technology plc entered into a share purchase agreement with Deutsche Bank AG and London Industrial Leasing Limited, a subsidiary of Deutsche Bank, pursuant to which Bookham Technology plc agreed to purchase all of the issued share capital of City Leasing (Creekside) Limited, a subsidiary of Deutsche Bank. Under the share purchase agreement and related documents, Creekside, as a subsidiary of Bookham Technology plc, is entitled to receivables of £73.8 million (approximately $135.8 million, based on an exchange rate of £1.00 to $1.8403, the noon buying rate on September 2, 2005 for cable transfers in foreign currencies as certified by the Federal Reserve Bank of New York) from Deutsche Bank in connection with certain aircraft subleases and will in turn apply those payments over a two-year term to obligations of £73.1 million (approximately $134.5 million). We expect Bookham Technology plc to utilize certain expected tax losses to reduce the taxes that might otherwise be due from Creekside on the receivables. In the event that Bookham Technology plc is not able to utilize these tax losses (or these tax losses do not arise), Creekside may have to pay taxes, reducing the cash available from Creekside. In the event there is a future change in applicable U.K. tax law, Creekside, and in turn Bookham Technology plc, would be responsible for any resulting tax liabilities, which amounts could be material to Bookham’s financial condition or operating results. As a result of these transactions, Bookham Technology plc will have available through Creekside cash of approximately £6.63 million (approximately $12.2 million): £4.2 million (approximately $7.8 million) on August 10, 2005, £1 million (approximately $1.8 million) on October 14, 2005; £1 million (approximately $1.8 million) on July 14, 2006; and the balance of approximately £431,000 (approximately $793,000) on July 16, 2007. Creekside will be consolidated as a subsidiary of the Company. Creekside is administered by City Leasing Limited, a subsidiary of Deutsche Bank.

Application of Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements contained elsewhere in this Form 10-K, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgements that affect our reported assets and liabilities, revenues and expenses and other financial information. Actual results may differ significantly from those based on our estimates or using different assumptions and conditions. In addition, our reported financial condition and results of operations could vary due to a change in the application of a particular accounting standard.

We regard an accounting estimate or assumption underlying our financial statements as a “critical accounting estimate” where:

	•		the nature of the estimate or assumption is material due to the level of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and

	•		the impact of such estimates and assumptions on our financial condition or operating performance is material.

Our significant accounting policies are more fully described in Note 1 to our consolidated financial statements included elsewhere in this Form 10-K. We have discussed our accounting policies with the audit committee of our board of directors, and we believe that the policies described below involve critical accounting estimates.

Revenue Recognition and Sales Returns

Revenue represents the amounts, excluding sales taxes, derived from the provision of goods and services to third-party customers during a given period. Our revenue recognition policy follows SEC Staff Accounting Bulletin, or SAB, No. 104, “Revenue

Recognition in Financial Statements”. Specifically, we recognize product revenue when persuasive evidence of an arrangement exists, the product has been shipped, title has transferred, collectibility is reasonably assured, fees are fixed or determinable and there are no uncertainties with respect to customer acceptance. For certain sales, we are required to determine, in particular, whether the delivery has occurred, whether items will be returned and whether we will be paid under normal commercial terms. For certain shipments, we specify delivery terms and assess each shipment against those terms, and only recognize revenue when we are certain that the delivery terms have been met. For shipments to new customers and evaluation units, including initial shipments of new products, where the customer has the right of return through the end of the evaluation period, we recognize revenue on these shipments at the end of an evaluation period, if not returned, and when collection is reasonably assured. We record a provision for estimated sales returns in the same period as the related revenues are recorded which is netted against revenue. These estimates are based on historical sales returns, other known factors and our return policy. Before accepting a new customer, we review publicly available information and credit rating databases to provide ourselves with reasonable assurance that the new customer will pay all outstanding amounts in accordance with our standard terms. For existing customers, we monitor historic payment patterns to assess whether we can expect payment in accordance with the terms of each shipment.

We recognize royalty revenue when it is earned and collectibility is reasonably assured.

7.0% Senior Convertible Debentures Due December 2007

In December 2004, we issued $25.5 million aggregate principal amount of convertible debentures accompanied by warrants to purchase 2.0 million shares of our common stock. As of July 2, 2005, $19.1 million of the aggregate principal amount was reflected on our balance sheet as long term debt, $5.4 million was allocated to the value of the warrants and $2.0 million was allocated to the value of the conversion feature of the debentures. The valuation of these financial instruments involved judgments that affect the carrying value of each instrument on the balance sheet and the periodic interest expense recorded. In order to determine the valuation of these instruments, we applied the guidance in Emerging Issues Task Force, or EITF, Issue 98-5, “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios” and EITF Issue 00-27, “Application of Issue 98-5 to Certain Convertible Instruments” to value the debentures, the accompanying warrants and the value of the convertibility element of the debentures. We first determined the fair value of the warrants and their value relative to the debentures. We chose to use the Black-Scholes model to determine the value of the warrants which requires, among other things, the determination of our stock’s volatility. The historical volatility rate was calculated by measuring the volatility of our stock since we became a public company in April 2000, which approximates the life of the warrants. Had we used a different period to measure the historical volatility, the value assigned as discount to the debt would have been affected. We used the following assumptions in the Black-Scholes model: 97% historical volatility rate; 2.89% risk free interest rate; and a five year life. Changing the assumptions would have changed the amount assigned by us to the discount of the debt liability by affecting both the warrant value and the value of the convertibility element of the debentures and may have a significant effect in the interest expense set forth in our financial statements included in this Form 10-K. The discount assigned is amortized as part of interest expense over the term of the debentures.

Inventory Valuation

In general, our inventory is valued at the cost to acquire or manufacture our products, less write-offs of inventory we believe could prove to be unsaleable. The manufacturing cost includes the cost of the components purchased to produce our products, and related labor and overhead. We review our inventory on a monthly basis to determine if it is saleable. Products may be unsaleable

because they are technically obsolete due to substitute products, specification changes or excess inventory relative to customer forecasts. We currently reserve for inventory using methods that take those factors into account. In addition, if we find that the cost of inventory is greater than the selling price, we will write the inventory down to the selling price, less the cost to complete and sell the product.

During 2002, in connection with the acquisition of the optical components business of Nortel Networks, we recorded the fair value of the inventory that was acquired. In accordance with SFAS No. 141 “Business Combinations”, an adjustment was made in the 2003 accounts for amendments to those provisional values. During 2003, a larger amount of inventory was sold than was expected at the time the transaction with Nortel Networks was completed in 2003. As a consequence, we increased the value of the inventory by $20.2 million, increased current liabilities by approximately $1.3 million, decreased intangible assets by $9.1 million and increased property, plant and equipment by $9.8 million.

Accounting for Acquisitions and Goodwill

We account for acquisitions using the purchase accounting method in accordance with Statement of Financial Accounting Standards, or SFAS, 142, “Goodwill and Other Intangible Assets.” SFAS No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually or sooner whenever events or changes in circumstances indicate they may be impaired. Circumstances that could trigger an impairment test include, but are not limited to, a significant adverse change in the business climate, unanticipated competition, loss of key personnel and the possible sale of the whole, or part of the reporting unit. Under this method, the total consideration paid, excluding the contingent consideration that has not been earned, is allocated over the fair value of the net assets acquired, including in-process research and development, with any excess allocated to goodwill (defined as the excess of the purchase price over the fair value allocated to the net assets). Our judgments as to fair value of the assets will, therefore, affect the amount of goodwill that we record. These judgments include estimating their useful lives, over which periods the fair values will be amortized to expense. For tangible assets acquired in any acquisition, such as plant and equipment, we estimate useful lives by considering comparable lives of similar assets, past history, the intended use of the assets and their condition. In estimating the useful life of the acquired intangible assets with definite lives, we consider the industry environment and unique factors relating to each product relative to our business strategy and the likelihood of technological obsolescence. Acquired intangible assets primarily include core and current technology, patents, supply agreements, capitalized licenses and customer contracts. We are currently amortizing our acquired intangible assets with definite lives over periods generally ranging from three to six years and sixteen years as to one specific customer contract.

Impairment of Goodwill and Intangibles

Under SFAS No. 142, goodwill is no longer amortized over an estimated useful life, but is instead tested annually for impairment, in our case during the fourth quarter, or more often if an event or circumstance suggests impairment has occurred. We review identifiable intangibles, excluding goodwill, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Circumstances which could trigger an impairment test include, but are not limited to, significant decreases in the market price of the asset, significant adverse changes to the business climate or legal factors, current period cash flow or operating losses or a forecast of continuing losses associated with the use of the asset and a current expectation that the asset will more likely than not be sold or disposed of significantly below carrying value before the end of its estimated useful life.

SFAS No. 142 requires that the first phase of testing goodwill for impairment be based on a business unit’s “fair value,” which is generally determined through market prices. Due to the absence of market prices for our businesses, and as permitted by SFAS No. 142, we have elected to base our testing on discounted future expected cash flows. Although the discount rates and other input variables may differ, the model we use in this process is the same model we use to evaluate the fair value of acquisition candidates and the fairness of offers to purchase businesses that we are considering for divestiture. The forecasted cash flows we use are derived from the annual long-range planning process that we perform and present to our board. In this process, each business unit is required to develop reasonable sales, earnings and cash flow forecasts for the next three to seven years based on current and forecasted economic conditions. For purposes of testing for impairment, the cash flow forecasts are adjusted as needed to reflect information that becomes available concerning changes in business levels and general economic trends. The discount rates used are generally based on our weighted average cost of capital and are then judgmentally adjusted for “plan risk” (the risk that a business will fail to achieve its forecasted results) and “country risk” (the risk that economic or political instability in the countries in which we operate will cause a business unit’s projections to be inaccurate). Finally, a growth factor beyond the three to seven-year period for which cash flows are planned is selected based on expectations of future economic conditions. Virtually all of the assumptions used are susceptible to change due to global and regional economic conditions as well as competitive factors in the industry in which we

operate. In recent years, many of our cash flow forecasts have not been achieved due in large part to the unexpected length and depth of the downturn in our industry. Unanticipated changes in discount rates from one year to the next can also have a significant effect on the results of the calculations. While we believe the estimates and assumptions we use are reasonable in these circumstances, various economic factors could cause the results of our goodwill testing to vary significantly.

SFAS No. 142 provides guidance for companies who have experienced a “triggering event”, or an event or circumstance indicating that a possible impairment of a business unit’s goodwill may have occurred. During the third quarter of fiscal 2005 we determined that, due to the continued decline in our stock price, and therefore market capitalization, combined with continued net losses and a history of not meeting revenue and profitability targets, the goodwill recorded in connection with our acquisitions of Ignis, Onetta, and New Focus had potentially been impaired. A preliminary evaluation of each business unit’s fair value in accordance with SFAS No. 140 led to a goodwill impairment charge of $98.1 million in the quarter ended April 3, 2005. The completion of our year-end evaluation of all goodwill and intangibles, required under SFAS No. 142, led to an additional impairment charge of $16.1 million in the fourth quarter of fiscal 2005, of which $15.5 million related to goodwill and $0.6 million related to other intangibles (see Note 14 to our consolidated financial statements included elsewhere in this Form 10-K).

Accounting for Acquired In-Process Research and Development

In the six-month period ended July 3, 2004, in connection with the acquisition of New Focus, we recorded a charge of $5.9 million for in-process research and development. In 2003, in connection with the acquisition of Ignis Optics, we recorded a charge of $1.9 million for in-process research and development. In 2002, in connection with the acquisition of the optical components businesses of Marconi and Nortel Networks, we recorded charges of $5.9 million and $7.3 million, respectively, for in-process research and development. There were no charges for in-process research and development related to the Cierra Photonics and Onetta acquisitions. During 2003, following the required review of the purchase price allocation for the acquisition of the optical components business of Nortel Networks, a credit of $1.7 million was made related to the in-process research and development expensed as part of an overall reallocation of the purchase price. Management is responsible for estimating the fair values of in-process research and development.

As of the dates of each in-process research and development valuation, the projects assessed had not yet demonstrated technological or commercial feasibility, and the technology did not have an alternative future use. Therefore, the fair values were expensed at the relevant date of acquisition. Expenses related to development projects which, when using the technology contribution approach, are deemed to have positive net present value, are assigned a fair value, capitalized and amortized over the expected useful lives.

For each acquisition, allocations of consideration were based on the estimated fair values derived from calculating the discounted cash flows required to develop each incomplete research and development project into a commercially viable product, taking into account the anticipated future revenues and the remaining costs of completion. Consideration was also given to the direct expenses incurred, contribution from other assets, the implications of various jurisdictions of corporate tax, the degrees of completion and the relative risks attributable to each project. All operating cash flows were discounted at appropriate rates. The revenue estimates assumed that the development and marketing of the projects would be successful, and that their commercialization would correlate to management’s forecasts as of the date of the analysis, and that forecasted sales would decline over each product’s expected economic life as new versions were introduced either by us or competitors.

In identifying the programs to be valued, we distinguish between two main areas of research and development. Pure research of a given technology application is referred to as Technology Research, or TR. New product introduction, or NPI, follows from this stage, and is the development of a known technology from initial identification of an application with a market opportunity, through design and testing, to implementation and delivery of products to a customer.

Acquisition of the Optical Components Business of Marconi Optical Components Limited

In connection with the acquisition of the optical components business of Marconi in February 2002, $5.9 million of the $29.9 million total consideration was allocated to in-process research and development projects.

The remaining projects under development at the acquisition date were expected to result in a portfolio addressing tunability, bandwidth, integration, amplification, and managed optical networks.

The expected dates of release of these projects ranged from seven to seventeen months from the date of acquisition. We acquired three main programs in the NPI stage of development. All estimated costs to complete were to be funded from our current cash reserves. The current status of each category is given below:

	•		Fast tuning, wide coverage, tunable lasers: We suspended development of these products post-acquisition in favor of alternative technologies. We have continued to work to eliminate many of the fundamental limitations of the chip. We have launched a development program of a laser and module with product availability expected in the second half of 2005.

	•		10 gigabyte transmitters: We rephased this program as a result of wafer fab and assembly and test facility transfers. We have completed an integrated narrow band tunable transmitter and began shipping this product to the customer in 2003. We discontinued the wide band transmitter in 2003.

	•		40 gigabyte transmitters and receivers: Following the acquisition, we suspended the program as the market conditions for acceptance of this product had changed, and there was overlap with products being developed/marketed by the optical components business acquired from Nortel Networks. While we continue to believe that this market will develop in the future, we do not plan to continue with this program.

Acquisition of the Optical Components Business of Nortel Networks

Of the total $119.0 million consideration for the optical components business of Nortel Networks in November 2002, the initial allocation to acquired in-process research and development was $7.3 million. This initial allocation was subsequently adjusted following the required review of the purchase price allocation during the second half of 2003, resulting in a reduction of the allocated in-process research and development by $1.7 million, which was recognized as a credit in 2003.

The projects remaining under development at the acquisition date were expected to result in a portfolio addressing tunability, bandwidth, integration, amplification, and managed optical networks. These projects were split into two distinct categories: NPI and TR. The TR projects, which met the criteria for recognition as in-process research and development, were assessed as requiring between one and one and a half years before attaining NPI status. All estimated costs to complete were to be funded from current cash reserves in Bookham. The current status of each category is given below.

NPI

	•		Amplifiers: The MiNi and Barolo platform products were successfully released in 2003 and continue to be shipped to customers.

	•		Pumps: The next generation of pumps incorporating the G07 higher power chip were successfully launched in 2003.

	•		Transmitters/Receivers: The majority of the transmitters and receivers in the NPI stage at acquisition have now been released to the market and are being shipped to customers. These include the 10 G/bs 8x50 GaAs laser, the 100mW UHP laser, the Compact MZ laser, MSA receiver, a 10G uncooled DFB directly modulated laser and hot pluggable transponder modules. A couple of programs, mainly comprising or modules including tunable lasers, have been rephased due to slower market demand for the new technology.

Technology Research

	•		Amplifiers: Activity on these projects has slowed significantly due to weakening market demand and pricing pressure. Since the date of acquisition, substantially all of the technology work-in-progress has been completed or absorbed into products.

	•		Pumps: Since the date of acquisition, substantially all of the technology work-in-progress has been completed or absorbed into products.

	•		Transmitter/Receivers: Since the date of acquisition, substantially all of the technology work-in-progress has been completed or absorbed into products.

Acquisition of Ignis Optics

In connection with the acquisition of Ignis Optics in October 2003, $1.9 million of the $18 million total consideration was allocated to in-process research and development projects. The NPI projects under development at the acquisition date were expected to result in small form factor pluggable optical transceivers or component elements to these products and address quality and reliability requirements. Commercial shipments of the products began during the second half of fiscal 2005. There were no TR projects at the time of acquisition.

Acquisition of New Focus

In connection with the acquisition of New Focus in March 2004, $5.9 million of the $211 million total consideration was allocated to in-process research and development projects. The NPI projects at the acquisition date were expected to result in the development of products to support the New Focus OEM and catalog business. Catalog related programs were focused on increasing the wavelength spectrum over which modulator products can operate and developing detectors to operate at higher frequency with lower noise over a broader wavelength, with their first incorporation in shipments in December 2004. Of the OEM related products, two have been completed, namely a super luminous diode light source for use in subsystems and a laser for use in high precision/high stability labs. The final program for development of a small form factor laser for use in fiber sensing applications continues but has been slowed due to lower than expected emergence of market opportunities. There were no TR programs at the time of acquisition.

Results of Operations

Revenues


			Twelve
	Year		Months		Percentage							Percentage							Percentage
($ millions)	Ended		Ended		Change			Six Months Ended				Change			Year Ended				Change
	July 2,		July 3,					July 3,		June 29,					December 31,		December 31,
	2005		2004					2004		2003					2003		2002
			(unaudited)							(unaudited)
Net revenues	$	200.3	$	158.2		27	%	$	79.8	$	67.8		18	%	$	146.2	$	51.9		182	%

Year ended July 2, 2005 versus twelve months ended July 3, 2004

Revenues for the year ended July 2, 2005 increased by $42.1 million, or 27%, as compared to the twelve months ended July 3, 2004. The increase was primarily due to the inclusion of a full year of revenue from New Focus and Onetta, which we acquired during the twelve months ended July 3, 2004. Revenues from products and services acquired as part of these acquisitions were $30.4 million for the year ended July 2, 2005 compared to $8.7 million in revenues for the twelve months ended July 3, 2004, which included only approximately three months of revenues from New Focus and one month of revenues from Onetta. In addition, sales of products and services to customers other than Nortel Networks and Marconi increased to $88.9 million in fiscal 2005 from $52.2 million in the twelve months ended July 3, 2004.

Revenues from our optics segment, which designs, manufactures, markets and sells optical solutions for telecommunications and industrial applications, increased to $176.6 million in fiscal 2005 from $147.8 million in the twelve months ended July 3, 2004, primarily as a result of increased sales of products and services. The research and industrial segment designs, manufactures, markets and sells photonic and microwave solutions and primarily comprises the products and services of New Focus. Revenues from the research and industrial segment increased to $23.7 million in fiscal 2005 from $10.4 million in the twelve months ended July 3, 2004, primarily as a result of these products and services contributing sales for the entire year.

Our largest customer for the year ended July 2, 2005 and the twelve months ended July 3, 2004 was Nortel Networks. Sales of products and services to Nortel Networks were $89.5 million in fiscal 2005 compared to $81.4 million in the twelve months ended July 3, 2004, representing 45% and 52% of our revenues in the respective years. The increase in revenue from the twelve months ended July 3, 2004 to fiscal 2005 was due to revisions to our supply agreement with Nortel Networks in March 2005. Pursuant to the terms of the supply agreement with Nortel Networks, Nortel Networks issued non-cancelable purchase orders and last-time buys totaling approximately $100 million, based on revised pricing terms, to be delivered through March 2006. Through July 2, 2005, we delivered products pursuant to these purchase orders having an aggregate price of approximately $34 million. We expect these

orders will lead to revenue increases in the first quarter of fiscal 2006 before declining in the second quarter of fiscal 2006 and potentially continuing to decline in future quarters.

Six months ended July 3, 2004 versus six months ended June 29, 2003

The increase in revenues for the six-month period ended July 3, 2004 over the six-month period ended June 29, 2003 principally resulted from the acquisition of New Focus in March 2004 and higher revenues from products sold to customers other than Nortel Networks and Marconi, offset by lower revenues from Nortel Networks. During the six-month period ended July 3, 2004, revenues from New Focus were $10.4 million, including $2.4 million from JCA Technology, Inc., a subsidiary of New Focus which we sold in the month of July 2004. As part of the acquisition of the optical components business from Nortel Networks, we entered into a three-year, non-exclusive supply agreement with Nortel Networks. The agreement required Nortel Networks to purchase over the six-quarter period from November 8, 2002 to March 31, 2004, which we refer to as the minimum commitment period, a minimum of $120 million of products and services from us. In the six-month period ended June 29, 2003, we sold $40.4 million of products and services, representing 60% of our revenues for the period, to Nortel Networks, compared with $36.5 million and 46% of our revenues for the six-month period ended July 3, 2004. In the quarter ended July 3, 2004, after expiration of the minimum commitment period, we sold $16.8 million of products and services to Nortel Networks. Our revenues over the minimum commitment period of the supply agreement with Nortel Networks may not be indicative of future revenue. As part of the acquisition of the optical components business of Marconi, we entered into a supply agreement, which provided for Marconi to purchase $48.3 million of products and services from us. This agreement expired in June 2004. Revenues from Marconi declined from $9 million for the six-month period ending June 29, 2003 to $7.4 million for the six-month period ended July 3, 2004, representing 13% and 9% of sales, respectively, for the first six months of 2003 and 2004, respectively, however, in 2004 this decline was offset by revenues from other customers which increased as we expanded our customer base through the sale of new products and products we acquired as part of the acquisition of the Nortel Networks optical components business.

Year ended December 31, 2003 versus year ended December 31, 2002

The increase in revenue in the period from 2002 to 2003 primarily resulted from sales of our products to Nortel Networks. Revenues from Nortel Networks increased 426% from $16.3 million for the year ended December 31, 2002 to $85.5 million for the year ended December 31, 2003, representing 32% and 59% of our revenues in 2002 and 2003, respectively. A further factor causing revenues to increase in 2003 over 2002 was growth in the sale of products produced by the optical components business acquired from Nortel Networks to customers other than Nortel Networks and Marconi. Sales to customers other than Nortel Networks and Marconi increased 167% from $15.9 million in 2002 to $42.4 million in 2003.

Cost of Revenues


			Twelve
	Year		Months		Percentage			Six Months				Percentage							Percentage
($ millions)	Ended		Ended		Change			Ended				Change			Year Ended				Change
	July 2,		July 3,					July 3,		June 29,					December 31,		December 31,
	2005		2004					2004		2003					2003		2002
			(unaudited)							(unaudited)
Cost of Revenues	$	193.6	$	159.5		21	%	$	84.4	$	80.9		4	%	$	156.0	$	79.1		97	%

Our cost of revenues consists of the costs associated with manufacturing our products, and includes the purchase of raw materials, labor and related overhead. It also includes the costs associated with under-utilized production facilities and resources, as well as the charges for the write-down of impaired manufacturing assets or restructuring related costs, which are categorized as “Net Charges.” Charges for inventory obsolescence, the cost of product returns and warranty costs are also included in cost of sales. Costs and expenses of the manufacturing resources, which relate to the development of new products, are included in research and development.

Year ended July 2, 2005 versus twelve months ended July 3, 2004

Our cost of revenues for the year ended July 2, 2005 increased compared to the prior year primarily due to the inclusion of a full year of manufacturing costs associated with the products of the New Focus and Onetta businesses which we acquired in March and June of 2004, respectively.

Our cost of revenues also increased as a result of adverse movements in foreign exchange rates in fiscal 2005. A substantial portion of our cost of revenues are incurred in U.K. pounds sterling due to the manufacturing expenses associated with our facilities in the United Kingdom. Relative to U.K. pounds sterling, the U.S. dollar declined significantly during the year ended July 2, 2005, with the rates moving from an average rate of 1.736 dollars per U.K. pound sterling for the twelve months ended July 3, 2004 to 1.856 dollars per U.K. pound sterling for the year ended July 2, 2005, reaching a peak of 1.926 dollars per U.K. pound sterling on December 31, 2004, and ending at a rate of 1.792 dollars per U.K. pound sterling on July 2, 2005.

Our cost of revenues also increased due to the costs of ramping up our manufacturing facility in Shenzhen, China. We are transferring most of our assembly and test operations from Paignton, U.K. to this facility in order to take advantage of lower costs of production. We began shipping products out of our Shenzhen facility during the quarter ended October 2, 2004, and as of July 2, 2005 all of the products being transferred have been qualified to ship to customers. We intended to shut down operations at our Paignton facility in the second quarter of fiscal 2006, however we will continue to operate both the Paignton and Shenzhen facilities until we fulfill the purchase orders and last-time buys required pursuant to the Nortel Networks supply agreement, which we expect to extend into the third quarter of fiscal 2006. We will not realize the full cost savings of the transition to Shenzhen until such time, and we will continue to incur duplicate costs as a result of maintaining both the Paignton and Shenzhen facilities in the interim.

Six months ended July 3, 2004 versus six months ended June 29, 2003

As part of the acquisition of the optical components business of Nortel Networks, we undertook a comprehensive restructuring plan, which involved closing facilities, consolidating manufacturing operations and workforce reductions. This plan began immediately after the acquisition was completed on November 8, 2002 and was substantially complete by the end of 2003. As a result of this restructuring plan, following the acquisition, fixed overhead was substantially lower for the six-month period ended July 3, 2004 compared with the six-month period ended June 29, 2003. However, cost of sales increased in the six-month period ended July 3, 2004 compared with the six-month period ended June 29, 2003 principally because of higher variable production costs, including direct material and labor costs related to increased revenues, which more than offset the lower fixed manufacturing overhead.

Year ended December 31, 2003 versus year ended December 31, 2002

The increase in our cost of revenues from 2002 to 2003 was due to the higher direct product costs related to higher revenues and, to a lesser degree, the higher fixed manufacturing overhead costs of the optical components businesses acquired from Nortel Networks and Marconi. These increases were partially offset by the reduction in manufacturing overheads resulting from first the reductions in, and then the closure of, manufacturing of our ASOC product line and other manufacturing overhead reductions implemented throughout 2003.

Gross Margin/(Loss)


				Twelve
	Year			Months			Percentage								Percentage									Percentage
($ millions)	Ended			Ended			Change		Six Months Ended						Change			Year Ended						Change
	July 2,			July 3,					July 3,			June 29,						December 31,			December 31,
	2005			2004					2004			2003						2003			2002
				(unaudited)								(unaudited)
Gross Margin/(Loss)	$	6.6		$	(1.3	)		n/a	$	(4.7	)	$	(13.2	)		64	%	$	(9.8	)	$	(27.2	)		64	%
Gross Margin/(Loss) Percentage		3	%		(1	)%		n/a		(6	)%		(19	)%		n/a			(7	)%		(52	)%		n/a

Gross margin/(loss) consists of revenues less cost of sales. Gross margin rate is the resulting gross margin/(loss) as a percentage of revenue.

Year ended July 2, 2005 versus twelve months ended July 3, 2004

Our gross margin rate improved in fiscal 2005 compared to the twelve months ended July 3, 2004 primarily because of the positive impact of higher revenues spread across our other fixed costs, despite the fact that we continue to experience a difficult competitive environment which was exacerbated in fiscal 2005 by the negative impact of currency fluctuations, and certain costs of maintaining assembly and test facilities in both Paignton and Shenzhen during the transition of these operations to Shenzhen. Over the next few quarters we expect the volume and pricing of sales under the Nortel Networks supply agreement, together with the lower assembly and test costs we expect to realize as we shift production to Shenzhen, will improve our gross margin rate.

During fiscal 2005, we had revenues of $19.5 million related to, and recognized profits on, inventory that had been carried on our books at zero value. The inventory had originally been acquired in connection with our purchase of the optical components business of Nortel Networks. We believe we will have revenues of between $6 and $7 million related to this zero value inventory in the next twelve months. There were no such profits recorded in the twelve months ended July 3, 2004. While this inventory is on our books at zero value, and its sale generates higher margins than most of our new products, we incur additional costs to complete the manufacturing of these products prior to sale.

Six months ended July 3, 2004 versus six months ended June 29, 2003

The improved gross margin and gross margin rate improvement between the six-month period ended July 3, 2004 compared with the six-month period ended June 29, 2003 was principally the result of the lower fixed overhead costs in 2004 and, to a lesser degree, the higher revenue.

Year ended December 31, 2003 versus year ended December 31, 2002

The reduced gross margin loss and improved negative gross margin rate in 2003 over 2002 was the result of higher revenues which were partially offset by the higher fixed manufacturing overhead costs.

Research and Development Expenses


				Twelve
				Months			Percentage									Percentage									Percentage
($ millions)	Year Ended			Ended			Change			Six Months Ended						Change			Year Ended						Change
	July 2,			July 3,						July 3,			June 29,						December			December 31,
	2005			2004						2004			2003						31, 2003			2002
				(unaudited)									(unaudited)
R&D Expenses	$	44.8		$	50.8			12	%	$	26.9		$	26.5			2	%	$	50.4		$	50.3			0	%
% of Revenues		22	%		32	%					34	%		39	%					34	%		97	%

Research and development expense consists primarily of salaries and related costs of employees engaged in research and design activities, costs of design tools and computer hardware, and costs related to prototyping.

Year ended July 2, 2005 versus twelve months ended July 3, 2004

Research and development expenses decreased in fiscal 2005 compared to the twelve months ended July 3, 2004 as a result of the significant reductions made in connection with our 2004 restructuring plan, which we describe below in Restructuring, offsetting the increase in research and development spending that resulted from acquiring New Focus and Onetta and the negative effects of the weakness in the U.S. dollar relative to the U.K. pound sterling and other currencies in which we operate. We expect that expenses related to our research and development will remain relatively unchanged in the first quarter of fiscal 2006.

Six months ended July 3, 2004 versus June 29, 2003

Research and development expenses rose by 2% in the six months ended July 3, 2004 compared to the six months ended June 29, 2003 due to increased spending of approximately $7.2 million that resulted from our acquisition of New Focus and Ignis, which was partially offset by the effect of cost cutting measures implemented in 2003.

Year ended December 31, 2003 versus year ended December 31, 2002

Research and development expenses were relatively constant in 2003 compared to 2002. Increases were related to the research and development programs of the optical components businesses we acquired from Nortel Networks and Marconi, offset by cost-cutting measures implemented in 2003 that included the discontinuance of our research and development of the ASOC product line.

Selling, General and Administrative Expenses


				Twelve
	Year			Months			Percentage									Percentage									Percentage
($ millions)	Ended			Ended			Change			Six Months Ended						Change			Year Ended						Change
	July 2,			July 3,						July 3,			June 29,						December			December 31,
	2005			2004						2004			2003						31, 2003			2002
				(unaudited)									(unaudited)
SG&A Expenses	$	59.5		$	44.6			33	%	$	29.6		$	18.8			57	%	$	33.8		$	20.3			67	%
% of Revenues		30	%		28	%					37	%		28	%					23	%		39	%

Selling, general and administrative expenses consist primarily of personnel-related expenses, legal and professional fees, facilities expenses, insurance expenses and information technology costs.

Year ended July 2, 2005 versus year twelve months ended July 3, 2004

Selling, general and administrative expenses increased by $14.9 million in fiscal 2005 compared to the twelve months ended July 3, 2004. The increase was due to higher selling costs to support revenue growth, the inclusion of the operations of New Focus and Onetta for an entire year, the negative impact of the weakness in the U.S. dollar relative to the U.K. pound sterling, costs associated with compliance with the Sarbanes-Oxley Act of 2002 and costs associated with moving administrative activities to the newly established U.S. headquarters in San Jose, California in the second quarter of fiscal 2005. In total, these costs more than offset the cost reductions attained in connection with the 2004 restructuring plan. We expect that selling, general and administrative expenses will decrease in the first quarter of fiscal 2006 as we complete our first year-end Sarbanes-Oxley compliance cycle.

Six months ended July 3, 2004 versus six months ended June 29, 2003

The increase between the six-month period ended July 3, 2004 compared with the six-month period ended June 29, 2003 resulted from the inclusion of the operations of New Focus and, to a lesser extent, the inclusion of the business acquired from Cierra Photonics, combined with higher legal and professional fees relating to various corporate development activities.

Year ended December 31, 2003 versus year ended December 31, 2002

The increase in selling, general and administrative expenses in fiscal 2003 compared to fiscal 2002 was due to the inclusion of a full year of results of the operations of the optical components business we acquired from Nortel Networks.

Restructuring


			Twelve Months
	Year Ended		Ended		Six Months Ended						Year Ended
($ millions)	July 2,		July 3,		July 3,			June 29,			December 31,		December 31,
	2005		2004		2004			2003			2003		2002
			(unaudited)					(unaudited)
Lease Cancellation and commitments	$	4.8	$	4.9	$	(2.0	)	$	(0.2	)	$	6.7	$	7.7

Termination payments to employees and related costs		15.7		15.6		1.3			6.6			20.9		3.7

Write-off on disposal of assets and related costs		0.4		2.6		—			1.2			3.8		43.7


	$	20.9	$	23.1	$	(0.7	)	$	7.6		$	31.4	$	55.1

Year ended July 2, 2005 versus twelve months ended July 3, 2004

In May 2004, we announced a plan of restructuring, primarily related to the transfer of our assembly and test operations from Paignton, U.K. to Shenzhen, China, along with reductions in research and development and selling, general and administrative expenses. In September 2004, we announced that the plan would also include the transfer of our main corporate functions, including

consolidated accounting, financial reporting, tax and treasury, from Abingdon U.K. to our new U.S. headquarters in San Jose, California. In December 2004, we announced additional cost reduction measures designed to expand the savings under the plan to within a range of $16 million to $20 million per quarter, which is expected to primarily affect the manufacturing, and also the research and development and selling, general and administrative, lines in our statement of operations. In the third and fourth fiscal quarters of 2005, we recorded additional restructuring charges, primarily personnel and other costs needed to operate the Paignton assembly and test facility into the third quarter of fiscal 2006, which is approximately six months longer than originally intended, in order to fulfill the purchase orders and last-time buys required under the Nortel Networks supply agreement. In the fourth fiscal quarter of 2005, we also incurred charges of $2.2 million related to revising certain assumptions on our accrual for lease commitments.

As of July 2, 2005, we had spent $11 million related to this plan ($10 million related to personnel and $1 million related to lease commitments). In total, we expect to spend approximately $24 million to $30 million related to this plan (approximately 90% related to personnel and 10% related to lease commitments). We accrued and spent $500,000 in the year ended July 2, 2005 in the research and industrial segment. There are no additional expenditures expected in that segment. The remaining reductions will occur in the optics segment. The full cost savings of the plan are expected to be realized in nine to twelve months.

Six months ended July 3, 2004

During the six months ended July 3, 2004, we recorded a $2 million credit from the completion of the closure of our facility in Ottawa, Canada at costs less than previously anticipated, partially offset by the initial charges under the restructuring plan announced in May 2004.

Year ended December 31, 2003

Prior to May 2004, we engaged in other restructuring plans. In the year ended December 31, 2003, we recorded charges for a separate major restructuring program, the main element of which was the closure of a semiconductor fabrication facility in Ottawa, Canada and the transfer of related fabrication capabilities to Caswell, U.K. We also closed a few smaller manufacturing-related sites in Milton, U.K., Harlow, U.K. and Poughkeepsie, New York, and consolidated certain production processes into new locations. The transfer was successfully completed in August 2003. In connection with this transfer, certain products and research projects were discontinued. We achieved annualized cost savings in excess of $25 million related to this plan. In the year ended December 31, 2003, we achieved additional annualized savings in excess of $20 million as a result of the final decommissioning of the ASOC product line. Substantially all cash expenditures related to the 2003 restructuring plan have been incurred prior to July 3, 2004. All charges recorded in the year ended December 31, 2003 related to the optics segment. Related to this restructuring plan, we also assumed $16.8 million of restructuring charges related to facility commitments previously entered into by companies acquired by Bookham during that period, the substantial portion of which represents lease commitments in the research and industrial segment.

Year ended December 31, 2002

In 2002, we incurred restructuring charges of $55.1 million in connection with our decision to discontinue further development of our ASOC product line, consisting of $37.7 million for the impairment of equipment used in our ASOC product line, $4.5 million for inventory and $1.5 million for purchase commitments. Also included in net charges in 2002 was $7.7 million related to the closure of our sites in Columbia, Maryland and Swindon, U.K., which had been manufacturing ASOC products.

We implemented three significant exit programs during 2002, all of which related to our decision to discontinue further development of our ASOC product line. During 2002, management performed reviews of the market conditions for ASOC products, and each time concluded that the market for these products was in decline. As a result of these reviews, management decided to close the manufacturing sites in Maryland and Swindon sites, and subsequently to close the production facility and a significant portion of the research and development facility in Abingdon, U.K.

The closure of the Maryland site was completed in December 2002. All production at the Swindon assembly and test facility was terminated and the premises were vacated during the summer of 2002. Prior to closure of the Maryland and Swindon sites, a small portion of the assets was transferred to other Bookham sites. The remaining assets from the Swindon and Maryland sites were auctioned to third parties for an aggregate consideration of approximately $6.9 million in 2003 and $0.3 million in 2002.

In 2002, we incurred charges related to inventory write-downs on excess inventory of $5 million, which includes write-downs of $1.8 million related to the downsizing of our ASOC product line. When calculating write-downs, consideration was given to internal six-month marketing and sales forecasts, as well as, in the case of raw materials, sales and operations planning, in order to produce estimates of the final quantity of finished goods that would be produced. The total amount of forecast finished goods was compared to the sales forecasts, and the difference was written-down. Raw materials were written-down to the extent not required by planned levels of production. We also considered inventory levels of customers in establishing our inventory valuation levels. No inventory was held by distributors. We had limited ability to reduce orders with suppliers. Previous experience has indicated that the usual negotiation process results in our having either to take the full order or to pay a termination penalty in lieu of receiving the products.

In connection with each of these restructuring programs, we conducted a complete program of employee consultation prior to each closure, and undertook measures to ensure that key personnel were retained in order to successfully complete outstanding projects. We planned inventory build-outs and communicated with customers that would be affected by the discontinuation of certain product lines and research projects.

Amortization of Purchased Intangible Assets


	Year		Twelve		Percentage							Percentage							Percentage
($ millions)	Ended		Months Ended		Change			Six Months Ended				Change			Year Ended				Change
	July 2,		July 3,					July 3,		June 29,					December 31,		December 31,
	2005		2004					2004		2003					2003		2002
			(unaudited)							(unaudited)
Amortization	$	11.1	$	9.4		18	%	$	5.7	$	4.7		21	%	$	8.5	$	5.4		57	%

We have acquired six companies and businesses, and the amortization of intangible assets purchased in connection with these acquisitions has increased with each acquisition. In the year ended December 31, 2002, we acquired the optical components businesses of Nortel Networks and Marconi. In the year ended December 31, 2003, amortization of purchased intangible assets increased due to the effect of including the results of the optical components businesses of Nortel Networks and Marconi for the full year, and of our acquisition of Ignis Optics and the business of Cierra Photonics during the year. Amortization of purchased intangible assets increased in the six months ended June 3, 2004 compared to the six months ended June 29, 2003, due to our acquisition of New Focus in March 2004 and Onetta in June 2004, and increased again in the year ended July 2, 2005 as compared to the twelve months ended July 3, 2004 due to the effect of amortizing the purchased intangible assets of New Focus and Onetta for the full year.

Impairment of Goodwill and Intangible Assets

In the year ended July 2, 2005, we recorded charges of $114.2 million, primarily related to the impairment of goodwill related to the acquisitions of New Focus, Ignis Optics and Onetta, including $0.6 million related to the impairment of certain intangible assets related to the acquisition of New Focus. We adopted SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually, or sooner whenever events or changes in circumstances indicate that they may be impaired. In the third quarter of the year ended July 2, 2005, the continued decline in our stock price, and therefore market capitalization, combined with continuing net losses and a history of not meeting revenue and profitability targets, suggested that the goodwill related to certain of our acquisitions may have been impaired. As a result of these triggering events, we performed a preliminary evaluation of the related goodwill balances. In the fourth quarter, we finalized this evaluation during our annual evaluation of goodwill, and also performed our annual evaluation of acquired intangible assets. In performing these evaluations, we applied discounted future cash flow models as permitted by SFAS No. 142. We recorded no charges for the impairment of goodwill or intangible assets during any of the other periods presented herein (see Note 14 to our consolidated financial statements included elsewhere in this Form 10-K).

Net Interest and Other Income/Expense


				Twelve
	Year			Months		Percentage						Percentage							Percentage
($ millions)	Ended			Ended		Change		Six Months Ended				Change			Year Ended				Change
	July 2,			July 3,				July 3,		June 29,					December		December 31,
	2005			2004				2004		2003					31, 2003		2002
				(unaudited)						(unaudited)
Net Interest and Other Income/(Expense)	$	(3.0	)	$	5.8		n/a	$	0.3	$	0.9		(63	)%	$	6.4	$	8.2		(23	)%

Net interest and other income/expense decreased in the year ended July 2, 2005 compared to the twelve months ended July 3, 2004 due to amortization of the interest costs related to the issuance of $25.5 million of convertible notes in December 2004, and lower cash balances during the year. The decrease was partially offset by a one-time gain of $1.1 million arising from the release of an acquisition provision related to the closure of the Bookham (Switzerland) AG pension arrangement in the first quarter of fiscal 2005. The decrease for the six months ended July 3, 2004 compared to the six months ended June 29, 2003 was due to lower cash balances during the period. The decrease for the year ended December 31, 2003 compared to the year ended December 31, 2002 was due to lower cash balances, and interest expense related to the issuance of $50 million of notes payable to Nortel Networks in November 2002.

Income Tax Benefit/Provision

We have incurred substantial losses to date and expect to incur additional losses in the future. Due to the uncertainty surrounding the realization of the benefits of the net loss carry-forward, a full valuation allowance has been placed against the otherwise recognizable deferred tax assets of $330.4 million at July 2, 2005 and $282.9 million at July 3, 2004. Income tax benefits have been insignificant in each of the fiscal years ended July 2, 2005 and December 31, 2002 and in the six-month period ended July 3, 2004. In 2003, we recognized a credit of $3.7 million related to a payment received in 2002 from the U.K. Inland Revenue as compensation for certain research and development expenditures. As our business develops globally, we may incur local tax charges which we will not be able to offset.

Liquidity, Capital Resources and Contractual Obligations

Liquidity and Capital Resources

Operating activities


				Six Months
	Year Ended			Ended			Year Ended
	July 2,			July 3,			December 31,			December 31,
($ millions)	2005			2004			2003			2002
Net loss	$	(248.0	)	$	(67.4	)	$	(125.8	)	$	(165.0	)

Non-cash accounting charges:
Depreciation and amortization and other		32.2			13.5			21.3			57.7
Impairment		114.2			—			—			—
Acquired IPR&D		—			5.9			0.2			13.2
Tax credit recognized for research and development activities		—			—			(3.7	)		—
Stock based compensation and expenses related to warrants issues		1.5			0.1			—			0.4
Gains on sale of property and equipment		(0.7	)		(5.3	)		(3.1	)		(0.0	)
Write back of acquisition expenses		1.8			—			—			—
Unrealized foreign currency losses		2.3			—			—			—

Total non-cash accounting charges		151.3			14.2			14.7			71.3

Decrease/(increase) in working capital		(2.1	)		3.0			13.1			9.0


Net cash used in operating activities	$	(98.8	)	$	(50.2	)	$	(98.0	)	$	(84.7	)

In the past five years, we have funded our operations from several sources, including through public offerings of equity, issuance of debt and net cash from acquisitions. As of July 2, 2005, we held $24.9 million in cash and cash equivalents (excluding restricted cash of $7.4 million), which represents our source of cash for funding operations for the immediate future. We do not have any bank lending facilities, borrowings or lines of credit, except for the secured notes in the current aggregate principal amount of $45.9 million we issued to Nortel Networks and the 7.0% senior unsecured convertible debentures we issued in a private placement on December 20, 2004.

Based on our cash balances and our cash flow forecasts, and given our continuing losses, we estimate that we will need to raise between $20 million and $30 million prior to December 2005 in order to maintain our planned level of operations. We will need to raise between $50 million and $60 million on a cumulative basis between now and August 2006 in order to comply with the $25 million minimum cash balance required by the terms of the notes held by Nortel Networks. If we are unable to maintain this cash balance after August 2006, we will be in default under the promissory notes. Beyond this, we will need to raise additional funds to repay the notes issued to Nortel Networks in the aggregate principal amounts of $25.9 million and $20 million that will be due and payable in November 2006 and 2007, respectively, and to repay, if still outstanding, $25.5 million principal amount of our 7% convertible debentures due in December 2007.

Year ended July 2, 2005

Net cash used in operating activities for the year ended July 2, 2005 was $98.8 million, primarily resulting from the net loss of $248.0 million, reduced by non-cash accounting charges of $151.3 million, including $114.2 million for the impairment of goodwill and certain intangibles recorded in connection with past acquisitions, primarily New Focus, and $32.2 million for depreciation and amortization. The increase in working capital also resulted in a reduction in cash in the amount of $2.1 million, primarily related to higher levels of inventory required to support our increasing level of sales through the period, and our expectations regarding the first quarter of fiscal 2006.

Six months ended July 3, 2004

Net cash used in operating activities for the six-month period ended July 3, 2004 was $50.2 million, primarily resulting from the net loss of $67.4 million, offset by non-cash accounting charges of $14.2 million and a $3.0 million decrease in working capital. The decrease in working capital was the result of a reduction in inventory, primarily through the sale of inventory purchased as part of the acquisition of the optical components business from Nortel Networks.

Year ended December 31, 2003

Net cash used in operating activities in 2003 was $98 million, primarily resulting from the net loss of $125.8 million, offset by non-cash accounting charges of $8.9 million and an $18.9 million decrease in working capital. The decrease in working capital was the result of a reduction in inventory, primarily through the sale of inventory purchased as part of the acquisition of the optical components business from Nortel Networks.

Year ended December 31, 2002

Net cash used in operating activities in 2002 was $84.7 million, primarily resulting from the net loss of $165 million, offset by non-cash accounting charges of $71.3 million and a $9 million decrease in working capital. The working capital decrease was primarily the result of the acquisition of the optical components business from Nortel Networks, which resulted in an increase in the levels of accounts payable partially offset by an increase in the level of accounts receivable.

Return/Loss on Investments

Return/loss on investments represents net interest, which is the difference between interest received on our cash and interest paid on our debts, which has declined as our cash balances have been reduced. Loss on investments were $4.3 million in the year ended July 2, 2005, and we had a return on investment of $0.2 million in the six months ended July 3, 2004, $6.3 million in the year ended December 31, 2003 and $8 million in the year ended December 31, 2002. The decreasing returns on investment and the loss on investment in fiscal 2005 are due to lower interest income earned on declining cash balances, interest on balances outstanding from the $50 million of notes payable issued to Nortel Networks in November 2002 and the amortization of interest, costs and warrants associated with our issuance of $25.5 million of convertible debt in December 2004.

Investing Activities

Net cash used in investing activities for the year ended July 2, 2005 was $2.3 million, primarily relating to the purchases of property and equipment of $16.0 million along with a $1.7 million transfer of funds to restricted cash, partially offset by proceeds of $7 million from the sale of marketable securities, proceeds of $5.7 million from the disposal of certain of our subsidiaries, net of costs, proceeds of $1.4 million from the sale of property and equipment, and proceeds of $1.2 million received from the settlement of a loan note issued by a former New Focus executive officer.

Net cash provided by investing activities for the six months ended July 3, 2004 was $87.4 million primarily consisting of $102.6 million of cash assumed in connection with our acquisitions of New Focus and Onetta. Proceeds from the sale of property and equipment of $5.2 million were partially offset by purchases of property and equipment of $6.6 million.

Net cash used in investing activities for the year ended December 31, 2003 was $12 million, which was primarily the result of purchases of $19.2 million of property and equipment, partially offset by $7.1 million received in connection with the sale of property and equipment. The principal area of capital spending in 2003 was to upgrade the Caswell, U.K. wafer fabrication site to a capability required to produce products transferred from Ottawa, Canada. In 2002, $18.1 million was expended in connection with acquisitions, and capital spending was $15.2 million, principally relating to implementation of an integrated enterprise resource planning and factory management solution, based at our Abingdon, U.K. and Caswell, U.K. sites, that permits our systems to interface with the systems we acquired from Nortel Networks.

Financing Activities

Net cash provided by financing activities for the year ended July 2, 2005 was $14.9 million. During the period, we received net proceeds of $24.2 million from the issuance of convertible debentures and warrants to purchase common stock. This was offset by the repayment of $4.2 million due to Nortel Networks under a loan note. In addition, during the year ended July 2, 2005, we paid $5.1 million related to capital lease obligations that were assumed primarily in connection with the Onetta acquisition.

Net cash provided by financing activities for the six months ended July 3, 2004 was $1.7 million, primarily resulting from the issuance of common stock.

At the time of our acquisition of the optical components business of Nortel Networks in November 2002, our wholly-owned subsidiary, Bookham Technology plc, issued a $30 million secured loan note due November 8, 2005 and a $20 million unsecured loan note due November 8, 2007 to affiliates of Nortel Networks. In September 2004, the $20 million unsecured loan note was exchanged for a $20 million note convertible into shares of our common stock.

On December 2, 2004, (i) the $30 million secured loan note was amended and restated to, among other things, extend the final maturity date by one year from November 8, 2005 to November 8, 2006 and (ii) the $20 million note was further amended and restated to, among other things, provide that it will not convert into shares of our common stock. These notes, as amended and restated on December 2, 2004 and further amended on February 7, 2005 and May 2, 2005, are each secured by the assets that secured the $30 million secured note issued in November 2002, as well as certain additional property, plant and equipment and Nortel Networks specific accounts receivables and inventory covered by our supply agreement with Nortel Networks. The amended and restated notes also contain certain covenants, including restrictions on assets sales and a requirement that we maintain a cash balance of at least $25 million or be deemed in default under the amended and restated notes, however, compliance with that covenant has been waived through August 7, 2006.

On December 20, 2004, we closed a private placement of $25.5 million of our 7.0% senior unsecured convertible debentures and warrants to purchase common stock which resulted in net proceeds of $24.2 million. We used $4.2 million to repay certain of our indebtedness to Nortel Networks. We are using and intend to continue to use the remaining net proceeds from the private placement for general corporate purposes, including, among other things, payment of outstanding indebtedness, working capital to support new growth and to fund our operations through our current restructuring. The debentures may be converted into shares of our common stock at the option of the holder prior to the maturity of the debentures on December 20, 2007. The initial conversion price of the debentures is $5.50, which represents a premium of approximately 16% over the closing price of our common stock on December 20, 2004. We may also convert the debentures into shares of common stock under certain circumstances. The warrants provide holders thereof the right to purchase up to 2,001,963 shares of common stock and are exercisable during the five years from the date of grant at an initial exercise price of $6.00 per share, which represents a premium of approximately 26% over the closing price of our common stock on December 20, 2004.

Acquisitions

On February 1, 2002, we acquired the optical components business of Marconi for 1,289,100 shares of our common stock valued at $28.0 million. In exchange, we received fixed assets, including equipment, land and buildings of $4.8 million and inventory of $10.4 million. We assumed no liabilities and incurred no debt in connection with this transaction.

On November 8, 2002, we completed the acquisition of the optical components business of Nortel Networks for 6,100,000 shares of common stock, warrants to purchase 900,000 shares of common stock, notes in the aggregate amount of $50 million and the payment of net cash consideration of $9.2 million for an aggregate value of $111.2 million. In exchange, we received intangible assets valued at $27.4 million, representing the patent portfolio for the amplifiers and active devices acquired from Nortel Networks; tangible fixed assets of $32.5 million, including equipment, land and buildings; and inventory of $61.9 million. As part of the transaction, we assumed certain liabilities falling due within one year of $8.4 million. In accordance with SFAS No. 141 “Business Combinations”, an adjustment was made in the accounts for the year ended December 31, 2003 for amendments to those provisional values. During fiscal 2003, a larger amount of inventory was sold than was expected at the time the transaction with Nortel Networks was completed. As a consequence, we adjusted the purchase price allocation and increased the value of the inventory by $20.2 million, reduced intangible assets by $9.1 million, reduced property, plant and equipment by $9.8 million and increased current liabilities by $1.3 million as part of the allocation of the fair value of the remaining assets.

On June 10, 2004, we acquired the entire issued share capital of Onetta for 2,764,030 shares of our common stock valued at $24.7 million. As part of the agreement, the Onetta stockholders agreed to discharge liabilities of $6.1 million.

On March 8, 2004, we acquired New Focus by a merger of a wholly-owned subsidiary with and into New Focus, with New Focus surviving as our wholly-owned subsidiary. Pursuant to the merger agreement, on March 8, 2004, each New Focus stockholder received a cash distribution from New Focus in the amount of $2.19 per share of New Focus common stock held on that date. In the merger, we issued an aggregate of 7,866,600 shares of our common stock valued at $197.2 million. In addition, we assumed all outstanding options to purchase shares of New Focus common stock, on the same terms and conditions as were applicable to that option under the applicable New Focus option plan and option agreement. Pursuant to the merger agreement, two directors of New Focus, Peter Bordui and Winston Fu, joined our board of directors. Winston Fu has since resigned, and Peter Bordui is currently the Chairman of our board of directors.

On July 4, 2003, we acquired substantially all of the assets and certain liabilities of Cierra Photonics for 307,148 shares of our common stock valued at $3.7 million. Up to an additional 420,000 shares of our common stock may be issued if the Cierra Photonics business meets a revenue target of at least $5.0 million in the 12-month period prior to October 1, 2004, or at least $8.5 million in the 12-month period prior to October 1, 2005. As of July 2, 2005, an additional 38,810 shares have been issued pursuant to these terms. In exchange, we received fixed assets of $1.7 million and inventory of $0.1 million. We also assumed liabilities of $1.6 million.

On October 6, 2003, we acquired the entire issued share capital of Ignis Optics for 802,081 shares of our common stock valued at $17.7 million. Up to an additional 78,084 shares of our common stock could have been issued in early 2005 if Ignis Optics had met a revenue target of at least $4 million for the twelve months ended December 31, 2004. No additional shares of common stock were issued, as this target was not achieved.

Sources of Cash

In the past five years, we have funded our operations from several sources, including through public offerings of equity, issuance of debt and net cash from acquisitions. As of July 2, 2005, we held $24.9 million in cash and cash equivalents (excluding restricted cash of $7.4 million), which represents net cash from the issuance of debt; the source of cash that will fund operations for the immediate future. As of that date, we did not have any bank lending facilities, borrowings or lines of credit, except for the secured notes in the current aggregate principal amount of $45.9 million we issued to Nortel Networks and $25.5 million of 7.0% senior unsecured convertible debentures we issued in a private placement on December 20, 2004.

Future Cash Requirements

From time to time, we have engaged in discussions with third parties concerning potential acquisitions of product lines, technologies and businesses. We continue to consider potential acquisition candidates. Any of these transactions could involve the issuance of a significant number of new equity securities, debt, and/or cash consideration. We may also be required to raise additional funds to complete any such acquisition, through either the issuance of equity securities or borrowings. If we raise additional funds or acquire businesses or technologies through the issuance of equity securities, our existing stockholders may experience significant dilution.

Risk Management—Foreign Currency Risk

We are exposed to fluctuations in foreign currency exchange rates and interest rates. As our business has grown and become increasing multinational in scope, we have become increasingly subject to fluctuations based upon changes in the exchange rates between the currencies in which we collect revenues and pay expenses. Despite our change in domicile from the United Kingdom to the United States, in the future we expect that a substantial portion of our revenues will be denominated in U.S. dollars, while the majority of our expenses will continue to be denominated in U.K. pounds sterling until such time as our facility in Shenzhen, China is fully operational. Fluctuations in the exchange rate between the U.S. dollar and the U.K. pound sterling and, to a lesser extent, other currencies in which we collect revenues and pay expenses, could affect our operating results. We enter into in foreign currency contracts in an effort to mitigate our exposure to such fluctuations, and we may be required to convert currencies to meet our obligations. Under certain circumstances, foreign currency contracts can have an adverse effect on our financial condition. As of July 2, 2005, we held two foreign currency exchange contracts with a nominal value of $50 million which include put and call options which expire at various dates from July 2005 to March 2006. During the year ended July 2, 2005, we recorded an unrealized loss of $1.7 million in our statement of operations in connection with these foreign

exchange contracts. In addition, the promissory notes we issued in connection with the acquisition of the optical components business from Nortel Networks are denominated in U.S. dollars.

Contractual Obligations

Our contractual obligations at July 2, 2005, by nature of the obligation and amount due over certain periods of time, are set out in the table below.


	Payments Due by Period
			Less than 1						More than
Contractual Obligations	Total		year		1-3 years		3-5 years		5 years
	(in thousands)
Long-term debt obligations	$	71,753	$	60	$	71,541	$	152	$	—
Operating lease obligations		32,964		14,608		16,081		2,275		—
Purchase obligations		31,902		31,902		—		—		—

Total contractual obligations	$	136,619	$	46,570	$	87,622	$	2,427	$	—

Our long-term debt at July 2, 2005 principally includes two loans payable to Nortel Networks, and 7% senior unsecured convertible debentures issued in December 2004, excluding interest. Long term debt obligations of $25.5 million included above relate to the convertible debentures, which are reflected on our balance sheet as long term debt of $19.1 million as of July 2, 2005, which is net of issuance costs. The value assigned to warrants granted in connection with the debt offering was $5.4 million and the value assigned to the conversion feature of the debt was $2.0 million.

Operating leases are future annual commitments under non-cancelable operating leases, including rents payable for land and buildings. The purchase obligations consist of our total outstanding purchase order commitments as at July 2, 2005.

Off-Balance Sheet Arrangements

We are not currently a party to any off-balance sheet arrangements.

Recent Accounting Developments

In December 2004, the FASB issued SFAS No. 123R which requires companies to recognize in their statement of operations all share-based payments to employees, including grants of employee stock options, based on their fair values. Accounting for share-based compensation transactions using the intrinsic method supplemented by pro forma disclosures will no longer be permissible. The new pronouncement will be effective for public entities no later than the beginning of the first fiscal year beginning after June 15, 2005. The Company will adopt the new pronouncement on July 3, 2005. The application of SFAS No. 123R will involve significant amounts of judgment in the determination of inputs into the Black-Scholes model which the company will use to determine the value of employee stock options. These inputs will be based upon assumptions as to historical volatility, risk free interest rates and expected life of the options. The Company has not yet completed its analysis of the impact of adopting SFAS No. 123R and is therefore currently unable to quantify the effect it will have on its financial statements because the effect will depend on, among other things, the timing and magnitude of future employee stock option exercises. However, the adoption of this new pronouncement will have a significant impact on the results of operations and net loss per share of the Company.

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

The Private Securities Litigation Reform Act of 1995 contains certain safe harbors regarding forward-looking statements. In that context, the discussion in this item and other portions of this report contain forward-looking statements that involve certain degrees of risk and uncertainty, including statements relating to our business, liquidity and capital resources. Except for the historical information contained herein, the matters discussed in this section are such forward-looking statements that involve risks and uncertainties, including:

Risks Related to Our Business

We have a history of large operating losses and we expect to generate losses in the future unless we achieve further cost reductions and revenue increases.

We have never been profitable. We have incurred losses and negative cash flow from operations since our inception. As of July 2, 2005, we had an accumulated deficit of $867 million.

Our net loss for the year ended July 2, 2005 was $248 million, as compared to a net loss for the twelve months ended July 3, 2004 of $125 million. Included in the loss for the year ended July 2, 2005 were goodwill and intangibles impairment charges of $114.2 million and restructuring charges of $21 million. Included in the loss for the twelve months ended July 3, 2004 were restructuring charges of $23 million and charges of $6 million for the write-off of acquired in process research and development.

Even though we generated positive gross margins in the three months ended April 2, 2005 and in the three months ended July 2, 2005, we have a history of negative gross margins and we may not be able to maintain positive gross margins if we do not continue to reduce our costs, improve our product mix and generate sufficient revenues from new and existing customers to offset the revenues we will lose after Nortel Networks completes its purchases pursuant to purchase orders for certain last-time buys, as described in “Risk Factors — We remain highly dependent on sales to Nortel Networks and we expect revenues from Nortel Networks to decrease significantly into and including the third quarter of fiscal 2006.”

We expect to experience continuing losses from operations for at least the next six quarters.

In order to continue as a going concern, we will need capital in excess of our current cash resources.

We may encounter unexpected costs or delays in transferring our assembly and test operations from the United Kingdom to Shenzhen, China.

A key element of our cost reduction program is the successful transfer of substantially all of our assembly and test operations from Paignton, U.K. to Shenzhen, China. Accordingly, we expect that our ability to transfer manufacturing capabilities to, and to operate effectively in China, is critical to the overall success of our business. We began to implement the transfer of our assembly and test operations from Paignton to Shenzhen in the fall of 2004 and we expect to complete the transfer in the first half of fiscal 2006. Our business and results of operations would be materially adversely affected if we experience delays in, increased costs related to, or if we are ultimately unable to:

	•		qualify our manufacturing lines and the products we produce in Shenzhen, as required by our customers;

	•		transfer our assembly and test equipment from Paignton to Shenzhen;

	•		retain qualified personnel to operate our Shenzhen facility;

	•		retain employees at our Shenzhen facility;

	•		achieve the requisite production levels for products manufactured at our Shenzhen facility;

	•		retain employees at our Paignton facility to produce certain last-time buy products for Nortel Networks; and

	•		wind down operations at our Paignton facility.

We may not be able to satisfy customer demand in a timely and cost effective manner as we transition our assembly and test operations from the United Kingdom to China.

We are in the process of transferring assembly and test operations previously undertaken at our Paignton facility to our Shenzhen facility. Fluctuations in customer demand present challenges and require us to continually assess and predict demand appropriately in order to ensure availability and staffing of assembly and test facilities sufficient to meet that demand. For example, in the quarters ended April 2, 2005 and July 2, 2005, we experienced increased customer demand for certain of our products that required that we operate our Paignton facility at greater capacity than we had anticipated when we implemented our most recent restructuring plan. This increased use of the Paignton facility to meet customer demands constrained the planned transition of our assembly and test operations from our facility in the U.K. to China and increased our expenses as we kept our U.K. production line operating. In addition, if we are not able to fill customer orders on time due to our inability to forecast customer demand, our reputation may be harmed with those customers and other potential customers.

The market for optical components continues to be characterized by excess capacity and intense price competition which has had, and will continue to have, a material adverse affect on our results of operations.

By 2002, actual demand for optical communications equipment and components was dramatically less than that forecasted by leading market researchers only two years before. Even though the market for optical components has been recovering recently, particularly in the metro market segment, there continues to be excess capacity, intense price competition among optical component manufacturers and continued consolidation of the industry. As a result of this excess capacity, and other industry factors, pricing pressure remains intense. The continued uncertainties in the telecommunications industry and the global economy make it difficult for us to anticipate revenue levels and therefore to make appropriate estimates and plans relating to management of costs. Continued uncertain demand for optical components has had, and will continue to have, a material adverse effect on our results of operations.

We remain highly dependent on sales to Nortel Networks and we expect revenues from Nortel Networks to decrease significantly into and including the third quarter of fiscal 2006.

Historically, Nortel Networks has been our largest customer. In the fiscal year ended July 2, 2005, we sold $89.5 million of products and services to Nortel Networks, or 45% of our total revenues during such period.

In connection with the second addendum to the supply agreement with Nortel Networks, which we entered into on May 2, 2005, Nortel Networks issued non-cancelable purchase orders for last-time buys of certain products that we have decided to discontinue and for certain other non last-time buys totaling approximately $100 million. Approximately $50 million of this represents last-time buys and approximately $50 million represents non last-time buys, all of which are scheduled to be delivered to Nortel Networks through March 31, 2006. These purchase orders will automatically expire on March 31, 2006, or earlier if certain events occur. Taking into account these purchase orders, we expect Nortel Networks to account for more than 50% of our revenues in the quarters ending October 1, 2005 and December 31, 2005, and as the final purchase orders for last-time buys are filled in the third fiscal quarter of 2006, we anticipate that revenues from Nortel Networks will begin to decrease and may continue to decline for at least several quarters thereafter. There can be no assurances that we will be able to replace this revenue.

To the extent that we may rely on Nortel Networks for revenues in the future, Nortel Networks has experienced significant losses in the past and any future adverse change in Nortel Networks’ financial condition could adversely affect their demand for our products.

Any default under our agreements with Nortel Networks or the notes issued to Nortel Networks would have an adverse impact on our ability to continue the conduct of our business.

We are party to a supply agreement with Nortel Networks that has been amended twice, most recently in May 2005. Pursuant to the terms of the supply agreement, as amended, Nortel Networks issued non-cancelable purchase orders for last-time buys of certain products and other non last-time buys products with a value that we estimate to be approximately $100 million, all of which are expected to be delivered to Nortel Networks over the next nine months. The provisions of the second addendum to the supply agreement also include increased prices and adjustment in payment terms of certain of the products we ship to Nortel Networks through March 31, 2006. These provisions will terminate automatically if we: (i) materially breach the terms of the supply agreement, (ii) default under the terms of the promissory notes issued to Nortel Networks and related agreements, as described below, (iii) are subject to a change in control or (iv) experience an insolvency event. If any of the foregoing events were to occur, Nortel Networks

would have the right to cancel the purchase orders they submitted, which would result in the loss of the remainder of the $100.0 million payable under the non-cancelable purchase orders issued pursuant to the second addendum to the supply agreement. In addition, to the extent that Nortel Networks decides to purchase any additional products under the second addendum, the increased prices for those products we ship to Nortel Networks would have to be re-negotiated at prices lower than those set forth in the supply agreement, as amended.

The supply agreement, as amended, also requires that we grant a license for the assembly, test, post-processing and test intellectual property (but excluding wafer technology) of certain critical products to Nortel Networks and to any designated alternative supplier, if at any time, we: (i) have a cash balance of less than $25 million; (ii) are unable to manufacture critical products for Nortel Networks in any material respect for a continuous period of not less than six weeks, or (iii) are subject to an insolvency event, such as a petition or assignment in bankruptcy, appointment of a trustee, custodian or receiver, or entrance into an arrangement for the general benefit of creditors. In addition, if our cash balance is less than $10 million or there is an insolvency event, Nortel Networks will have the right to buy all Nortel Networks inventory we hold, and we will be obligated to grant a license to Nortel Networks or any alternative supplier for the manufacture of all products covered by the first supply agreement addendum. Our revenues and business would be substantially harmed if we were required to license this assembly, test, post-processing and test intellectual property to Nortel Networks or any supplier they were to designate.

In connection with our acquisition of the optical components business of Nortel Networks, we issued two promissory notes in an initial aggregate principal amount of $50 million. As of July 2, 2005, approximately $45.9 million aggregate principal amount was outstanding under these two notes. The notes provide that, upon an event of default, Nortel Networks can declare all principal and interest payable under the notes immediately due and payable. Pursuant to the terms of the notes, an event of default includes: (i) failure to pay any interest or principal on the notes when due, (ii) any event which results in the payment of any other debt in an amount in excess of $5 million in advance of the scheduled maturity date, (iii) failure to maintain a cash balance of $25 million or greater after August 2006, (iv) a material default under notes or certain other agreements entered into in connection with the notes, (v) our becoming subject to a bankruptcy event and (vi) failure to provide certain financial information to Nortel Networks within the schedules provided for in the notes. Any event of default under these notes would also trigger an event of default under our 7% senior unsecured convertible debentures due December 2007, which have an aggregate principal amount of $25.5 million. If an event of default were to occur and the principal and interest payable under the notes were accelerated, we would not be able to pay the notes issued to Nortel Networks or the 7% senior unsecured convertible debentures due December 2007 without selling a substantial amount of our assets, if at all, which would have a material adverse impact on our ability to continue the conduct of our business.

We and our customers are each dependent upon a limited number of customers.

Historically, we have generated most of our revenues from a limited number of customers. Sales to one customer, Nortel Networks, accounted for 59% of our revenues for the year ended December 31, 2003, 52% for the twelve months ended July 3, 2004, and 45% for the year ended July 2, 2005. In addition to the reduced outlook for revenue from Nortel Networks after the non-cancelable purchase orders are filled, we expect that revenue from our other major customers may decline or fluctuate significantly in fiscal 2006 and beyond. We may not be able to offset any such decline in revenues from our existing major customers with revenues from new customers.

Our dependence on a limited number of customers is due to the fact that the optical telecommunications systems industry is dominated by a small number of large companies. Similarly, our customers depend primarily on a limited number of major telecommunications carrier customers to purchase their products that incorporate our optical components. Many major telecommunication systems companies and telecommunication carriers are experiencing losses from operations. The further consolidation of the industry, coupled with declining revenues from our major customers, may have a material adverse impact on our business.

As a result of our global operations, our business is subject to currency fluctuations that have adversely affected our results of operations in recent quarters and may continue to do so in the future.

Our financial results have been materially impacted by foreign currency fluctuations and our future financial results may also be materially impacted by foreign currency fluctuations. Over the last two years, the decline in the value of the U.S. dollar versus the U.K. pound sterling has had a major negative effect on our profit margins and our cash flow. Despite our change in domicile from the United Kingdom to the United States and the implementation of our restructuring program to move all assembly and test operations from Paignton, U.K. to Shenzhen, China, the majority of our expenses are still currently denominated in U.K. pounds sterling and substantially all of our revenues are denominated in U.S. dollars. Fluctuations in the exchange rate between these two currencies and, to a lesser extent, other currencies in which we collect revenues and pay expenses will continue to have a material affect on our operating results.

We engage in currency transactions in an effort to cover any exposure to such fluctuations, and we may be required to convert currencies to meet our obligations; however, under certain circumstances, these transactions can have an adverse effect on our financial condition.

We are increasing manufacturing operations in China, which exposes us to risks inherent in doing business in China.

We are taking advantage of the comparatively low manufacturing costs in China by transferring substantially all of our assembly and test operations to our facility in Shenzhen, China. Operations in China are subject to greater political, legal and economic risks than our operations in other countries. In order to operate the facility, we must obtain required legal authorization and train and hire a workforce. In particular, the political, legal and economic climate in China, both nationally and regionally is fluid and unpredictable. Our ability to operate in China may be adversely affected by changes in Chinese laws and regulations such as those related to taxation, import and export tariffs, environmental regulations, land use rights, intellectual property and other matters. In addition, we may not obtain the requisite legal permits to continue to operate in China and costs or operational limitations may be imposed in connection with obtaining and complying with such permits.

We have been advised that power may be rationed in the location of our Shenzhen facility, and were power rationing to be implemented, it could either have an adverse impact on our ability to complete manufacturing commitments on a timely basis or, alternatively, require significant investment in generating capacity to sustain uninterrupted operations at the facility. Our ability to transfer certain assembly and test operations from our facilities in the U.K. to China would be hindered by a potential power rationing. We may also be required to expend greater amounts than we currently anticipate in connection with increasing production at the facility. Any one of these factors, or a combination of them, could result in the incurrence of unanticipated costs, with the potential to materially and adversely affect our business.

We intend to export the majority of the products manufactured at our Shenzhen facility. Under current regulations, upon application and approval by the relevant governmental authorities, we will not be subject to certain Chinese taxes and will be exempt from certain duties on imported materials that are used in the manufacturing process and subsequently exported from China as finished products. However, Chinese trade regulations are in a state of flux and we may become subject to other forms of taxation and duties in China or may be required to pay export fees in the future. In the event that we become subject to new forms of taxation in China, our business and results of operation could be materially adversely affected.

Our debt repayment obligations may affect our ability to operate our business.

In connection with our acquisition of the optical components business from Nortel Networks, we issued to Nortel Networks secured interest-bearing notes. As of July 2, 2005, the aggregate principal amount outstanding under the notes was approximately $45.9 million. The first note, with an aggregate principal amount outstanding of $25.9 million, bears interest at the rate of 7% per year, increasing 0.25% per quarter beginning three months after issue until repayment, up to a maximum rate of 10% per year, and is payable in full no later than November 8, 2006. As of July 2, 2005, the note bore interest at a rate of 9.5%. The second note, in the aggregate principal amount of $20 million, bears interest at the rate of 4% per year, and is payable in full no later than November 8, 2007. Both notes are secured by certain of our and our subsidiaries’ assets. We are required to repay the notes, in full or in part, at earlier times upon the occurrence of various events, including equity or equity-linked financings; provided, however, Nortel Networks has waived any such payment with respect to $75 million of aggregate financing proceeds through May 2006. Failure to

maintain a cash balance of at least $25 million while the notes are outstanding on or after August 8, 2006 will constitute a default under these notes. If we are in default pursuant to the terms of the senior unsecured convertible debentures we issued in December 2004 described below, we would trigger a default under the notes issued to Nortel Networks, in which event all outstanding principal and accrued interest would be immediately due and payable under such notes.

On December 20, 2004, we issued senior unsecured convertible debentures in a private placement resulting in gross proceeds of $25.5 million. These debentures bear interest at a rate of 7% per annum payable on each March 31, June 30, September 30 and December 31, while such debentures are outstanding, and on the maturity date. The debentures may be converted into shares of our common stock at the option of the holder prior to the maturity of the debentures on December 20, 2007. The conversion price of the debentures is $5.50. The debentures may also be converted into common stock by us under certain circumstances. If we are in default pursuant to the terms of the notes we issued to Nortel Networks, we would also trigger an event of default under the debentures, in which event all outstanding principal and interest would be immediately due and payable under the debentures.

Fluctuations in operating results could adversely affect the market price of our common stock.

Our revenues and operating results are likely to fluctuate significantly in the future. The timing of order placement, size of orders and satisfaction of contractual customer acceptance criteria, as well as order or shipment delays or deferrals, with respect to our products, may cause material fluctuations in revenues. Our lengthy sales cycle, which may extend to more than one year, may cause our revenues and operating results to vary from period to period and it may be difficult to predict the timing and amount of any variation. Delays or deferrals in purchasing decisions may increase as we develop new or enhanced products for new markets, including data communications, aerospace, industrial and military. Our current and anticipated future dependence on a small number of customers increases the revenue impact of each customer’s decision to delay or defer purchases from us. Our expense levels in the future will be based, in large part, on our expectations regarding future revenue sources and, as a result, net income for any quarterly period in which material orders fail to occur, are delayed, or deferred could vary significantly.

Because of these and other factors, quarter-to-quarter comparisons of our results of operations may not be an indication of future performance. In future periods, results of operations may differ from the estimates of public market analysts and investors. Such a discrepancy could cause the market price of our common stock to decline.

We may incur additional significant restructuring charges that will adversely affect our results of operations.

In light of our restructuring and cost reduction measures in 2002, 2003 and 2004 in response to the depressed demand for optical components and our consolidation activities, we have incurred significant restructuring related charges. In 2004, we announced further restructuring plans, which include moving the majority of our assembly and test operations from our site in Paignton, U.K. to our facility in Shenzhen, China and closing our former headquarters facility in Abingdon, U.K. In the years ended December 31, 2002 and December 31, 2003, in the six months ended July 3, 2004 and in the year ended July 2, 2005, we recorded restructuring charges of $55.0 million, $31.0 million, $(0.7) million and $22.6 million, respectively.

We anticipate that the 2004 restructuring plans will be completed by March 31, 2006 and we expect to spend in the range of $25 million to $30 million relating to these programs over this time period. We may incur charges in excess of amounts currently estimated for these restructuring plans. We may incur additional charges in the future in connection with future restructurings. These charges, along with any other charges, have adversely affected, and will continue to adversely affect, our results of operations for the periods in which such charges have been or will be incurred.

Our results of operations may suffer if we do not effectively manage our inventory and we may incur inventory-related charges.

We need to manage our inventory of component parts and finished goods effectively to meet changing customer requirements. The ability to accurately forecast customers’ product needs is difficult. Some of our products and supplies have in the past, and may in the future, become obsolete while in inventory due to rapidly changing customer specifications or a decrease in customer demand. If we are not able to manage our inventory effectively, we may need to write-down the value of some of our existing inventory or write-off unsaleable or obsolete inventory, which would adversely affect our results of operations. We have from time to time incurred significant inventory-related charges. Any such charges we incur in future periods could significantly adversely affect our results of operations.

Charges to earnings resulting from the application of the purchase method of accounting may adversely affect the market value of our common stock.

We account for our acquisitions, including the acquisition of New Focus, using the purchase method of accounting. In accordance with GAAP, we allocate the total estimated purchase price to the acquired company’s net tangible assets, amortizable intangible assets, and in-process research and development based on their fair values as of the date of announcement of the transaction, and record the excess of the purchase price over those fair values as goodwill. With respect to our acquisition of New Focus, we expensed the portion of the estimated purchase price allocated to in-process research and development in the first quarter of 2004. We will incur an increase in the amount of amortization expense over the estimated useful lives of certain of the intangible assets acquired in connection with the merger on an annual basis. To the extent the value of goodwill or intangible assets with indefinite lives becomes impaired, we may be required to incur material charges relating to the impairment of those assets. In the year ended July 2, 2005, following a triggering event in the third quarter and in accordance with our policy of evaluating long-lived assets for impairment in the fourth quarter, we recorded charges totaling $114.2 million related to the impairment of goodwill and purchased intangible assets. In addition, in the past, after the completion of a transaction, we have amended the provisional values of assets and liabilities we obtained as part of transactions, specifically the Nortel Networks acquisition. This amendment resulted in the value of our inventory being increased by $20.2 million, current liabilities being increased by approximately $1.3 million, intangible assets being decreased by approximately $9.1 million and property, plant and equipment increased by $9.8 million. We cannot assure you that we will not incur charges in the future as a result of any such transaction, which may have an adverse effect on our earnings.

Bookham Technology plc may not be able to utilize tax losses against the receivables that arise as a result of its transaction with Deutsche Bank.

On August 10, 2005, Bookham Technology plc purchased all of the issued share capital of City Leasing (Creekside) Limited, a subsidiary of Deutsche Bank. Creekside is entitled to receivables of £73.8 million (approximately $135.8 million, based on an exchange rate of £1.00 to $1.8403, the noon buying rate on September 2, 2005 for cable transfers in foreign currencies as certified by the Federal Reserve Bank of New York) from Deutsche Bank in connection with certain aircraft subleases and will in turn apply those payments over a two-year term to obligations of £73.1 million (approximately $134.5 million) owed to Deutsche Bank. As a result of these transactions, Bookham Technology plc will have available through Creekside cash of approximately £6.63 million (approximately $12.2 million). We expect Bookham Technology plc to utilize certain expected tax losses to reduce the taxes that might otherwise be due by Creekside as the receivables are paid. In the event that Bookham Technology plc is not able to utilize these tax losses (or these tax losses do not arise), Creekside may have to pay taxes, reducing the cash available from Creekside. In the event there is a future change in applicable U.K. tax law, Creekside, and in turn Bookham Technology plc, would be responsible for any resulting tax liabilities, which amounts could be material to Bookham’s financial condition or operating results.

Our success will depend on our ability to anticipate and respond to evolving technologies and customer requirements.

The market for telecommunications equipment is characterized by substantial capital investment and diverse and evolving technologies. For example, the market for optical components is currently characterized by a trend toward the adoption of “pluggable” components that do not require the customized interconnections of traditional “gold box” devices and the increased integration of components on subsystems. Our ability to anticipate and respond to these and other changes in technology, industry standards, customer requirements and product offerings and to develop and introduce new and enhanced products will be significant factors in our ability to succeed. We expect that new technologies will continue to emerge as competition in the telecommunications industry increases and the need for higher and more cost efficient bandwidth expands. The introduction of new products embodying new technologies or the emergence of new industry standards could render our existing products uncompetitive from a pricing standpoint, obsolete or unmarketable.

Our products are complex, may take longer to develop than anticipated and we may not recognize revenues from new products until after long field testing and customer acceptance periods.

Many of our new products must be tailored to customer specifications. As a result, we are constantly developing new products and using new technologies in those products. For example, while we currently manufacture and sell “discrete gold box” technology, we expect that many of our sales of gold box technology will soon be replaced by pluggable modules. These products often take many quarters to develop because of their complexity and because customer specifications sometimes change during the development cycle. We often incur substantial costs associated with the research and development and sales and marketing activities in connection with products that may be purchased long after we have incurred the costs associated with designing, creating and selling such products. In addition, due to the rapid technological changes in our market, a customer may cancel or modify a design project before we begin large-scale manufacture of the product and receive revenue from the customer. It is unlikely that we would be able to recover the expenses for cancelled or unutilized design projects. It is difficult to predict with any certainty, particularly in the present economic climate, the frequency with which customers will cancel or modify their projects, or the effect that any cancellation or modification would have on our results of operations.

If our customers do not qualify our manufacturing lines or the manufacturing lines of our subcontractors for volume shipments, our operating results could suffer.

Most of our customers do not purchase products, other than limited numbers of evaluation units, prior to qualification of the manufacturing line for volume production. Our existing manufacturing lines, as well as each new manufacturing line, must pass through varying levels of qualification with our customers. Our manufacturing line has passed our qualification standards, as well as our technical standards. However, our customers may also require that we pass their specific qualification standards and that we, and any subcontractors that we may use, be registered under international quality standards. In addition, we have in the past, and may in the future, encounter quality control issues as a result of relocating our manufacturing lines or introducing new products to fill production. We may experience delays in obtaining customer qualification of our manufacturing lines and, as a consequence, our operating results and customer relationships would be harmed.

Delays, disruptions or quality control problems in manufacturing could result in delays in product shipments to customers and could adversely affect our business.

We may experience delays, disruptions or quality control problems in our manufacturing operations or the manufacturing operations of our subcontractors. As a result, we could incur additional costs that would adversely affect gross margins, and product shipments to our customers could be delayed beyond the shipment schedules requested by our customers, which would negatively affect our revenues, competitive position and reputation. Furthermore, even if we are able to deliver products to our customers on a timely basis, we may be unable to recognize revenues based on our revenue recognition policies.

We may experience low manufacturing yields.

Manufacturing yields depend on a number of factors, including the volume of production due to customer demand and the nature and extent of changes in specifications required by customers for which we perform design-in work. Higher volumes due to demand for a fixed, rather than continually changing, design generally result in higher manufacturing yields, whereas lower volume production generally results in lower yields. In addition, lower yields may result, and have in the past resulted, from commercial shipments of products prior to full manufacturing qualification to the applicable specifications. Changes in manufacturing processes required as a result of changes in product specifications, changing customer needs and the introduction of new product lines have historically caused, and may in the future cause, significantly reduced manufacturing yields, resulting in low or negative margins on those products. Moreover, an increase in the rejection rate of products during the quality control process either pre, during or post manufacture, results in lower yields and margins. Finally, manufacturing yields and margins can also be lower if we receive or inadvertently use defective or contaminated materials from our suppliers.

We depend on a number of suppliers who could disrupt our business if they stopped, decreased or delayed shipments.

We depend on a number of suppliers of raw materials and equipment used to manufacture our products. Some of these suppliers are sole sources. We typically have not entered into long-term agreements with our suppliers and, therefore, these suppliers generally may stop supplying materials and equipment at any time. The reliance on a sole or limited number of suppliers could result in delivery problems, reduced control over product pricing and quality, and an inability to identify and qualify another supplier in a timely manner. Any supply deficiencies relating to the quality or quantities of materials or equipment we use to manufacture our products could adversely affect our ability to fulfill customer orders or our financial results of operations.

Our intellectual property rights may not be adequately protected.

Our future success will depend, in large part, upon our intellectual property rights, including patents, design rights, trade secrets, trademarks, know-how and continuing technological innovation. We maintain an active program of identifying technology appropriate for patent protection. Our practice is to require employees and consultants to execute non-disclosure and proprietary rights agreements upon commencement of employment or consulting arrangements. These agreements acknowledge our exclusive ownership of all intellectual property developed by the individuals during their work for us and require that all proprietary information disclosed will remain confidential. Although such agreements may be binding, they may not be enforceable in all jurisdictions.

Our intellectual property portfolio is an important corporate asset. The steps we have taken and may take in the future to protect our intellectual property may not adequately prevent misappropriation or ensure that others will not develop competitive technologies or products. We cannot assure investors that our competitors will not successfully challenge the validity of these patents, or design

products that avoid infringement of our proprietary rights with respect to our technology. There can be no assurance that other companies are not investigating or developing other similar technologies, that any patents will be issued from any application pending or filed by us or that, if patents are issued, the claims allowed will be sufficiently broad to deter or prohibit others from marketing similar products. In addition, we cannot assure investors that any patents issued to us will not be challenged, invalidated or circumvented, or that the rights under those patents will provide a competitive advantage to us. Further, the laws of certain regions in which our products are or may be developed, manufactured or sold, including Asia-Pacific, Southeast Asia and Latin America, may not protect our products and intellectual property rights to the same extent as the laws of the United States, the U.K. and continental European countries. This is especially relevant as we transfer certain of our assembly and test operations from our facilities in the U.K. to China and as our competitors establish manufacturing operations in China to take advantage of comparatively low manufacturing costs.

Our products may infringe the intellectual property rights of others which could result in expensive litigation or require us to obtain a license to use the technology from third parties.

Companies in the industry in which we operate frequently receive claims of patent infringement or infringement of other intellectual property rights. In this regard, third parties may in the future assert claims against us concerning our existing products or with respect to future products under development. We have entered into and may in the future enter into indemnification obligations in favor of some customers that could be triggered upon an allegation or finding that we are infringing other parties’ proprietary rights. If we do infringe a third party’s rights, we may need to negotiate with holders of patents relevant to our business. We have from time to time received notices from third parties alleging infringement of their intellectual property and where appropriate have entered into license agreements with those third parties with respect to that intellectual property. We may not in all cases be able to resolve allegations of infringement through licensing arrangements, settlement, alternative designs or otherwise. We may take legal action to determine the validity and scope of the third-party rights or to defend against any allegations of infringement. In the course of pursuing any of these means or defending against any lawsuits filed against us, we could incur significant costs and diversion of our resources. Due to the competitive nature of our industry, it is unlikely that we could increase our prices to cover such costs. In addition, such claims could result in significant penalties or injunctions that could prevent us from selling some of our products in certain markets or result in settlements that require payment of significant royalties that could adversely affect our ability to price our products profitably.

If we fail to obtain the right to use the intellectual property rights of others necessary to operate our business, our ability to succeed will be adversely affected.

The telecommunications and optical components markets in which we sell our products have experienced frequent litigation regarding patent and other intellectual property rights. Numerous patents in these industries are held by others, including academic institutions and our competitors. Optical component suppliers may seek to gain a competitive advantage or other third parties may seek an economic return on their intellectual property portfolios by making infringement claims against us. In the future, we may need to obtain license rights to patents or other intellectual property held by others to the extent necessary for our business. Unless we are able to obtain such licenses on commercially reasonable terms, patents or other intellectual property held by others could inhibit our development of new products for our markets. Licenses granting us the right to use third-party technology may not be available on commercially reasonable terms, if at all. Generally, a license, if granted, would include payments of up-front fees, ongoing royalties or both. These payments or other terms could have a significant adverse impact on our operating results. Our larger competitors may be able to obtain licenses or cross-license their technology on better terms than we can, which could put us at a competitive disadvantage.

The markets in which we operate are highly competitive, which could result in lost sales and lower revenues.

The market for fiber optic components is highly competitive and such competition could result in our existing customers moving their orders to competitors. Certain of our competitors may be able more quickly and effectively to:

•		respond to new technologies or technical standards;

•		react to changing customer requirements and expectations;

•		devote needed resources to the development, production, promotion and sale of products; and

•		deliver competitive products at lower prices.

Many of our current competitors, as well as a number of our potential competitors, have longer operating histories, greater name recognition, broader customer relationships and industry alliances and substantially greater financial, technical and marketing resources than we do. In addition, market leaders in industries such as semiconductor and data communications, who may have also

significantly more resources than we do, may in the future enter our market with competing products. All of these risks may be increased if the market were to consolidate through mergers or business combinations between competitors.

We cannot assure investors that we will be able to compete successfully with our competitors or that aggressive competition in the market will not result in lower prices for our products or decreased gross profit margins. Any such development would have a material adverse effect on our business, financial condition and results of operations.

We generate a significant portion of our revenues internationally and therefore are subject to additional risks associated with the extent of our international operations.

For the year ended July 2, 2005, the six months ended July 3, 2004, and the years ended December 31, 2003 and December 31, 2002, 28%, 26%, 9% and 9% of our revenues, respectively, were derived in the United States and 72%, 74%, 91% and 91%, respectively, were derived outside the United States.

We are subject to additional risks related to operating in foreign countries, including:

•		currency fluctuations, which could result in increased operating expenses and reduced revenues;

•		greater difficulty in accounts receivable collection and longer collection periods;

•		difficulty in enforcing or adequately protecting our intellectual property;

•		foreign taxes;

•		political, legal and economic instability in foreign markets; and

•		foreign regulations.

Any of these risks, or any other risks related to our foreign revenues, could materially adversely affect our business, financial condition and results of operations.

Our business will be adversely affected if we cannot manage the significant changes in the number of our employees and the size of our operations.

In the past we have significantly reduced the number of employees and scope of our operations because of declining demand for our products. There is a risk that, during periods of growth or decline, management will not sufficiently coordinate the roles of individuals to ensure that all areas receive appropriate focus and attention. If we are unable to manage our headcount, manufacturing capacity and scope of operations effectively, the cost and quality of our products may suffer, we may be unable to attract and retain key personnel and we may be unable to market and develop new products. Further, the inability to successfully manage the substantially larger and geographically more diverse organization, or any significant delay in achieving successful management, could have a material adverse effect on us and, as a result, on the market price of our common stock.

We may be faced with product liability claims.

Despite quality assurance measures, there remains a risk that defects may occur in our products. The occurrence of any defects in our products could give rise to liability for damages caused by such defects and for consequential damages. They could, moreover, impair the market’s acceptance of our products. Both could have a material adverse effect on our business and financial condition. In addition, we may assume product warranty liabilities related to companies we acquire which could have a material adverse effect on our business and financial condition. In order to mitigate the risk of liability for damages, we carry product liability insurance with a $26 million aggregate annual limit and errors and omissions insurance with a $5 million annual limit. We cannot assure investors that this insurance could adequately cover our costs arising from defects in our products or otherwise.

If we fail to attract and retain key personnel, our business could suffer.

Our future depends, in part, on our ability to attract and retain key personnel. Competition for highly skilled technical people is extremely intense and we continue to face difficulty identifying and hiring qualified engineers in many areas of our business. We may not be able to hire and retain such personnel at compensation levels consistent with our existing compensation and salary structure. Our future also depends on the continued contributions of our executive management team and other key management and technical personnel, each of whom would be difficult to replace. The loss of services of these or other executive officers or key personnel or the inability to continue to attract qualified personnel could have a material adverse effect on our business.

Similar to other technology companies, we rely upon our ability to use stock options and other forms of equity-based compensation as key components of our executive and employee compensation structure. Historically, these components have been critical to our ability to retain important personnel and offer competitive compensation packages. Without these components, we would be required to significantly increase cash compensation levels (or develop alternative compensation structures) in order to retain our key employees. Recent proposals to modify accounting rules relating to the expensing of equity compensation may cause us to substantially reduce, modify, or even eliminate, all or portions of our equity compensation programs.

Our business and future operating results may be adversely affected by events outside of our control.

Our business and operating results are vulnerable to interruption by events outside of our control, such as earthquakes, fire, power loss, telecommunications failures, political instability, military conflict and uncertainties arising out of terrorist attacks, including a global economic slowdown, the economic consequences of additional military action or additional terrorist activities and associated political instability, and the effect of heightened security concerns on domestic and international travel and commerce.

Risks Related to Regulatory Compliance and Litigation

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results, which may cause stockholders to lose confidence in the accuracy of our financial statements.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. If we cannot provide reliable financial reports or prevent fraud, our brand and operating results could be harmed. In addition, compliance with the internal control requirements, as well as other financial reporting standards applicable to a public company, including the Sarbanes-Oxley Act of 2002, has in the past and will in the future continue to involve substantial cost and investment of our management’s time.

In the past, we have reported that Ernst & Young LLP, our independent registered public accounting firm, informed us and our audit committee that we had incorrectly included certain foreign currency translation adjustments in our statement of operations. Ernst & Young LLP advised us that this condition is a material weakness in our internal control over financial reporting. In addition, we did not file our Quarterly Report on Form 10-Q for the quarter ended April 2, 2005 by May 12, 2005, the filing deadline. Our management concluded that the delay reflected a material weakness in our internal controls over financial reporting.

Included in this Annual Report on Form 10-K is management’s report on our internal controls our financial reporting (See Item 9A.b) and Ernst & Young LLP’s attestation audit report thereon (See Item 9A.c), both of which identify material weaknesses in our internal controls over financial reporting as of July 2, 2005 related to the following:

	•		Shortage of, and turnover in, qualified financial reporting personnel to ensure complete application of GAAP. As a result of a shortage of, and turnover in, qualified financial reporting personnel, controls over financial reporting processes did not function to reduce to remote the likelihood of material misstatements in the application of generally accepted accounting principles to complex, non-routine transactions. This material weakness resulted in adjustments to goodwill related to acquisition reserves, and to interest expense and amortization of debt issuance costs.

	•		Insufficient management review of analyses and reconciliations. The lack of sufficient management review, arising from a shortage of, and turnover in, qualified personnel, of analyses and reconciliations prepared as part of the financial reporting processes did not function to reduce to remote the likelihood that material misstatement of certain accounts in the financial statements would be prevented or detected in a timely manner. This material weakness resulted in adjustments to inventory, cost of sales, deferred compensation and additional paid-in-capital.

	•		Inaccurate updating of accounting inputs for estimates of complex non-routine transactions. Controls that reasonably assure the accurate and timely updating of accounting data used in making estimates for financial reporting purposes did not function to reduce to remote the likelihood that errors in the accounting data that could result in material misstatements to related accounting estimates would be prevented or detected in a timely manner, due to the turnover in qualified people with sufficient skills and experience. This material weakness resulted in an adjustment to our accrual for lease commitments on vacated facilities and the related restructuring charges.

	•		Accounting for foreign currency exchange transactions. In the first quarter of the fiscal year, we reported a material weakness in controls over the application of GAAP in the accounting for foreign currency exchange transactions. In spite of improvements in levels of staff with proficiency in GAAP, our controls over the application of GAAP in the accounting for foreign currency contracts as hedges did not sufficiently improve through the remainder of the year and resulted in a year-end adjustment to our statement of operations for unrealized losses on the remeasuring of these contracts to fair market value.

In fiscal 2006, and beyond, we will continue to spend significant time and incur significant costs to assess and report on the effectiveness of internal controls over financial reporting as required by Section 404 of the Sarbanes-Oxley Act. Discovering material weaknesses in the future could make it more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers, which could harm our business. In addition, if we discover future material weaknesses, disclosure of that fact could reduce the market’s confidence in our financial statements, which could harm our stock price and our ability to raise capital.

As a result of discussions with staff at the Nasdaq National Market, we intend to submit our 2004 stock incentive plan for stockholder approval, and any failure to receive that approval could have an adverse effect.

We have been advised by the staff at the Nasdaq National Market that, in its judgment, the approval of our 2004 stock incentive plan was not sufficient to satisfy the stockholder approval requirements of Nasdaq Marketplace Rule 4350(i)(1)(a). We have agreed with Nasdaq to seek stockholder approval of the plan at our 2005 annual meeting of stockholders. Until we receive stockholder approval, we have agreed that no shares of common stock will be issued upon the exercise of any options granted under the plan and that restrictions will not lapse on any shares of restricted stock issued under the plan. As of September 2, 2005, there were approximately 1,473,910 shares subject to outstanding options under the 2004 stock incentive plan, some of which begin to vest on September 22, 2005, and 249,859 shares of restricted stock, for which restrictions lapse on February 9, 2006. In addition, we may not grant additional options or restricted stock awards under the 2004 stock incentive plan until the 2004 stock incentive plan is approved by our stockholders. Nasdaq has advised us that its extension period for compliance with Nasdaq Marketplace Rule 4350(i)(1)(a) will expire on October 31, 2005. If our stockholders do not approve the 2004 stock incentive plan, we will be required to undertake to rescind any outstanding options, which would affect employee morale and could trigger employee claims, and may require that we seek substitute alternative forms of equity incentive or other compensation or, if we decline to do so, may face delisting from the Nasdaq National Market.

Our business involves the use of hazardous materials, and environmental laws and regulations may expose us to liability and increase our costs.

We historically have handled small amounts of hazardous materials as part of our manufacturing activities and now handle more and different hazardous materials as a result of the manufacturing processes related to New Focus, the optical components business acquired from Nortel Networks and the product lines we acquired from Marconi. Consequently, our operations are subject to environmental laws and regulations governing, among other things, the use and handling of hazardous substances and waste disposal. We may be required to incur environmental costs to comply with current or future environmental laws. As with other companies engaged in manufacturing activities that involve hazardous materials, a risk of environmental liability is inherent in our manufacturing activities, as is the risk that our facilities will be shut down in the event of a release of hazardous waste. The costs associated with environmental compliance or remediation efforts or other environmental liabilities could adversely affect our business.

Major litigation regarding Bookham Technology plc’s initial public offering and follow-on offering and any other litigation in which we become involved, including as a result of acquisitions, may substantially increase our costs and harm our business.

On June 26, 2001, a putative securities class action captioned Lanter v. New Focus, Inc. et al., Civil Action No. 01-CV-5822, was filed against New Focus, Inc. and several of its officers and directors, or the New Focus Individual Defendants, in the United States District Court for the Southern District of New York. Also named as defendants were Credit Suisse First Boston Corporation, Chase Securities, Inc., U.S. Bancorp Piper Jaffray, Inc. and CIBC World Markets Corp., or the Underwriter Defendants, the underwriters in New Focus’s initial public offering. Three subsequent lawsuits were filed containing substantially similar allegations. These complaints have been consolidated. On April 19, 2002, plaintiffs filed an Amended Class Action Complaint, described below, naming as defendants the New Focus Individual Defendants and the Underwriter Defendants.

On November 7, 2001, a Class Action Complaint was filed against Bookham Technology plc and others in the United States District Court for the Southern District of New York. On April 19, 2002, plaintiffs filed an Amended Complaint. The Amended Complaint names as defendants Bookham Technology plc, Goldman, Sachs & Co. and FleetBoston Robertson Stephens, Inc., two of the underwriters of Bookham Technology plc’s initial public offering in April 2000, and Andrew G. Rickman, Stephen J. Cockrell and David Simpson, or the Bookham Individual Defendants, each of whom was an officer and/or director at the time of the initial public offering.

The Amended Complaint asserts claims under certain provisions of the securities laws of the United States. It alleges, among other things, that the prospectuses for Bookham Technology plc’s and New Focus’s initial public offerings were materially false and misleading in describing the compensation to be earned by the underwriters in connection with the offerings, and in not disclosing certain alleged arrangements among the underwriters and initial purchasers of ordinary shares, in the case of Bookham Technology plc, or common stock, in the case of New Focus, from the underwriters. The Amended Complaint seeks unspecified damages (or in the alternative rescission for those class members who no longer hold common stock), costs, attorneys’ fees, experts’ fees, interest and other expenses. In October 2002, the New Focus Individual Defendants and the Bookham Individual Defendants were dismissed, without prejudice, from the action. In July 2002, all defendants filed Motions to Dismiss the Amended Complaint. The motion was denied as to Bookham Technology plc and New Focus in February 2003. Special committees of the board of directors authorized the companies to negotiate a settlement of pending claims substantially consistent with a memorandum of understanding negotiated among class plaintiffs, all issuer defendants and their insurers.

Plaintiffs and most of the issuer defendants and their insurers have entered into a stipulation of settlement for the claims against the issuer defendants, including Bookham. Under the stipulation of settlement, the plaintiff will dismiss and release all claims against participating defendants in exchange for a payment guaranty by the insurance companies collectively responsible for insuring the issuers in the related cases, and the assignment or surrender to the plaintiffs of certain claims the issuer defendants may have against the underwriters. On February 15, 2005, the court issued an Opinion and Order preliminarily approving the settlement provided that the defendants and plaintiffs agree to a modification narrowing the scope of the bar order set forth in the original settlement agreement. The parties agreed to the modification narrowing the scope of the bar order, and on August 31, 2005, the court issued an order preliminarily approving the settlement and setting a public hearing on its fairness for April 24, 2006.

In addition, in October 2003, New Focus filed a cross-complaint against Mr. Yue seeking damages in connection with Mr. Yue’s conduct during the acquisition of Globe Y. Technology, Inc., by New Focus. In February 2004, New Focus filed a corrected amended cross-complaint against Mr. Yue. In May 2004, Mr. Yue filed an answer to New Focus’s corrected amended cross-complaint denying New Focus’s allegations and asserting various defenses. In December 2004, plaintiff and defendants filed a motion for summary judgment and/or summary adjudication with respect to the corrected amended cross-complaint and certain causes of action in the fifth amended complaint. On April 26, 2005, the court denied both plaintiff’s and defendant’s motions. The trial date has been set for November 14, 2005 and the court has scheduled 15 days for the trial.

Litigation is subject to inherent uncertainties, and an adverse result in these or other matters that may arise from time to time could have a material adverse effect on our business, results of operations and financial condition. Any litigation to which we are subject may be costly and, further, could require significant involvement of our senior management and may divert management’s attention from our business and operations.

Risks Related to the Market for Our Common Stock

A variety of factors could cause the trading price of our common stock to be volatile or decline.

The market price of our common stock has been, and is likely to continue to be, highly volatile due to causes other than publication of our business results, such as:

•		announcements by our competitors and customers of their historical results or technological innovations or new products;

•		developments with respect to patents or proprietary rights;

•		governmental regulatory action; and

•		general market conditions.

Since Bookham Technology plc’s initial public offering in April 2000, Bookham Technology plc’s ADSs and ordinary shares, our shares of common stock and the shares of our customers and competitors have experienced substantial price and volume fluctuations, in many cases without any direct relationship to the affected company’s operating performance. An outgrowth of this market volatility is the significant vulnerability of our stock price and the stock prices of our customers and competitors to any actual or perceived fluctuation in the strength of the markets we serve, regardless of the actual consequence of such fluctuations. As a result, the market prices for these companies are highly volatile. These broad market and industry factors caused the market price of Bookham Technology plc’s ADSs, ordinary shares, and our common stock to fluctuate, and may in the future cause the market price of our common stock to fluctuate, regardless of our actual operating performance or the operating performance of our customers.

The future sale of substantial amounts of our common stock could adversely affect the price of our common stock.

On December 20, 2004, we issued convertible debentures and warrants in a private placement with institutional investors. The debentures and warrants issued in connection with the private placement are convertible or exercisable, as applicable, for up to an aggregate of 7,797,526 shares of our common stock, subject to adjustment in certain circumstances. In addition, in connection with Bookham Technology plc’s acquisition of the optical components business from Nortel Networks, Bookham Technology plc issued to affiliates of Nortel Networks an aggregate of 6,100,000 shares of our common stock and a warrant to purchase 900,000 shares of our common stock. The warrant was exercised on September 7, 2004. As of July 2, 2005, affiliates of Nortel Networks held approximately 3,999,999 shares of our common stock. Other stockholders or groups of stockholders also hold significant percentages of our shares of common stock. Sales by Nortel Networks, institutional investors holding the convertible debentures and warrants or other holders of substantial amounts of our shares in the public or private market could adversely affect the market price of our common stock by increasing the supply of shares available for sale compared to the demand in the private and public capital markets to buy our common stock. These sales may also make it more difficult for us to sell equity securities in the future at a time and price that we deem appropriate to meet our capital needs.

Some anti-takeover provisions contained in our charter and under Delaware laws could hinder a takeover attempt.

We are subject to the provisions of Section 203 of the General Corporation Law of the State of Delaware prohibiting, under some circumstances, publicly-held Delaware corporations from engaging in business combinations with some stockholders for a specified period of time without the approval of the holders of substantially all of our outstanding voting stock. Such provisions could delay or impede the removal of incumbent directors and could make more difficult a merger, tender offer or proxy contest involving us, even if such events could be beneficial, in the short-term, to the interests of the stockholders. In addition, such provisions could limit the price that some investors might be willing to pay in the future for shares of our common stock. Our certificate of incorporation and bylaws contain provisions relating to the limitations of liability and indemnification of our directors and officers, dividing our board of directors into three classes of directors serving three-year terms and providing that our stockholders can take action only at a duly called annual or special meeting of stockholders. These provisions also may have the effect of deterring hostile takeovers or delaying changes in control or management of us.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Interest rates

We finance our operations through a mixture of stockholders’ funds, loan notes, finance leases and working capital. Throughout the period, our only exposure to interest rate fluctuations was on our cash deposits and certain of our dollar denominated Nortel Networks notes and 7.0% convertible debentures.

We monitor our interest rate risk on cash balances primarily through cash flow forecasting. Cash that is surplus to immediate requirements is invested in short-term deposits with banks accessible with one day’s notice and invested in overnight money market accounts.

Foreign currency

Due to our multinational operations, we are subject to fluctuations based upon changes in the exchange rates between the currencies in which we collect revenue and pay expenses. Our expenses are not necessarily incurred in the currency in which revenue is generated, and, as a result, we may from time to time have to exchange currency to meet our obligations. These currency conversions are subject to exchange rate fluctuations, in particular, changes in the value of the U.K. pound sterling compared to the

US dollar. In an effort to mitigate exposure to those fluctuations, we enter into foreign currency exchange contracts with respect to portions of our forecasted expenses denominated in U.K. pound sterling. At July 2, 2005, we held two foreign currency exchange contracts, including put and call options, to purchase U.K. pound sterling with a nominal value of $50 million. These contracts include put and call options which expire on dates ranging from July 2005 to March 2006. It is estimated that a 10% fluctuation in the dollar between July 2, 2005 and the maturity dates of the put and call instruments underlying the contracts would lead to a profit of $2.2 million (dollar weakening), or loss of $9.2 million (dollar strengthening) on our outstanding trades, should they be held to maturity.

Item 8. Financial Statements and Supplementary Data

The information required by this item may be found on pages F-1 through F-42 of this Annual Report on Form 10-K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

As of July 2, 2005, our management carried out an evaluation under the supervision and with the participation of our CEO and CFO, of the effectiveness of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

As described below under Management’s Report on Internal Control over Financial Reporting, our management has identified and reported to our audit committee and Ernst & Young LLP, our independent registered public accounting firm, material weaknesses in our internal control over financial reporting. As a result of these material weaknesses, our CEO and CFO have concluded that, as of July 2, 2005, our disclosure controls and procedures were not effective.

(b) Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

As of July 2, 2005, our management has assessed the effectiveness of our internal control over financial reporting. In making its assessment of internal control over financial reporting, management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. In performing the assessment, management identified the following control deficiencies that we have concluded are material weaknesses in internal control over financial reporting as of July 2, 2005:

	•		Shortage of, and turnover in, qualified financial reporting personnel to ensure complete application of GAAP. As a result of a shortage of, and turnover in, qualified financial reporting personnel, controls over financial reporting processes did not function to reduce to remote the likelihood of material misstatements in the application of generally accepted accounting principles to complex, non-routine transactions. This material weakness resulted in adjustments to goodwill related to acquisition reserves, and to interest expense and amortization of debt issuance costs.

	•		Insufficient management review of analyses and reconciliations. The lack of sufficient management review, arising from a shortage of, and turnover in, qualified personnel, of analyses and reconciliations prepared as part of the financial reporting processes did not function to reduce to remote the likelihood that material misstatement of certain accounts in the financial statements would be prevented or detected in a timely manner. This material weakness resulted in adjustments to inventory, cost of sales, deferred compensation and additional paid-in-capital.

	•		Inaccurate updating of accounting inputs for estimates of complex non-routine transactions. Controls that reasonably assure the accurate and timely updating of accounting data used in making estimates for financial reporting purposes did not function to reduce to remote the likelihood that errors in the accounting data that could result in material misstatements to related accounting estimates would be prevented or detected in a timely manner, due to the turnover in qualified people with sufficient skills and experience. This material weakness resulted in an adjustment to our accrual for lease commitments on vacated facilities and the related restructuring charges.

	•		Accounting for foreign currency exchange transactions. In the first quarter of the fiscal year, we reported a material weakness in controls over the application of GAAP in the accounting for foreign currency exchange transactions. In spite of improvements in levels of staff with proficiency in GAAP, our controls over the application of GAAP in the accounting for foreign currency contracts as hedges did not sufficiently improve through the remainder of the year and resulted in a year-end adjustment to our statement of operations for unrealized losses on the remeasuring of these contracts to fair market value.

As a result of the material weaknesses described above, management has concluded that, as of July 2, 2005, our system of internal control over financial reporting was not effective based on the criteria in Internal Control—Integrated Framework.

Our independent registered public accounting firm, Ernst & Young LLP, has issued an audit report on our assessment of our internal control over financial reporting. This report appears below.

(c) Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Bookham, Inc.

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control over Financial Reporting, that Bookham, Inc. did not maintain effective internal control over financial reporting as of July 2, 2005, because of the effect of the four material weaknesses identified in management’s assessment and described below, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO control criteria”). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and

dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The following material weaknesses have been identified and included in management’s assessment as of July 2, 2005:

	•		Shortage of, and turnover in, qualified financial reporting personnel to ensure complete application of GAAP. As a result of a shortage of, and turnover in, qualified financial reporting personnel, controls over financial reporting processes did not function to reduce to remote the likelihood of material misstatements in the application of generally accepted accounting principles to complex, non-routine transactions. This material weakness resulted in adjustments to goodwill related to acquisition reserves, and to interest expense and amortization of debt issuance costs.

	•		Insufficient management review of analyses and reconciliations. The lack of sufficient management review, arising from a shortage of, and turnover in, qualified personnel, of analyses and reconciliations prepared as part of the financial reporting processes did not function to reduce to remote the likelihood that material misstatement of certain accounts in the financial statements would be prevented or detected in a timely manner. This material weakness resulted in adjustments to inventory, cost of sales, deferred compensation and additional paid-in-capital.

	•		Inaccurate updating of accounting inputs for estimates of complex non-routine transactions. Controls that reasonably assure the accurate and timely updating of accounting data used in making estimates for financial reporting purposes did not function to reduce to remote the likelihood that errors in the accounting data that could result in material misstatements to related accounting estimates would be prevented or detected in a timely manner, due to the turnover in qualified people with sufficient skills and experience. This material weakness resulted in an adjustment to our accrual for lease commitments on vacated facilities and the related restructuring charges.

	•		Accounting for foreign currency exchange transactions. In the first quarter of the fiscal year, we reported a material weakness in controls over the application of GAAP in the accounting for foreign currency exchange transactions. In spite of improvements in levels of staff with proficiency in GAAP, Bookham, Inc’s controls over the application of GAAP in the accounting for foreign currency contracts as hedges did not sufficiently improve through the remainder of the year and resulted in a year-end adjustment to Bookham, Inc.’s statement of operations for unrealized losses on the remeasuring of these contracts to fair market value.

These material weaknesses were considered in determining the nature, timing, and extent of the audit tests applied in our audit of Bookham, Inc.’s 2005 financial statements, and this report does not affect our report dated September 6, 2005 on those financial statements.

In our opinion, management’s assessment that Bookham, Inc. did not maintain effective internal control over financial reporting as of July 2, 2005, is fairly stated, in all material respects, based on the COSO control criteria. Also, in our opinion, because of the effect of the material weaknesses

described above on the objectives of the control criteria, Bookham, Inc. has not maintained effective internal control over financial reporting as of July 2, 2005, based on the COSO control criteria.

Ernst & Young LLP

Reading, England
September 8, 2005

(d) Remediation Efforts to Address Material Weaknesses

We have been, and intend to continue, planning and implementing changes to our processes to improve our internal control over financial reporting. The following are steps we have taken, or intend to take, to remediate the conditions leading to the above stated material weaknesses:

	•		In August of 2004, we changed our domicile from the United Kingdom to the United States. In conjunction with this change, we relocated our corporate headquarters to San Jose, California from Abingdon, England. This required us to hire new accounting staff in the United States and improve our internal base of GAAP knowledge. In addition there has been significant turnover in the in the United States accounting personnel since this transition. As a result, we have only recently staffed our corporate accounting group with qualified personnel. In the third quarter of fiscal 2005, we hired a new external reporting manager. In the fourth quarter of fiscal 2005, we hired a new corporate consolidations manager. Subsequent to the end of fiscal 2005, we hired a new corporate controller. While we believe the senior corporate accounting level is now adequate, they will likely require at least another quarterly reporting period to be trained and familiarized with Bookham before their effect is fully realized. In addition to the staffing requirement at the corporate accounting level, we intend to increase certain business unit staffing.

	•		We are committed to improving our accounting processes in order to strengthen our internal controls and meet required reporting deadlines. In the fourth quarter of fiscal 2005, we formalized the closing process through better definition of responsibilities and reporting requirements and a more detailed closing schedule. We began using a corporate consolidations software package to replace spreadsheets we had used previously which had become unreliable as we acquired more entities. We instituted a pre-close balance sheet review meeting of all sites, which was followed by a post-close balance sheet review meeting weeks prior to the release of our earnings for fiscal 2005. Subsequent to the year end close, we added further detail to our financial reporting schedule. In spite of our actions taken to date to facilitate the orderly evaluation of complex, non-routine transactions, and to disseminate knowledge of localized operations throughout our financial personnel, we identified the material weaknesses described herein. We plan to continue revising and improving our closing and reporting scheduling and coordination so as to improve our ability to evaluate complex, non-routine transactions in a timely and orderly fashion.

	•		In fiscal 2006, we plan to centralize management review of the more complex and highly judgmental areas including inventory valuation, restructuring accruals and other complex transactions. Beginning in the first quarter of fiscal 2006, all complex, non-routine transactions will be identified in the pre-close and post-close balance sheet review meetings, and we will centralize the review of potentially material complex, non-routine transactions.

In consideration to the foregoing, the following are the specific actions we plan to take to address each material weakness:

Shortage of, and turnover in, qualified financial reporting personnel to ensure complete application of GAAP:

	•		Identify complex, non-routine transactions in the pre-close and post-close balance sheet review meetings, and centralize the review of potentially material complex, non-routine transactions. All such transactions will be identified and documented and distributed to the top levels of financial management for evaluation and ultimate sign off.

	•		Disseminate localized knowledge of operations and historical operations during the pre-close and post-close balance sheet review meetings. These meetings will involve senior financial personnel and attended by all site controllers.

	•		Centralize the review of complex, highly judgmental areas such as inventory valuation, restructuring accruals and other similar areas.

Insufficient management review of analyses and reconciliations:

	•		Identify complex, non-routine transactions in the pre-close and post-close balance sheet review meetings, and centralize the review of potentially material complex, non-routine transactions. All such transactions will be identified and documented and distributed to the top levels of financial management to for evaluation and ultimate sign off.

	•		Centralize the review of complex, highly judgmental areas such as inventory valuation, restructuring accruals and other similar areas.

Inaccurate updating of accounting inputs for estimates of complex non-routine transactions:

	•		Identify complex, non-routine transactions in the pre-close and post-close balance sheet review meetings, and centralize the review of potentially material complex, non-routine transactions. All such transactions will be identified and documented and distributed to the top levels of financial management for evaluation and ultimate sign off.

	•		Centralize the review of complex, highly judgmental areas such as inventory valuation, restructuring accruals and other complex areas.

Accounting for foreign exchange transactions:

	•		Identify complex, non-routine transactions in the pre-close and post-close balance sheet review meetings, and centralize the review of potentially material complex, non-routine transactions. All such transactions will be identified and documented and distributed to the top levels of financial management to for evaluation and ultimate sign off.

	•		Disseminate localized knowledge of operations and historical operations in the context of pre-close and post-close balance sheet review meetings, as described above.

Although we have already taken some actions to remediate these material weaknesses, further action is required to complete our remediation including the addition of finance staff and the development and implementation of enhanced processes. Our management and audit committee will monitor closely the implementation of our remediation plan. The effectiveness of the steps we have taken to date and the steps we are still in the process of completing is subject to continued management review, as well as audit committee oversight, and we may make additional changes to our internal control over financial reporting. Our remediation progress will be reviewed on a regular basis by management and the Audit Committee and reported on quarterly.

(e) Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting during the quarter ended July 2, 2005, other than as discussed herein, that have materially

affected, or are reasonably likely to materially affect, internal controls over financial reporting.

Refer to Item 9A (d) for a discussion of remediation activities in connection with the material weaknesses in internal control over financial reporting identified above.

Inherent Limitations on Effectiveness of Controls

Our management, including our CEO and our CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting are or will be capable of preventing or detecting all errors and all fraud. Any control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within Bookham have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks.

Item 9B. Other Information

Not applicable.

PART III

Item 10. Directors and Executive Officers of the Registrant

Executive Officers and Key Employee of the Registrant

Below is information about executive officers and key employee, including their ages as of August 25, 2005, their positions with us, the length of time they have held their positions, and their business experience for the past five years. There are no family relationships among any of the executive officers and key employees.

Executive Officers and Key Employee


Name	Age		Position

Giorgio Anania		46	President and Chief Executive Officer
James Haynes		43	Chief Operating Officer
Steve Abely		47	Chief Financial Officer
Stephen Turley		51	Chief Commercial Officer
Adrian Meldrum		35	Vice President, Communication Sales

Executive Officers of the Company

Giorgio Anania, 46, has served as a director since June 2004, as our Chief Executive Officer since September 2004 and as our President since March 4, 2005. Dr. Anania has served as Chief Executive Officer and a director of Bookham Technology plc since February 2001. From August 2000 to March 2004, he also served as President of Bookham Technology plc. From October 1998, when he joined Bookham Technology plc, until August 2000, Dr. Anania was the Senior Vice President, Sales and Marketing of Bookham Technology plc. Dr. Anania has a BA(Hons) in Physics from Oxford University and an MA and PhD in Plasma Physics from Princeton University.

James Haynes, 43, has served as Chief Operating Officer since March 4, 2005. From August 2004 to March 2005, Mr. Haynes was the Officer VP, U.K. Operations, of Bookham, Inc. From June 2003 to August 2004, Mr. Haynes served as VP Operations and Site Leader, Caswell for Bookham, Inc. From December 2000 to June 2003, Mr. Haynes served as Chief Operating Officer of Agility Communications, Inc., a tunable laser company. From 1998 to December 2000, Mr. Haynes served as Director of Technology of Nortel Networks Corporation.

Stephen Abely, 47, has served as our Chief Financial Officer since September 2004. Mr. Abely has served as Chief Financial Officer of Bookham Technology plc since October 2001. From August 2000 until August 2001, Mr. Abely was the Chief Financial Officer of Arescom Technology, a private broadband access equipment provider based in California. Previously, Mr. Abely was an independent consultant from May 1999 to August 2000, during which time he served as interim Chief Financial Officer for two privately-held companies. Mr. Abely holds a BS in Business Administration from Northeastern University in Boston.

Stephen Turley, 51, has served as our Chief Commercial Officer since September 2004. Dr. Turley joined Bookham as Chief Commercial Officer of Bookham Technology plc in October 2001. From June 2000 to September 2001, he was Vice President, Strategic Partnerships, with Nortel Networks’ High Performance Optical Component Solutions group. Dr. Turley has a BA in Physics from Oxford University and a PhD in Semiconductor Laser Physics from Sheffield University.

Key Employee of the Company

Adrian Meldrum, 35, has served as our Vice President, Sales and Marketing since July 2005. From November 2004 to July 2005, Mr. Meldrum served as our Vice President, Communication Sales. Mr. Meldrum previously served as the Vice President, Business Development and held various positions in business development and product management roles since joining Bookham in 2001. From 2000 to 2001, Mr. Meldrum served as Product Line Manager for JDS Uniphase Corp., a manufacturer of fiber optic products, in the United Kingdom and joined JDS Uniphase Corp. through their acquisition of SDL in 2000. Mr. Meldrum holds a BSc in Physics from Manchester Metropolitan University.

Information required by this Item is incorporated by reference to the information under the headings “Proposal I – Election of Class I Directors,” “Section 16(a) Beneficial Ownership Compliance,” “Board and Committee Meetings” and “Corporate Governance” contained in Bookham’s definitive Proxy Statement for its 2005 annual meeting of stockholders.

Item 11. Executive Compensation

Information required by this Item is incorporated by reference to the information under the headings “Executive Compensation,” “Director Compensation,” “Compensation Committee Interlocks and Insider Participation,” and “Employment and Other Agreements” contained in Bookham’s definitive Proxy Statement for its 2005 annual meeting of stockholders.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Information required by this Item is incorporated by reference to the information under the headings “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” contained in Bookham’s definitive Proxy Statement for its 2005 annual meeting of stockholders.

Item 13. Certain Relationships and Related Transactions

Information required by this Item is incorporated by reference to the information under the headings “Certain Relationships and Related Transactions” and “Employment, Change of Control and Severance Arrangements” contained in Bookham’s definitive Proxy Statement for its 2005 annual meeting of stockholders.

Item 14. Principal Accountant Fees and Services

Information required by this Item is incorporated by reference under the heading “Principal Accountant Fees and Services” contained in Bookham’s definitive Proxy Statement for its 2005 annual meeting of stockholders.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of or are included in this Form 10-K:

Financial Statement Schedules

Financial statement schedule II: Valuation and Qualifying Accounts that follows the Notes to Consolidated Financial Statements is filed as part of this Form 10-K.

List of Exhibits

The Exhibits filed as part of this Form 10-K are listed on the Exhibit Index immediately preceding such Exhibits, which Exhibit Index is incorporated herein by reference. Documents listed on such Exhibit Index, except for documents identified by footnotes, are being filed as exhibits herewith. Documents identified by footnotes are not being filed herewith and, pursuant to Rule 12b-32 under the Exchange Act, reference is made to such documents as previously filed as exhibits with the Securities and Exchange Commission. Bookham’s file number under the Exchange Act is 000-30684.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


September 8, 2005	BOOKHAM, INC.

	By:	/s/ Giorgio Anania

	Name: Giorgio Anania
	Title: Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


Signature	Title	Date
/s/ Giorgio Anania Giorgio Anania	Chief Executive Officer and Director (Principal Executive Officer)	September 8, 2005
/s/ Stephen Abely Stephen Abely	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	September 8, 2005
/s/ Liam Nagle Liam Nagle	Director	September 8, 2005
/s/ David Simpson	Director	September 8, 2005
David Simpson
/s/ Lori Holland	Director	September 8, 2005
Lori Holland
/s/ W. Arthur Porter W. Arthur Porter	Director	September 8, 2005
Joseph Cook	Director
/s/ Peter Bordui Peter Bordui	Director	September 8, 2005

BOOKHAM, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Report of Independent Registered Public Accounting Firm			F-2
Consolidated Balance Sheets			F-3
Consolidated Statements of Operations			F-4
Consolidated Statements of Cash Flows			F-5
Consolidated Statements of Stockholders’ Equity			F-6
Notes to Consolidated Financial Statements			F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
Bookham, Inc.

We have audited the accompanying consolidated balance sheets of Bookham, Inc. as of July 2, 2005, and July 3, 2004 and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended July 2, 2005, the six-month period ended July 3, 2004, and for each of the two years in the period ended December 31, 2003. Our audits also included the financial statement schedule listed in the Index at Item 15(a)2. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Bookham, Inc. at July 2, 2005, and July 3, 2004, and the consolidated results of its operations and its consolidated cash flows for the year ended July 2, 2005, the six-month period ended July 3, 2004 and each of the two years in the period ended December 31, 2003, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

The accompanying financial statements have been prepared assuming that Bookham, Inc. will continue as a going concern. As more fully described in Note 1, the Company will need to raise additional funding through external sources prior to December 2005 in order to maintain sufficient financial resources to continue to operate its business. In addition, depending on the amount of additional funding secured prior to December 2005, the Company will also need to raise sufficient funds before June 2006 in order to maintain a cash balance of at least $25 million in order to comply with the loan note covenants described in Note 1. Management are taking actions to raise additional equity capital and considering the disposal of selected assets or businesses. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Bookham Inc.’s internal control over financial reporting as of July 2, 2005, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated September 8, 2005 expressed an unqualified opinion on management’s assessment of the effectiveness of internal control over financial reporting and an adverse opinion on the effectiveness of internal control over financial reporting.


		Ernst & Young LLP
Reading, England
September 8, 2005

F-2

BOOKHAM, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and par value amounts)


	July 2, 2005			July 3, 2004
Assets – Note 15
Current assets:
Cash and cash equivalents	$	24,934		$	109,682
Short-term investments		—			6,985
Restricted cash		3,260			—
Accounts receivable (net of allowances of $726 and $1,260, respectively)		20,257			13,565
Amounts due from related parties, net		7,262			15,954
Inventories		53,192			48,339
Prepaid expenses and other current assets		11,190			17,887
Assets held for resale		13,694			13,908

Total current assets		133,789			226,320
Long-term restricted cash		4,119			4,434
Goodwill		6,260			119,953
Other intangible assets, net		28,010			43,849
Property and equipment, net		64,156			72,369
Investments and other long-term assets		1,552			1,100

Total assets	$	237,886		$	468,025


Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	31,334		$	28,765
Amounts owed to related parties		722			628
Short-term capital lease obligations		—			5,131
Accrued expenses and other liabilities		38,477			38,351
Current portion of notes payable		52			53

Total current liabilities		70,585			72,928
Non-current portion of notes payable		340			400
Notes payable to related party		45,861			50,000
7% convertible debentures		19,140			—
Other long-term liabilities		10,892			14,107

Total liabilities		146,818			137,435


Commitments and contingencies (Note 6)

Stockholders’ equity:
Common stock:
$0.01 par value; 175,000,000 authorized; 33,805,437 and 32,612,555 issued and outstanding at July 2, 2005 and July 3, 2004, respectively		338			326
Additional paid-in capital		925,677			917,639
Deferred compensation		(808	)		(1,354	)
Accumulated other comprehensive income		32,889			33,035
Accumulated deficit		(867,028	)		(619,056	)

Total stockholders’ equity		91,068			330,590

Total liabilities and stockholders’ equity	$	237,886		$	468,025

The accompanying notes form an integral part of these consolidated financial statements.

F-3

BOOKHAM, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)


	Year Ended			Six Months Ended						Year Ended December 31,
	July 2, 2005			July 3, 2004			June 29, 2003			2003			2002
							(unaudited)
Revenues	$	110,751		$	35,846		$	18,346		$	42,457		$	15,869
Revenues from related parties		89,505			43,917			49,416			103,740			36,036

Total revenues		200,256			79,763			67,762			146,197			51,905
Cost of revenues		193,647			84,415			80,915			156,008			79,055

Gross profit/(loss)		6,609			(4,652	)		(13,153	)		(9,811	)		(27,150	)

Operating expenses:
Research and development		44,825			26,887			26,469			50,371			50,291
Selling, general and administrative		59,508			29,584			18,795			33,849			20,253
Amortization of intangible assets		11,107			5,677			4,746			8,487			5,376
In-process research and development		—			5,890			—			245			13,132
Restructuring charges		20,888			(664	)		7,631			31,392			55,090
Stock-based compensation		750			104			—			—			339
Impairment of goodwill and other intangible assets		114,226			—			—			—			—
Gain on sale of property and equipment		(708	)		(5,254	)		—			(3,060	)		(66	)


Total operating expenses		250,596			62,224			57,641			121,284			144,415

Operating loss		(243,987	)		(66,876	)		(70,794	)		(131,095	)		(171,565	)

Other income/(expense), net
Other income/(expense)		1,382			126			185			32			199
Interest income		1,107			1,871			5,334			9,484			8,693
Interest expense		(5,439	)		(1,651	)		(4,579	)		(3,162	)		(681	)
(Loss)/gain on foreign exchange		(1,020	)		(1,050	)		1,814			(4,445	)		(1,584	)

Total other income/(expense)		(3,970	)		(704	)		2,754			1,909			6,627

Loss before income taxes		(247,957	)		(67,580	)		(68,040	)		(129,186	)		(164,938	)
Income tax (provision)/ benefit		(15	)		209			—			3,439			—

Net loss	$	(247,972	)	$	(67,371	)	$	(68,040	)	$	(125,747	)	$	(164,938	)


Net loss per share (basic and diluted)	$	(7.43	)	$	(2.48	)	$	(3.32	)	$	(6.03	)	$	(10.92	)
Weighted average shares of common stock outstanding		33,379,453			27,198,838			20,495,259			20,844,793			15,099,620

Stock-based compensation is excluded from the following categories:
Research and development	$	8		$	28		$	—		$	—		$	24
Selling, general and administrative		742			76			—			—			315

Total	$	750		$	104		$	—		$	—		$	339

The accompanying notes form an integral part of these consolidated financial statements.

F-4

BOOKHAM, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except warrants)


				Six Months
	Year Ended			Ended			Year Ended December 31,
	July 2, 2005			July 3, 2004			2003			2002
Cash flows used in operating activities:
Net loss	$	(247,972	)	$	(67,371	)	$	(125,747	)	$	(164,938	)
Adjustments to reconcile net loss to net cash used in operating activities:
In-process research and development		—			5,890			245			13,132
Tax credit recognized for research and development activities		—			—			(3,719	)		3,719
Write off of investments		—			44			—			—
Unrealized loss on marketable securities		(4	)		—			—			—
Amortization of interest expense for warrants and beneficial conversion feature		673			—			—			—
Depreciation and amortization		32,208			13,455			21,312			57,702
Unrealized loss on foreign currency contracts		1,687			—			—			—
Losses on foreign currency remeasurement of notes payable		638			—			—			—
Impairment of goodwill and intangibles		114,226			—			—			—
Stock-based compensation		750			122			—			290
Expense of stock options for non-employee services		—			—			—			124
Gain on sale of property and equipment		(650	)		(5,254	)		(3,060	)		(66	)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net		622			2,406			4,087			(21,228	)
Inventories		(5,813	)		2,790			19,674			18,952
Prepaid expenses and other current assets		6,256			752			(2,208	)		(5,521	)
Accounts payable		2,416			6,199			(274	)		7,230
Accrued expenses and other liabilities		(3,813	)		(8,135	)		(2,517	)		5,906
Unrealized foreign exchange adjustments		—			(1,071	)		(5,768	)		—

Net cash used in operating activities		(98,776	)		(50,173	)		(97,975	)		(84,698	)

Cash flows used in investing activities:
Purchase of intangible assets		—			(98	)		—			(138	)
Purchase of property and equipment		(16,008	)		(6,648	)		(19,186	)		(15,158	)
Proceeds from sale of property and equipment		1,429			5,254			7,105			66
Acquisitions, net of cash acquired		—			88,598			65			(18,090	)
Proceeds from long-term investments		—			(751	)		—			—
Proceeds from notes receivable		—			1,233			—			—
Settlement of Westrick note		1,200			—			—			—
Proceeds from disposal of subsidiaries, net of costs		5,736			—			—			—
Proceeds from sales and maturities of available for sale investments		6,978			—			—			—
Transfers to restricted cash, net		(1,671	)		(197	)		—			—


Net cash (used in)/provided by investing activities		(2,336	)		87,391			(12,016	)		(33,320	)

Cash flows provided by financing activities:
Proceeds from issuance of common stock		3			2,152			1,369			188
Proceeds from issuance of common stock warrant		55			—			—			—
Repayment of capital lease obligations		(5,132	)		(417	)		(227	)		(1,347	)
Proceeds from issuance of convertible debentures and warrants to purchase common stock, net of issuance costs		24,175			—			—			—
Repayment of loans		(4,175	)		(57	)		(49	)		—

Net cash provided by/(used in) financing activities		14,926			1,678			1,093			(1,159	)


Effect of exchange rate on cash		1,438			1,446		8,515			20,920
Net (decrease)/increase in cash and cash equivalents		(84,748	)		40,342		(100,383	)		(98,257	)
Cash and cash equivalents at beginning of period		109,682			69,340		169,723			267,980

Cash and cash equivalents at end of period	$	24,934		$	109,682	$	69,340		$	169,723

Supplemental cash flow disclosures
Income taxes paid	$	56		$	11	$	280		$	—
Cash paid for interest	$	4,196		$	1,658	$	3,131		$	586
Supplemental disclosure of non-cash transactions
Warrants issued in connection with debt	$	5,353,729		$	228,704	$	21,417		$	80,000

The accompanying notes form an integral part of these consolidated financial statements.

F-5

BOOKHAM, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)


													Accumulated Other
	Common Stock				Additional Paid-In			Notes Receivable		Deferred			Comprehensive			Accumulated			Comprehensive
	Shares		Amount		Capital			Stockholders		Compensation			Income/(Loss)			Deficit			Income/(Loss)			Total
Balance at January 1, 2002		13,016,041	$	130	$	582,218		$	—	$	(442	)	$	(15,030	)	$	(261,000	)	$			$	305,876
Conversion of shares in respect of Measurement Microsystems A-Z, Inc.		57,724		1		(1	)		—		—			—			—			—			—
Add back of contingent shares in respect of Measurement Microsystems A-Z Inc.		—		—		267			—		—			—			—			—			267
Issuance of shares on acquisition of the Marconi Optical Components business		1,289,100		13		27,998			—		—			—			—			—			28,011
Issuance of shares on acquisition of Nortel Networks Optical Components business		6,100,000		61		45,243			—		—			—			—			—			45,304
Issuance of warrants on acquisition of Nortel Networks Optical Components business		—		—		6,685			—		—			—			—			—			6,685
Issuance of shares upon exercise of common stock options		32,222		—		188			—		—			—			—			—			188
Amortization of deferred stock compensation		—		—		—			—		290			—			—			—			290
Issuance of non-employee stock options in exchange for services		—		—		—			—		124			—			—			—			124
Refund of value added taxes on IPO costs		—		—		72			—		—			—			—			—			72
Comprehensive loss:
Currency translation adjustment		—		—		—			—		—			26,729			—			26,729			26,729
Net loss for the year		—		—		—			—		—			—			(164,938	)		(164,938	)		(164,938	)

Total comprehensive loss		—		—		—			—		—			—			—		$	(138,209	)


Balance at December 31, 2002		20,495,087	$	205	$	662,670		$	—	$	(28	)	$	11,699		$	(425,938	)				$	248,608


Balance at December 31, 2002		20,495,087	$	205	$	662,670		$	—	$	(28	)	$	11,699		$	(425,938	)				$	248,608
Conversion of shares in respect of Measurement Microsystems A-Z, Inc.		873		—		—			—		—			—			—			—			—
Issuance of shares on the acquisition of the Cierra Photonics business		307,148		3		3,666			—		—			—			—			—			3,669
Issuance of shares on the acquisition of Ignis Optics, Inc.		802,082		8		17,740			—		—			—			—			—			17,748
Issuance of shares upon exercise of common stock options		63,429		1		1,134			—		—			—			—			—			1,135
Exercise of common stock warrants		12,282		—		234			—		—			—			—			—			234
Comprehensive loss:
Unrealized gain on currency transactions		—		—		—			—		—			274			—			274			274
Currency translation adjustment		—		—		—			—		—			18,474			—			18,474			18,474
Net loss for the year		—		—		—			—		—			—			(125,747	)		(125,747	)		(125,747	)

Total comprehensive loss		—		—		—			—		—			—			—		$	(106,999	)


Balance at December 31, 2003		21,680,901	$	217	$	685,444		$	—	$	(28	)	$	30,447		$	(551,685	)				$	164,395

The accompanying notes form an integral part of these consolidated financial statements.

F-6

BOOKHAM, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except share amounts)


														Accumulated Other
	Common Stock				Additional Paid-In			Notes Receivable			Deferred			Comprehensive			Accumulated			Comprehensive
	Shares		Amount		Capital			Stockholders			Compensation			Income/(Loss)			Deficit			Income/(Loss)			Total
Balance at December 31, 2003		21,680,901	$	217	$	685,444		$	—		$	(28	)	$	30,447		$	(551,685	)	$			$	164,395
Conversion of shares in respect of Measurement Microsystems A-Z, Inc.		1,081		—		—			—			—			—			—			—			—
Issuance of shares on the acquisition of New Focus, Inc.		7,866,600		78		197,632			—			—			—			—			—			197,710
Issuance of shares on the acquisition of Onetta, Inc.		2,764,030		28		24,680			—			—			—			—			—			24,708
Issuance of shares upon exercise of common stock options		299,943		3		2,149			—			—			—			—			—			2,152
Issuance of fully vested stock on the acquisition of New Focus, Inc.		—		—		6,286			—			—			—			—			—			6,286
Assumption of stockholder’s notes receivable from acquisition of New Focus Inc.		—		—		—			(1,233	)		—			—			—			—			(1,233	)
Assumption of unvested stock options on the acquisition of New Focus, Inc.		—		—		1,464			—			(1,464	)		—			—			—			—
Payments received on stockholder’s notes receivable		—		—		—			1,233			—			—			—			—			1,233
Amortization of deferred stock compensation, net of cancellations		—		—		(16	)		—			138			—			—			—			122
Comprehensive loss:
Unrealized loss on marketable securities		—		—		—			—			—			(16	)		—			(16	)		(16	)
Unrealized loss on currency contract transactions		—		—		—			—			—			(122	)		—			(122	)		(122	)
Currency translation adjustment		—		—		—			—			—			2,726			—			2,726			2,726
Net loss for the period		—		—		—			—			—			—			(67,371	)		(67,371	)		(67,371	)

Total comprehensive loss		—		—		—			—			—			—			—		$	(64,783	)

Balance at July 3, 2004		32,612,555	$	326	$	917,639		$	—		$	(1,354	)	$	33,035		$	(619,056	)				$	330,590


Balance at July 3, 2004		32,612,555	$	326	$	917,639		$	—		$	(1,354	)	$	33,035		$	(619,056	)				$	330,590
Exercise of common stock warrants by Nortel		900,000		9		46			—			—			—			—			$—			55
Issuance of restricted stock		249,859		3		779			—			(478	)		—			—			—			304
Issuance of shares on the exercise of options		811		—		4			—			—			—			—			—			4
Issuance of shares to CP Santa Rosa Enterprises Corp		38,810		—		—			—			—			—			—			—			—
Conversion of shares in respect of Measurement Microsystems A-Z Inc.		3,402		—		250			—			—			—			—			—			250
Beneficial conversion feature associated with convertible redeemable notes		—		—		1,969			—			—			—			—			—			1,969
Issuance of warrants in connection with convertible redeemable notes		—		—		5,354			—			—			—			—			—			5,354
Amortization of deferred stock compensation, net of cancellations		—		—		(364	)		—			1,024			—			—			—			660
Comprehensive loss:
Currency translation adjustment		—		—		—			—			—			(9	)		—			(9	)		(9	)
Unrealized loss on financial instruments		—		—		—			—		$	—			(137	)		—			(137	)		(137	)
Net loss for the period		—		—		—			—			—			—			(247,972	)		(247,972	)		(247,972	)

Total comprehensive loss		—		—		—			—			—			—			—		$	(248,118	)		—


Balance at July 2, 2005		33,805,437	$	338	$	925,677		$	—		$	(808	)	$	32,889		$	(867,028	)				$	91,068

The accompanying notes form an integral part of these consolidated financial statements.

F-7

BOOKHAM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Summary of Significant Accounting Policies

Description of Business

Bookham Technology plc was incorporated under the laws of England and Wales on September 22, 1988. On September 10, 2004, pursuant to a scheme of arrangement under the laws of the United Kingdom (the “Scheme”), Bookham Technology plc became a wholly-owned subsidiary of Bookham, Inc., a Delaware corporation (“Bookham, Inc.”). Bookham, Inc. principally designs, manufactures and markets optical components, modules and subsystems for the telecommunications industry. Bookham, Inc. also manufactures high-speed electronic components for the telecommunications, defense and space industries. References to the “Company” mean Bookham, Inc. and its subsidiaries consolidated business activities since September 10, 2004 and Bookham Technology plc’s consolidated business activities prior to September 10, 2004.

Basis of Presentation

At the time of the Company’s acquisition of Nortel Network’s optical components business (“NNOC”) in November 2002, a subsidiary of the Company issued a $30 million secured loan note due November 8, 2005 (the “$30m Note”) and a $20 million unsecured loan note due November 8, 2007 (the “Original $20m Note”) to affiliates of Nortel. The Original $20m Note was then exchanged for a $20 million note issued by the Company which was convertible into shares of the Company’s common stock in connection with the Company’s reorganization as a Delaware corporation in September 2004 (the “New $20m Note”).

On December 2, 2004, (i) the $30m Note was amended and restated to, among other things, extend the final maturity date by one year from November 8, 2005 to November 8, 2006 and (ii) the New $20m Note was amended and restated to, among other things, provide that it will not convert into the Company’s common stock (collectively, the “Amended and Restated Notes”). The Amended and Restated Notes are each secured by the assets that secured the $30m Note, as well as certain additional property, plant and equipment of the Company. The Amended and Restated Notes also contain certain limitations, including restrictions on asset sales and a requirement that the Company maintain a cash balance of at least $25 million.

On February 8, 2005, the Company, Bookham Technology plc, a wholly-owned subsidiary, and certain of the Company’s other subsidiaries entered into a Notes Amendment and Waiver Agreement with Nortel Networks Corporation and Nortel Networks UK Limited, relating to the $25 million cash balance covenant set forth in the Amended and Restated Notes. Under the waiver, the obligation to maintain this cash balance is waived until August 7, 2006.

On December 20, 2004, the Company closed a private placement of $25.5 million of the Company’s 7.0% senior unsecured convertible debentures and warrants to purchase common stock. The Company intends to use the net proceeds from the private placement for general corporate purposes, including, among other things, payment of outstanding indebtedness and working capital. The debentures may be converted into the Company’s common stock at the option of the holder prior to the maturity of the debentures on December 20, 2007. The conversion price of the debentures is $5.50, which represents a premium of approximately 16% over the closing price of the Company’s common stock on December 20, 2004. The debentures also may be converted into shares of common stock by the Company under certain circumstances. The warrants provide holders thereof the right to purchase up to 2,001,963 shares of common stock and are exercisable during the five-year period ending December 20, 2009 at an exercise price of $6.00 per share which represents a premium of approximately 26% over the closing price of the Company’s common stock on December 20, 2004.

Based upon management’s current cash flow forecasts, the Company will need to raise additional funding through external sources prior to December 2005 in order to maintain sufficient financial resources to continue to operate its business. In addition, depending on the amount of additional funding secured prior to December 2005, the Company will also need to raise further funding before June 2006 in order to maintain a cash balance of at least $25 million as required by the new terms of the Amended and Restated Notes.

The failure to raise additional capital would have a significant impact on the Company’s ability to continue operations. It is the Company’s belief that it will be able to raise additional funds through: (i) working capital financing and other forms of financing such as issuing debt, selling equity by means of a private placement or public offering, (ii) a sale of Company assets or non core businesses or (iii) issuing equity to acquire companies with substantial cash resources. The Company will pursue any one or a combination of the above in order to enable it to continue operations through the period to June 2006 and to maintain cash balances required pursuant to the Amended and Restated Notes.

The Company assumed Bookham Technology plc’s financial reporting history effective September 10, 2004. As a result, management deems Bookham Technology plc’s consolidated business activities prior to September 10, 2004 to represent the Company’s consolidated business activities as if the Company and Bookham Technology plc historically had been the same entity. The consolidated financial statements include Bookham, Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. The Company has included the results of operations of acquired entities from the date of acquisition (Note 13).

Until July 3, 2004, the Bookham Technology plc’s fiscal year ended on December 31. Effective June 30, 2004, Bookham Technology changed its fiscal year end from December 31 to the Saturday closest to June 30, which matches the fiscal year end of the Company. Accordingly, financial statements have been prepared for the six months ended July 3, 2004, the year ended July 2, 2005 and now will be prepared for fifty-two/fifty-three week cycles going forward.

In connection with the scheme of arrangement, the Company changed its domicile from the United Kingdom to the United States. In addition, effective September 10, 2004 the Company changed its reporting currency from pounds sterling to the United States dollar. During the year ended July 3, 2004, the Company has purchased four companies with primary operations in the United States. As a result of these acquisitions, the Company increased both its revenues from U.S. customers, as well as its operations and expenses denominated in U.S. dollars. Because of the continuing shift toward business denominated in U.S. dollars, the Company also changed its headquarters to San Jose, California in September 2004.

The consolidated balance sheets of the Company as of July 2, 2005 and July 3, 2004, and the related consolidated statements of operations for the year ended July 2, 2005, the six months ended July 3, 2004 and June 29, 2003 and the years ended December 31, 2003 and 2002, stockholders’ equity and cash flows for the year ended July 2, 2005, the six months ended July 3, 2004 and the years ended December 31, 2003 and 2002 contained in this Report on Form 10-K have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and have been translated

F-8

from pounds sterling into U. S. dollars using the exchange rates set forth below. Translation differences are recorded in other comprehensive income.


	Income statement		Balance sheet
	(average rates)		(period end rates)
Year Ended December 31, 2002		1.50		1.61
Year Ended December 31, 2003		1.74		1.78
Six Months Ended June 29, 2003 (unaudited)		1.61		1.66
Six Months Ended July 3, 2004		1.82		1.82
Year Ended July 2, 2005		1.86		1.79

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are used for, but are not limited to, the allowances for doubtful accounts; accruals for product returns; inventory write-offs and warranty accruals; the useful lives of fixed assets; impairment charges on long-lived assets, goodwill and other intangible assets; losses on facility leases and other charges; and accrued liabilities and other reserves. Actual results could differ from these estimates and such differences may be material to the financial statements.

Cash and Cash Equivalents

Cash and cash equivalents are recorded at market value. The Company considers all liquid investment securities with an original maturity date of three months or less to be cash equivalents. Any realized gains and losses on liquid investment securities are included in other income/(expense) in the consolidated statements of operations.

Restricted Cash

The Company has provided irrevocable letters of credit totaling $4,119,000 as collateral for the performance of its obligations under certain facility lease agreements. The letters of credit expire at various dates through 2007, and they are reflected in long-term restricted cash as of July 2, 2005. The Company also has approximately $3,260,000 of short-term restricted cash included in current assets, the substantial portion of which is reserved in escrow for payments of interest under its 7% convertible notes.

Inventories

Inventories are stated at the lower of cost (determined using the first in, first out method) or market value (determined using the estimated net realizable value). The Company plans production based on orders received and forecasted demand and maintains a stock of certain items. The Company must order components and build inventories in advance of product shipments. These production estimates are dependent on the Company’s assessment of current and expected orders from its customers, including consideration that orders are subject to cancellation with limited advance notice prior to shipment.

Property and Equipment

The Company records its property and equipment at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows:


Buildings		Twenty years
Plant and machinery		Three to five years
Fixtures, fittings and equipment		Three to five years
Computer equipment		Three years

No depreciation is recorded on land or assets in the course of construction

Assets Held For Resale

Assets are classified as held for resale when the Company has a plan for disposal of certain assets and those assets meet the held for sale criteria of Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for Impairment of Long-

F-9

Lived Assets and for Long-Lived Assets to Be Disposed Of. The Company has classified land which is being actively marketed for sale as held for resale. Negotiations with interested parties are ongoing, and the Company has evaluated the fair value of the land based on per acre sales data for recent property transactions in the region.

Long-Lived Assets Including Goodwill and Other Acquired Intangible Assets

The Company reviews property and equipment and certain identifiable intangibles, excluding goodwill, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and on an annual basis. Recoverability of these assets is measured by comparison of its carrying amounts to future undiscounted cash flows the assets are expected to generate. If property and equipment and certain identifiable intangibles are considered to be impaired, the impairment to be recognized would equal the amount by which the carrying value of the asset exceeds its fair market value.

The Company has adopted SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that they may be impaired.

SFAS No. 142 also requires that intangible assets with definite lives be amortized over their estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate an asset’s carrying value may not be recoverable in accordance with SFAS No. 144. The Company is currently amortizing its acquired intangible assets with definite lives over periods ranging from 3 to 6 years, and 16 years as to a specific customer contract.

In the third quarter of the year ended July 2, 2005, the continued decline in the Company’s share price, and therefore market capitalization, combined with continuing net losses and a history of not meeting revenue and profitability targets, suggested that the goodwill related to certain of its acquisitions may have been impaired. As a result of these triggering events, the Company performed a preliminary evaluation of the related goodwill balances. In the fourth quarter of 2005, in connection with its annual evaluation of goodwill, the Company finalized this evaluation, and also performed its annual evaluation of acquired intangible assets. In total, the Company recorded impairment charges of $114,226,000 for the year ended July 2, 2005, of which $113,592,000 related to goodwill and $634,000 related to intangibles. Of these charges, $83,326,000 related to the Research and Industrial segment, and $30,900,000 related to the Optics segment.

Foreign Currency Translation

The assets and liabilities of foreign operations are translated from their respective functional currencies into U.S. dollars at the rates in effect at the consolidated balance sheet date, and revenue and expense amounts are translated at the average rate during the applicable period reflected on the consolidated statements of operations. Foreign currency translation adjustments are recorded as other comprehensive income. Gains and losses from foreign currency transactions, realized and unrealized, and those transactions denominated in currencies other than the Company’s functional currency, are recorded in the consolidated statements of operations.

Derivative Financial Instruments

SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, requires the Company to recognize all derivatives, such as foreign currency contracts, on the consolidated balance sheet at fair value regardless of the purpose for holding the instrument. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged assets, liabilities or firm commitments through operating results or recognized in other comprehensive income/(loss) until the hedged item is recognized in operating results on the consolidated statements of operations.

For derivative instruments that are designated and qualify as a cash flow hedge, the purpose of which is to hedge the exposure to variability in expected future cash flows that is attributable to a particular risk, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income/(loss) on the consolidated statements of operations and reclassified into operating results in the same period or periods during which the hedged transaction affects operating results. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, is recognized in current operating results on the consolidated statements of operations during the period of change. For derivative instruments not designated as hedging instruments, the gain or loss is recognized as other income/(expense) during the period of change.

F-10

The Company is exposed to fluctuations in foreign currency exchange rates, interest rates and the prices of its common stock. As the business has grown and become multinational in scope, the Company has become subject to fluctuations based upon changes in the exchange rates between the currencies in which the Company collects revenue and pays expenses. The Company enters into foreign currency transactions in an effort to minimize the effects of fluctuations in exchange rates. In the majority of these contracts the Company agrees under certain circumstances to sell dollars in exchange for U.K. pound sterling.

The Company marks foreign currency contracts to market on a quarterly basis and the changes in fair value are recognized as other income/(expense). To date, the Company has not entered into any such contracts for longer than 12 months. At July 2, 2005, the Company has recorded an unrealized loss of $1.7 million to other expense, relating to the fair value of two foreign currency contracts that were not designated as hedges for accounting purposes that were outstanding as of the end of the year. As of July 2, 2005, the Company’s two outstanding foreign exchange contracts, which have not been designated as hedges for accounting purposes, amounted to an aggregate nominal value of approximately $50 million of put and call options expiring from July 2005 to March 2006.

Advertising Expenses

The cost of advertising is expensed as incurred. The Company’s advertising costs for fiscal year ended July 2, 2005, the six months ended July 3, 2004 and the fiscal years ended December 31, 2003 and 2002 were $473,000, $138,000, $0 and $197,000, respectively.

Revenue Recognition

Revenue represents the amounts (excluding sales taxes) derived from the provision of goods and services to third-party customers during the period. The Company’s revenue recognition policy follows Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, Revenue Recognition in Financial Statements. Specifically, the Company recognizes product revenue when persuasive evidence of an arrangement exists, the product has been shipped, title has transferred, collectibility is reasonably assured, fees are fixed or determinable and there are no uncertainties with respect to customer acceptance. For shipments to new customers and evaluation units, including initial shipments of new products, where the customer has the right of return through the end of the evaluation period, the Company recognizes revenue on these shipments at the end of an evaluation period, if not returned, and when collection is reasonably assured. The Company records a provision for estimated sales returns in the same period as the related revenues are recorded which is netted against revenue. These estimates are based on historical sales returns, other known factors and the Company’s return policy.

The Company recognizes royalty revenue when it is earned and collectibility is reasonably assured.

The Company applies the same revenue recognition policy to both of its segments.

Shipping and handling costs are included in costs of net revenues.

Research and Development

Company-sponsored research and development costs are expensed as incurred.

Income Taxes

The Company recognizes income taxes under the liability method. Deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date.

Stock-Based Compensation

The Company accounts for employee stock options using the intrinsic value method in accordance with Accounting Principles Board Opinion (“APB”) No. 25, Accounting for Stock Issued to Employees, and has adopted the disclosure-only alternative SFAS No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure. Under the intrinsic value method, the Company has only recorded stock-based

F-11

employee compensation resulting from stock options granted at below fair market value. Stock-based compensation expense reflected in the as reported net loss includes expenses for compensation expense related to the amortization of certain acquisition related deferred compensation expense. No tax benefits were attributed to the stock-based employee compensation expense during the periods presented because valuation allowances were maintained on substantially all of the Company’s net deferred tax assets.

The following table illustrates the pro forma effect on net loss and loss per share if the Company had applied the fair value recognition provisions of SFAS No. 123, as amended by SFAS No. 148, to stock-based employee compensation data:


	Year Ended			Six Months Ended			Year Ended December 31,
	July 2, 2005			July 3, 2004			2003			2002
	(in thousands except per share data)
Net loss—as reported	$	(247,972	)	$	(67,371	)	$	(125,747	)	$	(164,938	)
Add: Stock-based compensation cost, included in the determination of net income as reported		750			122			—			414
Deduct: Total stock-based employee compensation determined under the fair value method for all awards		(9,096	)		(6,751	)		(3,710	)		(10,754	)

Pro forma net loss	$	(256,318	)	$	(74,000	)	$	(129,457	)	$	(175,278	)

Loss per share:
Basic and diluted—as reported	$	(7.43	)	$	(2.48	)	$	(6.03	)	$	(10.92	)
Basic and diluted—pro forma	$	(7.68	)	$	(2.72	)	$	(6.21	)	$	(11.61	)

The weighted average fair value of stock options granted at fair market value during the year ended July 2, 2005, the six months ended July 3, 2004 and the years ended December 31, 2003 and 2002 was $6.15, $11.38, $20.80, and $12.30, respectively. The weighted-average fair value for stock options granted was calculated using the Black-Scholes option-pricing model based on the following assumptions:


	Year Ended			Six Months Ended			Year Ended December 31
	July 2, 2005			July 3, 2004			2003			2002
Volatility		186	%		194	%		147	%		191	%
Weighted-average estimated life	4.0 years			4.1 years			3.8 years			5.4 years
Weighted-average risk-free interest rate		2.9	%		2.9	%		3.4	%		4.3	%
Dividend yield		—			—			—			—

Comprehensive Income

For the year ended July 2, 2005, the six months ended July 3, 2004 and years ended December 31, 2003 and 2002, the Company’s comprehensive income is comprised of its net loss, unrealized gains on the Company’s hedging instruments, foreign currency translation adjustments and unrealized losses on available for sale investments. The components of accumulated other comprehensive income were as follows:


						December 31,
	July 2, 2005		July 3, 2004			2003		2002
	(in thousands)
Unrealized gains on currency instruments	$	—	$	153		$	274	$	—
Currency translation adjustment		32,889		32,898			30,173		11,699
Unrealized loss on marketable securities		—		(16	)		—		—

Accumulated other comprehensive income	$	32,889	$	33,035		$	30,447	$	11,699

F-12

Scheme of Arrangement

On August 16, 2004 at an extraordinary general meeting, the Company’s shareholders approved the scheme of arrangement pursuant to which, effective September 10, 2004, Bookham Technology plc became a wholly owned subsidiary of Bookham, Inc. Pursuant to the scheme of arrangement, Bookham Technology plc ordinary shares were exchanged for shares of common stock of Bookham, Inc. on a ten for one basis. All references in the consolidated financial statements and notes thereto with respect to the number of shares, per share amounts and market prices have been restated to reflect the scheme of arrangement.

Reclassifications

Certain reclassifications have been made to the balances as of and for the periods ended July 3, 2004, December 31, 2003 and December 31, 2002 to conform to the July 2, 2005 presentation, including the reclassification of gain on sale of property and equipment to operating expenses from other income (expense), net. Other reclassifications were immaterial and had no impact on the Company’s loss from operations or net loss.

Recent Accounting Developments

Concentration of Revenues and Credit and Other Risks

The Company places its cash and cash equivalents with and in the custody of financial institutions with high credit standing and, by policy, limits the amounts invested with any one institution, type of security and issuer.

For the year ended July 2, 2005, the six months ended July 3, 2004 and years ended December 31, 2003 and 2002, transactions with Nortel Networks accounted for approximately 45%, 46%, 59% and 31%, respectively, of the Company’s total revenues. For the year ended July 2, 2005, the six months ended July 3, 2004 and years ended December 31, 2003 and 2002, transactions with Marconi Communications accounted for approximately 3%, 9%, 13% and 38%, respectively, of the Company’s total revenues. These revenues were generated in the Company’s Optics segment. For the year ended July 2, 2005, the six months ended July 3, 2004 and years ended December 31, 2003 and 2002, no other customer accounted for more than 10% of the Company’s total revenues.

At July 2, 2005 and July 3, 2004, Nortel Networks accounted for 26% and 39% of the Company’s gross accounts receivable balance, respectively. At July 2, 2005 and July 3, 2004, Marconi Communications accounted for 2% and 15% of the Company’s gross accounts receivable balance, respectively. At July 2, 2005, Cisco Systems accounted for 16% of the Company’s gross accounts receivable balance and less than ten percent as of July 3, 2004. The Company performs ongoing credit evaluations of its customers and does not typically require collateral or guarantees.

Trade receivables are recorded at the invoiced value. Allowances for uncollectible trade receivables are based upon historical loss patterns, the number of days that billings are past due and an evaluation of the potential risk of loss associated with specific problem accounts.

Inventories

Inventories consist of the following:


	July 2, 2005		July 3, 2004
	(in thousands)
Raw materials	$	11,236	$	30,880
Work-in-progress		26,862		9,004
Finished goods		15,094		8,455

	$	53,192	$	48,339

Inventory is valued at the cost to acquire or manufacture the product less reserves of the inventory which prove to be unsaleable. The manufacturing cost will include the cost of the components purchased to produce products, the related labor and overhead. On a monthly basis, inventory is reviewed to determine if it is believed to be saleable. Products may be unsaleable because they are technically obsolete, due to substitute products or specification changes or because the Company holds an excessive amount of inventory relative to customer forecasts. Inventory is currently reserved using methods that take these factors into account. In addition, if it is determined that cost is greater than selling price then inventory is written down to the selling price less costs to complete and sell the product.

F-13

Property, Plant and Equipment


	July 2, 2005			July 3, 2004
	(in thousands)
Land	$	7,371		$	7,486
Buildings		22,691			29,508
Plant and machinery		61,453			52,969
Fixtures, fittings and equipment		1,596			2,502
Computer equipment		12,479			10,538

		105,590			103,003
Less accumulated depreciation		(41,434	)		(30,634	)

	$	64,156		$	72,369

Depreciation expense was $20,572,000, $7,755,000, $9,222,000 and $11,759,000 for the year ended July 2, 2005, the six months ended July 3, 2004, and the years ended December 31, 2003 and 2002, respectively.

Accrued Expenses and Other Liabilities

Accrued expenses and other current liabilities consist of the following:


	July 2, 2005		July 3, 2004
	(in thousands)
Accounts payable accruals	$	6,335	$	5,538
Compensation and benefits related accruals		6,408		10,831
Other accruals		7,007		9,645
Current portion of provisions for:
Restructuring		14,945		8,485
Warranty		3,782		3,852

	$	38,477	$	38,351

Other long term liabilities consist of the following:


	July 2, 2005		July 3, 2004
	(in thousands)
Restructuring provisions	$	9,888	$	12,221
Environmental provisions		1,004		1,132
Warranty provisions		—		754

	$	10,892	$	14,107

Movements in provisions for warranty are as follows:


	Provision for
	warranties
	(in thousands)
At January 1, 2002	$	—
Warranties issued		87
Arising on acquisition		1,545
Foreign exchange movements		120
Repairs and replacements		—

At December 31, 2002		1,752
Change in liability for pre-existing warranties, including expiration		—
Fair value adjustment		1,968
Warranties issued		846
Arising on acquisition		65
Foreign exchange movements		430
Repairs and replacements		—

At December 31, 2003		5,061

F-14


	Provision for
	warranties
	(in thousands)
Change in liability for pre-existing warranties, including expiration		(1,096	)
Arising on acquisition		569
Fair value adjustment		—
Foreign exchange movements		155
Repairs and replacements		(83	)

At July 3, 2004		4,606
Short-term portion		3,852

Long-term portion		754

At July 3, 2004		4,606
Change in liability for pre-existing warranties, including expiration		(327	)
Warranties issued		838
Foreign exchange movements		(35	)
Repairs and replacements		(1,300	)

At July 2, 2005		3,782

Short-term portion		3,782
Long-term portion		—

	$	3,782

Provision for warranties

The Company accrues for the estimated costs to provide warranty services at the time revenue is recognized. The Company’s estimate of costs to service its warranty obligations is based on historical experience and expectation of future conditions. To the extent the Company experiences increased warranty claim activity or increased costs associated with servicing those claims, the Company warranty costs will increase resulting in increases to gross loss.

Environmental Provision

The Company has provided for potential environmental liabilities at sites where the Company could be required to remove asbestos from its facilities following a change in U.K. legislation. The Company has an undiscounted provision relating to potential costs of future remediation works of $1,004,000 at July 2, 2005. The provision is expected to be utilized between 2005 and 2007. Following a review of potential soil contamination liabilities, environmental liabilities were reduced by $1,171,000 during the six months ended July 3, 2004 because of a reduction in the total estimated cost of remediation.

Commitments and Contingencies

Operating Leases

The Company leases its facilities under non-cancelable operating lease agreements that expire at various dates from 2006 through 2011. Net rent expense for these leases aggregated $8,856,000, $1,998,000, $5,565,000 and $4,463,000 for the year ended July 2, 2005, the six months ended July 3, 2004 and fiscal years ended December 31, 2003 and 2002, respectively.

The Company’s future minimum lease payments under non-cancelable operating leases are as follows (in thousands):


For Fiscal Year Ending on or about June 30,
2006	$	14,608
2007		11,975
2008		2,878
2009		1,228
2010		1,254
Thereafter		1,021

Total	$	32,964

Included in future minimum lease payments above is approximately $10,259,031 related to unoccupied facilities as a result of the Company’s restructuring activities. As of July 2, 2005, the aggregate future minimum sublease income to be received under non-cancelable subleases totaled approximately $265,000.

Guarantees

F-15

The Company adopted the provisions of Financial Accounting Standards Board (“FASB”) issued Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others, an interpretation of FASB Statements No. 5, 57 and 107 and a rescission of FASB Interpretation No. 34 (“FIN 45”) effective December 31, 2002. The Company has the following financial guarantees:

•

In connection with the sale by New Focus, Inc. of its passive component line to Finisar, Inc., New Focus agreed to indemnify Finisar for claims related to the intellectual property sold to Finisar. This indemnification expires in May 2009 and has no maximum liability. In connection with the sale by New Focus of its tunable laser technology to Intel Corporation, New Focus has indemnified Intel against losses for certain intellectual property claims. This indemnification expires in May 2008 and has a maximum liability of $7.0 million. The Company does not expect to pay out any amounts in respect of these indemnifications, therefore no accrual has been made.

•

In connection with the sale by the Company of JCA Technology, Inc. to Endwave Corporation on July 21, 2004, the Company agreed to indemnify Endwave Corporation against losses arising from breach of any representation or warranty of the Company contained in the purchase agreement and for certain claims arising from non-compliance with environmental laws prior to the closing date. This indemnification obligation expired on July 21, 2005 with no claims.

•

The Company indemnifies its directors and certain employees as permitted by law. Indemnification covers at least negligence and gross negligence on the part of indemnified parties. The Company has not recorded a liability associated with these indemnification agreements as the Company historically has not incurred any costs associated with such indemnifications. Costs associated with such indemnifications may be mitigated by insurance coverage that the Company maintains.

•

The Company also has indemnification clauses in various contracts that it enters into in the normal course of business, such as those issued by its bankers in favor of several of its suppliers or indemnification in favor of customers in respect of liabilities they may incur as a result of purchasing the Company’s products should such products infringe the intellectual property rights of a third party. The Company has not historically paid out any amounts related to these indemnifications and does not expect to in the future, therefore no accrual has been made for these indemnifications.

Litigation

On June 26, 2001, a putative securities class action captioned Lanter v. New Focus, Inc. et al., Civil Action No. 01-CV-5822, was filed against New Focus, Inc. and several of its officers and directors, or the Individual Defendants, in the United States District Court for the Southern District of New York. Also named as defendants were Credit Suisse First Boston Corporation, Chase Securities, Inc., U.S. Bancorp Piper Jaffray, Inc. and CIBC World Markets Corp., or the Underwriter Defendants, the underwriters in New Focus’s initial public offering. Three subsequent lawsuits were filed containing substantially similar allegations. These complaints have been consolidated. On April 19, 2002, plaintiffs filed an Amended Class Action Complaint, described below, naming as defendants the Individual Defendants and the Underwriter Defendants.

On November 7, 2001, a Class Action Complaint was filed against Bookham Technology plc and others in the United States District Court for the Southern District of New York. On April 19, 2002, plaintiffs filed an Amended Complaint. The Amended Complaint names as defendants Bookham Technology plc, Goldman, Sachs & Co. and FleetBoston Robertson Stephens, Inc., two of the underwriters of Bookham Technology plc’s initial public offering in April 2000, and Andrew G. Rickman, Stephen J. Cockrell and David Simpson, each of whom was an officer and/or director at the time of the initial public offering.

The Amended Complaint asserts claims under certain provisions of the securities laws of the United States. It alleges, among other things, that the prospectuses for Bookham Technology plc’s and New Focus’s initial public offerings were materially false and misleading in describing the compensation to be earned by the underwriters in connection with the offerings, and in not disclosing certain alleged arrangements among the underwriters and initial purchasers of ordinary shares, in the case of Bookham Technology plc, or common stock, in the case of New Focus, from the underwriters. The Amended Complaint seeks unspecified damages (or in the alternative rescission for those class members who no longer hold ordinary shares, in the case of Bookham Technology plc or common stock, in the case of New Focus), costs, attorneys’ fees, experts’ fees, interest and other expenses. In October 2002, the individual defendants were dismissed, without prejudice,

F-16

from the action. In July 2002, all defendants filed Motions to Dismiss the Amended Complaint. The motion was denied as to Bookham Technology plc and New Focus in February 2003. Special committees of the board of directors authorized the companies to negotiate a settlement of pending claims substantially consistent with a memorandum of understanding negotiated among class plaintiffs, all issuer defendants and their insurers.

Plaintiffs and most of the issuer defendants and their insurers have entered into a stipulation of settlement for the claims against the issuer defendants, including the Company. Under the stipulation of settlement, the plaintiff will dismiss and release all claims against participating defendants in exchange for a payment guaranty by the insurance companies collectively responsible for insuring the issuers in the related cases, and the assignment or surrender to the plaintiffs of certain claims the issuer defendants may have against the underwriters. On February 15, 2005, the Court issued an Opinion and Order preliminarily approving the settlement provided that the defendants and plaintiffs agree to a modification narrowing the scope of the bar order set forth in the original settlement agreement. The parties agreed to the modification narrowing the scope of the bar order, and on August 31, 2005, the court issued an order preliminarily approving the settlement and setting a public hearing on its fairness for April 24, 2006. The Company believes that both Bookham Technology, plc and New Focus have meritorious defenses to the claims made in the Amended Complaint and therefore believes that such claims will not have a material effect on its financial position, results of operations or cash flows.

On February 13, 2002, Howard Yue, the former sole shareholder of Globe Y. Technology, Inc., a company acquired by New Focus in February 2001, filed a lawsuit against New Focus and several of its officers and directors in Santa Clara County Superior Court. The lawsuit is captioned Howard Yue v. New Focus, Inc. et al, Case No. CV808031, and asserts claims stemming from New Focus’s acquisition of Globe Y. Technology, Inc. The plaintiff has amended his complaint several times following the Court’s dismissal of his earlier complaints. Currently, the plaintiff’s fifth amended complaint alleges the following causes of action against New Focus: violation of §25400 and §25500 of the California Corporations Code; violation of §§1709-1710 of the California Civil Code; violation of §25402 of the California Corporations Code; violation of §17200 and §17500 of the California Business & Professions Code; fraud and deceit by concealment; fraud and deceit by active concealment; fraud and deceit based upon non-disclosure of material facts; negligent misrepresentation; and breach of contract and the duty of good faith and fair dealing. The complaint seeks unspecified economic, punitive, and exemplary damages, prejudgment interest, costs, and equitable and general relief. In November 2004 New Focus filed answers to the plaintiff’s fifth amended complaint denying the plaintiff’s allegations and asserting various defenses.

In addition, in October 2003, New Focus filed a cross-complaint against Mr. Yue seeking damages in connection with Mr. Yue’s conduct during the acquisition of Globe Y. Technology, Inc., by New Focus. In February 2004, New Focus filed a corrected amended cross-complaint against Mr. Yue. In May 2004, Mr. Yue filed an answer to New Focus’s corrected amended cross-complaint denying New Focus’s allegations and asserting various defenses. In December 2004, plaintiff and defendants filed a motion for summary judgment and/or summary adjudication with respect to the corrected amended cross-complaint and certain causes of action in the fifth amended complaint. On April 26, 2005, the Court denied both plaintiff’s and defendant’s motions. The trial date had been set for November 14, 2005 and the Court has scheduled 15 days for the trial. The Company intends to conduct a vigorous defense of this lawsuit.

The Company does not believe that the results of these pending legal matters will have a material impact on its financial position, results of operations or cash flows, although it will incur legal fees in their defense.

Restructuring

In May 2004, the Company announced a plan of restructuring, primarily related to the transfer of our assembly and test operations from Paignton, UK to Shenzhen, China, along with reductions in research and development and selling, general and administrative expenses. In September 2004, we announced the inclusion in the plan of the transfer of our main corporate functions, including consolidated accounting, financial reporting, tax and treasury, from Abingdon, UK to our new U.S. headquarters in San Jose. In December 2004, we announced additional cost reduction measures designed to expand the savings under the plan to within a range of $16 million to $20 million per quarter which is expected to primarily affect the manufacturing, and also the research and development and selling, general and administrative lines in our income statement. In the third and fourth fiscal quarters of 2005 we recorded additional restructuring charges, primarily personnel and other costs needed to operate the Paignton assembly and test facility for approximately six months longer than originally intended, into the third quarter of fiscal 2006, in order to fulfill the level of product demand under the Second Addendum to the Supply Agreement with Nortel. In the fourth fiscal quarter of 2005, the Company also incurred charges related to revising certain assumptions on its accrual for lease commitments.

As of July 2, 2005, the Company has spent $11 million related to this plan ($10 million related to personnel and $1 million related to lease commitments). In total the Company expects to spend between $24 million to $30 million related to this plan (approximately 90% related to personnel and 10% related to lease commitments). Of this, $500,000 was accrued and spent in the year ended July 2, 2005 in the Research and Industrial segment. There are no additional expenditures expected in that

F-17

segment. Otherwise the plan relates to the Optics segment. The full cost savings of the plan are expected to be realized in nine to twelve months.

Prior to May 2004, the Company engaged in other restructuring plans. In the year ended December 31, 2003, the Company recorded charges for a separate major restructuring program, the main element of which was the closure of a semiconductor fabrication facility in Ottawa, Canada and the transfer of related fabrication capabilities to Caswell, UK. In the six months ended July 3, 2004, the Company recorded restructuring credits related to the completion of the closure of its Ottawa, Canada facility at less cost than anticipated. The transfer was successfully completed in August 2003. In connection with this transfer, certain products and research projects were discontinued. The company achieved annualized cost savings in excess of $25 million related to this plan, primarily related to the manufacturing and research and development lines in our income statement. In the year ended December 31, 2003, we achieved additional annualized savings in excess of $20 million as a result of the final decommissioning of the ASOC product line; a decision made in connection with the year ended 2002, and for which charges were recorded in 2002. Substantially all cash expenditures related to the 2003 restructuring plan have been incurred prior to July 3, 2004. All charges in the year ended December 31, 2003 were to the Optics segment.

Related to this restructuring plan, the Company also assumed $16,839,000 of restructuring charges primarily related to facilities commitments previously entered into by companies acquired by Bookham during that period, the substantial portion of which represents lease commitments in the Research and Industrial segment. The commitments as of July 2, 2005 related to these leases are included in the disclosures in Note 6 to these financial statements.

In the year ended December 31, 2002, the Company made the decision to discontinue its ASOC product lines, which included shutting down three sites responsible for manufacturing ASOC products. Substantially all cash expenditures related to this restructuring have been incurred prior to July 3, 2004. All charges in the year ended December 31, 2002 were to the Optics segment.

For all periods presented, separation payments were accrued and charged to restructuring in the period that both the benefit amounts were determined and the amounts had been communicated to the affected employees.

The following table summarizes the activity related to the restructuring liability for the year ended July 2, 2005:


	Accrued											Accrued
	restructuring			Amounts								restructuring
	costs at			charged to								costs at
	July 3,			restructuring					Amounts paid			July 2,
	2004			accrual		Adjustments			or written off			2005
						(in thousands)
Lease cancellations and commitments	$	19,579		$	7,462	$	(1,008	)	$	(7,500	)	$	18,533
Termination payments to employees and related costs		1,127			16,256		(535	)		(10,548	)		6,300
Write-off on disposal of assets and related costs		—			449		—			(449	)		—

Total restructuring accrual and other		20,706		$	24,167	$	(1,543	)		($18,497	)		24,833

Less non-current accrued restructuring charges		(12,221	)										(9,888	)

Accrued restructuring charges included within other accrued liabilities	$	8,485										$	14,945

The ending restructuring accrual as of July 2, 2005, and the amounts in restructuring costs for the year ended July 2, 2005, include $1,738,000 related to a revision of accruals for building leases commitments assumed on acquisition, resulting in a purchase price adjustment directly to goodwill. Excluding this amount, the net restructuring charge to the statement of operations for the year ended July 2, 2005 was $20,888,000 (charges of $24,167,000 less the purchase price adjustment of $1,738,000 less the adjustments of $1,543,000). The adjustments principally relate to the closure of the Millon, U.K. site at costs less than initially anticipated. Amounts paid or written off in the year ended July 2, 2005 includes $5,330,000 paid on lease accruals assumed on acquisition and $449,000 of assets written off, with the remainder of $12,718,000 being the cash paid under the Company’s restructuring plan.

F-18

The following table summarizes the activity related to the restructuring liability for the six month period ended July 3, 2004:


	Accrued												Accrued
	restructuring				Amounts								restructuring
	costs at		Amounts		charged to								costs at
	January 1,		assumed on		restructuring								July 3,
	2004		acquisition		accrual		Adjustments			Amounts paid			2004
	(in thousands)
Lease cancellations and commitments	$	5,030	$	16,815	$	—	$	(1,953	)	$	(313	)	$	19,579
Termination payments to employees and related costs		3,222		24		1,411		(122	)		(3,408	)		1,127

Total restructuring accrual and other		8,252	$	16,839	$	1,411	$	(2,075	)	$	(3,721	)		20,706

Less non-current accrued restructuring charges		—												(12,221	)

Accrued restructuring charges included within other accrued liabilities	$	8,252											$	8,485

The amount charged to restructuring in the statement of operations for the six month period ended July 3, 2004 is a credit of $(664,000), which represent charges of $1,411,000 less adjustments of $2,075,000.

The following table summaries the activity related to the restructuring liability for the year ended December 31, 2003:


	Accrued			Amounts					Accrued
	restructuring			charged to		Amounts			restructuring
	costs at			restructuring		paid or			costs at
	January 1, 2003			accrual		written off			December 31, 2003
				(in thousands)
Lease cancellations and commitments	$	2,898		$	6,703	$	(4,571	)	$	5,030
Termination payments to employees and related costs		1,127			20,888		(18,793	)		3,222
Write-off on disposal of assets and related costs		4,830			3,801		(8,631	)		—

Total restructuring accrual and other		8,855		$	31,392	$	(31,995	)		8,252

Less non-current accrued restructuring charges		(8,855	)							—

Accrued restructuring charges included within other accrued liabilities	$	—							$	8,252

The following table summarizes the activity related to the restructuring liability for the year ended December 31, 2002:


	Accrued		Amounts					Accrued
	restructuring		charged to		Amounts			restructuring
	costs at		restructuring		paid or			costs at
	January 1, 2002		accrual		written off			December 31, 2002
			(in thousands)
Lease cancellations and commitments	$	—	$	7,690	$	(4,792	)	$	2,898
Termination payments to employees and related costs		—		3,750		(2,623	)		1,127
Write-off on disposal of assets and related costs		—		43,650		(38,820	)		4,830

Accrued restructuring charges included within other accrued liabilities		—	$	55,090	$	(46,235	)		8,855

Less non-current accrued restructuring charges									(8,855	)

Accrued restructuring charges included within other accrued liabilities								$	—

F-19

Lease cancellations and commitments

The Company charged $7,462,000 of additional restructuring accrual for the year ended July 2, 2005 related to revised assumptions regarding subleasing facilities, $1,738,000 of this amount related to a pre-acquisition facility with the revised assumptions being assigned as a purchase price adjustment to the goodwill related to the acquisition of New Focus. For the six months ended July 3, 2004, due to the closure of certain sites at costs less than initially anticipated, the Company reversed approximately $1,953,000 of amounts previously accrued for the Ottawa site. The Company incurred closure costs of $6,703,000 and $7,690,000 for the years ended December 31, 2003 and 2002, respectively, for facilities consolidated or closed in Canada, the United States and the United Kingdom. These closure costs reflect the remaining contractual obligations under facility leases. On acquiring New Focus in June 2004, the Company assumed $16,815,000 of lease commitments related to facilities it was not going to use.

Termination payments to employees and related costs

The Company incurred restructuring charges of approximately $15,721,000, $1,289,000, $20,888,000 and $3,750,000 for the year ended July 2, 2005, the six months ended July 3, 2004 and the years ended December 31, 2003 and 2002, respectively, as separation pay. The separation payments were accrued and charged to restructuring costs in the period that both the benefit amounts were determined and such amounts were communicated to the affected employees. The employee reductions occurred in all areas of the Company. All of the employees to be terminated had been notified prior to the recording of the related charges. The majority of the personnel related to the restructuring accrual balances as of July 2, 2005 are associated with retention provisions related to fulfilling last time buys under the second amendment to the Nortel Supply Agreement prior to ultimate termination of the employees, which is expected to extend to the end of the third quarter of fiscal 2006.

Write-off on disposal of assets and related costs

The Company incurred restructuring charges of approximately $449,000, $0, $3,801,000 and $43,650,000 for the year ended July 2, 2005, the six months ended July 3, 2004 and the years ended December 31, 2003 and 2002, respectively, related to the carrying values of equipment abandoned at the Milton U.K. facility in connection with the restructuring. Included in the assets disposed of and charged to restructuring costs are office equipment and manufacturing equipment.

8. Employee Benefit Plan

In the United States, the Company sponsors a 401(k) Plan that allows voluntary contributions by eligible employees, who may elect to contribute up to the maximum allowed under the U.S. Internal Revenue Service regulations. The Company generally makes 25% matching contributions (up to a maximum of $2,000 per eligible employee per year) recognized costs of $642,000, $140,000, $101,000 and $18,000 for these matching provisions in the year ended July 2, 2005, the six months ended July 3, 2004 and the years ended December 31, 2003 and 2002, respectively.

The Company pays contributions into the Company’s defined contribution pension scheme for directors and employees. The Company also has a defined contribution plan for the benefit of one director. The Company’s contributions to the plans are charged to the profit and loss account in the year they which they relate. The Company does not accept any responsibility for the benefit gained from these schemes. Accordingly, the Company has no other liability in respect of these pension arrangements. There were $475,000, $859,000, $696,000 and $989,000 in respect of payments due to pension plans as of July 2, 2005, July 3, 2004, December 31, 2003 and 2002, respectively.

In August 2004, the Company closed the Bookham (Switzerland) AG pension scheme and recorded a one-time gain of $1.1 million from the release of a related acquisition provision. The Company has no further obligations under this arrangement.

The plan assets as of July 3, 2004 consisted of (in thousands):


Covering capital	$	3,862
Accumulated profit shares		273
Accumulated leaving profits		160
Free reserves		795
Other assets		2

Total plan assets	$	5,092

F-20

The actuarial basis for the obligations were based on the following assumptions:


Actuarial Method		The calculated cost shown in the report are computed using the projected unit credit cost method

Discount rate		An annual discount rate of 3.75% has been applied.

Expected return on plan assets		Expected net return of 4.5% across all investments.
Salary increase		2% per annum.
Pension increase		Currently estimated at 0%
Morality and disability		As per Swiss Federal Pension Fund tables.

In accordance with SFAS No. 87, Employers’ Accounting for Pensions, the following disclosure is required with respect to the Bookham (Switzerland)AG pension plan.

Balance Sheet


	July 3, 2004
	(in thousands)
Market value of plan assets	$	5,092
Projected benefit obligation		(5,821	)

Fund status		(729	)
Unrecognized actuarial loss		(385	)

Net liability	$	(1,114	)

Accumulated benefit obligation	$	(5,223	)

9. Income Taxes

The components of the provision for income taxes are as follows:


						Year Ended
						December 31,
	Year Ended		Six Months Ended
	July 2, 2005		July 3, 2004			2003			2002
	(in thousands)
Current:
Federal	$	—	$	—		$	—		$	—
State		4		—			—			—
Foreign		11		(209	)		(3,439	)		—

		15		(209	)		(3,439	)		—
Deferred:
Federal		—		—			—			—
State		—		—			—			—
Foreign		—		—			—			—

	$	15	$	(209	)	$	(3,439	)	$	—

Reconciliations of the income tax provision at the statutory rate to the Company’s provision for income tax are as follows:


	Year Ended			Six Months Ended			Year Ended December 31,
	July 2, 2005			July 3, 2004			2003			2002
	(in thousands)
Tax benefit at federal statutory rate	$	(86,784	)	$	(22,977	)	$	(43,923	)	$	(56,079	)
Domestic loss for which no tax benefit is currently recognizable		14,414			2,891			—			—
Foreign research & development credits		(500	)		(209	)		(3,720	)		—
Federal and state research and development credits		(418	)
Foreign losses with no current benefit		73,303			20,086			43,923			56,079
Foreign capital taxes		—			—			281			—

Provision for (benefit from) income taxes	$	15		$	(209	)	$	(3,439	)	$	—

F-21

Deferred taxation

Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:


	July 2,			July 3,			December 31,
	2005			2004			2003			2002
				(in thousands)
Deferred tax assets:
Net operating loss carryforwards	$	252,018		$	200,442		$	128,703		$	83,796
Depreciation and other		55,564			55,703			46,120			38,149
Inventory valuation		2,968			3,643			—			—
Accruals and reserves		5,233			8,693			—			—
Capitalized research and development		4,470			4,889			—			—
Tax credit carryforwards		10,180			9,491			—			—

Total deferred tax assets		330,433			282,861			174,823			121,945
Deferred tax liabilities		—			—			—			—
Valuation allowance		(330,433	)		(282,861	)		(174,823	)		(121,945	)

Net deferred tax assets	$	—		$	—		$	—		$	—

The valuation allowance increased by $47,572,000, $108,038,000, $52,878,000 and $56,959,000 for the year ended July 2, 2005, the six month period ended July 3, 2004 and the years ended December 31, 2003 and 2002 respectively.

Recognition of deferred tax assets is appropriate when realization of such assets is more likely than not. Based upon the weight of available evidence, which includes the Company’s historical operating performance and the recorded cumulative net losses in all prior fiscal periods, the Company has provided a full valuation allowance against its net deferred tax assets.

As of July 2, 2005, the Company had foreign net operating loss carryforwards of approximately $582,000,000, $16,000,000, and $45,000,000 in the U.K., Switzerland, and China, respectively. The U.K. net operating loss does not expire, the Switzerland net operating loss will expire completely in 2012 if unused and the China net operating loss will expire completely in 2010 if unused. The Company also has U.S. federal and state net operating losses of approximately $198,000,000 and $120,000,000, respectively, which will expire completely in 2025 if unused.

As of July 2, 2005, the Company has U.S. federal, state and foreign tax credit carryforwards of approximately $2,500,000, $11,400,000, and $300,000, respectively. The federal credit will expire completely in 2025 if unused. The state research and development credits can be carried forward indefinitely. The foreign credits will expire completely in 2015 if unused.

Utilization of the net operating loss carryforwards are subject to substantial annual limitations due to the ownership limitations provided by the Internal Revenue Code of 1986, as amended, similar state provisions and various foreign legislatures.

10. Stockholders’ Equity

The staff of the Nasdaq National Market has advised the Company that, in its judgment, the approval of Company’s 2004 Stock Incentive Plan (the “Plan”) was not sufficient to satisfy the stockholder approval requirements of with Nasdaq Marketplace Rule 4350(I)(1)(a) and must be submitted to the Company’s stockholders for approval. The Plan was adopted in good faith in connection with the Company’s reincorporation in the United States. The Company has agreed with the staff of the Nasdaq National Market, in order to avoid a determination of deficiency to submit the Plan to its stockholders at the annual meeting of stockholders scheduled to be held on October 26, 2005. The staff confirmed in its notice that the Company has provided a definitive plan evidencing its ability to achieve compliance with the Nasdaq Marketplace Rules and has given the Company until October 31, 2005 to regain compliance with the rules. Until the Plan is approved by stockholders, the Company has agreed, in accordance with

F-22

the applicable provisions of the Plan, that shares will not be granted upon the exercise of any options and that restrictions will not lapse on any shares of restricted stock issued under the Plan. In addition, the Company does not intend to grant further restricted stock awards unless and until the Plan is approved at the annual meeting and any further grants of options will be subject to stockholder approval. If the stockholders do not approve the Plan, the Company will be required to undertake to rescind any outstanding options, and seek to substitute alternative forms of equity incentive and other compensation.

At July 2, 2005, the Company had the following employee stock option plans:

2004 Stock Incentive Plan

Under the 2004 Stock Incentive Plan, eligible employees, officers, directors, consultants and advisors may be granted stock options, restricted stock and other equity incentives. On September 22, 2004, options to purchase 1,730,950 shares of common stock of the Company were granted to employees at an exercise price of $6.73 per share. One half of the options vest on a time based schedule (twenty-five percent vests one year from the grant date, with the remaining seventy-five percent vesting monthly over the next three years) and the remaining half vest on a performance based schedule. The performance based schedule options vest as follows: (i) fifty percent of the performance based shares vest when the Company achieves cash flow break-even (which is defined as the point when the Company generates earnings before interest, taxes, depreciation and amortization (excluding one-time items) that are greater than zero in any fiscal quarter) and (ii) the remaining fifty percent of these performance based shares vest upon the Company achieving profitability (which is defined as the point at which the Company generates a profit before interest and taxes (excluding one-time items) that is greater than zero in any fiscal quarter). Any unvested performance based options shall vest in full on September 22, 2009. Since the initial grants on September 22, 2004, an additional 115,028 options have been granted, 372,068 options have been cancelled and no options have vested or been exercised.

2001 Approved Sharesave Scheme

Under the 2001 Approved Sharesave Scheme, eligible employees and full-time directors could be granted options to purchase common stock. Options issued under the plan were dependent on the savings made by the participant and the option price. No options were exercised under this scheme during the year ended July 2, 2005. The 2001 Approved Sharesave Scheme expired on December 31, 2004.

1998 Employee Share Option Scheme

Pursuant to the 1998 Employee Share Option Scheme, eligible employees, officers and consultants could be granted options to purchase shares of Company common stock. During the year ending July 2, 2005, 156,200 options were granted under the 1998 Employee Share Option Scheme and options to purchase 1,601,039 shares of common stock were outstanding. The Company does not intend to grant additional options under the scheme.

1995 Employee Share Option Scheme

Pursuant to the 1995 Employee Stock Option Scheme, eligible employees, officers and consultants could be granted options to purchase shares of Company common stock. At July 2, 2005, there were outstanding options to purchase 58,673 shares of common stock. The Company does not intend to grant additional options under the scheme.

New Focus Stock Option Plans

In March 2004, the Company granted New Focus employees options to purchase 605,797 shares of its common stock upon the assumption of outstanding options granted under the 1999 and 2000 New Focus Stock Plans. In connection with the issuance of these options, the Company determined an intrinsic value related to future services of $1,463,000 and recorded this amount as deferred stock compensation to be expensed over the vesting periods, $122,000 of which was recorded as stock compensation expense in the six months ended July 3, 2004, $443,000 of which was recorded as stock compensation expense in the year ended July 2, 2005, and $340,000 of which remains as deferred stock compensation as of July 2, 2005. The difference between the opening value, the cumulative stock compensation expense, and the ending deferred stock compensation balance relates to employees who have left the Company prior to the vesting of their options. During the year ended July 2, 2005, 811 of these options were exercised. At July 2, 2005, there were outstanding options to purchase 113,630 shares of Company common stock under the 1999 and 2000 New Focus Stock Plans. The Company does not intend to grant additional options under these plans.

F-23

Restricted Stock

On February 9, 2005, the Company granted 249,859 shares of restricted commons stock to the Chief Executive Officer and the Chief Financial Officer (“the Participants”) under the Company’s 2004 Stock Incentive Plan. In connection with the grant, the Participants surrendered substantially all of their outstanding stock options as of that date. Pursuant to the terms of the award, the shares shall vest in their entirety and become free from transfer restrictions on the one year anniversary of the grant date provided that (A) the Participant has been continuously employed by the Company during the period, (B) on or before the anniversary, the Company has filed on a timely basis any report required pursuant to Item 308 of Regulation S-K of the Securities Act of 1933, as amended and (C) on the anniversary date, the Company does not have any material weakness that has not been remedied to the satisfaction of the Audit Committee of the Company’s board of directors. In the event the Participant’s employment with the Company is terminated for any reason other than his death, his disability or a change of control, all of the shares will be forfeited and the Participant shall have no further rights with respect to the shares. The Company recorded deferred compensation of approximately $782,000 representing the fair market value of the restricted shares on the date of the grant. The deferred compensation will be amortized over the term of the agreement as a charge to compensation expense, however, because there are performance metrics which prevent the shares from being vested over the term of the agreement, the grants will be revalued at each reporting period and deferred compensation will be adjusted accordingly. In connection with these shares, the Company recorded an expense of $307,000 for fiscal 2005.

A summary of the activity of stock option movements for all issuances is given below:


	Options			Weighted average
	Outstanding			exercise price
Outstanding at January 1, 2002		1,407,033		$	60.24
Granted		1,071,541			15.65
Exercised		(32,222	)		7.10
Cancelled		(258,434	)		65.34

Outstanding at December 31, 2002		2,187,918			33.85
Granted		993,363			21.11
Exercised		(63,429	)		19.84
Cancelled		(576,930	)		51.14

Outstanding at December 31, 2003		2,540,922			26.57

F-24


	Options			Weighted average
	Outstanding			exercise price
Granted		640,195			11.56
Assumed on acquisition of New Focus		605,797			2.90
Exercised		(299,943	)		9.41
Cancelled		(280,359	)		27.05

Outstanding at July 3, 2004		3,206,612			15.21
Granted		2,002,178			6.70
Exercised		(811	)		4.74
Cancelled		(1,960,727	)		13.90

Outstanding at July 2, 2005		3,247,252		$	16.40

The following summarizes option information relating to outstanding options under the Company’s stock option plans as of July 2, 2005:


					Options Outstanding				Options Exercisable
					Weighted Average
	Range of Exercise				Remaining		Weighted Average		Number		Weighted Average
	Prices		Number Outstanding		Contractual Life		Exercise Price		Exercisable		Exercisable Price
U.S. Plans:
	$	2.06-5.16		142,143		8.52	$	4.22		39,119	$	4.69
		5.17-6.73		1,374,250		9.25		6.73		—		—
		6.74-14.98		490,147		7.54		12.55		272,136		13.18
		14.98-510.28		290,805		6.28		24.75		210,361		24.69

		2.06-510.28		2,297,345		8.46		10.10		521,616		21.37

U.K. Plans:
		9.19-10.03		37,658		9.04		9.36		4,183		10.01
		10.04-10.87		254,893		8.92		10.86		73,934		10.86
		10.88-14.49		306,737		7.36		14.39		182,081		14.39
		14.50-22.38		143,898		6.73		20.91		109,630		21.06
		22.39-669.56		206,721		7.40		54.63		129,077		72.36

	$	9.19-669.56		949,907		7.76	$	22.99		498,905		30.30


	Total			3,247,252						1,020,521	$	25.37

Warrants and Stock Options Issued to Non-Employees

In 2002, the Company issued a warrant to purchase 900,000 shares of common stock to Nortel Networks as part of the purchase price for the acquisition of the optical components business of Nortel Networks. The Company valued the warrants at $6,685,000 based on the fair market value of the Company’s common stock as of the announcement date of the acquisition. The warrant was exercised in full on September 7, 2004 at the exercise price of approximately $0.06 per share.

F-25

During 2003, the Company assumed warrants to purchase 4,881 shares of common stock as part of the terms of acquisition of Ignis Optics. The warrants, which have an exercise price of $40.00 per share, were exercisable immediately and expire beginning in April 2008. As of July 2, 2005, all of these warrants remained outstanding.

In December 2004, in connection with the 7% convertible note private placement (Note 16), the Company issued warrants to purchase 2,001,963 shares of its common stock. These warrants are exercisable, they have an exercise price of $6.00 per share and expire on December 20, 2009.

In connection with the acquisition of Measurement Microsystems A-Z , Inc. (“MM”) in 2001, the Company issued exchangeable shares to the MM stockholders. The exchangeable shares were issued by Bookham Exchange, Inc., a wholly-owned subsidiary of Bookham Technology plc. The exchangeable shares were non-voting, preferred shares which were convertible at any time into shares of Bookham Technology plc, the then parent company of Bookham Exchange, Inc. During the year ended July 2, 2005, the six months ended July 3, 2004 and the years ended December 31, 2003 and 2002, MM stockholders exchanged 3,403, 1,081, 873 and 57,724 shares, respectively. As of July 2, 2005, the arrangement has been completed and no more shares will be issued or exchanged.

Notes Receivable from Stockholders

In connection with the acquisition of New Focus, the Company acquired secured full recourse loans aggregating approximately $1,233,000 which had been made to certain employees in connection with their purchase of New Focus common stock. Each of these loans was made pursuant to a full recourse promissory note secured by a stock pledge. As at July 3, 2004, the loans had been repaid in full.

Common Stock

Common stock reserved for future issuance is as follows:


	July 2, 2005
Stock option plan:
Outstanding options		3,247,252
Warrants and convertible debentures		6,643,208
Reserved for future grants		2,276,231

Total		12,166,691

11. Earnings per share

If the Company had reported net income, as opposed to a net loss, the calculation of diluted earnings per share would have included an additional 10,140,319, 4,145,000, 2,275,000 and 1,940,000 common equivalent shares related to outstanding share options and warrants (determined using the treasury stock method) for the year ended July 2, 2005, the six months ended July 3, 2004 and for the years ended December 31, 2003 and 2002, respectively.

12. Segments of an Enterprise and Related Information

The Company is currently organized and operates as two operating segments: Optics and Research and Industrial. The Optics segment designs, develops, manufactures, markets and sells optical solutions for telecommunications and industrial applications. The Research and Industrial segment designs, manufactures, markets and sells photonic and microwave solutions. The Company evaluates the performance of its segments and allocates resources based on consolidated revenues and overall profitability.

Segment and geographic information for the year ended July 2, 2005, the six months ended July 3, 2004 and June 29, 2003 and the years ended December 31, 2003 and 2002 is presented below. Revenues are attributed to countries based on the location of customers.

Information on reportable segments is as follows:

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				Six months
	Year Ended			Ended
	July 2,			July 3,			Year Ended December 31,
	2005			2004			2003			2002
				(in thousands)
Net revenues:
Optics	$	176,598		$	69,315		$	146,197		$	51,905
Research and industrial		23,658			10,448			—			—

Consolidated total revenues	$	200,256		$	79,763		$	146,197		$	51,905

Net loss:
Optics	$	(159,154	)	$	(59,321	)	$	(125,747	)	$	(164,938	)
Research and industrial		(88,818	)		(8,050	)		—			—

Consolidated net loss	$	(247,972	)	$	(67,371	)	$	(125,747	)	$	(164,938	)

Depreciation and amortization of tangible assets:
Optics	$	20,532		$	11,941		$	17,709		$	17,135
Research and industrial		221			1,491			—			—

Consolidated depreciation and amortization	$	20,753		$	13,432		$	17,709		$	17,135

Total expenditures for additions to tangible long life assets:
Optics	$	15,913		$	6,592		$	19,186		$	15,158
Research and industrial		95			56			—			—

Consolidated total expenditures for additions to long life assets	$	16,008		$	6,648		$	19,186		$	15,158

Information regarding the Company’s operations by geographic area is as follows:


	Year Ended		Six Months		Year Ended
	July 2,		Ended July 3,		December 31,
	2005		2004		2003		2002
Revenues:
United States	$	54,660	$	20,446	$	13,502	$	4,683
United Kingdom		15,727		4,023		25,454		31,910
Canada		85,168		35,529		78,207		11,235
Europe other than United Kingdom		19,274		8,797		13,230		3,560
Asia		24,439		10,875		14,986		479
Rest of the World		988		93		818		38

Consolidated total revenues	$	200,256	$	79,763	$	146,197	$	51,905


	July 2,		July 3,
	2005		2004
	(in thousands)
Net assets:
United States	$	47,066	$	171,227
United Kingdom		150,813		266,131
Canada		3,407		3,624
Europe other than United Kingdom		11,660		11,400
Asia		24,940		15,643

Total net assets	$	237,886	$	468,025


	July 2,		July 3,
	2005		2004
	(in thousands)
Long-lived tangible assets:
United States	$	2,229	$	3,944
United Kingdom		40,813		46,656
Canada		897		1,355

F-27


	July 2,		July 3,
	2005		2004
	(in thousands)
Europe other than United Kingdom		5,312		7,389
Asia		14,905		13,025

Total long-lived tangible assets	$	64,156	$	72,369

For the year ended July 3, 2004, JCA Technology, Inc.’s results consolidated in the research and industrial segment amounted to $2,400,000 of revenue and a loss of $500,000 and, at July 3, 2004, net assets of $1,600,000. The Company sold JCA Technology to Endwave Corporation in July 2004 and its results from July 3, 2004 to the date of sale were immaterial.

13. Business Combinations

During the year ended July 2, 2005, the six months ended July 3, 2004 and the years ended December 31, 2003 and 2002, the Company completed a total of six strategic acquisitions. Each of the acquisitions was accounted for under the purchase method of accounting. The allocation of the purchase price to the assets acquired and liabilities assumed, as determined by the Company, was conducted at the date of acquisition, with the assistance of third-party valuation experts, except for the acquisitions of the business of C.P. Santa Rosa Enterprises Corp., or Cierra Photonics, and Onetta, Inc. The methodologies used to value intangible assets acquired were consistently applied to each of the acquisitions.

To determine the value of the developed technology, the expected future cash flow attributed to all existing technology was discounted, taking into account risks related to the characteristics and application of the technology, existing and future markets and assessments of the lifecycle stage of the technology.

The value of in-process research and development, or IPR&D, was determined based on the expected cash flow attributed to in-process projects, taking into account revenue that is attributable to previously developed technology, the level of effort to date in the IPR&D, the percentage of completion of the project and the level of risk associated with the in-process technology. The projects identified as in-process are those that were underway at each of the acquired companies at the time of the acquisition and that required additional efforts in order to establish technological feasibility. The value of IPR&D was included in the Company’s results of operations during the period of the acquisition.

The value of the acquired patent portfolio was determined based on the income approach, as it most accurately reflected the fair value associated with unique assets such as a patent. Specifically, the relief from royalty method was utilized to arrive at an estimate of fair value. This methodology estimates the amount of hypothetical royalty income that could be generated if the patents were licensed by an independent, third-party owner to the business currently using the patents in an arm’s-length transaction. Conversely, this is the royalty savings enjoyed by the owners of the patent portfolio in that the owner is not required to pay a royalty for the use of the patents.

The value of supply contracts was determined based on discounted cash flows. The discounted cash flow method was considered to be the most appropriate methodology, as it reflects the present value of the operating cash flows generated by the contracts over their returns.

Onetta, Inc.

Onetta, Inc., or Onetta, designs and manufacturers optical amplifier modules and subsystems for communications networks. Their intelligent Erbium Doped Fiber Amplifiers (EDFA) incorporate advanced optics, control electronics and firmware to provide industry leading performance for current and next-generation optical communication networks On June 10, 2004, under the terms of the purchase agreement, the Company acquired the entire issued share capital of Onetta. The consideration for the acquisition was 2,764,030 shares of common stock valued at $24,708,000. As part of the agreement, the Onetta stockholders agreed to settle liabilities of Onetta in the amount of $6,083,000. In connection with the acquisition, there was no value allocated to IPR&D projects.

New Focus, Inc.

New Focus, Inc., or New Focus, provides photonics and microwave solutions to non-telecom diversified markets, including the semiconductor, defense, research, industrial, biotech/medical and telecom test and measurement industries. On March 8, 2004, under the terms of the merger agreement, the Company acquired New Focus by a merger of a wholly-owned subsidiary with and into New Focus, with New Focus surviving as the Company’s wholly-owned subsidiary. Pursuant to the merger agreement, immediately prior to the merger, each New Focus stockholder received a cash distribution from New Focus in the amount of $2.19 per share of New Focus common stock held on that date. The consideration paid by the Company for New Focus consisted of 7,866,600 shares of common stock, valued at $197,710,000, and the assumption of

F-28

options with a value of $6,286,000. Each of the assumed options became an option to purchase a unit consisting of 1.2015 shares of common stock. New Focus made a cash distribution of $2.19 for each share of New Focus common stock immediately prior to the merger. The exercise price of the assumed options was adjusted to reflect the cash distribution.

In connection with the acquisition of New Focus, $5.9 million of the $211.0 million total consideration was allocated to IPR&D projects. The NPI projects at the acquisition date were expected to result in the development of products to support the New Focus OEM and Catalog business. Catalog-related programs were focused on increasing the wavelength spectrum over which modulator products can operate and the development of detectors to operate at higher frequency with lower noise over a broader wavelength. Their first incorporation in shipments was in December 2004. Of the OEM related products: Two have been completed, namely the development of a super luminous diode light source for use in subsystems and a laser development for use high precision/high stability labs, and the final program for development of a small form factor laser for use in fiber sensing applications continues but has been slowed down due to lower than expected market opportunities emerging. There were no TR programs at the time of acquisition.

Ignis Optics, Inc.

Ignis Optics, Inc., or Ignis, designs and manufactures small form-factor, pluggable, single-mode optical transceivers for current and next generation optical datacom and telecom networks. On October 6, 2003, the Company acquired the entire share capital of Ignis in exchange for 802,081 shares of common stock and the assumption of warrants to purchase 4,880 shares of common stock, valued at $17,748,000. In addition, and subject to certain performance criteria, 78,084 additional shares of common stock could be issued in early 2005. No such shares were issued in the year ended July 2, 2005, and no such shares will be issued beyond July 2, 2005. In connection with the acquisition of Ignis, $1.9 million of the $18.0 million total consideration was allocated to IPR&D projects. The NPI projects under development at the acquisition date were expected to result in small form factor pluggable optical transceivers or component elements to these products and address quality and reliability requirements. Commercial shipments of the products began shipping during the second half of fiscal 2005. There were no TR projects at the time of acquisition.

Cierra Photonics, Inc.

Cierra Photonics, Inc., or Cierra, designs and manufactures thin-film filters and other components for the fiber optic telecommunications industry. Cierra Photonics Advanced Energetic Deposition (AED) technology is a specialized process for wafer-scale deposition of extremely well-controlled films that results in thin-film components that have lower costs, high yields and industry-leading optical performance. On July 4, 2003, the Company acquired substantially all of the assets and certain liabilities of Cierra. The consideration for the acquisition consisted of 307,148 shares of common stock valued at $3,669,000. In addition, and subject to the satisfactory achievement of specific sales milestones over the next two years, 420,000 additional shares of common stock could be issued to Cierra in 2004 and 2005. In the year ended July 2, 2005, 38,810 shares of such common stock were issued. In connection with the acquisition, there was no value allocated to IPR&D projects.

Nortel Networks Optical Components

Nortel Networks Optical Components, or NNOC, comprises the Optical Amplifier Business and the Transmitter and Receiver Business of Nortel Networks. The optical amplifier business, based in Paignton, United Kingdom and Zurich, Switzerland is a vertically integrated business, with 980nm and 14xx chip foundries, module assembly as well as broad raman pump units and long-haul EDFA offerings, for the long haul and metro network markets. The transmitter and receiver business is located in Ottawa, Canada and Paignton, United Kingdom and produces active components for metro, long-haul and ultra long-haul applications.

On November 8, 2002, the Company acquired NNOC for a total consideration of 6,100,000 shares of common stock, warrants to purchase 900,000 shares of common stock, notes with an aggregate principal value of $50 million and the payment of a cash consideration of $9,212,000, which equals an aggregate of approximately $111,201,000 (excluding deal costs). The common stock transferred to Nortel Networks had a value of $45,304,000, as determined on the announcement date of the acquisition. The warrants were exercised in full on September 7, 2004. The notes are in two series, the first is a $30 million principal amount secured loan note and the second, a $20 million principal amount unsecured loan notes. Nortel Networks beneficially held 11.9% of the Company’s common stock as of July 2, 2005. On December 2, 2004, the notes were amended and restated, and on February 7, 2005 and May 2, 2005 (effective April 1, 2005) additional note amendments and waiver agreements were entered into (see Note 16).

F-29

In connection with the acquisition, the Company also entered into a supply agreement with Nortel that has since been amended (see Note 15).

The Company valued the warrants issued to NNOC at $6,685,000 determined as the value of the Company’s common stock issued at closing based on the fair market value on the announcement date of the acquisition. The warrants were exercised in full on September 7, 2004 at an exercise price of approximately $0.06 per share.

Tangible assets acquired principally included property, plant and equipment and inventories. Liabilities assumed included provisions for environmental liabilities and certain employee related accruals.

Of the total consideration, the allocation to acquired IPR&D projects was $5,657,000. The projects remaining under development at the acquisition date were expected to result in a portfolio addressing tunability, bandwidth, integration, amplification, and managed optical networks. These projects were split into two distinct categories: NPI and Technology Research. The TR projects, which met the criteria for recognition as IPR&D, were assessed as requiring between 1 and 1¹/2 years before attaining NPI status.

All estimated costs to complete were to be funded from current cash reserves in Bookham. The current status of each category is given below.

NPI

	•		Amplifiers: The MiNi and Barolo platform products were successfully released in 2003 and continue to be shipped to customers.

	•		Pumps: The next generation of pumps incorporating the G07 higher power chip were successfully launched in 2003.

	•		Transmitters/Receivers: The majority of the Transmitters and Receivers in the NPI stage at acquisition have now been released to the market and are being shipped to customers. These include the 10 Gb/s 8x50 GaAs laser, the 100mW UHP laser, the Compact MZ laser, MSA receiver, a 10 Gb/s uncooled DFB directly modulated laser and hot pluggable transponder modules. A couple of programs, mainly comprising or modules including tunable lasers have been rephased due to slower market demand for the new technology.

Technology Research

	•		Amplifiers: Activity on these projects has slowed significantly due to weakening market demand and pricing pressure. Since the date of acquisition, substantially all of the technology work-in-progress has been completed or absorbed into products.

	•		Pumps/Transmitter/Receivers: Since the date of acquisition, substantially all of the technology work-in-progress has been completed or absorbed into products.

Marconi Optical Components (MOC)

Marconi Optical Components, or MOC, designs, manufactures and supplies current and next generation active optical components. MOC’s products include fixed and tunable lasers, high-speed gallium arsenide modulators, transmitters, receivers and erbium doped fibre amplifiers. MOC has over twenty five years experience of advanced research and development in the area of optical technologies, compound semiconductor materials and semiconductor manufacturing processes. MOC has an intellectual property portfolio relating to lasers, high-speed modulators, optical amplifiers and general micro-optics and processes.

In accordance with the MOC acquisition agreement, the Company paid $1,843,000 in cash and issued 1,289,100 shares of common stock having a value equal to approximately $28,011,000 determined as of the closing, based on the fair market value of the securities on the announcement date. Tangible assets acquired principally include fixed assets and inventories. In connection with the acquisition of the assets of MOC, $5,922,000 was allocated to IPR&D projects. The remaining projects under development at the acquisition date were expected to result in a portfolio addressing tunability, bandwidth, integration, amplification, and managed optical networks. The expected dates of release of these projects ranged from seven to seventeen months from the date of acquisition. There were three main programs acquired in the NPI stage of development. All estimated

F-30

costs to complete were to be funded from current cash reserves in Bookham, unless stated to the contrary. The current status of each category is given below:

	•		Fast tuning, wide coverage, tunable lasers: Development of these products was suspended post-acquisition in favor of alternative technologies. Technology work has continued to eliminate many of the fundamental limitations of the chip. A development program for a laser and module has been launched with product availability expected in the second half of calendar 2005.

	•		10 Gb/s Transmitters: This program was rephased as a result of wafer fab and assembly and test facility transfers. An integrated narrow band tunable transmitter has been completed and shipping to the customer commenced in 2003. The wide band transmitter was discontinued in 2003.

	•		40 Gb/s Transmitters and Receivers: Following the acquisition, the program was suspended as the market conditions for acceptance of this product have changed, and there was overlap with products being developed/marketed by the acquired Nortel Networks businesses. While we continue to believe that this market will develop in the future, there are no plans at this stage to continue with this program.

A summary of the purchase price allocations pertaining to the above acquisitions and the amortization periods of the intangible assets acquired is as follows:


	Onetta		New Focus		Ignis		Cierra		NNOC		MOC
	(in thousands)
Purchase price:
Ordinary stock issued	$	24,708	$	197,710	$	17,748	$	3,669	$	45,304	$	28,011
Stock options assumed		—		6,286		—		—		—		—
Warrants		—		—		—		—		6,685		—
Loan notes		—		—		—		—		50,000		—
Cash		—		—		—		—		9,212		—

		24,708		203,996		17,748		3,669		111,201		28,011
Transaction and other direct acquisition costs		274		7,261		300		249		7,800		1,843

	$	24,982	$	211,257	$	18,048	$	3,918	$	119,001	$	29,854


Allocation of purchase price:
Cash	$	1,238		$	111,325		$	3,139		$	—		$	—		$	—
Accounts receivable		1,004			2,588			75			560			—			—
Inventory		1,897			3,871			648			102			61,927			10,385
Fixed Assets		847			15,645			1,883			1,673			32,461			4,837
Other assets		9,180			9,896			127			60			—			—
Accounts payable and other liabilities		(10,386	)		(37,138	)		(1,417	)		(1,634	)		(8,427	)		—

Net tangible assets acquired		3,780			106,187			4,455			761			85,961			15,222
Supply contracts and customer relationships		—			606			—			—			6,878			978
Customer database		—			135			—			—			—			—
Patent portfolio		—			2,317			913			216			7,906			1,817
Core and current technology		—			6,597			775			2,941			12,599			5,915
In process research and development		—			5,890			1,878			—			5,657			5,922
Goodwill		21,202			89,525			10,027			—			—			—

Total net assets acquired	$	24,982		$	211,257		$	18,048		$	3,918		$	119,001		$	29,854


Amortization period (in years):
Supply contracts/customer relationships		—			3			—			—			3 - 16			4 - 5
Customer database		—			5			—			—			—			—
Patent portfolio		—			6 - 10			5			6			5			4 - 5
Core & current technology		—			3 - 6			5			5			5			4 - 5

As of July 2, 2005, the weighted average amortization period for intangibles is 5.8 years, including 7.8 years for supply contracts, 5 years for customer database, 5.7 years for patents and 5.4 for core technology.

F-31

On November 8, 2002, the Company acquired the trade and assets of NNOC, the net assets of which were provisionally valued in the 2002 accounts. In accordance with SFAS No. 141 “Business Combinations”, an adjustment was made in the 2003 accounts for amendments to those provisional values. This adjustment was principally the result of the company selling more inventory than anticipated during 2003.

During 2003, a larger amount of inventory was sold than was expected at the time the acquisition of NNOC was completed in 2003. As a consequence, the Company increased the value of the inventory by $20,227,000, reduced intangible assets by $9,134,000 and decreased other net assets by $11,093,000 as part of the allocation fair value of the remaining assets as summarized below.

The warranty provision recognized on acquisition has been increased by $1,968,000 following a review of the level of expected warranty costs. In addition, the initial value recognized for historic employee-related costs has been reduced by $590,000 a revised valuation and settlement of the pension scheme in Switzerland.

In accordance with SFAS No. 141, Business Combinations, the Company revises the value of acquired net assets when the initial assigned revaluation is provisional. The final revision of the purchase price allocation of proceeds related to the acquisition of NNOC led to the following changes in the year ended December 31, 2003:


	Original Purchase		Purchase Price			Revised Purchase
	Price Allocation		Adjustments			Price Allocation
	(in thousands)
Purchase price	$	111,201	$	—		$	111,201
Transaction and other direct acquisition costs		7,800		—			7,800

	$	119,001	$	—		$	119,001

Allocation of purchase price:
Net tangible assets acquired	$	76,827	$	9,134		$	85,961
Intangible assets acquired:
Supply contracts		8,862		(1,984	)		6,878
Patent portfolio		9,988		(2,082	)		7,906
Core and current technology		16,034		(3,435	)		12,599
In process research and development		7,290		(1,633	)		5,657

	$	119,001	$	—		$	119,001

The final revision of the purchase price allocation of proceeds related to the acquisition of New Focus led to the following changes in the year ended July 2, 2005:


	Original Purchase		Purchase Price			Revised Purchase
	Price Allocation		Adjustments			Price Allocation
	(in thousands)
Purchase price	$	203,996	$	—		$	203,996
Transaction and other direct acquisition costs		6,969		292			7,261

	$	210,965	$	292		$	211,257

Allocation of purchase price:
Historical net tangible assets acquired	$	101,665	$	4,522		$	106,187
Intangible assets acquired:
Supply contracts		625		(19	)		606
Customer database		606		(471	)		135
Patent portfolio		2,317		—			2,317
Core and current technology		10,563		(3,966	)		6,597
In process research and development		5,890		—			5,890
Goodwill		89,299		226			89,525

	$	210,965	$	292		$	211,257

During the year ended July 2, 2005, the Company finalized the allocation of the proceeds of the acquisition of New Focus prior to the Company’s evaluation of goodwill for impairment (see Note 14). The adjustments to the purchase price allocation, as summarized above, arose from two principal areas; namely, the completion of the anticipated sale of JCA; and the finalization of certain judgements as to the realization of other acquired assets and liabilities.

The JCA sale impacted the purchase price allocation as follows: Net tangible assets acquired were increased through the receipt of cash of $5.9 million; intangible assets were decreased through the sale of $4.6 million of supply contracts, customer database and the patent portfolio; and a resultant decrease in goodwill of $1.3 million.

The finalization of certain judgements as to the realization of other acquired assets and liabilities included: an increase of $0.4 million of refunds due from the lessor of certain of the Company’s leased premises; a $1.7 million increase in building lease liabilities relating to acquired premises; a $0.9 million saving in expected acquisition related tax expenses; a $0.6 million reduction in the expected settlement of a note due from a former New Focus officer; and a reduction of $0.4 million in the carrying value of an investment acquired in connection with acquiring New Focus. These adjustments impacted the purchase price allocation as follows: net tangible assets acquired were decreased by $5.9 million; and goodwill was increased by $1.5 million.

The following unaudited proforma summary shows the consolidated results of Bookham had the acquisitions of Onetta, New Focus, Ignis and Cierra been completed on January 1, 2003. It is provided for illustrative purposes and is not indicative of

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the consolidated results of operations for future periods or that actually would have been realized had Bookham actually acquired those companies on the dates assumed.


	Six Months Ended			Year Ended
	July 3, 2004			December 31, 2003
Revenues	$	87,763		$	180,207
Net loss	$	82,380		$	168,832
Basic and diluted loss per share	$	(3.03	)	$	(8.10	)

The following unaudited proforma summary shows the consolidated results of Bookham had the acquisitions of NNOC and MOC been completed on January 1, 2001. It is provided for illustrative purposes and is not indicative of the consolidated results of operations for future periods or that actually would have been realized had Bookham actually acquired those companies on the date assumed.


	Year Ended
	December 31, 2002
Revenues	$	187,880
Net loss	$	601,918
Basic and diluted loss per share	$	(39.86	)

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14. Goodwill and other intangibles

The following is a summary of the goodwill and other intangible assets:


	Goodwill			Intangibles
	(in thousands)
Cost
At January 1, 2002	$	1,530		$	3,796
Acquired		—			43,733
Disposals		(1,583	)		(858	)
Exchange rate allocation		53			2,252

At December 31, 2002		—			48,923
Fair value adjustment to NNOC		—			(7,501	)
Acquired		10,027			4,845
Disposals		—			(605	)
Exchange rate adjustment		647			4,380

At December 31, 2003		10,674			50,042
Acquired		110,501			14,209
Exchange rate adjustment		(1,222	)		1,078

At July 3, 2004		119,953			65,329
Acquired		226			—
Disposals		—			(6,568	)
Impairment		(113,592	)		(634	)
Exchange rate adjustment		(327	)		(579	)

At July 2, 2005	$	6,260		$	57,548


Accumulated Amortization
At January 1, 2002	$	1,530		$	1,380
Charged		—			5,376
Disposals		(1,583	)		(858	)
Exchange rate adjustment		53			484

At December 31, 2002	$	—			6,382

Fair value adjustment					(190	)
Charged					8,487
Disposals					(518	)
Exchange adjustment					1,325

At December 31, 2003					15,486
Charged					5,677
Exchange rate adjustment					317

At July 3, 2004					21,480
Charged					11,107
Disposals					(2,413	)
Exchange rate adjustment					(636	)

At July 2, 2005				$	29,538


Net Book Value
Net book value at December 31, 2002	$	—		$	42,541
Net book value at December 31, 2003	$	10,674		$	34,556
Net book value at July 3, 2004	$	119,953		$	43,849
Net book value at July 2, 2005	$	6,260		$	28,010

Intangible assets consist of the following:

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				Disposal of
	Balance at			Subsidiary												Translation			Balance at
	July 3, 2004			(JCA)			Impairment			Disposals			Additions			Adjustment			July 2, 2005
	(in thousands)
Supply agreements	$	5,482		$	—		$	—		$	(1,242	)	$	—		$	(83	)	$	4,157
Customer relationships		617			(10	)		(120	)		—			—			—			487
Customer databases		599			(467	)		—			—			—			—			132
Core and current technology		36,660			(620	)		(156	)		(870	)		—			(264	)		34,750
Patent portfolio		14,951			(41	)		(358	)		—			—			(175	)		14,377
Capitalized licenses		3,318			(3,318	)		—			—			—			—
Customer contracts		3,702			—			—			—			—			(57	)		3,645

		65,329			(4,456	)		(634	)		(2,112	)		—			(579	)		57,548
Less accumulated amortization		(21,480	)		—			—			2,413			(11,107	)		636			(29,538	)

Intangible assets, net	$	43,849		$	(4,456	)		(634	)	$	301			(11,107	)	$	57		$	28,010


	Balance at								Translation			Balance at
	January 1, 2004			Additions			Acquisitions		Adjustment			July 3, 2004
	(in thousands)
Supply agreements	$	5,361		$	—		$	—	$	121		$	5,482
Customer relationships		—			—			625		(8	)		617
Customer databases		—			—			606		(7	)		599
Core and current technology		25,569			—			10,563		528			36,660
Patent portfolio		12,342			—			2,317		292			14,951
Capitalized licenses		3,148			98			—		72			3,318
Customer contracts		3,622			—			—		80			3,702

		50,042			98			14,111		1,078			65,329
Less accumulated amortization		(15,486	)		(5,677	)		—		(317	)		(21,480	)

Intangible assets, net	$	34,556		$	(5,579	)	$	14,111	$	761		$	43,849


	Balance at								Fair Value			Reclassifications			Translation			Balance at
	January 1, 2003			Additions			Acquisitions		Adjustment			and disposals			Adjustment			December 31, 2003
	(in thousands)
Supply agreements	$	5,926		$	—		$	—	$	(1,057	)	$	—		$	492		$	5,361
Core and current technology		23,086			—			3,716		(3,435	)		—			2,202			25,569
Patent portfolio		12,249			—			1,129		(2,082	)		—			1,046			12,342
Capitalized licenses		2,848			—			—		—			—			300			3,148
Customer contracts		4,220			—			—		(927	)		—			329			3,622
Capitalized professional fees		594			—			—		—			(605	)		11			—

		48,923			—			4,845		(7,501	)		(605	)		4,380			50,042
Less accumulated amortization		(6,382	)		(8,487	)		—		190			518			(1,325	)		(15,486	)

Intangible assets, net	$	42,541		$	(8,487	)	$	4,845	$	(7,311	)	$	(87	)	$	3,055		$	34,556

Goodwill

On June 10, 2004, Bookham acquired Onetta for a total consideration of $24,982,000 (Note 13). The goodwill arising from this combination was $21,202,000.

On March 8, 2004, Bookham acquired New Focus for a total consideration of $211,257,000 (Note 13). The goodwill arising from the acquisition was $89,299,000.

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On October 6, 2003, Bookham acquired Ignis for a total consideration of $18,048,000 (Note 13). The goodwill arising from this combination was $10,027,000.

No other acquisitions by the Company resulted in recognition of goodwill in the year ended July 2, 2005 or the period six month ended July 3, 2004 or the years ended December 31, 2003 and 2002.

Goodwill recorded as part of the New Focus acquisition was recorded to the Research and Industrial segment and the goodwill from all other acquisitions was recorded in the Optics segment.

Intangible Assets

Intangible assets have primarily been acquired through business combinations and are being amortized on a straight line basis over the estimated useful life of the related asset, generally three to six years, except for sixteen years as to a specific customer contract.

The expected future annual amortization expense of the other intangible assets is as follows (in thousands):


For the fiscal year ending on or about June 30,
2006	$	10,028
2007		8,466
2008		4,263
2009		1,379
2010		756
Thereafter		3,118

Total expected future amortization	$	28,010

Impairment

In the third quarter of the year ended July 2, 2005, the continued decline in the Company’s share price, and therefore market capitalization, combined with continuing net losses and a history of not meeting revenue and profitability targets, suggested that the goodwill related to certain of its acquisitions may have been impaired. As a result of these triggering events, the Company performed a preliminary evaluation of the related goodwill balances. In the fourth quarter, the Company finalized this evaluation during its annual evaluation of goodwill, and also performed its annual evaluation of acquired intangible assets. In performing these evaluations, the Company applied discounted future cash flow models as permitted by SFAS No. 142.

In total, the Company recorded impairment charges of approximately $114,226,000, approximately $113,592,000 related to goodwill associated with New Focus, Ignis and Onetta, and approximately $634,000 related to intangibles of New Focus, including patents and other technology, for the year ended July 2, 2005. Approximately, $83,326,000 of these charges related to the Research and Industrial segment, and approximately $30,900,000 related to the Optics segment.

Other

During the year ended July 2, 2005, the Company finalized the allocation of the proceeds of the acquisition of New Focus, which involved removing the net assets of JCA from the allocation due to JCA being sold as previously contemplated, increasing accruals and goodwill by $1,738,000 related to revised assumptions on a building lease assumed from New Focus, and increased the purchase price to be allocated by $292,000 for additional professional fees.

During 2003 the Company conducted a Purchase Price Allocation review of its acquisition of NNOC, and identified the need to adjust the original fair value of the fixed assets and inventory. This resulted in an adjustment of the values of all the remaining assets and consequential adjustments of the amortization and depreciation thereof. This adjustment reduced the value of the intangible assets by $7,501,000 and created a reversal of depreciation of $207,000 (Note 13).

During 2002, the Company’s investment in Measurement Microsystems A-Z Inc. (MM), was reduced, resulting in the Company ceasing to control MM. As a result, the Company eliminated the cost and accumulated depreciation of $858,000 in

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respect of MM’s intangible assets. The Company wrote off a further $605,000 in respect of MM’s capitalized professional fees (with net book value of $92,000) in 2003.

15. Related Party Transactions

During the year, the Company entered into transactions in the ordinary course of business with Nortel and other related parties. Transactions entered into, and trading balances outstanding at July 2, 2005 and July 3, 2004 and December 31, 2003 and 2002, are as follows:


					Amounts		Amounts
	Sales to related		Purchases from		owed from		owed to
	party		related party		related party		related party
	(in thousands)
Related party
Nortel Networks
July 2, 2005	$	89,505	$	508	$	7,271	$	722
July 3, 2004		36,532		818		11,553		628
December 31, 2003		85,593		9,499		15,133		739
December 31, 2002		16,267		789		13,564		844
Marconi Communications
July 2, 2005		6,348		—		569		—
July 3, 2004		7,385		2		4,401		—
December 31, 2003		18,147		—		3,731		—
December 31, 2002		19,769		2,019		11,140		—

Nortel

In connection with its commercial dealings with the Company, Nortel Networks has perfected security interests in much of the Company’s assets arising from the Notes and Supply Agreement discussed below. Specifically, Nortel retains an interest in our accounts receivable specific to them, which amounted to $7.3 million at July 2, 2005, certain intellectual property arising from the NNOC acquisition, and certain property, plant and equipment. Additionally, Nortel has a right to off-set their accounts receivables against the debt owed to Nortel should certain default events occur. Nortel also retains a security interest in our Swindon land in U.K. which is currently being held for resale in the amount of $13.7 million, however, under the terms of the May 2, 2005 Agreement, we are permitted to sell such land and retain 100% of the proceeds. Furthermore, Nortel has as collateral, all of our inventory which is specific to them, which is difficult to quantify at any given point due to the subjective nature of the term as well as the frequency of inventory movements between the companies.

At the time of the Company’s acquisition of NNOC in November 2002, a subsidiary of the Company issued a $30 million secured loan note due November 8, 2005 (the “$30m Note”) and a $20 million unsecured loan note due November 8, 2007 (the “Original $20m Note”) to affiliates of Nortel. In connection with the issuance of these notes, the Company and Nortel entered into security agreements with respect to certain assets of the Company. In September 2004, the Original $20m Note was exchanged for a $20 million note convertible into shares of the Company’s common stock (the “New $20m Note”). See Note 16.

On February 7, 2005, the Company, Bookham Technology plc, a wholly-owned subsidiary, and certain of the Company’s other subsidiaries entered into a Notes Amendment and Waiver Agreement with Nortel Networks Corporation and Nortel Networks UK Limited, relating to the $25 million cash balance covenant set forth in the Amended and Restated Notes. Under the waiver, the obligation to maintain this cash balance is waived until August 7, 2006.

F-37

On February 7, 2005, the Company also entered into an addendum (the “The First Addendum”) to the Optical Components Supply Agreement with Nortel Networks Limited dated November 8, 2002 (the “Supply Agreement”). The First Addendum effects the following changes to the Supply Agreement:

•		The term of the Supply Agreement is extended by one year to November 2006, provided that Nortel Networks’ obligation to purchase a percentage of certain optical components from the Company will expire by its terms in November 2005.

•		Nortel Networks has provided the Company with a purchase commitment for last time buys, for certain of the Company’s discontinued products, which Nortel Networks will be obligated to purchase as these products are manufactured and delivered. If the Company fails to meet milestones set out in an agreed upon delivery schedule for last-time buy products by more than 10% in aggregate revenue for three consecutive weeks, and does not rectify the failure within 30 days, those products will be deemed critical products, subject to the relevant provisions of the Supply Agreement described below.

•		At Nortel Networks’ request, the Company has agreed to increase its manufacturing of certain critical product wafer infeeds against a Nortel Networks agreed upon manufacturing schedule. Upon manufacture and placement into inventory, Nortel Networks has agreed to pay a holding and inventory fee pending Nortel’s outright purchase of such wafers. In addition, Nortel Networks may at its election supply any capital equipment required in connection with the requisite inventory buildup or extend the time period for meeting its demand if its demand requires the Company to increase its capital equipment to meet the demand in the required time period.

•		If at any time the Company (a) has a cash balance of less than $25 million; (b) is unable to manufacture critical products in any material respect, and that inability continues uncured for a period of six weeks, or (c) is subject to an insolvency event, such as a petition or assignment in bankruptcy, appointment of a trustee, custodian or receiver, or entrance into an arrangement for the general benefit of creditors, then the Company shall grant a license for the assembly, post-processing and test intellectual property (but excluding wafer technology) of certain critical products to Nortel Networks and to any designated alternative supplier.

•		If the Company’s cash balance is less than $10 million or there is an insolvency event, Nortel Networks Limited shall have the right to buy all Nortel inventory held by the Company, and the Company shall grant a license to Nortel Networks Limited or any alternative supplier for the manufacture of all products covered by the First Addendum.

•		The Company’s licensing and related obligations terminate on February 7, 2007, unless the license has been exercised, in which case they would terminate 24 months from the date the license was exercised, provided that at that time, among other things, the Company has a cash balance of $25 million and is able to meet Nortel Network’s demand for the subject products.

Pursuant to the First Addendum, the Company is obligated to make prepayments under the $30 million note, of which approximately $25.9 million principal amount is currently outstanding, and the $20 million note issued to Nortel Networks UK Limited on a pro rata basis in the following amounts upon the occasion of any one of the events described below:

•		$1.0 million if the Company fails to deposit intellectual property relating to all covered products in escrow and its cash balance has fallen below $10 million.

•		$1.0 million in each case if (a) the Company fails to meet 90% of scheduled critical component wafer manufacturing through August 2005, subject to cure provisions or (b) the Company fails to use commercially reasonable efforts to provide for an alternative supplier of two identified product lines when obligated to do so under the agreement.

•		$2.0 million in each case if (a) the Company fails to deliver 75% of scheduled last time buys through August 2005, subject to cure provisions, or (b) the Company fails to meet 75% of scheduled critical product deliveries through November 2005, subject to cure provisions.

On March 28, 2005, the Company entered into a letter agreement with Nortel Networks pursuant to which the Company and Nortel Networks agreed to enter into definitive documentation further amending certain terms of the Supply Agreement, the Amended and Restated Notes and documentation related to the Amended and Restated Notes, including the security agreements entered into in connection with the Amended and Restated Notes.

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On May 2, 2005, the Company and Nortel Networks concluded the definitive agreements formally documenting the arrangements contemplated by the Letter Agreement. The terms of the definitive agreements were effective April 1, 2005 and include, among other agreements including security agreement, a further Addendum (the “Second Addendum”) to the Supply Agreement and a Second Notes Amendment and Waiver Agreement between the Company and Nortel Networks relating to the Amended and Restated Notes (the “Notes Agreement”).

The Second Addendum, which amends the terms and provisions of the First Addendum, increases the prices and adjusts the payment terms of certain products shipped to Nortel Networks under the Supply Agreement. The increased prices and adjusted payment terms will continue for one year beginning April 1, 2005. Such prices and payment terms may terminate if an event of default occurs and is continuing under the Amended and Restated Notes or if a change in control or bankruptcy event occurs.

Pursuant to the Second Addendum, Nortel Networks has confirmed the arrangements in the Letter Agreement to issue non-cancelable purchase orders for last-time buys for certain products and other non last-time buy products. The products are to be delivered to Nortel Networks Limited over the next 12 months beginning on April 1, 2005. This resulted in the issuance of a noncancelable purchase order for such products valued at approximately $100 million with approximately $50 million of last-time buy products and $50 million for other non last-time buy products. A specific delivery schedule was agreed for the last-time buy products, however, the delivery schedule and composition of the non last-time buy products is subject to change as agreed between the parties. The Addendum also formally confirms increases in the prices and adjustments in the payment terms of certain products shipped to Nortel Networks under the Supply Agreement. Pursuant to the Notes Agreement, Nortel Networks UK Limited waived through May 2, 2006 the terms of the Notes requiring prepayment in the event the Company raises additional capital. This waiver applies to net proceeds of up to $75 million in the aggregate, provided that the Company uses such proceeds for working capital purposes in the ordinary course of business. The waiver will terminate prior to May 2, 2006 if an event of default has occurred and is continuing under the Amended and Restated Notes or if a change in control or bankruptcy event occurs.

The Notes Agreement further amended the Amended and Restated Notes to provide that an event of default under the Supply Agreement constitutes an event of default under the Notes. An event of default would occur under the Supply Agreement (and therefore the Amended and Restated Notes) upon:

•		the Company’s failure to deliver products pursuant to the Supply Agreement to the extent that Nortel Networks would be entitled to cancel all or part of an order, provided that Nortel Networks provides written notice of such default;

•		the Company’s failure to meet a milestone for a last time buy product, provided that Nortel Networks provides written notice of such default;

•		the Company’s breach of or default under any one of its material obligations under the Supply Agreement which continues for more than 10 calendar days;

•		Any other default by the Company which would entitle Nortel Networks to terminate the Supply Agreement; or

•		Any event of default under the Amended and Restated Notes, as further amended pursuant to the Notes Agreement.

Pursuant to the Notes Agreement, the Company and certain of its subsidiaries entered into security agreements securing the obligations of the Company and its subsidiaries under the Amended and Restated Notes. These obligations are secured by the assets already securing the obligations of the Company and its subsidiaries under the Amended and Restated Notes as of December 2, 2004, as well as by Nortel Networks’ specific inventory and accounts receivable under the Supply Agreement and the Company’s real property located in Swindon, United Kingdom. However, the Company is permitted to sell the Swindon property provided that no event of default has occurred and is continuing under the Amended and Restated Notes, and provided that the Company uses the proceeds of such sale for working capital purposes in the ordinary course of business.

At July 2, 2005, July 3, 2004, December 31, 2003 and 2002 Nortel Networks had a 11.8%, 12.3%, 13.5%, and 29.8% ownership interest, respectively, in the Company.

F-39

Other Related Parties

Ms. Lori Holland became a Director of the Company in 1999. In 1998, and continuing until August 2002, Ms. Holland provided service as a consultant to the Company under which she was compensated in cash and options to purchase shares of the Company’s common stock. As of July 2, 2005, all of these options had vested, 3,166 had been exercised in 2000, and 48,664 remain outstanding.

During the quarter ended January 1, 2005, the Company settled a $5.9 million promissory note due from a former Officer and Director of New Focus, which the former Officer and Director had entered into with New Focus in connection with a separation agreement in July 2002. The note, including accrued interest of $0.6 million was settled for a cash payment of $1.2 million. At the time of the acquisition of New Focus, the note had been assumed and recorded on the Company’s books at a value of $1.75 million, and in the quarter ended January 1, 2005 the Company recorded the $0.55 million difference between book value and the payment amount as a purchase price adjustment increasing the goodwill recorded in connection with the New Focus transaction.

16. Loans

Nortel

The Company has two loans payable to Nortel Networks, a related party (see Note 15). The first loan is an unsecured loan for $20,000,000 which is due in full on November 8, 2007. This loan bears interest at 4% per annum, which is payable quarterly in arrears. The second loan is a secured loan for $30,000,000, of which approximately $25,861,000 remains outstanding as of July 2, 2005, and is due in full on November 8, 2006. This loan bears interest at a 7% per annum base rate, which increases by 0.25% each quarter over the term of the note and is payable quarterly in arrears.

The notes also contain certain covenants, including restrictions on assets sales and a requirement that we maintain a cash balance of at least $25 million, however, compliance with that covenant has been waived through August 7, 2006. Requirements to prepay portions of the notes in the event of raising additional capital, up to $75 million in the aggregate and providing the funds are used for working capital purposes in the normal course of business, have also been waived, through May 2, 2006.

Other Notes

On December 20, 2004, the Company closed a private placement of $25.5 million of 7.0% senior unsecured convertible debentures and warrants to purchase common stock which resulted in net proceeds of $21.5 million. The Company forwarded $4.2 million of the proceeds to Nortel, paying a portion of the $30 million loan note owed as part of the acquisition of NNOC. The debentures may be converted into shares of common stock at the option of the holder prior to the maturity of the debentures on December 20, 2007. The initial conversion price of the debentures is $5.50, which represents a premium of approximately 16% over the closing price of our common stock on December 20, 2004. The holder also has a right to mandatory redemption of unpaid principle and accrued and unpaid interest in the event of a change in control or default, including penalties in the event of a change in control ranging from ten percent to twenty percent of the unpaid principle, as determined based on the timing of the triggering event. The Company has a right to convert debentures into shares of common stock under certain circumstances. The warrants provide holders thereof the right to purchase up to 2,001,963 shares of common stock and are exercisable during the five years from the date of grant at an initial exercise price of $6.00 per share, which represents a premium of approximately 26% over the closing price of common stock on December 20, 2004.

The valuation of the financial instruments issued in connection with this private placement involves judgment which affects the carrying value of each instrument on the balance sheet and the periodic interest expense recorded. In order to determine the valuation of these instruments the Company applied the guidance in Emerging Issues Task Force, “EITF” Issue 98-5, “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios” and EITF Issue 00-27, “Application of Issue 98-5 to Certain Convertible Instruments” to value the debentures, the accompanying warrants and the value of the convertibility element of the debentures. The Company first determined the fair value of the warrant and its value relative to the debenture. The Company chose to use the Black-Scholes model to determine the value of the warrant which requires the determination of the Company’s stock’s volatility and the life of the instrument, among other factors. The Company determined that its stock’s historic volatility of 97% was representative of its stock’s future volatility and used the contractual term of five years for the life of the instrument and a risk free interest rate of 2.89%. The valuation independently derived from the Black-Scholes model for the warrant was then compared to the face value of the debenture and a relative value of $5.4 million was assigned to the warrant. The value of the conversion element of the

F-40

debenture was determined based on the difference between the relative value of the debenture per share of $4.35 of the 4.6 million shares, which the debenture can be converted into, compared to the fair market value per share of $4.77 per share of the Company’s common stock on the date on which the debentures were entered into. The value of the conversion feature of the debenture was thereby determined to be $2.0 million. The value of the warrants and the conversion feature were recorded as a discount to the debt liability on the balance sheet and will be amortized to interest expense over the life of the convertible debenture of three years. In addition, the Company capitalized $1.9 million related to issuance costs associated with the debentures and warrants, which is being amortized as part of interest expense for the term of the debentures, and has a balance of $1.6 million as of July 2, 2005.

The Company also has an unsecured loan payable to Scheappi Grundstûke Verwaltungen KG for $392,000 which is repayable in equal monthly installments until December 2013. This loan bears interest at 5% per annum, which is payable monthly in arrears.

The amounts payable under these loans are as follows (in thousands):


Fiscal year ending on or about June 30,
2006	$	60
2007		25,921
2008		45,560
2009		60
2010		60
Thereafter		92

	$	71,753

17. Quarter Summaries (unaudited)


	Three Months Ended
	July 2,			April 2,			January 1,			October 2			July 3,			April 4,			Dec. 31,			Sept. 28,
	2005			2005			2005			2004			2004			2004			2003			2003
	(in thousands, except per share data)
Revenues	$	61,002		$	49,939		$	45,751		$	43,564		$	38,797		$	40,966		$	40,613		$	37,822
Cost of revenues		49,295			49,392			49,298			45,662			42,655			41,760			36,685			38,408

Gross profit/(loss)		11,707			547			(3,547	)		(2,098	)		(3,858	)		(794	)		3,928			(586	)
Operating expenses:
Research and development		9,754			10,648			12,046			12,377			14,436			12,451			12,199			11,703
Selling, general and administrative		13,913			13,957			14,195			17,443			13,394			16,190			5,205			9,849
Amortization of intangible assets		2,789			2,855			2,837			2,626			5,677			—			3,741			—
IPR&D		—			—			—			—			224			5,666			245			—
Restructuring charges		4,860			3,777			7,938			4,313			(664	)		—			(156	)		23,917
Stock-based compensation		218			289			121			122			104			—			—			—
Gain on sale of fixed assets		(59	)		—			(5	)		(644	)		(157	)		(5,097	)		(3,060	)		—
Impairment of goodwill and intangibles		16,090			98,136			—			—			—			—			—			—

Total operating expenses		47,565			129,662			37,132			36,237			33,014			29,210			18,174			45,469

Operating loss		(35,858	)		(129,115	)		(40,679	)		(38,335	)		36,892			30,004			14,246			46,055
Interest and other income/(expense), net		(3,171	)		(460	)		(429	)		90			786			(1,470	)		213			(1,058	)

Loss before income taxes		(39,029	)		(129,575	)		(41,108	)		(38,245	)		(36,106	)		(31,474	)		(14,033	)		(47,113	)
Income tax credit/(expense)		—			—			1			(16	)		209			—			3,478			(39	)

Net loss	$	(39,029	)	$	(129,575	)	$	(41,107	)	$	(38,261	)	$	(35,897	)	$	(31,474	)	$	(10,555	)	$	(47,152	)

Basic and diluted net income/(loss) per share	$	(1.16	)	$	(3.86	)	$	(1.23	)	$	(1.16	)	$	(1.18	)	$	(1.31	)	$	(0.49	)	$	(2.27	)
Shares used to compute basic net income/(loss) per share		33,555			33,555			33,535			32,867			30,421			23,976			21,599			20,790

F-41

18. Subsequent Events

On August 10, 2005, Bookham Technology plc entered into a share purchase agreement with Deutsche Bank AG and London Industrial Leasing Limited, a subsidiary of Deutsche Bank, pursuant to which Bookham Technology plc agreed to purchase all of the issued share capital of City Leasing (Creekside) Limited, a subsidiary of Deutsche Bank. Under the share purchase agreement and related documents, Creekside, as a subsidiary of Bookham Technology plc, is entitled to receivables of £73.8 million or $135.8 million (based on the exchange rate of UK pounds sterling to US dollars as of September 2, 2005) from Deutsche Bank in connection with certain aircraft subleases and will in turn apply those payments over a two-year term to obligations of £73.1 million, or $134.5 million (based on the exchange rate of UK pounds sterling to US dollars as of September 2, 2005). We expect Bookham Technology plc to utilize certain expected tax losses to reduce the taxes that might otherwise be due from Creekside on the receivables. In the event that Bookham Technology plc is not able to utilize these tax losses (or these tax losses do not arise), Creekside may have to pay taxes, reducing the cash available from Creekside. In the event there is a future change in applicable U.K. tax law, Creekside, and in turn Bookham Technology plc, would be responsible for any resulting tax liabilities, which amounts could be material to Bookham’s financial condition or operating results. As a result of these transactions, Bookham Technology plc will have available through Creekside cash of approximately £6.63 million or $12.2 million (based on the exchange rate of UK pounds sterling to US dollars as of September 2, 2005): £4.2 million or $7.8 million (based on the exchange rate of UK pounds sterling to US dollars as of September 2, 2005) on August 10, 2005, £1 million or $1.8 million (based on the exchange rate of UK pounds sterling to US dollars as of September 2, 2005) on October 14, 2005; £1 million or $1.8 million (based on the exchange rate of UK pounds sterling to US dollars as of September 2, 2005) on July 14, 2006; and the balance of approximately £431,000 or $793,000 (based on the exchange rate of UK pounds sterling to US dollars as of September 2, 2005) on July 16, 2007. Creekside will be consolidated as a subsidiary of the Company. Creekside is administered by City Leasing Limited, a subsidiary of Deutsche Bank.

On August 15, 2005, the Company filed a shelf registration statement with the Securities and Exchange Commission (SEC). Upon being declared effective by the SEC, the shelf registration statement will allow the Company to sell up to $35 million of its common stock from time to time in one or more public offerings. The terms of any offering will be established at the time of sale and will be described in a prospectus supplement that the Company will file with the SEC.

F-42

Schedule II: Valuation And Qualifying Accounts

Year ended July 2, 2005, Six Months ended July 3, 2004 and

Years ended December 31, 2003 and 2002


						Additions
	Balance of		Exchange			Charged to
	Beginning of		Rate			Costs and			Deductions			Balance at
Description	Year		Movements			Expenses			Write Offs			End of Year
			(in thousands)
Year Ended July 2, 2005
Allowance for doubtful accounts	$	858	$	(2	)	$	113		$	(524	)	$	445
Product returns		402		—			212			(333	)		281
Six Months Ended July 3, 2004
Allowance for doubtful accounts		396		9			548			(95	)		858
Product returns		191		4			886			(679	)		402
Year Ended December 31, 2003
Allowance for doubtful accounts		322		38			36			—			396
Product returns		641		27			—			(477	)		191
Year Ended December 31, 2002
Allowance for doubtful accounts		651		44			(373	)		—			322
Product returns		277		53			311			—			641

S-1

EXHIBIT INDEX


Exhibit
number		Description of Exhibit
3.1		Amended and Restated Bylaws of Bookham, Inc. (previously filed as Exhibit 3.2 to Transition Report on Form 10-K (file no. 000-30684) for the transition period from January 1, 2004 to July 3, 2004, and incorporated herein by reference).

3.2		Restated Certificate of Incorporation of Bookham, Inc. (previously filed as Exhibit 3.1 to Current Report on Form 8-K (file no. 000-30684) dated September 10, 2004, and incorporated herein by reference).

10.1		Agreement and Plan of Merger, dated September 21, 2003, by and among Bookham Technology plc, Budapest Acquisition Corp. and New Focus, Inc. (previously filed as Appendix A to Registration Statement on Form F-4, as amended (file no. 333-109904) dated February 3, 2004, and incorporated herein by reference).

10.2		Acquisition Agreement dated as of October 7, 2002 between Nortel Networks Corporation and Bookham Technology plc (previously filed as Exhibit 1 to Schedule 13D filed by Nortel Networks Corporation on October 17, 2002, and incorporated herein by reference).

10.3*		Letter Agreement dated November 8, 2002 between Nortel Networks Corporation and Bookham Technology plc amending the Acquisition Agreement referred to in Exhibit 10.2 (previously filed as Exhibit 4.2 to Amendment No. 2 to Annual Report on Form 20-F (file no. 000-30684) for the year ended December 31, 2002, and incorporated herein by reference).

10.4*		Optical Components Supply Agreement dated November 8, 2002, by and between Nortel Networks Limited and Bookham Technology plc (previously filed as Exhibit 4.3 to Amendment No. 1 to Annual Report on Form 20-F (file no. 000-30684) for the year ended December 31, 2002, and incorporated herein by reference).

10.5		Relationship Deed dated November 8, 2002 between Nortel Networks Corporation and Bookham Technology plc (previously filed as Exhibit 4.4 to Annual Report on Form 20-F (file no. 000-30684) for the year ended December 31, 2002, and incorporated herein by reference).

10.6		Registration Rights Agreement dated as of November 8, 2002 among Nortel Networks Corporation, the Nortel Subsidiaries listed on the signature pages and Bookham Technology plc (previously filed as Exhibit 4.5 to Annual Report on Form 20-F (file no. 000-30684) for the year ended December 31, 2002, and incorporated herein by reference).

10.7		Agreement relating to the Sale and Purchase of the Business of Marconi Optical Components Limited, dated December 17, 2001, among Bookham Technology plc, Marconi Optical Components Limited and Marconi Corporation plc (previously filed as Exhibit 4.1 to Annual Report on Form 20-F (file no. 000-30684) for the year ended December 31, 2001, and incorporated herein by reference).

10.8		Supplemental Agreement to the Agreement relating to the Sale and Purchase of the Business of Marconi Optical Components Limited, dated January 31, 2002, among Bookham Technology plc, Marconi Optical Components Limited and Marconi Corporation plc (previously filed as Exhibit 4.2 to Annual Report on Form 20-F (file no. 000-30684) for the year ended December 31, 2001, and incorporated herein by reference).

10.9(1)		Service Agreement dated July 23, 2001 between Bookham Technology plc and Giorgio Anania (previously filed as Exhibit 4.5 to Annual Report on Form 20-F (file no. 000-30684) for the year ended December 31, 2001, and incorporated herein by reference).

10.10		Lease dated May 21, 1997, between Bookham Technology plc and Landsdown Estates Group Limited, with respect to 90 Milton Park, Abingdon, England (previously filed as Exhibit 10.1 to Registration Statement on Form F-1, as amended (file no. 333-11698) dated April 11, 2000, and incorporated herein by reference).


Exhibit
number		Description of Exhibit
10.11		Lease dated December 23, 1999 by and between Silicon Valley Properties, LLC and New Focus, Inc., with respect to 2580 Junction Avenue, San Jose, California (previously filed as Exhibit 10.32 to Amendment No. 1 to Transition Report on Form 10-K (file no. 000-30684) for the for the transition period from January 1, 2004 to July 3, 2004, and incorporated herein by reference).

10.12(1)		2004 Employee Stock Purchase Plan (previously filed as Exhibit 10.18 to Transition Report on Form 10-K (file no. 000-30684) for the transition period from January 1, 2004 to July 3, 2004, and incorporated herein by reference).

10.13(1)		2004 Stock Incentive Plan, including forms of stock option agreement for incentive and nonstatutory stock options (previously filed as Exhibit 10.1 to Quarterly Report on Form 10-Q for the quarter ended October 2, 2004, and incorporated herein by reference).

10.14(1)		2004 Sharesave Scheme (previously filed as Exhibit 10.20 to Transition Report on Form 10-K (file no. 000-30684) for the transition period from January 1, 2004 to July 3, 2004, and incorporated herein by reference).

10.15(1)		Director’s Fee Agreement dated as of August 1, 2002, between Bookham Technology plc and Lori Holland (previously filed as Exhibit 4.23 to Annual Report on Form 20-F (file no. 000-30684) for the year ended December 31, 2003, and incorporated herein by reference).

10.16(1)		Bonus Scheme dated July 20, 2004 between Bookham Technology plc and Giorgio Anania (previously filed as Exhibit 10.23 to Transition Report on Form 10-K (file no. 000-30684) for the transition period from January 1, 2004 to July 3, 2004, and incorporated herein by reference).

10.17(1)		Bonus Scheme dated July 20, 2004 between Bookham Technology plc and Stephen Abely (previously filed as Exhibit 10.25 to Transition Report on Form 10-K (file no. 000-30684) for the transition period from January 1, 2004 to July 3, 2004, and incorporated herein by reference).

10.18(1)		Bonus Scheme dated July 20, 2004 between Bookham Technology plc and Stephen Turley (previously filed as Exhibit 10.26 to Transition Report on Form 10-K (file no. 000-30684) for the transition period from January 1, 2004 to July 3, 2004, and incorporated herein by reference).

10.19(1)		Principal Statement of Terms and Conditions dated September 13, 2001 between Bookham Technology plc and Stephen Abely, as amended on July 1, 2003 (previously filed as Exhibit 10.29 to Transition Report on Form 10-K (file no. 000-30684) for the transition period from January 1, 2004 to July 3, 2004, and incorporated herein by reference).

10.20(1)		Principal Statement of Terms and Conditions dated August 15, 2001 between Bookham Technology plc and Stephen Turley (previously filed as Exhibit 10.30 to Transition Report on Form 10-K (file no. 000-30684) for the transition period from January 1, 2004 to July 3, 2004, and incorporated herein by reference).

10.21		Securities Purchase Agreement, dated as of December 20, 2004, by and between Bookham, Inc. and the Investors (as such term is defined therein) (previously filed as Exhibit 99.1 to Current Report on Form 8-K (file no. 000-30684) dated December 10, 2004, and incorporated herein by reference).

10.22		Registration Rights Agreement, dated as of December 20, 2004, by and between Bookham, Inc. and the Investors (as such term is defined therein) (previously filed as Exhibit 99.2 to Current Report on Form 8-K (file no. 000-30684) dated December 10, 2004, and incorporated herein by reference).

10.23		Form of Debenture (previously filed as Exhibit 99.3 to Current Report on Form 8-K (file no. 000-30684) dated December 10, 2004, and incorporated herein by reference).

10.24		Form of Warrant (previously filed as Exhibit 99.4 to Current Report on Form 8-K (file no. 000-30684) dated December 10, 2004, and incorporated herein by reference).


Exhibit
number		Description of Exhibit
10.25**		Restructuring Agreement, dated as of December 2, 2004, among Bookham Technology plc, Bookham, Inc., certain subsidiaries of Bookham, Inc., Nortel Networks UK Limited and Nortel Networks Corporation (previously filed as Exhibit 10.1 to Quarterly Report on Form 10-Q for the quarter ended January 1, 2005, and incorporated herein by reference).

10.26		Amended and Restated Series A-2 Senior Secured Note Due 2007 (previously filed as Exhibit 10.2 to Quarterly Report on Form 10-Q for the quarter ended January 1, 2005, and incorporated herein by reference).

10.27		Amended and Restated Series B-1 Senior Secured Note Due 2008 (previously filed as Exhibit 10.3 to Quarterly Report on Form 10-Q for the quarter ended January 1, 2005, and incorporated herein by reference).

10.28*		Addendum to Optical Components Supply Agreement, dated as of February 7, 2005, by and between Bookham Technology plc and Nortel Networks Limited (previously filed as Exhibit 10.1 to Quarterly Report on Form 10-Q for the quarter ended April 2, 2005, and incorporated herein by reference).

10.29*		Notes Amendment and Waiver Agreement, dated as of February 7, 2005 by and among Bookham Technology plc, Bookham, Inc., Nortel Networks UK Limited and Nortel Networks Corporation (previously filed as Exhibit 10.2 to Quarterly Report on Form 10-Q for the quarter ended April 2, 2005, and incorporated herein by reference).

10.30*		Letter Agreement dated, as of March 24, 2005, by and between Bookham, Inc. and Nortel Networks Limited (previously filed as Exhibit 10.3 to Quarterly Report on Form 10-Q for the quarter ended April 2, 2005, and incorporated herein by reference).

10.31(1)		UK Subplan to the 2004 Stock Incentive Plan (previously filed as Exhibit 10.4 to Quarterly Report on Form 10-Q for the quarter ended April 2, 2005, and incorporated herein by reference).

10.32(1)		Restricted Stock Agreement dated February 9, 2005 between Bookham, Inc. and Giorgio Anania (previously filed as Exhibit 10.5 to Quarterly Report on Form 10-Q for the quarter ended April 2, 2005, and incorporated herein by reference).

10.33(1)		Restricted Stock Agreement dated February 9, 2005 between Bookham, Inc. and Stephen Abely (previously filed as Exhibit 10.6 to Quarterly Report on Form 10-Q for the quarter ended April 2, 2005, and incorporated herein by reference).

10.34(1)		Bonus Agreement dated February 9, 2005 between Bookham, Inc. and Giorgio Anania (previously filed as Exhibit 10.7 to Quarterly Report on Form 10-Q for the quarter ended April 2, 2005, and incorporated herein by reference).

10.35(1)		Bonus Agreement dated February 9, 2005 between Bookham, Inc. and Stephen Abely (previously filed as Exhibit 10.8 to Quarterly Report on Form 10-Q for the quarter ended April 2, 2005, and incorporated herein by reference).

10.36*		Addendum to Optical Components Supply Agreement, dated as of April 1, 2005, by and between Bookham Technology plc and Nortel Networks Limited.

10.37*		Second Notes Amendment and Waiver Agreement, dated as of May 2, 2005 by and among Bookham Technology plc, Bookham, Inc., Nortel Networks UK Limited, Nortel Networks Corporation and Nortel Networks Limited.

10.38(1)		Contract of Employment between Bookham Technology plc and Jim Haynes.

21.1		List of Bookham, Inc. subsidiaries.

23.1		Consent of Independent Registered Public Accounting Firm.


Exhibit
number		Description of Exhibit
31.1		Rule 13a-14(a)/15(d)-14(a) Certification of Chief Executive Officer.

31.2		Rule 13a-14(a)/15(d)-14(a) Certification of Chief Financial Officer.

32.1		Section 1350 Certification of Chief Executive Officer.

32.2		Section 1350 Certification of Chief Financial Officer.


*		Confidential treatment requested as to certain portions, which portions have been omitted and filed separately with the Commission.

**		The exhibits and schedules to this agreement were omitted by Bookham, Inc. Bookham, Inc. agrees to furnish any exhibit or schedule to this agreement supplementally to the Securities and Exchange Commission upon written request.

(1)		Management contract or compensatory plan or arrangement.

EX-10.36 2 b56701biexv10w36.htm EX-10.36 ADDENDUM TO OPTICAL COMPONENTS SUPPLY AGREEMENT exv10w36

Exhibit 10.36

Confidential Material omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

Addendum
to
Optical Components Supply Agreement

This Addendum, including attached exhibits, (the “Agreement”) dated the 1^st day of April, 2005, (the “Effective Date”) is made between Nortel Networks Limited, a Canadian corporation with offices located at 8200 Dixie Road, Suite 100, Brampton, Ontario L6T 5P6 (“NNL”) and Bookham Technology plc a company incorporated under the laws of England and Wales with office located at Towcester, Northamptonshire, NN12 8EQ, United Kingdom ( “Supplier” and, together with NNL, the “Parties”);

WHEREAS:

	1.		NNL and Supplier entered into an Optical Components Supply Agreement effective November 8, 2002 (the “Supply Agreement”);

	2.		NNL and Supplier entered into an Addendum to the Supply Agreement effective February 7, 2005 (the “February 2005 Addendum”);

	3.		The Parties have agreed to amend and supplement the Supply Agreement;

	4.		In consideration of the changes to the Supply Agreement set forth herein, Supplier and certain of its subsidiaries have agreed to grant a security interest in certain of their assets to NNL and certain of its affiliates pursuant to the Security Agreements (as defined herein) in order to secure the performance of Supplier’s obligations under the Supply Agreement, as amended hereby;

	5.		The Parties have agreed to amend and supplement the Supply Agreement;

NOW, THEREFORE, in consideration of the premises and promises set forth herein, and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Parties agree as follows:

1.		Definitions and Interpretation

1.1		Definitions. Except as otherwise defined herein, the defined terms used in this Agreement will be as defined in the Supply Agreement.

Page 1 of 24

	1.1.1		“Event of Default” means the occurrence of any of the following without the requirement for further notice or action: (i) Supplier’s intentional cessation of shipment of Product to NNL against an agreed delivery schedule without prior written approval by an authorized representative of NNL; (ii) Supplier’s failure to deliver Products pursuant to the requirements of Section 8 of the Supply Agreement to the extent that the same would entitle NNL to cancel all or part of an order, provided that NNL has provided Supplier written notice of such default; (iii) Supplier’s failure to meet a milestone for a Last Time Buy Product pursuant to Section 2.2 of the February 2005 Addendum, provided that NNL has provided Supplier written notice of such default; (iv) Supplier’s breach of or default under any one of its material obligations under the Supply Agreement which continues for more than 10 calendar days; (v) any other default by Supplier which would entitle NNL to terminate the Supply Agreement pursuant to Section 25.2 of that agreement; or (vi) any event of default under the Senior Secured Notes (as defined therein).

	1.1.2		“Expiration Event” has the meaning set forth in the Second Notes Amendment and Waiver Agreement.

	1.1.3		“First Notes Amendment and Waiver Agreement” means the Notes Amendment and Waiver Agreement, dated as of February 7, 2005, among Bookham Technology plc, Bookham, Inc. and certain of their subsidiaries whose names appear on the signature pages thereof, Nortel Networks UK Limited and Nortel Networks Corporation.

	1.1.4		“Last Time Buy Products” or “LTB Products” mean those Products which Supplier intends to discontinue manufacturing as set out in Exhibit A to the February 2005 Addendum.

	1.1.5		“Person” means any natural person, general or limited partnership, corporation, limited liability company, firm, association, trust or other entity or organization, including a government or political subdivision or agency or instrumentality thereof.

	1.1.6		“Restructuring Agreement” means the agreement entered into as of December 2, 2004, among Bookham Technology plc, Bookham, Inc., the other subsidiaries of Supplier whose names appear on the signature pages thereto, Nortel Networks UK Limited and Nortel Networks Corporation, as amended.

	1.1.7		“Second Notes Amendment and Waiver Agreement” means the Second Notes Amendment and Waiver Agreement, dated as of May 2, 2005, among Bookham Technology plc, Bookham, Inc. and certain of their subsidiaries whose names appear on the signature pages thereof, Nortel Networks UK Limited, Nortel Networks Limited and Nortel Networks Corporation.

	1.1.8		“Security Agreements” means the security agreements entered into pursuant to and in connection with the Senior Secured Notes each as amended, modified or supplemented in writing from time to time.

	1.1.9		“Senior Note Documents” means the Restructuring Agreement, the Senior Secured Notes, the First Notes Amendment and Waiver Agreement, the Second Notes

Page 2 of 24

			Amendment and Waiver Agreement, the Security Agreements and the other agreements and documents delivered pursuant thereto each as amended, modified or supplemented in writing from time to time.

	1.1.10		“Senior Secured Notes” means (i) Series A-2 Senior Secured Note Due 2007 U.S.$20,000,000 September 10, 2004 executed by BOOKHAM, INC., BOOKHAM TECHNOLOGY PLC, NEW FOCUS, INC., ONETTA, INC., BOOKHAM (US) INC., BOOKHAM (CANADA), INC., BOOKHAM (SWITZERLAND) AG and IGNIS OPTICS, INC., and (ii) Series B-1 Senior Secured Note Due 2006 U.S.$30,000,000.00 November 8, 2002 executed by BOOKHAM TECHNOLOGY PLC, NEW FOCUS, INC., ONETTA, INC., BOOKHAM (US) INC., BOOKHAM (CANADA) INC., BOOKHAM (SWITZERLAND) AG, IGNIS OPTICS, INC., and BOOKHAM, INC each as amended, modified or supplemented in writing from time to time.

	1.1.11		“Term” means the time period beginning April 1, 2005 and ending on the earlier of March 31, 2006 or the occurrence of an Expiration Event.

1.2		Interpretation. This Agreement amends and supplements the Supply Agreement. To the extent there is a conflict between the terms of this Agreement and the Supply Agreement, this Agreement shall govern. Unless modified by the terms of this Agreement, the Supply Agreement shall remain unchanged.

2.		Payment

2.1

For any Products or LTB Products delivered during the Term, Payment shall be due to Supplier fifteen (15) calendar days following the receipt of an invoice. For the avoidance of doubt, in no event shall Supplier be permitted to issue invoices for Products or LTB Products prior to the relevant Delivery Date of such Product or LTB Product.

2.2

Payments will be made via wire transfer or in a similar manner as mutually agreed by the Parties.

2.3

As further described in the Senior Secured Notes and/or Second Notes Amendment and Waiver Agreement, NNL, Nortel Subsidiaries and/or Nortel Affiliates shall have the right without prior notice to setoff and/or recoup any amount owed to NNL, Nortel Subsidiaries and/or Nortel Affiliates against any amounts due any Supplier entity under the Supply Agreement, as further described in the Senior Secured Notes.

3. Pricing

3.1

During the Term, prices for LTB Products shall increase by [**] percent ([**]%) based on the prices in effect March 31, 2005.

3.2

During the Term, prices for all Products (other than LTB Products) shall increase by [**] percent ([**]%) based on the prices in effect March 31, 2005.

Page 3 of 24

3.3

Exhibit A attached hereto includes the prices for Products and LTB Products as of March 31, 2005 as well as the prices in effect during the Term as set forth above.

3.4

The Parties agree to work together to create a process which is acceptable to NNL’s and Supplier’s auditors and finance departments for implementing the above price increases.

3.5

At the end of the Term, prices for Products and LTB Products will automatically revert to the prices in effect March 31, 2005.

3.6

During the Term, the prices provided for in this Section 3 shall not be subject to the pricing adjustment provisions or other pricing restrictions or parameters set forth in the Supply Agreement.

4. Accelerated Purchase Orders

4.1

NNL will, or will instruct its contract manufacturer to issue non-cancelable Purchase Orders no later than April 29, 2005 for all Products NNL estimates it will require for:

	(i)		Eight (8) months against its twelve (12) month forecast current at April 1, 2005 for Products other than LTB Products; and

	(ii)		One hundred percent (100%) of the value of the LTB Products.

	(i)		and (ii) collectively the “Accelerated Purchase Orders”.

4.2

The foregoing will not prevent NNL from issuing additional Purchase Orders in NNL’s discretion.

4.3

The Product mix to be delivered by Supplier pursuant to the Accelerated Purchase Orders will be determined on a monthly basis by NNL and Supplier and will be in agreement with the February 2005 Addendum.

4.4

In no event will such Accelerated Purchase Orders be transferable or assignable by Supplier.

4.5

The Accelerated Purchase Orders will automatically expire upon the occurrence of an Expiration Event.

4.6

The Accelerated Purchase Orders shall not be subject to the purchase order adjustment, cancellation, rescheduling or termination provisions of the Supply Agreement.

5. Warranty

Supplier represents and warrants that it has reviewed the impact of this Agreement, the amendments to the Senior Note Documents, and the other matters contemplated herein, from an accounting and legal perspective and that it has or will take all necessary steps to ensure compliance in all material respects with United States federal and state securities laws and U.S. generally-accepted accounting principles.

Page 4 of 24

6. Dispute Resolution

6.1

Any disputes that the relevant Nortel Account Manager and Supplier Account Manager are unable to resolve will be addressed through the following process:

	a)		Relevant party initiates escalation process (the “Initiator”) by providing notice to their counterpart (i.e. Nortel Account Manager informs Supplier Account Manager that he or she intends to pursue the dispute resolution process).

	b)		Within four (4) business days of providing notice to their counterpart, the Initiator drafts a complete description of the issue including the preferred solution (the “Issue”) and circulates it to all stakeholders including the Nortel Vice-President of Supply Chain Operations, Nortel Vice-President of Supply Management, Supplier Chief Operating Officer, Supplier Chief Financial Officer and Supplier General Counsel.

	c)		Within five (5) business days of having received the Issue, Nortel Vice-President of Supply Chain Operations, Nortel Vice-President of Supply Management, Supplier Chief Operating Officer and Supplier Chief Financial Officer must meet for an Issue resolution conference (the “Escalation Meeting”) having considered the input of all stakeholders.

	d)		If Nortel Vice-President of Supply Chain Operations, Nortel Vice-President of Supply Management, Supplier Chief Operating Officer and Supplier Chief Financial Officer come to agreement on the resolution of the Issue, they jointly document the corrective action and communicate to the stakeholders.

	e)		If Nortel Vice-President of Supply Chain Operations, Nortel Vice-President of Supply Management, Supplier Chief Operating Officer and Supplier Chief Financial Officer are unable to come to agreement on the resolution of the Issue within five (5) days of originally receiving the Issue, then they must forward the Issue including the minutes from the Escalation Meeting that should clearly document the Issue, proposed corrective action, cost allocation, business impact, and reason for inability to agree to the Nortel President of Global Operations and Supplier Chief Executive Officer.

	f)		Nortel President of Global Operations and Supplier Chief Executive Officer must have a conference within five (5) business days, or such other time period as agreed to by the parties, to discuss the Issue, define the resolution, and issue a joint resolution document.

	g)		In the event an is not resolved by Nortel President of Global Operations and Supplier Chief Executive Officer, the parties shall be free to pursue all rights and remedies in law and in equity.

7. Additional Provisions

7.1

Supplier shall not assign or otherwise transfer all or any part of the Supply Agreement or any rights, obligations or duties thereunder, or any interest therein, without the prior written consent of NNL, which consent may be withheld by NNL in its sole discretion. Any attempted assignment or transfer in violation of this provision shall be void.

Page 5 of 24

7.2

The Supply Agreement, to the extent not inconsistent with the terms and conditions of this Agreement and any definitive documentation evidencing the transactions contemplated in the February 2005 Addendum, will govern purchase orders and the following provisions will have no force or effect as of the Effective Date (i) any click-wrap or shrink-wrap terms and conditions (or any terms and conditions referenced within any click-wrap or shrink-wrap terms), or (ii) any purchase order or standard acknowledgement form terms and conditions.

8. General

8.1

This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument. A faxed signature shall have the same legally binding effect as an original signature.

8.2

The section headings contained in this Agreement are for reference purposes only and shall not affect the meaning of this Agreement.

8.3

If any provision of this Agreement is determined to be legally unenforceable or invalid, the remaining provisions will continue in effect. The parties will substitute a provision that most closely approximates the economic effect and intent of the invalid provision.

8.4

Unless waived and agreed in writing by the Parties, no action or inaction by a party under this Agreement will constitute a waiver of a party’s rights or obligations under this Agreement.

8.5

Under this Agreement Supplier is an independent contractor. This Agreement does not create a joint venture, partnership, principal-agent or employment relationship between Supplier and NNL.

8.6

All exhibits attached to this Agreement are also incorporated herein.

8.7

All written communication concerning this Agreement or amendments or restatements of this Agreement will be in the English language.

8.8

The validity, construction, interpretation and performance of this Agreement and the rights and obligations of the Parties and any purchase made hereunder shall be governed by the laws of the State of New York, without regard to its rules with respect to the conflict of laws. The application of the U.N. Convention on Contracts for the International Sale of Goods is specifically excluded from this Agreement.

8.9

Section headings are inserted herein for convenience only and shall not affect the meaning or interpretation of this Agreement or any provision hereof.

Page 6 of 24

IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their duly authorized representatives to be effective as of the Effective Date defined herein.


NORTEL NETWORKS LIMITED				BOOKHAM TECHNOLOGY PLC
By: /s/ John Haydon				By: /s/ Steve Abely


Printed Name: John Haydon				Printed Name: Steve Abely

Title: Vice President, Global Supply
Management				Title: Chief Financial Officer

Date: May 2, 2005				Date: May 2, 2005

Page 7 of 24

EXHIBIT A

PRICING

Allocation

March 31^st

April 1, 2005

Family

Sub-Family

LTB

CPC

Bookham P/N

ITEM DESC

1H05

2005 Prices

Agreement

EDFA

LTB

A0776715

NTW099DE

AF,EDFA,DUAL AMP,L-BAND

[**]

$[**]

[**]

EDFA

LTB

A0776716

NTW099ED

AF,EDFA,BOOSTER 18,L-BAND

[**]

$[**]

[**]

EDFA

LTB

A0776717

NTW099FD

AF,EDFA,BOOSTER 21,L-BAND

[**]

$[**]

[**]

EDFA

A0512494

MGMFP-1 (2343)

OPTERA Metro OFA C band EDFA C

[**]

$[**]

EDFA

A0512495

MGMEL-2 (2535)

AF,EDFA,BOOSTE,L

[**]

$[**]

EDFA

LTB

A0830132

NTW099BD

EDFA,MOSAIC C-Band Booster 18

[**]

EDFA

LTB

A0830133

NTW099AE

EDFA,BOOSTER Dual Amp C-Band

[**]

EDFA

LTB

A0830135

NTW099CD

EDFA,BOOSTER,21dBM, C-BAND

[**]

EDFA

LTB

A0851346

NTW111CD

AF,RA,DISTR,L-C,17DB,1443,4NM

[**]

EDFA

LTB

A0851353

NTW111LD

AF,RA,DISTR,L-C,17DB

[**]

EDFA Racl

EDFA

LTB

A0725599

NTW048AB

18dBm OPTICAL AMPLIFIER SUBRACK

[**]

$[**]

EDFA Racl

EDFA

LTB

A0765676

NTW048HB

Type 119 Sub Rack EDFA 9dBm (C33 FC/SPC Connectors) with Pre

[**]

$[**]

EDFA

A0893852

MGMFP-1(2515)

C-Band High Power EDFA Gain Mo

[**]

$[**]

EDFA

A0893853

MGMEL-2(2547)

L-Band High Power EDFA Gain Mo

[**]

$[**]

EDFA

A0522334

MBC-1EBC57

SFF Group 2

[**]

$[**]

EDFA

A0522335

MBC-1ECC57

SFF Group 9

[**]

$[**]

EDFA

A0522336

MBC-1EDC57

SFF Group 1,3,4,5,6,7,8

[**]

$[**]

EDFA

Amplifier

N0023684

MGM2FV-1EOC28

C-BAND Variable Gain Amplifier EDFA

[**]

$[**]

EDFA

Amplifier

N0023685

MGM2EV-1EPC28

L-BAND Variable Gain Ampifier EDFA

[**]

$[**]

EDFA

CPL Amplifier

A0521584

PTC234AA

CPL EDFA Module 1 — NTT830AA

[**]

$[**]

EDFA

CPL Amplifier

A0521585

PTC234BA

CPL EDFA Module 2 — NTT830BA

[**]

$[**]

EDFA

CPL Amplifier

A0521586

PTC234CA

CPL EDFA Module 3 — NTT830CA

[**]

EDFA

CPL Amplifier

A0533236

PTC234DA

CPL EDFA Module 4 — NTT830DA

[**]

$[**]

Misc.

A0544680

CP2A52BA

CPL EDFA Fan Replacement Kit

[**]

$[**]

XFP

XFPs

TBD

IGF-32311

SR-1/10GBase -LX XFP

$[**]

XFP

XFPs

TBD

IGF-32511

IR-2/10GBase-EX XFP

$[**]

XFP

XFPs

TBD

IGF-32611

LR-2 XFP

$[**]

Tx/Rx

Buried Het

A0786528

NTW142CE

QFT0018-32A TX,DM,2.5Gb/s,1530

[**]

$[**]

Tx/Rx

Buried Het

A0786857

NTW142BE

QFT0018-17A TX,DM,2.5Gb/s,1528

[**]

$[**]

Tx/Rx

Buried Het

A0786859

NTW142EE

QFT0018-18A TX,DM,2.5Gb/s,1533

[**]

$[**]

Tx/Rx

Buried Het

A0786860

NTW142DE

QFT0018-19A TX,DM,2.5Gb/s,1531

[**]

$[**]

Tx/Rx

Buried Het

A0786861

NTW142HE

QFT0018-20A TX,DM,2.5Gb/s,1538

[**]

$[**]

Tx/Rx

Buried Het

A0786863

NTW142LE

QFT0018-21A TX,DM,2.5Gb/s,1542

[**]

$[**]

Tx/Rx

Buried Het

A0786864

NTW142JE

QFT0018-22A TX,DM,2.5Gb/s,1539

[**]

$[**]

Tx/Rx

Buried Het

A0786866

NTW142KE

QFT0018-23A TX,DM,2.5Gb/s,1541

[**]

$[**]

Tx/Rx

Buried Het

A0786867

NTW142PE

QFT0018-24A TX,DM,2.5Gb/s,1547

[**]

$[**]

Tx/Rx

Buried Het

A0786868

NTW142SE

QFT0018-25A TX,DM,2.5Gb/s,1552

[**]

$[**]

Tx/Rx

Buried Het

A0786869

NTW142QE

QFT0018-26A TX,DM,2.5Gb/s,1549

[**]

$[**]

Tx/Rx

Buried Het

A0786870

NTW142RE

QFT0018-27A TX,DM,2.5Gb/s,1550

[**]

$[**]

Tx/Rx

Buried Het

A0786871

NTW142VE

QFT0018-28A TX,DM,2.5Gb/s,1557

[**]

$[**]

Tx/Rx

Buried Het

A0786872

NTW142YE

QFT0018-29A TX,DM,2.5Gb/s,1562

[**]

$[**]

Tx/Rx

Buried Het

A0786874

NTW142WE

QFT0018-30A TX,DM,2.5Gb/s,1558

[**]

$[**]

Tx/Rx

Buried Het

A0786875

NTW142XE

QFT0018-31A TX,DM,2.5Gb/s,1560

[**]

$[**]

Tx/Rx

Buried Het

A0798171

NTW142BE

QFT0018-33A TX,DM,2.5GBPS,1528

[**]

$[**]

Tx/Rx

Buried Het

A0798175

NTW142EE

QFT0018-34A TX,DM,2.5GBPS,1533

[**]

$[**]

Tx/Rx

Buried Het

A0798354

NTW142CE

QFT0018-35A TX,DM,2.5GBPS,1530

[**]

$[**]

Tx/Rx

Buried Het

A0798355

NTW142DE

QFT0018-36A TX,DM,2.5GBPS,1531

[**]

$[**]

Tx/Rx

Buried Het

A0798356

NTW142HE

QFT0018-37A TX,DM,2.5GBPS,1538

[**]

$[**]

Tx/Rx

Buried Het

A0798357

NTW142LE

QFT0018-38A TX,DM,2.5GBPS,1542

[**]

$[**]

Tx/Rx

Buried Het

A0798358

NTW142JE

QFT0018-39A TX,DM,2.5GBPS,1539

[**]

$[**]

Tx/Rx

Buried Het

A0798359

NTW142KE

QFT0018-40A TX,DM,2.5GBPS,1541

[**]

$[**]

Tx/Rx

Buried Het

A0798360

NTW142PE

QFT0018-41A TX,DM,2.5GBPS,1547

[**]

$[**]

Tx/Rx

Buried Het

A0798361

NTW142SE

QFT0018-42A TX,DM,2.5GBPS,1552

[**]

$[**]

Tx/Rx

Buried Het

A0798362

NTW142QE

QFT0018-43A TX,DM,2.5GBPS,1549

[**]

$[**]

Tx/Rx

Buried Het

A0798363

NTW142RE

QFT0018-44A TX,DM,2.5GBPS,1550

[**]

$[**]

Tx/Rx

Buried Het

A0798364

NTW142VE

QFT0018-45A TX,DM,2.5GBPS,1557

[**]

$[**]

Tx/Rx

Buried Het

A0798365

NTW142YE

QFT0018-46A TX,DM,2.5GBPS,1562

[**]

$[**]

Tx/Rx

Buried Het

A0798366

NTW142WE

QFT0018-47A TX,DM,2.5GBPS,1558

[**]

$[**]

Tx/Rx

Buried Het

A0798367

NTW142XE

QFT0018-48A TX,DM,2.5GBPS,1560

[**]

$[**]

Tx/Rx

Buried Het

A0798368

NTW142DJ

QFT0018-49A TX,DM,2.5GBPS,1570

[**]

$[**]

Tx/Rx

Buried Het

A0798369

NTW142GJ

QFT0018-50A TX,DM,2.5GBPS,1575

[**]

$[**]

Tx/Rx

Buried Het

A0798370

NTW142EJ

QFT0018-51A TX,DM,2.5GBPS,1572

[**]

$[**]

Tx/Rx

Buried Het

A0798371

NTW142FJ

QFT0018-52A TX,DM,2.5GBPS,1573

[**]

$[**]

Tx/Rx

Buried Het

A0786838

NTW142GJ

TX,DM,2.5GBPS,1575.37NM,2.0MW,14PIN BUTTERFLY

[**]

$[**]

Tx/Rx

Buried Het

A0798372

NTW142KJ

QFT0018-53A TX,DM,2.5GBPS,1580

[**]

$[**]

Tx/Rx

Buried Het

A0798373

NTW142NJ

QFT0018-54A TX,DM,2.5GBPS,1585

[**]

$[**]

Tx/Rx

Buried Het

A0798374

NTW142LJ

QFT0018-55A TX,DM,2.5GBPS,1582

[**]

$[**]

Tx/Rx

Buried Het

A0798375

NTW142MJ

QFT0018-56A TX,DM,2.5GBPS,1583

[**]

$[**]

Tx/Rx

Buried Het

A0798405

NTW142RJ

QFT0018-57A TX,DM,2.5GBPS,1590

[**]

$[**]

Page 8 of 24

Allocation

March 31^st

April 1, 2005

Family

Sub-Family

LTB

CPC

Bookham P/N

ITEM DESC

1H05

2005 Prices

Agreement

Tx/Rx

Buried Het

A0798406

NTW142UJ

QFT0018-58A TX,DM,2.5GBPS,1595

[**]

$[**]

Tx/Rx

Buried Het

A0798408

NTW142SJ

QFT0018-59A TX,DM,2.5GBPS,1592

[**]

$[**]

Tx/Rx

Buried Het

A0798409

NTW142TJ

QFT0018-60A TX,DM,2.5GBPS,1593

[**]

$[**]

Tx/Rx

Buried Het

A0798411

NTW142XJ

QFT0018-61A TX,DM,2.5GBPS,1600

[**]

$[**]

Tx/Rx

Buried Het

A0798414

NTW142AN

QFT0018-62A TX,DM,2.5GBPS,1605

[**]

$[**]

Tx/Rx

Buried Het

A0798415

NTW142YJ

QFT0018-63A TX,DM,2.5GBPS,1602

[**]

$[**]

Tx/Rx

Buried Het

A0798416

NTW142ZJ

QFT0018-64A TX,DM,2.5GBPS,1604

[**]

$[**]

Tx/Rx

CWDM

A0506482

LC25WC147AGN-C57

TX,DM,2.5Gb/s,1470nm,4mW,DFB,LC (was NTW1422D)

[**]

$[**]

Tx/Rx

CWDM

A0506487

LC25WC149AGN-C57

TX,DM,2.5Gb/s,1490nm,4mW,DFB,LC (was NTW1423D)

[**]

$[**]

Tx/Rx

CWDM

A0506545

LC25WC151AGN-C57

TX,DM,2.5Gb/s,1510 nm,4mW,DFB,LC (was NTW1424D)

[**]

$[**]

Tx/Rx

CWDM

A0506546

LC25WC153AGN-C57

TX,DM,2.5Gb/s,1530 nm,4mW,DFB,LC (was NTW1425D)

[**]

$[**]

Tx/Rx

CWDM

A0506549

LC25WC155AGN-C57

TX,DM,2.5Gb/s,1550 nm,4mW,DFB,LC (was NTW1426D)

[**]

$[**]

Tx/Rx

CWDM

A0506550

LC25WC157AGN-C57

TX,DM,2.5Gb/s,1570 nm,4mW,DFB,LC (was NTW1427D)

[**]

$[**]

Tx/Rx

CWDM

A0506551

LC25WC159AGN-C57

TX,DM,2.5Gb/s,1590 nm,4mW,DFB,LC (was NTW1428D)

[**]

$[**]

Tx/Rx

CWDM

A0506553

LC25WC161AGN-C57

TX,DM,2.5Gb/s,1610 nm,4mW,DFB,LC (was NTW1429D)

[**]

$[**]

Tx/Rx

Buried Het

A0543453

NTW173BE

TX,DM,2.GGBPS,1528.77NM,2MW

[**]

$[**]

Tx/Rx

Buried Het

A0543454

NTW173CE

TX,DM,2.5GBPS,1530.33NM,2MW

[**]

$[**]

Tx/Rx
Tx/Rx

Buried Het
Buried Het

A0543455
A0543456

NTW173DE
NTW173EE

TX,DM,2.5GBPS,1531.89NM,2MW TX,DM,2.5GBPS,1533.47NM,2MW

[**]
[**]

%
%

$[**]
$[**]

Tx/Rx

Buried Het

A0543457

NTW173HE

TX,DM,2.5GBPS,1538.19NM,2MW

[**]

$[**]

Tx/Rx

Buried Het

A0543458

NTW173JE

TX,DM,2.5GBPS,1539.77NM,2MW

[**]

$[**]

Tx/Rx

Buried Het

A0543459

NTW173KE

TX,DM,2.5GBPS,1541.35NM,2MW

[**]

$[**]

Tx/Rx

Buried Het

A0543460

NTW173LE

TX,DM,2.5GBPS,1542.94NM,2MW

[**]

$[**]

Tx/Rx

Buried Het

A0543461

NTW173PE

TX,DM,2.5GBPS,1547.72NM,4MW,14PIN BUTTERFLY

[**]

$[**]

Tx/Rx

Buried Het

A0543462

NTW173QE

TX,DM,2.5GBPS,1549.32NM,2MW

[**]

$[**]

Tx/Rx

Buried Het

A0543463

NTW173RE

TX,DM,2.5GBPS,1550.92NM,4MW,14PIN BUTTERFLY

[**]

$[**]

Tx/Rx

Buried Het

A0543463

NTW173RE

TX,DM2.5GBPS,1550.92NM2MW14PIN BUTTERFLY

[**]

$[**]

Tx/Rx

Buried Het

A0543464

NTW173SE

TX,DM,2.5GBPS,1552.52NM,2MW

[**]

$[**]

Tx/Rx

Buried Het

A0543465

NTW173VE

TX,DM,2.5GBPS,1557.36NM,2MW

[**]

$[**]

Tx/Rx

Buried Het

A0543466

NTW173WE

TX,DM,2.5GBPS,1558.98NM,2MW

[**]

$[**]

Tx/Rx

Buried Het

A0543467

NTW173XE

TX,DM,2.5GBPS,1560.61NM,2MW

[**]

$[**]

Tx/Rx

Buried Het

A0543468

NTW173YE

TX,DM,2.5GBPS,1562.23NM,2MW

[**]

$[**]

Tx/Rx

Buried Het

A0543469

NTW173FE

TX,DM,2.5GBPS,1535.04NM,2MW

[**]

$[**]

Tx/Rx

Buried Het

A0543470

NTW173UE

TX,DM,2.5GBPS,1555.75NM,2MW

[**]

$[**]

Tx/Rx

Buried Het

A0547831

NTW173JJ

TX,DM,2.5GBPS,1578.69NM,4MW,14PIN BUTTERFLY

[**]

$[**]

Tx/Rx

Buried Het

A0547832

NTW173UL

TX,DM,2.5GBPS,1596.34NM,4MW,14PIN BUTTERFLY

[**]

$[**]

Tx/Rx

Buried Het

A0830024

NTW173DJ

TX,DM,2.5GBPS,1570.42NM,2MW,14PIN (SC/PC CONN)

[**]

$[**]

Tx/Rx

Buried Het

A0830063

NTW173EJ

TX,DM,2.5GBPS,1572.06NM,2MW,14PIN (SC/PC CONN)

[**]

$[**]

Tx/Rx

Buried Het

A0830065

NTW173FJ

TX,DM,2.5GBPS,1573.71NM,2MW,14PIN (SC/PC CONN

[**]

$[**]

Tx/Rx

Buried Het

A0830174

NTW173KJ

TX,DM,2.5GBPS,1580.35NM,2MW,14PIN BUTTERFLY

[**]

$[**]

Tx/Rx

Buried Het

A0830176

NTW173LJ

TX,DM,2.5GBPS,1582.02NM,2MW,14PIN BUTTERFLY

[**]

$[**]

Tx/Rx

Buried Het

A0830177

NTW173MJ

TX,DM,2.5GBPS,1583.69NM,2MW,14PIN BUTTERFLY

[**]

$[**]

Tx/Rx

Buried Het

A0830178

NTW173NJ

TX,DM,2.5GBPS,1585.36NM,2MW,14PIN BUTTERFLY

[**]

$[**]

Tx/Rx

Buried Het

A0830179

NTW173RJ

TX,DM,2.5GBPS,1590.41NM,2MW,14PIN BUTTERFLY (SC/PC CON

[**]

$[**]

Tx/Rx

Buried Het

A0830180

NTW173SJ

TX,DM,2.5GBPS,1592.10NM,2MW,14PIN BUTTERFLY (SC/PC CON

[**]

$[**]

Tx/Rx

Buried Het

A0830181

NTW173TJ

TX,DM,2.5GBPS,1593.79NM,2MW,14PIN BUTTERFLY (SC/PC CON

[**]

$[**]

Tx/Rx

Buried Het

A0830183

NTW173XJ

TX,DM,2.5GBPS,1600.60NM,2MW,14PIN BUTTERFLY

[**]

$[**]

Tx/Rx

Buried Het

A0830184

NTW173YJ

TX,DM,2.5GBPS,1602.31NM,2MW,14PIN BUTTERFLY

[**]

$[**]

Tx/Rx

Buried Het

A0830185

NTW173ZJ

TX,DM,2.5GBPS,1604.03NM,2MW,14PIN BUTTERFLY

[**]

$[**]

Tx/Rx

Buried Het

A0830186

NTW173AN

TX,DM,2.5GBPS,1605.74NM,2MW,14PIN BUTTERFLY

[**]

$[**]

Tx/Rx

Buried Het

A0998325

NTW173GJ

TX,DM,2.5GBPS,1575.37NM ,2.0MW,SC connector, pigtail length 60

[**]

$[**]

Tx/Rx

Buried Het

A0998326

NTW173UJ

TX,DM,2.5GBPS,1595.49NM,2.0MW,SC connector , pigtail length 600

[**]

$[**]

Tx/Rx

Buried Het

N0025909

NTW173HJ

TX,DM,2.5GBPS,1577.03,2MW,14PIN (SC/PC CONN)

[**]

$[**]

Tx/Rx

Buried Het

A0980842

NTW190AN

TX,DM,2.5Gb/s,1605.74NM,4.0mW,14PIN,LC,FLEX RATE,EXT REA

[**]

$[**]

Page 9 of 24

Allocation

March 31^st

April 1, 2005

Family

Sub-Family

LTB

CPC

Bookham P/N

ITEM DESC

1H05

2005 Prices

Agreement

Tx/Rx

Buried Het

A0889416

NTW190BE

TX,DM,2.5Gb/s,1528.77nm,4.0mW,

[**]

$[**]

Tx/Rx

Buried Het

A0980815

NTW190CE

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980816

NTW190DE

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980829

NTW190DJ

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980814

NTW190EE

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980831

NTW190EJ

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980832

NTW190FJ

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980830

NTW190GJ

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980817

NTW190HE

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980819

NTW190JE

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980820

NTW190KE

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980833

NTW190KJ

TX,DM,2.5Gb/s,1580.35NM,4.0mW,14PIN,LC,FLEX RATE, EXT REA

[**]

$[**]

Tx/Rx

Buried Het

A0980818

NTW190LE

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980835

NTW190LJ

TX,DM,2.5Gb/s,1582.02NM,4.0mW,14PIN,LC,FLEX RATE,EXT REA

[**]

$[**]

Tx/Rx

Buried Het

A0980836

NTW190MJ

TX,DM,2.5Gb/s,1583.69NM,4.0mW,14PIN,LC,FLEX RATE,EXT REA

[**]

$[**]

Tx/Rx

Buried Het

A0980834

NTW190NJ

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980821

NTW190PE

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980823

NTW190QE

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980824

NTW190RE

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980837

NTW190RJ

TX,DM,2.5Gb/s,1590.41NM,4.0mW,14PIN,LC,FLEX RATE, EXT REA

[**]

$[**]

Tx/Rx

Buried Het

A0980822

NTW190SE

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980839

NTW190SJ

TX,DM,2.5Gb/s,1592.10NM,4.0mW,14PIN,LC,FLEX RATE, EXT REA

[**]

$[**]

Tx/Rx

Buried Het

A0980840

NTW190TJ

TX,DM,2.5Gb/s,1593.79NM,4.0mW,14PIN,LC,FLEX RATE, EXT REA

[**]

$[**]

Tx/Rx

Buried Het

A0980838

NTW190UJ

TX,DM,2.5Gb/s,1595.49NM,4.0mW,14PIN,LC,FLEX RATE, EXT REA

[**]

$[**]

Tx/Rx

Buried Het

A0980825

NTW190VE

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980827

NTW190WE

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980828

NTW190XE

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980841

NTW190XJ

TX,DM,2.5Gb/s,1600.60NM,4.0mW,

[**]

$[**]

Tx/Rx

Buried Het

A0980826

NTW190YE

2.4Gbps BH FBR DFB TX 4mW

[**]

$[**]

Tx/Rx

Buried Het

A0980843

NTW190YJ

TX,DM,2.5Gb/s,1602.31NM,4.0mW,

[**]

$[**]

Tx/Rx

Buried Het

A0980844

NTW190ZJ

TX,DM,2.5Gb/s,1604.03NM,4.0mW,14PIN,LC,FLEX RATE, EXT REA

[**]

$[**]

Tx/Rx

BH Ext. Reach

A0996404

NTW607BE

2.4Gbps XLR DFB Laser 1528.77nm 4mW ETALON Stabilised Exten

[**]

$[**]

Tx/Rx

BH Ext. Reach

A0996405

NTW607CE

2.4Gbps XLR DFB Laser 1530.33nm 4mW ETALON Stabilised Exten

[**]

$[**]

Tx/Rx

BH Ext. Reach

A0996406

NTW607DE

2.4Gbps XLR DFB Laser 1531.90nm 4mW ETALON Stabilised Exten

[**]

$[**]

Tx/Rx

BH Ext. Reach

A0996407

NTW607EE

2.4Gbps XLR DFB Laser 1533.47nm 4mW ETALON Stabilised Exten

[**]

$[**]

Tx/Rx

BH Ext. Reach

A0996408

NTW607FE

2.4Gbps XLR DFB Laser 1535.04nm 4mW ETALON Stabilised Exten

[**]

$[**]

Tx/Rx

BH Ext. Reach

A0996415

NTW607RE

2.4Gbps XLR DFB Laser 1550.92nm 4mW ETALON Stabilised Exten

[**]

$[**]

Tx/Rx

BH Ext. Reach

A0996416

NTW607SE

2.4Gbps XLR DFB Laser 1552.52nm 4mW ETALON Stabilised Exten

[**]

$[**]

Tx/Rx

BH Ext. Reach

A0996417

NTW607UE

2.4Gbps XLR DFB Laser 1555.57nm 4mW ETALON Stabilised Exten

[**]

$[**]

Tx/Rx

BH Ext. Reach

A0996418

NTW607VE

2.4Gbps XLR DFB Laser 1557.36nm 4mW ETALON Stabilised Exten

[**]

$[**]

Tx/Rx

BH Ext. Reach

A0996419

NTW607WE

2.4Gbps XLR DFB Laser 1558.98nm 4mW ETALON Stabilised Exten

[**]

$[**]

Tx/Rx

BH Ext. Reach

A0996420

NTW607XE

2.4Gbps XLR DFB Laser 1560.61nm 4mW ETALON Stabilised Exten

[**]

$[**]

Tx/Rx

BH Ext. Reach

A0996421

NTW607YE

2.4Gbps XLR DFB Laser 1562.23nm 4mW ETALON Stabilised Exten

[**]

$[**]

Tx/Rx

BH Ext. Reach

N0005056

NTW607QG

2.4GBPS XLR DFB LASER 1550.12NM 4MW ETALON STABI

[**]

$[**]

Tx/Rx

BH Ext. Reach

N0005059

NTW607EG

2.4GBPS XLR DFB LASER 1534.25NM 4MW ETALON STABI

[**]

$[**]

Tx/Rx

BH Ext. Reach

N0005057

NTW607DG

2.4GBPS XLR DFB LASER 1532.68NM 4MW ETALON STABI

[**]

$[**]

Tx/Rx

BH Ext. Reach

N0005055

NTW607CG

2.4GBPS XLR DFB LASER 1531.12NM 4MW ETALON STABI

[**]

$[**]

Tx/Rx

BH Ext. Reach

N0005058

NTW607RG

2.4GBPS XLR DFB LASER 1551.72NM 4MW ETALON STABI

[**]

$[**]

Tx/Rx

BH Ext. Reach

N0005060

NTW607UG

2.4GBPS XLR DFB LASER 1556.55NM 4MW ETALON STABI

[**]

$[**]

Tx/Rx

Buried Het

A0514026

LC25W7703AAN-C57

Custom Wavelensgth, 1577.03nm,

[**]

$[**]

Tx/Rx

Buried Het

A0514027

LC25W7869AAN-C57

Custom Wavelength, 1578.69nm,

[**]

$[**]

Tx/Rx

Buried Het

A0514028

LC25W9464AAN-C57

Custom Wavelength, 1594.64nm,

[**]

$[**]

Tx/Rx

Buried Het

A0514029

LC25W9634AAN-C57

Custom Wavelength, 1596.34nm,

[**]

$[**]

Tx/Rx

Buried Het

A0521299

NTW6076D

2.4Gbps XLR DFB Laser 1528.77nm to 1562.23nm 4mW ETALON S

[**]

$[**]

Tx/Rx

Buried Het

A0998603

NTW1416D

2.4Gbps BH DFB Laser (1526nm-1615nm) 3mW

[**]

$[**]

Page 10 of 24

Allocation

March 31^st

April 1, 2005

Family

Sub-Family

LTB

CPC

Bookham P/N

ITEM DESC

1H05

2005 Prices

Agreement

Tx/Rx

Buried Het

A0831310

NTW141HE

2.4Gbps BH DFB Laser 1538.19nm 3mW, 14 pin Butterfly Common I

[**]

$[**]

Tx/Rx

Buried Het

A0831314

NTW141JE

2.4Gbps BH DFB Laser 1541.35nm 3mW, 14 pin Butterfly Common I

[**]

$[**]

Tx/Rx

Buried Het

A0831312

NTW141KE

2.4Gbps BH DFB Laser 1539.77nm 3mW, 14 pin Butterfly Common I

[**]

$[**]

Tx/Rx

Buried Het

A0831316

NTW141LE

2.4Gbps BH DFB Laser 1542.94nm 3mW, 14 pin Butterfly Common I

[**]

$[**]

Tx/Rx

Buried Het

A0831326

NTW141RE

2.4Gbps BH DFB Laser 1550.92nm 3mW, 14 pin Butterfly Common I

[**]

$[**]

Tx/Rx

Buried Het

A0831433

LC25W4932BA-20AC(NTW143C

2.4Gbps BH DFB Laser 1549.32nm 10mW, 14 pin Butterfly Common

[**]

$[**]

Tx/Rx

Buried Het

A0831435

LC25W5092BA-20AC(NTW143F

2.4Gbps BH DFB Laser 1550.92nm 10mW, 14 pin Butterfly Common

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549100

LC25EW3033AAN-C57

TX,DM,2.5GB/S,1530.334NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549101

LC25EW3112AAN-C57

TX,DM,2.5GB/S,1531.116NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549102

LC25EW3190AAN-C57

TX,DM,2.5GB/S,1531.898NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549103

LC25EW3268AAN-C57

TX,DM,2.5GB/S,1532.681NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549104

LC25EW3425AAN-C57

TX,DM,2.5GB/S,1534.250NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549105

LC25EW3503AAN-C57

TX,DM,2.5GB/S,1535.036NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549106

LC25EW3582AAN-C57

TX,DM,2.5GB/S,1535.822NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549107

LC25EW3660AAN-C57

TX,DM,2.5GB/S,1536.609NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549108

LC25EW3818AAN-C57

TX,DM,2.5GB/S,1538.186NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549109

LC25EW3898AAN-C57

TX,DM,2.5GB/S,1538.976NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549110

LC25EW3976AAN-C57

TX,DM,2.5GB/S,1539.766NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549111

LC25EW4056AAN-C57

TX,DM,2.5GB/S,1540.557NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549112

LC25EW4214AAN-C57

TX,DM,2.5GB/S,1542.142NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549113

LC25EW4293AAN-C57

TX,DM,2.5GB/S,1542.936NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549114

LC25EW4373AAN-C57

TX,DM,2.5GB/S,1543.730NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549115

LC25EW4452AAN-C57

TX,DM,2.5GB/S,1544.526NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549116

LC25EW4611AAN-C57

TX,DM,2.5GB/S,1546.119NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549117

LC25EW4691AAN-C57

TX,DM,2.5GB/S,1546.917NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549118

LC25EW4771AAN-C57

TX,DM,2.5GB/S,1547.715NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549119

LC25EW4851AAN-C57

TX,DM,2.5GB/S,1548.515NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549120

LC25EW5011AAN-C57

TX,DM,2.5GB/S,1550.116NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549121

LC25EW5091AAN-C57

TX,DM,2.5GB/S,1550.918NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549122

LC25EW5172AAN-C57

TX,DM,2.5GB/S,1551.721NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549123

LC25EW5252AAN-C57

TX,DM,2.5GB/S,1552.524NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549124

LC25EW5413AAN-C57

TX,DM,2.5GB/S,1554.134NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549125

LC25EW5494AAN-C57

TX,DM,2.5GB/S,1554.940NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0546126

LC25EW5574AAN-C57

TX,DM,2.5GB/S,1555.747NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549127

LC25EW5655AAN-C57

TX,DM,2.5GB/S,1556.555NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549128

LC25EW5817AAN-C57

TX,DM,2.5GB/S,1558.173NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549129

LC25EW5898AAN-C57

TX,DM,2.5GB/S,1558.983NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549130

LC25EW5979AAN-C57

TX,DM,2.5GB/S,1559.794NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549131

LC25EW6060AAN-C57

TX,DM,2.5GB/S,1560.606NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549132

LC25EW6223AAN-C57

TX,DM,2.5GB/S,1562.233NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549133

LC25EW6305AAN-C57

TX,DM,2.5GB/S,1563.047NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549134

LC25EW6386AAN-C57

TX,DM,2.5GB/S,1563.863NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Tx/Rx

Buried Het — Locked

A0549135

LC25EW6468AAN-C57

TX,DM,2.5GB/S,1564.679NM,4.0MW,14PIN,LC,FLEX RATE,

[**]

$[**]

Page 11 of 24

Allocation

March 31^st

April 1, 2005

Family

Sub-Family

LTB

CPC

Bookham P/N

ITEM DESC

1H05

2005 Prices

Agreement

Tx/Rx

2.5 Gb/s Rx

LTB

A0643928

NTW001AA

1310/1550 nm Rx module, 2.5 GB

[**]

$[**]

Tx/Rx

2.5 Gb/s Rx

LTB

A0994198

NTW001AD

8 pin (uncooled) APD Preamp Rx

[**]

$[**]

Tx/Rx

2.5 Gb/s Rx

LTB

A0895858

NTW001AF

8 Pin APD Pre-amp Rx Module, 1310/1550nm, 2.5 Gbps, (C28 SC C

[**]

$[**]

Tx/Rx

2.5 Gb/s Rx

LTB

A0738255

NTW001BA

8 pin (cooled) APD Pre-amp Rx

[**]

$[**]

Tx/Rx

2.5 Gb/s Rx

LTB

A0774429

NTW001BB

8 PIN (cooled) APD PRE-AMP

[**]

$[**]

Tx/Rx

2.5 Gb/s Rx

LTB

A0851004

NTW001BC

8 pin APD Cooled Pre-amp RX

[**]

$[**]

Tx/Rx

Co-planar 2.5 Gb/s Rx

LTB

A0543858

AT3GC/GA57

2.5 Gb/s co-planar APD

[**]

$[**]

Tx/Rx

Co-planar 2.5 Gb/s Rx

N0016610

AT3SGCB-C57

2.5Gb/s Rx, APD-Preamp module, Coplannar package, Uncoo

[**]

$[**]

Tx/Rx

Co-planar 2.5 Gb/s Rx

N0000970

AT3SGC-C28

UNCOOLED OC48 COPLANAR APD WITH AGC

[**]

$[**]

Modules

LTB

A0806599

NTW080AD

IM,MO,2.5GBPS,1310nm,TX,DC,

[**]

$[**]

Modules

LTB

A0806602

NTW081AD

IM,MO,2.5GBPS,1310NM,RX,DC,

[**]

$[**]

Tx/Rx

10 Gb/s PIN & APD

LTB

A0861414

NT8L73QB

A0861414 RX,APD,10.0GBPS,1280-

[**]

$[**]

Tx/Rx

10 Gb/s PIN & APD

LTB

A0995370

AT10GC

HIGH PERFORMANCE 10G APD/PREAMP RX, MSA CO-PLA

[**]

$[**]

Tx/Rx

10 Gb/s PIN & APD

LTB

A0863412

PP-10G-C57

RX,PIN,10GBPS,1300-1575NM

[**]

$[**]

Tx/Rx

10G Co-Planar APD

A0504850

NTW606DE

10G APD RX,LOW BANDWIDTH,MSA CO-PLANAR FOOTPRINT

[**]

$[**]

[**]

Tx/Rx

10 Gb/s PIN & APD

A0541381

PTV10GC-C57R

10G COPLANAR PIN/PREAMP WITH INTEGRATED VOA

[**]

$[**]

[**]

Modules

LTB

A0855312

NTCC07X3

10G RX FIBER TRAY ASSEMBLY w/A

[**]

$[**]

Tx/Rx

Mini-dil Tx

LTB

A0814045

NT8W66AE

8 pin miniDil Tx 0.2mW Plastic

[**]

$[**]

Tx/Rx

Mini-dil Tx

LTB

A0825309

NT8W66AE

8 pin miniDil Tx 0.2mW Plastic

[**]

$[**]

Tx/Rx

Mini-dil Tx

LTB

A0767175

NT8W66BE

IM,MO,1.25GBPS,1260-1360NM

[**]

$[**]

Tx/Rx

Mini-dil Tx

LTB

A0680981

NT8W66BM

1260-1360 nm TX MODULE, 0.1 mW

[**]

$[**]

Tx/Rx

Mini-dil Tx

LTB

A0667667

NT8W66DB

1300NM Transmitter, 0.2 MW, SONET 155/622 MBPS

[**]

$[**]

Tx/Rx

Mini-dil Tx

LTB

A0640837

NT8W66DD

1300 NM TRANSMITTER MODULE, 0.

[**]

$[**]

Tx/Rx

Mini-dil Tx

LTB

A0796722

NT8W66DF

8 pin mini DIL Tx Module, 1300

[**]

$[**]

Tx/Rx

Mini-dil Tx

LTB

A0658478

NT8W66DG

TX,DM,15MBPS,1300NM

[**]

$[**]

Tx/Rx

Mini-dil Tx

LTB

A0738160

NT8W66DM

8 PIN MINI DIL TX MODULE 0.2mW

[**]

$[**]

Tx/Rx

Mini-dil Tx

LTB

A0727546

NT8W66DX

1300nm TX MODULE, .2mW

[**]

$[**]

Tx/Rx

Mini-dil Tx

LTB

A0644863

NT8W66DE

1300 NM TRANSMITTER MODULE 0.2 MW. HOUSED IN AN

[**]

$[**]

Tx/Rx

Mini-dil Tx

LTB

A0642223

NT8W66ED — LCV75CB-98C2

MEMORY IC, CMOS, CLOCKED FIFO, 64X36, 15NS, TQFP12

[**]

$[**]

Tx/Rx

Mini-dil Tx

LTB

A0846669

NT8W66AX

8 PIN MINI DIL TX MODULE 0.2 MW 155 / 622 MBPS 130

[**]

$[**]

Tx/Rx

Mini-dil Tx

LTB

A0727549

NT8W66DY

1300nm TX Module, .2mW

[**]

$[**]

Tx/Rx

Mini-dil Tx

LTB

A0727550

NT8W66DZ

1300nm TX Module, .2mW

[**]

$[**]

Tx/Rx

Mini-dil Tx HiPwr

LTB

A0834252

NT8W66JU

8 pin mini DIL VHT 1300nm Transmitter 155Mbps, 0.5mW

[**]

$[**]

Tx/Rx

Mini-dil Tx HiPwr

LTB

A0641235

NT8W66UD

LASER MODULE, 1300 NM, 1.4 MW,

[**]

$[**]

Tx/Rx

Mini-dil Tx HiPwr

LTB

A0768206

NT8W66UE

8 pin mini DIL 1300nm Tx Modul

[**]

$[**]

Tx/Rx

Mini-dil OC3 Rx

LTB

A0640984

NT8W95AD

RX,PIN,155MBPS,1300NM

[**]

$[**]

Tx/Rx

Mini-dil OC3 Rx

LTB

A0667668

NT8W95EB

RX,PIN,155MBPS,1300NM,,8-PIN MINI-DIL (SC/PC CONN)

[**]

$[**]

Tx/Rx

Mini-dil OC3 Rx

LTB

A0645709

NT8W95ED

1300 NM IR/LR RX MODULE, 155 M

[**]

$[**]

Tx/Rx

Mini-dil OC3 Rx

LTB

A0727563

NT8W95EU

1300nm IR/LR RX Module, 155MBPS

[**]

$[**]

Tx/Rx

Mini-dil OC3 Rx

LTB

A0727565

NT8W95EV

1300nm IL/LR RX Module, 155MBPS

Mini-Dil OC3 Rx

[**]

$[**]

Tx/Rx

Mini-dil OC12 Rx

LTB

A0851732

PTAV155G-P98C28

8 PIN MINI DIL RX MODULE 155MBPS 1300NM IR/LR 0.8

[**]

$[**]

Tx/Rx

Mini-dil OC12 Rx

LTB

A0640983

NT8W96AD

RX,PIN,622MBPS,1300NM

[**]

$[**]

Tx/Rx

Mini-dil OC12 Rx

LTB

A0658519

NT8W96AE

IM,MO,622MBPS,1300 NM,RX

[**]

$[**]

Tx/Rx

Mini-dil OC12 Rx

LTB

A0796727

NT8W96AG

8 pin mini DIL Rx Module, 1300

[**]

$[**]

Tx/Rx

Mini-dil OC12 Rx

LTB

A0648895

NT8W96CB

RX, PIN, 622MBPS, 1300N

[**]

$[**]

Tx/Rx

Mini-dil OC12 Rx

LTB

A0851735

NT8W96FE

8 PIN MINI DIL RX MODULE 622MBPS 1300NM IR/LR 0.8

[**]

$[**]

Tx/Rx

Mini-dil OC12 Rx

LTB

A0727566

NT8W96CT

RX, PIN, 622MBPS, 1300N

[**]

$[**]

Tx/Rx

Mini-dil 2.5 Gb/s Tx

LTB

A0835933

NTW103BE

8pin mini DIL 1300nm Tx PkGRND

[**]

$[**]

Tx/Rx

Mini-dil 2.5 Gb/s Rx

LTB

A0723516

NTW042AD

1300nm RX MODULE, SR, 2.5Gbps,

[**]

$[**]

Page 12 of 24

Allocation

March 31^st

April 1, 2005

Family

Sub-Family

LTB

CPC

Bookham P/N

ITEM DESC

1H05

2005 Prices

Agreement

Tx/Rx

Mini-dil 2.5 Gb/s Rx

LTB

A0827486

NTW042ED

SiV Rx 2.5G 1300nm 8V PIN Bias

[**]

$[**]

Tx/Rx

Mini-dil 2.5 Gb/s Rx

LTB

A0799350

NTW042BB

Silicon V Rx Module, 2.5Gb

[**]

$[**]

Tx/Rx

Mini-dil 2.5 Gb/s Tx

LTB

A0723518

NTW044AD

1300/1550nm RX MODULE, LR, 622

[**]

$[**]

Misc.

A0769197

NT8W56AC

Detector Coaxial with Single M

[**]

$[**]

Tx/Rx

OSC

A0521583

LC151D-20C57

OPTICAL TX MODULE, OSC LASER, 1510 NM, 100 MM FIB

[**]

$[**]

Tx/Rx

OSC

A0776722

NTW106BE

QFT0014-2A MODULE, Tx, OSC LAS

[**]

$[**]

Tx/Rx

OSC

A0824553

NTW106AE

TX,OSC,,1471.5NM,4.28MW

[**]

$[**]

Tx/Rx

OSC

A0824564

NTW106EE

TX,OSC,,1486.5NM,4.28MW

[**]

$[**]

Tx/Rx

OSC

A0832329

NTW106CE

TX,OSC,,1615.0NM,4.28MW

[**]

$[**]

Tx/Rx

OSC

A0824553

NTW106DE

TX,OSC,,1471.5NM,4.28MW,s2.4MM CABLE (SC CONN)

[**]

$[**]

Tx/Rx

OSC

A0782553

NTW106AE

OSC Laser, 1510nm, 3.3dBm, 2.4

[**]

$[**]

Tx/Rx

OSC

A0782554

NTW106BE

OSC Laser, 1480nm, 3.3dBm, 2.4

[**]

$[**]

Tx/Rx

OSC

A0896444

NTW106KE

OSC laser 1620nm, 5 dBm

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699447

NT8L73AE

1527.22 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0671566

NT8L73AF

OC-192 STABILIZED III-V MZ LASER MODULE, 1527.22 N

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762514

NT8L73AL

1527.99 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699448

NT8L73BE

1528.77 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762515

NT8L73BL

1529.55 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699449

NT8L73CE

1530.33 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0673452

NT8L73CG

OC-48 STABILIZED III-V MZ LASE

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762516

NT8L73CL

1531.12 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0838473

NT8L73CR

1530.72 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699450

NT8L73DE

1531.90 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762517

NT8L73DL

1532.68 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699451

NT8L73EE

1533.47 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762518

NT8L73EL

1534.25 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0838474

NT8L73ES

1534.64 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699452

NT8L73FE

1535.04 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762519

NT8L73FL

1535.82 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699453

NT8L73GE

1536.61 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762520

NT8L73GL

1537.40 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699454

NT8L73HE

1538.19 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762521

NT8L73HL

1538.98 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699455

NT8L73JE

1539.77 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762522

NT8L73JL

1540.56 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699456

NT8L73KE

1541.35 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762523

NT8L73KL

1542.14 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699457

NT8L73LE

1542.94 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762524

NT8L73LL

1543.73 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0838475

NT8L73LS

1544.13 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699458

NT8L73ME

1544.53 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762525

NT8L73ML

1545.32 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699459

NT8L73NE

1546.12 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0673478

NT8L73NG

OC-48 STABILIZED III-V MZ LASE

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762526

NT8L73NL

1546.92 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699460

NT8L73PE

1547.72 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762527

NT8L73PL

1548.52 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699461

NT8L73QE

1549.32 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762528

NT8L73QL

1550.12 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699462

NT8L73RE

1550.92 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762529

NT8L73RL

1551.72 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0838476

NT8L73RR

1551.32 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699463

NT8L73SE

1552.52 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762530

NT8L73SL

1553.33 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699464

NT8L73TE

1554.13 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762531

NT8L73TL

1554.94 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699465

NT8L73UE

1555.75 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762532

NT8L73UL

1556.56 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0838477

NT8L73US

1556.96 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699466

NT8L73VE

1557.36 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762533

NT8L73VL

1558.17 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699467

NT8L73WE

1558.98 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762534

NT8L73WL

1559.79 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0838478

NT8L73WS

1560.20 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699468

NT8L73XE

1560.61 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0762535

NT8L73XL

1561.42 nm adj pwr OC-48 MZ Tx

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0699469

NT8L73YE

1562.23 nm III-V MZ module, st

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0859880

NT8L74BE

OC48 III-V MZ 1528.773, 3 Caps

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0859882

NT8L74BL

OC48 III-V MZ 1529.553, 3 Caps

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0859884

NT8L74CE

OC48 III-V MZ 1530.334, 3 Caps

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0859886

NT8L74CL

OC48 III-V MZ 1531.116, 3 Caps

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0859885

NT8L74CR

OC48 III-V MZ 1530.725, 3 Caps

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0859887

NT8L74CS

OC48 III-V MZ 1531.507, 3 Caps

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0859889

NT8L74DE

OC48 III-V MZ 1531.898, 3 Caps

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0859893

NT8L74DL

OC48 III-V MZ 1532.681, 3 Caps

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0859891

NT8L74DR

OC48 III-V MZ 1532.290, 3 Caps

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0859895

NT8L74DS

OC48 III-V MZ 1533.073, 3 Caps

[**]

$[**]

Page 13 of 24

Allocation

March 31^st

April 1, 2005

Family

Sub-Family

LTB

CPC

Bookham P/N

ITEM DESC

1H05

2005 Prices

Agreement

Tx/Rx

OC48 DWDM

LTB

A0859896

NT8L74EE

OC48 III-V MZ 1533.465, 3 Caps

[**]

$[**]

Tx/Rx

OC48 DWDM

LTB

A0859900

NT8L74EL

OC48 III-V MZ 1534.250, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859902

NT8L74ES

OC48 III-V MZ 1534.643, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859903

NT8L74FE

OC48 III-V MZ 1535.036, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859907

NT8L74FL

OC48 III-V MZ 1535.822, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859905

NT8L74FR

OC48 III-V MZ 1535.429, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859908

NT8L74FS

OC48 III-V MZ 1536.216, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859910

NT8L74GE

OC48 III-V MZ 1536.609, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859912

NT8L74GL

OC48 III-V MZ 1537.397, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859911

NT8L74GR

OC48 III-V MZ 1537.003, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859913

NT8L74GS

OC48 III-V MZ 1537.792, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859914

NT8L74HE

OC48 III-V MZ 1538.186, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859916

NT8L74HL

OC48 III-V MZ 1538.976, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859915

NT8L74HR

OC48 III-V MZ 1538.581, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859917

NT8L74HS

OC48 III-V MZ 1539.371, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859918

NT8L74JE

OC48 III-V MZ 1539.766, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859920

NT8L74JL

OC48 III-V MZ 1540.557, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859919

NT8L74JR

OC48 III-V MZ 1540.162, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859921

NT8L74JS

OC48 III-V MZ 1540.953, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859922

NT8L74KE

OC48 III-V MZ 1541.349, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859924

NT8L74KL

OC48 III-V MZ 1542.142, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859923

NT8L74KR

OC48 III-V MZ 1541.746, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859925

NT8L74KS

OC48 III-V MZ 1542.539, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859926

NT8L74LE

OC48 III-V MZ 1542.936, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859928

NT8L74LL

OC48 III-V MZ 1543.730, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859927

NT8L74LR

OC48 III-V MZ 1543.333, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859929

NT8L74LS

OC48 III-V MZ 1544.128, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859930

NT8L74ME

OC48 III-V MZ 1544.526, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859932

NT8L74ML

OC48 III-V MZ 1545.322, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859931

NT8L74MR

OC48 III-V MZ 1544.924, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859933

NT8L74MS

OC48 III-V MZ 1545.720, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859934

NT8L74NE

OC48 III-V MZ 1546.119, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859937

NT8L74NL

OC48 III-V MZ 1546.917, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859936

NT8L74NR

OC48 III-V MZ 1546.518, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859938

NT8L74NS

OC48 III-V MZ 1547.316, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859940

NT8L74PE

OC48 III-V MZ 1547.715, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859943

NT8L74PL

OC48 III-V MZ 1548.515, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859942

NT8L74PR

OC48 III-V MZ 1548.115, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859944

NT8L74PS

OC48 III-V MZ 1548.915, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859945

NT8L74QE

OC48 III-V MZ 1549.315, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859947

NT8L74QL

OC48 III-V MZ 1550.116, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859946

NT8L74QR

OC48 III-V MZ 1549.715, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859948

NT8L74QS

OC48 III-V MZ 1550.517, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859949

NT8L74RE

OC48 III-V MZ 1550.918, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859951

NT8L74RL

OC48 III-V MZ 1551.721, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859950

NT8L74RR

OC48 III-V MZ 1551.319, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859952

NT8L74RS

OC48 III-V MZ 1552.122, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859954

NT8L74SE

OC48 III-V MZ 1552.524, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859956

NT8L74SL

OC48 III-V MZ 1553.329, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859955

NT8L74SR

OC48 III-V MZ 1552.926, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859957

NT8L74SS

OC48 III-V MZ 1553.731, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859958

NT8L74TE

OC48 III-V MZ 1554.134, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859960

NT8L74TL

OC48 III-V MZ 1554.940, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859959

NT8L74TR

OC48 III-V MZ 1554.537, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859961

NT8L74TS

OC48 III-V MZ 1555.343, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859963

NT8L74UE

OC48 III-V MZ 1555.747, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859965

NT8L74UL

OC48 III-V MZ 1556.555, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859964

NT8L74UR

OC48 III-V MZ 1556.151, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859966

NT8L74US

OC48 III-V MZ 1556.959, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859967

NT8L74VE

OC48 III-V MZ 1557.363, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859969

NT8L74VL

OC48 III-V MZ 1558.173, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859968

NT8L74VR

OC48 III-V MZ 1557.768, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859970

NT8L74VS

OC48 III-V MZ 1558.578, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859972

NT8L74WE

OC48 III-V MZ 1558.983, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859974

NT8L74WL

OC48 III-V MZ 1559.794, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859973

NT8L74WR

OC48 III-V MZ 1559.389, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859976

NT8L74WS

OC48 III-V MZ 560.200, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859977

NT8L74XE

OC48 III-V MZ 1560.606, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859979

NT8L74XL

OC48 III-V MZ 1561.419, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859978

NT8L74XR

OC48 III-V MZ 1561.013, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859980

NT8L74XS

OC48 III-V MZ 1561.826, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859982

NT8L74YE

OC48 III-V MZ 1562.233, 3 Caps

[**]

$[**]

TxRx

OC48 DWDM

LTB

A0859983

NT8L74YR

OC48 III-V MZ 1562.640, 3 Caps

[**]

$[**]

TxRx

ROA

LTB

A0866368

NTCC0600

WRAPPER, C-BAND Pin-PreAmp ASS

[**]

$[**]

TxRx

ROA

LTB

A0720566

NTCC0612

OC-192 T/R RX OPTICS ASSY

[**]

$[**]

TxRx

TOA

LTB

A0733256

NTCC06E0

OC192 T/R FIBRE TRAY ASSY 1542

[**]

$[**]

TxRx

TOA

LTB

A0733248

NTCC06E1

OC192 T/R FIBRE TRAY ASSY 1528

[**]

$[**]

TxRx

TOA

LTB

A0733249

NTCC06E2

OC192 T/R FIBRE TRAY ASSY 1530

[**]

$[**]

TxRx

TOA

LTB

A0733250

NTCC06E3

OC192 T/R FIBRE TRAY ASSY 1531

[**]

$[**]

TxRx

TOA

LTB

A0720568

NTCC06E4

OC-192 T/R TX OPTICS ASSY 1533

[**]

$[**]

TxRx

TOA

LTB

A0733251

NTCC06E5

OC192 T/R FIBRE TRAY ASSY 1535

[**]

$[**]

TxRx

TOA

LTB

A0733252

NTCC06E6

OC192 T/R FIBRE TRAY ASSY 1536

[**]

$[**]

TxRx

TOA

LTB

A0733253

NTCC06E7

OC192 T/R FIBRE TRAY ASSY 1538

[**]

$[**]

TxRx

TOA

LTB

A0733254

NTCC06E8

OC192 T/R FIBRE TRAY ASSY 1539

[**]

$[**]

Page 14 of 24

Allocation

March 31^st

April 1, 2005

Family

Sub-Family

LTB

CPC

Bookham P/N

ITEM DESC

1H05

2005 Prices

Agreement

TxRx

TOA

LTB

A0733255

NTCC06E9

OC192 T/R FIBRE TRAY ASSY 1541

[**]

$[**]

TxRx

TOA

LTB

A0790378

NTCC06EB

OC192 T/R FIBRE TRAY ASSY 1544

[**]

$[**]

TxRx

TOA

LTB

A0771911

NTCC06F0

OC-192/STM-64 T/R FIBRE TRAY A

[**]

$[**]

TxRx

TOA

LTB

A0733257

NTCC06F1

OC192 T/R FIBRE TRAY ASSY 1546

[**]

$[**]

TxRx

TOA

LTB

A0733258

NTCC06F2

OC192 T/R FIBRE TRAY ASSY 1547

[**]

$[**]

TxRx

TOA

LTB

A0733259

NTCC06F3

OC192 T/R FIBRE TRAY ASSY 1549

[**]

$[**]

TxRx

TOA

LTB

A0733260

NTCC06F4

OC192 T/R FIBRE TRAY ASSY 1550

[**]

$[**]

TxRx

TOA

LTB

A0733261

NTCC06F5

OC192 T/R FIBRE TRAY ASSY 1552

[**]

$[**]

TxRx

TOA

LTB

A0733262

NTCC06F6

OC192 T/R FIBRE TRAY ASSY 1554

[**]

$[**]

TxRx

TOA

LTB

A0733263

NTCC06F7

OC192 T/R FIBRE TRAY ASSY 1555

[**]

$[**]

TxRx

TOA

LTB

A0733264

NTCC06F8

OC192 T/R FIBRE TRAY ASSY 1557

[**]

$[**]

TxRx

TOA

LTB

A0733265

NTCC06F9

OC192 T/R FIBRE TRAY ASSY 1558

[**]

$[**]

TxRx

TOA

LTB

A0789292

NTCC06FA

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

TxRx

TOA

LTB

A0795597

NTCC06J1

OC192 T/R FIBRE TRAY ASSY 1530

[**]

$[**]

TxRx

TOA

LTB

A0795603

NTCC06J2

OC192 T/R FIBRE TRAY ASSY 1531

[**]

$[**]

TxRx

TOA

LTB

A0795604

NTCC06J3

OC192 T/R FIBRE TRAY ASSY 1532

[**]

$[**]

TxRx

TOA

LTB

A0795605

NTCC06J4

OC192 T/R FIBRE TRAY ASSY 1533

[**]

$[**]

TxRx

TOA

LTB

A0795607

NTCC06J5

OC192 T/R FIBRE TRAY ASSY 1533

[**]

$[**]

TxRx

TOA

LTB

A0795608

NTCC06J6

OC192 T/R FIBRE TRAY ASSY 1534

[**]

$[**]

TxRx

TOA

LTB

A0795609

NTCC06J7

OC192 T/R FIBRE TRAY ASSY 1535

[**]

$[**]

TxRx

TOA

LTB

A0795610

NTCC06J8

OC192 T/R FIBRE TRAY ASSY 1536

[**]

$[**]

TxRx

TOA

LTB

A0795611

NTCC06J0

OC192 T/R FIBRE TRAY ASSY 1537

[**]

$[**]

TxRx

TOA

LTB

A0795612

NTCC06JA

OC192 T/R FIBRE TRAY ASSY 1537

[**]

$[**]

TxRx

TOA

LTB

A0795613

NTCC06JB

OC192 T/R FIBRE TRAY ASSY 1538

[**]

$[**]

TxRx

TOA

LTB

A0795615

NTCC06JC

OC192 T/R FIBRE TRAY ASSY 1539

[**]

$[**]

TxRx

TOA

LTB

A0795616

NTCC06JD

OC192 T/R FIBRE TRAY ASSY 1540

[**]

$[**]

TxRx

TOA

LTB

A0795617

NTCC06JE

OC192 T/R FIBRE TRAY ASSY 1540

[**]

$[**]

TxRx

TOA

LTB

A0795618

NTCC06JF

OC192 T/R FIBRE TRAY ASSY 1541

[**]

$[**]

TxRx

TOA

LTB

A0795619

NTCC06JG

OC192 T/R FIBRE TRAY ASSY 1542

[**]

$[**]

TxRx

TOA

LTB

A0795624

NTCC06JH

OC192 T/R FIBRE TRAY ASSY 1543

[**]

$[**]

TxRx

TOA

LTB

A0795625

NTCC06JJ

OC192 T/R FIBRE TRAY ASSY 1544

[**]

$[**]

TxRx

TOA

LTB

A0795621

NTCC06JK

OC192 T/R FIBRE TRAY ASSY 1544

[**]

$[**]

TxRx

TOA

LTB

A0795629

NTCC06JL

OC192 T/R FIBRE TRAY ASSY 1545

[**]

$[**]

TxRx

TOA

LTB

A0795622

NTCC06JM

OC192 T/R FIBRE TRAY ASSY 1546

[**]

$[**]

TxRx

TOA

LTB

A0795627

NTCC06JN

OC192 T/R FIBRE TRAY ASSY 1547

[**]

$[**]

TxRx

TOA

LTB

A0795628

NTCC06JP

OC192 T/R FIBRE TRAY ASSY 1548

[**]

$[**]

TxRx

TOA

LTB

A0795631

NTCC06JQ

OC192 T/R FIBRE TRAY ASSY 1548

[**]

$[**]

TxRx

TOA

LTB

A0795635

NTCC06JR

OC192 T/R FIBRE TRAY ASSY 1549

[**]

$[**]

TxRx

TOA

LTB

A0795632

NTCC06JS

OC192 T/R FIBRE TRAY ASSY 1550

[**]

$[**]

TxRx

TOA

LTB

A0795633

NTCC06JT

OC192 T/R FIBRE TRAY ASSY 1551

[**]

$[**]

TxRx

TOA

LTB

A0795634

NTCC06JU

OC192 T/R FIBRE TRAY ASSY 1552

[**]

$[**]

TxRx

TOA

LTB

A0795413

NTCC06JV

OC192 T/R FIBRE TRAY ASSY 1552

[**]

$[**]

TxRx

TOA

LTB

A0795414

NTCC06JX

OC192 T/R FIBRE TRAY ASSY 1553

[**]

$[**]

TxRx

TOA

LTB

A0795415

NTCC06JY

OC192 T/R FIBRE TRAY ASSY 1554

[**]

$[**]

TxRx

TOA

LTB

A0795416

NTCC06JZ

OC192 T/R FIBRE TRAY ASSY 1555

[**]

$[**]

TxRx

TOA

LTB

A0789313

NTCC06KO

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

TxRx

TOA

LTB

A0789335

NTCC06K1

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

TxRx

TOA

LTB

A0789333

NTCC06K2

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

TxRx

TOA

LTB

A0789331

NTCC06K3

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

TxRx

TOA

LTB

A0789324

NTCC06K4

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

TxRx

TOA

LTB

A0789322

NTCC06K5

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

TxRx

TOA

LTB

A0789320

NTCC06K6

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

TxRx

TOA

LTB

A0789318

NTCC06K7

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

TxRx

TOA

LTB

A0789316

NTCC06K8

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

TxRx

TOA

LTB

A0789314

NTCC06K9

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

TxRx

TOA

LTB

A0789378

NTCC06KB

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

Tx/Rx

TOA

LTB

A0795417

NTCC06KC

OC192 T/R FIBER TRAY ASSY 1556

[**]

$[**]

Tx/Rx

TOA

LTB

A0795418

NTCC06KD

OC192 T/R FIBER TRAY ASSY 1556

[**]

$[**]

Tx/Rx

TOA

LTB

A0795419

NTCC06KE

OC192 T/R FIBER TRAY ASSY 1557

[**]

$[**]

Tx/Rx

TOA

LTB

A0795420

NTCC06KF

OC192 T/R FIBER TRAY ASSY 1558

[**]

$[**]

Tx/Rx

TOA

LTB

A0795421

NTCC06KG

OC192 T/R FIBER TRAY ASSY 1559

[**]

$[**]

Tx/Rx

TOA

LTB

A0795376

NTCC06KH

OC192 T/R FIBER TRAY ASSY 1560

[**]

$[**]

Tx/Rx

TOA

LTB

A0795377

NTCC06KJ

OC192 T/R FIBER TRAY ASSY 1561

[**]

$[**]

Tx/Rx

TOA

LTB

A0795365

NTCC06KK

OC192 T/R FIBER TRAY ASSY 1561

[**]

$[**]

Tx/Rx

TOA

LTB

A0795364

NTCC06KL

OC192 T/R FIBER TRAY ASSY 1562

[**]

$[**]

Tx/Rx

TOA

LTB

A0789297

NTCC06L0

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

Tx/Rx

TOA

LTB

A0789311

NTCC06L1

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

Tx/Rx

TOA

LTB

A0789310

NTCC06L2

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

Tx/Rx

TOA

LTB

A0789308

NTCC06L3

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

Tx/Rx

TOA

LTB

A0789307

NTCC06L4

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

Tx/Rx

TOA

LTB

A0789305

NTCC06L5

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

Tx/Rx

TOA

LTB

A0789304

NTCC06L6

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

Tx/Rx

TOA

LTB

A0789301

NTCC06L7

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

Tx/Rx

TOA

LTB

A0789300

NTCC06L8

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

Tx/Rx

TOA

LTB

A0789298

NTCC06L9

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

Tx/Rx

TOA

LTB

A0789294

NTCC06LA

OC-192/STM64 T/R FIBRE TRAY AS

[**]

$[**]

Tx/Rx

TOA

LTB

A0797546

NTCC06Q0

OC192/STM64 XMOD 1542.936nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0796820

NTCC06Q1

OC192/STM64 XMOD 1528.773nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797455

NTCC06Q2

OC192/STM64 XMOD 1530.334nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797457

NTCC06Q3

OC192/STM64 XMOD 1531.898nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797481

NTCC06Q4

OC192/STM64 XMOD 1533.465nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797482

NTCC06Q5

OC192/STM64 XMOD 1535.036nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797484

NTCC06Q6

OC192/STM64 XMOD 1536.609nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797485

NTCC06Q7

OC192/STM64 XMOD 1538.186nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797486

NTCC06Q8

OC192/STM64 XMOD 1539.766nm TR

[**]

$[**]

Page 15 of 24

Allocation

March 31^st

April 1, 2005

Family

Sub-Family

LTB

CPC

Bookham P/N

ITEM DESC

1H05

2005 Prices

Agreement

Tx/Rx

TOA

LTB

A0797545

NTCC06Q9

OC192/STM64 XMOD 1541.349nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797547

NTCC06QB

OC192/STM64 XMOD 1544.526nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797557

NTCC06R0

OC192/STM64 XMOD 1560.606nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797548

NTCC06R1

OC192/STM64 XMOD 1546.119nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797549

NTCC06R2

OC192/STM64 XMOD 1547.715nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797550

NTCC06R3

OC192/STM64 XMOD 1549.315nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797551

NTCC06R4

OC192/STM64 XMOD 1550.918nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797552

NTCC06R5

OC192/STM64 XMOD 1552.524nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797553

NTCC06R6

OC192/STM64 XMOD 1554.134nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797554

NTCC06R7

OC192/STM64 XMOD 1555.747nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797555

NTCC06R8

OC192/STM64 XMOD 1557.363nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797556

NTCC06R9

OC192/STM64 XMOD 1558.983nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797558

NTCC06RA

OC192/STM64 XMOD 1562.233nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797568

NTCC06S0

OC192/STM64 XMOD 1543.731nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797559

NTCC06S1

OC192/STM64 XMOD 1529.553nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797560

NTCC06S2

OC192/STM64 XMOD 1531.116nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797561

NTCC06S3

OC192/STM64 XMOD 1532.681nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797562

NTCC06S4

OC192/STM64 XMOD 1534.250nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797563

NTCC06S5

OC192/STM64 XMOD 1535.822nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797564

NTCC06S6

OC192/STM64 XMOD 1537.397nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797565

NTCC06S7

OC192/STM64 XMOD 1538.976nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797566

NTCC06S8

OC192/STM64 XMOD 1540.557nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797567

NTCC06S9

OC192/STM64 XMOD 1542.142nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797569

NTCC06SB

OC192/STM64 XMOD 1545.322nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797609

NTCC06T0

OC192/STM64 XMOD 1561.419nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797600

NTCC06T1

OC192/STM64 XMOD 1546.917nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797601

NTCC06T2

OC192/STM64 XMOD 1548.515nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797602

NTCC06T3

OC192/STM64 XMOD 1550.116nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797603

NTCC06T4

OC192/STM64 XMOD 1551.721nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797604

NTCC06T5

OC192/STM64 XMOD 1553.329nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797605

NTCC06T6

OC192/STM64 XMOD 1544.940nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797606

NTCC06T7

OC192/STM64 XMOD 1556.555nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797607

NTCC06T8

OC192/STM64 XMOD 1558.173nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797608

NTCC06T9

OC192/STM64 XMOD 1559.794nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0797610

NTCC06TA

OC192/STM64 XMOD 1563.047nm TR

[**]

$[**]

Tx/Rx

TOA

LTB

A0803304

NTCC06U5

1567.133nm TR FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803380

NTCC06U6

1567.542nm TR FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803379

NTCC06U7

1567.952nm TR FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803378

NTCC06U8

1568.362nm TR FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803377

NTCC06U9

1568.773nm TR FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803376

NTCC06UA

1569.183nm TR FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803375

NTCC06UB

1569.594nm TR FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803374

NTCC06UC

1570.005nm TR FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0795638

NTCC06UD

OC192 T/R FIBRE TRAY ASSY 1570

[**]

$[**]

Tx/Rx

TOA

LTB

A0795639

NTCC06UE

OC192 T/R FIBRE TRAY ASSY 1571

[**]

$[**]

Tx/Rx

TOA

LTB

A0803538

NTCC06UF

1570.828nm TR FIBRE TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803373

NTCC06UG

1571.651nm TR FIBRE TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0795641

NTCC06UH

OC192 T/R FIBRE TRAY ASSY 1572

[**]

$[**]

Tx/Rx

TOA

LTB

A0803372

NTCC06UJ

1572.476nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0795640

NTCC06UK

OC192 T/R FIBRE TRAY ASSY 1572

[**]

$[**]

Tx/Rx

TOA

LTB

A0803371

NTCC06UL

1573.301nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0795644

NTCC06UM

OC192 T/R FIBRE TRAY ASSY 1573

[**]

$[**]

Tx/Rx

TOA

LTB

A0803370

NTCC06UN

1574.127nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803369

NTCC06UP

1574.540nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803368

NTCC06UQ

1574.954nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803367

NTCC06UR

1575.368nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803366

NTCC06US

1575.782nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0795642

NTCC06UT

OC192 T/R FIBRE TRAY ASSY 1576

[**]

$[**]

Tx/Rx

TOA

LTB

A0803365

NTCC06UU

1576.610nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803364

NTCC06UV

1577.025nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803363

NTCC06UW

1577.440nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803362

NTCC06UX

1577.855nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803361

NTCC06UY

1578.270nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0795645

NTCC06UZ

OC192 T/R FIBRE TRAY ASSY 1578

[**]

$[**]

Tx/Rx

TOA

LTB

A0803360

NTCC06V1

1579.102nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803359

NTCC06V2

1579.518nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803358

NTCC06V3

1579.934nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803357

NTCC06V4

1580.350nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803356

NTCC06V5

1580.767nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0795646

NTCC06V6

OC192 T/R FIBRE TRAY ASSY 1581

[**]

$[**]

Tx/Rx

TOA

LTB

A0803355

NTCC06V7

1581.601nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803354

NTCC06V8

1582.018nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803353

NTCC06V9

1582.436nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803352

NTCC06VA

1582.854nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803351

NTCC06VB

1583.271nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803350

NTCC06VC

1583.690nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803349

NTCC06VD

1584.108nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803348

NTCC06VE

1584.527nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803347

NTCC06VF

1584.946nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803346

NTCC06VG

1585.365nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803345

NTCC06VH

1585.784nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0795647

NTCC06VJ

OC192 T/R FIBRE TRAY ASSY 1586

[**]

$[**]

Tx/Rx

TOA

LTB

A0803344

NTCC06VK

1586.623nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803343

NTCC06VL

1587.043nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803342

NTCC06VM

1587.463nm T/R FIBER TRAY ASSY

[**]

$[**]

Page 16 of 24

Allocation

March 31^st

April 1, 2005

Family

Sub-Family

LTB

CPC

Bookham P/N

ITEM DESC

1H05

2005 Prices

Agreement

Tx/Rx

TOA

LTB

A0803341

NTCC06VN

1587.884nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803340

NTCC06VP

1588.304nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803339

NTCC06VQ

1588.725nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803338

NTCC06VR

1589.146nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803337

NTCC06VS

1589.568nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803336

NTCC06VT

1589.989nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803335

NTCC06VU

1590.411nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803334

NTCC06VV

1590.833nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0795637

NTCC06VW

OC192 T/R FIBRE TRAY ASSY 1591

[**]

$[**]

Tx/Rx

TOA

LTB

A0803333

NTCC06VX

1591.678nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803332

NTCC06VY

1592.100nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803331

NTCC06VZ

1592.523nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803329

NTCC06W1

1592.946nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803328

NTCC06W2

1593.369nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0795756

NTCC06W3

OC192 T/R FIBRE TRAY ASSY 1593

[**]

$[**]

Tx/Rx

TOA

LTB

A0803327

NTCC06W4

1594.217nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803326

NTCC06W5

1594.641nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803325

NTCC06W6

1594.065nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803324

NTCC06W7

1595.489nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803323

NTCC06W8

1595.914nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0795755

NTCC06W9

OC192 T/R FIBRE TRAY ASSY 1596

[**]

$[**]

Tx/Rx

TOA

LTB

A0803322

NTCC06WA

1596.764nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803321

NTCC06WB

1597.189nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803320

NTCC06WC

1597.615nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803319

NTCC06WD

1598.041nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803318

NTCC06WE

1598.467nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0795754

NTCC06WF

OC192 T/R FIBRE TRAY ASSY 1598

[**]

$[**]

Tx/Rx

TOA

LTB

A0803317

NTCC06WG

1599.320nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0795753

NTCC06WH

OC192 T/R FIBRE TRAY ASSY 1599

[**]

$[**]

Tx/Rx

TOA

LTB

A0803315

NTCC06WJ

1600.173nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0795752

NTCC06WK

OC192 T/R FIBRE TRAY ASSY 1600

[**]

$[**]

Tx/Rx

TOA

LTB

A0803314

NTCC06WL

1601.028nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0795751

NTCC06WM

OC192 T/R FIBRE TRAY ASSY 1601

[**]

$[**]

Tx/Rx

TOA

LTB

A0803313

NTCC06WN

1601.833nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0795750

NTCC06WP

OC192 T/R FIBRE TRAY ASSY 1602

[**]

$[**]

Tx/Rx

TOA

LTB

A0803312

NTCC06WQ

1602.740nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0799223

NTCC06WR

T/R FIBRE TRAY ASSY 1603.168n

[**]

$[**]

Tx/Rx

TOA

LTB

A0803311

NTCC06WS

1603.597nm T/R FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803310

NTCC06WT

1604.026nm TR FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803309

NTCC06WU

1604.455nm TR FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803308

NTCC06WV

1604.855nm TR FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0803307

NTCC06WW

1605.314nm TR FIBER TRAY ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0814185

NTCC07E0

T/R 0D5 F/TRAY ASSY 1542.936

[**]

$[**]

Tx/Rx

TOA

LTB

A0796376

NCCC07E1

OC192 T/R FIBRE TRAY 0D5 ASSY

[**]

$[**]

Tx/Rx

TOA

LTB

A0814218

NTCC07E2

T/R 0D5 F/TRAY ASSY 1530.334

[**]

$[**]

Tx/Rx

TOA

LTB

A0813348

NTCC07E4

0D5 T/R RX F/TRAY ASY 1533.465

[**]

$[**]

Tx/Rx

TOA

LTB

A0814205

NTCC07E5

T/R 0D5 F/TRAY ASSY 1535.036

[**]

$[**]

Tx/Rx

TOA

LTB

A0814201

NTCC07E6

T/R 0D5 F/TRAY ASSY 1536.609

[**]

$[**]

Tx/Rx

TOA

LTB

A0814197

NTCC07E7

T/R 0D5 F/TRAY ASSY 1538.186

[**]

$[**]

Tx/Rx

TOA

LTB

A0814193

NTCC07E8

T/R 0D5 F/TRAY ASSY 1539.766

[**]

$[**]

Tx/Rx

TOA

LTB

A0814189

NTCC07E9

T/R 0D5 F/TRAY ASSY 1541.349

[**]

$[**]

Tx/Rx

TOA

LTB

A0814181

NTCC07EB

T/R 0D5 F/TRAY ASSY 1544.526

[**]

$[**]

Tx/Rx

TOA

LTB

A0814213

NTCC07EC

T/R 0D5 F/TRAY ASSY 1531.898

[**]

$[**]

Tx/Rx

TOA

LTB

A0813773

NTCC07F0

T/R 0D5 F/TRAY ASSY 1560.606

[**]

$[**]

Tx/Rx

TOA

LTB

A0814072

NTCC07F4

T/R 0D5 F/TRAY ASSY 1550.918

[**]

$[**]

Tx/Rx

TOA

LTB

A0814068

NTCC07F5

T/R 0D5 F/TRAY ASSY 1552.524

[**]

$[**]

Tx/Rx

TOA

LTB

A0813791

NTCC07F6

T/R 0D5 F/TRAY ASSY 1554.134

[**]

$[**]

Tx/Rx

TOA

LTB

A0813787

NTCC07F7

T/R 0D5 F/TRAY ASSY 1555.747

[**]

$[**]

Tx/Rx

TOA

LTB

A0813783

NTCC07F8

T/R 0D5 F/TRAY ASSY 1557.363

[**]

$[**]

Tx/Rx

TOA

LTB

A0813778

NTCC07F9

T/R 0D5 F/TRAY ASSY 1558.983

[**]

$[**]

Tx/Rx

TOA

LTB

A0813769

NTCC07FA

T/R 0D5 F/TRAY ASSY 1562.233

[**]

$[**]

Tx/Rx

TOA

LTB

A0814176

NTCC07FB

T/R 0D5 F/TRAY ASSY 1546.199

[**]

$[**]

Tx/Rx

TOA

LTB

A0814170

NTCC07FC

T/R 0D5 F/TRAY ASSY 1547.715

[**]

$[**]

Tx/Rx

TOA

LTB

A0814077

NTCC07FD

T/R 0D5 F/TRAY ASSY 1549.315

[**]

$[**]

Tx/Rx

TOA

LTB

A0814217

NTCC07J1

T/R 0D5 F/TRAY ASSY 1530.725

[**]

$[**]

Tx/Rx

TOA

LTB

A0814214

NTCC07J2

T/R 0D5 F/TRAY ASSY 1531.507

[**]

$[**]

Tx/Rx

TOA

LTB

A0814211

NTCC07J3

T/R 0D5 F/TRAY ASSY 1532.290

[**]

$[**]

Tx/Rx

TOA

LTB

A0814209

NTCC07J4

T/R 0D5 F/TRAY ASSY 1533.073

[**]

$[**]

Tx/Rx

TOA

LTB

A0814208

NTCC07J5

T/R 0D5 F/TRAY ASSY 1533.858

[**]

$[**]

Tx/Rx

TOA

LTB

A0814206

NTCC07J6

T/R 0D5 F/TRAY ASSY 1534.643

[**]

$[**]

Tx/Rx

TOA

LTB

A0814204

NTCC07J7

T/R 0D5 F/TRAY ASSY 1535.429

[**]

$[**]

Tx/Rx

TOA

LTB

A0814202

NTCC07J8

T/R 0D5 F/TRAY ASSY 1536.216

[**]

$[**]

Tx/Rx

TOA

LTB

A0814200

NTCC07J9

T/R 0D5 F/TRAY ASSY 1537.003

[**]

$[**]

Tx/Rx

TOA

LTB

A0814198

NTCC07JA

T/R 0D5 F/TRAY ASSY 1537.792

[**]

$[**]

Tx/Rx

TOA

LTB

A0814196

NTCC07JB

T/R 0D5 F/TRAY ASSY 1538.581

[**]

$[**]

Tx/Rx

TOA

LTB

A0814194

NTCC07JC

T/R 0D5 F/TRAY ASSY 1539.371

[**]

$[**]

Tx/Rx

TOA

LTB

A0814192

NTCC07JD

T/R 0D5 F/TRAY ASSY 1540.162

[**]

$[**]

Tx/Rx

TOA

LTB

A0814190

NTCC07JE

T/R 0D5 F/TRAY ASSY 1540.953

[**]

$[**]

Tx/Rx

TOA

LTB

A0814188

NTCC07JF

T/R 0D5 F/TRAY ASSY 1541.746

[**]

$[**]

Tx/Rx

TOA

LTB

A0814186

NTCC07JG

T/R 0D5 F/TRAY ASSY 1542.539

[**]

$[**]

Tx/Rx

TOA

LTB

A0814184

NTCC07JH

T/R 0D5 F/TRAY ASSY 1543.333

[**]

$[**]

Tx/Rx

TOA

LTB

A0814182

NTCC07JJ

T/R 0D5 F/TRAY ASSY 1544.128

[**]

$[**]

Tx/Rx

TOA

LTB

A0814180

NTCC07JK

T/R 0D5 F/TRAY ASSY 1544.924

[**]

$[**]

Tx/Rx

TOA

LTB

A0814178

NTCC07JL

T/R 0D5 F/TRAY ASSY 1545.720

[**]

$[**]

Tx/Rx

TOA

LTB

A0814175

NTCC07JM

T/R 0D5 F/TRAY ASSY 1546.518

[**]

$[**]

Page 17 of 24

Allocation

March 31^st

April 1, 2005

Family

Sub-Family

LTB

CPC

Bookham P/N

ITEM DESC

1H05

2005 Prices

Agreement

Tx/Rx

TOA

LTB

A0814172

NTCC07JN

T/R 0D5 F/TRAY ASSY 1547.316

[**]

$[**]

Tx/Rx

TOA

LTB

A0814081

NTCC07JP

T/R 0D5 F/TRAY ASSY 1548.115

[**]

$[**]

Tx/Rx

TOA

LTB

A0814078

NTCC07JQ

T/R 0D5 F/TRAY ASSY 1548.915

[**]

$[**]

Tx/Rx

TOA

LTB

A0814076

NTCC07JR

T/R 0D5 F/TRAY ASSY 1549.715

[**]

$[**]

Tx/Rx

TOA

LTB

A0814073

NTCC07JS

T/R 0D5 F/TRAY ASSY 1550.517

[**]

$[**]

Tx/Rx

TOA

LTB

A0814071

NTCC07JT

T/R 0D5 F/TRAY ASSY 1551.319

[**]

$[**]

Tx/Rx

TOA

LTB

A0814069

NTCC07JU

T/R 0D5 F/TRAY ASSY 1552.122

[**]

$[**]

Tx/Rx

TOA

LTB

A0814065

NTCC07JV

T/R 0D5 F/TRAY ASSY 1552.926

[**]

$[**]

Tx/Rx

TOA

LTB

A0813792

NTCC07JX

T/R 0D5 F/TRAY ASSY 1553.731

[**]

$[**]

Tx/Rx

TOA

LTB

A0813790

NTCC07JY

T/R 0D5 F/TRAY ASSY 1554.537

[**]

$[**]

Tx/Rx

TOA

LTB

A0813788

NTCC07JZ

T/R 0D5 F/TRAY ASSY 1555.343

[**]

$[**]

Tx/Rx

TOA

LTB

A0814183

NTCC07K0

T/R 0D5 F/TRAY ASSY 1543.730

[**]

$[**]

Tx/Rx

TOA

LTB

A0814219

NTCC07K1

T/R 0D5 F/TRAY ASSY 1529.553

[**]

$[**]

Tx/Rx

TOA

LTB

A0814215

NTCC07K2

T/R 0D5 F/TRAY ASSY 1531.116

[**]

$[**]

Tx/Rx

TOA

LTB

A0814210

NTCC07K3

T/R 0D5 F/TRAY ASSY 1532.681

[**]

$[**]

Tx/Rx

TOA

LTB

A0814207

NTCC07K4

T/R 0D5 F/TRAY ASSY 1534.250

[**]

$[**]

Tx/Rx

TOA

LTB

A0814203

NTCC07K5

T/R 0D5 F/TRAY ASSY 1535.822

[**]

$[**]

Tx/Rx

TOA

LTB

A0814199

NTCC07K6

T/R 0D5 F/TRAY ASSY 1537.397

[**]

$[**]

Tx/Rx

TOA

LTB

A0814195

NTCC07K7

T/R 0D5 F/TRAY ASSY 1538.976

[**]

$[**]

Tx/Rx

TOA

LTB

A0814191

NTCC07K8

T/R 0D5 F/TRAY ASSY 1540.557

[**]

$[**]

Tx/Rx

TOA

LTB

A0814187

NTCC07K9

T/R 0D5 F/TRAY ASSY 1542.142

[**]

$[**]

Tx/Rx

TOA

LTB

A0814179

NTCC07KB

T/R 0D5 F/TRAY ASSY 1545.322

[**]

$[**]

Tx/Rx

TOA

LTB

A0813786

NTCC07KC

T/R 0D5 F/TRAY ASSY 1556.151

[**]

$[**]

Tx/Rx

TOA

LTB

A0813784

NTCC07KD

T/R 0D5 F/TRAY ASSY 1556.959

[**]

$[**]

Tx/Rx

TOA

LTB

A0813782

NTCC07KE

T/R 0D5 F/TRAY ASSY 1557.768

[**]

$[**]

Tx/Rx

TOA

LTB

A0813779

NTCC07KF

T/R 0D5 F/TRAY ASSY 1558.578

[**]

$[**]

Tx/Rx

TOA

LTB

A0813776

NTCC07KG

T/R 0D5 F/TRAY ASSY 1559.389

[**]

$[**]

Tx/Rx

TOA

LTB

A0813774

NTCC07KH

T/R 0D5 F/TRAY ASSY 1560.200

[**]

$[**]

Tx/Rx

TOA

LTB

A0813772

NTCC07KJ

T/R 0D5 F/TRAY ASSY 1561.013

[**]

$[**]

Tx/Rx

TOA

LTB

A0813770

NTCC07KK

T/R 0D5 F/TRAY ASSY 1561.826

[**]

$[**]

Tx/Rx

TOA

LTB

A0813768

NTCC07KL

T/R 0D5 F/TRAY ASSY 1562.640

[**]

$[**]

Tx/Rx

TOA

LTB

A0813771

NTCC07L0

T/R 0D5 F/TRAY ASSY 1561.419

[**]

$[**]

Tx/Rx

TOA

LTB

A0814174

NTCC07L1

T/R 0D5 F/TRAY ASSY 1546.917

[**]

$[**]

Tx/Rx

TOA

LTB

A0814079

NTCC07L2

T/R 0D5 F/TRAY ASSY 1548.515

[**]

$[**]

Tx/Rx

TOA

LTB

A0814075

NTCC07L3

T/R 0D5 F/TRAY ASSY 1550.116

[**]

$[**]

Tx/Rx

TOA

LTB

A0814070

NTCC07L4

T/R 0D5 F/TRAY ASSY 1551.721

[**]

$[**]

Tx/Rx

TOA

LTB

A0814064

NTCC07L5

T/R 0D5 F/TRAY ASSY 1553.329

[**]

$[**]

Tx/Rx

TOA

LTB

A0813789

NTCC07L6

T/R 0D5 F/TRAY ASSY 1554.940

[**]

$[**]

Tx/Rx

TOA

LTB

A0813785

NTCC07L7

T/R 0D5 F/TRAY ASSY 1556.555

[**]

$[**]

Tx/Rx

TOA

LTB

A0813780

NTCC07L8

T/R 0D5 F/TRAY ASSY 1558.173

[**]

$[**]

Tx/Rx

TOA

LTB

A0813775

NTCC07L9

T/R 0D5 F/TRAY ASSY 1559.794

[**]

$[**]

Tx/Rx

TOA

LTB

A0813767

NTCC07LA

T/R 0D5 F/TRAY ASSY 1563.047

[**]

$[**]

Tx/Rx

TOA

LTB

A0815217

NTCC07UC

1570.005 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815216

NTCC07UD

1570.416 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815214

NTCC07UE

1571.239 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815215

NTCC07UF

1570.828 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815213

NTCC07UG

1571.651 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815212

NTCC07UH

1572.063 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815211

NTCC07UJ

1572.476 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815210

NTCC07UK

1572.888 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815209

NTCC07UL

1573.301 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815208

NTCC07UM

1573.714 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815207

NTCC07UN

1574.127 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815206

NTCC07UP

1574.540 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815205

NTCC07UQ

1574.954 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815204

NTCC07UR

1575.368 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815203

NTCC07US

1575.782 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815202

NTCC07UT

1576.196 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815201

NTCC07UU

1576.610 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815199

NTCC07UV

1577.025 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815198

NTCC07UW

1577.440 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815197

NTCC07UX

1577.855 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815196

NTCC07UY

1578.270 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815194

NTCC07UZ

1578.686 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815193

NTCC07V1

1579.102 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815192

NTCC07V2

1579.518 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815191

NTCC07V3

1579.934 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815189

NTCC07V4

1580.350 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815188

NTCC07V5

1580.767 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815187

NTCC07V6

1581.184 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815185

NTCC07V7

1581.601 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815181

NTCC07V8

1582.018 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815179

NTCC07V9

1582.436 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815178

NTCC07VA

1582.854 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815177

NTCC07VB

1583.271 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815175

NTCC07VC

1583.690 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815174

NTCC07VD

1584.108 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815173

NTCC07VE

1584.527 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815171

NTCC07VF

1584.946 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815170

NTCC07VG

1585.365 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815169

NTCC07VH

1585.784 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815168

NTCC07VJ

1586.203 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815167

NTCC07VK

1586.623 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815165

NTCC07VL

1587.043 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815164

NTCC07VM

1587.463 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Page 18 of 24

Allocation

March 31^st

April 1, 2005

Family

Sub-Family

LTB

CPC

Bookham P/N

ITEM DESC

1H05

2005 Prices

Agreement

Tx/Rx

TOA

LTB

A0815162

NTCC07VN

1587.884 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815161

NTCC07VP

1588.304 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815160

NTCC07VQ

1588.725 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815159

NTCC07VR

1589.146 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815158

NTCC07VS

1589.568 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815157

NTCC07VT

1589.989 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815156

NTCC07VU

1590.411 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815154

NTCC07VV

1590.833 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815153

NTCC07VW

1591.255 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815152

NTCC07VX

1591.678 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815151

NTCC07VY

1592.100 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815150

NTCC07VZ

1592.523 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815033

NTCC07W1

1592.946 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815032

NTCC07W2

1593.369 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815031

NTCC07W3

1593.793 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815029

NTCC07W4

1594.217 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815028

NTCC07W5

1594.641 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815027

NTCC07W6

1595.065 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815026

NTCC07W7

1595.489 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815025

NTCC07W8

1595.914 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815024

NTCC07W9

1596.339 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815023

NTCC07WA

1596.764 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815022

NTCC07WB

1597.189 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815021

NTCC07WC

1597.615 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815020

NTCC07WD

1598.041 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815019

NTCC07WE

1598.467 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815018

NTCC07WF

1598.893 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815017

NTCC07WG

1599.320 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815016

NTCC07WH

1599.746 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815015

NTCC07WJ

1600.173 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815014

NTCC07WK

1600.600 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815013

NTCC07WL

1601.028 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815012

NTCC07WM

1601.455 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815011

NTCC07WN

1601.883 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815010

NTCC07WP

1602.311 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815009

NTCC07WQ

1602.740 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815008

NTCC07WR

1603.168 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

TOA

LTB

A0815007

NTCC07WS

1603.597 nm T/R 0D5 FIBRE TRAY

[**]

$[**]

Tx/Rx

10 Gb/s PIN

LTB

A0842037

NTW126BE

8pnBut 10G PIN/Pre-ampRx TRIBS

[**]

$[**]

Tx/Rx

10 Gb/s PIN

LTB

A0892850

NTW126JU

8pn Bfly 10G P/Pamp Rx PC Fbr

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853051

NTW157BN

GaAs Tx Module1528.773nm+PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853053

NTW157CN

GaAs Tx Module1530.334nm+PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853054

NTW157CP

GaAs Tx Module1531.116nm+PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853055

NTW157DN

GaAs Tx Module1531.898nm+PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853056

NTW157DP

GaAs Tx Module1532.681nm+PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853057

NTW157EN

GaAs Tx Module1533.465nm+PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853059

NTW157FN

GaAs Tx Module1535.036nm+PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853060

NTW157FP

GaAs Tx Module1535.822nm+PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853061

NTW157GN

GaAs Tx Module1536.609nm+PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853063

NTW157HN

GaAs Tx Module1538.186nm+PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853065

NTW157JN

GaAs Tx Module1539.766nm+PCB

[**]

$[**]

Tx/Rx

GaAs Lasers

LTB

A0853074

NTW157NP

GaAs Tx Module, 1546.917nm, with Chirped Modulator and Side PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853075

NTW157PN

GaAs Tx Module1547.715nm+PCB

[**]

$[**]

Tx/Rx

GaAs Lasers

LTB

A0853076

NTW157PP

GaAs Tx Module, 1548.515nm, with Chirped Modulator and Side PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853077

NTW157QN

GaAs Tx Module1549.315nm+PCB

[**]

$[**]

Tx/Rx

GaAs Lasers

LTB

A0853078

NTW157QP

GaAs Tx Module, 1550.116nm, with Chirped Modulator and Side PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853079

NTW157RN

GaAs Tx Module1550.918nm+PCB

[**]

$[**]

Tx/Rx

GaAs Lasers

LTB

A0853080

NTW157RP

GaAs Tx Module, 1551.721nm, with Chirped Modulator and Side PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853081

NTW157SN

GaAs Tx Module1552.524nm+PCB

[**]

$[**]

Tx/Rx

GaAs Lasers

LTB

A0853082

NTW157SP

GaAs Tx Module, 1553.329nm, with Chirped Modulator and Side PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853083

NTW157TN

GaAs Tx Module1554.134nm+PCB

[**]

$[**]

Tx/Rx

GaAs Lasers

LTB

A0853084

NTW157TP

GaAs Tx Module, 1554.940nm, with Chirped Modulator and Side PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853085

NTW157UN

GaAs Tx Module1555.747nm+PCB

[**]

$[**]

Tx/Rx

GaAs Lasers

LTB

A0853086

NTW157UP

GaAs Tx Module, 1556.555nm, with Chirped Modulator and Side PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853087

NTW157VN

GaAs Tx Module1557.363nm+PCB

[**]

$[**]

Tx/Rx

GaAs Lasers

LTB

A0853088

NTW157VP

GaAs Tx Module, 1558.173nm, with Chirped Modulator and Side PCB

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853089

NTW157WN

GaAs Tx Module1558.983nm+PCB

[**]

$[**]

Tx/Rx

GaAs Lasers

LTB

A0506690

NTW157XX

10Gbs Integrated Laser modulator for HDX IR-2 applications

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853058

NTW157EP

GALIUM ARSENIDE TX MODULE, 1534.250NM, WITH CHIRP

[**]

$[**]

Tx/Rx

GaAs lasers

LTB

A0853073

NTW157NN

Gallium Arsenide Tx Module, 1546.119nm, with Chirped Modula

[**]

$[**]

Assy

Fibre

A0898711

NTW10763

Fibre Tail Assembly, Short, for GaAs MZ

$[**]

Assy

Fibre

A0898712

NTW10764

Fibre Tail Assembly, Long, for GaAs MZ

$[**]

Page 19 of 24

Allocation

March 31^st

April 1, 2005

Family

Sub-Family

LTB

CPC

Bookham P/N

ITEM DESC

1H05

2005 Prices

Agreement

Tx/Rx

Pluggable GaAs

LTB

A0511306

PTC158VN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1557.363 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511342

PTW158BN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1528.773 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511341

PTW158BP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1529.553 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511340

PTW158CN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1530.334 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511339

PTW158CP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1531.116 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511338

PTW158DN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1531.898 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511337

PTW158DP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1532.681 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511336

PTW158EN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1533.465 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511335

PTW158EP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1534.250 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511334

PTW158FN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1535.036 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511333

PTW158FP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1535.822 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511332

PTW158GN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1536.609 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511331

PTW158GP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1537.397 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511330

PTW158HN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1538.186 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511329

PTW158HP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1538.976 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511328

PTW158JN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1539.766 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511327

PTW158JP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1540.557 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511326

PTW158KN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1541.349 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511325

PTW158KP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1542.142 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511324

PTW158LN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1542.936 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511323

PTW158LP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1543.730 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511322

PTW158MN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1544.526 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511321

PTW158MP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1545.322 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511320

PTW158NN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1546.119 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511319

PTW158NP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1546.917 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511318

PTW158PN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1547.715 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511317

PTW158PP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1548.515 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511316

PTC158QN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1549.315 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511315

PTW158QP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1550.116 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511314

PTW158RN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1550.918 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511313

PTW158RP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1551.721 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511312

PTW158SN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1552.524 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511311

PTW158SP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1553.329 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511310

PTW158TN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1554.134 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511309

PTW158TP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1554.940 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511308

PTW158UN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1555.747 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511307

PTW158UP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1556.555 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511305

PTW158VP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1558.173 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511304

PTW158WN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1558.983 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511303

PTW158WP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1559.794 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511302

PTW158XN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1560.606 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511301

PTW158XP

HDX PLUG FIX GAAS CHIRPED TX MODULE 1561.419 NM

[**]

$[**]

Tx/Rx

Pluggable GaAs

LTB

A0511300

PTW158YN

HDX PLUG FIX GAAS CHIRPED TX MODULE 1562.233 NM

[**]

$[**]

Page 20 of 24

Allocation

March 31^st

April 1, 2005

Family

Sub-Family

LTB

CPC

Bookham P/N

ITEM DESC

1H05

2005 Prices

Agreement

Tx/Rx

Compact MZ

A0522906

LMC10NEVC57

10 Gbps any 1528nm to 1565nm wavelength, Compact MZ Tx negative chirp, etalon, high power

[**]

$[**]

Tx/Rx

Compact MZ

A0506570

LMC10NEV2877-C57

10 Gbps 1528.773 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506571

LMC10NEV3347-C57

10 Gbps 1533.465 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506572

LMC10NEV3033-C57

10 Gbps 1530.334 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506573

LMC10NEV3190-C57

10 Gbps 1531.898 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506574

LMC10NEV3819-C57

10 Gbps 1538.186 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506575

LMC10NEV4294-C57

10 Gbps 1542.936 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506576

LMC10NEV3977-C57

10 Gbps 1539.766 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506577

LMC10NEV4135-C57

10 Gbps 1541.349 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506578

LMC10NEV4772-C57

10 Gbps 1547.715 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506579

LMC10NEV5252-C57

10 Gbps 1552.524 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506580

LMC10NEV4932-C57

10 Gbps 1549.315 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506581

LMC10NEV5092-C57

10 Gbps 1550.918 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506582

LMC10NEV5736-C57

10 Gbps 1557.363 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506583

LMC10NEV6223-C57

10 Gbps 1562.233 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506584

LMC10NEV5898-C57

10 Gbps 1558.983 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506585

LMC10NEV6061-C57

10 Gbps 1560.606 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0549300

LMC10NEV3112-C57

10 GBPS 1531.116 NM COMPACT MZ TX NEGATIVE CHIRP

[**]

$[**]

Tx/Rx

Compact MZ

A0549301

LMC10NEV3268-C57

10 GBPS 1532.681 NM COMPACT MZ TX NEGATIVE CHIRP

[**]

$[**]

Tx/Rx

Compact MZ

A0549302

LMC10NEV3425-C57

10 GBPS 1534.250 NM COMPACT MZ TX NEGATIVE CHIRP

[**]

$[**]

Tx/Rx

Compact MZ

A0549303

LMC10NEV3504-C57

10 GBPS 1535.04 NM COMPACT MZ TX NEGATIVE CHIRP

[**]

$[**]

Tx/Rx

Compact MZ

A0549304

LMC10NEV3582-C57

10 GBPS 1535.822 NM COMPACT MZ TX NEGATIVE CHIRP

[**]

$[**]

Tx/Rx

Compact MZ

A0549305

LMC10NEV3660-C57

10 GBPS 1536.609 NM COMPACT MZ TX NEGATIVE CHIRP

[**]

$[**]

Tx/Rx

Compact MZ

A0549306

LMC10NEV3898-C57

10 GBPS 1538.976 NM COMPACT MZ TX NEGATIVE CHIRP

[**]

$[**]

Tx/Rx

Compact MZ

A0549307

LMC10NEV4056-C57

10 GBPS 1540.557 NM COMPACT MZ TX NEGATIVE CHIRP

[**]

$[**]

Tx/Rx

Compact MZ

A0549308

LMC10NEV4214-C57

10 GBPS 1542.142 NM COMPACT MZ TX NEGATIVE CHIRP

[**]

$[**]

Tx/Rx

Compact MZ

A0549309

LMC10NEV4373-C57

10 GBPS 1543.730 NM COMPACT MZ TX NEGATIVE CHIRP

[**]

$[**]

Tx/Rx

Compact MZ

A0549310

LMC10NEV4453-C57

10 GBPS 1544.526 NM COMPACT MZ TX NEGATIVE CHIRP

[**]

$[**]

Tx/Rx

Compact MZ

A0549311

LMC10NEV4612-C57

10 GBPS 1546.119 NM COMPACT MZ TX NEGATIVE CHIRP

[**]

$[**]

Tx/Rx

Compact MZ

A0549312

LMC10NEV4692-C57

10 GBPS 1546.917 NM COMPACT MZ TX NEGATIVE CHIRP

[**]

$[**]

Tx/Rx

Compact MZ

A0549313

LMC10NEW4852-C57

10 GBPS 1548.515 NM COMPACT MZ TX NEGATIVE CHIRP

[**]

$[**]

Tx/Rx

Compact MZ

A0549314

LMC10NEV5012-C57

10 GBPS 1550.116 NM COMPACT MZ TX NEGATIVE CHIRP

[**]

$[**]

Tx/Rx

Compact MZ

A0549315

LMC10NEV5172-C57

10 GBPS 1551.721 NM COMPACT MZ TX NEGATIVE CHIRP

[**]

$[**]

Tx/Rx

Compact MZ

A0549316

LMC10NEV5413-C57

10 GBPS 1554.134 NM COMPACT MZ TX NEGATIVE CHIRP

[**]

$[**]

Tx/Rx

Compact MZ

A0549317

LMC10NEV5494-C57

10 GBPS COMPACT MZ TX NEGATIVE CHIRP ETALON HIG

[**]

$[**]

Tx/Rx

Compact MZ

A0549318

LMC10NEV5575-C57

10 GBPS COMPACT MZ TX NEGATIVE CHIRP ETALON HIG

[**]

$[**]

Tx/Rx

Compact MZ

A0549319

LMC10NEV5655-C57

10 GBPS COMPACT MZ TX NEGATIVE CHIRP ETALON HIG

[**]

$[**]

Tx/Rx

Compact MZ

A0549320

LMC10NEV5817-C57

10 GBPS COMPACT MZ TX NEGATIVE CHIRP ETALON HIG

[**]

$[**]

Tx/Rx

Compact MZ

A0549321

LMC10NEV5979-C57

10 GBPS COMPACT MZ TX NEGATIVE CHIRP ETALON HIG

[**]

$[**]

Tx/Rx

Compact MZ

A0549322

LMC10NEV6305-C57

10 GBPS COMPACT MZ TX NEGATIVE CHIRP ETALON HIG

[**]

$[**]

Tx/Rx

Compact MZ

A0549323

LMC10NEV6386-C57

10 GBPS COMPACT MZ TX NEGATIVE CHIRP ETALON HIG

[**]

$[**]

Tx/Rx

Compact MZ

A0549324

LMC10NEV6468-C57

10 GBPS COMPACT MZ TX NEGATIVE CHIRP ETALON HIG

[**]

$[**]

Tx/Rx

Compact MZ

A0506586

LMC10NEV7042-C57

10 Gbs 1570.416 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506587

LMC10NEV7537-C57

10 Gbs 1575.368 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Page 21 of 24

Allocation

March 31^st

April 1, 2005

Family

Sub-Family

LTB

CPC

Bookham P/N

ITEM DESC

1H05

2005 Prices

Agreement

Tx/Rx

Compact MZ

A0506588

LMC10NEV7206-C57

10 Gbs 1572.063 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506589

LMC10NEV7371-C57

10 Gbs 1573.714 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506590

LMC10NEV8035-C57

10 Gbs 1580.350 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506591

LMC10NEV8537-C57

10 Gbs 1585.365 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506592

LMC10NEV8202-C57

10 Gbs 1582.018 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506593

LMC10NEV8369-C57

10 Gbs 1583.690 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506594

LMC10NEV9041-C57

10 Gbs 1590.411 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506595

LMC10NEV9549-C57

10 Gbs 1595.489 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506596

LMC10NEV9210-C57

10 Gbs 1592.100 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506597

LMC10NEV9379-C57

10 Gbs 1593.793 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506598

LMC10NEV0060-C57

10 Gbs 1600.600 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506599

LMC10NEV0574-C57

10 Gbs 1605.744 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506600

LMC10NEV0231-C57

10 Gbs 1602.311 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

A0506601

LMC10NEV0403-C57

10 Gbs 1604.026 nm Compact MZ Tx negative chirp etalon high pow

[**]

$[**]

Tx/Rx

Compact MZ

N0005246

LMC10NEW8788-C57

10 Gbs 1587.88 nm Compact MZ Tx negative chirp etalon ultra

[**]

$[**]

Tx/Rx

Compact MZ

N0013318

LMC10NEW7703-C57

10 Gbs 1577.03 nm Compact MZ Tx negative chirp etalon ultra

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0507382

NTW616AG

HP Tunable Laser K Ass’y 1530.334-1533.073

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0507383

NTW616AQ

HP Tunable Laser J Ass’y 1533.465-1536.215

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0507384

NTW616AY

HP Tunable Laser H Ass’y 1536.609-1539.370

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0507385

NTW616BG

HP Tunable Laser G Ass’y 1539.766- 1542.539

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0507386

NTW616BQ

HP Tunable Laser F Ass’y 1542.936-1545.720

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0507387

NTW616CA

HP Tunable Laser A Ass’y 1546.916-1549.715

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0507388

NTW616CJ

HP Tunable Laser B Ass’y 1550.116-1552.926

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0507389

NTW616CS

HP Tunable Laser C Ass’y 1553.328-1556.151

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0507390

NTW616DA

HP Tunable Laser D Ass’y 1556.555-1559.388

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0507391

NTW616DJ

HP Tunable Laser E Ass’y 1559.794-1562.640

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

504334/ NTU621

NTW615AG

UHP Tunable Laser K Ass’y 1530.334-1533.073

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

504335/ NTU621

NTW615AQ

UHP Tunable Laser J Ass’y 1533.465-1536.215

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

504336/ NTU621

NTW615AY

UHP Tunable Laser H Ass’y 1536.609-1539.370

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

504337/ NTU621

NTW615BG

UHP Tunable Laser G Ass’y 1539.766- 1542.539

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

504338/ NTU621

NTW615BQ

UHP Tunable Laser F Ass’y 1542.936-1545.720

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

504339/ NTU621

NTW615CS

UHP Tunable Laser C Ass’y 1553.328-1556.151

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

504340/ NTU621

NW615DA

UHP Tunable Laser D Ass’y 1556.555-1559.388

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

504341/ NTU621

NTW615DJ

UHP Tunable Laser E Ass’y 1559.794-1562.640

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

993583/ NTU621

NTW615CA

UHP Tunable Laser A Ass’y 1546.916-1549.715

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

993584/ NTU621

NTW615CJ

UHP Tunable Laser B Ass’y 1550.116-1552.926

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544605

NTW615CA REL2

UHP TUNABLE LASER A ASS’Y 1546.916-1549.715

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544606

NTW615CJ REL2

UHP TUNABLE LASER B ASS’Y 1550.116-1552.926

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544607

NTW615CS REL2

UHP TUNABLE LASER C ASS’Y 1553.328-1556.151

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544612

NTW615DA REL2

UHP TUNABLE LASER D ASS’Y 1556.555-1559.388

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544613

NTW615DJ REL2

UHP TUNABLE LASER E ASS’Y 1559.794-1562.640

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544614

NTW615BQ REL2

UHP TUNABLE LASER F ASS’Y 1542.936-1545.720

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544615

NTW615BG REL2

UHP TUNABLE LASER G ASS’Y 1539.766-1542.539

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544616

NTW615AY REL2

UHP TUNABLE LASER H ASS’Y 1536.609-1539.370

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544617

NTW615AQ REL2

UHP TUNABLE LASER J ASS’Y 1533.465-1536.215

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544619

NTW615AG REL2

UHP TUNABLE LASER K ASS’Y 1530.334-1533.073

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544620

NTW616CA REL2

HP TUNABLE LASER A ASS’Y 1546.916-1549.715

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544621

NTW616CJ REL2

HP TUNABLE LASER B ASS’Y 1550.116-1552.926

[**]

$[**]

Page 22 of 24

Allocation

March 31^st

April 1, 2005

Family

Sub-Family

LTB

CPC

Bookham P/N

ITEM DESC

1H05

2005 Prices

Agreement

Tx/Rx

Tunable 8 X 50

LTB

A0544622

NTW616CS REL2

HP TUNABLE LASER C ASS’Y 1553.328-1556.151

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544623

NTW616DA REL2

HP TUNABLE LASER D ASS’Y 1556.555-1559.388

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544624

NTW616DJ REL2

HP TUNABLE LASER E ASS’Y 1559.794-1562.640

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544625

NTW616BQ REL2

HP TUNABLE LASER F ASS’Y 1542.936-1545.720

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544626

NTW616BG REL2

HP TUNABLE LASER G ASS’Y 1539.766-1542.539

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544627

NTW616AY REL2

HP TUNABLE LASER H ASS’Y 1536.609-1539.370

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544628

NTW616AQ REL2

HP TUNABLE LASER J ASS’Y 1533.465-1536.215

[**]

$[**]

Tx/Rx

Tunable 8 X 50

LTB

A0544629

NTW616AG REL2

HP TUNABLE LASER K ASS’Y 1530.334-1533.073

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541491

MQ25EW2877DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1528.77nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541492

MQ25EW3033DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1530.33nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541493

MQ25EW3112DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1531.12nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541494

MQ25EW3190DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1531.90nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541495

MQ25EW3268DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1532.68nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541496

MQ25EW3347DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1533.47nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007163

MQ25EW3425DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1534.25nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007164

MQ25EW3504DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1535.04nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007166

MQ25EW3582DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1535.82nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007167

MQ25EW3661DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1536.61nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541497

MQ25EW3819DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1538.19nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541498

MQ25EW3898DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1538.98nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541499

MQ25EW3977DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1539.77nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541500

MQ25EW4056DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1540.56nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541501

MQ25EW4135DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1541.35nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0016967

MQ25EW4254DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1542.54nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541502

MQ25EW4294DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1542.94nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007168

MQ25EW4373DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1543.73nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007174

MQ25EW4453DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1544.53nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007169

MQ25EW4612DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1546.12nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007170

MQ25EW4692DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1546.92nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541503

MQ25EW4772DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1547.72nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007171

MQ25EW4851DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1548.51nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541504

MQ25EW4932DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1549.32nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007172

MQ25EW5012DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1550.12nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541505

MQ25EW5092DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1550.92nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007175

MQ25EW5172DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1551.72nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541506

MQ25EW5252DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1552.52nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007176

MQ25EW5413DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1554.13nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007177

MQ25EW5494DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1554.94nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007178

MQ25EW5575DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1555.75nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007179

MQ25EW5655DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1556.55nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541507

MQ25EW5736DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1557.36nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007180

MQ25EW5817DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1558.17nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541508

MQ25EW5898DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1558.98nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007181

MQ25EW5979DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1559.79nm,LC,DWDM Plugg

[**]

$[**]

Page 23 of 24

Allocation

March 31^st

April 1, 2005

Family

Sub-Family

LTB

CPC

Bookham P/N

ITEM DESC

1H05

2005 Prices

Agreement

Tx/Rx

DWDM Transceiver

A0541509

MQ25EW6061DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1560.61nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

A0541510

MQ25EW6223DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1562.23nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007183

MQ25EW6305DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1563.05nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007184

MQ25EW6386DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1563.86nm,LC,DWDM Plugg

[**]

$[**]

Tx/Rx

DWDM Transceiver

N0007185

MQ25EW6468DABB-DLC

Trcvr, 2.5Gb/s,175km dispersion limited,1564.68nm,LC,DWDM Plugg

[**]

$[**]

Passive

eVOA

LTB

A0871041

BKM-52006-31-UN

C-Band eVOA

[**]

$[**]

[**]

Passive

eVOA

LTB

A0871055

BKM-52006-32-UN

L-band eVOA

[**]

$[**]

[**]

Passive

eAPBE

A0554389

PBECS

Enhanced APBE C-Band

[**]

$[**]

Passive

eAPBE

A0554390

PBELS

Enhanced APBE L-Band

[**]

$[**]

Page 24 of 24

EX-10.37 3 b56701biexv10w37.htm EX-10.37 SECOND NOTES AMENDEMENT AND WAIVER AGREEMENT exv10w37

Exhibit 10.37

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

SECOND NOTES AMENDMENT AND WAIVER AGREEMENT

This Second Notes Amendment and Waiver Agreement (the “Agreement”) is entered into as of May 2, 2005, among Bookham Technology plc, a public limited company incorporated under the laws of England and Wales (“Bookham plc”), Bookham, Inc., a Delaware corporation (“Bookham, Inc.” and, together with Bookham plc and its other subsidiaries whose names appear on the signature pages hereto, the “Bookham Parties”), Nortel Networks UK Limited (“NNUKL”), Nortel Networks Corporation (“Nortel Networks”) and Nortel Networks Limited, a Canadian corporation (“NNL”).

WHEREAS, the parties to this Agreement are parties to a Restructuring Agreement (the “Restructuring Agreement”), dated as of December 2, 2004;

WHEREAS, Bookham plc has issued to NNUKL an amended and restated Series B-1 Senior Secured Note due November 8, 2006 in an original principal amount of $30,000,000.00 (as amended, supplemented or modified from time to time in writing, the “Series B-1 Note”);

WHEREAS, Bookham, Inc. has issued to NNUKL an amended and restated Series A-1 Senior Secured Note due November 8, 2007 in an original principal amount of $20,000,000.00 (as amended, supplemented or modified from time to time in writing, the “Series A-2 Note”, together with the Series B-1 Note, the “Notes”);

WHEREAS, Bookham plc has entered into the Optical Components Supply Agreement with NNL, effective as of November 8, 2002, as amended by the Addendum to Optical Components Supply Agreement dated as of February 7, 2005 (the “Addendum”) between NNL and Bookham plc (as amended, supplemented or modified from time to time in writing, the “Supply Agreement”);

WHEREAS, Bookham, Inc. and certain of its subsidiaries and NNUKL are parties to an Amended and Restated U.S. Security Agreement, dated as of December 2, 2004 (as amended, supplemented or modified from time to time in writing, the “U.S. Security Agreement”);

WHEREAS, Bookham, Inc. and certain of its subsidiaries and Nortel Networks and certain of its subsidiaries have entered into certain amendment and waiver agreements, certain security agreements and other agreements and delivered certain other documents in connection with the foregoing (all such agreements and documents as amended, supplemented or modified from time to time in writing, and together with the U.S. Security Agreement, the Notes and the Restructuring Agreement, the “Senior Note Documents”);

WHEREAS, Bookham, Inc. and the other Bookham Parties and NNUKL desire to further amend the Notes as set forth herein;

WHEREAS, the Bookham Parties have requested that NNUKL agree to waive certain provisions of the Notes pursuant to the terms and subject to the conditions set forth herein;

WHEREAS, the Bookham Parties have requested that NNL amend certain provisions of the Supply Agreement pursuant to the terms and subject to the conditions set forth in the Supply Agreement Addendum substantially in the form set forth in Exhibit A (the “Supply Agreement Addendum”); and

WHEREAS, in consideration of the foregoing, the parties desire to amend the U.S. Security Agreement and certain of the Senior Note Documents and enter into certain other security agreements (i) to provide that the collateral pledged to secure the obligations under the Notes shall also be pledged to secure the obligations of Bookham plc and certain of its Subsidiaries under the Supply Agreement and (ii) to cause Bookham, Inc. and its subsidiaries to pledge certain additional assets to secure the various obligations of Bookham, Inc., Bookham plc and the guarantors under each of the Series B-1 Note, the Series A-2 Note and the Supply Agreement (such amendments and additional security documents as further described in Section 5(b) through 5(e) hereof, the “Additional Security Documents”).

NOW THEREFORE, in consideration of the mutual premises hereinafter set forth and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

1. Definitions. The following terms used herein shall have the meaning set forth below:

(i) “Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. A person shall be deemed to control another Person if the first Person possesses, directly or indirectly, the power (i) to vote 5% or more of the equity interests having ordinary voting power for the election of directors (or comparable governing body) of such Person or (ii) to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise. For purposes of this Agreement, none of Nortel Networks, NNUKL or NNL or any of their respective Subsidiaries shall be deemed to be an “Affiliate” of any Bookham Party or any of their respective Subsidiaries.

(ii) “Bankruptcy Event” means, with respect to any Person, any of the following events (a) such Person commences a case or other proceeding under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency, liquidation or conservatorship, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or seeking the appointment of a receiver, trustee, custodian, conservator or other similar

official for it or for all or any substantial part of its assets; (b) the commencement against such Person of any such case or proceeding or other action of a nature referred to in clause (a) above which (1) results in the entry of an order for relief or any such adjudication or appointment or (2) that is not dismissed, discharged or bonded within 60 days after commencement; (c) the adjudication of such Person as insolvent or bankrupt, or any order of relief or other order approving any such case or proceeding is entered; (d) such Person suffers any appointment of any custodian, trustee, receiver, receiver-manager or the like for it or any substantial part of its property that is not discharged or stayed within 60 days; (e) a warrant of attachment (to the extent such warrant of attachment does not constitute an attachment in aid of jurisdiction or other similar pre-judgment remedy, and Nortel and its Affiliates are satisfied in their reasonable judgment that such attachment does not affect the perfection or priority of any security interest in the name of NNUKL as security agent in such property or in any material respect the rights or remedies of Nortel and its Affiliates therein), execution or similar process shall have been issued against any substantial part of such Person’s property if the property, plant and equipment of such Person subject to such warrant or writ at the time of such issue has an aggregate fair market value greater than or equal to $500,000 and is not discharged or stayed within 60 days; (f) such Person makes a general assignment for the benefit of creditors; (g) such Person fails to pay or states that it is unable to pay or is unable to pay, its debts generally as they become due; (h) such Person calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (i) such Person, by any act or failure to act, indicates its consent to, approval of or acquiescence of any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

(iii) “Change of Control” means (A) the failure of Bookham Inc. to own, directly or indirectly, 100% of the voting stock or other ownership interest in (i) Bookham plc or (ii) any of its Subsidiaries that sell Products (as defined in the Supply Agreement) to Nortel or its Affiliates or any contract manufacturer designated by Nortel or its Affiliates or (B) any of the following with respect to Bookham Inc. or Bookham Technology plc: any (i) merger, consolidation, share exchange or other similar transaction, unless Bookham Inc. or Bookham Technology plc, as the case may be, is the surviving party, provided that no Event of Default shall have occurred and be continuing at the time of such proposed transaction or would result therefrom, (ii) sale, transfer, exchange or other disposition of all or substantially all of its assets in a single transaction or series of related transactions, (iii) consummation of a tender offer or exchange offer for a majority of the outstanding voting securities of such entity; (iv) issuance of that number of voting securities of such entity that would, after such issuance, constitute a majority of the outstanding voting securities of such entity; (v) any Person or group of Persons acting in concert shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their having the power to direct or cause the direction, directly or indirectly, of the management or policies of such Bookham Party, whether through the ownership of voting securities, through ability to exercise voting power, by contract or otherwise; or (vi) with respect to Bookham, Inc., (a) any Person or two or more Persons (other than the Permitted Holders) acting as a group (as defined in Section 13d-3 of the Securities Exchange Act of 1934) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of

35% or more of the outstanding shares of voting stock of Bookham, Inc.; or (b) individuals who, as of the Reference Date, constitute the Board of Directors of Bookham, Inc. (the “Bookham Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors of Bookham, Inc.; provided, however, that any individual becoming a director of Bookham, Inc. subsequent to the Reference Date whose election, or nomination for election by Bookham, Inc.’s shareholders was approved by a vote of at least a majority of the directors then comprising the Bookham Incumbent Board shall be considered as though such individual were a member of the Bookham Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act of 1934) or other actual or threatened solicitation of proxies or contest by or on behalf of a Person other than the Board of Directors of Bookham, Inc.

(iv) “Expiration Event” has the meaning set forth in Section 4 hereof.

(v) “Indebtedness” means any obligation in respect of (i) borrowed money (excluding intercompany loans), (ii) capitalized lease obligations, (iii) obligations under interest rate agreements and currency agreements, (iv) guarantees of any obligation of any third Person, (v) letters of credit, (vi) indemnity obligations or performance bonds and (vii) any obligation owed for all or any part of the deferred purchase price of property or services (other than accounts payable in the ordinary course of business payable on terms customary in the trade and not past due).

(vi) “Permitted Holder” means, with respect to any Person, any holder of more than 5% of the total outstanding shares of stock or other ownership interests in such Person on the Reference Date.

(vii) “Person” means any natural person, general or limited partnership, corporation, limited liability company, firm, association, trust or other entity or organization, including a government or political subdivision or agency or instrumentality thereof.

(viii) “Reference Date” means April 1, 2005.

(ix) “Subsidiary” means, as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.

2. Amendment; Waiver; Further Actions. (a) Contemporaneously with the execution and delivery of this Agreement, NNUKL hereby:

(i)

waives the application of Section 4(a) and 4(b) of the Series B-1 Note until the earlier of the twelve-month anniversary of the date hereof and the

occurrence of an Expiration Event; except that if the Net Proceeds (as defined in the Series B-1 Note) of the Qualified Financings (as defined in the Series B-1 Note) during such period exceed $75,000,000 in the aggregate (the “Excess Net Proceeds”), the Borrower (as defined in the Series B-1 Note) shall within one (1) Business Day of the consummation of the relevant Qualified Financing prepay in cash on a pro rata basis by wire transfer of immediately available funds the outstanding obligations of the Series B-1 Note in an amount equal to (a) 40% of the Net Proceeds of any such Qualified Financings to the extent such Net Proceeds constitute all or part of the Excess Net Proceeds less than the Threshold Net Proceeds (as defined in the Series A-2 Note) and (b) 100% of the Threshold Net Proceeds (as defined in the Series A-2 Note); and provided that the Borrower shall not use the Net Proceeds of any Qualified Financings to retire, redeem, prepay or repay any other Indebtedness of the Borrower (other than scheduled principal and interest payments on Indebtedness in existence on the date hereof as set forth in Schedule 3(d) hereto and any renewals, extensions or refinancings of such Indebtedness (provided that, with respect to any such renewal, extension or refinancing (a) the terms and conditions thereof are no less favorable to the obligor thereon or to NNUKL than the Indebtedness being renewed, refinanced or extended, (b) the average life to maturity thereof is greater than or equal to that of the Indebtedness being renewed, refinanced or extended and (c) such renewal, extension or refinancing does not increase the principal amount of such Indebtedness), but shall instead use such Net Proceeds (except for any Net Proceeds applied to repay the Series B-1 Note as described above) for working capital purposes in the ordinary course of business; and

(ii)

waives the application of Section 4(a) of the Series A-2 Note until the earlier of the repayment in full of the Series B-1 Note, the twelve-month anniversary of the date hereof and the occurrence of an Expiration Event (as defined herein); provided that the Borrower (as defined in the Series A-2 Note) shall not be required to apply Threshold Net Proceeds (as defined in the Series A-2 Note) to prepay the outstanding obligations under the Series A-2 Note to the extent that such Threshold Net Proceeds have already been applied to prepay the outstanding obligations under the Series B-1 Note pursuant to clause (i) above.

Except as specifically waived hereby, each of the Notes shall continue in full force and effect in accordance with the provisions thereof as in existence on the date hereof. After the date hereof, any reference thereto shall mean any such document, as applicable, as modified hereby.

(b) Contemporaneously with the execution and delivery of this Agreement, NNUKL, Bookham, Inc. and the other Bookham Parties agree that the Notes are amended as follows:

	(i)		Section 7(d) of each of the Notes shall be deleted in its entirety and replaced with the following:

			“(d) Neither the Borrower nor any Guarantor shall distribute, sell, assign, transfer or otherwise dispose of any Collateral without the prior written consent of the Holder while the Guaranteed Obligations are outstanding, except for (i) the disposition of equipment having a fair market value not to exceed $[**] in the aggregate and (ii) the sale of the Swindon Property; provided that with respect to clause (ii), (x) no Event of Default under the Notes or Supply Agreement Event of Default shall have occurred and be continuing at the time of such sale and Nortel shall have received a certificate signed by the chief executive officer or chief financial officer of the Borrower stating that no Event of Default under the Notes or Supply Agreement Event of Default has occurred and is continuing at the time of such sale and (y) the Borrower shall use the Net Proceeds of such sale for working capital purposes in the ordinary course of business.”

	(ii)		The following new subsection (x) shall be inserted at the end of Section 9(a) of each of the Notes:

			“(x) a Supply Agreement Event of Default occurs under the Supply Agreement.”

	(iii)		The following new subsection (c) shall be inserted at the end of Section 9 of each of the Notes:

			“(c) If an Event of Default has occurred and is continuing, the Holder is hereby authorized by the Borrower at any time and from time to time, to the extent permitted by applicable law, without prior notice to the Borrower (any such notice being expressly waived by the Borrower), to set off and apply any amount due and owing by the Holder or any of its Affiliates or their designees to or for the account of the Borrower or any of its Affiliates (including any amounts that have been invoiced to the Holder or any of its Affiliates or their designees by the Borrower or any of its Affiliates), as the case may be, pursuant to the Supply Agreement or any Related Supply Agreement (whether such amounts are owed by the Holder or its Affiliates directly or indirectly or was originally owing by the Holder or its Affiliates or has subsequently been assumed by the Holder or its Affiliates) against any Guaranteed Obligations of the Borrower due and payable to the Holder under this Note (whether at stated maturity, by acceleration or otherwise; provided that for purposes of this section, the Guaranteed Obligations shall be deemed to be automatically due and payable upon the occurrence of a Bankruptcy Event under Section 9(a)(v) of this Note), regardless of whether any such amount is in the same currency or is booked or otherwise payable at the same office as the obligation against which it is set off and regardless of whether the Holder

shall have made any demand for payment under this Note. The Holder agrees to promptly notify the Borrower after any such setoff and application made by the Holder or its Affiliates; provided that any failure to give such notice shall not affect the validity of such setoff or application. The rights of the Holder under this section are in addition to any other rights and remedies which the Holder may have.”

	(iv)		The following new defined terms shall be inserted in alphabetical order in Section 16 of each of the Notes:

			““Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. A person shall be deemed to control another Person if the first Person possesses, directly or indirectly, the power (i) to vote 5% or more of the equity interests having ordinary voting power for the election of directors (or comparable governing body) of such Person or (ii) to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise. For purposes of this Note, none of the Lender, Nortel, Nortel Networks Corporation or any of their respective Subsidiaries shall be deemed to be an “Affiliate” of the Borrower, Bookham, Inc., the Supplier or any of their respective Subsidiaries.”

			““Nortel” has the meaning set forth in the Supply Agreement.”

			““Related Supply Agreement” means any agreement in writing entered into between Supplier or any of its Affiliates and any contract manufacturer designated by Nortel or its Affiliates in connection with the Supply Agreement for the purpose of purchasing products for or on behalf of Nortel or its Affiliates from Supplier or its Affiliates.

			““Second Addendum” means the Addendum to Optical Components Supply Agreement dated as of April 1, 2005 between Nortel Networks Limited, a Canadian corporation, and Bookham Technology plc that amends and supplements the Supply Agreement.”

			““Supplier” has the meaning set forth in the Supply Agreement.”

			““Supply Agreement Event of Default” shall mean an “Event of Default” as defined in the Second Addendum.

			““Swindon Property” has the meaning set forth in that certain Debenture dated as of May 2, 2005 among Nortel Networks UK Limited, Nortel Networks Limited and the other secured parties named therein, as the Secured Parties, and Bookham Technology plc, Bookham, Inc. and certain of their respective Subsidiaries as the Chargors.”

	(v)		The definition of “Security Agreements” in Section 16 of each of the Notes shall be deleted in its entirety and replaced with the following:

			““Security Agreements” means the “Security Agreements” as defined in the Acquisition Agreement, and any additional Security Agreements contemplated by the Restructuring Agreement and any amendments, restatements, modifications or supplements to any of the foregoing that are in writing.”

(c) Each of the Bookham Parties hereby acknowledges and agrees that the products ordered by any designated contract manufacturer on behalf of NNL or its Affiliates from time to time pursuant to the Supply Agreement or any other agreement entered into between Bookham plc or any of its Affiliates and any contract manufacturer designated by NNL or its Affiliates (“Contract Manufacturers”) for the purpose of purchasing products for or on behalf of NNL or its Affiliates (“Related Supply Agreements”) are for the benefit of NNL and its Affiliates and that the value provided to Bookham by way of price increases and other amendments set forth in the Supply Agreement Amendment is being given directly or indirectly by NNL and its Affiliates. Each of the Bookham Parties further acknowledges and agrees that each of NNL and its Affiliates shall enjoy the rights of a third party beneficiary under any Related Supply Agreement between Bookham plc or its Affiliates and any designated Contract Manufacturer. Each Bookham Party acknowledges that NNL and its Affiliates are relying upon Bookham plc to produce and ship products to NNL’s designated Contract Manufacturers according to the terms of the Supply Agreement and/or Related Supply Agreements and that upon any failure by Bookham plc or its respective Affiliates to deliver products to the designated Contract Manufacturers or otherwise perform under the Supply Agreement or any Related Supply Agreement (except as may be provided in such documents), NNL and its Affiliates, as the case may be, shall have a claim for damages against Bookham plc and its Affiliates, as the case may be, for breach of contract or otherwise (except as may be provided in such documents).

(d) Each of the Bookham Parties (A) agrees that, from the date hereof, all references to the Notes or the Supply Agreement contained in the U.S. Security Agreement and the other Senior Note Documents and any filing or other documents contemplated thereby shall mean the Notes or Supply Agreement, as the case may be, as hereby amended and (B) agrees, and agrees to cause its respective affiliates to, promptly execute and deliver any and all further agreements, instruments and other documents, and to take any and all other actions, reasonably requested by NNUKL and Nortel Networks to effect the purposes of this Agreement, including without limitation, executing and delivering amended and restated notes, security agreements, deeds, mortgages, filings and other documents.

3. Representations and Warranties. The Bookham Parties hereby jointly represent and warrant to NNUKL and Nortel Networks as follows:

(a) Each Bookham Party is a corporation or legal entity duly organized and validly existing under the laws of the jurisdiction of its organization and is duly qualified or licensed to do business and is in good standing (if and to the extent such term is recognized in the relevant jurisdiction) in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary,

except where the failure to so qualify would not reasonably be expected to result in damages to the Bookham Parties of more than $1,000,000 in the aggregate.

(b) Each Bookham Party has the requisite corporate power and authority to own, lease and operate its properties and to carry on its business as currently conducted and the requisite corporate power and authority to enter into and perform this Agreement and all other agreements and documents contemplated in clauses (b) through (f) of Section 5 hereof (together, the “Additional Documents”) and to carry out the transactions contemplated by this Agreement and the Additional Documents.

(c) This Agreement has been, and the Additional Documents when executed will be, duly executed and delivered by the applicable Bookham Party, and constitute valid and binding obligations of such Bookham Party, enforceable in accordance with their respective terms, except that no representation is made with respect to the law of any jurisdiction outside of the United States, and subject as to enforcement of remedies to the applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting generally the enforcement of creditors’ rights and subject to a court’s discretionary authority with respect to the granting of a decree ordering specific performance or other equitable remedies.

(d) Other than (A) as set forth on Schedule 3(d) hereto, (B) Indebtedness secured by purchase money security interests, (C) the Series A-2 Note, (D) the Series B-1 Note, (E) $25,500,000 aggregate principal amount of 7.0% senior unsecured convertible debentures issued by Bookham, Inc. on December 20, 2004 plus accrued and unpaid interest from March 31, 2005 through the date hereof and (F) capitalized leases, letters of credit, indemnity obligations and performance bonds not exceeding U.S.$2,000,000 in the aggregate, the Bookham Parties do not have any Indebtedness.

(e) The execution and delivery of this Agreement and the Additional Documents have been duly authorized by all requisite corporate action on the part of the Bookham Parties party hereto and thereto, as the case may be.

(f) Neither the execution or delivery by any Bookham Party of this Agreement or any Additional Document, the consummation of the transactions contemplated hereby or thereby, nor the compliance by the Bookham Parties with any of the provisions hereof or thereof (including, without limitation, any obligation to prepay any amounts under the Notes) will (i) conflict with, violate or result in the breach of, any provision of the certificate of incorporation or by-laws or other organizational documents of any Bookham Party; (ii) conflict with, violate, or result in the breach by any Bookham Party of any applicable law; (iii) conflict with, violate, result in the breach or termination of, or constitute a default or give rise to any right of termination or acceleration or right to increase the obligations or otherwise modify the terms under any contract, agreement or understanding to which any Bookham Party is a party or by which any Bookham Party or any of its assets is bound; or (iv) result in the creation of any lien upon any of the assets of the Bookham Parties (other than the liens created pursuant to the transactions contemplated hereby), in each case, with respect to the foregoing, except for such conflicts, violations, breaches, terminations, defaults, rights or liens that have not had and would not reasonably by expected to have, individually or in the aggregate, a material adverse effect on any Bookham Party.

(g) No consent, approval or authorization of, permit from, or declaration, filing or registration with, any governmental authority or any other person is required to be made or obtained by any Bookham Party in connection with the execution, delivery and performance of this Agreement or any Additional Document and the consummation of the transactions contemplated hereby or thereby, except where the failure to obtain such consent, approval, authorization or permit, or to make such declaration, filing or registration, has not had and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on any Bookham Party.

(h) As of the date hereof, other than Bookham (Canada), Inc., neither Bookham, Inc., nor any of its subsidiaries owns, leases or operates any assets in Canada, except for any Intellectual Property registered in Canada. The aggregate fair market value of the assets of Bookham, Inc. and its subsidiaries in Canada does not exceed $[**] as of the date hereof. “Intellectual Property” means trademarks, service marks, brand names, distinguishing guises, trade dress, trade names, words, symbols, color schemes, business names, internet domain names and other indications of origin, patents and pending patent applications, utility models, inventors’ certificates and invention disclosures, technology, copyrights, know-how, goodwill and other intellectual property necessary for the conduct of its business as currently conducted.

(i) Bookham Technology (Shenzhen) (FFTZ) Co. Ltd. and New Focus Pacific (SHIP) Co. Ltd. are the only entities organized under the laws of China in which Bookham, Inc. or any of its subsidiaries holds an equity interest; and Bookham International Ltd. owns all the outstanding equity interests of Bookham Technology (Shenzhen) (FFTZ) Co. Ltd. and New Focus Pacific (SHIP) Co. Ltd. free and clear of all Liens.

(j) Each Principal Subsidiary (as defined in the U.S. Security Agreement) of Bookham, Inc. is a party to the U.S. Security Agreement and is a Guarantor (as defined in the Series A-2 Note) of the obligations of Bookham, Inc. under the Series A-2 Note and the obligations of Bookham plc under the Series B-1 Note and is a Pledgor Party under the U.S. Security Agreement.

(k) Since March 24, 2005, no Event of Default (as defined in the Notes) has occurred and is continuing (other than any Event of Default that has been waived) and no Event of Default (as defined in the Supply Agreement Addendum) has occurred and is continuing (other than any Event of Default that has been waived).

(l) Since January 1, 2005, no material adverse change in the business of Bookham, Inc. or any of its Subsidiaries has occurred.

(m) Bookham, Inc. has reviewed the impact of the amendment to the Supply Agreement, the amendments to the Senior Note Documents, and the other matters contemplated herein, from an accounting and legal perspective and it has or will take all necessary steps to ensure compliance in all material respects with United States federal and state securities laws and U.S. generally-accepted accounting principles.

4. Expiration Events. The occurrence of any of the following shall constitute an “Expiration Event”):

(a) an Event of Default (as defined in the Series B-1 Note or the Series A-2 Note) shall have occurred and be continuing under either of the Notes (which Event of Default has not been waived);

(b) an Event of Default (as defined in the Supply Agreement Addendum) shall have occurred and be continuing under the Supply Agreement (which Event of Default is not currently waived);

(d) (i) any of Bookham, Inc., Bookham Technology plc or Bookham Technology (Shenzhen) (FFTZ) Co. Ltd. shall have become subject to a Bankruptcy Event or (ii) any other Bookham Party or Bookham Parties shall have become subject to a Bankruptcy Event and the net book value of the assets affected by any such Bankruptcy Event(s) (as calculated immediately before any such Bankruptcy Event irrespective of any liabilities) is equal to or greater than $[**] in the aggregate.

5. Conditions to Effectiveness. This Agreement shall become effective as of the date first above written when the following conditions precedent have been satisfied (each in form and substance reasonably satisfactory to Nortel Networks and NNUKL):

(a) the parties to this Agreement shall have received duly executed and delivered counterparts of this Agreement, that, taken together bear the signatures of each of the parties hereto.

(b) Nortel Networks and NNUKL shall have received copies of the Second Amended and Restated U.S. Security Agreement duly executed by the Bookham Parties, substantially in the form attached as Exhibit B hereto;

(c) Nortel Networks and NNUKL shall have received copies of the Debenture relating to the real property at Swindon, U.K. and certain additional security duly executed by the Bookham Parties, substantially in the form attached as Exhibit C hereto;

(d) Nortel Networks and NNUKL shall have received copies of the Amended and Restated Charge over Shares in Bookham International Limited duly executed by Bookham plc, substantially in the form attached as Exhibit D hereto;

(e) Nortel Networks and NNUKL shall have received copies of the Second Amended and Restated Canadian Security Agreement duly executed by the relevant Bookham Parties, substantially in the form attached as Exhibit E hereto;

(f) Nortel Networks and NNUKL shall have received copies of the Supply Agreement Addendum duly executed by Bookham Technology plc;

(g) Nortel Networks and NNUKL shall have received duly executed copies of all other documentation, amendments and authorizations reasonably requested by Nortel Networks or NNUKL to effect a security interest over the additional collateral (as described in the Proposal Letter from NNUKL to Bookham, Inc., dated March 24, 2005).

(h) The security interest granted by the Bookham Parties to NNUKL and NNL pursuant to the Additional Security Documents shall constitute a legal, valid and perfected security interest and first-priority lien in all collateral (as described in the relevant Additional Security Document) securing the payment and performance by the Bookham Parties of their respective obligations under the Notes, the Supply Agreement and the other Senior Note Documents, as applicable, upon the filing of financing statements in favor of the secured parties named therein in the relevant jurisdictions as further described in the relevant Additional Security Document.

(i) Nortel Networks and NNUKL shall have received for each Bookham Party (i) copies of the organization documents, certified to be true and complete as of a recent date acceptable to Nortel by the appropriate governmental authority of the state of jurisdiction of is incorporation; (ii) signature and incumbency certificates of the officers of the Bookham Parties executing this Agreement, the Supply Agreement Addendum and each Additional Security Document to which it is a party; (iii) resolutions of the board of directors or similar governing body of each Bookham Party approving and authorizing the execution, delivery and performance of this Agreement, the Supply Agreement Addendum and each Additional Security Document to which it is a party, certified as of the date hereof by its Secretary or Assistant Secretary as being in full force and effect; and (iv) to the extent applicable, a good standing certificate from the applicable governmental authority of each Bookham Party’s jurisdiction of incorporation, dated a recent date prior to the date hereof.

(j) The representations and warranties made by each of the Bookham Parties in this Agreement and the Additional Documents shall be true and correct in all material respects on and as of the date of the effectiveness of this Agreement as if made on and as of such date.

(k) Nortel Networks and NNUKL shall have received legal opinions of counsel to the Bookham Parties covering such matters incident to the transactions contemplated by this Agreement and the Additional Documents as NNUKL and NNL may require.

6. Indemnification. Each of the Bookham Parties hereby agrees, jointly and severally, to indemnify and hold harmless Nortel Networks and each of its affiliates and each of their respective officers, directors, employees, agents, advisors and representatives (each, an “Indemnified Party”) from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, fees and disbursements of counsel), joint or several, that may be incurred by or asserted or awarded against any Indemnified Party (including, without limitation, in connection with any investigation, litigation or proceeding or the preparation of a defense in connection therewith), in each case arising out of or in connection with or by reason of this Agreement, the Restructuring Agreement, the Notes, the Supply Agreement or the other Senior Note Documents, or the transactions contemplated thereby or hereby, as applicable. In the case of an investigation, litigation or other proceeding to which the indemnity in this paragraph applies, such indemnity shall be effective whether or not such

investigation, litigation or proceeding is brought by the any of the Bookham Parties, any of their directors, security holders or creditors, an Indemnified Party or any other person or an Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are consummated. In no event, however, shall any Bookham Party be liable on any theory of liability for any special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings), it being understood that the foregoing limitation shall not apply to any such damages of a third party that result in any claim against, damage to or loss, liability or expense of an Indemnified Party.

No Indemnified Party shall have any liability (whether in contract, tort or otherwise) to any of the Bookham Parties or any of their respective affiliates, security holders or creditors for or in connection with this Agreement, the Restructuring Agreement, the Notes, the Supply Agreement or the other Senior Note Documents, or the transactions contemplated thereby or hereby, as applicable, except as set forth in the Supply Agreement. In no event, however, shall any Indemnified Party be liable on any theory of liability for any special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings).

7. Miscellaneous.

(a) Parties in Interest. All covenants, agreements, representations, warranties and undertakings in this Agreement made by and on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and permitted assigns of the parties hereto.

(b) Amendments and Waivers. Except as set forth in this Agreement, changes in or additions to this Agreement may be made, or compliance with any term, covenant, agreement, condition or provision set forth herein may be omitted or waived (either generally or in a particular instance and either retroactively or prospectively), upon the written consent of all of the parties to this Agreement.

(c) Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York (including, without limitation, Sections 5-1401 and 5-1402 of the New York General Obligations Law, which are expressly made applicable to this Agreement).

(d) Notices. All notices, requests, consents, and other communications under this Agreement shall be in writing and shall be deemed delivered (i) two business days after being sent by registered or certified mail, return receipt requested, postage prepaid or (ii) one business day after being sent via a reputable nationwide overnight courier service guaranteeing next business day delivery, in each case to the intended recipient as set forth below:

(i) If to any Bookham Party, at Bookham Technology plc, 10 Brewer Hunt Way, Ottawa, ON K2K 2B5, Canada, Attention: General Counsel, with a copy to Thomas S. Ward, Esq., Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, MA 02109; and

(ii) If to NNUKL or Nortel Networks, at Nortel Networks Corporation, 8200 Dixie Road, Brampton, ON L6T 5P6, Canada, Attention: Secretary, with a copy to Robert Fishman, Nortel Networks Corporation, 2221 Lakeside Boulevard, Mail Stop 991-14-B40, Richardson, TX 75082-4399.

(iii) Any party may give any notice, request, consent or other communication under this Agreement using any other means (including, without limitation, personal delivery, messenger service, telecopy, first class mail or electronic mail), but no such notice, request, consent or other communication shall be deemed to have been duly given unless and until it is actually received by the party for whom it is intended. Any party may change the address to which notices, requests, consents or other communications hereunder are to be delivered by giving the other parties notice in the manner set forth in this Section 7(d).

(e) Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(f) Agreements Remain in Effect; No Waiver. Except as expressly provided herein, all terms and provisions of the Senior Note Documents shall remain unchanged and in full force and effect and are hereby ratified and confirmed. Each Bookham Party (i) hereby acknowledges that an aggregate principal amount equal to $25,860,600 is currently outstanding under the Series B-1 Note and the aggregate principal amount equal to $20,000,000 is currently outstanding under the Series A-2 Note and (ii) hereby irrevocably waives any defenses, offsets or counterclaims existing on or prior to the date hereof to the performance of their respective obligations under the Senior Note Documents and the Supply Agreement (other than obligations with respect to any invoices issued to Nortel which are past due). No waiver by NNUKL or Nortel Networks of any Event of Default hereunder shall be deemed to be a waiver of any other Event of Default.

(g) Reservation of Rights. Each party hereto expressly reserves all of its respective rights, remedies, powers and privileges under the Supply Agreement and the Senior Note Documents, except to the extent specifically provided to the contrary herein (including, without limitation, in Section 7(f) hereto). No failure on the part of Nortel Networks, NNUKL or NNL to exercise, and no delay or omission by Nortel Networks, NNUKL or NNL in exercising, any right, remedy, power or privilege under the Supply Agreement or the Senior Note Documents, at law, or in equity, shall operate as a waiver thereof, nor shall any single or partial exercise by Nortel Networks, NNUKL or NNL of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege under the Senior Note Documents, the Supply Agreement or otherwise.

(h) Entire Agreement. This Agreement and the exhibits hereto together with any other agreement referred to herein constitute the entire agreement among the parties with respect to the subject matter hereof.

(i) Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

(j) Counterparts; Facsimile Signatures. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which shall constitute one and the same document. This Agreement may be executed by facsimile signatures.

(k) Properties in China. Promptly upon the request of NNUKL or Nortel, and to the extent permitted by law, Bookham Inc. shall cause the property, plant and equipment (including real property, all inventory set forth on Exhibits A and B to the Addendum and all Accounts Receivable owing by Nortel or its Affiliates (whether originally owing by Nortel or its Affiliates or subsequently assumed by Nortel or its Affiliates) or any Contract Manufacturer (as defined in the Second Amended and Restated US Security Agreement) to Bookham, Inc. or its Affiliates, including any accounts receivable relating to the inventory described above) located in the People’s Republic of China that is owned by subsidiaries of Bookham, Inc. (including Bookham Technology (Shenzhen) (FFTZ) Co. Ltd. and New Focus Pacific (SHIP) Co. Ltd.) to be mortgaged or pledged on a first priority-basis (to the extent such priority is contemplated by applicable law) for the benefit of NNUKL and the other Secured Parties (as defined in the Second Amended and Restated US Security Agreement) in the manner contemplated by Section 2(b) of the Restructuring Agreement together with such evidence of corporate authority, legal opinions, evidence of insurance, surveys and other related matters as NNUKL, Nortel and NNL may reasonably require. The Bookham Parties acknowledge that the agreement to deliver additional collateral and additional documents described in this Section 7(k) is a material inducement to Nortel, NNUKL and NNL to enter into this Agreement.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the day and year first written above.


		BOOKHAM TECHNOLOGY PLC

		By: /s/ Stephen Abely
		Name: Stephen Abely
		Title: Director

		BOOKHAM, INC.

		By: /s/ Stephen Abely
		Name: Stephen Abely Title: Chief Financial Officer

		BOOKHAM (US), INC.

		By: /s/ Stephen Abely
		Name: Stephen Abely Title: President

		NEW FOCUS, INC.

		By: /s/ Stephen Abely
		Name: Stephen Abely Title: President

		ONETTA, INC.

		By: /s/ Stephen Abely
		Name: Stephen Abely Title: President

[SECOND NOTES AMENDMENT AND WAIVER AGREEMENT ]


		IGNIS OPTICS, INC.

		By: /s/ Stephen Abely
		Name: Stephen Abely Title: President

		BOOKHAM (CANADA), INC.

		By: /s/ Michael Scott
		Name: Michael Scott Title: President

		BOOKHAM (SWITZERLAND) AG

		By: /s/ Stephen Abely
		Name: Stephen Abely
		Title: Director

[SECOND NOTES AMENDMENT AND WAIVER AGREEMENT ]


		NORTEL NETWORKS UK LIMITED

		By: /s/ Christian Waida
		Name: Christian Waida
		Title: Director

		NORTEL NETWORKS CORPORATION

		By: /s/ Gordon A. Davies
		Name: Gordon A. Davies Title: Corporate Secretary

		By: /s/ K. B. Stevenson
		Name: K. B. Stevenson
		Title: Treasurer

		NORTEL NETWORKS LIMITED

		By: /s/ Gordon A. Davies
		Name: Gordon A. Davies Title: Corporate Secretary

		By: /s/ K. B. Stevenson
		Name: K. B. Stevenson
		Title: Treasurer

[SECOND NOTES AMENDMENT AND WAIVER AGREEMENT ]

EX-10.38 4 b56701biexv10w38.htm EX-10.38 CONTRACT OF EMPLOYMENT exv10w38

Exhibit 10.38

CONTRACT OF EMPLOYMENT

This Agreement is dated the day of 2003.

BETWEEN:

(1)		BOOKHAM TECHNOLOGY PLC whose registered office is at 90 Milton Park, Abingdon, Oxfordshire OX14 4RY (the “Company”); and

(2)		Mr Jim Haynes of 949 Via Bolzano, Goleta, CA 93117, USA

1.		JOB TITLE AND DUTIES

1.1.		You will be employed as (job title to be confirmed), reporting to the Chief Operating Officer or such other person as the Company may from time to time determine (“your Manager”).

1.2.		You may however be required to carry out such alternative or additional duties as the Company may require from time to time and you agree that you may be seconded to work for one or more Group Companies at any time.

1.3.		You agree to faithfully and diligently perform your duties to the best of your ability and use your best endeavours to promote the interests of the Company and any Group Companies for whom you are required to work.

2.		OUTSIDE INTERESTS

2.1.		You agree that during your employment you will not be employed, engaged, interested or concerned in any trade, business, firm, company or organisation without the prior written consent of your Manager. You may, however, hold (directly or through nominees including your spouse, partner or minor children) by way of bona fide personal investment up to 3% of the issued shares, debentures or other securities of any company whose shares are listed on a recognised investment exchange or dealt in the Alternative Investment Market.

2.2.		During your employment you will, and will procure that your spouse and minor children will comply with all applicable rules of law, any recognised investment exchange regulations or any Company policy, code or regulations in relation to dealings in shares, debentures or other securities of the Company and any Group Company or relating to any unpublished price sensitive information affecting the securities of the Company, any Group Company or any other company.

FREEDOM TO TAKE UP EMPLOYMENT WITH THE COMPANY

You warrant that any notice period you are required to give or to serve with a previous employer has expired and that, by entering into this contract or performing any of your duties for the Company, you will not be in breach of any other contract, agreement or obligation binding on you.

PERIOD OF CONTINUOUS EMPLOYMENT:

Your employment will commence on a date to be confirmed. No employment with a previous employer counts as part of your period of continuous employment with the Company.

5.		CONDITIONS OF EMPLOYMENT

5.1.		Your employment with the Company is conditional on:

(a)

receipt by the Company of at least two references in relation to you which the Company considers satisfactory, one of which must be from your last employer; and

(b)

your producing such documentation as the Company may reasonably require to establish your right to work lawfully in the United Kingdom.

5.2.		Should you fail to comply with either of these conditions, any offer of employment by the Company may be withdrawn without notice and if already accepted, the Company may terminate your employment (notwithstanding any other term of this Agreement) without notice or a payment in lieu of notice during the first month of employment or thereafter by giving you the minimum period of notice required by statute.

7.		TERM

		You are entitled to receive from the company six months notice during the first year of your employment for “no just cause”; thereafter you are entitled to receive three months notice of termination. In the event of the Company choosing to terminate your employment within the first twelve months you will be entitled to receive six months pay in lieu of notice and a six month severance payment. Should this occur within twenty four months of employment you will be entitled to receive three months pay in lieu of notice and a three month severance payment.

7.1.		You may terminate your employment at any time by giving to the Company six months notice during the first year of your employment, followed by three months notice thereafter.

7.2.		Notwithstanding any other term of this Agreement, the Company may terminate your employment without notice and without any payment in lieu of notice in the event that you are guilty of gross misconduct, gross negligence or breach a fundamental term of this Agreement.

7.3.		The Company may in its absolute discretion choose to terminate your employment immediately at any time and make you a payment in lieu of notice equivalent to your basic salary over any unexpired period of notice due under clause 7 of this Agreement, subject to deductions for income tax, employee’s national insurance contributions and other deductions required by law. The Company is not under an obligation to make a payment in lieu of notice and if it fails to do so any claim you have will be for damages and will be subject to your duty to take reasonable steps to mitigate your loss.

7.4.		The Company’s contractual retirement age and your normal retirement age is 60. Your employment will therefore come to an end automatically and without the need for notice on the date of your 60th birthday.

8.		PLACE OF WORK

8.1.		Your normal place of work will initially be 90 Milton Park, Abingdon, Oxfordshire OX14 4RY. You agree that the Company may change your normal place of work, temporarily or permanently, to anywhere within the United Kingdom, even if this requires you to relocate your home. If you are required to move your home, the Company will consider relocation assistance.

8.2.		You may be required to travel and undertake your duties anywhere in the world, provided that you shall not be required to work outside the United Kingdom for periods in excess of one month at a time.

9.		SALARY

9.1.		You will be paid a basic salary at a rate of £130,000 (One Hundred and Thirty Thousand Pounds) per annum, subject to deductions for income tax, employee’s national insurance contributions and any other deductions required or permitted by law. Your salary will accrue on a day-to-day basis and will be payable monthly in arrears on or about the 24th day of each month. Your salary is paid in respect of your duties both for the Company and any other Group Company for whom you are required to work.

		You will also receive financial protection of six months salary plus pay in lieu of notice (six months) for your first year of service and three months salary plus pay in lieu of notice (three months) thereafter.

10.		RELOCATION ALLOWANCE

You are eligible for relocation at a rate of £50,000 in accordance with, and subject to, the Company Relocation Policy. Reimbursement of relocation expenses is conditional upon you remaining in The Company’s service for at least 24 months after the date of the start of the relocation process. If you leave The Company within 24 months of The Company making the first payment to you under the Company Relocation Policy, you will be required to repay any monies paid to you by The Company and The Company will be entitled to offset any payments due to you on termination against the whole or part of the debt.

You will see from the attached Relocation Policy that you may use the services of Cendent, our relocation support group. We would be happy to arrange a pre-acceptance visit to the UK for you and your family for which there will be no clawback. This will include return economy flights, three nights accommodation (including breakfast, lunch and an evening meal) in a hotel and an organised “tour” of the area by Cendent.

11.

EXPENSES

You will be reimbursed for all expenses reasonably and properly incurred by you on the business of the Company or the Group provided you produce to the Company such receipts, voucher or other evidence of actual payment of the expenses concerned as the Company may reasonably require from time to time.

12.		PENSION AND OTHER BENEFITS

12.1.		Bonus. Subject to the successful achievement by you of the personal objectives set for you by your Manager and the Company’s performance against targets, you may, at the absolute discretion of the Board, be awarded a bonus under any bonus scheme which applies to you from time to time. Whether each objective has been successfully achieved, whether to award any bonus to you and the amount of any bonus awarded to you are matters within the absolute discretion of the Board. All of the Company’s bonus schemes may be withdrawn or varied from time to time at the discretion of the Board. Your objectives and the Company’s targets are likely to vary from year to year. The fact that a bonus is paid in one year is no guarantee that a bonus will be paid in subsequent years. As the bonus is intended to incentivise employees to remain in the employment of the Company, payment of any bonus is conditional on your remaining in the employment of the Company and not having given to the Company or been given by the Company notice to terminate your employment as at the date bonus is payable to you under the scheme rules. Bonuses are subject to deductions for income tax, employee’s national insurance contributions and other deductions required by law.

12.2.		Pension. You are entitled to become a member of the Company’s money-purchase pension scheme subject to and in accordance with the rules thereof. You may contribute between 2% and 15% of your basic annual salary each year to the scheme. Subject to Inland Revenue rules and the rules of the scheme in force from time to time (which the Company may vary in its discretion), the Company will match your personal contribution to the scheme each year and make an additional Company contribution to the scheme for your benefit equivalent to 3% of your basic annual salary each year provided that the Company’s maximum annual contribution to the scheme for your benefit shall be 9% of your basic annual salary. The Company reserves the right to withdraw this benefit at any time or to vary the rules applicable to the scheme or the level of Company contributions to the scheme.

12.3.		Car Allowance. The Company will pay you a car allowance of £750 per month which will be paid on or before the last day of each month, subject to deductions for income tax, employee’s national insurance contributions and other deductions required by law. You

shall at all times be required to have access to and use of an appropriate motor vehicle for the proper performance of your duties under this Agreement.

		In addition, the Company will pay for the cost of car hire for the first two months of your service with Bookham Technology.

12.4.		Private Medical Expenses Insurance. The Company shall bear the cost of membership for you, your spouse or partner and children (up to the age of 21 or 25 if in full time education) of a private medical insurance scheme with such reputable medical expenses insurance provider as the Company shall determine from time to time, subject to the Company being able to secure such cover at rates which it determines to be reasonable. The Company reserves the right to withdraw this benefit at any time or to vary the terms or level of cover at any time. This is a benefit in respect of which you will be liable to pay income tax.

12.5.		Permanent Health Insurance. The Company shall bear the cost of permanent health insurance cover for you subject to and in accordance with the rules and terms of such insurance scheme as may be in force from time to time. The Company reserves the right to withdraw this benefit at any time or to vary the terms or level of benefits provided by this cover at any time.

12.6.		Life Assurance. The Company shall bear the cost of membership of an Inland Revenue approved life assurance scheme for you, subject to and in accordance with the rules and terms of such life assurance scheme as may be in force from time to time. This scheme provides benefits on death in service of 4 times your basic annual salary, which is paid in accordance with the rules of the scheme in force. The Company reserves the right to withdraw this benefit at any time or to vary the terms or level of cover at any time.

13.		HOURS OF WORK

13.1.		Your normal office hours are 9.00am to 5.30pm Monday to Friday, with a lunch break each working day of half an hour. The Company may require you to work such additional hours as the Company may determine to be necessary for the proper and efficient performance of your duties. You shall not be entitled to any overtime or other payments in relation to such additional hours. You agree that the limit on average weekly working time set out in Regulation 4(1) of the Working Time Regulations 1998 will not apply to you, although you may withdraw your consent on giving the Company three months prior written notice.

14.		HOLIDAYS

14.1.		The Company’s holiday year runs from 1 January to 31 December.

14.2.		You are entitled to 23 days paid holiday entitlement in each holiday year in addition to English public holidays. You are required to save three days holiday each year which shall be taken by you on such days over the Christmas period as the Company may determine, unless you are notified otherwise by the Board in any year.

14.3.		All holiday must be taken at times authorised by your Manager at least two weeks in advance. For the avoidance of doubt Regulations 15(1) to 15(4) of the Working Time Regulations 1998 (dealing with dates when leave is taken) will not apply to your employment.

14.4.		You may not, save with the prior permission of your Manager, carry forward any unused part of your holiday entitlement for a given holiday year into the subsequent holiday year.

14.5.		For the holiday year during which your employment commences or terminates, your holiday entitlement will be calculated on a pro rata basis according to the number of weeks of completed service in such year.

14.6.

On the termination of your employment with the Company, the Company may at its discretion:

(a)

require you to take, during your notice period, any or all holiday entitlement which will have accrued to you by the date on which your employment terminates; or

(b)

pay you in lieu of your accrued but unused holiday entitlement, save that, if you are dismissed summarily for gross misconduct, the Company shall be under no obligation to pay you in respect of accrued but untaken holiday entitlement in excess of any minimum holiday entitlement required by law. All pay in lieu of holiday entitlement will be subject to deductions for income tax, employee’s national insurance contributions and other deductions required by law; or

(c)

deduct an amount equal to salary paid to you in respect of holiday taken by you but not accrued by the date on which your employment terminates from any salary or payment in lieu of notice due to you or, in the event that this is insufficient, require you to repay such an amount to the Company.

15.

DEDUCTIONS FROM WAGES

Without prejudice to any other rights open to the Company, you agree that the Company may deduct from any wages due to you, (including Company sick pay and any payment in lieu of notice or holiday entitlement) sums representing the value of any Company property lost by you; the cost of repairing any Company property damaged by you or damaged as a consequence of negligence on your part; the amount of any outstanding loans or advances made to you by the Company; any other sums owing from you to the Company; where you have been unable to perform your duties under this Agreement due to an accident caused by a third party, an amount equal to the amount of any damages you recover from a third party in respect of that accident capped at an amount equal to the salary and benefits you have received from the Company in respect of any period of absence to which the damages relate; any overpayment of salary or expenses or payment made to you by mistake or through misrepresentation; and any other sums authorised to be deducted by Section 13 of the Employment Rights Act 1996.

16.

DATA PROTECTION

In order to keep and maintain any records relating to your employment under this Agreement, it will be necessary for the Company to record, keep and process personal data relating to you on computer and in hard copy form. (Examples of personal data include details of your disciplinary record, any grievances raised by you and the contents of your personnel file, together with any sensitive personal data held by the Company such as your religious beliefs, your ethnic or racial origin and information relating to any physical disability or pregnancy). Further in order to pay your salary and offer you the other benefits to which you may be entitled, the Company may also need to obtain from you details of your bank account and other financial information. To the extent that it is reasonably necessary in connection with your employment and the Company’s responsibilities as an employer, this data may be disclosed to others, including other employees of the Company or any Group Company, the Company’s professional advisers, the Inland Revenue or other taxation authority, the police and other regulatory authorities. You hereby consent to the recording, processing, use and disclosure by the Company of personal data relating to you as set out above, including the recording, processing, use and disclosure of your sensitive personal data to the extent required by reason of your employment or by law and the transmission of such data within or outside the European Union.

17.		SICKNESS OR INJURY

17.1.		If you are absent from work due to sickness, injury or accident you must notify the Company as soon as possible and in any event before 10.00 am on the first working day of absence.

17.2.		If you are absent from work for less than 7 days you must complete a self certification form setting out the nature of your illness or incapacity on your return to work. If your absence continues for more than 7 days you will, on the eighth day of such absence, submit a doctor’s certificate to the Company and continue to submit promptly to the Company doctor’s certificates covering any further period of absence.

17.3.		Provided you comply with the notification and certification procedure set out above, the Company will pay you during such absence the Company will pay your normal basic salary for up to one consecutive calendar month of absence in a calendar year, and then pay you half your normal basic salary for up to two further consecutive calendar months during a calendar year.

		Thereafter, any Company sick pay is entirely at the discretion of the Company, provided that you shall be entitled to statutory sick pay in accordance with the rules of the statutory sick pay scheme, subject to the Company’s right to terminate your employment under this Agreement.

17.4.		Failure to comply with the certification requirements set out above may result in your forfeiting your entitlement to be paid during periods of absence and in your facing disciplinary action.

17.5.		Any Company sick pay shall include any statutory sick pay payable to you under the prevailing rules of the statutory sick pay scheme. The Company may deduct from

		Company sick pay an amount or amounts equal to any state benefit to which you are entitled or any payments made to you or for which you are eligible under any permanent health insurance scheme.

17.6.		The Company reserves the right to require you to undergo a medical examination by the Company’s doctor or an independent medical practitioner at any time during a period of absence. You agree that the doctor or independent medical practitioner may disclose to the Company the results of the examination and discuss with the Company and its professional advisers any matters arising from the examination as might impair you from properly discharging your duties. You also authorise your own doctor to provide the Company’s doctor and/or independent medical practitioner with any relevant extracts from your medical notes.

18.		CONFIDENTIALITY

18.1.		During the course of your employment you will have access to and become aware of information which is confidential to the Company. You undertake that you will not, save in the proper performance of your duties for the Company, disclose to any person, firm, company or organisation or use (whether for your own benefit or for the benefit of any person, firm, company or organisation) any of the trade secrets or other confidential information of or relating to (a) the Company; (b) any Group Company; (c) any client or customer of the Company; (d) any person, firm, company or organisation with whom or which the Company is involved in any kind of business venture or partnership; or (e) any other third party to which the Company or any Group Company owes a duty or confidentiality. Further, you agree use your best endeavours to prevent the unauthorised publication or disclosure of any such trade secrets or confidential information.

18.2.		The restriction in clause 18.1 shall continue to apply after the termination of your employment without limit in point of time, but shall cease to apply to information ordered to be disclosed by a Court or Tribunal of competent jurisdiction or to information which becomes available to the public generally (other than by reason of your breaching this clause). Nothing in this clause 18 will prevent you making a “protected disclosure” within the meaning of the Public Interest Disclosure Act 1998.

18.3.		For the purposes of this Agreement confidential information shall include, but shall not be limited to:

	(a)		corporate and marketing strategy and plans and business development plans;

	(b)		budgets, management accounts, bank account details and other confidential financial data;

	(c)		business sales and marketing methods;

	(d)		all techniques and processes used in relation to products and services;

	(e)		details of products and services being developed, including research and development reports, details of the Company’s computer technology, applications

			and systems, computer code and algorithms developed or used, information relating to proprietary computer hardware or software (including updates) and details of intellectual property solutions;

	(f)		methods, procedures and information relating to the operation of its business, including details of salaries, bonuses, commissions and other employment terms applicable;

	(g)		the names, addresses and contact details of any customers or Prospective Customers, including customer lists in whatever medium this information is stored and details in relation to the requirements of those customers or the potential requirements of Prospective Customers for any products or services. Without prejudice to the generality of the foregoing, information provided by visitors to and users of any of its web sites,

	(h)		the terms of business with its advertisers, customers and suppliers, including any pricing policy adopted and the terms of any partnership, joint venture or other form of commercial co-operation or agreement entered into with any third party;

	(i)		software and technical information necessary for the development, maintenance or operation of any of any website and the source and object code of each website; and

	(j)		any other information in respect of which it is bound by an obligation of confidence owed to a third party.

18.4.		Your undertaking to the Company in clause 18.1 is given to the Company for itself and as trustee for each Group Company.

19.		DELIVERY UP OF THE COMPANY’S PROPERTY

19.1.		You may not save in the proper performance of your duties or with the Company’s permission, remove any property belonging to the Company or any Group Company, or relating to the affairs of the Company or any Group Company, from the Company’s or any Group Company’s premises, or make any copies of documents or records relating to the Company’s or any Group Company’s affairs.

19.2.		Upon the Company’s request at any time, and in any event on the termination of your employment, you will immediately deliver up to the Company or its authorised representative, any plans, keys, mobile telephone, security passes, credit cards, customer lists, price lists, equipment, documents, records, papers, computer disks, tapes or other computer hardware or software (together with all copies of the same), and all property of whatever nature in your possession or control which belongs to the Company or any Group Company or relates to its or their business affairs. You will at the Company’s request furnish the Company with a written statement confirming that you have complied with this obligation.

19.3.		If you have any information relating to the Company or the Group or work you have carried out for the Company or any Group Company which is stored on a computer or laptop computer which computer or lap top does not belong to the Company, this must be disclosed to the Company and the Company shall be entitled to down load the information and/or supervise its deletion from the computer or laptop concerned.

20.		COPYRIGHT AND DESIGN RIGHTS

20.1.		You will promptly disclose to the Company all works in which copyright or design rights may exist which you make or originate either by yourself or jointly with other people during your employment.

20.2.		Any copyright work or design created by you in the normal course of your employment or in the course of carrying out duties specifically assigned to you, which relate to the affairs of the Company, shall be the property of the Company whether or not the work was made at the direction of the Company, or was intended for the Company and the copyright in it and the rights in any design shall belong absolutely to the Company throughout all jurisdictions and in all parts of the world, together with all rights of registration, extensions and renewal (where relevant).

20.3.		To the extent that such copyright or design rights are not otherwise vested in the Company, you hereby assign the same to the Company, together with all past and future rights to action relating thereto.

20.4.		You recognise and accept that the Company may edit, copy, add to, take from, adapt, alter and translate the product of your services in exercising the rights assigned under clause 20.3.

20.5.		To the full extent permitted by law, you irrevocably and unconditionally waive any provision of law known as “moral rights” including any moral rights you may otherwise have under sections 77 to 85 inclusive of the Copyright Designs and Patents Act 1988 in relation to the rights referred to at clause 20.2.

20.6.		You agree that you will at the Company’s request and expense, execute such further documents or deeds and do all things necessary or reasonably required to confirm and substantiate the rights of the Company under this clause 20 and despite the termination of this Agreement for any reason.

20.7.		You agree that you will not at any time make use of or exploit the Company’s property, trade marks, service marks, documents or materials in which the Company owns the copyright or the design rights for any purpose which has not been authorised by the Company.

21.		INVENTIONS

21.1.		It shall be part of your normal duties at all times to consider in what manner and by what new methods or devices, products, services, processes, equipment or systems of the Company and each Group Company might be improved, and promptly to give to the

		Board full details of any invention, discovery, design, improvement or other matter or work whatsoever in relation thereto (“the Inventions”) which you may from time to time make or discover during your employment, and to further the interests of the Company in relation to the same. You hereby acknowledge and agree that the sole ownership of the Inventions and all proprietary rights therein discovered or made by you (whether alone or jointly with others) at any time during your employment shall (subject to any contrary provisions of the Patents Act 1977 and the Copyright Designs and Patents Act 1988 and to any rights of a joint inventor thereof) belong free of charge and exclusively to the Company as it may direct.

21.2.		All worldwide copyright and design rights in all the Inventions shall be and remain the property of the Company and the provisions of clause 20 above shall apply in relation to the same.

21.3.		You agree that you will, at any time during your employment or thereafter, at the Company’s expense, do all such acts and things and execute such documents (including without limitation making application for letters patent) as the Company may reasonably request in order to vest effectually any Invention (whether owned by the Company in accordance with this clause 21 or owned by you) and any protection as to ownership or use (in any part of the world) of the same, in the Company or any Group Company, or as the Company may direct, jointly if necessary with any joint inventor thereof, and you hereby irrevocably appoint the Company for these purposes to be your attorney in your name and on your behalf to execute such acts and things and execute any such documents as set out above.

21.4.		You agree that you will not knowingly do or omit to do anything which will or may have the result of imperilling any such protection aforesaid or any application for such protection.

22.		GARDEN LEAVE

The Company shall be under no obligation to provide you with work during any period of notice to terminate your employment (or any part thereof), whether given by the Company or by you. During such period the Company may require you: (a) to carry out different duties from your normal duties, whether or not this occasions a loss of status; (b) to cease carrying out your duties altogether; (c) not to attend work and may exclude you from any premises of the Company or any Group Company; and/or (d) not to have any business dealings or contact with the Company’s employees, suppliers, advertisers, customers, Prospective Customers and agents. You will continue to receive your salary and all contractual benefits provided by your employment. During such period of notice, you may not be engaged or employed by or take up any office in any other company, firm, business or organisation or trade on your own account or enter into any partnership without the prior written permission of the Board.

23.

SUSPENSION

The Company may at any time suspend you on full pay pending the outcome of a disciplinary investigation or for health reasons. Whilst you are suspended, the Company may impose the same conditions as apply to garden leave under clause 22 above.

24.

RESTRICTIONS AFTER TERMINATION OF EMPLOYMENT

24.1.

You agree that you will not, without the prior written permission of the Board, during your employment or for a period of 6 months following the termination of your employment (less any period you spend on garden leave pursuant to clause 22), whether on your own behalf or on behalf of any individual, company, firm, business or other organisation, directly or indirectly:

	(a)		in connection with the carrying on of any business which competes with any business of the Company or any Group Company with which business you were involved in the period of 12 months prior to the termination of your employment, solicit or entice away from the Company or any Group Company the business or custom of any customer or Prospective Customer with whom you had business dealings on behalf of the Company or any Group Company in the course of the period of 12 months prior to the termination of your employment or about which customer or Prospective Customer you are privy to confidential information at the date your employment terminates; or

	(b)		in connection with the carrying on of any business which competes with any business of the Company or any Group Company with which business you were involved in the period of 12 months prior to the termination of your employment, have business dealings or contract with any customer or Prospective Customer of the Company or any Group Company with which customer or Prospective Customer you had business dealings on behalf of the Company or any Group Company in the course of the period of 12 months prior to the termination of your employment or about which customer or Prospective Customer you are privy to confidential information at the date your employment terminates; or.

	(c)		seek to entice away from the Company or any Group Company any person employed or engaged by the Company or any Group Company as or carrying out the functions of a director, vice president, manager or any other person acting in a sales, research and development or technical capacity at the date your employment terminates with whom you had material contact in the period of 12 months prior to the termination of your employment with the Company provided that this restriction shall apply regardless of whether the solicitation involves a breach of contract on the part of the director or employee concerned; or

	(d)		employ or engage or offer to employ or engage any person employed or engaged by the Company any Group Company as or carrying out the functions of a director, vice president, manager or any other person acting in a sales, research and development or technical capacity at the date your employment terminates

			with whom you had dealings in the last 12 months of your employment with the Company provided that this restriction shall apply regardless of whether the employment involves a breach of contract on the part of the director or employee concerned; or

	(e)		endeavour to entice away from the Company or in any way seek to affect the terms of business on which the Company deals with any person, firm, company or organisation whom or which supplied goods or services to the Company during the period of 12 months prior to the termination of your employment.

24.2.

You agree that you will not, without the prior written permission of the Board, for a period of 6 months following the termination of your employment with the Company (less any period you spend on garden leave pursuant to clause 22), be engaged or employed in the Restricted Area by or otherwise involved or interested in any company, firm, organisation or business which competes in the Restricted Area with any business of the Company or any Group Company with which business you are involved in the last 12 months of your employment under this Agreement. In the event that you serve on the Company a written request for permission to be employed or engaged by any company, firm, organisation or business and the Company refuses to provide its permission, then the Company will pay you at a rate equivalent to one twelfth of your basic annual salary under this Agreement as at the date your employment with the Company terminates for each period of one month following the date on which your employment with the Company terminates during which period you are restricted from commencing such employment or engagement by reason of this clause 24.2 subject to:

	(a)		you providing the Company, in any such request made by you, with: the name and address of the company, firm, organisation or business which has offered to employ or engage you; details of the job title and duties associated with the position offered to you by such company, firm, organisation or business; and a copy of any written offer of employment or engagement made to you by such company, firm, organisation or business.

	(b)		you complying in full with the terms of clause 24; and

	(c)		the deduction from any sum prima facie due to you under this clause 24.2 of any remuneration, salary, fees or other income earned by you arising from or in relation to any employment or engagement undertaken by you during such period (but not including any income arising from any employment or engagement which you had commenced at least six months prior to the date on which your employment terminates provided that you had permission from your Manager to undertake such employment or engagement pursuant to clause 2.1 of this Agreement).

The payment due to you will be paid in monthly instalments in arrears within 14 days of you confirming to the Board in writing the amount of remuneration, salary, fees or other income earned by you arising from or in relation to any employment or engagement undertaken by you during the period of one month to which the instalment relates.

24.3.

Each of the sub-clauses contained in clause 24 constitutes an entirely separate and independent covenant. If any restriction is held to be invalid or unenforceable by a court of competent jurisdiction, it is intended and understood by the parties that such invalidity or unenforceability will not affect the remaining restrictions or the validity of the rest of the Agreement and that if any such restriction would be valid if some part thereof were deleted, such restrictions shall apply with such modification as may be necessary to make them effective.

24.4.

You agree that if you receive an offer of employment, consultancy, directorship or other office or partnership during the continuance in force of any of the above, you will prior to acceptance of an offer, provide the party making the offer with copies of this clause and details of your notice period, the restrictions on your use and disclosure of confidential information and the clauses dealing with copyright and inventions. Further, within 48 hours of receiving the aforementioned offer you will notify the Company of the identity of the party making the offer and the terms of the offer.

24.5.

You acknowledge that:

	(a)		each of the restrictions in clause 24 goes no further than is necessary to protect the legitimate business interests of the Company and any Group Company; and

	(b)		the Company is entering into this Agreement not only for itself but as trustee for each Group Company and with the intention that the Company and/or any Group Company will be entitled to seek the protection of and enforce each of its restrictions directly against you. If requested to do so by the Company however, you will at any time enter into like restrictions as those contained in this clause 24 (mutatis mutandis) with any other Group Company.

24.6.

Nothing in this clause 24 shall prohibit you from holding the investments and interests set out in clause 2.1 above.

24.7.

Following the date your employment terminates, you will not:

	(a)		represent yourself as being in any way connected with the business of the Company or any Group Company (except to the extent agreed by such Company):

	(b)		represent, promote or advertise or refer to your previous connection with the Company or any Group Company in such a way as to utilise any of their goodwill

	(c)		carry on, cause or permit to be carried on any business under or using any name, trade mark, service mark, style, logo, get-up or image which is or has been used by the Company or any Group Company, or which in the reasonable opinion of the Board, is calculated to cause confusion with such a name, trade mark, service mark, style, logo, get-up or image or infer a connection with the Company or any Group Company.

25.

DISCIPLINARY AND GRIEVANCE PROCEDURES

A copy of the Company’s disciplinary and grievance procedures are available from Human Resources. These policies do not form part of your contract of employment and may be varied by the Company at any time.

26.

COLLECTIVE AGREEMENTS

There are no collective Agreements which directly affect your terms and conditions of employment.

27.

SECURITY

27.1.		All communications, whether by telephone, email, fax, or any other means, which are transmitted, undertaken or received using Company property or on Company premises will be treated by the Company as work related and are subject to interception, recording and monitoring without further notice. You should not regard any such communications as private.

27.2.		Interception, recording and monitoring of communications is intended to protect the Company’s business interests, for example, but without limitation, for the purposes of quality control, security of communication and IT systems, record-keeping and evidential requirements, detection and prevention of criminal activity or misconduct and to assist the Company to comply with relevant legal requirements. Such interception, recording and monitoring will not be undertaken for prurient interest.

27.3.		Intercepted communications may be used as evidence in disciplinary or legal proceedings, including in any such action against you.

27.4.		By transmitting, undertaking or receiving communication using Company property or on Company premises you consent to the above terms.

28.		ENTIRE AGREEMENT

28.1.		This Agreement sets out the entire agreement between the Company and you at the date of this Agreement in relation to your terms and conditions of employment and is in substitution for and supersedes any previous contract of employment between the Company and you, which shall be deemed to have been terminated by mutual consent and without giving rise to claims against the Company. You represent and warrant that you are not entering into this Agreement in reliance on any representation not expressly set out herein.

28.2.		The termination of this Agreement howsoever arising shall not affect any of the provisions of this Agreement which are expressed to operate or have effect or are capable of operation or effect after such termination.

29.

NOTICES

Any notice you are required to give under this Agreement should be given by you to your Manager. Any notice the Company is required to give you should be handed to you or delivered or posted by special delivery post to your last notified address. These notices will be deemed to have been given on receipt if handed to you or your Manager, when delivered if delivered or posted to your last notified address.

30.

THIRD PARTIES

This Agreement constitutes an agreement solely between the Company and you and, save where otherwise provided, nothing in this contract confers or purports to confer on a third party any benefit or any right to enforce a term of this contract for the purposes of the Contracts (Rights of Third Parties) Act 1999.

31.		INTERPRETATION

31.1.		Any reference in this Agreement to:-

31.2.		any Act or delegated legislation includes any statutory modification or re-enactment of it or the provision referred to;

31.3.		“Board” shall mean the Board of Directors of the Company from time to time or any person or any committee of the Board duly appointed by it;

31.4.		“Group Company” means a company which from time to time is a subsidiary or a holding company of the Company or a subsidiary of such holding company (where the teems “subsidiary” and “holding company” have the meanings attributed to them by section 736 of the Companies Act 1985);

31.5.		The words “include” and “including” and “in particular” shall be construed as being by way of illustration only and shall not limit the generality of the preceding words;

31.6.		“Prospective Customer” means any person with whom the Company (or any Group Company) is in negotiations or is tendering for the supply of its goods and services; and

31.7.		“Restricted Area” means the United Kingdom and other geographical area in relation to which you carried out your duties for the Company or in respect of which you were responsible during (in both cases) the period of 12 months immediately preceding the termination of your employment with the Company.

32.		GOVERNING LAW

Your terms of employment with the Company are governed by English law and the parties submit to the exclusive jurisdiction of the English Courts. The Company may however enforce the Agreement in any other courts of competent jurisdiction.

IN WITNESS WHEREOF this Agreement has been executed and delivered as a deed on the date set out above.


EXECUTED and DELIVERED		/s/ Giorgio Anania
as a DEED by		Giorgio Anania
BOOKHAM TECHNOLOGY PLC
acting by its attorney Giorgio Anania in the presence of:-

Signature of witness:

Print name of witness:		[ ]

Print address of witness:		Bookham Technology plc Milton

Print occupation of witness:

EXECUTED and DELIVERED		/s/ Jim Haynes
as a DEED by:

in the presence of:

Signature of witness:

Print name of witness:

Print address of witness:

Print occupation of witness:

EX-21.1 5 b56701biexv21w1.htm EX-21.1 LIST OF BOOKHAM, INC. SUBSIDIARIES exv21w1

Exhibit 21.1

SUBSIDIARIES

Bookham Technology plc, a UK corporation

Onetta, Inc., a Delaware corporation

Bookham (US), Inc., a Delaware corporation

Ignis Optics, Inc., a Delaware corporation (100% owned by Bookham Technology, Inc.)

Bookham Technology KK, a Japanese corporation

Bookham (Canada), Inc., an Ottawa, Canada, corporation

Bookham Exchange, Inc., a New Brunswick, Canada, corporation (100% owned by Bookham (Canada), Inc.)

Bookham (Switzerland) AG, a Swiss corporation

Bookham International Ltd., a Cayman Islands corporation

Bookham Technology (Shenzhen) (FFTZ) Co. Ltd., a People’s Republic of China corporation (100% owned by New Focus International Ltd.)

New Focus Pacific (SHIP) Co. Ltd., a People’s Republic of China corporation (100% owned by New Focus International Ltd.)

New Focus, Inc., a Delaware corporation

Focused Research, Inc., a California corporation (100% owned by New Focus, Inc.)

New Focus FSC, Inc., a Barbados corporation (100% owned by New Focus, Inc.)

New Focus GmbH, a German corporation (100% owned by New Focus, Inc.)

Globe Y. Technology, Inc., a California corporation (100% owned by New Focus, Inc.)

EX-23.1 6 b56701biexv23w1.htm EX-23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM exv23w1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements (Form S-8/A Nos. 333-113341 and 333-13388 and Form S-8 No. 333-119011) of Bookham, Inc. of our reports dated September 8, 2005, with respect to the consolidated financial statements and schedule of Bookham, Inc., Bookham, Inc. management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of Bookham, Inc., included in the Annual Report (Form 10-K) for the year ended July 2, 2005.

Ernst & Young LLP

Reading, England
September 8, 2005

EX-31.1 7 b56701biexv31w1.htm EX-31.1 CERTIFICATION OF CEO exv31w1

Exhibit 31.1

CERTIFICATION

I, Giorgio Anania, certify that:

	1.		I have reviewed this Annual Report on Form 10-K of Bookham, Inc.;

	2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) for the registrant and have:

	a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and

	d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

	a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: September 8, 2005
		/s/ Giorgio Anania
		Giorgio Anania Chief Executive Officer

EX-31.2 8 b56701biexv31w2.htm EX-31.2 CERTIFICATION OF CFO exv31w2

Exhibit 31.2

CERTIFICATION

I, Stephen Abely, certify that:

	1.		I have reviewed this Annual Report on Form 10-K of Bookham, Inc.;

	2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) for the registrant and have:

	a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and

	d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: September 8, 2005
		/s/ Stephen Abely
		Stephen Abely Chief Financial Officer

EX-32.1 9 b56701biexv32w1.htm EX-32.1 CERTIFICATION OF CEO exv32w1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Bookham, Inc. (the “Company”) for the period ended July 2, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Giorgio Anania, Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

	(1)		the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	(2)		the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: September 8, 2005		/s/ Giorgio Anania

		Giorgio Anania Chief Executive Officer

EX-32.2 10 b56701biexv32w2.htm EX-32.2 CERTIFICATION OF CFO exv32w2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Bookham, Inc. (the “Company”) for the period ended December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Stephen Abely, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

	(1)		the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	(2)		the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: September 8, 2005		/s/ Stephen Abely

		Stephen Abely Chief Financial Officer

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(WILMER CUTLER PICKERING HALE AND DORR LLP LETTERHEAD)

September 8, 2005

VIA ELECTRONIC SUBMISSION

Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549


Re:		Bookham, Inc. Commission File No. 000-30684 Annual Report on Form 10-K

Ladies and Gentlemen:

On behalf of Bookham, Inc. (the “Company”), transmitted herewith for filing under the reporting requirements of the Securities Exchange Act of 1934, as amended, is the Company’s Annual Report on Form 10-K for the fiscal year ended July 2, 2005, complete with financial statement schedules and exhibits.

The Company’s financial statements filed as part of the Form 10-K do not reflect a change from the preceding year in any accounting principles or practices or in the method of applying any such principles or practices.

Please call the undersigned if you have any questions regarding this matter.

Very truly yours,

/s/ Douglas J. Barry

Douglas J. Barry

Attachments

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