JDS Uniphase Form S-3

Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement.

If the only securities on this Form are being offered pursuant to dividend or reinvestment plans, please check the following box. o

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 (the “Securities Act”), other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. þ

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o


(1)	Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(i) under the Securities Act.

(2)	Equals the aggregate principal dollar amount of the Notes being registered.

(3)	Each share of Common Stock being registered pursuant to this registration statement includes a right to purchase 1/100,000 of a share of Series B Preferred Stock pursuant to the Company’s Fifth Amended and Restated Rights Agreement, dated as of February 15, 2003, between the Company and American Stock Transfer & Trust.

(4)	The number of shares of Common Stock registered hereunder is based upon the number of shares of Common Stock that are issuable upon conversion of the Notes at an initial conversion price of $4.94 per share. Pursuant to Rule 416 under the Securities Act, also being registered are an indeterminate number of shares of Common Stock issuable upon conversion of the Notes registered hereby or in connection with a stock split, stock dividend, recapitalization or similar event, for which no additional registration fee is payable pursuant to Rule 457(i) under the Securities Act.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file an amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. The selling securityholders may not resell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

This prospectus relates to $475,000,000 aggregate principal amount of our Zero Coupon Senior Convertible Notes due 2010 (the “Notes”) and 96,153,846 shares of our Common Stock, par value $0.001 per share (the “Common Stock”), which are initially issuable upon conversion of the Notes plus such additional indeterminate number of shares of Common Stock as may become issuable upon conversion of the Notes as the result of any adjustment to the conversion price. We issued the Notes in a private placement in October 2003. The initial purchasers resold the Notes to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). This prospectus will be used by the selling securityholders named in this prospectus to resell their Notes and the Common Stock issuable upon conversion of their Notes.

Holders of the Notes may convert the Notes into shares of our Common Stock at a conversion rate of 202.4291 shares per $1,000 principal amount of notes, subject to adjustment, before close of business on November 15, 2010 only under the following circumstances: (1) during any fiscal quarter commencing after December 31, 2003, if the closing sale price of our Common Stock exceeds 110% of the conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter; (2) if the closing sale price of our Common Stock exceeds 110% of the conversion price on any date after November 15, 2008, and at all times thereafter; (3) during the five business day period after any five consecutive trading day period in which the trading price per note for each day of that period was less than 98% of the product of the closing sale price of the Common Stock and the conversion rate, provided that noteholders will receive an amount of cash or Common Stock, or any combination thereof, equal to the principal amount of notes being converted pursuant to this contingency if the closing sale price of our Common Stock exceeds the conversion price; (4) if we call the notes for redemption; or (5) upon the occurrence of certain corporate events. Upon conversion, we have a right to deliver cash (or a combination of cash and shares of Common Stock) in lieu of shares of our Common Stock.

Beginning November 15, 2008, under certain circumstances we may redeem any of the Notes. Holders of the Notes may require us to repurchase the notes for cash on November 15, 2008.

Upon the occurrence of certain corporate events, each holder of the Notes may require us to purchase all or a portion of such holder’s Notes at a price equal to the principal amount, plus accrued and unpaid additional interest, if any, on such notes to the date of purchase. We may choose to pay the repurchase price in cash, shares of our common stock, shares of the surviving corporation or a combination thereof.

The notes are our senior unsecured debt and will rank on a parity with all of our other existing and future unsecured debt and prior to all subordinated debt.

We are filing the registration statement, of which this prospectus is a part, pursuant to contractual obligations. We will not receive any proceeds from the resale of the Notes and the shares of Common Stock issuable upon conversion of the Notes by the selling securityholders but we have agreed to pay certain registration expenses.

Our Common Stock is quoted on the Nasdaq National Market under the symbol “JDSU”. The last reported price of our Common Stock on November 13, 2003 was $3.44 per share.

Investing in the Notes and the shares of Common Stock issuable upon conversion of the Notes involves substantial risks. See “Risk Factors” beginning on page 6.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Neither we nor the selling securityholders have authorized any person to give any information or to make any representation not contained or incorporated by reference in this prospectus. You must not rely upon any information or representation not contained or incorporated by reference in this prospectus as if we had authorized it. This prospectus is not an offer to sell or the solicitation of an offer to buy any securities other than the registered securities to which it relates and this prospectus is not an offer to sell or the solicitation of an offer to buy securities in any jurisdiction where, or to any person to whom, it is unlawful to make such offer or solicitation. You should not assume that the information contained in this prospectus is correct on any date after the date of this prospectus, even though this prospectus is delivered or shares are sold pursuant to this prospectus on a later date.

This prospectus and the documents incorporated or deemed to be incorporated by reference herein contain statements concerning our future results and performance and other matters that are “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, those listed under “Risk Factors” and elsewhere in this prospectus. You can identify forward-looking statements by terminology such as “may,” “will,” “should,” “intend,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of such terms or other comparable terminology. Forward-looking statements include, among other things, all italicized portions included under the heading “Risk Factors,” the information and expectations concerning our future financial performance and potential or expected growth in our markets and the markets in which we expect to compete, business strategy, projected plans and objectives, anticipated cost savings from restructurings and our estimates with respect to future operating results, including, without limitation, earnings, cash flow and revenue. Factors which could cause actual results to differ materially include those set forth in the risks discussed below under “Risk Factors” and elsewhere in this prospectus and the documents incorporated by reference.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, events, levels of activity, performance, or achievements. We undertake no obligation to assume responsibility for the accuracy and completeness of the forward-looking statements. We do not intend to update any of the forward-looking statements after the date of this prospectus to conform them to actual results.

We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). You may read and copy materials that we have filed with the Securities and Exchange Commission at the Securities and Exchange Commission public reference room located at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the public reference room. Our Securities and Exchange Commission filings are also available to the public on the Securities and Exchange Commission’s Internet website at http://www.sec.gov. These reports, proxy and information statements and other information may also be inspected at the offices of Nasdaq Operations, National Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.

We have filed a registration statement on Form S-3 with the SEC under the Securities Act with respect to the Notes and the Common Stock issuable upon conversion of the Notes offered by this prospectus. This prospectus, which constitutes part of the registration statement, does not contain all of the information set forth in the registration statement and its exhibits and schedules. For further information, please refer to the registration statement and its exhibits and schedules.

We incorporate hereby by reference hereto in this prospectus the following documents filed by us with the SEC:


	•	our Annual Report on Form 10-K for the fiscal year ended June 30, 2003;

	•	our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2003;

	•	our Current Reports on Form 8-K filed on October 28, 2003 and October 31, 2003;

	•	the description of our Common Stock contained in our registration statement on Form 8-A, dated November 15, 1993, and any other amendment or report filed for the purpose of updating such description; and

	•	the description of our preferred share purchase rights contained in amendment no. 5 to our registration statement on Form 8-A, dated February 15, 2003, and any other amendment or report filed for the purpose of updating such description.

We also incorporate hereby by reference hereto all documents filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this prospectus and prior to the termination of this prospectus.

We are “incorporating by reference” certain documents that we file with the SEC, which means that such documents are considered part of this prospectus and that we can disclose important information to you by referring to those documents. Information that we file in the future with the SEC will automatically update and supersede earlier information in or incorporated by reference in this prospectus. Any statement made in a document incorporated or deemed incorporated in this prospectus by reference is deemed to be modified or superseded for purposes of this prospectus if a statement contained in this prospectus or in any other subsequently filed document, which also is incorporated or deemed incorporated in this prospectus by reference, modifies or supersedes that statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

Statements made in this prospectus, or in any document incorporated by reference in this prospectus, as to the contents of any contract or other document referred to in this prospectus, or in such document incorporated herein, are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the documents incorporated herein; each such statement being qualified in all material respects by such reference. We will provide a copy of these filings and any exhibits specifically incorporated in these filings and a copy of the indenture and registration rights agreement referred to in this prospectus at no cost by request directed to us at the following address and telephone number: JDS Uniphase Corporation, 1768 Automation Parkway, San Jose, California 95131, Attention: Investor Relations, or by telephone to Investor Relations at (415) 268-6590.

This summary highlights information contained elsewhere or incorporated by reference in this prospectus. This is not intended to be a complete description of the matters covered in this prospectus and is subject to and qualified in its entirety by reference to the more detailed information and financial statements (including the notes thereto) included or incorporated by reference in this prospectus. When we refer to “we,” “us,” “our,” or “the Company,” we mean JDS Uniphase Corporation and its subsidiaries, unless the context indicates otherwise. Unless otherwise indicated, references to “2003” mean our fiscal year ending June 30, 2003, references to “2002” mean our fiscal year ended June 30, 2002, references to “2001” mean our fiscal year ended June 30, 2001, references to “2000” mean our fiscal year ended June 30, 2000 and references to “1999” mean our fiscal year ended June 30, 1999.

We are a worldwide leader in optical technology. We design and manufacture products for fiberoptic communications, as well as for markets where our core optics technologies provide innovative solutions for industrial, commercial and consumer applications. Our fiberoptic components and modules are deployed by system manufacturers for the telecommunications, data communications and cable television industries. We also offer products through original equipment manufacturers for display, security, medical/ environmental instrumentation, decorative, aerospace and defense applications.

Fiberoptic communications systems enable transmission of video, audio and text data over high-capacity fiberoptic cables. Although ultimately highly complex, a fiberoptic communications system performs three basic functions common to all communications systems: transmitting, routing (switching) and receiving information, in this case information encoded on light signals. Our fiberoptic components, modules and subsystems, alone and in combinations, are the building blocks for these systems. These products include transmitters, receivers, amplifiers, dispersion compensators, multiplexers and demultiplexers, add/ drop modules, switches, optical performance monitors and couplers, splitters and circulators. Complementing our components, modules and subsystem products, our test and measurement equipment is used in manufacturing, research and development, system development and network maintenance environments for measuring performance of optical components. We sell our communications products to the world’s leading and emerging telecommunications, data communications and cable television systems providers worldwide.

In addition to fiberoptic communications, we apply our optical technologies for use in the display, security, medical/ environmental, instrumentation, and aerospace and defense markets. Products of these businesses rely on optical technologies to control, enhance and modify the behavior of light utilizing its reflection, absorption and transmission properties to achieve specific effects such as high reflectivity, anti-glare and spectral filtering. Specific product applications include computer monitors and flat panel displays, projection systems, photocopiers, facsimile machines, scanners, security products and decorative surface treatments. We also supply laser products for biotechnology, graphic arts and imaging, semiconductor processing, materials processing, and a variety of other laser-based applications.

We group our communications and non-communications products into two principal segments which we call the communications products group and the thin film products group.

Our Internet address is www.jdsu.com. On our Investor Relations web site, which is accessible through www.jdsu.com, we post all Securities and Exchange Commission filings as soon as reasonably practicable after they are electronically filed or furnished to the Securities and Exchange Commission. All such filings on our Investor Relations web site are available free of charge. The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

We were incorporated in California in May 1979 and reincorporated in Delaware in October 1993. We are the product of several significant mergers and acquisitions, including, among others, the combination of Uniphase Corporation and JDS FITEL Inc. to form JDS Uniphase Corporation on June 30, 1999, and the

subsequent acquisitions of Optical Coating Laboratory, Inc., or OCLI, on February 4, 2000, E-TEK Dynamics, Inc., or E-TEK, on June 30, 2000 and SDL, Inc., or SDL, on February 13, 2001. Our principal executive offices are located at 1768 Automation Parkway, San Jose, California. Our telephone number at this location is (408) 546-5000.

In fiscal year 2001, we changed our year-end from a fiscal year ending on June 30 to a 52 or 53 week fiscal year ending on the Saturday closest to June 30. This change had no impact on our results of operations, financial position or cash flows in fiscal year 2001.

Our fiscal year 2003 ended on June 28, 2003, whereas fiscal years 2002 and 2001 ended on June 29, 2002 and June 30, 2001, respectively. For comparative presentation purposes, all accompanying consolidated financial statements and notes thereto have been shown as ending on June 30. The first quarters of fiscal year 2004 and 2003 ended on September 27, 2003 and September 28, 2002, respectively. For comparative presentation purposes, all accompanying financial statements and footnotes thereto have been shown as ending on the last day of the calendar month.


		100% of the principal amount of the Notes plus accrued and unpaid additional interest, if any, resulting from a default under the registration rights agreement. We may choose to pay the repurchase price in cash, shares of our Common Stock or, if applicable, of the surviving corporation’s common stock or a combination thereof. See “Description of Notes — Registration Rights of the Noteholders.”

Repurchase at the Option of the Holder		A holder of Notes may require us to repurchase the Notes, in whole or in part, on November 15, 2008 for a repurchase price equal to 100% of the principal amount of the Notes plus additional interest, if any.

Sinking Fund		None.

Senior Notes		The Notes are our senior unsecured debt and will rank on a parity with all of our existing and future unsecured debt and prior to all subordinated debt. The indenture does not restrict our ability to incur additional indebtedness. See “Description of Notes — Subordination.”

Use of Proceeds		We will not receive any proceeds from the resale of the Notes and the shares of our Common Stock issuable upon conversion of the Notes by the selling securityholders.

Registration Rights		We have agreed to file a shelf registration statement, of which this prospectus is a part, with the SEC covering the resale of the Notes and the underlying Common Stock. We also agree to use commercially reasonable efforts to keep the shelf registration statement effective until one of the following has occurred:

		• all securities covered by the registration statement have been sold pursuant to the shelf registration statement or Rule 144;

		• the expiration of the applicable holding period with respect to the Notes and the underlying Common Stock under Rule 144(k) under the Securities Act or any successor provision; or

		• the Notes and the underlying Common Stock have ceased to be outstanding (whether as result of repurchase and cancellation, conversion or otherwise).

Trading		We do not intend to list the Notes on any national securities exchange. As of October 31, 2003, the Notes were eligible for trading on the PORTAL market. Our Common Stock is quoted on the Nasdaq National Market under the symbol “JDSU.”

Absence of a Public Market		The Notes are securities for which there is currently no public market. An active or liquid market may not develop for the Notes. See “Plan of Distribution.”

You should carefully consider the risks described below before making an investment decision. The risks described below are not the only ones facing our company. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations.

Our business, financial condition or results of operations could be materially adversely affected by any of these risks. The trading price of the Notes and our Common Stock could decline due to any of these risks, and you may lose all or part of your investment.

This prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this prospectus.

As a result of continuing unfavorable economic and market conditions, particularly in the communications sector (but also in our non-communications business), our revenues have declined significantly from historic levels, we are not currently profitable, and we are unable to predict future sales accurately or to provide long-term guidance for future financial performance. Historically, our communications business was the more affected business; however, recently, these unfavorable conditions are increasingly impacting our non-communications businesses. The conditions contributing to this difficulty include:


	•	uncertainty regarding the capital spending plans of the major telecommunications carriers, upon which our telecommunications systems manufacturing customers, and ultimately we, depend for a substantial amount of our sales;

	•	the weakened financial condition of many major telecommunications carriers and their current limited access to the capital required for expansion;

	•	continued reduction in inventory levels by our telecommunications systems manufacturing customers;

	•	limited visibility regarding the long-term demand for high content, high speed, broadband telecommunications networks;

	•	excess fiber and channel capacity, particularly in the long-haul market, which historically has been responsible for a major portion of our communications sales and profits;

	•	uncertainty regarding the growth and profitability of the security display and commercial laser markets, which are responsible for a substantial portion of our non-communications sales and profits; and

	•	general market and economic uncertainty.

Based on these and other factors, many of our major customers have reduced, modified, cancelled or rescheduled orders for our products and have expressed uncertainty as to their future requirements. In the communications business, this uncertainty is reflected in the limited and highly variable forecasts our customers are providing of their anticipated needs for our communications products. As a result, our revenues in the future are likely to fluctuate and may, in fact, decline, and we anticipate that we will continue to be unprofitable in the near future. In addition, due to our current limited ability to provide long-term guidance for our operating results, our ability to meet financial expectations for future periods may be harmed.

Our communications business is largely dependent upon product sales to telecommunications systems manufacturers who in turn are dependent for their business upon sales of fiberoptic systems to telecommunica-

tions carriers. All of our systems manufacturing customers and their carrier customers have experienced severe business declines during the current downturn. Many of these companies are currently operating at losses and are unable to make meaningful long-term predictions for their recovery, and hence their forecasted requirements for optical telecommunications systems. This continuing uncertainty means that, as a supplier of the components and modules for these systems, our ability to predict our financial results or business prospects for future periods is severely limited.

In response to the economic slowdown and as part of our continuing integration efforts, we commenced a Global Realignment Program in April 2001, under which we are, among other things:


	•	eliminating some product development programs and consolidating or curtailing others in order to focus our research and development investments on the most promising projects;

	•	consolidating our manufacturing facilities from multiple sites into single locations, as well as consolidating sales and administrative functions; and

	•	aligning our sales organization to offer customers a single point of contact for all of their product requirements, and creating regional and technical centers to streamline customer interaction with product line managers.

Implementation of the Global Realignment Program involves major reductions in our workforce and facilities and, in certain instances, the relocation of products, technologies and personnel. We have incurred and will continue to incur significant costs (including cash expenditures) to implement the Global Realignment Program and we expect to realize significant future cost reductions as a result. The Global Realignment Program may not be successful in achieving the expected cost reductions or other benefits, may be insufficient to align our operations with customer demand and the changes affecting our industry, or may be more costly or extensive than currently anticipated. Even if the Global Realignment Program is successful and meets our current cost reduction goals, our sales must increase substantially in the future for us to be profitable.

We are undertaking cost reduction measures, under and in addition to the Global Realignment Program, intended to reduce our expense structure at both the cost of goods sold and the operating expense levels. We believe these measures are a necessary response to, among other things, declining average sales prices across our product lines. These measures may be unsuccessful in creating profit margins sufficient to sustain our current operating structure and business.

As a result of the business downturn and declining demand for our products, we have written down a substantial portion of our inventory as our revenue forecasts continued to decline. We generally use a rolling six-month forecast based on anticipated product orders, product order history, forecasts and backlog to assess our inventory requirements. However, as discussed above, our ability to forecast our customers’ needs for our products in the current economic environment is very limited. Consequently, we have incurred, and may in the future incur, charges to write down our inventory. We recorded charges of $56.1 million and $203.9 million related to excess and obsolete inventory during fiscal 2003 and 2002, respectively. We may incur such inventory write-downs in future periods. Moreover, because of our current difficulty in forecasting overall revenue, we may in the future revise our previous forecasts, which could lead to further inventory write-downs. While we believe, based on current information, that the amount recorded for inventory is properly reflected on our balance sheet at September 30, 2003, if market conditions are less favorable than our forecasts, our

During the rapid growth in the telecommunications sector in the mid-to-late 1990s, telecommunications systems manufacturers and their telecommunications carrier customers incurred large amounts of debt in order to finance the expansion that was then forecasted. In the rapid downturn that followed, both capital spending and revenue declined, but debt remained and in some instances increased. As a result, several of the telecommunications carriers and, in turn their suppliers, our telecommunications systems manufacturing customers, continue to have significant amounts of outstanding debt. The servicing of this debt may, among other things, limit the carriers’ ability to buy new capital equipment and, thus, the demand for telecommunications systems. In fact, several carriers (WorldCom and Global Crossing, among others) have declared bankruptcy over the past two years, or are otherwise in financial distress. We anticipate that some or all of these companies will need to repay or restructure significant portions of their debt in the future. Any failure in this task could materially harm their businesses, and consequently ours. As long as these companies are focused on debt concerns, they are less likely to acquire telecommunications systems.

Although we perform ongoing credit evaluations of our customers and manage and monitor balances owed us, we are not able to predict changes in their financial condition, particularly during the current economic environment. Based on our estimates as to the quality of our accounts receivable, we maintain allowances for doubtful accounts for estimated losses resulting from the inability or unwillingness of our customers to make required payments. However, if our customers are unable to meet their financial obligations to us as a result of bankruptcy or deterioration in their operating results or financial condition, our trade receivables may not be recoverable and, in addition to not receiving the amounts owed, we may be required to record additional bad debt expenses, which could materially affect our financial condition and operating results.

Moreover, the continuing economic slowdown has exacerbated our vulnerability to demand fluctuations for our communications products. Specifically, we have experienced and remain vulnerable to material order cancellations, modifications and reschedulings, all of which, among other things, reduce our sales and impair our ability to achieve financial targets and predict financial results for future periods.

Our future success as a manufacturer of optical components, modules and subsystems ultimately depends on the continued growth of the communications industry, and, in particular, the growth of the Internet as a global communications system. As part of that growth, we are relying on increasing demand for high-content voice, text and other data delivered over high-speed connections (i.e., high bandwidth communications). As Internet usage and bandwidth demand increase, so does the need for advanced optical networks to provide the required bandwidth. Without Internet and bandwidth growth, the need for our advanced communications products, and hence our future growth as a manufacturer of these products, is jeopardized. Currently, while generally increasing demand for Internet access is apparent, less evident is when order capacity will be absorbed. Moreover, multiple service providers compete to supply the existing demand. Also, currently, fiberoptic networks have significant excess capacity. The combination of a large number of service providers and excess network capacity has resulted in severely depressed prices for bandwidth. Until pricing recovers, service providers have less incentive to install equipment and, thus, little need for many of our communications products. Ultimately, should long-term expectations for Internet growth and bandwidth demand not be realized, our business would be significantly harmed.

The growth of our display products, light interference pigment and other businesses served out of our thin film products group, depends significantly on the continued stability or growth and success of these markets. Among other things, advances in the technology used in computer monitors, televisions, conference room projectors and other display devices have led to increased demand for flat panel displays and projection displays. We cannot be certain that growth in these markets will continue. In recent periods, we have experienced reduced demand for some of our non-communications products, particularly our display components sold to Texas Instruments. We expect this reduced demand to continue for the near term. Among other things, we are working to develop additional profitable applications for our interference pigments and display components and modules. If we fail, these businesses will suffer. Moreover, we cannot predict the impact of technological or other changes in these industries on our business. In addition, each of our non-communications products is subject to pricing pressure, consolidation and realignment as industry participants react to shifting customer requirements and overall demand. There is a risk that any consolidation or realignment could adversely affect our business, and pricing pressure can adversely affect our operating results.

Notwithstanding the recent decline, the optical businesses as well as the businesses that we serve out of the thin film products group have historically grown, at times rapidly, and we have grown accordingly. We have made and, although we remain in an industry slowdown, expect in the future to make significant investments to enable our future growth through, among other things, internal expansion programs, product development, acquisitions and other strategic relationships. If we fail to manage or anticipate our future growth effectively, particularly during periods of industry decline, our business will suffer. Through our Global Realignment Program and other cost reductions measures we are balancing the need to shrink our operations consistent with the current economic conditions with the need to preserve our ability to grow and scale our operations when our markets recover. If we fail to achieve this balance, our business will suffer to the extent our resources and operations are insufficient to respond to a return to growth.

We intend to continue to develop new product lines and improve existing ones to meet our customers’ diverse and changing needs. New product development activities are expensive, with no guarantee of success. Risks associated with our development of new products and improvements to existing products include the risk that:


	•	we may fail to complete the development of a new or improved product;

	•	our customers may not purchase the new or improved product because, among other things, the product is too expensive, is defective in design, manufacture or performance, is uncompetitive, or because the product has been superceded by another product or technology; or

	•	we may fail to anticipate or respond to new technologies that could have a disruptive impact on our business.

Nonetheless, if we fail to successfully develop and introduce new products and improve existing ones, our business will suffer. We have considerably reduced our research and development spending from historic levels and some of our competitors now spend considerably higher percentages of their revenues on research and development than do we.

Furthermore, new products require increased sales and marketing, customer support and administrative effort to support anticipated increased levels of operations. We may not be successful in creating this infrastructure, or we may not realize increased sales sufficient to offset the additional expenses resulting from this increased infrastructure. In connection with our many acquisitions, we have incurred expenses in

We measure compensation expense for our employee stock compensation plans under the intrinsic value method of accounting prescribed by APB Opinion No. 25, “Accounting for Stock Issued to Employees.” Under this method, we recognized compensation charges related to stock compensation plans of $1.2 million, $50.9 million, $124.9 million and $52.6 million in the first quarter of fiscal year 2004 and in fiscal 2003, 2002 and 2001, respectively. In accordance with SFAS No. 123, “Accounting for Stock-Based Compensation,” we provide disclosures of our operating results as if we had applied the fair value method of accounting. Beginning in the third quarter of fiscal 2003, we provide such disclosures in our Quarterly Reports on Form 10-Q in accordance with SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure.” Had we accounted for our compensation expense under the fair value method of accounting prescribed by SFAS No. 123, the charges would have been significantly higher than the intrinsic value method used by us, totaling $72.1 million, $685.2 million, $688.9 million and $566.2 million during the first quarter of fiscal year 2004 and during fiscal 2003, 2002 and 2001, respectively. Currently, the FASB is considering changes to accounting rules concerning the recognition of stock option compensation expense. If these proposals are implemented, we and other companies may be required to measure compensation expense using the fair value method, which would adversely affect our results of operations by increasing our losses by the additional amount of such stock option charges.

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51,” which was amended in October 2003. FIN 46 requires an investor who receives the majority of the expected losses, the expected residual returns, or both, (primary beneficiary) of a variable interest entity (“VIE”) to consolidate the assets, liabilities and results of operations of the entity. A variable interest entity is an entity in which the equity investors do not have a controlling interest or the equity investment at risk is insufficient to finance the entity’s activities without receiving additional subordinated financial support from other parties. FIN 46, as amended, is applicable: (i) immediately for all variable interest entities created after January 31, 2003; or (ii) in the first fiscal year or interim period ending after December 15, 2003 for those created before February 1, 2003, so long as we have not issued financial statements reporting that VIE in accordance with FIN 46, other than the disclosures required by paragraph 26 of FIN 46. During the first quarter of fiscal 2004, we adopted the provisions of FIN 46 with respect to a synthetic lease agreement pertaining to two separate properties and recognized a non-cash cumulative effect of an accounting change adjustment of $2.9 million and deferred impairment charge of $5 million.

The Company is currently reviewing its cost and equity method investments and other variable interests acquired prior to February 1, 2003 to determine whether those entities are variable interest entities and, if so, if the Company is the primary beneficiary of any of its investee companies. At September 30, 2003, the Company had 24 cost and equity method investments primarily in privately held companies and venture funds that have the potential to provide strategic technologies and relationships to the Company’s businesses. The Company expects to complete the review during the second quarter of fiscal 2004. Provided the Company is not the primary beneficiary, the Company’s maximum exposure to loss for these investments at September 30, 2003 is limited to the carrying amount of its investment of $37.8 million in such entities and its minimum funding commitments of $20.6 million. The consolidation of any investee companies under Interpretation No. 46 could adversely affect the financial position and results of operations of the Company.

A few large customers account for most of our total net revenue. During fiscal 2003, Texas Instruments accounted for 12% of our total net revenue. During fiscal 2002, no customer accounted for more than 10% of our total net revenue. During fiscal 2001, Nortel, Alcatel and Lucent accounted for 14%, 12% and 10% of our total net revenue, respectively. We expect that, for the foreseeable future, sales to a limited number of customers will continue to account, alone or in the aggregate, for a high percentage of our total net revenue. Dependence on a limited number of customers exposes us to the risk that order reductions from any one customer can have a material adverse effect on periodic revenue. In fiscal 2003, we experienced a dramatic decline in our sales to Texas Instruments, from $23.5 million (15% of quarterly revenue) in the second quarter of the year to $14.4 million (less than 10% of quarterly revenue) in the fourth quarter of the year. Moreover, many of our customers are currently experiencing significant revenue declines and, in recent periods, have significantly reduced their orders from us. If such reductions continue, our business will continue to be harmed.

The markets in which we sell our products are highly competitive and characterized by rapidly changing and converging technologies. We face intense competition from established competitors and the threat of future competition from new and emerging companies in all aspects of our business. Among our current competitors are some of our customers, who are vertically integrated and either manufacture and/or are capable of manufacturing some or all of the products we sell to them. In addition to our current competitors, we expect that new competitors providing niche, and potentially broad, product solutions will increase in the future. While the current economic downturn has reduced the overall level of business in our industries, the competition remains fierce. To remain competitive in both the current and future business climates, we believe we must maintain a substantial commitment to research and development, improve the efficiency of our manufacturing operations, and streamline our marketing and sales efforts, as well as customer service and support. Under our Global Realignment Program, we have ongoing initiatives in each of these areas. However, our efforts to remain competitive as we continue to implement our Global Realignment Program may be unsuccessful. Among other things, we may not have sufficient resources to continue to make the investments necessary to remain competitive, or we may not make the technological advances necessary to remain competitive. In addition, notwithstanding our efforts, technological changes, manufacturing efficiencies or development efforts by our competitors may render our products or technologies obsolete or uncompetitive.

In the telecommunications industry, our telecommunications systems manufacturing customers evaluate our products and competitive products for deployment in their telecommunications systems. Similarly, telecommunications carrier customers evaluate our customers’ system products and competitive products for system installation. Any failure of us to be selected by our customers, or our customers to be selected by their customers, can significantly harm our business.

The businesses we serve through our thin film products group (e.g., display, medical/environmental instrumentation, document security, product security, aerospace and defense, and lasers) are also susceptible to changing technologies and competition. Growth in the demand for our products within these markets will depend upon our ability to compete with providers of lower cost, higher performance products by developing more cost-effective processes and improving our products. Currently, we are working to develop new products for use in the commercial laser and flat panel display markets, markets with significant existing and developing competition. Our success or failure in these efforts will have a material impact on our non-communications business. In the security market, we face competition from alternative anti-counterfeiting devices such as holograms, embedded threads and watermarks.

The telecommunications industry is consolidating and we believe it will continue to consolidate in the future as companies attempt to strengthen or hold their market positions in an evolving industry. The recent

consolidations of Bookham and Nortel Network’s optical components business and of Avanex and Corning’s and Alcatel’s respective optical components businesses are recent examples of high profile consolidations. We anticipate that consolidation will continue as a result of the current industry downturn. In addition, industry consolidation may result in stronger competitors who are able to compete better as sole-source vendors for customers. This could harm our business as we compete to be a single-vendor solution.

We also expect consolidation to occur among our telecommunications systems manufacturing customers and their telecommunications carrier customers. Consolidation at either level could result in, among other things, greater negotiating power for the consolidated companies with their suppliers in response to reduced competition, and reduced overall demand for telecommunications systems as the number of companies installing systems or providing services declines. Any of these results could reduce demand for our telecommunications products and increase pressure to reduce our prices and provide other incentives.

Prices for telecommunications fiberoptic products generally decline over time as new and more efficient components and modules with increased functionality are developed, manufacturing processes improve and competition increases. The current economic environment has exacerbated the general trend, as declining revenues have forced telecommunications carriers and their suppliers to reduce costs, leading to increasing pricing pressure on our competitors and us. Weakened demand for optical components and modules has created an oversupply of these products, which has increased pressure on us to reduce our prices. To the extent this oversupply is not resolved in future periods, we anticipate continuing pricing pressure. Moreover, currently, fiberoptic networks have significant excess capacity. Industry participants disagree as to the amount of this excess capacity. However, to the extent that there is significant overcapacity and this capacity is not profitably utilized in future periods, we expect to face additional pressure to reduce our prices. Also, numerous telecommunications carriers (WorldCom and Global Crossing, among others) have declared bankruptcy over the past two years or are otherwise in financial distress. As carriers are eliminated from the marketplace, through bankruptcy or consolidation, system vendors lose customers, while remaining carriers are able to increase price pressures on system vendors since vendors have fewer customer alternatives. System vendors in turn will apply those pressures on us.

We are also experiencing pricing pressure in the businesses we serve through our thin film products group (e.g., display, medical/environmental instrumentation, document security, product security, aerospace and defense, and lasers), as a result of improved internal sourcing capabilities within some of our customers, declining demand for some of our products and increased competition.

In response to declining average sales prices, we are undertaking cost reduction measures, under and in addition to the Global Realignment Program, intended to reduce our expense structure at both the cost of goods sold and the operating expense levels. These measures may be unsuccessful in creating profit margins sufficient to sustain our current operating structure and business. In addition to direct cost cutting, we must continue to: (i) timely develop and introduce new products that incorporate features that enable such products to be less price sensitive, and (ii) increase the efficiency of our manufacturing operations. Failure to do so could cause our revenues and profit margins to further decline, which would harm our business.

Our future depends, in part, on our ability to attract and retain key personnel. Competition for highly skilled technical people is extremely intense, and, the current economic environment notwithstanding, 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.

As a consequence of the current economic environment and as part of our Global Realignment Program, we have reduced our global workforce to 5,194 employees as of September 30, 2003. We cannot predict the impact our recent workforce reductions and any other reductions we are compelled to make in the future will have on our ability to attract and retain key personnel.

Similar to other technology companies, particularly those located in Silicon Valley, 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, particularly as and when an industry recovery returns. Recent proposals to modify accounting rules relating to the expensing of equity compensation may cause us to substantially reduce, or even eliminate, all or portions of our equity compensation programs.

Our success depends upon our ability to timely deliver products to our customers at acceptable volume and cost levels. The manufacture of our products involves highly complex and precise processes, requiring production in highly controlled and clean environments. Changes to our manufacturing processes or those of our suppliers, or the inadvertent use of defective or contaminated materials by our suppliers or us, could significantly hurt our ability to meet our customers’ product volume and quality needs. Moreover, in some cases, existing manufacturing techniques, which involve substantial manual labor, may not achieve the volume or cost targets necessary to be competitive. In these cases, we will need to develop new manufacturing processes and techniques, which are anticipated to involve higher levels of automation, to achieve these targets, and we will need to undertake other efforts to reduce manufacturing costs. Currently, we are devoting significant funds and other resources to: (i) develop advanced manufacturing techniques to improve product volumes and yields and reduce costs, and (ii) realign some of our product manufacturing facilities to locations offering optimal labor costs. These efforts may not be successful. If we fail to achieve acceptable manufacturing yields, volumes and costs, our business will be harmed.

Customers will not purchase any of our products, other than limited numbers of evaluation units, prior to qualification of the manufacturing lines for the products. Each new manufacturing line must go through rigorous qualification with our customers. The qualification process can be lengthy and is expensive, with no guarantee that any particular product qualification process will lead to profitable product sales. Moreover, we are currently consolidating our worldwide manufacturing operations into centralized locations, such as our facilities in Shenzhen, China. Among other things, we are moving the manufacturing of some of our products to other facilities. We expect that consolidation and product relocations may continue for the foreseeable future. The manufacturing lines for relocated products must undergo qualification before commercial shipment of these products can recommence. The qualification process, whether for new products or in connection with the relocation of manufacturing of current products, determines whether the manufacturing line achieves the customers’ quality, performance and reliability standards. Our expectations as to the time periods required to qualify (or requalify) a product line and ship products in volumes to customers may be erroneous. Delays in qualification can cause a product to be dropped from a long-term supply program. These delays will also impair the expected timing, and may impair the expected amount, of sales of the affected products. Nevertheless, we may, in fact, experience delays in obtaining qualification of our manufacturing lines and, as a consequence, our operating results and customer relationships would be harmed.

Our business depends on manufacturing excellent products of consistently high quality. Our products are highly complex and, as such susceptible to design and manufacturing defects. To guard against this, our products are rigorously tested for quality both by our customers and us. Nevertheless, our customers’ testing procedures are limited to evaluating our products under likely and foreseeable failure scenarios. For various reasons (including, among others, the occurrence of performance problems that are unforeseeable in testing or that are detected only when products are fully deployed and operated under peak stress conditions), our products may fail to perform as expected. Failures could result from faulty design or problems in manufacturing. In either case, we could incur significant costs to repair and/or replace defective products under warranty, particularly when such failures occur in installed systems. We have experienced such failures in the past and remain exposed to such failures, as our products are widely deployed throughout the world in multiple demanding environments and applications. In some cases, product redesigns or additional capital equipment may be required to correct a defect. We have in the past increased our warranty reserves and have incurred significant expenses relating to certain communications products. Any significant product failure could result in lost future sales of the affected product and other products, as well as customer relations’ problems, litigation and damage to our reputation.

The commercialization of certain of the products we design, manufacture and distribute through our thin film products group may be delayed or made more costly due to required government and industry approval processes. Development of applications for our light interference pigment products may require significant testing that could delay our sales. For example, certain uses in cosmetics may be regulated by the Food and Drug Administration, which has extensive and lengthy approval processes. Durability testing by the automobile industry of our pigments used with automotive paints can take up to three years. If we change a product for any reason including technological changes or changes in the manufacturing process, prior approvals or certifications may be invalid and we may need to go through the approval process again. If we are unable to obtain these or other government or industry certifications in a timely manner, or at all, our operating results could be adversely affected.

We often rely on strategic alliances with other companies to commercialize some of our products in a timely or effective manner, primarily in our non-telecommunication businesses. Our current strategic alliance partners provide us with assistance in the marketing, sales and distribution of a diverse line of products. We may be unable to find appropriate strategic alliances in markets in which we have little experience, which could prevent us from bringing our products to market in a timely manner, or at all. For instance, we have a strategic alliance with SICPA, one of our major customers in the thin film products group, for the marketing and sale of our light interference pigments used to provide security features in currency. Under a license and supply agreement, we rely exclusively on SICPA to market and sell to this market worldwide. SICPA has the right to terminate the agreement if we breach it. If SICPA terminates our agreement or if it is unable to market and sell our light interference pigments successfully for the applications covered by the agreement, our business may be harmed and we may be unable to find a substitute marketing and sales partner or develop these capabilities ourselves. Also, if SICPA fails to meet its minimum purchase requirements under the agreement for any reason, our operating results would be adversely affected.

We are increasing our use of contract manufacturers as an alternative to our own manufacturing of products. If these contract manufacturers do not fulfill their obligations to us, or if we do not properly manage these relationships and the transition of production to these contract manufacturers, our existing customer relationships may suffer. In addition, by undertaking these activities, we run the risk that the reputation and

competitiveness of our products and services may deteriorate as a result of the reduction of our control over quality and delivery schedules. We also may experience supply interruptions, cost escalations and competitive disadvantages if our contract manufacturers fail to develop, implement or maintain manufacturing methods appropriate for our products and customers.

Our supply chain and manufacturing process relies on accurate forecasting to provide us with optimal margins and profitability. Because of market uncertainties, forecasting is becoming much more difficult. In addition, as we come to rely more heavily on contract manufacturers, we may have fewer personnel resources with expertise to manage these third-party arrangements.

We obtain various components included in the manufacture of our products from single or limited source suppliers. A disruption or loss of supplies from these companies or price increases for these components would materially harm our results of operations, product quality and customer relationships. For example, we currently utilize a sole source for the crystal semiconductor chip sets incorporated in our solid-state microlaser products. We obtain lithium niobate wafers, gallium arsenide wafers, specialized fiber components and some lasers used in our telecommunications products primarily from limited source suppliers. These materials are important components of certain of our products and we currently do not have alternative sources for such materials. Also, we do not currently have long-term or volume purchase agreements with any of these suppliers, and these components may not in the future be available at reasonable prices in the quantities required by us, if at all, in which case our business could be materially harmed.

Our customers are located throughout the world. In addition, we have significant offshore operations, including manufacturing, sales and customer support operations. Our operations outside North America include facilities in Europe and Asia-Pacific.

Our international presence exposes us to certain risks, including the following:


	•	our ability to comply with the customs, import/export and other trade compliance regulations of the countries in which we do business, together with any unexpected changes in such regulations;

	•	tariffs and other trade barriers;

	•	political, legal and economic instability in foreign markets, particularly in those markets in which we maintain manufacturing and research facilities;

	•	difficulties in staffing and management;

	•	language and cultural barriers;

	•	seasonal reductions in business activities in the countries where our international customers are located;

	•	integration of foreign operations;

	•	longer payment cycles;

	•	greater difficulty in accounts receivable collection;

	•	currency fluctuations; and

	•	potential adverse tax consequences.

Net revenue from customers outside North America accounted for 30%, 26% and 32% of our total net revenue in fiscal 2003, 2002 and 2001, respectively. We expect that revenue from customers outside North America will continue to account for a significant portion of our total net revenue. Lower sales levels that typically occur during the summer months in Europe and some other overseas markets may materially and

adversely affect our business. In addition, sales of many of our customers depend on international sales and consequently further expose us to the risks associated with such international sales.

The international dimensions of our operations and sales subject us to a myriad of domestic and foreign trade regulatory requirements. As part of our ongoing integration program, we are evaluating our current trade compliance practices and implementing improvements, where necessary. Among other things, we are auditing our product export classification and customs procedures and are installing trade information and compliance systems using our global enterprise software platforms. We do not currently expect the costs of such evaluation or the implementation of any resulting improvements to have a material adverse effect on our operating results or business. However, our evaluation and related implementation are not yet complete and, accordingly, the costs could be greater than expected and such costs and the legal consequences of any failure to comply with applicable regulations could affect our business and operating results.

As a result of our Global Realignment Program and in an effort to reduce costs, we have increased our manufacturing operations in China and those operations are subject to greater political, legal and economic risks than those faced by our other operations. In particular, the political, legal and economic climate in China (both at national and regional levels) is extremely fluid and unpredictable. Among other things, the legal system in China (both at the national and regional levels) remains highly underdeveloped and subject to change, with little or no prior notice, for political or other reasons. Our ability to operate in China may be adversely affected by changes in Chinese laws and regulations, such as those relating to taxation, import and export tariffs, environmental regulations, land use rights, intellectual property and other matters. Moreover, the enforceability of applicable existing Chinese laws and regulations is uncertain. These concerns are exacerbated for foreign businesses, such as ours, operating in China. Our business could be materially harmed by any changes to the political, legal or economic climate in China or the inability to enforce applicable Chinese laws and regulations.

Currently, we operate manufacturing facilities located in Shenzhen, Fuzhou and Beijing, China. As part of our Global Realignment Program and in an effort to reduce costs, we continue to increase the scope and extent of our manufacturing operations in our Shenzhen facilities. Accordingly, we expect that our ability to operate successfully in China will become increasingly important to our overall success. As we continue to consolidate our manufacturing operations, we will incur additional costs to transfer product lines to the facilities located in China, which could have a material adverse impact on our operating results and financial condition.

We expect to export the majority of the products manufactured at our facilities in China.

Upon application to and approval by the relevant government authorities, we will not be subject to certain of China’s taxes and are exempt from customs duties on imported components or materials and exported products. We are required to pay income taxes in China, subject to certain tax relief. We may become subject to other taxes in China or may be required to pay customs duties and export license fees in the future. In the event that we are required to pay other taxes, customs duties and export license fees in China, our results of operations could be materially and adversely affected.

Our operations use certain substances and generate certain wastes that are regulated or may be deemed hazardous under environmental laws. Some of these laws impose liability for cleanup costs and damages relating to releases of hazardous substances into the environment. Such laws may become more stringent in the future. In the past, costs and liabilities arising under such laws have not been material; however, we cannot assure you that such matters will not be material to us in the future.

Our business could be adversely affected by certain unexpected catastrophic events.

We may encounter natural disasters, which could harm our financial condition and results of operations.

Our headquarters, including some of our research and development and manufacturing facilities, are located in California near major earthquake faults. Any damage to our facilities in California or other locations as a result of an earthquake, fire or any other natural disasters could disrupt our operations and have a material adverse impact on our business, operating results and financial condition.

Terrorist acts or acts of war may disrupt our operations, as well as our customers’ operations. The terrorist attacks on September 11, 2001 created many economic and political uncertainties, and intensified the global economic downturn. Any future terrorist activities could further weaken the global economy and create additional uncertainties, forcing our customers to further reduce their capital spending or cancel orders from us, which could have a material adverse impact on our business, operating results and financial condition.

We rely upon the capacity, reliability and security of our information technology hardware and software infrastructure and our ability to expand and update this infrastructure in response to our changing needs. We are constantly updating our information technology infrastructure. Among other things, we recently unified most of our manufacturing, accounting, sales and human resource data systems using an Oracle platform, and we have entered into an agreement with Oracle to provide and maintain our global ERP infrastructure on an outsourced basis. Any failure to manage, expand and update our information technology infrastructure or any failure in the operation of this infrastructure could harm our business.

Despite our implementation of security measures, our systems are vulnerable to damages from computer viruses, natural disasters, unauthorized access and other similar disruptions. Any system failure, accident or security breach could result in disruptions to our operations. To the extent that any disruptions or security breach results in a loss or damage to our data, or inappropriate disclosure of confidential information, it could harm our business. In addition, we may be required to spend additional costs and other resources to protect us against damages caused by these disruptions or security breaches in the future.

Others, including academic institutions, our competitors and other large technology-based companies, hold numerous patents in the industries in which we operate. Some of these patents may purport to cover our products. In response, we may seek to acquire license rights to these or other patents or other intellectual property to the extent necessary to ensure we possess sufficient intellectual property rights for the conduct of 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, impede the sale of some of our current products, or substantially increase the cost to provide these products to our customers. While in the past licenses generally have been available to us where third-party technology was necessary or useful for the development, production or sale of our products, in the future licenses to third-party technology may not be available on commercially reasonable terms, if at all. Generally, a license, if granted, includes payments by us of up-front fees, ongoing royalties or a combination of both. Such royalty or other terms could have a significant adverse impact on our operating results. We are a licensee of a number of third-party technologies and intellectual property rights and are required to pay royalties to these third-party licensors on some of our telecommunications products and laser subsystems.

Our products may be subject to claims that they infringe the intellectual property rights of others.

The industry in which we operate experiences periodic claims of patent infringement or other intellectual property rights. We have received in the past and, from time to time, may in the future receive notices from third parties claiming that our products infringe upon third-party proprietary rights. As the downturn in the communications industries deepened and continued over the past two years, many companies have turned to their intellectual property portfolios as an alternative revenue source. This is particularly true of companies which no longer compete with us. Many of these companies have larger, more established intellectual property portfolios than ours. Typical for a growth-oriented technology company, at any one time we generally have various pending claims from third parties that one or more of our products or operations infringe or misappropriate their intellectual property rights or that one or more of our patents are invalid. However, as economic uncertainty continues, the level of patent infringement disputes in which we are engaged and expect to be engaged for the foreseeable future has increased. For example, we have pending litigation with Litton Systems, Inc. and the Board of Trustees of the Leland Stanford, Jr. University involving claims for damages in connection with the alleged past infringement by our optical amplifiers of a now expired U.S. patent. We have also received claims and notice letters from British Telecommunications and other companies regarding the alleged infringement of their patents by certain of our products. We will continue to respond to other claims in the course of our business operations. We do not believe that any of these claims will materially harm our business or financial condition. In the past the settlement and disposition of these disputes has not had a material adverse impact on our business or financial condition, however this may not be the case in the future. Further, the litigation or settlement of these matters, regardless of the merit of the claims, could result in significant expense to us and divert the efforts of our technical and management personnel, whether or not we are successful. If we are unsuccessful, we could be required to expend significant resources to develop non-infringing technology or to obtain licenses to the technology that is the subject of the litigation. We may not be successful in such development or such licenses may not be available on terms acceptable to us, if at all. Without such a license, we could be enjoined from future sales of the infringing product or products.

Our future depends in part upon our intellectual property, including trade secrets, know-how and continuing technological innovation. We currently hold numerous U.S. patents on products or processes and corresponding foreign patents and have applications for some patents currently pending. The steps taken by us to protect our intellectual property may not adequately prevent misappropriation or ensure that others will not develop competitive technologies or products. Other companies may be investigating or developing other technologies that are similar to our own. It is possible that patents may not be issued from any application pending or filed by us and, if patents do issue, the claims allowed may not be sufficiently broad to deter or prohibit others from marketing similar products. Any patents issued to us may be challenged, invalidated or circumvented. Further, the rights under our patents may not provide a competitive advantage to us. In addition, the laws of some territories in which our products are or may be developed, manufactured or sold, including Europe, Asia-Pacific or Latin America, may not protect our products and intellectual property rights to the same extent as the laws of the United States.

We have had numerous lawsuits filed against us asserting various claims, including securities and ERISA class actions and stockholder derivative actions. The results of complex legal proceedings are difficult to predict. Moreover, many of the complaints filed against us do not specify the amount of damages that plaintiffs seek and we therefore are unable to estimate the possible range of damages that might be incurred should these lawsuits be resolved against us. While we are unable to estimate the potential damages arising from such lawsuits, certain of them assert types of claims that, if resolved against us, could give rise to substantial damages. Thus, an unfavorable outcome or settlement of one or more of these lawsuits could have a material adverse effect on our financial position, liquidity and results of operations. Even if these lawsuits are not resolved against us, the uncertainty and expense associated with unresolved lawsuits could seriously harm our business, financial condition and reputation. Litigation can be costly, time-consuming and disruptive to normal

business operations. The costs of defending these lawsuits, particularly the securities class actions and stockholder derivative actions, have been significant, will continue to be costly and may not be covered by our insurance policies. The defense of these lawsuits could also result in continued diversion of our management’s time and attention away from business operations, which could harm our business.

Like most other public companies, we carry insurance protecting our officers and directors against claims relating to the conduct of our business. Historically, this insurance covered, among other things, the costs incurred by companies and their management to defend against and resolve claims relating to management conduct and results of operations, such as securities class action claims. These claims typically are extremely expensive to defend against and resolve. Hence, as is customary, we purchase and maintain insurance to cover some of these costs. We pay significant premiums to acquire and maintain this insurance, which is provided by third-party insurers, and we agree to underwrite a portion of such exposures under the terms of the insurance coverage. Over the last several years, the premiums we have paid for this insurance have increased substantially. One consequence of the current economic environment and decline in stock prices has been a substantial increase in the number of securities class actions and similar claims brought against public corporations and their management, including our company and certain of our current and former officers and directors. Many, if not all, of these actions and claims are, and will likely continue to be, at least partially insured by third-party insurers. Consequently, insurers providing director and officer liability insurance have in recent periods sharply increased the premiums they charge for this insurance, raised retentions (that is, the amount of liability that a company is required to pay to defend and resolve a claim before any applicable insurance is provided), and limited the amount of insurance they will provide. Moreover, insurers typically provide only one-year policies.

The insurance policies that may cover the current securities lawsuits against us have a $10 million retention. As a result, the costs we incur in defending the current securities lawsuits against us may not be reimbursed until they exceed $10 million. The policies that would cover any future lawsuits may not provide any coverage to us and may cover the directors and officers only in the event we are unable to cover their costs in defending against and resolving any future claims. In fact our current policy only covers our directors and officers and is only applicable under circumstances in which the Company is unable to pay or is prohibited from paying claims accrued during the policy period. As a result, our costs in defending or settling any future lawsuits or paying any judgments arising therefrom could increase significantly and could materially impair the Company’s financial condition.

Each year we negotiate with insurers to renew our director and officer insurance. Particularly in the current economic environment, we cannot assure you that in the future we will be able to obtain sufficient director and officer liability insurance coverage at acceptable rates and with acceptable deductibles and other limitations. Failure to obtain such insurance could materially harm our financial condition in the event that we are required to defend against and resolve any future or existing securities class actions or other claims made against us or our management arising from the conduct of our operations. Further, the inability to obtain such insurance in adequate amounts may impair our future ability to retain and recruit qualified officers and directors.

Recently enacted and proposed changes in the laws and regulations affecting public companies, including the provisions of the Sarbanes-Oxley Act of 2002, will increase our expenses as we evaluate the implications of new rules and devote resources to respond to the new requirements. In particular, we expect to incur additional SG&A expense as we implement Section 404 of the Sarbanes-Oxley Act, which requires management to report on, and our independent auditors to attest to, our internal controls. The compliance of these new rules could also result in continued diversion of management’s time and attention, which could prove to be disruptive to normal business operations. Further, the impact of these events could also make it more

We are exposed to financial market risks, including changes in interest rates, foreign currency exchange rates and marketable equity security prices. We often utilize derivative financial instruments to mitigate these risks. We do not use derivative financial instruments for speculative or trading purposes. The primary objective of most of our investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. To achieve this objective, a majority of our marketable investments are floating rate and municipal bonds, auction instruments and money market instruments denominated in U.S. dollars. When we acquire assets denominated in foreign currencies, we usually mitigate currency risks associated with these exposures with forward currency contracts. A substantial portion of our sales, expense and capital purchasing activities are transacted in U.S. dollars. However, some of these activities are conducted in other currencies, primarily Canadian and European currencies. To protect against reductions in value and the volatility of future cash flows caused by changes in foreign exchange rates, we may enter into foreign currency forward contracts. The contracts reduce, but do not always entirely eliminate, the impact of foreign currency exchange rate movements. Actual results on our financial position may differ materially.

We also hold investments in other public and private companies, including, among others, Nortel Networks, Adept and ADVA, and have limited funds invested in private venture funds. All three companies have experienced severe stock price declines during the economic downturn, which have greatly reduced the value of our investments, and we have written down the value of these investments as the decline in fair value was deemed to be other-than-temporary. During fiscal 2003, we have written down the value of our Adept investment to $0 and recorded impairment charges of $25.0 million. During fiscal 2002, we recorded impairment charges of $187.3 million related to Nortel and $13.9 million related to ADVA. During fiscal 2001, we recorded impairment charges of $511.8 million related to Nortel and $744.7 million related to ADVA. In addition to our investments in public companies, we have in the past and expect to continue to make investments in privately held companies for strategic and commercial purposes. For example, we had a commitment to provide additional funding of up to $20.6 million to certain venture capital investment partnerships as of September 30, 2003. In recent months several of the private companies in which we held investments have ceased doing business and have either liquidated or are in bankruptcy proceedings. If the carrying value of our investments exceeds the fair value and the decline in fair value is deemed to be other-than-temporary, we will be required to write down the value of the investments, which could materially harm our results of operations or financial condition.

In connection with our initial issuance of the Notes, we incurred $475 million of indebtedness, which substantially increased our principal payment obligations and we may not have enough cash to repay the notes when due. Our ability to satisfy our obligations to repay amounts outstanding under the Notes will depend on our ability to generate cash. Our ability to generate sufficient cash flow will depend on our ability to successfully manage our business and other factors, including general economic, financial, competitive, legislative and regulatory conditions, some of which are beyond our control. By incurring new indebtedness, the related risks that we now face could intensify. Our ability to satisfy our payment obligations under the Notes and to satisfy any other future debt obligations will depend upon our future operating performance and possibly our ability to obtain additional financing. The degree to which we are leveraged could materially and adversely affect our ability successfully to obtain financing for working capital, acquisitions or other purposes and could make us more vulnerable to industry downturns and competitive pressures.

None of our subsidiaries have guaranteed our obligations under, or have any obligation to pay any amounts due on, the Notes. As a result, the Notes are effectively subordinated to all liabilities of our subsidiaries. Our rights and the rights of our creditors, including holders of the Notes, to participate in the assets of any of our subsidiaries upon their liquidation or recapitalization will generally be subject to the prior claims of those subsidiaries’ creditors. At September 30, 2003, our subsidiaries had outstanding indebtedness of approximately $6.0 million, other than intercompany indebtedness and trade payables.

In addition, the Notes are not secured by any of our assets or those of our subsidiaries. As a result, the Notes will be effectively subordinated to any secured debt we may incur. In any liquidation, dissolution, bankruptcy or other similar proceeding, holders of our secured debt may assert rights against any assets securing such debt in order to receive full payment of their debt before those assets may be used to pay the holders of the Notes. At September 30, 2003, we had no secured debt outstanding.

We are not restricted under the terms of the Notes from incurring additional indebtedness, including secured debt. In addition, the limited covenants applicable to the Notes do not require us to achieve or maintain any minimum financial results relating to our financial position or results of operations. Our ability to recapitalize, incur additional debt and take a number of other actions that are not limited by the terms of the Notes could have the effect of diminishing our ability to make payments on the Notes when due. In addition, we are not restricted from repurchasing subordinated indebtedness or shares of our Common Stock by the terms of the Notes.

Holders of the Notes have the right to require us to repurchase their Notes on November 15, 2008 or upon the occurrence of a designated event prior to maturity, as described under the heading “Description of Notes — Repurchase at Option of the Holder.” Moreover, in the event of a default under the indenture, such as the failure to satisfy our payment obligations or the acceleration of any of our then-outstanding indebtedness in excess of $50 million, the trustee or the holders of the Notes may accelerate our obligation to repay the principal amount of the Notes and accrued and unpaid additional interest, if any. We may not have sufficient funds to repurchase the Notes in cash or make the required repayment at such time or the ability to arrange necessary financing on acceptable terms. In addition, our ability to repurchase the Notes in cash or make the required repayment may be limited by law or the terms of other agreements relating to our indebtedness outstanding at the time. As a result, we may not be able to fulfill our obligations under the Notes, and holders of the Notes could lose all or part of their investment.

The Notes are convertible into shares of our Common Stock only if specified conditions are met. If the specific conditions for conversion are not met, holders of the Notes will not be able to convert their Notes, and they may not be able to receive the value of the Common Stock into which the Notes would otherwise be convertible.

With respect to conversion elections that occur on or before the fifth day prior to maturity (the final notice date), we may elect to satisfy our obligation upon conversion by cash settlement or combined cash and stock settlement. We will notify the converting noteholders if we chose to satisfy our obligation upon conversion by cash or combined settlement, and these noteholders may retract their conversion notice. If the conversion notice has not been retracted, then cash settlement or combined settlement will occur on the business day following the final trading day of the five trading-day period beginning on the first trading day after the final day of the conversion retraction period. Because the market price of our Common Stock will be determined prior to the date of settlement, if we elect a combined settlement or settlement in shares of our Common Stock, note holders bear the market risk that our Common Stock will decline in value between the date the market price is calculated and the settlement date.

If a termination of trading event occurs at any time prior to the maturity of the Notes, noteholders may require us to repurchase their Notes, in whole or in part, on a repurchase date that is 30 days after the date of our notice of the designated event. A “termination of trading” will be deemed to have occurred if our Common Stock (or other Common Stock into which the Notes are then convertible) is neither listed for trading on a United States national securities exchange nor approved for trading on The Nasdaq National Market. If our Common Stock is delisted from Nasdaq, we may be obligated to repay to the noteholders $475,000,000 in principal, plus amounts for accrued and unpaid additional interest, if any. We may not have sufficient funds to make the required repurchase in cash at such time or the ability to arrange necessary financing on acceptable terms. If we elect to pay the repurchase price in stock, it would be highly dilutive to our earnings per share and consequently harm our stock price. If such a termination of trading occurs during a period of unexpectedly weak financial condition for the Company, such a repurchase obligation could further weaken our financial condition and disrupt our normal business operations and our ability to meet our other financial obligations.

Holders of the Notes are entitled to convert the Notes into shares of our Common Stock, among other circumstances, if the Common Stock price for the periods described in this prospectus is more than 110% of the conversion price. Unless and until this contingency or another conversion contingency is met, the shares of our Common Stock underlying the Notes are not included in the calculation of our basic or diluted earnings per share. When this contingency is met, diluted earnings per share may, depending on the relationship between the interest on the Notes and the earnings per share of our Common Stock, be expected to decrease as a result of the inclusion of the underlying shares in the diluted earnings per share calculation. Moreover, volatility in our stock price could cause this condition to be met in one quarter and not in a subsequent quarter, increasing the volatility of diluted earnings per share.

At the time of issuance, there was no trading market for the Notes, and there can be no assurance as to: (1) the liquidity of any market for the Notes that develop following the issuance of the Notes; (2) the ability of the holders to sell their Notes; or (3) the prices at which holders of the Notes would be able to sell their Notes. If an active trading market for the Notes develops, the Notes could trade at prices higher or lower than their initial purchase prices depending on many factors. If an active trading market for the Notes does not develop, or if one develops but is not maintained, noteholders may experience difficulty in reselling or in their

ability to sell, the Notes and the trading price of the Notes could fall. We do not intend to apply for listing of the Notes on any securities exchange or for quotation on the Nasdaq National Market.

We have been informed by the initial purchasers that they intend to make a market in the Notes, but they may cease doing so at any time without notice. Such market-making activities will be subject to limits imposed by the Securities Act and the Exchange Act.

We do not intend to seek a rating on the Notes. However, if one or more rating agencies rates the Notes and assigns the Notes a rating lower than the rating expected by investors, or reduces their rating in the future, the market price of the Notes and our Common Stock would be harmed.

The trading price of our Common Stock has been and may continue to be subject to wide fluctuations. During fiscal 2003, the closing sale prices of our Common Stock on the Nasdaq National Market ranged from $1.62 to $4.28 per share, and the closing sale price on October 27, 2003 was $3.58 per share. Our stock price may fluctuate in response to a number of events and factors, such as quarterly variations in operating results, announcements of technological innovations or new products by us or our competitors, changes in financial estimates and recommendations by securities analysts, the operating and stock price performance of other companies that investors may deem comparable to us, and new reports relating to trends in our markets or general economic conditions.

In addition, the stock market in general, and the market price for companies in the telecommunications industry, have experienced extreme volatility that often has been unrelated to the operating performance of such companies. These broad market and industry fluctuations may adversely affect the price of our stock, regardless of our operating performance. Because the Notes are convertible into shares of our Common Stock, volatility or depressed prices of our Common Stock could have a similar effect on the trading price of our Notes. Holders who receive Common Stock upon conversion also will be subject to the risk of volatility and depressed prices of our Common Stock. In addition, the existence of the Notes may encourage short selling in our Common Stock by market participants because the conversion of the Notes could depress the price of our Common Stock.

Additionally, volatility or a lack of positive performance in our stock price may adversely affect our ability to retain key employees, all of whom have been granted stock options.

Although we are required to register resales of the Notes and the shares of our Common Stock issuable upon conversion of the Notes, the registration statement of which this prospectus is a part may not be available to holders at all times. We may suspend the use of this prospectus under certain circumstances relating to pending corporate developments, public filings with the SEC and similar events. While our ability to suspend the use of this prospectus is limited, we will be permitted to suspend the use of the prospectus for up to 60 days in any 3-month period under certain circumstances, relating to possible acquisitions, financings or other similar transactions.

The ability of holders of the Notes to cause us to repurchase the Notes upon a designated event could discourage a potential acquirer.

Upon the occurrence of certain acquisitions, mergers, combinations and similar transactions, as more fully described in “Description of the Notes — Repurchase at Option of the Holder Upon a Designated

Event,” the holders of the Notes have the right to cause us to repurchase the Notes. Potential acquirers who otherwise would consider these types of acquisitions, mergers, combinations, or similar transactions, may be reluctant in doing so if they were concerned with the size of the repurchase payments that we may have to make to the holders of the Notes upon consummation of such a transaction. If we were to make repurchase payments to the holders of the Notes upon the consummation of such a transaction, our cash balances could decrease significantly, or we, or our potential acquirer, may have to assume additional debt to satisfy those repurchase obligations. If either of these scenarios would be viewed negatively by potential acquirers, these repurchase obligations would have the effect of deterring such acquisition transactions with such potential acquirers.

Sales of substantial amounts of shares of our Common Stock in the public market after our initial issuance of the Notes, or the perception that those sales may occur, could cause the market price of our Common Stock to decline. Because the Notes are convertible into Common Stock only at a conversion price in excess of the recent trading price, such a decline in our Common Stock price may cause the value of the Notes to decline.

If all of the Notes are converted at the conversion rate of 202.4291 shares of Common Stock per $1,000 in principal amount of Notes, approximately 96,153,846 shares of our Common Stock would be issuable. Our stock price could be depressed significantly if the holders of the Notes decide to convert their Notes and sell the Common Stock issued upon conversion of the Notes or are perceived by the market as intending to sell them, notwithstanding our ability to elect to settle any conversion notices in cash. These sales also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

In February 2003, we amended and restated our Stockholder Rights Agreement and currently each share of our outstanding Common Stock is associated with one right. Each right entitles stockholders to purchase 1/100,000 share of our Series B Preferred Stock at an exercise price of $21.

The rights only become exercisable in certain limited circumstances following the tenth day after a person or group announces acquisition of or tender offers for 15% or more of our Common Stock. For a limited period of time following the announcement of any such acquisition or offer, the rights are redeemable by us at a price of $0.01 per right. If the rights are not redeemed, each right will then entitle the holder to purchase Common Stock having the value of twice the then-current exercise price. For a limited period of time after the exercisability of the rights, each right, at the discretion of our Board of Directors, may be exchanged for either 1/100,000 share of Series B Preferred Stock or one share of Common Stock per right. The rights expire on June 22, 2013.

Our Board of Directors has the authority to issue up to 499,999 shares of undesignated preferred stock and to determine the powers, preferences and rights and the qualifications, limitations or restrictions granted to or imposed upon any wholly unissued shares of undesignated preferred stock and to fix the number of shares constituting any series and the designation of such series, without the consent of our stockholders. The preferred stock could be issued with voting, liquidation, dividend and other rights superior to those of the holders of Common Stock.

The issuance of Series B Preferred Stock or any preferred stock subsequently issued by our Board of Directors, under some circumstances, could have the effect of delaying, deferring or preventing a change in control.

Some provisions contained in the rights plan, and in the equivalent rights plan that our subsidiary JDS Uniphase Canada Ltd. has adopted with respect to our exchangeable shares, may have the effect of discouraging a third party from making an acquisition proposal for us and may thereby inhibit a change in control. For example, such provisions may deter tender offers for shares of Common Stock or exchangeable shares, which offers may be attractive to stockholders, or deter purchases of large blocks of Common Stock or exchangeable shares, thereby limiting the opportunity for stockholders to receive a premium for their shares of Common Stock or exchangeable shares over the then-prevailing market prices.

We are subject to the provisions of Section 203 of the Delaware General Corporation Law 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.

The ratio of earnings to fixed charges is computed by dividing fixed charges into net earnings (loss) before income tax provision (benefit), minority interest (benefit) and cumulative effect of change in accounting principle plus fixed charges. Fixed charges consist of interest expense and that portion of rent expense deemed to represent interest. The deficiencies of net earnings to cover fixed charges for the years ended June 30, 2003, 2002, 2001, 2000, 1999 and the three month period ended September 30, 2003 were $(920,293), $(8,501,090), $(56,493,762), $(829,811), $(149,589) and $(38,032), respectively (in thousands).

We will not receive any proceeds from the resale of the Notes or the shares of Common Stock issuable upon conversion of the Notes by the selling securityholders but we have agreed to pay certain registration expenses.

We originally issued the Notes on October 31, 2003 to the initial purchasers in a transaction exempt from the registration requirements of the Securities Act. The initial purchasers resold the Notes to persons believed by the initial purchaser to be “qualified institutional buyers” under Rule 144A under the Securities Act in transactions exempt from the registration requirements of the Securities Act. The selling securityholders (which term includes their transferees, pledges, donees or successors) may from time to time offer and sell pursuant to this prospectus any and all of the Notes and the shares of Common Stock issuable upon conversion of the Notes.

Any or all of the Notes or Common Stock issuable upon conversion of the Notes may be offered for sale pursuant to this prospectus by the selling securityholders from time to time. Accordingly, no estimate can be given as to the amount of Notes or Common Stock that will be held by the selling securityholders upon consummation of any such sales. The table below assumes that all selling securityholders will sell all of their Notes or Common Stock, unless otherwise indicated. The selling securityholders identified below may have sold, transferred or otherwise disposed of all or a portion of their Notes or Common Stock since the date on which they provided the information regarding their Notes and Common Stock in transactions exempt from the registration requirements of the Securities Act. No selling securityholder may make any offer or sale under this prospectus unless that selling securityholder is listed in the table below. The names of each selling securityholder, the principal amount of Notes that may be offered by such selling securityholder pursuant to this prospectus and the number of shares of Common Stock into which such Notes are convertible will be set forth in a prospectus supplement, if required. Unless described in the prospectus supplement, none of the selling securityholders has had a material relationship with us or any of our predecessors or affiliates within the past three years.

The following table sets forth information as of November 13, 2003 regarding the offer and sale of the Notes and the shares of our Common Stock issuable upon conversion of the Notes and is based on information provided to us by the selling securityholders. Beneficial ownership is determined in accordance with Rule 13d-3 of the Securities Exchange Act.


(1)	Assumes none of the holder’s Notes are converted into shares of Common Stock and a cash payment in lieu of any fractional share interests. Assumes offer and sale of all Notes held by the selling securityholder, although the selling securityholder is not obligated to sell any Notes.

(2)	Assumes conversion of all of the holder’s Notes at a conversion price of $4.94. However, this conversion price will be subject to satisfaction of certain conditions and adjustment as described under “Description of the Notes — Conversion Rights.” As a result, the amount of Common Stock issuable upon conversion of the Notes may increase or decrease in the future. Assumes offer and sale of all shares of Common Stock issuable upon conversion of the Notes held by the securityholder, although the selling securityholder is not obligated to sell any shares of Common Stock. Also assumes that after the sale of all shares of Common Stock issuable upon conversion of the Notes held by a selling securityholder, no selling securityholder will own 1% or more of our outstanding Common Stock.

(3)	Information about other selling securityholders will be set forth in prospectus supplements, if required. Assumes that any other holders of Notes, or any future transferees, pledgees, donees or successors of or from any such other holders of Notes, do not beneficially own any Common Stock other than the Common Stock issuable upon conversion of the Notes at the initial conversion rate.

(4)	This selling securityholder has identified itself as a registered broker-dealer and, accordingly, an underwriter. Please see “Plan of Distribution” for required disclosure regarding these selling securityholders.

The selling securityholders listed above may have sold or transferred, in transactions exempt from the registration requirements of the Securities Act, some or all of their Notes since the date on which the information is presented in the above table. Information concerning other selling securityholders will be set forth in prospectus supplements from time to time, if required. Information about the selling securityholders may change over time. Any changed information will be set forth in prospectus supplements if and when necessary.


*	The securityholder has informed us that there is no natural person with voting or investment power over the respective Notes.

Generally, only selling securityholders identified in the foregoing Selling Securityholders Table who beneficially own the securities set forth opposite their respective names may sell offered securities under the registration statement of which this prospectus is a part. We may from time to time include additional selling securityholders in an amendment to the registration statement of which this prospectus is a part, or a supplement to this prospectus.

This prospectus relates to the resale from time to time by the selling securityholders of Notes of an aggregate amount of $475,000,000 and Common Stock issuable upon conversion of the Notes. The Notes were issued and sold on October 31, 2003 in transactions exempt from the registration requirements of the Securities Act. The Notes and the Common Stock issuable upon conversion of the Notes are being registered to permit public secondary trading of these securities by the holders thereof from time to time after the date of this prospectus. We have agreed, among other things, to bear all expenses (other than underwriting discounts and selling commissions) in connection with the registration and sale of the Notes and the Common Stock issuable upon conversion of the Notes covered by this prospectus. We have registered the Notes and the Common Stock issuable upon conversion of the Notes pursuant to the terms of a registration rights agreement, but registration of these securities does not necessarily mean that any of the securities will be offered and sold by the selling securityholders.

We will not receive any of the proceeds from resales of the Notes or the Common Stock issuable upon conversion of the Notes by the selling securityholders. The selling securityholders may sell all or a portion of the Notes and Common Stock issuable upon conversion of the Notes beneficially owned by them and offered hereby from time to time on any exchange on which the securities are listed or quotation service upon which such securities are quoted on terms to be determined at the times of such sales. The selling securityholders may also make private sales directly or through a broker or brokers, in the over-the-counter market, otherwise than on such exchanges or services in the over-the-counter market; through the writing of options, whether the options are listed on an options exchange or otherwise, or through the settlement of short sales. Alternatively, any of the selling securityholders may from time to time offer the Notes or the Common Stock beneficially owned by them through underwriters, dealers or agents, who may receive compensation in the form of underwriting discounts, commissions or concessions from the selling securityholders and the purchasers of the Notes and the Common Stock for whom they may act as agent. The aggregate proceeds to the selling securityholders from the sale of the Notes or Common Stock offering by them hereby will be the purchase price of such Notes or Common Stock less discounts and commissions, if any.

The Notes and Common Stock may be sold from time to time in one or more transactions at fixed offering prices, which may be changed, at prevailing market prices at the time of sale, at prices related to the prevailing market prices, or at varying prices determined at the time of sale or at negotiated prices. These prices will be determined by the holders of such securities or by agreement between these holders and underwriters or dealers who may receive fees or commissions in connection therewith. These transactions may include block transactions or crosses. Crosses are transactions in which the same broker acts as an agent on both sides of the trade.

In connection with sales of the Notes and the underlying Common Stock or otherwise, the selling securityholders may enter into hedging transactions with broker-dealers. These broker-dealers may in turn engage in short sales of the Notes and the underlying Common Stock in the course of hedging their positions. The selling securityholders may also sell the Notes and underlying Common Stock short and deliver Notes and the underlying Common Stock to close out short positions, or loan or pledge Notes and the underlying Common Stock to broker-dealers that in turn may sell the Notes and the underlying Common Stock. However, if the Notes or shares of Common Stock are to be delivered by the selling securityholder’s successors in interest, unless permitted by law, we must distribute a prospectus supplement and/or file an amendment to the registration statement, of which this prospectus is a part, under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling securityholders to include the successors in interest as selling securityholders under this prospectus. Each selling securityholder may not satisfy its obligations in connection with short sale or hedging transactions entered into before the effective date of the registration statement, of which this prospectus is a part, by delivering securities registered under such registration statement.

The selling securityholders or their successors in interest may from time to time pledge or grant a security interest in some or all of the Notes or shares of Common Stock and, if the selling securityholders default in the performance of their secured obligation, the pledgees or secured parties may offer and sell the Notes or shares of Common Stock from time to time under this prospectus; however, in the event of a pledge or the default on the performance of a secured obligation by the selling securityholders, in order for the Notes or shares of Common Stock to be sold under cover of the registration statement, of which this prospectus is a part, unless permitted by law, we must distribute a prospectus supplement and/or an amendment to the registration statement, of which this prospectus is a part, under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling securityholders to include the pledge, transferee, secured party or other successors in interest as selling securityholders under this prospectus.

To our knowledge, there are currently no plans, arrangements or understandings between any selling securityholders and any underwriter, broker-dealer or agent regarding the sale of the Notes and the underlying Common Stock by the selling securityholders. Selling securityholders may not sell any or all of the Notes and the underlying Common Stock offered by them pursuant to this prospectus. In addition, we cannot assure you that any such selling securityholder will not transfer, devise or gift the Notes and the underlying Common Stock by other means not described in this prospectus. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold under Rule 144 or Rule 144A rather than pursuant to this prospectus.

Our outstanding Common Stock is listed for trading on the Nasdaq National Market. We do not intend to list the Notes for trading on any national securities exchange or on the Nasdaq National Market. The Notes are eligible for trading in the PORTAL Market. The initial purchasers have advised us that they intend to make a market in the Notes as permitted by applicable laws and regulations but are not obligated, however, to make a market in the notes and any such market making may be discontinued at any time at the sole discretion of the initial purchasers. Accordingly, we cannot assure you that any trading market for the Notes will develop.

The selling securityholders and any broker and any broker-dealers, agents or underwriters that participate with the selling securityholders in the distribution of the Notes or the Common Stock may be deemed to be “underwriters” within the meaning of the Securities Act, in which event any commission received by such broker-dealers, agents or underwriters, and any profit on the resale of the Notes or the Common Stock

purchased by them, may be deemed to be underwriting commissions or discounts under the Securities Act. Selling securityholders who are deemed to be “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act. To the extent the selling securityholders may be deemed to be “underwriters,” they may be subject to statutory liabilities, including, but not limited to, Sections 11, 12 and 17 of the Securities Act.

In addition, in connection with any resales of Notes, any broker-dealer who acquired the Notes for its own account as a result of market-making activities or other trading activities must deliver a prospectus meeting the requirements of the Securities Act. Broker-dealers may fulfill their prospectus delivery requirements with respect to the Notes (other than a resale of an unsold allotment from the original sale of the outstanding Notes) with this prospectus. In addition, all securityholders effecting transactions in the Notes may be required to deliver a prospectus and any and all supplements or amendments thereto.

Pursuant to the registration rights agreement that has been filed as an exhibit to the registration statement of which this prospectus is a part, we have agreed to indemnify each selling securityholder, and each selling securityholder has agreed to indemnify us and each other selling securityholder against certain liabilities arising under the Securities Act. The selling securityholders may indemnify any broker-dealer that participates in transactions involving the sale of the Notes or shares of Common Stock against certain liabilities, including liabilities arising under the Securities Act, as amended.

In order to comply with the securities laws of some states, if applicable, the Notes and the Common Stock issuable upon conversion of the Notes may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the Notes and Common Stock issuable upon conversion of the Notes may not be sold unless they have been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.

The selling securityholders and any other persons participating in such distribution will be subject to the Exchange Act. The Exchange Act rules include, without limitation, Regulation M, which may limit the timing of purchases and sales of the Notes and the underlying Common Stock by the selling securityholders and any other such person. In addition, Regulation M of the Exchange Act may restrict the ability of any person engaged in the distribution of the Notes and the underlying Common Stock to engage in market-making activities with respect to the particular Notes and the underlying Common Stock being distributed for a period of up to five business days prior to the commencement of such distribution. This may affect the marketability of the Notes and the underlying Common Stock and the ability of any person or entity to engage in market-making activities with respect to the Notes and the underlying Common Stock.

We will use commercially reasonable efforts to maintain the effectiveness of the shelf registration statement until the earliest of:


	•	all securities covered by the shelf registration statement have been sold pursuant to the shelf registration statement or Rule 144;

	•	the expiration of the applicable holding period with respect to the Notes and the underlying Common Stock under Rule 144(k) under the Securities Act or any successor provision; or

	•	the Notes and the underlying Common Stock have ceased to be outstanding (whether as result of repurchase and cancellation, conversion or otherwise).

We issued the Notes under an indenture, dated as of October 31, 2003, between us and The Bank of New York, as trustee.

The following description is a summary of the material provisions of the Notes, the indenture and the registration rights agreement. It does not purport to be complete. We urge you to read the indenture because the indenture, and not this description, defines your rights as a holder of the Notes. You should refer to all the provisions of the indenture and the registration rights agreement, including the definitions of certain terms used in the those agreements. The terms of the Notes include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as amended. The indenture including the form of Note contained therein, and the registration rights agreement referred to below, are specifically incorporated herein by reference. Copies of these documents are available to you as set forth under “Where You Can Find More Information.”

As used in this “Description of Notes” section, references to “we,” “our” or “us” refer solely to JDS Uniphase Corporation and not to our subsidiaries.

The Notes are our senior unsecured debt and rank on parity with all of our other existing and future senior unsecured debt and prior to all of our subordinated debt. The Notes are convertible into Common Stock, as described more fully under “Conversion of Notes” below.

The Notes are limited to $475,000,000 aggregate principal amount. The Notes are issued only in denominations of $1,000 and multiples of $1,000. The Notes mature on November 15, 2010, unless earlier converted or repurchased. We will not pay interest on the Notes unless specified defaults under the registration rights agreement occur, nor does the principal amount of the Notes accrete. We may, without the consent of the holders, issue additional Notes under the indenture with the same terms and with the same CUSIP numbers as the Notes offered hereby in an unlimited aggregate principal amount, provided that such additional Notes must be part of the same issue as the Notes offered hereby for U.S. federal income tax purposes. We may also from time to time repurchase Notes in open market purchases or negotiated transactions without prior notice to holders.

Neither we nor any of our subsidiaries are subject to any financial covenants under the indenture. In addition, neither we nor any of our subsidiaries are restricted under the indenture from paying dividends, incurring debt, or issuing or repurchasing our securities.

The holders of the Notes are not afforded protection under the indenture in the event of a highly leveraged transaction or a change in control of us except to the extent described under “Repurchase at Option of the Holder Upon a Designated Event” below.

We maintain an office in the City of New York where the Notes may be presented for registration, transfer, exchange, repurchase or conversion. This office is initially an office or agency of the trustee.

Except under limited circumstances described below, the Notes are issued only in fully registered book-entry form and are represented by one or more global Notes. There is no service charge for registration of transfer or exchange Notes. We may, however, require holders to pay a sum to cover any tax or other governmental charge payable in connection with certain transfers or exchanges.

Holders of the Notes may convert any Notes or portions of the Notes, in whole or in part, into Common Stock prior to the close of business on the final maturity date of the Notes, subject to prior repurchase of the Notes, only under the following circumstances:


	•	upon satisfaction of a market price condition;

	•	upon satisfaction of a trading price condition;

The number of shares of Common Stock holders of Notes will receive upon conversion of their Notes will be determined by multiplying the number of $1,000 principal amount of Notes that are converted by the conversion rate on the date of conversion. A holder of a Note may convert the Notes in part so long as such part is $1,000 principal amount or an integral multiple of $1,000.

If we call Notes for redemption, a holder of Notes may convert the Notes only until the close of business on the business day immediately preceding the redemption date unless we fail to pay the redemption price. If a holder of Notes has submitted the Notes for repurchase upon a designated event, a holder of Notes may convert the Notes only if that holder withdraws the repurchase election made by that holder. Similarly, if a holder of Notes exercises the option to require us to repurchase those Notes other than upon a designated event, those Notes may be converted only if that holder withdraws its election to exercise the option in accordance with the terms of the indenture.

A holder of Notes may surrender its Notes for conversion into our Common Stock prior to close of business on the maturity date during any fiscal quarter commencing after December 31, 2003 if the closing sale price of our Common Stock exceeds 110% of the conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter. A holder of Notes may also surrender its Notes for conversion into our Common Stock if the closing sale price of our Common Stock exceeds 110% of the conversion price on any date after November 15, 2008 and at all times thereafter.

The closing sale price of our Common Stock on any date means the closing per share sale price (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on such date as reported in composite transactions for the principal United States securities exchange on which our Common Stock is traded or, if our Common Stock is not listed on a United States national or regional securities exchange, as reported by the Nasdaq System or by the National Quotation Bureau Incorporated.

The conversion price as of any day will equal $1,000 divided by the number of shares of Common Stock issuable upon a conversion of a Note.

A holder of Notes may surrender its Notes for conversion into our Common Stock prior to maturity during the five business day period after any five consecutive trading day period in which the “trading price” per $1,000 principal amount of Notes, as determined following a request by a holder of Notes in accordance with the procedures described below, for each day of that period was less than 98% of the product of the closing sale price of our Common Stock and the conversion rate (the “98% Trading Exception”); provided that, if on the date of any conversion pursuant to the 98% Trading Exception the closing sale price of our Common Stock is greater than the conversion price, then a holder of Notes will receive, in lieu of Common Stock based on the conversion rate, cash or Common Stock or a combination of cash and Common Stock, at our option, with a value equal to the principal amount of such Notes (a “Principal Value Conversion”). If a holder of Notes surrenders its Notes for conversion and it is a Principal Value Conversion, we will notify that holder by the second trading day following the date of conversion whether we will pay that holder all or a portion of the principal amount in cash, Common Stock or a combination of cash and Common Stock, and in what percentage. Any Common Stock delivered upon a Principal Value Conversion will be valued at the greater of the conversion price on the conversion date and the applicable stock price (as defined below) as of the conversion date. We will pay the holder of Notes any portion of the principal amount to be paid in cash and deliver Common Stock with respect to any portion of the principal amount to be paid in Common Stock, no later than the third business day following the determination of the applicable stock price. The “applicable stock price” means, in respect of a date of determination, the average of the closing sales price per share of

The “trading price” of the Notes on any date of determination means the average of the secondary market bid quotations obtained by the trustee for $10,000,000 principal amount of the Notes at approximately 3:30 p.m., New York City time, on such determination date from three independent nationally recognized securities dealers we select; provided that, if three such bids cannot reasonably be obtained by the trustee but two such bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the trustee, that one bid shall be used. If the trustee cannot reasonably obtain at least one bid for $10,000,000 principal amount of the Notes from a nationally recognized securities dealer, then the trading price per $1,000 principal amount of Notes will be deemed to be less than 98% of the product of the closing sale price of our Common Stock and the number of shares issuable upon conversion of $1,000 principal amount of the Notes.

In connection with any conversion upon satisfaction of the above trading price condition, the trustee shall have no obligation to determine the trading price of the Notes unless we have requested such determination; and we shall have no obligation to make such request unless the holder of the Notes provides us with reasonable evidence that the trading price per $1,000 principal amount of Notes would be less than 98% of the product of the closing sale price of our Common Stock and the number of shares of Common Stock issuable upon conversion of $1,000 principal amount of the Notes. At such time, we shall instruct the trustee to determine the trading price of the Notes beginning on the next trading day and on each successive trading day until the trading price per $1,000 principal amount of Notes is greater than or equal to 98% of the product of the closing sale price of our Common Stock and the number of shares issuable upon conversion of $1,000 principal amount of the Notes.

If we call the Notes for redemption, a holder of Notes may convert the Notes until the close of business on the business day immediately preceding the redemption date, after which time that holder’s right to convert will expire unless we default in the payment of the redemption price.


	•	distribute to all holders of our Common Stock certain rights entitling them to purchase, for a period expiring within 45 days, our Common Stock at less than the current market price (measured by averaging the closing prices for the 10 preceding trading days); or

	•	distribute to all holders of our Common Stock, assets, debt securities or certain rights to purchase our securities, which distribution has a per share value exceeding 5% of the closing sale price of our Common Stock on the day preceding the declaration date for such distribution;

we must notify each holder of Notes at least 20 days prior to the ex-dividend date for such distribution. Once we have given such notice, a holder of Notes may surrender its Notes for conversion at any time until the earlier of close of business on the business day prior to the ex-dividend date or any announcement by us that such distribution will not take place. No adjustment to a holder of Notes’ ability to convert will be made if that holder will otherwise participate in the distribution without conversion.

In addition, if we are a party to a consolidation, merger, binding share exchange or sale of all or substantially all of our assets, in each case pursuant to which our Common Stock would be converted into cash, securities or other property, a holder of Notes may surrender its Notes for conversion at any time from and after the date which is 15 days prior to the anticipated effective date of the transaction until and including the date which is 15 days after the actual date of such transaction. If we are a party to a consolidation, merger, binding share exchange or sale of all or substantially all of our assets, in each case pursuant to which our Common Stock is converted into cash, securities, or other property, then at the effective time of the transaction, a holder of Notes’ right to convert a Note into our Common Stock will be changed into a right to

convert it into the kind and amount of cash, securities and other property which holders of the Notes would have received if those holders had converted their Notes immediately prior to the transaction. If the transaction also constitutes a designated event, a holder of Notes can require us to repurchase all or a portion of their Notes as described under “Repurchase At Option of the Holder Upon a Designated Event.”

The initial conversion rate for the Notes is 202.4291 shares of Common Stock per $1,000 principal amount of Notes, subject to adjustment as described below. We will not issue fractional shares of Common Stock upon conversion of Notes. Instead, we will pay cash, in lieu of fractional shares, equal to the closing price of the Common Stock on the trading day prior to the conversion date. Consequently, our delivery to a holder of Notes of the fixed number of shares of our Common Stock into which the Notes are convertible, together with the cash payment, if any, in lieu of a fractional share of our Common Stock, will be deemed to satisfy our obligation to pay the principal amount of the Notes.


	•	complete and manually sign the conversion notice on the back of the Note or facsimile of the conversion notice and deliver this notice to the conversion agent;

	•	surrender the Note to the conversion agent;

	•	if required, furnish appropriate endorsements and transfer documents; and

	•	if required, pay all transfer or similar taxes.

The date a holder of Notes complies with these requirements is the conversion date under the indenture.


	(1) we issue Common Stock as a dividend or distribution on our Common Stock;

	(2) we issue to all holders of Common Stock certain rights or warrants to purchase our Common Stock at less than the sale price of our Common Stock on the business day immediately preceding the time of announcement of such issuance, which rights or warrants are exercisable for not more than 60 days;

	(3) we subdivide or combine our Common Stock;

	(4) we distribute to all holders of our Common Stock, shares of our capital stock, evidences of indebtedness or assets, including cash or securities but excluding:


	•	rights or warrants specified above; and

	•	dividends or distributions specified above.


	If we distribute capital stock of, or similar equity interests in, a subsidiary or other business unit of ours, the conversion rate will be adjusted based on the market value of the securities so distributed relative to the market value of our Common Stock, in each case based on the average closing sales prices of those securities for the 10 trading days commencing on and including the fifth trading day after the date on which “ex-dividend trading” commences for such distribution on The Nasdaq National Market or such other national or regional exchange or market on which the securities are then listed or quoted.

	If we distribute cash, then the conversion rate shall be increased so that it equals the rate determined by multiplying the conversion rate in effect on the record date with respect to the cash distribution by a fraction, the numerator of which shall be the current market price of a share of our Common Stock on the record date, and the denominator of which shall be the current market price of a share on the record date less the amount of the distribution per share.

	“Current market price” means the average of the daily closing sale prices per share of Common Stock for the ten consecutive trading days ending on the earlier of the date of determination and the day


	before the “ex” date with respect to the distribution requiring such computation. As used in the definition of current market price, the term “ex” date, when used with respect to any distribution, means the first date on which the Common Stock trades, regular way, on the relevant exchange or in the relevant market from which the closing sale price was obtained without the right to receive such distribution; and

	(5) we or one of our subsidiaries makes a payment in respect of a tender offer or exchange offer for our Common Stock to the extent that the cash and value of any other consideration included in the payment per share of our Common Stock exceeds the current market price per share of our Common Stock on the trading day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer.

We will not make any adjustment if holders of Notes may participate in the transactions described above.

To the extent that we have a rights plan in effect upon conversion of the Notes into Common Stock, a holder of Notes will receive, in addition to the Common Stock, the rights under the rights plan unless the rights have separated from the Common Stock at the time of conversion, in which case the conversion rate will be adjusted as if we distributed to all holders of our Common Stock, shares of our capital stock, evidences of indebtedness or assets as described above, subject to readjustment in the event of the expiration, termination or redemption of such rights.


	•	any reclassification of our Common Stock;

	•	a consolidation, merger or combination involving us; or

	•	a sale or conveyance to another person or entity of all or substantially all of our property and assets;

in which holders of our Common Stock would be entitled to receive stock, other securities, other property, assets or cash for their Common Stock, upon conversion of the Notes a holder thereof will be entitled to receive the same type of consideration which it would have been entitled to receive if it had converted the Notes into our Common Stock immediately prior to any of these events.

A holder of Notes may in certain situations be deemed to have received a distribution subject to United States federal income tax as a dividend in the event of any taxable distribution to holders of Common Stock or in certain other situations requiring a conversion rate adjustment. See “Material United States Federal Tax Considerations.”

We may, from time to time, increase the conversion rate for a period of at least 20 days if our board of directors has made a determination that this increase would be in our best interests. Any such determination by our board will be conclusive. In addition, we may increase the conversion rate if our board of directors deems it advisable to avoid or diminish any income tax to holders of Common Stock resulting from any stock or rights distribution. See “Material United States Federal Tax Considerations.”

We will not be required to make an adjustment in the conversion rate unless the adjustment would require a change of at least 1% in the conversion rate. However, we will carry forward any adjustments that are less than 1% of the conversion rate. Except as described above in this section, we will not adjust the conversion rate for any issuance of our Common Stock or convertible or exchangeable securities or rights to purchase our Common Stock or convertible or exchangeable securities.

Any such increases in the conversion rate by our board of directors shall not, without the approval of our stockholders, as required by Rule 4310 of the Marketplace Rules of The Nasdaq Stock Market, result in the sale or issuance of 20% or more of the shares of our Common Stock, or 20% or more of the voting power, outstanding on October 31, 2003.

Upon conversion, we may choose to deliver either cash in lieu of shares of our Common Stock, shares of our Common Stock or a combination of cash and shares of our Common Stock, as described below.

In the event that we receive from a holder of Notes a notice of conversion on or prior to the day that is five days prior to maturity (the final notice date), and we choose to satisfy our obligation upon conversion (the conversion obligation) by cash settlement or combined settlement, we will notify the holder electing to convert through the trustee of the dollar amount to be satisfied in cash at any time on or before the date that is two business days following receipt of the holder’s notice of conversion (cash settlement notice period). Share settlement will automatically apply if we do not notify a holder of Notes that we have chosen another settlement method.

If we timely elect cash settlement or combined settlement, the holder may retract the conversion notice at any time during the two business days after notice that we intend to satisfy all or part of the conversion price in cash (the conversion retraction period). No such retraction can be made (and a conversion notice shall be irrevocable) if we do not elect to deliver cash in lieu of shares of our Common Stock (other than cash in lieu of fractional shares). If the conversion notice has not been retracted, then cash settlement or combined settlement will occur on the business day following the final trading day of the five trading-day period beginning on the first trading day after the final day of the conversion retraction period (the cash settlement averaging period), provided however, that the conversion shall be deemed to have occurred as described above under Conversion Procedures. Because the market price of our Common Stock will be determined prior to the date of settlement, if we elect a combined settlement or settlement in shares of our Common Stock, Note holders bear the market risk that our Common Stock will decline in value between the date the market price is calculated and the settlement date. Settlement amounts will be computed as follows:


	•	If we elect to satisfy the conversion obligation in shares of Common Stock, we will deliver to the electing holder a number of shares of Common Stock equal to (1) the aggregate principal amount of Notes to be converted divided by 1,000, multiplied by (2) the conversion rate.

	•	If we elect to satisfy the conversion obligation in cash, we will deliver to the electing holder cash in an amount equal to the product of:


	•	a number equal to (1) the aggregate principal amount of Notes to be converted divided by 1,000, multiplied by (2) the conversion rate, and

	•	the average sale price of our shares of Common Stock during the cash settlement averaging period.


	•	If we elect to satisfy a portion of the conversion obligation in cash (the partial cash amount) and a portion in share of our Common Stock, we will deliver to the electing holder such partial cash amount plus a number of shares equal to:


	•	the cash settlement amount as set forth above minus such partial cash amount divided by

	•	the average sale price of our shares of Common Stock during the cash settlement averaging period.

If a holder exercises its right to require us to repurchase its Notes as described under “Repurchase at Option of the Holder Upon a Designated Event,” such holder may convert its Notes as provided above only if it withdraws its repurchase notice and converts its Notes prior to the close of business on the business day immediately preceding the applicable repurchase date.

In the event that we receive a notice of conversion from a holder of Notes after the final notice date, and we choose to satisfy the conversion obligation by cash settlement or combined settlement, we will notify that holder through the trustee and will tell that holder what percentage of such settlement will be in the form of cash and what percentage, if any, will be in the form of shares of our Common Stock. Share settlement will

apply automatically if we do not notify a holder of Notes that we have chosen another settlement method. Settlement amounts will be computed and settlement dates will be determined in the same manner as set forth above under “Conversion On or Prior to the Final Notice Date” except that the cash settlement averaging period shall be the five trading-day period beginning on the first trading day after the final day of the conversion retraction period. If we timely elect cash settlement or combined settlement, the holder may retract the conversion notice at any time during the conversion retraction period. No such retraction can be made (and a conversion notice shall be irrevocable) if we do not elect cash settlement or combined settlement (other than cash in lieu of fractional shares). If the conversion notice has not been retracted, settlement will occur on the business day following the final day of such cash settlement averaging period.

Beginning November 15, 2008, we may redeem the Notes in whole or in part for an amount in cash equal to 100% of the principal amount of the Notes, plus accrued and unpaid additional interest, if any.

We are required to give notice of redemption by mail to holders not more than 60 but not less than 30 days prior to the redemption date.

If less than all of the outstanding Notes are to be redeemed, the trustee will select the Notes to be redeemed in principal amounts of $1,000 or multiples of $1,000 by lot, pro rata or by another method the trustee considers fair and appropriate. If a portion of the Notes is selected by a holder for partial redemption and a holder of Notes converts a portion of its Notes, the converted portion will be deemed to be of the portion selected for redemption.

A holder of Notes has the right to require us to repurchase the Notes on November 15, 2008. We will be required to repurchase for cash any outstanding Note for which a holder of Notes delivers a written repurchase notice to the paying agent. This notice must be delivered during the period beginning at any time from the opening of business on the date that is 20 business days prior to the repurchase date until the close of business on the repurchase date. If a repurchase notice is given and withdrawn during that period, we will not be obligated to repurchase the Notes. Our repurchase obligation will be subject to certain additional conditions.

The repurchase price payable for a Note will be equal to 100% of the principal amount of the Notes. The paying agent initially will be the trustee.


	(1) if certificated Notes have been issued, the Note certificate numbers (or, if the Notes are not certificated, a repurchase notice made by a holder of Notes must comply with appropriate DTC procedures);

	(2) the portion of the principal amount of Notes to be repurchased, which must be in $1,000 multiples; and

	(3) that the Notes are to be repurchased by us pursuant to the applicable provisions of the Notes and the indenture

A holder of Notes may withdraw any written repurchase notice by delivering a written notice of withdrawal to the paying agent prior to the close of business of the repurchase date. The withdrawal notice must state:


	•	the principal amount of the withdrawn Notes;

	•	if certificated Notes have been issued, the certificate numbers of the withdrawn Notes (or, if the Notes are not certificated, the withdrawal notice must comply with appropriate DTC procedures); and

	•	the principal amount, if any, which remains subject to the repurchase notice.

We must give notice of an upcoming repurchase date to all Note holders not less than 20 business days prior to the repurchase date at their addresses shown in the register of the registrar. We will also give notice to beneficial owners as required by applicable law. This notice will state, among other things, the procedures that holders must follow to require us to repurchase their Notes.

Payment of the repurchase price for a Note for which a repurchase notice has been delivered and not withdrawn is conditioned upon book-entry transfer or delivery of the Note, together with necessary endorsements, to the paying agent at its office in the Borough of Manhattan, The City of New York, or any other office of the paying agent, at any time after delivery of the repurchase notice. Payment of the repurchase price for the Note will be made promptly following the later of the repurchase date and the time of book-entry transfer or delivery of the Note. If the paying agent holds money sufficient to pay the repurchase price of the Note on the business day following the repurchase date, then, on and after the date:


	•	the Note will cease to be outstanding; and

	•	all other rights of the holder will terminate, other than the right to receive the repurchase price upon delivery of the Note.

This will be the case whether or not book-entry transfer of the Note has been made or the Note has been delivered to the paying agent.

Our ability to repurchase Notes with cash may be limited by the terms of our then-existing borrowing agreements. Even though we become obligated to repurchase any outstanding Note on a repurchase date, we may not have sufficient funds to pay the repurchase price on that repurchase date.

We will comply with the provisions of Rule 13e-4 and any other rules under the Exchange Act that may be applicable. We will file a Schedule TO or any other schedule required in connection with any offer by us to repurchase the Notes.

If a designated event occurs at any time prior to the maturity of the Notes, a holder of Notes may require us to repurchase its Notes, in whole or in part, on a repurchase date that is 30 days after the date of our notice of the designated event. The Notes will be repurchased in integral multiples of $1,000 principal amount.

We will repurchase the Notes at a price equal to the principal amount plus accrued but unpaid additional interest, as described below, if any, through the repurchase date.

We may, at our option, elect to pay the repurchase price in cash, in shares of our Common Stock or, if applicable, the surviving corporation’s Common Stock or in any combination of cash and such Common Stock.

If we elect to pay the repurchase price, in whole or in part, in shares of our Common Stock or, if applicable, the surviving corporation’s Common Stock, the number of shares to be delivered in exchange for the portion of the repurchase price to be paid in our Common Stock will be equal to that portion of the repurchase price divided by the closing sale price of such Common Stock for the five trading days ending on the third business day prior to the applicable repurchase date (appropriately adjusted to take into account the occurrence of certain events that would result in an adjustment of the conversion rate with respect to such Common Stock). We will not, however, deliver fractional shares in repurchases using shares of such Common Stock as consideration. Note holders who would otherwise be entitled to receive fractional shares will instead receive cash in an amount equal to the market price of a share of such Common Stock multiplied by such fraction.

We will mail to all record holders a notice of a designated event within 30 days after it has occurred. We are also required to deliver to the trustee a copy of the designated event notice. This notice will state, among other things:


	•	whether we will pay the repurchase price of the Notes in cash, shares of our Common Stock or, if applicable, the surviving corporation’s Common Stock, or both cash and such Common Stock (in which case the relative percentages will be specified);

	•	if we elect to pay all or a portion of the repurchase price in shares of our Common Stock or, if applicable, the surviving corporation’s Common Stock, the method by which we are required to calculate market price of the Common Stock; and

	•	the procedures that holders must follow to require us to repurchase their Notes.

If a holder of Notes elects to require us to repurchase its Notes, that holder must deliver to us or our designated agent, on or before the 30th day after the date of our designated event notice, a repurchase notice and any Notes to be repurchased, duly endorsed for transfer. The repurchase notice must state:


	(1) if certificated Notes have been issued, the Note certificate numbers (or, if the Notes are not certificated, the repurchase notice must comply with appropriate DTC procedures);

	(2) the portion of the principal amount of Notes to be repurchased, which must be in $1,000 multiples; and

	(3) that the Notes are to be repurchased by us pursuant to the applicable provisions of the Notes and the indenture.

A holder of Notes may withdraw any written repurchase notice by delivering a written notice of withdrawal to the paying agent prior to the close of business on the repurchase date. The withdrawal notice must state:


	•	the principal amount of the withdrawn Notes;

	•	if certificated Notes have been issued, the certificate numbers of the withdrawn Notes (or, if the Notes are not certificated, the withdrawal notice must comply with appropriate DTC procedures); and

	•	the principal amount, if any, which remains subject to the repurchase notice.

We will promptly pay the repurchase price for Notes surrendered for repurchase following the repurchase date.

Because the market price of our Common Stock will be determined prior to the applicable repurchase date, Note holders bear the market risk that our Common Stock will decline in value between the date the market price is calculated and the repurchase date.

A “designated event” will be deemed to have occurred upon a fundamental change or a termination of trading.

A “fundamental change” is any transaction or event (whether by means of an exchange offer, liquidation, tender offer, consolidation, merger, combination, reclassification, recapitalization or otherwise) in connection with which all or substantially all of our Common Stock is exchanged for, converted into, acquired for or constitutes solely the right to receive, consideration which is not all or substantially all Common Stock or American Depositary Shares that:


	•	is listed on, or immediately after the transaction or event will be listed on, a United States national securities exchange, or

	•	is approved, or immediately after the transaction or event will be approved, for quotation on The Nasdaq National Market or any similar United States system of automated dissemination of quotations of securities prices.

A “termination of trading” will be deemed to have occurred if our Common Stock (or other Common Stock into which the Notes are then convertible) is neither listed for trading on a United States national securities exchange nor approved for trading on The Nasdaq National Market.

We will comply with any applicable provisions of Rule 13e-4 and any other tender offer rules under the Exchange Act in the event of a designated event.

These designated event repurchase rights could discourage a potential acquirer. However, this designated event repurchase feature is not the result of management’s knowledge of any specific effort to obtain control of us by means of a merger, tender offer or solicitation, or part of a plan by management to adopt a series of anti-takeover provisions. The term “designated event” is limited to specified transactions and may not include other events that might adversely affect our financial condition or business operations. Our obligation to offer to repurchase the Notes upon a designated event would not necessarily afford a holder of Notes protection in the event of a highly leveraged transaction, reorganization, merger or similar transaction involving us.

We may be unable to repurchase the Notes for cash if a designated event occurs. If a designated event were to occur, we may not have enough funds to pay the repurchase price for all tendered Notes. Any future credit agreements or other agreements relating to our indebtedness may contain provisions prohibiting repurchase of the Notes under certain circumstances, or expressly prohibit our repurchase of the Notes upon a designated event or may provide that a designated event constitutes an event of default under that agreement. If a designated event occurs at a time when we are prohibited from repurchasing Notes, we could seek the consent of our lenders to repurchase the Notes or attempt to refinance this debt. If we do not obtain consent, we would not be permitted to repurchase the Notes. Our failure to repurchase tendered Notes would constitute an event of default under the indenture, which might constitute a default under the terms of our other indebtedness.

The indenture provides that we may not consolidate with or merge with or into any other person or convey, transfer or lease its properties and assets substantially as an entirety to another person, unless among other items:


	•	we are the surviving person, or the resulting, surviving or transferee person, if other than us is organized and existing under the laws of the United States, any state thereof or the District of Columbia;

	•	the successor person assumes all of our obligations under the Notes and the indenture; and

	•	we or such successor person will not be in default under the indenture immediately after the transaction.

When such a person assumes our obligations in such circumstances, subject to certain exceptions, we shall be discharged from all obligations under the Notes and the indenture.

The Notes are our senior unsecured obligations and rank equally in right of payment with all of our other senior unsecured and unsubordinated indebtedness. The Notes rank senior to any of our subordinated indebtedness. At September 30, 2003, we had no material amount of outstanding debt for borrowed money.

Because the creditors of our subsidiaries generally would have a right to receive payment superior to our right to receive payment from the assets of our subsidiaries, the holders of the Notes are effectively subordinated to the creditors of our subsidiaries. If we were to liquidate or reorganize, a holder of Notes’ right to participate in any distribution of our subsidiaries’ assets is necessarily subject to the claims of the subsidiaries’ creditors. As of September 30, 2003, our subsidiaries had outstanding indebtedness of approximately $6.0 million, excluding intercompany indebtedness and trade payables.


	•	we fail to pay the principal amount of the Notes when due upon redemption, repurchase or otherwise on the Notes;

	•	we fail to pay additional interest, if any, on the Notes, when due and such failure continues for a period of 30 days;

	•	we fail to perform or observe any of the covenants in the indenture for 60 days after notice;

	•	any indebtedness for money borrowed by us or one of our significant subsidiaries (all or substantially all of the outstanding voting securities of which are owned, directly or indirectly, by us) in an outstanding principal amount in excess of $50 million is not paid at final maturity or upon acceleration and such indebtedness is not discharged, or such default in payment or acceleration is not cured or rescinded within the period specified in such instrument; or

	•	certain events involving our bankruptcy, insolvency or reorganization.

The trustee may withhold notice to the holders of the Notes of any default, except defaults in payment of principal, premium or additional interest, if any, on the Notes. However, the trustee must consider it to be in the interest of the holders of the Notes to withhold this notice.

If an event of default occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the outstanding Notes may declare the principal amount of the Notes and additional interest, if any, on the outstanding Notes to be immediately due and payable. In case of certain events of bankruptcy or insolvency involving us, principal amount plus additional interest, if any, on the Notes will automatically become due and payable. However, if we cure all defaults, except the nonpayment of the principal amount of the Notes plus additional interest, if any, that became due as a result of the acceleration, and meet certain other conditions, with certain exceptions, this declaration may be cancelled and the holders of a majority of the principal amount of outstanding Notes may waive these past defaults.

Payments of redemption price, principal, premium, if any, and additional interest on the Notes, if any, that are not made when due will accrue interest at the annual rate of 1% above the then-applicable interest rate from the required payment date.

Subject to the trustee’s duties in the case of an event of default, the trustee will not be obligated to exercise any of its rights or powers at the request of the holders, unless the holders have offered to the trustee reasonable indemnity. Subject to the indenture, applicable law and the trustee’s indemnification, the holders of a majority in aggregate principal amount of the outstanding Notes will have the right to direct the time, method and place of any proceedings for any remedy available to the trustee.

No holder of the Notes may pursue any remedy under the indenture, except in the case of a default in the payment of principal or additional interest (in respect of any default in payment under a Note on or after the due date) on the Notes, unless:


	•	the holder has given the trustee written notice of an event of default;

	•	the holders of at least 25% in principal amount of outstanding Notes make a written request, and offer reasonable indemnity, to the trustee to pursue the remedy;

	•	the trustee does not receive an inconsistent direction from the holders of a majority in principal amount of the Notes; and

	•	the trustee fails to comply with the request within 60 days after receipt.

The consent of the holders of a majority in principal amount of the outstanding Notes is required to modify or amend the indenture. However, a modification or amendment requires the consent of the holder of each outstanding Note if it would:


	•	extend the fixed maturity of any Note;

	•	reduce the principal amount of, or additional interest, if any, payable on, any Note;

	•	reduce any amount payable upon redemption or repurchase of any Note;

	•	after the occurrence of a designated event, modify the provisions with respect to the purchase right of the holders upon a designated event in a manner adverse to holders;

	•	impair the right of a holder to institute suit for payment on any Note;

	•	change the currency in which any Note is payable;

	•	impair the right of a holder to convert any Note;

	•	reduce the quorum or voting requirements under the indenture;

	•	change any obligation of ours to maintain an office or agency in the places and for the purposes specified in the indenture;

	•	change the ranking of the Notes in a manner adverse to the holder of the Notes;

	•	subject to specified exceptions, modify certain of the provisions of the indenture relating to modification or waiver of provisions of the indenture; or

	•	reduce the percentage of Notes required for consent to any modification of the indenture.

We are permitted to modify certain provisions of the indenture without the consent of the holders of the Notes.


	•	in fully registered form; and

	•	in denominations of $1,000 principal amount and integral multiples of $1,000.

The Notes are evidenced by one or more global Notes, deposited and registered in the name of Cede & Co., as DTC’s nominee. Except as set forth below, a global Note may be transferred, in whole or in part, only to another nominee of DTC or to a successor of DTC or its nominee.

Beneficial interests in a global Note may be held through organizations that are participants in DTC, or participants. Transfers between participants will be effected in the ordinary way in accordance with DTC rules and will be settled in clearing house funds. The laws of some states require that certain persons take physical delivery of securities in definitive form. As a result, the ability to transfer beneficial interests in the global Note to such persons may be limited.

Beneficial interests in a global Note held by DTC may be held only through participants, or certain banks, brokers, dealers, trust companies and other parties that clear through or maintain a custodial relationship with a participant, either directly or indirectly, and when indirectly they are called “indirect participants”. So long as Cede & Co., DTC’s nominee, is the registered owner of a global Note, Cede & Co. for all purposes will be


	•	not be entitled to have certificates registered in their names;

	•	not receive physical delivery of certificates in definitive registered form; and

	•	not be considered holders of the global Note.

We will pay interest, if any, and the repurchase price of a global Note to Cede & Co., as the registered owner of the global Note, by wire transfer of immediately available funds on the repurchase date, as the case may be. Neither we, the trustee nor any paying agent will be responsible or liable:


	•	for the records relating to, or payments made on account of, beneficial ownership interests in a global Note; or

	•	for maintaining, supervising or reviewing any records relating to the beneficial ownership interests.

Neither we, the trustee, registrar, paying agent nor conversion agent will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations. DTC has advised us that it will take any action permitted to be taken by a holder of Notes, including the presentation of Notes for conversion, only at the direction of one or more participants to whose account with DTC interests in the global Note are credited, and only in respect of the principal amount of the Notes represented by the global Note as to which the participant or participants has or have given such direction.


	•	a limited purpose trust company organized under the laws of the State of New York, and a member of the Federal Reserve System;

	•	a “clearing corporation” within the meaning of the Uniform Commercial Code; and

	•	a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act.

DTC was created to hold securities for its participants and to facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes to the accounts of its participants. Participants include securities brokers, dealers, banks, trust companies and clearing corporations and other organizations. Some of the participants or their representatives, together with other entities, own DTC. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly.

DTC has agreed to the foregoing procedures to facilitate transfers of interests in a global Note among participants. However, DTC is under no obligation to perform or continue to perform these procedures, and may discontinue these procedures at any time.


	•	DTC notifies us that it is unwilling or unable to continue as depositary or DTC ceases to be a clearing agency registered under the Securities and Exchange Act of 1934, as amended, and a successor depositary is not appointed by us within 90 days;

	•	an event of default shall have occurred and the maturity of the Notes shall have been accelerated in accordance with the terms of the Notes and any holder shall have requested in writing the issuance of definitive certificated Notes; or

	•	we have determined in our sole discretion that Notes shall no longer be represented by global Notes.

The Notes will be subject to transfer restrictions as described below under “Transfer Restrictions” and certificates for the Notes will bear a legend to this effect.

On October 31, 2003, we entered into a registration rights agreement with the initial purchasers. Pursuant to the registration rights agreement, we have filed with the SEC a shelf registration statement, of which this prospectus is a part.

We will use commercially reasonable efforts to keep that shelf registration statement effective until the earliest of:


	•	the date when all of the registrable securities have been sold pursuant to the shelf registration statement or Rule 144;

	•	the expiration of the holding period under Rule 144(k) under the Securities Act, or any successor provision; or

	•	the date when the Notes and the shares of Common Stock issuable upon conversion of the Notes have ceased to be outstanding (whether as result of repurchase and cancellation, conversion or otherwise).

When we use the term “registrable securities” in this section, we are referring to the Notes and the Common Stock issuable upon conversion of the Notes until the earliest of:


	•	the effective registration under the Securities Act and the resale of the securities in accordance with the registration statement;

	•	the expiration of the holding period under Rule 144(k) under the Securities Act; and

	•	the sale to the public pursuant to Rule 144 under the Securities Act, or any similar provision then in force, but not Rule 144A.

We may suspend the use of this prospectus under certain circumstances relating to pending corporate developments, public filings with the SEC and similar events. Any suspension period shall not:


	•	exceed 30 days in any three-month period; or

	•	an aggregate of 90 days for all periods in any 12-month period.

Notwithstanding the foregoing, we will be permitted to suspend the use of the prospectus for up to 60 days in any 3-month period under certain circumstances, relating to possible acquisitions, financings or other similar transactions.

We will be required to begin paying predetermined “additional interest” if the shelf registration statement is not filed within 90 days after the closing date or made effective within 180 days after the closing date, or if there is another registration default as described in the registration rights agreement.

Such interest, if any, will be paid semiannually in arrears, with the first semiannual payment due on the first May 15 or November 15 to occur after the date on which such additional amounts begin to accrue, and will accrue at a rate per year equal to:


	•	0.25% of the principal amount of a Note to and including the 90th day following such registration default; and

	•	0.50% of the principal amount of a Note from and after the 91st day following such registration default.

In no event will interest accrue at a rate per year exceeding 0.50%. If a holder has converted some or all of its Notes into shares of our Common Stock, and if those shares of Common Stock continue to be registrable securities, the holder will be entitled to receive equivalent amounts of additional interest based on the

A holder who elects to sell registrable securities pursuant to the registration statement of which this prospectus is a part will be required to:


	•	be named as a selling stockholder herein or in a related prospectus supplement;

	•	deliver a prospectus to purchasers; and

	•	be subject to the provisions of the registration rights agreement, including indemnification provisions.


	•	pay all expenses of the shelf registration statement;

	•	provide each registered holder copies of the prospectus;

	•	notify holders when the shelf registration statement has become effective; and

	•	take other reasonable actions as are required to permit unrestricted resales of the registrable securities in accordance with the terms and conditions of the registration rights agreement.

We may file amendments to the shelf registration statement, of which this prospectus is a part, as necessary to permit holders of Notes to deliver prospectus to purchasers of registrable securities, subject to our right to suspend the use of the prospectus. This summary of the registration rights agreement is not complete. This summary is subject to, and is qualified in its entirety by reference to, all the provisions of the registration rights agreement.

We will furnish to the holders or beneficial holders of the Notes or the underlying Common Stock and prospective purchasers, upon their request, the information, if any, required under Rule 144A(d) under the Securities Act until such time as such securities are no longer “restricted securities” within the meaning of Rule 144 under the Securities Act, assuming these securities have not been owned by an affiliate of ours.

We have appointed The Bank of New York, the trustee under the indenture, as paying agent, conversion agent, Note registrar and custodian for the Notes. The trustee or its affiliates may provide banking and other services to us in the ordinary course of their business.

The indenture contains certain limitations on the rights of the trustee, if it or any of its affiliates is then our creditor, to obtain payment of claims in certain cases or to realize on certain property received on any claim as security or otherwise. The trustee and its affiliates will be permitted to engage in other transactions with us. However, if the trustee or any affiliate continues to have any conflicting interest and a default occurs with respect to the Notes, the trustee must eliminate such conflict or resign.

Our total authorized shares of capital stock consists of (1) 6,000,000,000 shares of Common Stock $0.001 par value per share, and (2) 1,000,000 shares of preferred stock, $0.001 par value per share, 500,000 of which are designated as series B preferred stock, one of which is designated as special voting stock and the remainder of which is undesignated.

The holders of Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders. Holders of Common Stock do not have cumulative voting rights in the election of directors. Subject to preferences that may be granted to any then outstanding preferred stock, holders of Common Stock are entitled to receive ratably such dividends as may be declared by the Board of Directors out of funds legally available therefor as well as any distributions to the stockholders. In the event of our liquidation or dissolution, holders of Common Stock are entitled to share ratably in all our assets remaining after payment of liabilities and the liquidation preference of any then outstanding preferred stock. Holders of our Common Stock have no preemptive or other subscription or conversion rights. There are no redemption or sinking fund provisions applicable to our Common Stock.

Our Board of Directors has the authority, without further action by the stockholders, to issue up to 1,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, without any further vote or action by the stockholders. The issuance of preferred stock could adversely affect the voting power of holders of Common Stock and the likelihood that such holders will receive dividend payments and payments upon liquidation and could have the effect of delaying, deterring or preventing a change in control of us. We have no present plan to issue any additional shares of preferred stock.

Our subsidiary, JDS Uniphase Canada Ltd., has issued and outstanding 66,092,619 exchangeable shares. Each exchangeable share is exchangeable at any time into our Common Stock on a one-for-one basis, entitles a holder to dividend and other rights economically equivalent to those of the Common Stock, and through a voting trust, votes at meetings of our stockholders.

In the last several years, a number of states have adopted special laws designed to make some kinds of “unfriendly” corporate takeovers, or other transactions involving a corporation and one or more of its significant stockholders, more difficult. Under Section 203 of the Delaware General Corporation Law, some business combinations by Delaware corporations with interested stockholders are subject to a three-year moratorium unless specified conditions are met. Section 203 prohibits a Delaware corporation from engaging in a business combination with an interested stockholder for three years following the date that such person becomes an interested stockholder. With some exceptions, an interested stockholder is generally a person or group who or which owns 15% or more of the corporation’s outstanding voting stock, including any rights to acquire stock pursuant to an option, warrant, agreement, arrangement or understanding, or upon the exercise of conversion or exchange rights, and stock with respect to which the person has voting rights only, or is an affiliate or associate of the corporation and was the owner of 15% or more of such voting stock at any time within the previous three years.

Because our certificate of incorporation and bylaws do not contain a provision expressly electing not to be governed by Section 203 of the Delaware General Corporation Law, they are subject to Section 203.

Our certificate of incorporation indemnifies our directors and officers to the fullest extent permissible under Delaware law, as such law exists currently or as it may be amended in the future. Under Delaware law, a corporation may not indemnify directors’ or officers’ liability for the following:


	•	breaches of a director’s or officer’s duty of loyalty to the corporation or its stockholders;

	•	acts or omissions not in good faith or involving intentional misconduct or knowing violations of law;

	•	the payment of unlawful dividends or unlawful stock repurchases or redemptions; or

	•	transactions in which the director or officer received an improper personal benefit.

Our bylaws authorize it to provide insurance for its directors, officers or agents against any expense, liability or loss, whether or not we would have the power to indemnify such a person against such expense, liability or loss under Delaware law.

Our bylaws fix the authorized number of directors at eight, and our Board of Directors or stockholders may change such number by amending the bylaws.

A classified board is one to which some, but not all, of the directors are elected on a rotating basis each year. Delaware law permits, but does not require, a classified board of directors with staggered terms under which one-half or one-third of the directors are elected for terms of two or three years, respectively. Currently, we have a classified Board of Directors under which one-third of our directors are elected each year for a term of three years.

Our bylaws provide that the number of directors constituting a quorum shall be a majority of the number of authorized directors.

Under Delaware law, unless otherwise restricted by the certificate of incorporation or by the corporation’s bylaws, any director or the entire board of directors may be removed with or without cause by the holders of a majority of the shares then entitled to vote at an election of directors; provided, however, that so long as stockholders of the corporation are entitled to cumulative voting, no individual director may be removed without cause, unless the entire board is removed, if the number of votes cast against such removal would be sufficient to elect the director if then cumulatively voted at an election of the class of directors of which the director is a part. Whenever the holders of any class or series are entitled to elect one or more directors by the certificate of incorporation, the director or directors may be removed without cause only if there are sufficient votes by the holders of the outstanding shares of that class or series. A vacancy created by the removal of a director may be filled only by the approval of the stockholders.

Our bylaws provide that the Board of Directors or any director may be removed with or without cause at a special meeting of stockholders by a vote of stockholders holding a majority of the outstanding shares entitled to vote at an election of directors. Under Delaware law, no reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of the director’s term of office.

Under Delaware law, vacancies and newly created directorships may be filled by a majority of the directors then in office, even though less than a quorum, unless otherwise provided in the certificate of incorporation or bylaws and unless the certificate of incorporation directs that a particular class is to elect the

director, in which case any other directors elected by such class, or a sole remaining director, shall fill such vacancy. Our bylaws allow a majority of the directors then in office to fill any vacancy on the Board of Directors even if they make up less than a quorum.

Our bylaws provide that no matter proposed by our respective stockholders will be considered at an annual meeting or special stockholder meeting unless:


	•	it is specified in the notice of meeting;

	•	it is brought by or at the direction of the Board of Directors; or

	•	it is brought by a stockholder of the corporation who was a stockholder of record on the record date and has provided written notice of the matter to us in compliance with the time and content requirements in our bylaws, as applicable.

Our certificate of incorporation provides that stockholders can take action only at a duly called annual or special meeting of stockholders. Our stockholders are not permitted to take action by written consent in lieu of a meeting. In addition, our certificate of incorporation provides that, subject to the rights of the holders of any stock having a preference over the Common Stock as to dividends or liquidation, special meetings of the stockholders can be called only by our Board of Directors, our Chairman of the Board or our Chief Executive Officer. Stockholders are not permitted to call a special meeting or to require the Board of Directors to call a special meeting of stockholders.

Generally, under Delaware law, an amendment to a corporation’s certificate of incorporation requires the approval of the board of directors and the approval of holders of a majority of the outstanding stock entitled to vote on the amendment. The holders of the outstanding shares of a class are entitled to vote as a separate class on a proposed amendment that would increase or decrease the aggregate number of authorized shares of their class, increase or decrease the par value of the shares of their class, or alter or change the powers, preferences or special rights of the shares of their class in a way that affects them adversely. Our certificate of incorporation can be amended, altered or repealed or rescinded in any manner now or hereafter prescribed by Delaware law. Our bylaws may be altered, amended, repealed or rescinded by unanimous written consent of our Board of Directors or by the affirmative vote of a majority of the stockholders.

Currently each share of our outstanding Common Stock is associated with one right. Each right entitles stockholders to purchase 1/100,000 share of our Series B Preferred Stock at an exercise price of $21. The rights only become exercisable in certain limited circumstances following the tenth day after a person or group announces acquisition of or tender offers for 15% or more of our Common Stock. For a limited period of time following the announcement of any such acquisition or offer, the rights are redeemable by us at a price of $0.01 per right. If the rights are not redeemed, each right will then entitle the holder to purchase Common Stock having the value of twice the then-current exercise price. For a limited period of time after the exercisability of the rights, each right, at the discretion of our Board of Directors, may be exchanged for either 1/100,000 share of Series B Preferred Stock or one share of Common Stock per right. The rights expire on June 22, 2013.

Some provisions contained in the rights plan, and in the equivalent rights plan that our subsidiary, JDS Uniphase Canada Ltd., has adopted with respect to our exchangeable shares, may have the effect of discouraging a third party from making an acquisition proposal for us and may thereby inhibit a change in control. For example, such provisions may deter tender offers for shares of Common Stock or exchangeable shares, which offers may be attractive to stockholders, or deter purchases of large blocks of Common Stock or exchangeable shares, thereby limiting the opportunity for stockholders to receive a premium for their shares of Common Stock or exchangeable shares over the then-prevailing market prices.

The transfer agent and registrar for our Common Stock is American Stock Transfer and Trust Company, New York, New York.

This section describes the material U.S. federal tax consequences relating to the purchase, ownership, and disposition of the Notes and of Common Stock into which the Notes may be converted. This description does not provide a complete analysis of all potential tax consequences. The information provided below is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations, Internal Revenue Service (“IRS”) published rulings and court decisions, all as currently in effect. These authorities may change, possibly on a retroactive basis, or the IRS might interpret the existing authorities differently. In either case, the tax consequences of purchasing, owning or disposing of Notes or Common Stock could differ from those described below. We do not intend to obtain a ruling from the IRS with respect to the tax consequences of acquiring or holding the Notes or Common Stock.

This description is general in nature and does not discuss all aspects of U.S. federal income taxation that may be relevant to a particular investor in light of the investor’s particular circumstances, or to certain types of investors subject to special treatment under U.S. federal income tax laws (such as financial institutions, real estate investment trusts, regulated investment companies, grantor trusts, insurance companies, pension funds, tax-exempt organizations, expatriates, brokers, dealers or traders in securities or foreign currencies, traders in securities that elect to apply a mark-to-market method of accounting, persons holding Notes or Common Stock as part of a position in a “straddle” or as part of a “hedging,” “conversion” or “integrated” transaction for U.S. federal income tax purposes, persons deemed to sell Notes or Common Stock under the constructive sale provisions of the Code, persons who hold Notes or Common Stock through a partnership or other pass through entity, persons subject to the alternative minimum tax provisions of the Code, U.S. Holders that have a “functional currency” other than the U.S. dollar, or Non-U.S. Holders, except to the extent described below). This description generally applies to investors who will hold the Notes and Common Stock as “capital assets” within the meaning of Section 1221 of the Code. This description does not consider the effect of any foreign, state, local or other tax laws that may be applicable to particular investors.

Investors considering the purchase of Notes should consult their own tax advisors regarding the application of the U.S. federal income tax laws to their particular situations and the consequences of U.S. federal estate or gift tax laws, foreign, state, or local tax laws, and tax treaties.

As used herein, the term “U.S. Holder” means a beneficial holder of a Note or Common Stock that is (i) a citizen or resident of the U.S.; (ii) a corporation organized in or under the laws of the U.S. or any political subdivision thereof; (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (iv) a trust, if such trust validly elects to be treated as a U.S. person for U.S. federal income tax purposes, or if (a) a court within the U.S. can exercise primary supervision over its administration and (b) one or more U.S. persons (as defined in Section 7701(a)(30) of the Code) have the authority to control all of the substantial decisions of such trust. Persons other than U.S. Holders (“Non-U.S. Holders”), as defined below, are subject to special U.S. federal income tax considerations, some of which are discussed below.

If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the Notes or Common Stock into which the Notes may be converted, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. A holder of the Notes or Common Stock into which the Notes may be converted that is a partnership and partners in such partnership should consult their individual tax advisors about the U.S. federal income tax consequences of holding and disposing of the Notes and the Common Stock into which the Notes may be converted.

As the issue price of the Notes for federal income tax purposes at original issue was less than their principal amount by an amount exceeding a de minimis threshold, the Notes are considered to have been issued with “original issue discount” (“OID”).

If a holder owns a Note with OID , the holder must include the OID in income as it accrues, which may be before the holder receives cash attributable to such income. The holder must include OID in income using the yield to maturity on the Note as defined in Treasury Regulations (the “OID Regulations”), which is computed based on a constant annual rate of interest and compounding at the end of each accrual period. The company has determined that the yield to maturity of the Notes is 0.29%, compounded semiannually. The OID Regulations permit a holder to use accrual periods of any length from one day to one year to compute accruals of OID, provided that the yield to maturity is adjusted to reflect the yield period selected, and further provided that each scheduled payment of principal or interest occurs either on the first or the last day of an accrual period. Under these rules a holder must include in income increasingly greater amounts of OID in successive accrual periods, unless payments that are part of the stated redemption price at maturity of a Note are made before its final maturity.

If the amount or timing of any payments on a Note is contingent, the Note could be subject to special rules that apply to contingent debt instruments. These rules generally require a U.S. Holder to accrue interest income at a rate higher than the stated interest rate on the Note and to treat as ordinary income (rather than capital gain) any gain recognized on a sale, exchange or retirement of the Note before the resolution of the contingencies. U.S. Holders would be entitled to receive additional interest if the Notes are not registered with the SEC within prescribed time periods. We do not believe that, because of these potential additional payments or otherwise, the Notes should be treated as contingent debt instruments. Therefore, for purposes of filing tax or information returns with the IRS, we will not treat the Notes as contingent debt instruments. Unless otherwise noted, this discussion assumes that the Notes are not subject to the contingent debt instrument rules.

A U.S. Holder generally will recognize capital gain or loss if the U.S. Holder disposes of a Note in a conversion solely for cash, a sale, a repurchase or a redemption. The U.S. Holder’s gain or loss will equal the difference between the amount realized by the U.S. Holder and the U.S. Holder’s adjusted tax basis in the Note. The U.S. Holder’s adjusted tax basis in the Note will generally equal the amount the U.S. Holder paid for the Note, increased by the amount of any OID or market discount includible in the U.S. Holder’s gross income with respect to the Note and decreased by the amount of premium previously taken into account. Such gain or loss will generally be (i) capital gain except to the extent of accrued market discount not previously included in income and (ii) long-term if the holder’s holding period in respect of such Note is more than one year. Long-term capital gain of non-corporate taxpayers is taxed at lower rates than those applicable to ordinary income. The deductibility of capital loss is subject to certain limitations.

If we deliver solely Common Stock upon a U.S. Holder’s conversion of a Note, such U.S. Holder generally will not recognize any income, gain or loss. The U.S. Holder will recognize gain, however, to the extent that the U.S. Holder receives cash in lieu of a fractional share. The U.S. Holder’s aggregate basis in the Common Stock (including any fractional share for which cash is paid) will equal his adjusted basis in the Note, and the U.S. Holder’s holding period for the stock will include the period during which he held the Note.

If we deliver a combination of Common Stock and cash upon a U.S. Holder’s conversion of a Note, assuming that the Notes are securities for U.S. federal income tax purposes, a holder will generally not recognize loss, but will generally recognize gain, if any, on a Note so converted in an amount equal to the lesser of the amount of (i) gain realized (i.e., the excess, if any, of the fair market value of the Common Stock received upon conversion plus cash received over the adjusted tax basis in Note tendered therefor) or (ii) cash received. Such gain will generally be (i) capital gain except to the extent of accrued market discount not

previously included in income and (ii) long-term if the holder’s holding period in respect of such Note is more than one year. The U.S. Holder’s aggregate basis in the Common Stock (including any fractional share for which cash is paid) will equal his adjusted basis in the Note, and the U.S. Holder’s holding period for the stock will include the period during which he held the Note.

The acquisition and sale of a Note may be subject to the market discount provisions of the Code. Subject to a de minimis exception, the market discount on a Note generally will equal the amount, if any, by which the issue price plus accrued OID of the Note immediately after its acquisition (other than at original issue) exceeds the U.S. Holder’s adjusted tax basis in the Note. A Note may also have market discount upon original issue if the holder has a cost basis in the Note that is less than the “issue price,” as defined above. If applicable, these provisions generally require a U.S. Holder who acquires a Note at a market discount to treat as ordinary income any gain recognized on the disposition of that Note to the extent of the accrued market discount on that Note at the time of disposition, unless the U.S. Holder elects to include market discount in income currently as it accrues with a corresponding increase in the U.S. Holder’s adjusted tax basis in the Note. If a U.S. Holder disposes of a Note with market discount in certain otherwise non-taxable transactions, the U.S. Holder must include accrued market discount as ordinary income as if the U.S. Holder had sold the Note at its then fair market value. A U.S. Holder will not recognize income for any accrued market discount attributable to a Note converted into Common Stock. Upon disposition of such Common Stock received, however, any gain will be treated as ordinary income to the extent of such accrued market discount not previously included in income.

The election to include market discount in income currently, once made, applies to all market discount obligations acquired on or after the first taxable year to which the election applies and may not be revoked without the consent of the IRS. In general, market discount will be treated as accruing on a straight-line basis over the remaining term of the Note at the time of acquisition, or, at the election of the U.S. Holder, under a constant yield method. A U.S. Holder who acquires a Note at a market discount and who does not elect to include accrued market discount in income currently may be required to defer the deduction of a portion of the interest on any indebtedness incurred or maintained to purchase or carry the Note until the Note is disposed of in a taxable transaction. If a Note with accrued market discount is converted into Common Stock pursuant to the conversion feature, the amount of such accrued market discount not previously included in income generally will be taxable as ordinary income on disposition of the Common Stock.

A U.S. Holder who purchases a Note at a premium over its stated principal amount will not include OID in income. A U.S. Holder who purchases a Note at a premium may elect to amortize that premium with a corresponding decrease in the adjusted tax basis from the purchase date to the Note’s maturity date under a constant-yield method that reflects semiannual compounding based on the Note’s payment period, but subject to special limitations if the Note is subject to optional redemption at a premium. Amortizable premium will not include any premium attributable to a Note’s conversion feature. The premium attributable to the conversion feature generally is the excess, if any, of the Note’s purchase price over what the Note’s fair market value would be if there were no conversion feature. Amortized premium is treated as an offset to interest income on a Note and not as a separate deduction. Under Treasury Regulations, the amount of amortizable bond premium that a U.S. Holder may deduct in any accrual period is limited to the amount by which the holder’s total interest inclusions on the Note in prior accrual periods exceed the total amount treated by the holder as a bond premium deduction in prior accrual periods. If any of the excess bond premium is not deductible, that amount is carried forward to the next accrual period. The election to amortize premium on a constant yield method, once made, applies to all debt obligations held or subsequently acquired by the electing U.S. Holder on or after the first day of the first taxable year to which the election applies and may not be revoked without the consent of the IRS. If an election to amortize premium is not made, a U.S. Holder must include all amounts of interest without reduction for such premium, and may receive a tax benefit from the

premium only in computing such U.S. Holder’s gain or loss on disposition of the Note. Investors should consult their own advisors concerning the advisability of electing to amortize premium.

A U.S. Holder who acquires a Note issued with more than a de minimis amount of OID for an amount less than or equal to the principal amount of the Note, but in excess of the adjusted issue price of such Note will generally be deemed to have acquired the Notes with acquisition premium. Under the acquisition premium rules, a holder is generally required to reduce daily portions of OID on a Note by the amount of acquisition premium allocable to such day.

As discussed in “ — Dividend Policy,” we have not paid cash dividends on our Common Stock and we do not anticipate paying cash dividends in the foreseeable future. However, if, after a U.S. Holder converts a Note into Common Stock, we make a distribution in respect of that stock, the distribution will be treated as a dividend, taxable to the U.S. Holder as ordinary income, to the extent it is paid from our current or accumulated earnings and profits. If the distribution exceeds our current and accumulated profits, the excess will be treated first as a nontaxable return of capital reducing the U.S. Holder’s tax basis in the U.S. Holder’s stock. Any remaining excess will be treated as capital gain. We are required to provide shareholders who receive dividends with an information return on Form 1099-DIV that states the extent to which the dividend is paid from our current or accumulated earnings and profits and is thus taxable. If the U.S. Holder is a U.S. corporation, it generally would be able to claim a deduction equal to a portion of any dividends received.

The terms of the Notes allow for changes in the conversion price of the Notes in certain circumstances. A change in conversion price that allows U.S. Holders of Notes to receive more shares of Common Stock on conversion may increase those Noteholders’ proportionate interests in our earnings and profits or assets. In that case, those Noteholders would be treated as though they received a dividend in the form of our stock. Such a constructive stock dividend could be taxable to those Noteholders, although they would not actually receive any cash or other property. A taxable constructive stock dividend would result to U.S. Holders of Notes, for example, if the conversion price were adjusted to compensate Noteholders for distributions of cash or property to our shareholders. Not all changes in conversion price that allow Noteholders to receive more stock on conversion, however, increase the Noteholders’ proportionate interests in us. For instance, a change in conversion price could simply prevent the dilution of the Noteholders’ interests upon a stock split or other change in capital structure. Changes of this type, if made under a bona fide, reasonable adjustment formula, are not treated as constructive stock dividends. On the other hand, if an event occurs that dilutes the Noteholders’ interests and the conversion price is not adjusted, the resulting increase in the proportionate interests of our shareholders could be treated as a taxable stock dividend to the shareholders. Any taxable constructive stock dividends resulting from a change to, or failure to change, the conversion price would be treated in the same manner as dividends paid in cash or other property. Such dividends would result in ordinary income to the recipient, to the extent of our current or accumulated earnings and profits, with any excess treated as a nontaxable return of capital or as capital gain.

A U.S. Holder will generally recognize capital gain or loss on a sale or exchange of Common Stock except to the extent of accrued market discount not previously included in income. See “Market Discount” above. The U.S. Holder’s gain or loss will equal the difference between the amount realized by the U.S. Holder and the U.S. Holder’s adjusted tax basis in the stock. The amount realized by the U.S. Holder will include the amount of any cash and the fair market value of any other property received for the stock. Capital gain or loss recognized by a U.S. Holder on a sale or exchange of stock will be long-term if the holder held the stock for more than one year. Long-term capital gain of non-corporate taxpayers is taxed at lower rates than those applicable to ordinary income. The deductibility of capital loss is subject to certain limitations.

The Code and the Treasury Regulations require those who make specified payments to report the payments to the IRS. Among the specified payments are interest, OID, dividends, and proceeds paid by brokers to their customers. This reporting regime is reinforced by “backup withholding” rules. These rules require the payors to withhold tax from payments subject to information reporting if the recipient fails to cooperate with the reporting regime by failing to provide the recipient’s taxpayer identification number to the payor or by furnishing an incorrect identification number, or if the recipient has been notified by the IRS that the recipient has failed to report interest or dividends on the recipient’s returns. The information reporting and backup withholding rules do not apply to payments to corporations, tax-exempt organizations and certain foreign persons, provided their exemptions from backup withholding are properly established.

Payments of interest, OID or dividends to individual U.S. Holders of Notes or Common Stock generally will be subject to information reporting, and generally will be subject to backup withholding unless the U.S. Holder provides us or our paying agent with a correct taxpayer identification number.

Payments made to U.S. Holders by a broker upon a sale of Notes or Common Stock generally will be subject to information reporting and backup withholding. If, however, the sale is made through a foreign office of a U.S. broker, the sale will be subject to information reporting but not backup withholding. If the sale is made through a foreign office of a foreign broker, the sale generally will not be subject to either information reporting or backup withholding. This exception may not apply, however, if the foreign broker is owned or controlled by U.S. persons, or is engaged in a U.S. trade or business.

Any amounts withheld from a payment to a U.S. Holder of Notes or Common Stock under the backup withholding rules can be credited against any U.S. federal income tax liability of the U.S. Holder.

This subsection describes the U.S. federal tax consequences to a Non-U.S. Holder.

(a) Payments of principal, interest (including additional interest), or OID on the Notes by us or our paying agent to a beneficial owner of a Note that is a Non-U.S. Holder will not be subject to U.S. federal income tax or U.S. withholding tax, provided that, in the case of interest (including additional interest) and OID on the Notes, (i) such Non-U.S. Holder does not own, actually or constructively, 10% or more of the total combined voting power of all classes of our stock entitled to vote within the meaning of Section 871(h)(3) of the Code, (ii) such Non-U.S. Holder is not a “controlled foreign corporation” within the meaning of Section 957(a) of the Code with respect to which we are a “related person” within the meaning of Section 864(d)(4) of the Code, and (iii) the certification requirements under Section 871(h) or Section 881(c) of the Code and Treasury Regulations thereunder (discussed below) are satisfied;

(b) A Non-U.S. Holder of a Note or Common Stock will not be subject to U.S. federal income tax on gains realized on the sale, exchange or other disposition of such Note or Common Stock unless (i) such Non-U.S. Holder is an individual who holds the Common Stock as a capital asset and is present in the U.S. for 183 days or more in the taxable year of sale, exchange or other disposition, and certain conditions are met, (ii) such gain is effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the U.S. and, if certain U.S. income tax treaties apply, is attributable to a U.S. permanent establishment maintained by the Non-U.S. Holder, (iii) the Non-U.S. Holder is subject to Code provisions applicable to certain U.S. expatriates, or (iv) in the case of Common Stock held by a person who holds more than 5% of such stock, we are or have been, at any time within the shorter of the five-year period preceding such sale or other disposition or the period such Non-U.S. Holder held the Common Stock, a U.S. real property holding corporation (USRPHC) within the meaning of Section 897(c)(2) of the Code for U.S. federal income tax purposes. We do not believe that we are currently a USRPHC or that we will become one in the future; and

(c) Interest (including additional interest) and OID on the Notes not excluded from U.S. federal income tax or U.S. withholding tax as described in (a) above and dividends on Common Stock after conversion generally will be subject to U.S. withholding tax at a 30% rate, except where an applicable U.S. income tax treaty provides for the reduction or elimination of such withholding tax.

Even if a Non-U.S. Holder is eligible for a lower treaty rate, we and other payors will generally be required to withhold at a 30% rate (rather than the lower treaty rate) on dividend payments (including additional interest and constructive dividends) on Common Stock to the Non-U.S. Holder, unless the Non-U.S. Holder has furnished to us or another payor:


	•	a valid IRS Form W-8BEN or an acceptable substitute form upon which the Non-U.S. Holder certifies, under penalties of perjury, its status as a non-U.S. person and its entitlement to the lower treaty rate with respect to such payments, or

	•	in the case of payments made outside the U.S. to an offshore account (generally, an account maintained by such Non-U.S. Holder at an office or branch of a bank or other financial institution at any location outside the United States), other documentary evidence establishing the Non-U.S. Holder’s entitlement to the lower treaty rate in accordance with U.S. Treasury regulations.

If a Non-U.S. Holder is eligible for a reduced rate of U.S. withholding tax under a tax treaty, such Non-U.S. Holder may obtain a refund of any amounts withheld in excess of that rate by filing a refund claim with the IRS.

To satisfy the certification requirements referred to in (a) (iii) above, Sections 871(h) and 881(c) of the Code and Treasury Regulations thereunder require that either (i) the beneficial owner of a Note certify, under penalties of perjury, to us or our paying agent, as the case may be, that such owner is a Non-U.S. Holder, or (ii) a securities clearing organization, bank or other financial institution that holds customer securities in the ordinary course of its trade or business (each a “Financial Institution”) and holds the Note on behalf of the beneficial owner thereof certify, under penalties of perjury, to us or our paying agent, as the case may be, that such certificate has been received from the beneficial owner and furnish the payor with a copy thereof. Such requirement will be fulfilled if the beneficial owner of a Note certifies on IRS Form W-8 BEN, under penalties of perjury, that it is a Non-U.S. Holder or any Financial Institution holding the Note on behalf of the beneficial owner files a statement with the withholding agent to the effect that it has received such a statement from the beneficial owner (and furnishes the withholding agent with a copy thereof).

If a Non-U.S. Holder of a Note or Common Stock is engaged in a trade or business in the U.S. and if interest (including additional interest) or OID on the Note, dividends on the Common Stock, or gain realized on the sale, exchange or other disposition of the Note or Common Stock is effectively connected with the conduct of such trade or business (and, if certain tax treaties apply, is attributable to a U.S. permanent establishment maintained by the Non-U.S. Holder in the U.S.), the Non-U.S. Holder, although exempt from U.S. withholding tax (provided that the certification requirements discussed in the next sentence are met), will generally be subject to U.S. federal income tax on such interest (including additional interest), OID, dividends or gain on a net income basis in the same manner as if it were a U.S. Holder. In lieu of the certificate described above, such a Non-U.S. Holder will be required, under currently effective Treasury Regulations, to provide us with a properly executed IRS Form W-8ECI in order to claim an exemption from U.S. tax withholding. In addition, if such Non-U.S. Holder is a foreign corporation, it may be subject to a branch profits tax equal to 30% (or such lower rate provided by an applicable U.S. income tax treaty) of a portion of its effectively connected earnings and profits for the taxable year.

A Note held by an individual who at the time of death is not a citizen or resident of the U.S. (as specially defined for U.S. federal estate tax purposes) will not be subject to U.S. federal estate tax if the individual did not actually or constructively own 10% or more of the total combined voting power of all classes of our stock and, at the time of the individual’s death, payments with respect to such Note would not have been effectively connected with the conduct by such individual of a trade or business in the U.S. Common Stock held by an

individual who at the time of death is not a citizen or resident of the U.S. (as specially defined for U.S. federal estate tax purposes) will be included in such individual’s estate for U.S. federal estate tax purposes, unless an applicable U.S. estate tax treaty otherwise applies.

Non-U.S. Holders should consult with their tax advisors regarding U.S. federal, state, local and foreign tax consequences with respect to the Notes and Common Stock.

In the case of payments of interest (including additional interest) or OID on a Note to a Non-U.S. Holder, backup withholding and information reporting will not apply to payments with respect to which either requisite certification has been received or an exemption has otherwise been established (provided that neither we nor a paying agent has actual knowledge or reason to know that the holder is a U.S. Holder or that the conditions of any other exemption are not in fact satisfied). However, we and other payors are required to report payments of interest (including additional interest) or OID on such Non-U.S. Holders’ Notes on IRS Form 1042-S even if the payments are not otherwise subject to information reporting requirements.

Dividends on the Common Stock paid to Non-U.S. Holders that are subject to U.S. withholding tax, as described above, generally will be exempt from U.S. backup withholding tax but will be subject to certain information reporting requirements.

Payments of the proceeds of the sale of a Note or Common Stock to or through a foreign office of a U.S. broker or a foreign office of a broker that is a U.S. related person (either a “controlled foreign corporation” or a foreign person, 50% or more of whose gross income from all sources for the three-year period ending with the close of its taxable year preceding the payment was effectively connected with the conduct of a trade or business within the U.S.), or a foreign partnership, if at any time during its tax year, one or more of its partners are U.S. persons who in the aggregate hold more than 50% of the income or capital interests in the partnership, or such foreign partnership is engaged in a U.S. trade or business, are subject to certain information reporting requirements, unless the payee is an exempt recipient or such broker has evidence in its records that the payee is a Non-U.S. Holder and no actual knowledge or reason to know that such evidence is false and certain other conditions are met. Such payments are not currently subject to backup withholding.

Payments of the proceeds of a sale of a Note or Common Stock to or through the U.S. office of a broker will be subject to information reporting and backup withholding unless the payee certifies under penalties of perjury as to his or her status as a Non-U.S. Holder and satisfies certain other qualifications (and no agent of the broker who is responsible for receiving or reviewing such statement has actual knowledge or reason to know that it is incorrect) and provides his or her name and address or the payee otherwise establishes an exemption.

If an investor fails to establish an exemption and the broker does not possess adequate documentation of the investor’s status as a non-U.S. person, the payments may be subject to information reporting and backup withholding. However, backup withholding will not apply with respect to payments made to an offshore account maintained by an investor unless the broker has actual knowledge that the investor is a U.S. person.

Payments of the proceeds of the sale of a Note or Common Stock to or through a foreign office of a broker will not be subject to information reporting or backup withholding. However, a sale effected at a foreign office of a broker will be subject to information reporting and backup withholding if the proceeds are transferred to an account maintained by the investor in the United States, the payment of proceeds or the confirmation of the sale is mailed to the investor at a U.S. address, or the sale has some other specified connection with the U.S. as provided in U.S. Treasury regulations, unless the broker does not have actual knowledge or reason to know that the investor is a U.S. person and the documentation requirements described above (relating to a sale of Notes effected at a U.S. office of a broker) are met or the investor otherwise establishes an exemption.

Any amounts withheld under the backup withholding rules from a payment to a holder of a Note or Common Stock will be allowed as a refund or credit against such holder’s U.S. federal income tax liability provided that the required information is furnished to the IRS in a timely manner.

A holder of a Note or Common Stock should consult with its tax advisor regarding the application of the backup withholding rules to its particular situation, the availability of an exemption therefrom and the procedure for obtaining such an exemption, if available.

The validity of the Notes and the shares of Common Stock issuable upon conversion of the Notes will be passed upon for us by Morrison & Foerster LLP, San Francisco, California.

The consolidated financial statements of JDS Uniphase Corporation appearing in JDS Uniphase Corporation’s Annual Report (Form 10-K) for the year ended June 30, 2003, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

The following table sets forth the expenses, other than underwriting discounts and commissions, in connection with the offering of the securities being registered. All the amounts shown are estimates except for the registration fee.

Reference is made to Section 102(b)(7) of the Delaware General Corporation Law (the “DGCL”), which permits a corporation in its certificate of incorporation or an amendment thereto to eliminate or limit the personal liability of a director for violations of the director’s fiduciary duty, except (i) for any breach of the director’s fiduciary duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL (providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions), or (iv) for any transaction from which the director derived an improper personal benefit. The Registrant’s Amended and Restated Certificate of Incorporation contains provisions permitted by Section 102(b)(7) of the DGCL.

Reference is made to Section 145 of the DGCL which provides that a corporation may indemnify any persons, including directors and officers, who are, or are threatened to be made, parties to any threatened, pending or completed legal action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person is or was a director, officer, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such director, officer, employee or agent acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s best interests and, with respect to any criminal actions or proceedings, had no reasonable cause to believe that his or her conduct was unlawful. A Delaware corporation may indemnify directors and/or officers in an action or suit by or in the right of the corporation under the same conditions, except that no indemnification is permitted without judicial approval if the director or officer is adjudged to be liable to the corporation. Where a director or officer is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him or her against the expenses which such director or officer actually and reasonably incurred.

The Registrant’s Amended and Restated Certificate of Incorporation provides indemnification of directors and officers of the Registrant to the fullest extent permitted by the DGCL. The Registrant has obtained liability insurance for each director and officer of the Registrant for certain losses arising from claims or charges made against them while acting in their capacities as directors or officers of the Registrant.

The above discussion of the Registrant’s Amended and Restated Certificate of Incorporation and Sections 102(b)(7) and 145 of the DGCL is not intended to be exhaustive and is qualified in its entirety by such Amended and Restated Certificate of Incorporation and statutes.


	(1)	Incorporated by reference to Exhibit 3.1 of the Company’s Annual Report on Form 10-K/ A filed February 13, 2001.

	(2)	Incorporated by reference to Exhibit 3(i)(d) of the Company’s Annual Report on Form 10-K filed September 28, 1998.

	(3)	Incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-3 filed July 14, 1999.

	(4)	Incorporated by reference to the Company’s definitive Proxy Statement on Schedule 14A filed June 2, 1999.

	(5)	Incorporated by reference to Exhibit 4.2 of the Company’s Annual Report on Form 10-K filed September 1, 1999.

	(6)	Incorporated by reference to Exhibit 4.3 of the Company’s Annual Report on Form 10-K filed September 1, 1999.


	(7)	Incorporated by reference to Exhibit 4.5 of the Company’s Annual Report on Form 10-K filed September 1, 1999.

	(8)	Incorporated by reference to Exhibit 1 of the Company’s Registration Statement on Form 8-A12G/ A filed February 18, 2003.

	(9)	Incorporated by reference to Exhibit 3.5 of the Company’s Annual Report on Form 10-K filed September 24, 2003.


(10)	Incorporated by reference to Exhibit 4.6 of the Company’s Annual Report on Form 10-K filed September 24, 2003.

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:


	(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

	(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

	(iii) To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement;

provided, however, that subparagraphs (i) and (ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in the periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, that are incorporated by reference in this registration statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

The undersigned Registrant hereby further undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual reports pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described under Item 15 above, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a

claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of San Jose, state of California, on the 14th day of November 2003.


	By:	/s/ KEVIN J. KENNEDY



	Kevin J. Kennedy, Ph.D.
	Chief Executive Officer
	(Principal Executive Officer)

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Kevin J. Kennedy, Ph.D. and Ronald C. Foster, and each of them, as his true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this filing on Form S-3, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1933, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


	(1)	Incorporated by reference to Exhibit 3.1 of the Company’s Annual Report on Form 10-K/ A filed February 13, 2001.

	(2)	Incorporated by reference to Exhibit 3(i)(d) of the Company’s Annual Report on Form 10-K filed September 28, 1998.

	(3)	Incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-3 filed July 14, 1999.

	(4)	Incorporated by reference to the Company’s definitive Proxy Statement on Schedule 14A filed June 2, 1999.

	(5)	Incorporated by reference to Exhibit 4.2 of the Company’s Annual Report on Form 10-K filed September 1, 1999.

	(6)	Incorporated by reference to Exhibit 4.3 of the Company’s Annual Report on Form 10-K filed September 1, 1999.

	(7)	Incorporated by reference to Exhibit 4.5 of the Company’s Annual Report on Form 10-K filed September 1, 1999.

	(8)	Incorporated by reference to Exhibit 1 of the Company’s Registration Statement on Form 8-A12G/A filed February 18, 2003.


(9)	Incorporated by reference to Exhibit 3.5 of the Company’s Annual Report on Form 10-K filed September 24, 2003.


(10)	Incorporated by reference to Exhibit 4.6 of the Company’s Annual Report on Form 10-K filed September 24, 2003.

EX-4.7 3 f94556orexv4w7.txt EXHIBIT 4.7 EXHIBIT 4.7 JDS UNIPHASE CORPORATION as Issuer AND THE BANK OF NEW YORK as Trustee ---------- INDENTURE Dated as of October 31, 2003 ---------- Zero Coupon Senior Convertible Notes due 2010 - -------------------------------------------------------------------------------- TABLE OF CONTENTS

i Section 3.06. Mutilated, Destroyed, Lost And Stolen Securities.........................................................29 Section 3.07. Persons Deemed Owners....................................................................................30 Section 3.08. Book-entry Provisions For Global Securities..............................................................30 Section 3.09. Cancellation.............................................................................................31 Section 3.10. Special Transfer Provision...............................................................................32 Section 3.11. CUSIP Numbers............................................................................................33 Section 3.12. Ranking..................................................................................................33 ARTICLE 4 SATISFACTION AND DISCHARGE......................................................................................34 Section 4.01. Satisfaction And Discharge Of Indenture..................................................................34 Section 4.02. Application Of Trust Money...............................................................................35 ARTICLE 5 REMEDIES........................................................................................................35 Section 5.01. Events Of Default........................................................................................35 Section 5.02. Acceleration Of Maturity; Rescission And Annulment.......................................................36 Section 5.03. Other Remedies...........................................................................................37 Section 5.04. Collection Of Indebtedness And Suits For Enforcement By Trustee..........................................37 Section 5.05. Trustee May File Proofs Of Claim.........................................................................38 Section 5.06. Application Of Money Collected...........................................................................38 Section 5.07. Limitation On Suits......................................................................................38 Section 5.08. Unconditional Right Of Holders To Receive Payment........................................................39 Section 5.09. Restoration Of Rights And Remedies.......................................................................39 Section 5.10. Rights And Remedies Cumulative...........................................................................39 Section 5.11. Delay Or Omission Not Waiver.............................................................................39 Section 5.12. Control By Holders.......................................................................................40 Section 5.13. Waiver Of Past Defaults..................................................................................40 Section 5.14. Undertaking For Costs....................................................................................40 Section 5.15. Waiver Of Stay Or Extension Laws.........................................................................40 ARTICLE 6 THE TRUSTEE.....................................................................................................41 Section 6.01. Certain Duties And Responsibilities......................................................................41 Section 6.02. Notice Of Defaults.......................................................................................41 Section 6.03. Certain Rights Of Trustee................................................................................41 Section 6.04. Not Responsible For Recitals.............................................................................42 Section 6.05. May Hold Securities......................................................................................43

ii Section 6.06. Money Held In Trust......................................................................................43 Section 6.07. Compensation And Reimbursement...........................................................................43 Section 6.08. Disqualification; Conflicting Interests..................................................................44 Section 6.09. Corporate Trustee Required; Eligibility..................................................................44 Section 6.10. Resignation And Removal; Appointment Of Successor........................................................44 Section 6.11. Acceptance Of Appointment By Successor...................................................................45 Section 6.12. Merger, Conversion, Consolidation Or Succession To Business..............................................46 Section 6.13. Preferential Collection Of Claims Against................................................................46 ARTICLE 7 HOLDERS' LISTS AND REPORTS BY TRUSTEE AND THE COMPANY...........................................................46 Section 7.01. Company To Furnish Trustee Names And Addresses Of Holders................................................46 Section 7.02. Preservation Of Information; Communications To Holders...................................................46 Section 7.03. Reports By Trustee.......................................................................................47 Section 7.04. Reports By Company.......................................................................................47 ARTICLE 8 CONSOLIDATION, MERGER, CONVEY, TRANSFER OR LEASE................................................................48 Section 8.01. Company May Consolidate, Etc., Only On Certain Terms.....................................................48 Section 8.02. Successor Substituted....................................................................................48 ARTICLE 9 SUPPLEMENTAL INDENTURES.........................................................................................48 Section 9.01. Supplemental Indentures Without Consent Of Holders.......................................................48 Section 9.02. Supplemental Indentures With Consent Of Holders..........................................................49 Section 9.04. Execution Of Supplemental Indentures.....................................................................51 Section 9.05. Effect Of Supplemental Indentures........................................................................51 Section 9.06. Conformity With Trust Indenture Act......................................................................51 Section 9.07. Reference In Securities To Supplemental Indentures.......................................................51 ARTICLE 10 COVENANTS......................................................................................................51 Section 10.01. Payments................................................................................................51 Section 10.02. Maintenance Of Office Or Agency.........................................................................52 Section 10.03. Money For Security Payments To Be Held In Trust.........................................................52 Section 10.04. Statement By Officers As To Default.....................................................................53 Section 10.05. Existence...............................................................................................53 Section 10.06. Reports And Delivery Of Certain Information.............................................................54 Section 10.07. Resale Of Certain Securities............................................................................54

iii Section 10.08. Book-Entry System.......................................................................................54 Section 10.09. Additional Interest Amounts Under The Registration Rights Agreement.....................................54 Section 10.10. Information For IRS Filings.............................................................................55 Section 10.11. Further Instruments And Acts............................................................................55 ARTICLE 11 REDEMPTION.....................................................................................................55 Section 11.01. The Company's Right To Redeem; Notice To Trustee........................................................55 Section 11.02. Selection Of Securities To Be Redeemed..................................................................55 Section 11.03. Notice of Redemption....................................................................................56 Section 11.04. Effect Of Notice Of Redemption..........................................................................57 Section 11.05. Deposit Of Redemption Price.............................................................................57 Section 11.06. Securities Redeemed In Part.............................................................................57 Section 11.07. Repayment To The Company................................................................................57 Section 11.08. Other Repurchases.......................................................................................57 ARTICLE 12 REPURCHASE OF SECURITIES AT THE OPTION OF HOLDERS ON A SPECIFIC DATE...........................................58 Section 12.01. Repurchase Of Securities At The Option Of Holders On A Specific Date....................................58 Section 12.02. Effect of Repurchase Notice.............................................................................60 Section 12.03. Deposit Of Repurchase Price.............................................................................60 Section 12.04. Securities Repurchased In Part..........................................................................61 Section 12.05. Covenant To Comply With Securities Laws Upon Repurchase Of Securities...................................61 Section 12.06. Repayment to the Company................................................................................61 ARTICLE 13 REPURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER UPON DESIGNATED EVENT.....................................62 Section 13.01. Repurchase Of Securities At Option Of The Holder Upon Designated Event..................................62 Section 13.02. The Company's Right To Elect Manner Of Payment Of Designated Event Repurchase Price.....................65 Section 13.03. Effect Of Designated Event Repurchase Notice............................................................67 Section 13.04. Deposit Of Designated Event Repurchase Price............................................................68 Section 13.05. Securities Repurchased In Part..........................................................................69 Section 13.06. Covenant To Comply With Securities Laws Upon Repurchase Of Securities...................................69

iv Section 13.07. Repayment To The Company................................................................................69 ARTICLE 14 PAYMENTS OF ADDITIONAL INTEREST AMOUNTS ON THE SECURITIES......................................................70 Section 14.01. Payment Of Additional Interest Amounts; Interest Rights Preserved.......................................70 ARTICLE 15 CONVERSION.....................................................................................................70 Section 15.01. Right To Convert........................................................................................70 Section 15.02. Conversion Procedure....................................................................................72 Section 15.03. Cash Payments In Lieu Of Fractional Shares..............................................................74 Section 15.04. Adjustment Of Conversion Price..........................................................................74 Section 15.05. Effect Of Reclassification, Consolidation, Merger Or Sale...............................................81 Section 15.06. Taxes On Shares Issued..................................................................................82 Section 15.07. Reservation Of Shares; Shares To Be Fully Paid; Compliance With Governmental Requirements; Listing Of Common Stock...................................................................82 Section 15.08. Responsibility Of Trustee...............................................................................83 Section 15.09. Notice To Holders Prior To Certain Actions..............................................................83 Section 15.10. Cash Conversion Option..................................................................................84 Section 15.11. Company Determination Final.............................................................................86

v INDENTURE, dated as of October 31, 2003, between JDS UNIPHASE CORPORATION, a corporation duly organized and existing under the laws of the State of Delaware, as Issuer (herein called the "COMPANY"), having its principal office at 1768 Automation Parkway, San Jose, California 95131, and THE BANK OF NEW YORK, a New York banking corporation, as Trustee (herein called the "TRUSTEE"). RECITALS OF THE COMPANY The Company has duly authorized the creation of an issue of Zero Coupon Senior Convertible Notes due 2010 (each a "SECURITY" and collectively, the "SECURITIES") of substantially the tenor and amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture. All things necessary to make the Securities, when executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the valid obligations of the Company, and to make this Indenture a valid agreement of the Company, in accordance with the terms of the Securities and the Indenture, have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchases of the Securities by the Holders thereof, it is mutually agreed, for the benefit of the Company and the equal and proportionate benefit of all Holders of the Securities, as follows: ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 1.01 Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (i) the terms defined in this Article 1 have the meanings assigned to them in this Article and include the plural as well as the singular; (ii) all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (iii) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP; and (iv) the words "herein," "hereof' and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. "ACT," when used with respect to any Holder, has the meaning specified in Section 1.04. "ADDITIONAL INTEREST AMOUNT" shall have the meaning given to such term in the Registration Rights Agreement. 1 "ADDITIONAL INTEREST PAYMENT DATE" means each May 15 and November 15 of each year, as provided in the Registration Rights Agreement. "AFFILIATE" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "AGENT MEMBERS" has the meaning specified in Section 3.08. "APPLICABLE STOCK PRICE" means, in respect of any date of determination, the average of the Closing Sale Prices over the five Trading Day period starting the third Trading Day following such date of determination. "BID SOLICITATION AGENT" means the Person appointed by the Company to act as set forth in the definition of the term "Trading Price" in this Section 1.01. The Trustee shall initially be the Bid Solicitation Agent. "BOARD OF DIRECTORS" means, with respect to any Person, either the board of directors of such Person or any duly authorized committee of that board. "BOARD RESOLUTION" means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "BUSINESS DAY" means any day other than a Saturday, a Sunday or a day on which banking institutions in The City of New York are authorized or obligated by law, or executive order or governmental decree to be closed. "CAPITAL STOCK" means any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, including, without limitation, with respect to partnerships, partnership interests (whether general or limited) and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership. "CASH SETTLEMENT AVERAGING PERIOD" has the meaning specified in Section 15.10. "CASH SETTLEMENT NOTICE PERIOD" has the meaning specified in Section 15.10. "CLOSING SALE PRICE" of a share of Common Stock on any date means the closing per share sale price (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on such date as reported in composite transactions for the principal United States securities exchange on which the Common Stock is traded or, if the Common Stock is not listed on a United States national or regional securities exchange, as reported by the Nasdaq System or by the National Quotation Bureau Incorporated. 2 "COMMISSION" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "COMMON STOCK" means the shares of Common Stock, par value $0.001 per share, of the Company as it exists on the date of this Indenture or any other shares of Capital Stock of the Company into which the Common Stock shall be reclassified or changed or, in the event of a merger, consolidation or other similar transaction involving the Company that is otherwise permitted hereunder in which the Company is not the surviving corporation, the common stock, common equity interests, ordinary shares or depositary shares or other certificates representing common equity interests of such surviving corporation or its direct or indirect parent corporation. "COMPANY" means the Person named as the "Company" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "COMPANY REQUEST" or "COMPANY ORDER" means a written request or order signed in the name of the Company by its Chairman of the Board, its Vice Chairman of the Board, its Chief Executive Officer, its Chief Operating Officer or any Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee. "CONTINUING DIRECTOR" means, at any date, a member of the Company's Board of Directors (i) who was a member of such board on October 1, 2003 or (ii) who was nominated or elected by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Company's Board of Directors was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or such lesser number comprising a majority of a nominating committee comprised of independent directors if authority for such nominations or elections has been delegated to a nominating committee whose authority and composition have been approved by at least a majority of the directors who were Continuing Directors at the time such committee was formed. (Under this definition, if the Board of Directors of the Company as of the date of this Indenture were to approve a new director or directors and then resign, no Change in Control would occur even though the current Board of Directors would thereafter cease to be in office). "CONVERSION AGENT" means the Trustee or such other office or agency designated by the Company where Securities may be presented for conversion. "CONVERSION DATE" has the meaning specified in Section 15.02. "CONVERSION NOTICE" has the meaning specified in Section 15.02. "CONVERSION OBLIGATION" has the meaning specified in Section 15.10. 3 "CONVERSION PRICE" has the meaning specified in the Securities. "CONVERSION RATE" means, at any time, $1,000 divided by the Conversion Price in effect at such time, rounded to three decimal places (rounded up if the fourth decimal place thereof is 5 or more and otherwise rounded down). "CONVERSION RETRACTION PERIOD" has the meaning specified in Section 15.10. "CORPORATE TRUST OFFICE" means the principal office of the Trustee at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of this Indenture is located at 101 Barclay Street, Floor 8 West, New York, New York 10286, Attention: Corporate Trust Administration (JDS Uniphase Corporation -- Zero Coupon Senior Convertible Notes due 2010) or at any other time at such other address as the Trustee may designate from time to time by notice to the Company. "CORPORATION" means a corporation, association, company, joint-stock company or business trust. "CURRENT MARKET PRICE" has the meaning specified in Section 15.04. "DEFAULT" means any event that is or with the passage of time or the giving of notice or both would become an Event of Default. "DEPOSITARY" means The Depository Trust Company until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Depositary" shall mean such successor Depositary. "DESIGNATED EVENT" has the meaning specified in Section 13.01. "DESIGNATED EVENT COMPANY NOTICE" has the meaning specified in Section 13.01. "DESIGNATED EVENT REPURCHASE DATE" has the meaning specified in Section 13.01. "DESIGNATED EVENT REPURCHASE NOTICE" has the meaning specified in Section 13.01. "DESIGNATED EVENT REPURCHASE PRICE" has the meaning specified in Section 13.01. "DISTRIBUTED SECURITIES" has the meaning specified in Section 15.04. "EVENT OF DEFAULT" has the meaning specified in Section 5.01. "EXCHANGE ACT" means the United States Securities Exchange Act of 1934, as amended. "EX-DIVIDEND DATE" means, with respect to any issuance or distribution on shares of Common Stock, the first Trading Day on which the shares of Common Stock trade regular way on the principal securities market on which the shares of Common Stock are then traded without the right to receive such issuance or distribution. "EXPIRATION TIME" has the meaning specified in Section 15.04. 4 "FAIR MARKET VALUE" has the meaning specified in Section 15.04. "FINAL MATURITY DATE" means November 15, 2010. "FINAL NOTICE DATE" has the meaning specified in Section 15.10. "FUNDAMENTAL CHANGE" has the meaning specified in Section 13.01. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, in each case, as in effect in the United States from time to time. "GLOBAL SECURITY" means a Security in global form registered in the Security Register in the name of a Depositary or a nominee thereof. "HOLDER" or "SECURITYHOLDER" means a Person in whose name a Security is registered in the Security Register. "INDENTURE" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively. "INITIAL PURCHASERS" means Morgan Stanley & Co. Incorporated, Goldman Sachs & Co. and CIBC World Markets Corp. "ISSUE DATE" means the date the Securities are originally issued as set forth on the face of the Security under this Indenture. "MARKET PRICE" means the average of the Closing Sale Price of one share of Common Stock for the 5-Trading Day period immediately preceding and including the third Business Day immediately preceding the applicable Designated Event Repurchase Date (or if the third Business Day immediately preceding the relevant date of determination is not a Trading Day, then on the last Trading Day immediately preceding such third Business Day). "MATURITY", when used with respect to any Security, means the date on which the Principal Amount, Redemption Price, Repurchase Price or Designated Event Repurchase Price of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity, Redemption Date, Repurchase Date or Designated Event Repurchase Date, or by declaration of acceleration or otherwise. "98% CONVERSION DATE" has the meaning specified in Section 15.02. "98% MARKET CONDITION" has the meaning specified in Section 15.01. 5 "NON-ELECTING SHARE" has the meaning specified in Section 15.05. "NON-U.S. PERSON" means a Person who is not a U.S. person, as defined in Regulation S. "NOTICE OF DEFAULT" has the meaning specified in Section 5.01. "OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the Board, the President or any Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee. One of the officers signing an Officers' Certificate given pursuant to Section 10.04 shall be the principal executive, financial or accounting officer of the Company. "OPINION OF COUNSEL" means a written opinion of counsel, who may be external or in-house counsel for the Company, and who shall be reasonably acceptable to the Trustee. "OUTSTANDING," when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (ii) Securities, or portions thereof, for whose payment in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; and (iii) Securities which have been paid or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a protected purchaser in whose hands such Securities are valid obligations of the Company; provided, however, that, in determining whether the Holders of the requisite Principal Amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor. "PARTIAL CASH AMOUNT" has the meaning specified in Section 15.10. "PAYING AGENT" means any Person authorized by the Company to pay the principal of, and Additional Interest Amounts, Redemption Price, Repurchase Price or Designated Event Repurchase Price of any Securities on behalf of the Company. The Trustee shall initially be the Paying Agent. 6 "PERSON" means any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof. "PHYSICAL SECURITIES" means permanent certificated Securities in registered form issued in denomination of $1,000 Principal Amount and integral multiples thereof. "PRINCIPAL AMOUNT" of a Security means the Principal Amount as set forth on the face of the Security. "PRINCIPAL VALUE CONVERSION" has the meaning specified in Section 15.02. "PURCHASE AGREEMENT" means the Purchase Agreement, dated as of October 27, 2003, entered into by the Company and the Initial Purchasers in connection with the sale of the Securities. "PURCHASED SHARES" has the meaning specified in Section 15.04. "QUALIFIED INSTITUTIONAL BUYER" or "QIB" shall have the meaning specified in Rule 144A. "RECORD DATE" has the meaning specified in Section 15.04. "REDEMPTION DATE" means, when used with respect to any Security to be redeemed, the date fixed for redemption pursuant to this Indenture. "REDEMPTION PRICE" has the meaning set forth in Section 11.01. "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement, dated as of October 31, 2003, between the Company and the Initial Purchasers, for the benefit of itself and the Holders, as the same may be amended or modified from time to time in accordance with the terms thereof. "REGULAR RECORD DATE" for the Additional Interest Amounts payable on any Additional Interest Payment Date means May 1 or November 1 (whether or not a Business Day) next preceding such Additional Interest Payment Date. "REGULATION S" means Regulation S under the Securities Act. "REPURCHASE DATE" has the meaning set forth in Section 12.01. "REPURCHASE NOTICE" has the meaning set forth in Section 12.01. "REPURCHASE PRICE" has the meaning set forth in Section 12.01. 7 "RESALE REGISTRATION STATEMENT" means a registration statement under the Securities Act registering the Securities for resale pursuant to the terms of the Registration Rights Agreement. "RESPONSIBLE OFFICER" means any officer of the Trustee within the Corporate Trust Office of the Trustee with direct responsibility for the administration of this Indenture and also, with respect to a particular matter, any other officer of the Trustee to whom such matter is referred because of such officer's knowledge and familiarity with the particular subject. "RESTRICTED SECURITY" or "RESTRICTED SECURITIES" has the meaning specified in Section 2.05. "RULE 144" means Rule 144 under the Securities Act (including any successor rule thereto), as the same may be amended from time to time. "RULE 144A" means Rule 144A under the Securities Act (including any successor rule thereto), as the same may be amended from time to time. "RULE 144A INFORMATION" has the meaning specified in Section 2.03. "SECURITIES ACT" means the United States Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder. "SECURITY" or "SECURITIES" has the meaning specified in the first paragraph of the Recitals of the Company. "SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective meanings specified in Section 3.05. "SPIN-OFF" has the meaning specified in Section 15.04. "STATED MATURITY" when used with respect to any Security, means the date specified in such Security as the fixed date on which an amount equal to the Principal Amount of such Security is due and payable. "STOCK TRANSFER AGENT" means Chemical Trust Company of California or such other Person designated by the Company as the transfer agent for the Common Stock. "SUBSIDIARY" means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, "VOTING STOCK" means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. "SURVIVING ENTITY" has the meaning specified in Section 8.01. "TERMINATION OF TRADING" has the meaning specified in Section 13.01. 8 "TRADING DAY" means (x) if the applicable security is quoted on the Nasdaq National Market System or Nasdaq SmallCap Market, a day on which trades may be made on thereon or (y) if the applicable security is listed or admitted for trading on the New York Stock Exchange or another national security exchange, a day on which the New York Stock Exchange or such other national security exchange is open for business or (z) if the applicable security is not so listed, admitted for trading or quoted, any day other than a Saturday or Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close. "TRADING PRICE" means, as of any date of determination, the average of the secondary market bid quotations per $1,000 Principal Amount of Securities obtained by the Bid Solicitation Agent for $10,000,000 Principal Amount of Securities at approximately 3:30 p.m., New York City time, on such date of determination from three independent, nationally-recognized securities dealers selected by the Company (none of which may include any of the Initial Purchasers) and provided to the Bid Solicitation Agent in writing; provided, that if at least three such bids cannot be reasonably obtained by the Bid Solicitation Agent, but two bids are obtained, then the Trading Price, as of such determination date, shall mean the average of such two bids, and if only one bid can be reasonably obtained by the Bid Solicitation Agent, then the Trading Price, as of such determination date, shall mean such one bid; provided, however, that if the Bid Solicitation Agent, through the exercise of reasonable efforts, is unable to obtain at least one bid from an independent, nationally-recognized securities dealer, then the Trading Price of a Security for such date of determination shall be deemed to be less than 98% of the product of the Closing Sale Price of the Common Stock on such date of determination and the Conversion Rate in effect as of such date of determination. "TRIGGER EVENT" has the meaning specified in Section 15.04. "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "TRUST INDENTURE ACT" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "TRUSTEE" means the Person named as the "TRUSTEE" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "TRUSTEE" shall mean such successor Trustee. "VICE PRESIDENT" when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title "VICE PRESIDENT". Section 1.02. Compliance Certificates And Opinions. Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers' Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirement set forth in this Indenture. 9 Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (a) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of each such individual, such individual has made such examination or investigation as is necessary to enable such individual to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. Section 1.03. Form Of Documents Delivered To Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. Section 1.04. Acts Of Holders; Record Dates. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "ACT" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent 10 shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee reasonably deems sufficient. (c) The Company may, in the circumstances permitted by the Trust Indenture Act, fix any day as the record date for the purpose of determining the Holders entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action, or to vote on any action, authorized or permitted to be given or taken by Holders. If not set by the Company prior to the first solicitation of a Holder made by any Person in respect of any such action, or, in the case of any such vote, prior to such vote, the record date for any such action or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 7.01) prior to such first solicitation or vote, as the case may be. With regard to any record date, only the Holders on such date (or their duly designated proxies) shall be entitled to give or take, or vote on, the relevant action. (d) The ownership of Securities shall be proved by the Security Register. (e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. Section 1.05. Notices, Etc., to Trustee and Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with: (i) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office; or (ii) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company, Attention: General Counsel. Section 1.06. Notice To Holders; Waiver. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such 11 event, at such Holder's address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. Section 1.07. Conflict With Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be. Section 1.08. Effect Of Headings And Table Of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 1.09. Successors And Assigns. All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. Section 1.10. Separability Clause. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 1.11. Benefits Of Indenture. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their respective successors hereunder and the Holders of Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 1.12. Governing Law. This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York. Section 1.13. Legal Holiday. If any specified date (including a date for giving notice) is a Legal Holiday, the action shall be taken on the next succeeding day that is not a Legal Holiday, and, if the action to be taken on such date is a payment in respect of the Securities, no interest, if any, shall accrue for the intervening period. 12 Section 1.14. No Recourse Against Others. No director, officer, employee, shareholder or Affiliate, as such, of the Company from time to time shall have any liability for any obligations of the Company under the Securities or this Indenture. Each Holder by accepting a Security waives and releases all such liability. This waiver and release are part of the consideration for the Securities. Each of such directors, officers, employers, shareholders and Affiliates of the Company is a third party beneficiary of this Section 1.14. ARTICLE 2 SECURITY FORMS Section 2.01. Forms Generally. The Securities and the Trustee's certificates of authentication shall be in substantially the forms set forth in this Article, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary therefor, the Internal Revenue Code of 1986, as amended, and regulations thereunder, or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution thereof. The Securities shall be initially issued in the form of permanent Global Securities in registered form in substantially the form set forth in this Article. The aggregate Principal Amount of the Global Securities may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary, as hereinafter provided. Section 2.02. Form Of Face Of Security. [INCLUDE IF SECURITY IS A RESTRICTED SECURITY -- THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A OR REGULATION S THEREUNDER. THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES 13 IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTIONS WITH REGARD TO THE SECURITIES EXCEPT AS PERMITTED UNDER THE SECURITIES ACT. THIS SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT. THE HOLDER OF THIS SECURITY IS SUBJECT TO, AND ENTITLED TO THE BENEFITS OF, A REGISTRATION RIGHTS AGREEMENT, DATED AS OF OCTOBER 31, 2003, ENTERED INTO BY THE COMPANY FOR THE BENEFIT OF CERTAIN HOLDERS OF SECURITIES FROM TIME TO TIME.] [INCLUDE IF SECURITY IS A GLOBAL SECURITY -- THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC"), A NEW YORK CORPORATION, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 14 THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT. HOLDERS NEEDING INFORMATION ABOUT THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT OR THE YIELD TO MATURITY MAY CONTACT JDS UNIPHASE CORPORATION INVESTOR RELATIONS OR THE COMPANY'S CONTROLLER, AT 1768 AUTOMATION PARKWAY, SAN JOSE, CA 95131, USA, TELEPHONE NUMBER 408-546-5000.] [INCLUDE IF THE SECURITY IS NOT A GLOBAL SECURITY -- THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS (A) A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) A NON-U.S. PERSON; (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE NOTE EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THIS NOTE OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE EXCEPT (A) TO THE COMPANY, OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(E) ABOVE), IT WILL FURNISH TO THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE 15 MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS NOTE UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF TRANSFEREE IS A PURCHASER WHO IS NOT A UNITED STATES PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS SUCH TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS NOTE PURSUANT TO CLAUSE 2(E) ABOVE OR UPON ANY TRANSFER OF THIS NOTE UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTION.] JDS UNIPHASE CORPORATION ZERO COUPON SENIOR CONVERTIBLE NOTES DUE 2010 No. [ ] CUSIP NO. [ ] U.S. $[ ] JDS Uniphase Corporation, a corporation duly organized and validly existing under the laws of the State of Delaware (herein called the "COMPANY", which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to __________, or registered assigns, the principal sum of [ ] United States Dollars ($ ) [INCLUDE IF SECURITY IS A GLOBAL SECURITY -- (which amount may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary, in accordance with the rules and procedures of the Depositary)] on November 15, 2010. Payment of the principal of this Security shall be made by check mailed to the address of the Holder of this Security specified in the register of Securities, or, at the option of the Holder of this Security, at the Corporate Trust Office, in such lawful money of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts. The Issue Date of this Security is [______, ____]. Reference is made to the further provisions of this Security set forth on the reverse hereof, including, without limitation, provisions giving the Holder of this Security the right to convert this Security into Common Stock of the Company in certain circumstances and the right to require the Company to repurchase this Security upon certain events on the terms and subject to the limitations referred to on the reverse hereof and as more fully specified in the Indenture. Such further provisions shall for all purposes have the same effect as though fully set forth at this place. This Security shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be construed in accordance with and governed by the laws of said State. This Security shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by the Trustee or a duly authorized authenticating agent under the Indenture. 16 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. JDS UNIPHASE CORPORATION By: --------------------------------- Authorized Signatory Attest: By: ---------------------------- Authorized Signatory Section 2.03. Form Of Reverse Of Security. This Security is one of a duly authorized issue of Securities of the Company, designated as its Zero Coupon Senior Convertible Notes due 2010 (herein called the "SECURITIES"), all issued or to be issued under and pursuant to an Indenture dated as of October 31, 2003 (herein called the "INDENTURE"), between the Company and The Bank of New York (herein called the "TRUSTEE"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Securities. The indebtedness evidenced by the Securities is unsecured and unsubordinated indebtedness of the Company and ranks equally with the Company's other unsecured and unsubordinated indebtedness. Redemption at the Option of the Company. The Company may, at its option, redeem the Securities for cash at any time as a whole, or from time to time in part, on or after November 15, 2008, at a redemption price equal to 100% of the Principal Amount of Securities to be redeemed plus Additional Interest Amounts, if any, on those Securities up to, but not including, the Redemption Date (the "REDEMPTION PRICE"). Notice of redemption pursuant to this Section of this Security will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of Securities to be redeemed at the Holder's registered address. If cash sufficient to pay the Redemption Price of all Securities (or portions thereof) to be redeemed on the Redemption Date is deposited with the Paying Agent prior to 10:00 a.m., New York City time, on the Redemption Date, then on such Redemption Date, Additional Interest Amounts, if any, cease to accrue on such Securities or portions thereof. Securities in denominations larger than $1,000 of Principal Amount may be redeemed in part but only in integral multiples of $1,000 of Principal Amount. Purchase By the Company at the Option of the Holder on the Repurchase Date. Subject to the terms and conditions of the Indenture, the Company shall become obligated to repurchase, at the option of the Holder, all or any portion of the Securities held by such Holder on November 15, 2008 in integral multiples of $1,000 at a repurchase price equal to 100% of the Principal Amount of those Securities plus Additional Interest Amounts, if any, up to, but not including, 17 such Repurchase Date (the "REPURCHASE PRICE"). To exercise such right, a Holder shall deliver to the Paying Agent a Repurchase Notice containing the information set forth in the Indenture, at any time from 9:00 a.m., New York City time, on the date that is 20 Business Days immediately preceding such Repurchase Date until 5:00 p.m., New York City time, on the Repurchase Date, and shall deliver the Securities to the Paying Agent as set forth in the Indenture. Purchase By the Company at the Option of the Holder upon a Designated Event. At the option of the Holder and subject to the terms and conditions of the Indenture, the Company shall become obligated to repurchase the Securities if a Designated Event occurs at any time prior to November 15, 2010 at a price equal to the Principal Amount plus accrued but unpaid Additional Interest Amount, if any, up to, but not including, the repurchase date (the "DESIGNATED EVENT REPURCHASE PRICE"). The Designated Event Repurchase Price may, at the Company's option, be paid in cash, in shares of Common Stock or in any combination of cash and shares of Common Stock in accordance with the Indenture. Holders have the right to withdraw any Repurchase Notice or Designated Event Repurchase Notice by delivering to the Paying Agent a written notice of withdrawal in accordance with the provisions of the Indenture. If cash sufficient to pay the Designated Event Repurchase Price of all Securities or portions thereof to be purchased on a Designated Event Repurchase Date is deposited with the Paying Agent on the Business Day following the Designated Event Repurchase Date, the Holder thereof shall have no other rights as such (other than the right to receive the Designated Event Repurchase Price, upon surrender of such Security). Conversion. Subject to and in compliance with the provisions of the Indenture (including without limitation the conditions of conversion of this Security set forth in Section 15.01 thereof), the Holder hereof has the right, at its option, to convert the Principal Amount hereof or any portion of such principal which is $1,000 or an integral multiple thereof, into, subject to Section 15.02 of the Indenture, that number of fully paid and non-assessable shares of Common Stock, as said shares shall be constituted at the date of conversion, obtained by dividing the Principal Amount of this Security or portion thereof to be converted by the conversion price of $4.94 (the "CONVERSION PRICE") as adjusted from time to time as provided in the Indenture, upon surrender of this Security, together with a Conversion Notice as provided in the Indenture, to the Company at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, or at the option of such Holder, the Corporate Trust Office, and, unless the shares issuable on conversion are to be issued in the same name as this Security, duly endorsed by, or accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the Holder or by his duly authorized attorney. No fractional shares will be issued upon any conversion, but an adjustment and payment in cash will be made, as provided in the Indenture, in respect of any fraction of a share which would otherwise be issuable upon the surrender of any Securities for conversion. Securities in respect of which a Holder is exercising its right to require repurchase on a Repurchase Date or Designated Event Repurchase Date may be converted only if such Holder withdraws its election to exercise such right in accordance with the terms of the Indenture. 18 Upon conversion, the Company may choose to deliver cash in lieu of shares of Common Stock, shares of Common Stock or a combination of cash and shares of Common Stock in accordance with the Indenture. The Company will notify Holders of any event triggering the right to convert the Securities as specified above in accordance with the Indenture. [INCLUDE IF SECURITY IS A GLOBAL SECURITY -- In the event of a deposit or withdrawal of an interest in this Security, including an exchange, transfer, repurchase or conversion of this Security in part only, the Trustee, as custodian of the Depositary, shall make an adjustment on its records to reflect such deposit or withdrawal in accordance with the rules and procedures of the Depositary.] [INCLUDE IF SECURITY IS A RESTRICTED SECURITY -- Subject to certain limitations in the Indenture, at any time when the Company is not subject to Section 13 or 15(d) of the United States Securities Exchange Act of 1934, as amended, upon the request of a Holder of a Restricted Security, the Company will promptly furnish or cause to be furnished Rule 144A Information (as defined below) to such Holder of Restricted Securities, or to a prospective purchaser of any such security designated by any such Holder, to the extent required to permit compliance by any such Holder with Rule 144A under the Securities Act of 1933, as amended (the "SECURITIES ACT"). "RULE 144A INFORMATION" shall be such information as is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto).] If an Event of Default shall occur and be continuing, the Principal Amount plus accrued but unpaid Additional Interest Amounts, if any, may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate Principal Amount of the Outstanding Securities. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate Principal Amount of the Outstanding Securities, on behalf of the Holders of all the Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities, the Holders of not less than 25% in aggregate Principal Amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity 19 satisfactory to it, and the Trustee shall not have received from the Holders of a majority in Principal Amount of Outstanding Securities a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of said principal hereof on or after the respective due dates expressed herein or for the enforcement of any conversion right. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the Principal Amount, Redemption Price, Repurchase Price or Designated Event Repurchase Price of, and Additional Interest Amounts, if any, on, this Security at the times, place and rate, and in the coin, currency or shares, herein prescribed. Notwithstanding the foregoing, prior to the occurrence of a Designated Event, the Company may, with the consent of the holders of not less than a majority of the Securities, amend the obligation of the Company to repurchase Securities upon a Designated Event. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in The City of New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate Principal Amount, will be issued to the designated transferee or transferees. The Securities are issuable only in registered form in denominations of $1,000 and any integral multiple of $1,000 above that amount, as provided in the Indenture and subject to certain limitations therein set forth. Securities are exchangeable for a like aggregate Principal Amount of Securities of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. All terms used in this Security that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 20 ASSIGNMENT FORM If you want to assign this Security, fill in the form below and have your signature guaranteed: I or we assign and transfer this Security to: ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Print or type name, address and zip code and social security or tax ID number of assignee) and irrevocably appoint _____________________________________ agent to transfer this Security on the books of the Company. The agent may substitute another to act for him. Date: __________________ Signed: ____________________ (Sign exactly as your name appears on the other side of this Security) Signature Guarantee: _________________________________ Note: Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. 21 In connection with any transfer of this Security occurring prior to the date which is the earlier of (i) the date of the declaration by the Commission of the effectiveness of a registration statement under the Securities Act of 1933, as amended (the "SECURITIES ACT"), covering resales of this Security (which effectiveness shall not have been suspended or terminated at the date of the transfer) and (ii) the second anniversary of the Issue Date set forth on the face of this Security, the undersigned confirms that it has not utilized any general solicitation or general advertising in connection with the transfer and that this Security is being transferred: [Check One] (1) [ ] to the Company or a subsidiary thereof; or (2) [ ] to a "QUALIFIED INSTITUTIONAL BUYER" pursuant to and in compliance with Rule 144A under the Securities Act; or (3) [ ] outside the United States to a "FOREIGN PERSON" in compliance with Rule 904 of Regulation S under the Securities Act; or (4) [ ] pursuant to the exemption from registration provided by Rule 144 under the Securities Act. Unless one of the boxes is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any Person other than the registered Holder thereof, provided that if box (3) or (4) is checked, the Company may require, prior to registering any such transfer of the Securities, in its sole discretion, such legal opinions, certifications (including an investment letter in the case of box (3)) and other information as the Company may reasonably request to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. If none of the foregoing boxes is checked, the Trustee or Security Registrar shall not be obligated to register this Security in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 3.10 of the Indenture shall have been satisfied. Date: __________________ Signed: ____________________ (Sign exactly as your name appears on the other side of this Security) Signature Guarantee: ________________________________ 22 Note: Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. 23 TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "QUALIFIED INSTITUTIONAL BUYER" within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. Date: __________________ Signed: ____________________ NOTICE: To be executed by an executive officer. 24 CONVERSION NOTICE If you want to convert this Security into Common Stock of the Company (or cash if the Company so elects), check the box: [ ] To convert only part of this Security, state the Principal Amount to be converted (which must be $1,000 or an integral multiple of $1,000): $________________________________ If you want the stock certificate made out in another person's name, fill in the form below: ________________________________________________________________________________ (Insert other person's social security or tax ID no.) ________________________________________________________________________________ ________________________________________________________________________________ (Print or type other person's name, address and zip code) Date: __________________ Signed: ____________________ (Sign exactly as your name appears on the other side of this Security) Signature Guarantee: _________________________________ Note: Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. 25 Section 2.04. Form Of Trustee's Certificate Of Authentication. This is one of the Securities referred to in the within-mentioned Indenture. Dated: THE BANK OF NEW YORK, -------------- as Trustee By ------------------------------------------- Authorized Signatory Section 2.05. Legend On Restricted Securities. During the period beginning on the Issue Date and ending on the date two years from such date, any Security including any Security issued in exchange therefor or in lieu thereof, shall be deemed a "RESTRICTED SECURITY" and shall be subject to the restrictions on transfer provided in the legends set forth on the face of the form of Security in Section 2.02; provided, however, that the term "RESTRICTED SECURITY" shall not include any Securities as to which restrictions have been terminated in accordance with Section 3.05. All Securities shall bear the applicable legends set forth on the face of the form of Security in Section 2.02. Except as provided in Section 3.05 and Section 3.10, the Trustee shall not issue any unlegended Security until it has received an Officers' Certificate from the Company directing it to do so. ARTICLE 3 THE SECURITIES Section 3.01. Title And Terms. The aggregate Principal Amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities shall be known and designated as the "Zero Coupon Senior Convertible Notes due 2010" of the Company. The Principal Amount shall be payable on November 15, 2010. The Principal Amount of and Additional Interest Amounts, if any, on the Securities shall be payable at the office or agency of the Company in The City of New York maintained for such purpose and at any other office or agency maintained by the Company for such purpose; provided, however, that at the option of the Company payments may be made by wire transfer or by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. The Securities shall not have the benefit of a sinking fund. The Securities shall not be superior in right of payment to, and shall rank pari passu with, all other unsecured and unsubordinated indebtedness of the Company. Section 3.02. Denominations. The Securities shall be issuable only in registered form without coupons and in denominations of $1,000 and any integral multiple of $1,000 above that amount. 26 Section 3.03. Execution, Authentication, Delivery And Dating. The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its Chief Operating Officer, one of its Vice Presidents, its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile. Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities. The Company Order shall specify the amount of Securities to be authenticated, and shall further specify the amount of such Securities to be issued as a Global Security or as Physical Securities. The Trustee in accordance with such Company Order shall authenticate and deliver such Securities as in this Indenture provided and not otherwise. Each Security shall be dated the date of its authentication. No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Section 3.04. Temporary Securities. Pending the preparation of definitive Securities, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. If temporary Securities are issued, the Company will cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at any office or agency of the Company designated pursuant to Section 10.02, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like Principal Amount of definitive Securities of authorized denominations. Until so exchanged the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities. Section 3.05. Registration; Registration Of Transfer And Exchange; Restrictions On Transfer. (a) The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency designated 27 pursuant to Section 10.02 being herein sometimes collectively referred to as the "SECURITY REGISTER") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed "Security Registrar" (the "SECURITY REGISTRAR") for the purpose of registering Securities and transfers of Securities as herein provided. Upon surrender for registration of transfer of any Security at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of any authorized denominations and of a like aggregate Principal Amount and tenor, each such Security bearing such restrictive legends as may be required by this Indenture (including Section 2.02, 2.05 and 3.10). At the option of the Holder and subject to the other provisions of this Section 3.05 and to Section 3.10, Securities may be exchanged for other Securities of any authorized denominations and of a like aggregate Principal Amount and tenor, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. As a condition to the registration of transfer of any Restricted Securities, the Company or the Trustee may require evidence satisfactory to them as to the compliance with the restrictions set forth in the legend on such securities. Except as provided in the following sentence and in Section 3.10, all Securities originally issued hereunder and all Securities issued upon registration of transfer or exchange or replacement thereof shall be Restricted Securities and shall bear the legend required by Section 2.02 and 2.05, unless the Company shall have delivered to the Trustee (and the Security Registrar, if other than the Trustee) a Company Order stating that the Security is not a Restricted Security and may be issued without such legend thereon. Securities which are issued upon registration of transfer of, or in exchange for, Securities which are not Restricted Securities shall not be Restricted Securities and shall not bear such legend. No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.04 or 9.07 not involving any transfer. 28 The Company shall not be required to exchange or register a transfer of any Security (i) that has been surrendered for conversion or (ii) as to which a Repurchase Notice or a Designated Event Repurchase Notice has been delivered and not withdrawn, except, where such Repurchase Notice or Designated Event Repurchase Notice provides that such Security is to be purchased only in part, the Company shall be required to exchange or register a transfer of the portion thereof not to be purchased. (b) Beneficial ownership of every Restricted Security shall be subject to the restrictions on transfer provided in the legends required to be set forth on the face of each Restricted Security pursuant to Section 2.02 and 2.05, unless such restrictions on transfer shall be terminated in accordance with this Section 3.05(b) or Section 3.10. The Holder of each Restricted Security, by such Holder's acceptance thereof, agrees to be bound by such restrictions on transfer. The restrictions imposed by this Section 3.05 and Section 2.02, 2.05 and 3.10 upon the transferability of any particular Restricted Security shall cease and terminate upon delivery by the Company to the Trustee of an Officers' Certificate stating that such Restricted Security has been sold pursuant to an effective Resale Registration Statement under the Securities Act or transferred in compliance with Rule 144 under the Securities Act (or any successor provision thereto). Any Restricted Security as to which the Company has delivered to the Trustee an Officers' Certificate that such restrictions on transfer shall have expired in accordance with their terms or shall have terminated may, upon surrender of such Restricted Security for exchange to the Security Registrar in accordance with the provisions of this Section 3.05, be exchanged for a new Security, of like tenor and aggregate Principal Amount, which shall not bear the restrictive legends required by Section 2.02 and 2.05. The Company shall inform the Trustee in writing of the effective date of any Resale Registration Statement registering the Securities under the Securities Act. The Trustee shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the aforementioned Resale Registration Statement. As used in the preceding two paragraphs of this Section 3.05, the term "transfer" encompasses any sale, pledge, transfer or other disposition of any Restricted Security. (c) Neither the Trustee nor any of its agents shall (i) have any duty to monitor compliance with or with respect to any federal or state or other securities or tax laws or (ii) have any duty to obtain documentation on any transfers or exchanges other than as specifically required hereunder. Section 3.06. Mutilated, Destroyed, Lost And Stolen Securities. If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of like tenor and Principal Amount and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and Principal Amount and bearing a number not contemporaneously outstanding. 29 In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. Section 3.07. Persons Deemed Owners. Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. Section 3.08. Book-entry Provisions For Global Securities. (a) The Global Securities initially shall (i) be registered in the name of the Depositary or the nominee of such Depositary, (ii) be delivered to the Trustee as custodian for the Depositary and (iii) bear legends as set forth on the face of the form of Security in Section 2.02. Members of, or participants in, the Depositary ("AGENT MEMBERS") shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depositary, or the Trustee as its custodian, or under the Global Security, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of the Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of any Holder. (b) Transfers of the Global Securities shall be limited to transfers in whole, but not in part, to the Depositary, its successors or their respective nominees. Physical Securities shall be transferred to beneficial owners in exchange for their beneficial interests in the Global Securities only if (A) such Depositary has notified the Company (or the Company becomes aware) that the 30 Depositary (i) is unwilling or unable to continue as Depositary for such Global Security or (ii) has ceased to be a clearing agency registered under the Exchange Act when the Depositary is required to be so registered to act as such Depositary and, in both such cases, no successor Depositary shall have been appointed within 90 days of such notification or of the Company becoming aware of such event, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Security and the Outstanding Securities shall have become due and payable pursuant to Section 5.02 and any Holder requests that Physical Securities be issued or (C) the Company has determined in its sole discretion that the Securities shall no longer be represented by Global Securities; provided that Holders of Physical Securities offered and sold in reliance on Rule 144A shall have the right, subject to applicable law, to request that such Securities be exchanged for interests in the applicable Global Security. Any such transfer or exchange of interests of beneficial owners in a Global Security, in whole or in part, for Physical Securities shall be in accordance with the rules and procedures of the Depositary and the provisions of Section 3.10. (c) In connection with any transfer or exchange of a portion of the beneficial interest in the Global Security to beneficial owners pursuant to paragraph (b), the Security Registrar shall (if one or more Physical Securities are to be issued) reflect on its books and records the date and a decrease in the Principal Amount of the Global Security in an amount equal to the Principal Amount of the beneficial interest in the Global Security to be transferred, and the Company shall execute, and the Trustee shall authenticate and deliver, one or more Physical Securities of like tenor and amount. (d) In connection with the transfer of the entire Global Security to beneficial owners pursuant to paragraph (b), the Global Security shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depositary in exchange for its beneficial interest in the Global Security, an equal aggregate Principal Amount of Physical Securities of authorized denominations and the same tenor. (e) Any Physical Security constituting a Restricted Security delivered in exchange for an interest in the Global Security pursuant to paragraph (c) or (d) shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of Section 3.10, bear the legend regarding transfer restrictions applicable to the Physical Securities set forth on the face of the form of Security in Section 2.02. (f) The Holder of the Global Securities may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities. Section 3.09. Cancellation. The Company at any time may deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold. The Trustee shall cancel and dispose of all Securities surrendered for registration of transfer, exchange, payment, purchase, repurchase, redemption, conversion (pursuant to Article 15 hereof) or cancellation in accordance with its customary practices. If the Company shall acquire 31 any of the Securities, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities unless and until the same are delivered to the Trustee for cancellation. The Company may not issue new Securities to replace Securities it has paid in full or delivered to the Trustee for cancellation. Section 3.10. Special Transfer Provision. (a) Transfers to Non-U.S. Persons. The following provisions shall apply with respect to the registration of any proposed transfer of a Security constituting a Restricted Security to any Non-U.S. Person to which Securities in the form of Global Securities cannot be issued: (i) the Security Registrar shall register the transfer of any Security constituting a Restricted Security, whether or not such Security bears the legend required by Section 2.02 and 2.05, if (x) the requested transfer is after the second anniversary of the Issue Date of such Security or (y) the proposed transferor has delivered to the Security Registrar a certificate substantially in the form of EXHIBIT A hereto, together with such other certifications, legal opinions or other information as the Company may reasonably require to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act; and (ii) if the proposed transferor is an Agent Member holding a beneficial interest in the Global Security, upon receipt by the Security Registrar of (x) the certificate, if any, required by paragraph (i) above and instructions given in accordance with the Depositary's and the Security Registrar's procedures, whereupon (1) the Security Registrar shall reflect on its books and records the date and (if the transfer does not involve a transfer of outstanding Physical Securities) a decrease in the Principal Amount of the Global Security in an amount equal to the Principal Amount of the beneficial interest in the Global Security to be transferred, and (b) the Company shall execute and the Trustee shall authenticate and deliver one or more Physical Securities of like tenor and amount. (b) Transfers to QIBs. The following provisions shall apply with respect to the registration of any proposed transfer of a Security constituting a Restricted Security to a QIB (excluding transfers to Non-U.S. Persons): (i) the Security Registrar shall register the transfer if such transfer is being made by a proposed transferor who has checked the box provided for on the form of Security stating, or has otherwise advised the Company and the Security Registrar in writing, that the sale has been made in compliance with the provisions of Rule 144A to a transferee who has signed the certification provided for on the form of Security stating, or has otherwise advised the Company and the Security Registrar in writing, that it is purchasing the Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a QIB within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A; and 32 (ii) if the proposed transferee is an Agent Member, and the Securities to be transferred consist of Physical Securities which after transfer are to be evidenced by an interest in the Global Security, upon receipt by the Security Registrar of instructions given in accordance with the Depositary's and the Security Registrar's procedures, the Security Registrar shall reflect on its books and records the date and an increase in the Principal Amount of the Global Security in an amount equal to the Principal Amount of the Physical Securities to be transferred, and the Trustee shall cancel the Physical Securities so transferred. (c) Private Placement Legend. Upon the registration of transfer, exchange or replacement of Securities not bearing the legends required by Section 2.02 and 2.05, the Security Registrar shall deliver Securities that do not bear such legends. Upon the registration of transfer, exchange or replacement of Securities bearing the legends required by Section 2.02 and 2.05, the Security Registrar shall deliver only Securities that bear such legends unless (i) the circumstance contemplated by paragraph (a)(i)(x) of this Section 3.10 exists or (ii) there is delivered to the Security Registrar an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act. (d) General. By its acceptance of any Security bearing the legends required by Section 2.02 and 2.05, each Holder of such a Security acknowledges the restrictions on transfer of such Security set forth in this Indenture and in such legends and agrees that it will transfer such Security only as provided in this Indenture. The Security Registrar shall retain, in accordance with its customary procedures, copies of all letters, notices and other written communications received pursuant to this Section 3.10. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Security Registrar. Section 3.11. CUSIP Numbers. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice and that reliance may be placed only on the other identification numbers printed on the Securities, and any such notice shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the "CUSIP" numbers. Section 3.12. Ranking. The indebtedness of the Company arising under or in connection with this Indenture and every outstanding Security issued under this Indenture from time to time constitutes and will constitute a senior unsecured general obligation of the Company, ranking equally with other existing and future senior unsecured and unsubordinated Indebtedness of the Company and ranking senior in right of payment to any future Indebtedness of the Company that 33 is expressly made subordinate to the Securities by the terms of such Indebtedness. For purposes of this Section 3.12 only, "Indebtedness" means, without duplication, the principal or face amount of (i) all obligations for borrowed money, (ii) all obligations evidenced by debentures, notes or other similar instruments, (iii) all obligations in respect of letters of credit or bankers acceptances or similar instruments (or reimbursement obligations with respect thereto), (iv) all obligations to pay the deferred purchase price of property or services, (v) all obligations as lessee which are capitalized in accordance with generally accepted accounting principles, and (vi) all Indebtedness of others guaranteed by the Company or any of its Subsidiaries or for which the Company or any of its Subsidiaries is legally responsible or liable (whether by agreement to purchase indebtedness of, or to supply funds or to invest in, others). ARTICLE 4 SATISFACTION AND DISCHARGE Section 4.01. Satisfaction And Discharge Of Indenture. This Indenture shall cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (a) either (i) all Securities theretofore authenticated and delivered (other than (A) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.06 and (B) Securities for whose payment money has theretofore been deposited with the Trustee in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust as provided in Section 10.03) have been delivered to the Trustee for cancellation; or (ii) all such Securities not theretofore delivered to the Trustee for cancellation have become due and payable and the Company has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness evidenced by such Securities not theretofore delivered to the Trustee for cancellation. (b) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and (c) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 6.07 and, if money shall have been deposited with the Trustee pursuant to subclause (ii) of Clause (a) of this Section, the obligations of the Trustee under Section 4.02 and the last paragraph of Section 10.03 shall survive. 34 Section 4.02. Application Of Trust Money. Subject to the provisions of the last paragraph of Section 10.03, all money deposited with the Trustee pursuant to Section 4.01 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and Additional Interest Amounts, if any, for whose payment such money has been deposited with the Trustee. ARTICLE 5 REMEDIES Section 5.01. Events Of Default. "EVENT OF DEFAULT", wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (a) default in the payment of the Principal Amount, Redemption Price, Repurchase Price or Designated Event Repurchase Price on any Security when it becomes due and payable; or (b) default in the payment of Additional Interest Amounts, if any, upon any Security, when such amounts become due and payable, and continuance of such default for a period of 30 days; or (c) default in the payment of any indebtedness for borrowed money by the Company or any of its significant subsidiaries (all or substantially all of the outstanding voting securities of which are owned, directly or indirectly, by the Company) in an outstanding principal amount in excess of $50,000,000 when such amounts become due at final maturity or upon acceleration, and such indebtedness is not discharged, or such default in payment or acceleration is not cured or rescinded within 30 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate Principal Amount of the Outstanding Securities a written notice specifying such default and requiring it to be remedied and stating that such notice is a "NOTICE OF DEFAULT" hereunder; or (d) default in the performance of any covenant, agreement or condition of the Company in this Indenture or the Securities (other than a default specified in (a) or (b) above), and continuance of such default for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate Principal Amount of the Outstanding Securities a written notice specifying such default and requiring it to be remedied and stating that such notice is a "NOTICE OF DEFAULT" hereunder; or (e) the entry by a court having jurisdiction in the premises of (i) a decree or order for relief in respect of the Company or any of its significant subsidiaries of a voluntary case or 35 proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (ii) a decree or order adjudging the Company as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State law or (iii) appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or (f) the commencement by the Company or any of its significant subsidiaries of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due. Section 5.02. Acceleration Of Maturity; Rescission And Annulment. (a) If an Event of Default (other than those specified in Section 5.01(e) and 5.01(f)) occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in aggregate Principal Amount of the Outstanding Securities may declare the Principal Amount plus Additional Interest Amounts, if any, on all the Outstanding Securities to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such Principal Amount plus accrued but unpaid Additional Interest Amounts, if any, shall become immediately due and payable. Notwithstanding the foregoing, in the case of an Event of Default specified in Section 5.01(e) or 5.01(f), the Principal Amount plus accrued but unpaid Additional Interest Amounts, if any, on all Outstanding Securities will ipso facto become due and payable without any declaration or other Act on the part of the Trustee or any Holder. (b) At any time after such a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in aggregate Principal Amount of the Outstanding Securities, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if: (i) the Company has paid or deposited with the Trustee a sum sufficient to pay 36 (A) the Principal Amount plus accrued but unpaid Additional Interest Amounts, if any, Redemption Price, Repurchase Price or Designated Event Repurchase Price, as applicable, on any Securities which have become due otherwise than by such declaration of acceleration, and interest on any such amounts that are overdue at the rate of 1.00% per annum from the required payment date, and (B) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.07; and (ii) all Events of Default, other than the non-payment of the Principal Amount plus accrued but unpaid Additional Interest Amounts, if any, on Securities which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 5.13. No such rescission shall affect any subsequent default or impair any right consequent thereon. Section 5.03. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may, but shall not be obligated to, pursue any available remedy to collect the payment of the Principal Amount plus accrued but unpaid Additional Interest Amounts, if any, on the Securities or to enforce the performance of any provision of the Securities or this Indenture. The Trustee may maintain a proceeding even if the Trustee does not possess any of the Securities or does not produce any of the Securities in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of, or acquiescence in, the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. Section 5.04. Collection Of Indebtedness And Suits For Enforcement By Trustee. The Company covenants that if: (i) default is made in the payment of any Additional Interest Amounts on any Security when such amounts become due and payable, and such default continues for a period of 30 days, or (ii) default is made in the payment of the Principal Amount plus accrued but unpaid Additional Interest Amounts, if any, at the Stated Maturity thereof or in the payment of the Redemption Price, Repurchase Price or Designated Event Repurchase Price in respect of any Security, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. 37 Section 5.05. Trustee May File Proofs Of Claim. In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due the Trustee under Section 6.07. No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. Section 5.06. Application Of Money Collected. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money to Holders, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 6.07; and SECOND: To the payment of the amounts then due and unpaid on the Securities for the Principal Amount, Redemption Price, Repurchase Price, Designated Event Repurchase Price or Additional Interest Amounts, if any, as the case may be, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities. Section 5.07. Limitation On Suits. No Holder of any Security shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder (other than in the case of an Event of Default specified in Section 5.01(a) or 5.01(b)), unless: (i) such Holder has previously given written notice to the Trustee of a continuing Event of Default; (ii) the Holders of not less than 25% in aggregate Principal Amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (iii) such Holder or Holders have offered to the Trustee indemnity reasonably satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request; 38 (iv) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (v) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in aggregate Principal Amount of the Outstanding Securities; it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders. Section 5.08. Unconditional Right Of Holders To Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of the Principal Amount, Redemption Price, Repurchase Price, Designated Event Repurchase Price or Additional Interest Amounts, if any, in respect of the Securities held by such Holder, on or after the respective due dates expressed in the Securities or on or after any Redemption Date, Repurchase Date or Designated Event Repurchase Date, as applicable, and to convert the Securities in accordance with Article 15, or to bring suit for the enforcement of any such payment on or after such respective dates or the right to convert, shall not be impaired or affected adversely without the consent of such Holder. For purposes of clarification, prior to the occurrence of a Designated Event, the provisions relating to the right to receive payment upon a Designated Event Repurchase Date may be modified in the manner set forth in Section 9.02. Section 5.09. Restoration Of Rights And Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. Section 5.10. Rights And Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 3.06, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 5.11. Delay Or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. 39 Section 5.12. Control By Holders. The Holders of a majority in Principal Amount of the Outstanding Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee, provided that: (i) such direction shall not be in conflict with any rule of law or with this Indenture; and (ii) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. Section 5.13. Waiver Of Past Defaults. The Holders of not less than a majority in Principal Amount of the Outstanding Securities may on behalf of the Holders of all the Securities waive any past Default hereunder and its consequences, except a Default: (i) described in Section 5.01(a) or 5.01(b); or (ii) in respect of a covenant or provision hereof which under Article 9 cannot be modified or amended without the consent of the Holder of each Outstanding Security affected. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. Section 5.14. Undertaking For Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, in either case in respect of the Securities, a court may require any party litigant in such suit to file an undertaking to pay the costs of the suit, and the court may assess reasonable costs, including reasonable attorney's fees, against any party litigant in the suit having due regard to the merits and good faith of the claims or defenses made by the party litigant; but the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in Principal Amount of the Outstanding Securities, or to any suit instituted by any Holder for the enforcement of the payment of the Principal Amount or accrued but unpaid Additional Interest Amounts, if any, on any Security on or after Maturity of such Security or the Redemption Price, Repurchase Price or Designated Event Repurchase Price. Section 5.15. Waiver Of Stay Or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay, or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. 40 ARTICLE 6 THE TRUSTEE Section 6.01. Certain Duties And Responsibilities. The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act and as set forth herein. In case an Event of Default with respect to the Securities has occurred (which has not been cured or waived), the Trustee shall exercise the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers. Except during the continuance of an Event of Default, the Trustee need perform only those duties as are specifically set forth in this Indenture and no duties, covenants or obligations of the Trustee shall be implied in this Indenture. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. Section 6.02. Notice Of Defaults. The Trustee shall give the Holders notice of any Default hereunder within 60 days after the occurrence thereof or, if later, within 15 days after it is known to the Trustee, unless such Default shall have been cured or waived before the giving of such notice; provided, that (except in the case of any Default in the payment of Principal Amount, premium or Additional Interest Amount, if any, on any of the Securities or the Redemption Price, Repurchase Price or Designated Event Repurchase Price), the Trustee shall be protected in withholding such notice if and so long as a trust committee of directors or trustees and/or a Responsible Officer of the Trustee in good faith determines that the withholding of such notice is in the interest of the holders of Securities. Section 6.03. Certain Rights Of Trustee. Subject to the provisions of Section 6.01: (a) the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors of the Company may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate; 41 (d) the Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit; and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation. (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any willful misconduct or gross negligence on the part of any agent or attorney appointed with due care by it hereunder; (h) the Trustee shall not be charged with knowledge of any Default or Event of Default with respect to the Securities unless either (i) a Responsible Officer shall have actual knowledge of such Default or Event of Default or (ii) written notice of such Default or Event of Default shall have been given to the Trustee by the Company or any other obligor on such Securities or by any Holder of such Securities; (i) the Trustee shall not be liable for any action taken, suffered or omitted by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; (j) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder; and (k) the Trustee may request that the Company deliver an Officers' Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers' Certificate may be signed by any person authorized to sign an Officers' Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded. Section 6.04. Not Responsible For Recitals. The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee 42 makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof. Section 6.05. May Hold Securities. The Trustee, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Section 6.08 and 6.13, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Paying Agent, Security Registrar or such other agent. Section 6.06. Money Held In Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company. Section 6.07. Compensation And Reimbursement. The Company agrees: (i) to pay to the Trustee from time to time such compensation for all services rendered by it hereunder as the Company and the Trustee shall from time to time agree in writing (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (ii) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its gross negligence or bad faith; (iii) to indemnify the Trustee and any predecessor Trustee for, and to hold it harmless against, any loss, liability or expense including taxes (other than taxes based upon, measured by or determined by the income of the Trustee) incurred without gross negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust, including the reasonable costs and expenses of defending itself against any claim (whether assessed by the Company, by any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder; and (iv) the Trustee shall notify the Company promptly of any claim asserted against it. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations under this Section 6.07. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may at its option have separate counsel of its own choosing and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its written consent, which consent shall not be unreasonably withheld. The obligations of the Company under this Section 6.07 shall survive the resignation or removal of the Trustee and the satisfaction and discharge of this Indenture. To secure the 43 Company's payment obligations in this Section 6.07, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on the Securities. Such lien shall survive the resignation or removal of the Trustee and the satisfaction and discharge of this Indenture. When the Trustee incurs expenses or renders services after a Default or an Event of Default specified in Section 5.01(e) and 5.01(f) hereof occurs, the expenses and the compensation for the services (including, the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under United States Code, Title 11 or any other similar foreign, federal or state law for the relief of debtors. Section 6.08. Disqualification; Conflicting Interests. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. Section 6.09. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. Section 6.10. Resignation And Removal; Appointment Of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 6.11. (b) The Trustee may resign at any time by giving written notice thereof to the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction at the expense of the Trustee for the appointment of a successor Trustee. (c) The Trustee may be removed at any time by Act of the Holders of a majority in Principal Amount of the Outstanding Securities, delivered to the Trustee and to the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the notice of removal, the Trustee being removed may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities. (d) If at any time: 44 (i) the Trustee shall fail to comply with Section 6.08 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or (ii) the Trustee shall cease to be eligible under Section 6.09 and shall fail to resign after written request therefor by the Company or by any such Holder, or (iii) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent, or (iv) a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (A) the Company by a Company Order may remove the Trustee, or (B) subject to Section 5.14, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of such Holder and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Company Order, shall promptly appoint a successor Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in Principal Amount of the Outstanding Securities delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the successor Trustee appointed by the Company. If no successor Trustee shall have been so appointed by the Company or the Holders and accepted appointment in the manner hereinafter provided, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee. (f) The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to all Holders in the manner provided in Section 1.06. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office. (g) If a Trustee is removed with or without cause, all fees and expenses (including the reasonable fees and expenses of counsel) of the Trustee incurred in the administration of the trust or in the performance of the duties hereunder prior to such removal shall be paid to the Trustee. Section 6.11. Acceptance Of Appointment By Successor. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such 45 successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts. No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. Section 6.12. Merger, Conversion, Consolidation Or Succession To Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. Section 6.13. Preferential Collection Of Claims Against. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor). ARTICLE 7 HOLDERS' LISTS AND REPORTS BY TRUSTEE AND THE COMPANY Section 7.01. Company To Furnish Trustee Names And Addresses Of Holders. The Company will furnish or cause to be furnished to the Trustee: (i) semi-annually, not later than 15 days after each Regular Record Date, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of such Regular Record Date; and (ii) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided, however, that no such list need be furnished so long as the Trustee is acting as Security Registrar. Section 7.02. Preservation Of Information; Communications To Holders. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 7.01 46 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 7.01 upon receipt of a new list so furnished. (b) The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and duties of the Trustee, shall be as provided by the Trust Indenture Act. (c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act. Section 7.03. Reports By Trustee. The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. Reports so required to be transmitted at stated intervals of not more than 12 months shall be transmitted no later than July 15 in each calendar year, commencing in July 15, 2004. Each such report shall be dated as of a date not more than 60 days prior to the date of transmission. (a) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which the Securities are listed, with the Commission and with the Company. The Company shall notify the Trustee promptly (and in any event within 10 days) whenever the Securities become listed on any stock exchange or of any delisting thereof. Section 7.04. Reports By Company. The Company shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission. In the event the Company is not subject to Section 13 or 15(d) of the Exchange Act, it shall file with the Trustee upon request the information required to be delivered pursuant to Rule 144A(d) under the Securities Act. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). It is expressly understood that materials transmitted electronically by the Company to the Trustee shall be deemed filed with the Trustee for purposes of this Section 7.04. 47 ARTICLE 8 CONSOLIDATION, MERGER, CONVEY, TRANSFER OR LEASE Section 8.01. Company May Consolidate, Etc., Only On Certain Terms. The Company shall not consolidate or combine with or merge into any other Person or convey, transfer or lease its properties, and assets, substantially as an entity to another Person, unless: (a) either (i) the Company shall be the continuing Person or (ii) the Person (if other than the Company) formed by such consolidation or combination into which the Company is merged or the Person which acquires by conveyance, transfer or other business combination, or which leases, the properties and assets of the Company substantially as an entirety (the "SURVIVING ENTITY"), (1) shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and (2) the Surviving Entity shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, all of the obligations of the Company under the Securities and this Indenture; (b) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and (c) the Company or the Surviving Entity has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer, business combination or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article 8 and Article 9, respectively. Section 8.02. Successor Substituted. Upon any consolidation or combination of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 8.01, the successor Person formed by such consolidation or combination or into which the Company is merged or to which such conveyance, transfer, business combination or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities. ARTICLE 9 SUPPLEMENTAL INDENTURES Section 9.01. Supplemental Indentures Without Consent Of Holders. Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may amend, modify or supplement this Indenture or the Securities, in form satisfactory to the Trustee, for any of the following purposes: 48 (i) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; or (ii) to add to the covenants of the Company for the benefit of the Holders, or to surrender any right or power herein conferred upon the Company; or (iii) to provide for a successor Trustee with respect to the Securities; or (iv) to add any additional Events of Default with respect to the Securities; or (v) to cure any ambiguity or defect, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture which shall not be inconsistent with the provisions of this Indenture, provided that such action pursuant to this clause (iv) shall not adversely affect the interests of the Holders in any material respect; or (vi) to secure the Securities; or (vii) to reduce the Conversion Price; provided, however, that such reduction in the Conversion Price is in accordance with the terms of this Indenture or shall not adversely affect the interests of the Holders of Securities (after taking into account tax and other consequences of such reduction) in any material respect; or (viii) to supplement any of the provisions of the Indenture to such extent as shall be necessary to permit or facilitate the discharge of the Securities; provided, however that such change or modification does not adversely affect the interests of the Holders of the Securities in any material respect; or (ix) to make any changes or modifications necessary in connection with the registration of the Securities under the Securities Act as contemplated in the Registration Rights Agreement; provided, however, that such change or modification does not adversely affect the interests of the Holders of Securities in any material respect; or (x) to add or modify any other provisions herein with respect to matters or questions arising hereunder which the Company and the Trustee may deem necessary or desirable and which would not reasonably be expected to adversely affect the interests of the Holders of Securities in any material respect; or (xi) to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Securities any property or assets; or (xii) to comply with any requirements of the Commission in connection with the qualification of this Indenture under the Trust Indenture Act. Section 9.02. Supplemental Indentures With Consent Of Holders. Section 9.03 With the consent of the Holders of not less than a majority in Principal Amount of the Outstanding 49 Securities, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby: (i) extend the fixed Maturity of any Security; or (i) reduce the Principal Amount of or Additional Interest Amount payable on any Security; or (ii) reduce the Redemption Price, Repurchase Price or Designated Event Repurchase Price of any Security; or (iii) after the occurrence of a Designated Event, make any change that adversely affects the right of Holders of the Securities to require the Company to purchase such Securities in accordance with the terms thereof and this Indenture; or (iv) change the currency of any payment amount of any Security from U.S. Dollars or shares of Common Stock as provided herein; or (v) make any change that impairs the right of Holders of Securities to convert any Security; or (vi) make any change that impairs the right of Holders to institute suit for payment of the Securities; or (vii) reduce the percentage in Principal Amount of the Outstanding Securities, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture; or (viii) change the ranking of the notes in any manner that adversely affects the rights of Holders of Securities under this Indenture; (ix) reduce the percentage of the Principal Amount of the outstanding Securities the written consent or affirmative vote of whose Holders is required to take specific actions under the Indenture; or (x) modify the obligation of the Company to maintain an agency in The City of New York as required under this Indenture; or (xi) modify any of the provisions of this Section or Section 5.13, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby. 50 (b) The Holders of not less than a majority in aggregate Principal Amount of the Outstanding Securities may, on behalf of the Holders of all of the Securities, waive any past default and its consequences under this Indenture, except a default (i) in the payment of the Principal Amount of or any premium or Additional Interest Amount, if any, on or with respect to the Securities or (ii) in respect of a covenant or provision that cannot be modified without the consent of the Holder of each Security affected thereby as set forth in paragraph (a) above. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. Section 9.04. Execution Of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, in addition to the documents required by Section 1.02, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. Subject to the preceding sentence, the Trustee shall sign such supplemental indenture if the same does not adversely affect the Trustee's own rights, duties or immunities under this Indenture or otherwise. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which adversely affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Section 9.05. Effect Of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. Section 9.06. Conformity With Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act. Section 9.07. Reference In Securities To Supplemental Indentures. Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article shall bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities. ARTICLE 10 COVENANTS Section 10.01. Payments. The Company shall duly and punctually make all payments in respect of the Securities in accordance with the terms of the Securities and this Indenture. The Company shall, to the fullest extent permitted by law, pay interest on overdue payments of 51 Principal Amount, plus accrued but unpaid Additional Interest Amounts, if any, Redemption Price, Repurchase Price and Designated Event Repurchase Price at the rate of 1% per annum from the required payment date of such overdue payment. Any payments made or due pursuant to this Indenture shall be considered paid on the applicable date due if by 10:00 a.m., New York City time, on such date the Paying Agent holds, in accordance with this Indenture, cash sufficient to pay all such amounts then due. Payment of the principal of and Additional Interest Amounts, if any, on the Securities shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Section 10.02. Maintenance Of Office Or Agency. The Company shall maintain in the Borough of Manhattan, The City of New York, an office or agency where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer, exchange, repurchase or conversion and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served, which shall initially be the Corporate Trust Office of the Trustee. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies (in or outside the Borough of Manhattan, The City of New York) where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York, for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. Section 10.03. Money For Security Payments To Be Held In Trust. If the Company shall at any time act as its own Paying Agent, it shall, on or before each due date of any payment in respect of any of the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to make the payment so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and shall promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents, it will, prior to each due date of any payment in respect of any Securities, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. 52 The Company shall cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (i) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the continuance of any default by the Company (or any other obligor upon the Securities) in the making of any payment in respect of the Securities, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent as such. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the making of payments in respect of any Security and remaining unclaimed for two years after such payment has become due shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining shall be repaid to the Company. Section 10.04. Statement By Officers As To Default. The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate, stating whether or not to the knowledge of the signers thereof the Company is in Default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in Default, specifying all such Defaults and the nature and status thereof of which they may have knowledge. The Company shall deliver to the Trustee, as soon as possible and in any event within five days after the Company becomes aware of the occurrence of any Event of Default or an event which, with notice or the lapse of time or both, would constitute an Event of Default, an Officers' Certificate setting forth the details of such Event of Default or default and the action which the Company proposes to take with respect thereto. Section 10.05. Existence. Subject to Article 8, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any such right or franchise if the Board of Directors of the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not disadvantageous in any material respect to the Holders. 53 Section 10.06. Reports And Delivery Of Certain Information. Whether or not required by the rules and regulations of the Commission, so long as any Securities are outstanding, the Company shall promptly furnish to the Trustee (i) all quarterly and annual financial information that is substantially equivalent to that which would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were required to file such Forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" section and, with respect to the annual information only, a report thereon by the Company's certified independent accountants and (ii) all reports that are substantially equivalent to that which would be required to be filed with the Commission on Form 8-K if the Company were required to file such reports; provided that in each case the delivery of materials to the Trustee by electronic means shall be deemed to be "furnished" to the Trustee for purposes of this Section 10.06; and provided further that so long as such filings by the Company are available on the Commission's Electronic Data Gathering, Analysis and Retrieval system (EDGAR), such filings shall be deemed to have been "furnished" to the Trustee for purposes of this Section 10.06 without any further action required by the Company. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). In addition, whether or not required by the rules and regulations of the Commission, the Company shall file a copy of all such information with the Commission for public availability (unless the Commission will not accept such a filing) and make such information available to investors who request it in writing. So long as any of the Securities remain Outstanding, the Company shall make available the information required by Rule 144A(d) under the Securities Act to any Holder or any beneficial owner of Securities or holder or beneficial owner of shares of Common Stock, or to a prospective purchaser of any such security designated by any such holder, as the case may be, to the extent required to permit compliance by such Holder or holder with Rule 144A under the Securities Act in connection with the resale of any such security. Section 10.07. Resale Of Certain Securities. During the period beginning on the Issue Date and ending on the date that is two years from the Issue Date, the Company shall not resell any Securities which constitute "RESTRICTED SECURITIES" under Rule 144 that have been reacquired by any of them. The Trustee shall have no responsibility in respect of the Company's performance of its agreement in the preceding sentence. Section 10.08. Book-Entry System. If the Securities cease to trade in the Depositary's book-entry settlement system, the Company covenants and agrees that it shall use reasonable efforts to make such other book-entry arrangements that it determines are reasonable for the Securities. Section 10.09. Additional Interest Amounts Under The Registration Rights Agreement. If at any time Additional Interest Amounts become payable by the Company pursuant to the Registration Rights Agreement, the Company shall promptly deliver to the Trustee a certificate 54 to that effect and stating (i) the amount of such Additional Interest Amounts that are payable and (ii) the date on which such Additional Interest Amounts are payable pursuant to the terms of the Registration Rights Agreement. Unless and until a Responsible Officer of the Trustee receives such a certificate, the Trustee may assume without inquiry that no Additional Interest Amounts are payable. If the Company has paid Additional Interest Amounts directly to the Persons entitled to such Additional Interest Amounts, the Company shall deliver to the Trustee a certificate setting forth the particulars of such payment. Section 10.10. Information For IRS Filings. The Company shall provide to the Trustee on a timely basis such information as the Trustee requires to enable the Trustee to prepare and file any form required to be submitted by the Company with the Internal Revenue Service and the Holders of the Notes. Section 10.11. Further Instruments And Acts. Upon reasonable request of the Trustee, or as otherwise necessary, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture. ARTICLE 11 REDEMPTION Section 11.01. The Company's Right To Redeem; Notice To Trustee. Beginning on November 15, 2008, the Company, at its option, may redeem the Securities in accordance with this Article 11 for cash at any time as a whole, or from time to time in part, at a redemption price equal to 100% of the Principal Amount of Securities to be redeemed plus accrued but unpaid Additional Interest Amounts, if any, up to but not including, the Redemption Date (the "REDEMPTION PRICE"). If the Company elects to redeem Securities, it shall notify the Trustee in writing of the Redemption Date, the Principal Amount of Securities to be redeemed and the Redemption Price. The Company shall give this notice to the Trustee by a Company Order at least 40 days before the Redemption Date (unless a shorter notice shall be satisfactory to the Trustee). Section 11.02. Selection Of Securities To Be Redeemed. If fewer than all of the outstanding Securities are to be redeemed, unless the procedures of the Depositary provide otherwise, the Trustee shall select the Securities to be redeemed by lot. The Trustee shall make the selection within five Business Days after it receives the notice provided for in Section 11.01 from outstanding Securities not previously called for redemption. Securities and portions of Securities that the Trustee selects shall be in Principal Amounts of $1,000 or an integral multiple of $1,000. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall notify the Company promptly of the Securities or portions of the Securities to be redeemed. 55 Securities and portions of Securities that are to be redeemed are convertible by the Holder until 5:00 p.m., New York City time, on the Business Day immediately preceding the Redemption Date. If any Security selected for partial redemption is converted in part before termination of the conversion right with respect to the portion of the Security so selected, the converted portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption. Securities which have been converted during a selection of Securities to be redeemed may be treated by the Trustee as outstanding for the purpose of such selection. Section 11.03. Notice of Redemption. At least 30 days but not more than 60 days before a Redemption Date, the Company shall mail a notice of redemption by first-class mail, postage prepaid, to each Holder of Securities to be redeemed. The notice of redemption shall identify the Securities to be redeemed and shall state: (a) the Redemption Date; (b) the Redemption Price; (c) the Conversion Price; (d) the name and address of the Paying Agent and Conversion Agent; (e) that Securities called for redemption may be converted at any time prior to 5:00 p.m., New York City time, on the Business Day preceding the Redemption Date; (f) that Holders who want to convert their Securities must satisfy the requirements set forth in Article 15; (g) that Securities called for redemption must be surrendered to the Paying Agent to collect the Redemption Price; (h) in the case of any Security redeemed in part, that the Holder of such Security will receive a new Security or Securities, of authorized denominations for the Principal Amount thereof remaining unredeemed; (i) if fewer than all of the outstanding Securities are to be redeemed, the certificate numbers, if any, and Principal Amounts of the particular Securities to be redeemed; (j) that, unless the Company defaults in making payment of such Redemption Price, any Additional Interest Amounts on Securities called for redemption will cease to accrue on and after the Redemption Date; (k) the CUSIP number(s) of the Securities; and (l) any other information the Company wants to present. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at the Company's expense; provided, however, that the Company makes such request at least five Business Days (unless a shorter period shall be satisfactory to the Trustee) prior to 56 the date by which such notice of redemption must be given to Holders in accordance with this Section 11.03; provided, further, that the text of the notice of redemption shall be prepared by the Company. Section 11.04. Effect Of Notice Of Redemption. Once notice of redemption is given, Securities called for redemption become due and payable on the Redemption Date and at the Redemption Price, except for Securities which are converted in accordance with the terms of this Indenture. Upon surrender to the Paying Agent, such Securities shall be paid at the Redemption Price. Section 11.05. Deposit Of Redemption Price. Prior to 10:00 a.m., New York City time, on the applicable Redemption Date, the Company shall deposit with the Paying Agent (or if the Company or a Subsidiary or an Affiliate of any of them is acting as the Paying Agent, shall segregate and hold in trust as provided in Section 10.03) an amount of cash (in immediately available funds if deposited on the Redemption Date) sufficient to pay the aggregate Redemption Price of all Securities or portions thereof which are to be redeemed as of such Redemption Date other than Securities or portions of Securities called for redemption which on or prior thereto have been delivered by the Company to the Trustee for cancellation or have been converted. If the Paying Agent holds, in accordance with the terms hereof, at 10:00 a.m., New York City time, on the applicable Redemption Date, cash sufficient to pay the Redemption Price of any Securities for which notice of redemption is given, then, on such Redemption Date, such Securities will cease to be outstanding and Additional Interest Amounts, if any, on such Securities will cease to accrue, whether or not such Securities are delivered to the Paying Agent, and the rights of the Holders in respect thereof shall terminate (other than the right to receive the Redemption Price upon delivery of such Securities). Section 11.06. Securities Redeemed In Part. Any Physical Security which is to be redeemed only in part shall be surrendered at the office of the Paying Agent and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security, without charge, a new Security or Securities, of any authorized denomination as requested by such Holder in aggregate Principal Amount equal to the unredeemed portion of the Security surrendered. Section 11.07. Repayment To The Company. To the extent that the aggregate amount of cash deposited by the Company pursuant to Section 11.05 exceeds the aggregate Redemption Price of the Securities or portions thereof which the Company is redeeming as of the Redemption Date, then, promptly after the Redemption Date, the Paying Agent shall return any such excess to the Company. Section 11.08. Other Repurchases. The Company may, from time to time, at its option (and nothing contained in this Indenture shall limit the Company's right to), repurchase the Securities in open market purchases or negotiated transactions, without any prior notice to any Holders, provided that in exercising its right under this Section 11.08, the Company complies with all applicable federal and state securities laws. 57 ARTICLE 12 REPURCHASE OF SECURITIES AT THE OPTION OF HOLDERS ON A SPECIFIC DATE Section 12.01. Repurchase Of Securities At The Option Of Holders On A Specific Date. (a) Securities shall be repurchased by the Company for cash, at the option of the Holder thereof, on November 15, 2008 (the "REPURCHASE DATE"), at a repurchase price equal to 100% of the Principal Amount of those Securities plus accrued but unpaid Additional Interest Amounts, if any, up to but not including, such Repurchase Date (the "REPURCHASE PRICE"), subject to satisfaction by or on behalf of the Holder of the requirements set forth in Section 12.01(c). (b) No later than 20 Business Days prior to the Repurchase Date, the Company shall mail a written notice of the repurchase right by first class mail to the Trustee and to each Holder (and to beneficial owners as required by applicable law). The notice shall include a form of Repurchase Notice to be completed by the Holder and shall briefly state, as applicable: (i) the date by which the Repurchase Notice must be delivered to the Paying Agent in order for a Holder to exercise the repurchase right; (ii) the Repurchase Date; (iii) the Repurchase Price; (iv) the name and address of the Paying Agent and the Conversion Agent; (v) the Conversion Rate and any adjustments thereto; (vi) that the Securities as to which a Repurchase Notice has been given may be converted if they are otherwise convertible pursuant to Article 15 only if the Repurchase Notice has been withdrawn in accordance with the terms of this Indenture; (vii) that the Securities must be surrendered to the Paying Agent to collect payment; (viii) that the Repurchase Price for any Security as to which a Repurchase Notice has been duly given and not withdrawn will be paid promptly following the later of the Repurchase Date and the time of surrender of such Security; (ix) the procedures the Holder must follow to exercise its repurchase right under this Section 12.01; (x) the conversion rights, if any, of the Securities; (xi) the procedures for withdrawing a Repurchase Notice; 58 (xii) that, unless the Company defaults in making payment of such Repurchase Price, any Additional Interest Amounts on Securities surrendered for repurchase by the Company will cease to accrue on and after the Repurchase Date; and (xiii) the CUSIP number(s) of the Securities. At the Company's request, the Trustee shall give the notice of repurchase right in the Company's name and at the Company's expense; provided, however, that the Company makes such request at least three Business Days (unless a shorter period shall be satisfactory to the Trustee) prior to the date by which such notice of repurchase right must be given to the Holder in accordance with this Section 12.01(b); provided, further, that the text of the notice of repurchase right shall be prepared by the Company. (c) A Holder may exercise its right specified in Section 12.01(a) upon delivery of a written notice of repurchase (a "REPURCHASE NOTICE") to the Paying Agent at any time during the period beginning at 9:00 a.m., New York City time, on the date that is 20 Business Days immediately preceding the Repurchase Date until 5:00 p.m., New York City time, on the Repurchase Date, stating: (i) the certificate number of the Security which the Holder will deliver to be repurchased or the appropriate Depositary procedures if Physical Securities have not been issued; (ii) the portion of the Principal Amount of the Security which the Holder will deliver to be repurchased, which portion must be in Principal Amounts of $1,000 or an integral multiple of $1,000; and (iii) that such Security shall be repurchased by the Company as of the Repurchase Date pursuant to the terms and conditions specified in the Securities and in this Indenture. The delivery of such Security to the Paying Agent with, or at any time after delivery of, the Repurchase Notice (together with all necessary endorsements) at the offices of the Paying Agent shall be a condition to the receipt by the Holder of the Repurchase Price therefor; provided, however, that such Repurchase Price shall be so paid pursuant to this Section 12.01 only if the Security so delivered to the Paying Agent shall conform in all respects to the description thereof in the related Repurchase Notice. The Company shall repurchase from the Holder thereof, pursuant to this Section 12.01, a portion of a Security, so long as the Principal Amount of such portion is $1,000 or an integral multiple of $1,000. Provisions of this Indenture that apply to the repurchase of all of a Security also apply to the repurchase of such portion of such Security. Any repurchase by the Company contemplated pursuant to the provisions of this Section 12.01 shall be consummated by the delivery of the consideration to be received by the Holder promptly following the later of the Repurchase Date and the time of delivery of the Security. 59 Notwithstanding anything contained herein to the contrary, any Holder delivering to the Paying Agent the Repurchase Notice contemplated by this Section 12.01(c) shall have the right to withdraw such Repurchase Notice at any applicable time prior to 5:00 p.m., New York City time, on the Repurchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 12.02. The Paying Agent shall promptly notify the Company of the receipt by it of any Repurchase Notice or written notice of withdrawal thereof. Section 12.02. Effect of Repurchase Notice. Upon receipt by the Paying Agent of the Repurchase Notice specified in Section 12.01(c), the Holder of the Security in respect of which such Repurchase Notice was given shall (unless such Repurchase Notice is withdrawn as specified in the following paragraph) thereafter be entitled to receive solely the Repurchase Price with respect to such Security. Such Repurchase Price shall be paid to such Holder, subject to receipts of cash by the Paying Agent, promptly following the later of (a) the Repurchase Date with respect to such Security (provided the conditions in Section 12.01(c) have been satisfied) and (b) the time of delivery of such Security to the Paying Agent by the Holder thereof in the manner required by Section 12.01(c). Securities in respect of which a Repurchase Notice has been given by the Holder thereof may not be converted pursuant to Article 15 on or after the date of the delivery of such Repurchase Notice unless such Repurchase Notice has first been validly withdrawn as specified in the following paragraph. A Repurchase Notice may be withdrawn by means of a written notice of withdrawal delivered to the office of the Paying Agent in accordance with the Repurchase Notice at any time prior to 5:00 p.m., New York City time, on the Repurchase Date, specifying: (a) the certificate number, if any, or the appropriate Depositary procedures, if applicable, of the Security in respect of which such notice of withdrawal is being submitted; (b) the Principal Amount of the Security with respect to which such notice of withdrawal is being submitted; and (c) the Principal Amount, if any, of such Security which remains subject to the original Repurchase Notice and which has been or will be delivered for repurchase by the Company. Section 12.03. Deposit Of Repurchase Price. Prior to 10:00 a.m., New York City time, on the Repurchase Date, the Company shall deposit with the Paying Agent (or if the Company or a Subsidiary or an Affiliate of any of them is acting as the Paying Agent, shall segregate and hold in trust as provided in Section 10.03) an amount of cash (in immediately available funds if deposited on such Business Day) sufficient to pay the aggregate Repurchase Price of all the Securities or portions thereof which are to be repurchased on such Repurchase Date. If the Paying Agent holds, in accordance with the terms hereof, at 10:00 a.m., New York City time, on the Repurchase Date, cash sufficient to pay the Repurchase Price of any Securities for which a Repurchase Notice has been tendered and not withdrawn pursuant to Section 12.02, then, immediately after the Repurchase Date, such Securities will cease to be outstanding and 60 any Additional Interest Amounts on such Securities will cease to accrue, whether or not such Securities are delivered to the Paying Agent, and the rights of the Holders in respect thereof shall terminate (other than the right to receive the Repurchase Price upon delivery of such Securities). Section 12.04. Securities Repurchased In Part. Any Physical Security which is to be repurchased only in part shall be surrendered at the office of the Paying Agent (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing) and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security, without charge, a new Security or Securities, of any authorized denomination as requested by such Holder in aggregate Principal Amount equal to, and in exchange for, the portion of the Principal Amount of the Security so surrendered which is not repurchased. Section 12.05. Covenant To Comply With Securities Laws Upon Repurchase Of Securities. When complying with the provisions of Section 12.01 hereof (provided that such offer or purchase constitutes an "issuer tender offer" for purposes of Rule 13e-4 (which term, as used herein, includes any successor provision thereto) under the Exchange Act at the time of such offer or purchase), and subject to any exemptions available under applicable law, the Company shall: (a) comply with Rule 13e-4 and Rule 14e-1 (or any successor provision) under the Exchange Act, as applicable; (b) file the related Schedule TO (or any successor schedule, form or report) under the Exchange Act, as applicable; and (c) otherwise comply with all federal and state securities laws so as to permit the rights and obligations under Article 12 to be exercised in the time and in the manner specified herein. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Article 12, the Company's compliance with such laws and regulations shall not in and of itself cause a breach of its obligations under this Article 12. Section 12.06. Repayment to the Company. The Paying Agent shall return to the Company any cash that remains unclaimed for two years, together with interest thereon, held by it for the payment of the Repurchase Price; provided, however, to the extent that the aggregate amount of cash deposited by the Company pursuant to Section 12.03 exceeds the aggregate Repurchase Price of the Securities or portions thereof which the Company is obligated to repurchase on the Repurchase Date, then, promptly after the Repurchase Date, the Paying Agent shall return any such excess to the Company. 61 ARTICLE 13 REPURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER UPON DESIGNATED EVENT Section 13.01. Repurchase Of Securities At Option Of The Holder Upon Designated Event.(a) General. If at any time prior to the Maturity Date there shall have occurred a Designated Event, Securities shall be purchased by the Company at the option of the Holder, in whole or in part, as of the date that is 30 days after the date of the mailing of the Designated Event Company Notice under Section 13.01(b) (the "DESIGNATED EVENT REPURCHASE DATE") at a purchase price equal to the Principal Amount of the Securities to be purchased plus accrued but unpaid Additional Interest Amounts, if any, up to but not including, the repurchase date (the "DESIGNATED EVENT REPURCHASE PRICE"), subject to satisfaction by or on behalf of any Holder of the requirements set forth in Section 13.01(c). A "DESIGNATED EVENT" will be deemed to have occurred upon a Fundamental Change or a Termination of Trading. A "TERMINATION OF TRADING" will be deemed to have occurred if the Common Stock is neither listed for trading on a United States national securities exchange nor approved for quotation on the Nasdaq National Market or any similar United States system of automated dissemination of quotations of securities prices. A "FUNDAMENTAL CHANGE" is any transaction or event (whether by means of an exchange offer, liquidation, tender offer, consolidation, merger, combination, reclassification, recapitalization or otherwise) in connection with which all or substantially all of the Common Stock is exchanged for, converted into, acquired for or constitutes solely the right to receive, consideration which is not all or substantially all common stock or American Depositary Shares that (i) is listed on, or immediately after the transaction or event will be listed on, a United States national securities exchange, or (ii) is approved, or immediately after the transaction or event will be approved, for quotation on the Nasdaq National Market or any similar United States system of automated dissemination of quotations of securities prices. (b) Notice of Designated Event. Within 30 days after the occurrence of a Designated Event, the Company shall mail a written notice of Designated Event (the "DESIGNATED EVENT COMPANY NOTICE") by first-class mail to the Trustee and to each Holder (and to beneficial owners as required by applicable law). The notice shall include a form of Designated Event Repurchase Notice to be completed by the Securityholder and shall state: (i) the events causing a Designated Event and the date of such Designated Event; (ii) that the Holder has a right to require the Company to repurchase the Holder's Securities; (iii) the date by which the Designated Event Repurchase Notice pursuant to this Section 13.01 must be delivered to the Paying Agent in order for a Holder to exercise the Designated Event repurchase right; (iv) the Designated Event Repurchase Date; (v) the Designated Event Repurchase Price; 62 (vi) whether the Designated Event Repurchase Price will be paid in cash or shares of Common Stock, or a combination thereof and, in the case of a combination, the percentage of each; (vii) if the Company elects to pay the Designated Event Repurchase Price in shares of Common Stock or a combination of cash and shares of Common Stock, that the number of shares of Common Stock each Holder will receive will equal the portion of the Designated Event Repurchase Price to be paid in shares of Common Stock divided by the Market Price of one share of Common Stock; (viii) if the Company elects to pay the Designated Event Repurchase Price in shares of Common Stock or a combination of cash and shares of Common Stock, the method of calculating the Market Price of the shares of Common Stock; (ix) that because the Market Price of one share of Common Stock will be determined prior to the Designated Event Repurchase Date, Holders of the Securities will bear the market risk that the shares of Common Stock to be received will decline in value between the date such Market Price is determined and the Designated Event Repurchase Date; (x) the name and address of the Paying Agent and the Conversion Agent; (xi) the Conversion Price applicable on the Designated Event Company Notice Date; (xii) that Securities as to which a Designated Event Repurchase Notice has been given may be converted pursuant to Article 15 hereof only if the Designated Event Repurchase Notice has been withdrawn in accordance with the terms of this Indenture; (xiii) that Securities must be surrendered to the Paying Agent for cancellation to collect payment; (xiv) that the Designated Event Repurchase Price for any Security as to which a Designated Event Repurchase Notice has been duly given and not withdrawn will be paid promptly following the later of the Designated Event Repurchase Date and the time of surrender of such Security as described in (xiii); (xv) the procedures the Holder must follow to exercise rights under this Section 13.01; (xvi) the conversion rights, if any, of the Securities; (xvii) the procedures for withdrawing a Designated Event Repurchase Notice; and (xviii) the CUSIP number of the Securities. 63 At the Company's request, the Trustee shall give such Designated Event Company Notice in the Company's name and at the Company's expense; provided, however, that, in all cases, the text of such Designated Event Company Notice shall be prepared by the Company. (c) Designated Event Repurchase Notice. A Holder may exercise its right specified in Section 13.01(a) upon delivery of a written notice of repurchase (a "DESIGNATED EVENT REPURCHASE NOTICE"), substantially in the form of EXHIBIT B hereto, at any time from the opening of business on the date of the Designated Event Company Notice until the close of business on the Designated Event Repurchase Date, stating: (i) the certificate number of the Security which the Holder will deliver to be repurchased or the appropriate Depositary procedures if Physical Securities have not been issued; (ii) the portion of the Principal Amount of the Security which the Holder will deliver to be repurchased, which portion must be in a Principal Amount of $1,000 or an integral multiple thereof; and (iii) that such Security shall be repurchased with respect to the Designated Event Repurchase Date pursuant to the terms and conditions specified in the Securities and in this Indenture (iv) in the event the Company elects, pursuant to Section 13.02, to pay the Designated Event Repurchase Price, in whole or in part, in shares of Common Stock but such portion of the Designated Event Repurchase Price shall ultimately be paid to such Holder entirely in cash because any of the conditions to payment of the Designated Event Repurchase Price in shares of Common Stock is not satisfied prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Designated Event Repurchase Date, as set forth in Section 13.02(b), whether such Holder elects to (A) withdraw such Designated Event Repurchase Notice as to some or all of the Securities to which such Designated Event Repurchase Notice relates (stating the Principal Amount and certificate numbers, if any, or the appropriate Depositary procedures, if applicable, of the Securities as to which such withdrawal shall relate), or (B) receive cash in respect of the entire Designated Event Repurchase Price for all Securities (or portions thereof) to which such Designated Event Repurchase Notice relates. The delivery of such Security to the Paying Agent with, or at any time after delivery of, the Designated Event Repurchase Notice (together with all necessary endorsements) at the offices of the Paying Agent shall be a condition to the receipt by the Holder of the Designated Event Repurchase Price therefor; provided, however, that such Designated Event Repurchase Price shall be so paid pursuant to this Section 13.01 only if the Security so delivered to the Paying Agent shall conform in all respects to the description thereof set forth in the related Designated Event Repurchase Notice. The Company shall repurchase from the Holder thereof, pursuant to this Section 13.01, a portion of a Security, so long as the Principal Amount of such portion is $1,000 or an integral 64 multiple thereof. Provisions of this Indenture that apply to the repurchase of all of a Security also apply to the repurchase of such portion of such Security. Any repurchase by the Company contemplated pursuant to the provisions of this Section 13.01 shall be consummated by the delivery of the consideration to be received by the Holder promptly following the later of the Designated Event Repurchase Date and the time of delivery of the Security; provided, however, that if the Designated Event Repurchase Notice is delivered after a date which is 2 Business Days prior to the Designated Event Repurchase Date, such payment may be made as promptly after such Designated Event Repurchase Date as is practicable. Notwithstanding anything contained herein to the contrary, any Holder delivering to the Paying Agent the Designated Event Repurchase Notice contemplated by this Section 13.01(c) shall have the right to withdraw such Designated Event Repurchase Notice at any time prior to the close of business on the Business Day immediately preceding the Designated Event Repurchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 13.03. The Paying Agent shall promptly notify the Company of the receipt by it of any Designated Event Repurchase Notice or written notice of withdrawal thereof. Section 13.02. The Company's Right To Elect Manner Of Payment Of Designated Event Repurchase Price. (a) The Securities to be repurchased with respect to any Designated Event Repurchase Date pursuant to Section 13.01(a) may be paid for at the election of the Company in cash or shares of Common Stock, or in any combination of cash and shares of Common Stock, subject to the conditions set forth in Section 13.02(b). The Company shall designate, in the Designated Event Company Notice delivered pursuant to Section 13.01(b), whether the Company will repurchase the Securities for cash or shares of common Stock, or, if a combination thereof, the percentages of the Designated Event Repurchase Price in respect of which it will pay in cash or shares of Common Stock; provided, however, that the Company will pay cash for fractional interests in shares of Common Stock. For purposes of determining the existence of potential fractional interests, all Securities subject to repurchase by the Company held by a Holder shall be considered together (no matter how many separate certificates are to be presented). Each Holder whose Securities are repurchased pursuant to Section 13.01 shall receive the same percentage of cash or shares of Common Stock in payment of the Designated Event Repurchase Price for such Securities, except (i) as provided in this Section 13.02(a) with regard to the payment of cash in lieu of fractional shares of Common Stock and (ii) in the event that the Company is unable to purchase the Securities of a Holder or Holders for shares of Common Stock because any necessary qualifications or registrations of the shares of Common Stock under applicable securities laws cannot be obtained, the Company may purchase the Securities of such Holder or Holders for cash. The Company may not change its election with respect to the consideration (or components or percentages of components thereof) to be paid once the Company has given its Designated Event Company Notice to Holders except in the event of a failure to satisfy, prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Designated Event Repurchase Date, any condition to the payment of the Designated Event Repurchase Price in whole or in part, in shares of Common Stock. 65 (b) If the Company elects to pay all or a portion of the Designated Event Repurchase Price of Securities in respect of which a Designated Event Repurchase Notice pursuant to Section 13.01(c) has been given in Common Stock, the number of shares of Common Stock to be issued shall be equal to (i) the portion of the Designated Event Repurchase Price to be paid in Common Stock divided by (ii) the Market Price of one share of Common Stock, subject to satisfaction of the conditions set forth in the second succeeding paragraph. The Company will not issue any fraction of a share of Common Stock in payment of the Designated Event Repurchase Price. Instead, the Company will make a cash payment (calculated to the nearest cent) equal to such fraction multiplied by the Market Price of one share of Common Stock. If a Holder elects to have more than one Security purchased, the number of shares of Common Stock shall be based on the aggregate amount of Securities to be purchased. The Company's right to exercise its election to repurchase Securities through the issuance of shares of Common Stock shall be conditioned upon: (i) the registration of such shares of Common Stock under the Securities Act and the Exchange Act, in each case, if required; and (ii) any qualification or registration of such shares of Common Stock under applicable state securities laws, if necessary, or the availability of an exemption from such qualification and registration; (iii) the receipt by the Trustee of an Officers' Certificate stating (A): that the terms of the issuance of the shares of Common Stock are in conformity with this Indenture; (B) that the shares of Common Stock to be issued in payment of the Designated Event Repurchase Price in respect of Securities have been duly authorized and, when issued and delivered pursuant to the terms of this Indenture in payment of the Designated Event Repurchase Price in respect of Securities, will be validly issued, fully paid, non-assessable and free from preemptive rights; (C) that the conditions in this clause (iii)(A) and (iii)(B) above, the conditions in clauses (i)-(ii) above and the condition set forth in the second succeeding paragraph regarding issuance of a press release have been satisfied in all material respects; and (D) the number of shares of Common Stock to be issued for each $1,000 Principal Amount of Securities and the Closing Sale Price of a share of Common Stock on each Trading Day during the period commencing on the first Trading Day of the period during which the Market Price is calculated and ending on the Trading Day immediately preceding the Designated Event Repurchase Date; and (iv) the receipt by the Trustee of an Opinion of Counsel stating that: (A) the shares of Common Stock to be issued by the Company in payment of the Designated Event Repurchase Price in respect of Securities have been duly authorized, and when issued and delivered pursuant to the terms of this Indenture 66 in payment of the Designated Event Repurchase Price in respect of Securities, will be validly issued, fully paid and non-assessable and, to such counsel's knowledge, free from preemptive rights; and (B) the conditions in clauses (i) and (ii) above have been satisfied in all material respects. If the foregoing conditions are not satisfied with respect to a Holder or Holders prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Designated Event Repurchase Date, and the Company has elected to repurchase the Securities pursuant to this Section 13.02 through the issuance of shares of Common Stock, the Company shall pay the entire Designated Event Repurchase Price of the Securities of such Holder or Holders in Cash. Upon determination of the actual number of shares of Common Stock to be issued upon repurchase of Securities, the Company shall be required to disseminate a press release through a public medium as is customary for such a press release. (c) Covenants of the Company. All shares of Common Stock delivered upon repurchase of the Securities shall be newly issued shares, shall be duly authorized, validly issued, fully paid and nonassessable, and shall be free from preemptive rights and free of any lien or adverse claim. (d) Taxes. If a Holder of a repurchased Security is paid in shares of Common Stock, the Company shall pay any documentary, stamp or similar issue or transfer tax due on such issue of Common Stock. However, the Holder shall pay any such tax which is due because the Holder requests the Common Stock to be issued in a name other than the Holder's name. The Paying Agent may refuse to deliver the certificates representing the shares of Common Stock being issued in a name other than the Holder's name until the Paying Agent receives a sum sufficient to pay any tax which will be due because the shares of Common Stock are to be issued in a name other than the Holder's name. Nothing contained herein shall preclude any income tax withholding required by law or regulations. Section 13.03 Effect Of Designated Event Repurchase Notice. Upon receipt by the Paying Agent of the Designated Event Repurchase Notice specified in Section 13.01(c), the Holder of the Security in respect of which such Designated Event Repurchase Notice was given shall (unless such Designated Event Repurchase Notice is withdrawn as specified in the following two paragraphs) thereafter be entitled to receive solely the Designated Event Repurchase Price with respect to such Security. Such Designated Event Repurchase Price shall be paid to such Holder, subject to receipt of funds and/or securities by the Paying Agent, promptly following the later of (x) the Designated Event Repurchase Date with respect to such Security (provided the conditions in Section 13.01(c) have been satisfied) and (y) the time of delivery of such Security to the Paying Agent by the Holder thereof in the manner required by Section 13.01(c). Securities in respect of which a Designated Event Repurchase Notice has been given by the Holder thereof may not be converted pursuant to Article 15 hereof on or after the date of the delivery of such Designated Event Repurchase Notice unless such Designated Event Repurchase Notice has first been validly withdrawn as specified in the following two paragraphs. A Designated Event Repurchase Notice may be withdrawn by means of a written notice of withdrawal delivered to the office of the Paying Agent in accordance with the procedures set 67 forth in the Designated Event Company Notice at any time prior to the close of business on the Business Day prior to the Designated Event Repurchase Date specifying: (i) the certificate number, if any, or the appropriate Depositary procedures, if applicable, of the Security in respect of which such notice of withdrawal is being submitted; (ii) the Principal Amount of the Security with respect to which such notice of withdrawal is being submitted; and (iii) the Principal Amount, if any, of such Security which remains subject to the original Designated Event Repurchase Notice and which has been or will be delivered for repurchase by the Company. There shall be no purchase of any Securities pursuant to Section 13.03 if there has occurred (prior to, on or after, as the case may be, the giving, by the Holders of such Securities, of the required Designated Event Repurchase Notice) and is continuing an Event of Default (other than a default in the payment of the Designated Event Repurchase Price with respect to such Securities). The Paying Agent will promptly return to the respective Holders any Securities (x) with respect to which a Designated Event Repurchase Notice has been withdrawn in compliance with this Indenture, or (y) held by it during the continuance of an Event of Default (other than a default in the payment of the Designated Event Repurchase Price with respect to such Securities) in which case, upon such return, the Designated Event Repurchase Notice with respect thereto shall be deemed to have been withdrawn. Section 13.04. Deposit Of Designated Event Repurchase Price. Prior to 10:00 a.m. (New York City time) on the Business Day following the Designated Event Repurchase Date, the Company shall deposit with the Trustee or with the Paying Agent (or if the Company or a Subsidiary or an Affiliate of any of them is acting as the Paying Agent, shall segregate and hold in trust as provided herein) an amount of cash (in immediately available funds if deposited on such Business Day) and/or Common Stock, if permitted hereunder, sufficient to pay the aggregate Designated Event Repurchase Price of all the Securities or portions thereof which are to be repurchased on such Designated Event Repurchase Date. If the Paying Agent holds, in accordance with the terms hereof, at 10:00 a.m. (New York City time) on the Business Day immediately following the applicable Designated Event Repurchase Date, cash and/or Common Stock, if permitted hereunder, sufficient to pay the Designated Event Repurchase Price of any Securities for which a Designated Event Repurchase Notice has been tendered and not withdrawn pursuant to Section 13.04, then, immediately after such Designated Event Repurchase Date, such Securities will cease to be outstanding, and the rights of the Holders in respect thereof shall terminate (other than the right to receive the Designated Event Repurchase Price upon delivery of such Securities). As soon as practicable on and after the Designated Event Repurchase Date, the Company shall deliver to each Holder entitled to receive shares of Common Stock through the Paying Agent, a certificate (other than in the case of Holders of Securities in book-entry form with the Depositary, which shares shall be delivered in accordance with the Depositary customary 68 practices) for the number of full shares of Common Stock issuable in payment of the Designated Event Repurchase Price and cash in lieu of any fractional interests. The person in whose name the certificate for the shares of Common Stock is registered shall be treated as a holder of record of Common Stock on the Designated Event Repurchase Date. No payment or adjustment will be made for dividends on the shares of Common Stock the record date for which occurred on or prior to the Designated Event Repurchase Date. Section 13.05. Securities Repurchased In Part. Any Security which is to be repurchased only in part shall be surrendered at the office of the Paying Agent (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing) and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security, without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder in aggregate Principal Amount equal to, and in exchange for, the portion of the Principal Amount of the Security so surrendered which is not purchased. Section 13.06. Covenant To Comply With Securities Laws Upon Repurchase Of Securities. In connection with any offer to repurchase Securities under Section 13.01 hereof (provided that such offer or repurchase constitutes an "issuer tender offer" for purposes of Rule 13e-4 (which term, as used herein, includes any successor provision thereto) under the Exchange Act at the time of such offer or purchase), and subject to any exemptions under applicable law, the Company shall (i) comply with Rule 13e-4 and Rule 14e-1 (or any successor provision) under the Exchange Act, (ii) file the related Schedule TO (or any successor schedule, form or report) under the Exchange Act, and (iii) otherwise comply with all Federal and state securities laws so as to permit the rights and obligations under Section 13.03 to be exercised in the time and in the manner specified in Section 13.03. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Article 13, the Company's compliance with such laws and regulations including the extension of the payment or notice periods contemplated by this Article, shall not in and of itself cause a breach of their obligations under this Article 13. Section 13.07. Repayment To The Company. The Trustee and the Paying Agent shall return to the Company any cash or shares of Common Stock that remain unclaimed, together with interest and dividends, if any, thereon, held by them for the payment of the Designated Event Repurchase Price; provided, however, that to the extent that the aggregate amount of cash or shares of Common Stock deposited by the Company pursuant to Section 13.04 exceeds the aggregate Designated Event Repurchase Price of the Securities or portions thereof which the Company is obligated to purchase as of the Designated Event Repurchase Date then on the Business Day following Designated Event Repurchase Date the Trustee or the Paying Agent, as the case may be, shall return any such excess to the Company. 69 ARTICLE 14 PAYMENTS OF ADDITIONAL INTEREST AMOUNTS ON THE SECURITIES Section 14.01. Payment Of Additional Interest Amounts; Interest Rights Preserved. (a) Accrued but unpaid Additional Interest Amounts, if any, on any Security that is payable, and is punctually paid or duly provided for, on any Additional Interest Payment Date shall be paid to the Person in whose name that Security is registered at the close of business on the Regular Record Date for such interest at the office or agency of the Company maintained for such purpose. Each installment of Additional Interest Amounts, if any, on any Security shall be made by check mailed to the address of the Holder specified in the register of Securities, or, at the option of the Holder, at the Corporate Trust Office, in such lawful money of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts; provided, however, that, with respect to any Holder of Securities with an aggregate Principal Amount in excess of $5,000,000, at the request of such Holder in writing to the Company, Additional Interest Amounts, if any, on such Holder's Securities shall be paid by wire transfer in immediately available funds in accordance with the written wire transfer instruction supplied by such Holder from time to time to the Trustee and Paying Agent (if different from the Trustee) at least two days prior to the applicable Regular Record Date. In the case of a permanent Global Security, interest payable on any Additional Interest Payment Date will be paid to the Depositary, with respect to that portion of such permanent Global Security held for its account by Cede & Co. for the purpose of permitting such party to credit the interest received by it in respect of such permanent Global Security to the accounts of the beneficial owners thereof. ARTICLE 15 CONVERSION Section 15.01. Right To Convert. (a) Subject to and upon compliance with the provisions of this Indenture, each Holder shall have the right, at such Holder's option, at any time following the Issue Date of the Securities hereunder through the close of business on the Final Maturity Date to convert the Principal Amount of any such Securities, or any portion of such Principal Amount which is $1,000 or an integral multiple thereof at the Conversion Price then in effect: (i) during any fiscal quarter commencing after December 31, 2003, if the Closing Sale Price of the Common Stock exceeds 110% of the Conversion Price for at least 20 Trading Days in the 30 consecutive Trading Days ending on the last Trading Day of the preceding fiscal quarter, (ii) on any Trading Day occurring after November 15, 2008, if the Closing Sale Price of the Common Stock has exceeded 110% of the then current Conversion Price on any day on or after November 15, 2008; or (iii) subject to Section 15.02(f), during the five Business Day period immediately following a five consecutive Trading Day period in which the Trading Price, as determined following a request by a Holder in accordance with Section 15.01(d), for each day of such five consecutive Trading Day period was less than 98% of the product 70 of the Closing Sale Price of the Common Stock on such Trading Day and the Conversion Rate in effect on such Trading Day (the condition specified in this subsection (b) being the "98% MARKET CONDITION"); (iv) at any time prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Redemption Date, if such Security has been called for redemption pursuant to Article 11 hereof; or (v) as provided in Section 15.01(b). (b) In addition, in the event that: (i) (A) the Company elects to distribute to holders of Common Stock rights entitling them to purchase, for a period expiring within 45 days, Common Stock at less than the average Closing Sale Price of the Common Stock for the 10 Trading Days immediately preceding the declaration for such distribution; or (B) the Company elects to distribute to holders of Common Stock assets, debt securities or certain rights to purchase the Company's securities, which distribution has a per share value as determined by the Board of Directors of the Company exceeding 5% of the Closing Sale Price of the Common Stock on the Business Day immediately preceding the declaration for such distribution; then, in each case, the Company must notify, in writing, Holders of Securities of the occurrence of such an event at least 20 days prior to the Ex-Dividend Date for any such distribution. Once the Company has given such notice, Holders may surrender their Securities for conversion at any time until the earlier of the close of business on the Business Day immediately preceding the Ex-Dividend Date or the date of announcement by the Company that the distribution will not take place. No adjustment shall be made to the ability of a Holder of Securities to convert if such Holder may participate in the distribution without conversion. (ii) the Company becomes party to a consolidation, merger, binding share exchange or sale of all or substantially all of the Company's assets, in each case pursuant to which the Common Stock of the Company would be converted into cash, securities or other property, a Holder may surrender the Securities for conversion at any time from and after the date which is 15 days prior to the anticipated effective date of the transaction until and including the date which is 15 days after the actual date of the transaction. If the Company becomes party to a consolidation, merger, binding share exchange or sale of all or substantially all of the Company's assets, in each case pursuant to which the Common Stock of the Company would be converted into cash, securities or other property, then at the effective time of the transaction, the right to convert the Securities into Common Stock shall be changed into a right to convert such Securities into the kind and amount of cash, securities and other property which the Holder would have received if the Holder had converted such Securities immediately prior to the transaction. If the transaction also constitutes a Designated Event, the Holder shall have the rights set forth in Article 13 above. 71 (c) Notwithstanding the foregoing, a Security in respect of which a Holder has delivered a Repurchase Notice or a Designated Event Repurchase Notice exercising such Holder's option to require the Company to repurchase such Security may be converted only if such notice of exercise is withdrawn in accordance with Article 13 hereof prior to the close of business on the Business Day immediately preceding the Repurchase Date or the Designated Event Repurchase Date, as the case may be. (d) In connection with any conversion upon satisfaction of the 98% Market Price Condition, the Bid Solicitation Agent shall have no obligation to determine the Trading Price unless the Company has requested such determination, and the Company shall have no obligation to request such determination unless a Holder has provided the Company with reasonable evidence that the Trading Price would be less than 98% of the product of the Closing Sale Price of the Common Stock and the Conversion Rate. At such time as the Company has determined that a Holder has provided such evidence to the Company, the Company shall instruct the Bid Solicitation Agent, in writing, to determine the Trading Price beginning on the next Trading Day and on each successive Trading Day until the Trading Price is greater than or equal to 98% of the product of the Closing Sale Price of the Common Stock and the Conversion Rate. After receiving from a Holder any materials that purport to constitute such "reasonable evidence," the Company shall promptly determine whether such material does constitute "reasonable evidence" for purposes of this Section 15.01(d); provided that absent manifest error, the Company's determination shall be binding and final. The Company shall not be obligated to give any instructions to the Bid Solicitation Agent until the Company has completed its determination, which it shall do promptly. Section 15.02. Conversion Procedure. (a) Each Security shall be convertible at the office of the Conversion Agent into fully paid and nonassessable shares (calculated to the nearest 1/100th of a share) of Common Stock (subject to Sections 15.02(f) and 15.10). The Security will be converted into shares of Common Stock at the Conversion Price therefor. (b) In order to exercise the conversion privilege with respect to any Securities in certificated form, the Holder of any such Securities to be converted, in whole or in part, shall: (i) complete and manually sign the conversion notice provided on the back of the Security (the "CONVERSION NOTICE") and deliver such notice to a Conversion Agent; (ii) surrender the Security to a Conversion Agent; (iii) furnish appropriate endorsements and transfer documents, if required; and (iv) pay any transfer or similar tax, if required. The date on which the Holder satisfies all of the requirements set forth in (i) through (iv) above is the "CONVERSION DATE." Such notice shall also state the name or names (with address or addresses) in which the certificate or certificates for shares of Common Stock which shall be issuable on such conversion shall be issued. All such Securities surrendered for conversion shall, unless the shares issuable on conversion are to be issued in the same name as the registration of such Securities, be duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the Holder or his duly authorized attorney. 72 In order to exercise the conversion privilege with respect to any interest in Securities in global form, the Holder must complete the appropriate instruction form for conversion pursuant to the Depositary's book-entry conversion program, furnish appropriate endorsements and transfer documents if required by the Company or the Trustee or Conversion Agent, and pay the funds, if any, required by this Section 15.02 and any transfer taxes if required pursuant to Section 15.06. (c) As promptly as practicable after satisfaction of the requirements for conversion set forth above (but in no event later than 5 Business Days after the Conversion Date), subject to compliance with any restrictions on transfer if shares issuable on conversion are to be issued in a name other than that of the Holder (as if such transfer were a transfer of the Securities (or portion thereof) so converted), the Company shall issue and shall deliver to such Holder at the office of the Conversion Agent, a certificate or certificates for the number of full shares of Common Stock issuable upon the conversion of such Securities or portion thereof in accordance with the provisions of this Article and a check or cash in respect of any fractional interest in respect of a share of Common Stock arising upon such conversion, as provided in Section 15.03. In case any Securities of a denomination greater than $1,000 shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to the Holder of the Securities so surrendered, without charge to him, new Securities in authorized denominations in an aggregate Principal Amount equal to the unconverted portion of the surrendered Securities. Each conversion shall be deemed to have been effected as to any such Securities (or portion thereof) on the date on which the requirements set forth above in this Section 15.02 have been satisfied as to such Securities (or portion thereof), and the person in whose name any certificate or certificates for shares of Common Stock shall be issuable upon such conversion shall be deemed to have become on said date the Holder of record of the shares represented thereby; provided, however, that in case of any such surrender on any date when the stock transfer books of the Company shall be closed, the person or persons in whose name the certificate or certificates for such shares are to be issued shall be deemed to have become the record Holder thereof for all purposes on the next day on which such stock transfer books are open, but such conversion shall be at the Conversion Price in effect on the date upon which such Securities shall be surrendered. (d) Upon the conversion of an interest in Global Securities, the Trustee (or other Conversion Agent appointed by the Company) shall make a notation on such Global Securities as to the reduction in the Principal Amount represented thereby. The Company shall notify the Trustee in writing of any conversions of Securities effected through any Conversion Agent other than the Trustee. (e) Each stock certificate representing Common Stock issued upon conversion of the Securities that are Restricted Securities shall bear the legend in substantially the form of EXHIBIT C hereto. (f) Notwithstanding the foregoing, if on the Conversion Date of the Holder's conversion of a Security pursuant to the 98% Market Condition (such date, the "98% CONVERSION DATE") the Closing Sale Price of the Common Stock is greater than the Conversion Price, the Holder converting a Security pursuant to the 98% Market Condition shall receive, in 73 lieu of a number of shares of Common Stock based on the Conversion Price, Cash or Common Stock or a combination of Cash and Common Stock, at the Company's sole option, with a value equal to the Principal Amount of the Security so surrendered for conversion (such conversion, a "PRINCIPAL VALUE CONVERSION"). Any Common Stock to be delivered to the Holder by the Company upon a Principal Value Conversion shall be valued at the greater of the Conversion Price on the 98% Conversion Date or the Applicable Stock Price of the Common Stock on the 98% Conversion Date. The Company shall notify the Trustee and any surrendering Holder of Securities whose conversion is a Principal Value Conversion of such Principal Value Conversion by the second Trading Day following the 98% Conversion Date and in such notice, state whether the Company shall pay to such Holder all or a portion of the Principal Amount of such Securities in Cash, Common Stock or a combination of Cash and Common Stock and, if a combination, the percentages of the Principal Amount in respect of which it will pay in Cash or Common Stock. Subject to the satisfaction of all requirements for conversion under this Section 13.02, the Company shall use reasonable efforts to (A) pay any portion of the Principal Amount of Securities elected to be paid in Cash by the Company in a Principal Value Conversion on the third Trading Day following the determination of the Applicable Stock Price and (B) deliver any portion of the Principal Amount of Securities elected to be paid by the Company in Common Stock in a Principal Value Conversion on the third Trading Day following the determination of the Applicable Stock Price. Section 15.03. Cash Payments In Lieu Of Fractional Shares. The Company will not issue fractional shares of Common Stock upon conversion of Securities. If multiple Securities shall be surrendered for conversion at one time by the same Holder, the number of full shares which shall be issuable upon conversion shall be computed on the basis of the aggregate Principal Amount of the Securities (or specified portions thereof to the extent permitted hereby) so surrendered. If any fractional share of stock would be issuable upon the conversion of any Securities, the Company shall make payment therefor in cash equal to the fraction of a share of Common Stock otherwise issuable multiplied by the Current Market Price (as defined in Section 15.04(g)) to the Holder of Securities. Section 15.04 . Adjustment Of Conversion Price. The Conversion Price shall be adjusted from time to time by the Company as follows: (a) In case the Company shall, at any time or from time to time while any of the Securities are outstanding, pay a dividend or make a distribution in shares of Common Stock to all holders of its outstanding shares of Common Stock, then the Conversion Price in effect at the opening of business on the date following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be adjusted by multiplying such Conversion Price by a fraction, (i) the numerator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination, and (ii) the denominator of which shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution. Such reduction becomes effective immediately after the opening of business on the day following the date fixed for such determination. If any dividend or distribution of the type described in this Section 15.04(a) is declared but not so paid or made, the Conversion Price shall again be adjusted to the Conversion Price which would then be in effect if such dividend or distribution had not been declared. 74 (b) In case the Company shall, at any time or from time to time while any of the Securities are outstanding, issue to all holders of its outstanding shares of Common Stock rights or warrants entitling them (for a period of not more than 60 days after such issuance) to subscribe for or purchase shares of Common Stock (or securities convertible into or exchangeable or exercisable for Common Stock) at a price per share (or having a conversion, exchange or exercise price per share) less than the Closing Sale Price of Common Stock on the Business Day immediately preceding the date of announcement of such issuance, the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect at the opening of business on the date of such announcement by a fraction, (i) the numerator of which shall be the number of shares of Common Stock outstanding at the close of business on the date of announcement, plus the number of shares which the aggregate offering price of the total number of shares so offered would purchase at such Closing Sale Price of Common stock on the Business Day immediately preceding the date of announcement of such issuance determined by multiplying such total number of shares so offered by the exercise price of such rights or warrants and dividing the product so obtained by such Closing Sale Price, and (ii) the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the date of announcement plus the total number of additional shares of Common Stock offered for subscription or purchase or into which convertible, exchangeable or exercisable, securities so offered are convertible, exchangeable or exercisable. Such adjustment shall become effective immediately after the opening of business on the day following the date of announcement of such issuance. To the extent that shares of Common Stock (or securities convertible into or exchangeable or exercisable for shares of Common Stock) are not delivered pursuant to such rights or warrants, upon the expiration or termination of such rights or warrants, the Conversion Price shall be readjusted to the Conversion Price which would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of the delivery of only the number of shares of Common Stock (or securities convertible into or exchangeable or exercisable for shares of Common Stock) actually delivered. In the event that such rights or warrants are not so issued, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if the date fixed for the determination of stockholders entitled to receive such rights or warrants had not been fixed. In determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than such Closing Sale Price, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received for such rights or warrants and the value of such consideration, if other than cash, to be determined in good faith by the Board of Directors of the Company. (c) In case the Company shall, at any time or from time to time while any of the Securities are outstanding, subdivide its outstanding shares of Common Stock into a greater number of shares of Common Stock, then the Conversion Price in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately decreased, and conversely, in case the Company shall, at any time or from time to time while any of the Securities are outstanding, combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, then the Conversion Price in effect at 75 the opening of business on the day following the day upon which such combination becomes effective shall be proportionately increased. In each such case, the Conversion Price shall be adjusted by multiplying such Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such subdivision or combination and the denominator of which shall be the number of shares of Common Stock outstanding immediately after giving effect to such subdivision or combination. Such decrease or increase, as the case may be, shall become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (d) (i) In case the Company shall, at any time or from time to time while the Securities are outstanding, by dividend or otherwise, distribute to all holders of its Common Stock shares of any class of capital stock of the Company (other than any dividends or distributions to which Section 15.04(a) applies) or evidences of its indebtedness or assets (including cash or securities, but excluding any rights or warrants referred to in Section 15.04(b), and excluding any dividend or distribution (x) paid exclusively in cash or (y) referred to in Section 15.04(a)) (any of the foregoing hereinafter in this Section 15.04(d)) called the "DISTRIBUTED SECURITIES"), then, in each such case, the Conversion Price shall be reduced so that the same shall be equal to the price determined by multiplying the Conversion Price in effect on the Record Date with respect to such distribution by a fraction: (A) the numerator of which shall be the Current Market Price per share of the Common Stock on such Record Date less the fair market value (as determined by the Board of Directors, whose good faith determination shall be conclusive, and described in a resolution of the Board of Directors) on the Record Date of the portion of the Distributed Securities so distributed applicable to one share of Common Stock, and (B) the denominator of which shall be the Current Market Price per share of the Common Stock. Such reduction shall become effective immediately prior to the opening of business on the day following the Record Date for such distribution. If the Board of Directors determines the fair market value of any distribution for purposes of this Section 15.04(d) by reference to the actual or when issued trading market for any securities, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price of the Common Stock. Each share of Common Stock issued upon conversion of securities pursuant to this Article 15 shall be entitled to receive the appropriate number of common stock or preferred stock purchase rights, if any, as may be provided by the terms of any stockholder rights plan adopted by the Company (unless an event causing such rights to separate from the Common Stock has occurred at or prior to the time of conversion). Any distribution of rights or warrants pursuant to a stockholder rights plan complying with the requirements set forth in the immediately preceding sentence of this paragraph shall not constitute a distribution of rights or warrants for the purposes of Section 15.04(b) or this Section 15.04(d). 76 (ii) In the event that any such distribution consists of shares of capital stock of, or similar equity interests in, one or more of the Company's Subsidiaries or other business unit (a "SPIN-OFF"), the fair market value of the securities to be distributed shall equal the average of the closing sale prices of such securities on the principal securities market on which such securities are traded for the ten consecutive Trading Days commencing on and including the fifth Trading Day of those securities after the Ex-Dividend Date. In the event, however, that an underwritten initial public offering of the securities in the Spin-Off occurs simultaneously with the Spin-Off, the fair market value of the securities distributed in the Spin-Off shall mean the initial public offering price of such securities. (iii) For the purposes of this Section 15.04(d), Rights or warrants distributed by the Company to all holders of its Common Stock entitling them to subscribe for or purchase shares of the Company's capital stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events ("TRIGGER EVENT"): (A) are deemed to be transferred with such shares of Common Stock; (B) are not exercisable; and (C) are also issued in respect of future issuances of Common Stock, shall be deemed not to have been distributed for purposes of this Section 15.04(d) (and no adjustment to the Conversion Price under this Section 15.04(d) will be required) until the occurrence of the earliest Trigger Event, whereupon such rights and warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Price shall be made under this Section 15.04(d). If any such right or warrant, including any such existing rights or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and record date with respect to new rights or warrants with such rights (and a termination or expiration of the existing rights or warrants without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Price under this Section 15.04(d) was made, (1) in the case of any such rights or warrants which shall all have been redeemed or repurchased without exercise by any Holders thereof, the Conversion Price shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or repurchase price received by a holder of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all applicable holders of Common Stock as of the date of such redemption or repurchase, and (2) in the case of such rights or warrants which shall have expired or been terminated without exercise by any holders thereof, the Conversion Price shall be readjusted as if such rights and warrants had not been issued. (iv) For purposes of this Section 15.04(d) and Section 15.04(a), 15.04(b), and 15.04(c), any dividend or distribution to which this Section 15.04(d) is applicable that also includes (x) shares of Common Stock, (y) rights or warrants to subscribe for or 77 purchase shares of Common Stock or securities convertible into or exercisable or exchangeable for Common Stock to which Section 15.04(b) applies (or any combination thereof), or (z) a subdivision or combination of shares of Common Stock to which Section 15.04(c) applies, shall be deemed instead to be: (A) a dividend or distribution of the evidences of indebtedness, assets, shares of capital stock, rights or warrants, other than such shares of Common Stock, such rights or warrants or securities convertible into or exercisable or exchangeable for Common Stock or such subdivision or combination to which Section 15.04(a), 15.04(b), and 15.04(c) apply, respectively (and any Conversion Price reduction required by this Section 15.04(d) with respect to such dividend or distribution shall then be made), immediately followed by, (B) a dividend or distribution of such shares of Common Stock, such rights or warrants or securities convertible into or exercisable or exchangeable for Common Stock or such subdivision or combination (and any further Conversion Price reduction required by Section 15.04(a), 15.04(b), and 15.04(c) with respect to such dividend or distribution shall then be made), except: (1) the Record Date of such dividend or distribution shall be substituted as (x) "the date fixed for the determination of stockholders entitled to receive such dividend or other distribution," and "the date fixed for such determination" within the meaning of Section 15.04(a), (y) "the date fixed for the determination of stockholders entitled to receive such rights or warrants," within the meaning of Section 15.04(b) and (z) "the day upon which such subdivision becomes effective" and "the day upon which such combination becomes effective" within the meaning of Section 15.04(c); and (2) any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination" within the meaning of Section 15.04(a) and any reduction or increase in the number of shares of Common Stock resulting from such subdivision or combination shall be disregarded in connection with such dividend or distribution. (e) In case the Company shall, at any time or from time to time while any of the Securities are outstanding, by dividend or otherwise, distribute to all holders of its shares of Common Stock, cash (excluding any cash that is distributed upon a merger or consolidation to which Section 15.05 applies or as part of a distribution referred to in Section 15.04(d)), then, immediately after the close of business on the date of such distribution, the Conversion Price shall be adjusted so that the same shall equal the rate determined by multiplying the Conversion Price in effect immediately prior to the close of business of such Record Date by a fraction: (A) the numerator of which shall be equal to the Current Market Price on the Record Date; and 78 (B) the denominator of which shall be equal to the Current Market Price on such date less the amount of the distribution per share. (f) In case of a payment in respect of a tender offer or exchange offer made by the Company or any of its subsidiaries for all or any portion of the Common Stock, the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to close of business on the date of the Expiration Time by a fraction (A) the numerator of which shall be the product of (1) the number of shares of Common Stock outstanding (including any tendered shares) at the Trading Day next succeeding the last time (the "EXPIRATION TIME") tenders could have been made pursuant to such tender offer (as it may be amended) and (2) the Current Market Price of the Common Stock on the Trading Day next succeeding the Expiration Time, and (ii) the denominator of which shall be the sum of (x) the fair market value (as determined by the Board of Directors, whose good faith determination shall be conclusive and described in a resolution of the Board of Directors) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender offer) of all shares validly tendered and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the "PURCHASED SHARES") and (y) the product of the number of shares of Common Stock outstanding (less any Purchased Shares) at the Expiration Time and the Current Market Price of the Common Stock on the Trading Day next succeeding the Expiration Time. Such reduction (if any) shall become effective immediately prior to the opening of business on the Business Day following the Expiration Time. In the event that the Company is obligated to purchase shares pursuant to any such tender offer, but the Company is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if such tender offer had not been made. If the application of this Section 15.04(f) to any tender offer would result in an increase in the Conversion Price, no adjustment shall be made for such tender offer under this Section 15.04(f). (g) For purposes of this Section 15.04, the following terms shall have the meaning indicated: (1) "CURRENT MARKET PRICE" on any date means the average of the Closing Sale Prices per share of Common Stock for the 10 consecutive Trading Days immediately preceding the day before the Record Date (or, if earlier, the Ex-Dividend date) with respect to any distribution, issuance or other event requiring such computation. (2) "FAIR MARKET VALUE" shall mean the amount which a willing buyer would pay a willing seller in an arm's length transaction. (3) "RECORD DATE" shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of stockholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise). 79 (h) Subject to subsection (j) below, the Company may make such decreases in the Conversion Price, in addition to any adjustments required by Section 15.04(a), 15.04(b), 15.04(c), 15.04(d), 15.04(e) or 15.04(f), as the Board of Directors considers to be advisable to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock resulting from any dividend or distribution of stock (or rights to acquire stock) or from any event treated as such for income tax purposes. (i) To the extent permitted by applicable law and subject to subsection (j) below, the Company from time to time may decrease the Conversion Price by any amount for any period of time if the period is at least 20 days, the decrease is irrevocable during the period and the Board of Directors shall have made a determination that such decrease would be in the best interests of the Company, which determination shall be conclusive. Whenever the Conversion Price is decreased pursuant to the preceding sentence, the Company shall mail to Holders of record of the Securities a notice of the decrease at least 15 days prior to the date the decreased Conversion Price takes effect, and such notice shall state the decreased Conversion Price and the period during which it will be in effect. (j) Any decrease in the Conversion Price pursuant to subsections (h) and (i) above shall not, without the approval of the stockholders of the Company, as required by Rule 4310 of the Marketplace Rules of the Nasdaq Stock Market, result in the sale or issuance of 20% or more of the shares of Common Stock, or 20% of more of the voting power, outstanding as of the date hereof. (k) No adjustment in the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least 1% in such price; provided, however, that any adjustments which by reason of this Section 15.04(j) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Article 15 shall be made by the Company and shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be. No adjustment need be made for rights to purchase Common Stock pursuant to a Company plan for reinvestment of dividends or interest. To the extent the Securities become convertible into cash, assets, property or securities (other than capital stock of the Company), no adjustment need be made thereafter as to the cash, assets, property or such securities. Interest will not accrue on the cash. (l) Whenever the Conversion Price is adjusted as herein provided, the Company shall promptly file with the Trustee and any Conversion Agent an Officers' Certificate setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee shall have received such Officers' Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Price and may assume without inquiry that the last Conversion Price of which it has knowledge is still in effect. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Price setting forth the adjusted Conversion Price and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Price to each Holder of Securities at such 80 Holder's last address appearing on the list of Security holders provided for in Section 3.05 of this Indenture, within 20 days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of any such adjustment. (m) In any case in which this Section 15.04 provides that an adjustment shall become effective immediately after a Record Date for an event, the Company may defer until the occurrence of such event (i) issuing to the Holder of any Securities converted after such Record Date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment and (ii) paying to such Holder any amount in cash in lieu of any fraction pursuant to Section 15.03. (n) For purposes of this Section 15.04, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock so long as the Company does not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company. (o) No adjustment to the Conversion Price shall be made pursuant to this Section 15.04 if the Holders of the Securities may participate in the transaction that would otherwise give rise to an adjustment pursuant to this Section 15.04. Section 15.05. Effect Of Reclassification, Consolidation, Merger Or Sale. If any of the following events occur, namely: (i) any reclassification or change of shares of Common Stock issuable upon conversion of the Securities (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination, or any other change for which an adjustment is provided in Section 15.04(c)); (ii) any consolidation or merger or combination to which the Company is a party other than a merger in which the Company is the continuing corporation and which does not result in any reclassification of, or change (other than in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination) in outstanding shares of Common Stock; or (iii) any sale or conveyance of all or substantially all of the properties and assets of the Company to any other person as a result of which holders of Common Stock shall be entitled to receive stock, securities or other property or assets (including cash) with respect to or in exchange for such Common Stock then the Company or the successor or purchasing person, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act as in force at the date of execution of such supplemental indenture) providing that such Securities shall be convertible into the kind and amount of shares of stock, securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance by a holder of a number of shares of Common Stock issuable upon conversion of such Securities (assuming, for such purposes, a sufficient number of 81 authorized shares of Common Stock available to convert all such Securities) immediately prior to such reclassification, change, consolidation, merger, combination, sale or conveyance, assuming such holder of Common Stock did not exercise his rights of election, if any, as to the kind or amount of securities, cash or other property receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance (provided that, if the kind or amount of stock, securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance is not the same for each share of Common Stock in respect of which such rights of election shall not have been exercised ("NON-ELECTING SHARE"), then for the purposes of this Section 15.05, the kind and amount of stock, securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance for each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares). Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 15. If, in the case of any such reclassification, change, consolidation, merger, combination, sale or conveyance, the stock, securities or other property or assets (including cash) receivable thereupon by a holder of Common Stock includes shares of stock, securities or other property or assets (including cash) of a corporation other than the successor or purchasing corporation, as the case may be, in such reclassification, change, consolidation, merger, combination, sale or conveyance, then such supplemental indenture shall also be executed by such other corporation and shall contain such additional provisions to protect the interests of the Holders of the Securities as the Board of Directors shall reasonably consider necessary by reason of the foregoing. The Company shall cause notice of the execution of such supplemental indenture to be mailed to each Holder, at the address of such Holder as it appears on the register of the Securities maintained by the Registrar, within 20 days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture. The above provisions of this Section shall similarly apply to successive reclassifications, changes, consolidations, mergers, combinations, sales and conveyances. If this Section 15.05 applies to any event or occurrence, Section 15.04 shall not apply. Section 15.06. Taxes On Shares Issued. The issue of stock certificates on conversions of Securities shall be made without charge to the converting Holder for any documentary, transfer, stamp or any similar tax in respect of the issue thereof, and the Company shall pay any and all documentary, stamp or similar issue or transfer taxes that may be payable in respect of the issue or delivery of shares of Common Stock on conversion of Securities pursuant hereto. The Company shall not, however, be required to pay any such tax which may be payable in respect of any transfer involved in the issue and delivery of stock in any name other than that of the Holder of any Securities converted, and the Company shall not be required to issue or deliver any such stock certificate unless and until the person or persons requesting the issue thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. Section 15.07. Reservation Of Shares; Shares To Be Fully Paid; Compliance With Governmental Requirements; Listing Of Common Stock. The Company shall provide, free from preemptive rights, out of its authorized but unissued shares or shares held in treasury, sufficient 82 shares of Common Stock to provide for the conversion of the Securities from time to time as such Securities are presented for conversion (assuming that, at the time of the computation of such number of shares or securities, all such Securities would be held by a single Holder). Before taking any action that would cause an adjustment reducing the Conversion Price below the then par value, if any, of the shares of Common Stock issuable upon conversion of the Securities, the Company will take all corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue shares of such Common Stock at such adjusted Conversion Price. The Company covenants that all shares of Common Stock that may be issued upon conversion of Securities shall be newly issued shares or treasury shares, shall be duly authorized, validly issued, fully paid and non-assessable and shall be free from preemptive rights and free from any lien or adverse claim. The Company shall use its reasonable efforts to list or cause to have quoted any shares of Common Stock to be issued upon conversion of Securities on each national securities exchange or over-the-counter or other domestic market on which the Common Stock is then listed or quoted. Section 15.08. Responsibility Of Trustee. The Trustee and any other Conversion Agent shall not at any time be under any duty or responsibility to any Holder of Securities to determine the Conversion Price or whether any facts exist which may require any adjustment of the Conversion Price, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, which may at any time be issued or delivered upon the conversion of any Securities; and the Trustee and any other Conversion Agent make no representations with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Securities for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article. Without limiting the generality of the foregoing, neither the Trustee nor any Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 15.05 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Holders upon the conversion of their Securities after any event referred to in such Section 15.05 or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 6.01, may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officers' Certificate (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto. Section 15.09 . Notice To Holders Prior To Certain Actions. In case, 83 (a) the Company shall declare a dividend (or any other distribution) on its Common Stock that would require an adjustment in the Conversion Price pursuant to Section 15.04; or (b) the Company shall authorize the granting to the holders of all or substantially all of its Common Stock of rights or warrants to subscribe for or purchase any share of any class or any other rights or warrants; or (c) of any reclassification or reorganization of the Common Stock of the Company (other than a subdivision or combination of its outstanding Common Stock, or a change in par value, or from par value to no par value, or from no par value to par value), or of any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or of the sale or transfer of all or substantially all of the assets of the Company or any of its significant subsidiaries; or (d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company or any of its significant subsidiaries; then, in each case, the Company shall cause to be filed with the Trustee and the Conversion Agent and to be mailed to each Holder of Securities at such Holder's address appearing on the list of Security holders provided for in Section 3.05 of this Indenture, as promptly as practicable but in any event at least 15 days prior to the applicable date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such dividend, distribution, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. Section 15.10. Cash Conversion Option. (a) In the event that, on or prior to the date that is five days prior to the Stated Maturity of a Security (the "FINAL NOTICE DATE"), a Holder elects to convert all or any portion of a Security into shares of Common Stock as set forth in Section 15.01, the Company may choose to satisfy all or any portion of its conversion obligation (the "CONVERSION OBLIGATION") in cash if the Company notifies such Holder through the Trustee at any time on or before the date that is two Business Days following receipt of written notice of conversion as specified in Section 15.02 (such period, the "CASH SETTLEMENT NOTICE PERIOD") of the dollar amount to be satisfied in cash. If the Company timely elects to pay cash in lieu of all or any portion of the shares of Common Stock otherwise issuable to the Holder, the Holder may retract the Conversion Notice at any time during the two Business Day period beginning on the day after the final day of the Cash Settlement Notice Period (a "CONVERSION RETRACTION PERIOD"); no such retraction may be made (and a conversion notice shall be irrevocable) if the Company does not elect to deliver cash in lieu of all or any portion of the shares (other than cash in lieu of fractional shares). If the conversion notice has not been retracted, then cash settlement or combined settlement (in a combination of cash and shares of Common Stock) will occur on 84 the Business Day following the final Trading Day of the five Trading Day period beginning on the first Trading Day after the final day of the Conversion Retraction Period (the "CASH SETTLEMENT AVERAGING PERIOD"). Settlement amounts will be computed as follows: (i) if the Company elects to satisfy the Conversion Obligation in shares of Common Stock, the Company will deliver to such Holder a number of shares of Common Stock equal to the quotient of the aggregate original Principal Amount of the Securities to be converted divided by the Conversion Price then in effect; (ii) if the Company elects to satisfy the Conversion Obligation in cash, the Company will deliver to such Holder cash in an amount equal to the product of: (A) a number equal to the quotient of the aggregate original Principal Amount of Securities to be converted divided by the Conversion Price then in effect, and (B) the average Closing Sale Price of the Common Stock during the Cash Settlement Averaging Period; (iii) if the Company elects to satisfy a portion of the Conversion Obligation in cash (the "PARTIAL CASH AMOUNT") and a portion of the Conversion Obligation in shares of Common Stock, the Company will deliver to such Holder cash in an amount equal to the Partial Cash Amount and a number of shares of Common Stock equal to the quotient of: (A) the excess of: (1) the product of (x) a number equal to the quotient of the aggregate original Principal Amount of Securities to be converted divided by the Conversion Price then in effect and (y) the average Closing Sale Price of the Common Stock during the Cash Settlement Averaging Period, over (2) the Partial Cash Amount; divided by (B) the average Closing Sale Price of the Common Stock during the Cash Settlement Averaging Period. Notwithstanding the foregoing, a Security in respect of which a Holder has delivered a Repurchase Notice or a Designated Event Repurchase Notice exercising such Holder's option to require the Company to repurchase such Security may be converted as described in this Article 15 only if such notice of exercise is withdrawn in accordance with the terms of Article 13 hereof. (b) If a Holder elects to convert all or any portion of a Security into shares of Common Stock after the Final Notice Date, the Company may choose to satisfy all or any portion of the Conversion Obligation in cash provided that the Company notifies such Holder through the Trustee of the cash settlement or combined settlement, including the percentage of any combined settlement to be satisfied in cash, at any time on or before the final day of the Cash Settlement 85 Notice Period. Settlement amounts will be computed and settlement dates will be determined in the same manner as set forth in (a) above except that the "Cash Settlement Averaging Period" shall be the 5 Trading Day period beginning on the first Trading Day after the Conversion Retraction Period. If the Company timely elects to pay cash in lieu of all or any portion of the shares of Common Stock otherwise issuable to the Holder, the Holder may retract the Conversion Notice at any time during the Conversion Retraction Period; no such retraction may be made (and a conversion notice shall be irrevocable) if the Company does not elect to deliver cash in lieu of all or any portion of the shares (other than cash in lieu of fractional shares). If the conversion notice has not been retracted, then cash settlement or combined settlement (in a combination of cash and shares of Common Stock) will occur on the Business Day following the final day of such Cash Settlement Averaging Period, and, with respect to the Securities subject to such conversion, such Business Day shall constitute the final Maturity Date (notwithstanding anything herein to the contrary). Section 15.11. Company Determination Final. Any determination that the Company or the Board of Directors must make pursuant to this Article 15 shall be conclusive if made in good faith and in accordance with the provisions of this Article, absent manifest error, and set forth in a Board Resolution. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 86 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written. JDS UNIPHASE CORPORATION By /s/ Christopher S. Dewees ----------------------------------- Name: Christopher S. Dewees Title: Senior Vice President THE BANK OF NEW YORK, as Trustee By /s/ Michael Pitfick ----------------------------------- Name: Michael Pitfick Title: Assistant Vice President 87 EXHIBIT A Form of Certificate to Be Delivered in Connection with Transfers Pursuant to Regulation S ---------------, ---- The Bank of New York 101 Barclay Street Floor 8 West New York, NY 10286 Attention: Corporate Trust Administration Fax: (212) 815-5915 or (212) 815-5917 Re: JDS Uniphase Corporation (the "COMPANY") Zero Coupon Senior Convertible Notes due 2010 (the "NOTES") Ladies and Gentlemen: In connection with our proposed sale of $[_________] aggregate Principal Amount of the Notes, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the United States Securities Act of 1933, as amended (the "SECURITIES ACT"), and, accordingly, we represent that: 1. the offer of the Notes was not made to a Person in the United States; 2. either (a) at the time the buy offer was originated, the transferee was outside the United States or we and any Person acting on our behalf reasonably believed that the transferee was outside the United States, or (b) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any Person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States; 3. no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(a) or Rule 904(a) of Regulation S, as applicable (or applicable successor rules); 4. the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and the conditions of Rule 903(b) or 904(b) of Regulation S, as applicable (or applicable successor rules) have been satisfied; and 5. We have advised the transferee of the transfer restrictions applicable to the Notes. You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party, in any administrative or A-1 legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S. Very truly yours, [Name of Transferor] By -------------------------------- Authorized Signature A-2 EXHIBIT B Form of Designated Event Repurchase Notice ---------------, ---- The Bank of New York 101 Barclay Street Floor 21 West New York, NY 10286 Attention: Corporate Trust Trustee Administration Fax: (212) 815-5915 or (212) 815-5917 Re: JDS Uniphase Corporation (the "COMPANY") Zero Coupon Senior Convertible Notes due 2010 This is a Designated Event Repurchase Notice as defined in Section 13.01 of the Indenture dated as of October 31, 2003 (the "INDENTURE") between the Company and The Bank of New York, as Trustee. Terms used but not defined herein shall have the meanings ascribed to them in the Indenture. Certificate No(s). of Securities: ---------------------------------- I intend to deliver the following aggregate Principal Amount of Securities for purchase by the Company pursuant to Section 13.01 of the Indenture (in multiples of $1,000): $ --------------------------------------- I hereby agree that the Securities will be purchased as of the Designated Event Repurchase Date pursuant to the terms and conditions thereof and of the Indenture. Signed: ----------------------------- B-1 EXHIBIT C THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT UNTIL THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO JDS UNIPHASE CORPORATION OR TO ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(E) ABOVE, IT WILL FURNISH TO CHEMICAL TRUST COMPANY OF CALIFORNIA, AS STOCK TRANSFER AGENT (OR SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) IT WILL DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(E) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFEREE IS A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO CHEMICAL TRUST COMPANY OF CALIFORNIA, AS STOCK TRANSFER AGENT (OR SUCCESSOR TRANSFER AGENT, AS APPLICABLE) SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY PURSUANT TO C-1 CLAUSE 1(E) ABOVE OR UPON ANY TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. C-2 ..................................... Certain Sections of this Indenture relating to Sections 310 through 318 of the Trust Indenture Act of 1939:
Trust Indenture Indenture Act Section Section --------------- --------- Section 310(a)(1) ........................................................... 6.09 (a)(2) ........................................................... 6.09 (a)(3) ........................................................... Not Applicable (a)(4) ........................................................... Not Applicable (b) ........................................................... 6.08 6.10 Section 311(a) ........................................................... 6.13 (b) ........................................................... 6.13 Section 312(a) ........................................................... 7.01 7.02(a) (b) ........................................................... 7.02(b) (c) ........................................................... 7.02(c) Section 313(a) ........................................................... 7.03(a) (b) ........................................................... 7.03(a) (c) ........................................................... 7.03(a) (d) ........................................................... 7.03(b) Section 314(a) ........................................................... 7.04 (b) ........................................................... Not Applicable (c)(1) ........................................................... 1.02 (c)(2) ........................................................... 1.02 (c)(3) ........................................................... Not Applicable (d) ........................................................... Not Applicable (e) ........................................................... 1.02 Section 315(a) ........................................................... 6.01 (b) ........................................................... 6.02 (c) ........................................................... 6.01 (d) ........................................................... 6.01 (e) ........................................................... 5.14 Section 316(a)(1)(A) ........................................................... 5.12 (a)(1)(B) ........................................................... 5.13 (a)(2) ........................................................... Not Applicable (b) ........................................................... 5.08 (c) ........................................................... 1.04(c) Section 317(a)(1) ........................................................... 5.03 (a)(2) ........................................................... 5.05 (b) ........................................................... 10.03 Section 318(a) ........................................................... 1.07
- -------- Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of this Indenture. i EX-4.9 4 f94556orexv4w9.txt EXHIBIT 4.9 EXHIBIT 4.9 REGISTRATION RIGHTS AGREEMENT DATED AS OF OCTOBER 27, 2003 BETWEEN JDS UNIPHASE CORPORATION AND MORGAN STANLEY & CO. INCORPORATED, GOLDMAN, SACHS & CO., AND CIBC WORLD MARKETS CORP., AS INITIAL PURCHASERS REGISTRATION RIGHTS AGREEMENT, dated as of October 27, 2003 (this "AGREEMENT"), between JDS Uniphase Corporation, a Delaware corporation (the "COMPANY"), and Morgan Stanley & Co. Incorporated, Goldman, Sachs & Co. and CIBC World Markets Corp., as initial purchasers (the "INITIAL PURCHASERS") to the Purchase Agreement, dated October 27, 2003 (the "PURCHASE AGREEMENT"), between the Company and the Initial Purchasers. In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Company has agreed to provide the registration rights set forth in this Agreement. The Company has represented and warranted that it will have executed and delivered this Agreement prior to closing the transactions contemplated under the Purchase Agreement. The Company agrees with the Initial Purchasers, (i) for their benefit as Initial Purchasers and (ii) for the benefit of the beneficial owners (including the Initial Purchasers) from time to time of the Notes (as defined herein) and the beneficial owners from time to time of the Underlying Common Stock (as defined herein) issued upon conversion of the Notes (each of the foregoing a "HOLDER" and together the "HOLDERS"), as follows: Section 1 . Definitions. Capitalized terms used herein without definition shall have their respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: "ADDITIONAL INTEREST AMOUNT" has the meaning set forth in Section 2(e) hereof. "AFFILIATE" means with respect to any specified person, an "affiliate," as defined in Rule 144, of such person. "AMENDMENT EFFECTIVENESS DEADLINE" has the meaning set forth in Section 2(d) hereof. "BUSINESS DAY" means any day, except a Saturday, Sunday or legal holiday on which banking institutions in The City of New York are authorized or obligated by law or executive order to close. "COMMON STOCK" means the shares of common stock, $0.001 par value per share, of the Company, together with the Rights evidenced by such common stock to the extent provided in the Rights Agreement, and any other shares of common stock as may constitute "Common Stock" for purposes of the Indenture, including the Underlying Common Stock. "CONVERSION PRICE" has the meaning assigned such term in the Indenture. "DEFERRAL NOTICE" has the meaning set forth in Section 3(h) hereof. "DEFERRAL PERIOD" has the meaning set forth in Section 3(h) hereof. "EFFECTIVENESS DEADLINE" has the meaning set forth in Section 2(a) hereof. "EFFECTIVENESS PERIOD" means the period commencing on the first date that a Shelf Registration Statement is declared effective under the Securities Act hereof and ending on (i) the date when all of the Registrable Securities have been sold pursuant to the Shelf Registration statement or Rule 144, (ii) the expiration of the holding period under Rule 144(k) under the Securities Act, or any successor provision or (iii) the date when the Registrable Securities have ceased to be outstanding (whether as a result of repurchase and cancellation, conversion or otherwise). "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. "FILING DEADLINE" has the meaning set forth in Section 2(a) hereof. "HOLDER" has the meaning set forth in the second paragraph of this Agreement. "INDENTURE" means the Indenture dated as of October 31, 2003 between the Company and The Bank of New York, as trustee, pursuant to which the Notes are being issued. "INITIAL PURCHASERS" has the meaning set forth in the preamble hereof. "INTEREST PAYMENT DATE" means each November 15 and May 15. "ISSUE DATE" means the first date of original issuance of the Notes. "LIQUIDATED DAMAGES AMOUNT" has the meaning set forth in Section 2(e) hereof. "MATERIAL EVENT" has the meaning set forth in Section 3(h) hereof. "NOTES" means the Zero Coupon Senior Convertible Notes Due 2010 of the Company to be purchased pursuant to the Purchase Agreement, including any Notes purchased by the Initial Purchasers upon exercise of their option to purchase additional Notes. 2 "NOTICE AND QUESTIONNAIRE" means a written notice delivered to the Company containing substantially the information called for by the Selling Securityholder Notice and Questionnaire attached as Annex A to the Offering Memorandum of the Company, dated October 27, 2003, relating to the Notes. "NOTICE HOLDER" means, on any date, any Holder that has delivered a Notice and Questionnaire to the Company on or prior to such date. "PURCHASE AGREEMENT" has the meaning set forth in the preamble hereof. "PROSPECTUS" means a prospectus relating to a Shelf Registration Statement, as amended or supplemented, and all materials incorporated by reference in such Prospectus. "RECORD HOLDER" means with respect to any Interest Payment Date relating to any Notes or Underlying Common Stock as to which any Additional Interest Amount or Liquidated Damages Amount has accrued, the registered holder of such Note or Underlying Common Stock on the November 1 or May 1 immediately preceding the Interest Payment Date. "REGISTRABLE SECURITIES" means the Notes until such Notes have been converted into or exchanged for the Underlying Common Stock and, at all times subsequent to any such conversion, the Underlying Common Stock and any securities into or for which such Underlying Common Stock has been converted or exchanged, and any security issued with respect thereto upon any stock dividend, split or similar event until, in the case of any such security, (A) the earliest of (i) its effective registration under the Securities Act and resale in accordance with a Shelf Registration Statement, (ii) expiration of the holding period that would be applicable thereto under Rule 144(k) or (iii) its sale to the public pursuant to Rule 144 (or any similar provision then in force, but not Rule 144A) under the Securities Act, and (B) as a result of the event or circumstance described in any of the foregoing clauses (i) through (iii), the legend with respect to transfer restrictions required under the Indenture is removed or removable in accordance with the terms of the Indenture or such legend, as the case may be. "REGISTRATION DEFAULT" has the meaning set forth in Section 2(e) hereof. "REGISTRATION DEFAULT PERIOD" has the meaning set forth in Section 2(e) hereof. "RIGHTS AGREEMENT" means the Fifth Amended and Restated Rights Agreement dated February 13, 2003 between the Company and American Stock Transfer & Trust Company, as rights agent. 3 "RULE 144" means Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. "RULE 144A" means Rule 144A under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. "SEC" means the Securities and Exchange Commission. "SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC thereunder. "SHELF REGISTRATION STATEMENT" has the meaning set forth in Section 2(a) hereof, including amendments to such registration statement, all exhibits and all materials incorporated by reference in such registration statement. "SPECIAL COUNSEL" means Skadden, Arps, Slate, Meagher & Flom LLP or one such other successor counsel as shall be specified by the Holders of a majority of the Registrable Securities, but which may, with the written consent of the Initial Purchasers (which shall not be unreasonably withheld), be another nationally recognized law firm experienced in securities law matters designated by the Company. For purposes of determining Holders of a majority of the Registrable Securities in this definition, Holders of Notes shall be deemed to be the Holders of the number of shares of Underlying Common Stock into which such Notes are or would be convertible as of the date the consent is requested. "TRUSTEE" means The Bank of New York, the Trustee under the Indenture. "UNDERLYING COMMON STOCK" means the Common Stock into which the Notes are convertible or issued upon any such conversion. Section 2 . Shelf Registration. (a) To the extent not prohibited by any applicable law or applicable interpretation of the staff of the SEC, the Company shall prepare and file or cause to be prepared and filed with the SEC, as soon as practicable but in any event by the date (the "FILING DEADLINE") 90 days after the Issue Date, a registration statement for an offering to be made on a delayed or continuous basis pursuant to Rule 415 of the Securities Act registering the resale from time to time by Holders of the Registrable Securities (a "SHELF REGISTRATION STATEMENT"). The Shelf Registration Statement shall be on Form S-3 or another appropriate form permitting registration of the Registrable Securities for resale by the Holders in accordance with the methods of distribution elected by the Holders and set forth in the Shelf Registration Statement. The Company shall use its 4 commercially reasonable efforts to cause a Shelf Registration Statement to be declared effective under the Securities Act as promptly as is practicable but in any event by the date (the "EFFECTIVENESS DEADLINE") that is 180 days after the Issue Date, and to keep a Shelf Registration Statement continuously effective under the Securities Act until the expiration of the Effectiveness Period (subject to the procedures described in Section 3). Each Holder that became a Notice Holder on or prior to the date ten Business Days prior to the initial Shelf Registration Statement is declared effective shall be named as a selling securityholder in the initial Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver the Prospectus to purchasers of Registrable Securities in accordance with applicable law provided that such Holder shall have completed and delivered to the Company a Notice and Questionnaire. None of the Company's current security holders (other than the Holders) have the right to include any of the Company's securities in a Shelf Registration Statement. (b) If a Shelf Registration Statement covering resales of the Registrable Securities ceases to be effective for any reason at any time during the Effectiveness Period (other than because all securities registered thereunder shall have been resold pursuant thereto or shall have otherwise ceased to be Registrable Securities), the Company shall use its best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within 45 days of such cessation of effectiveness amend the Shelf Registration Statement in a manner reasonably expected to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional Shelf Registration Statement so that all Registrable Securities outstanding as of the date of such filing are covered by a Shelf Registration Statement. If a new Shelf Registration Statement is filed, the Company shall use its commercially reasonable efforts to cause the new Shelf Registration Statement to become effective as promptly as is practicable after such filing and to keep the new Shelf Registration Statement continuously effective until the end of the Effectiveness Period. (c) The Company shall amend and supplement the Prospectus and amend the Shelf Registration Statement if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or file a new Shelf Registration Statement, if required by the Securities Act, or any other documents necessary to name a Notice Holder as a selling securityholder pursuant to Section 2(d) below. (d) Each Holder may sell Registrable Securities pursuant to a Shelf Registration Statement and related Prospectus only in accordance with this Section 2(d) and Section 3(h). From and after the date the initial Shelf Registration Statement is declared effective, the Company shall, as promptly as 5 practicable after the date a Notice and Questionnaire is delivered, and in any event upon the later of (x) 15 Business Days after such date or (y) five Business Days after the expiration of any Deferral Period in effect when the Notice and Questionnaire is delivered or put into effect within 15 Business Days of such delivery date: (i) if required by applicable law, file with the SEC a post-effective amendment to the Shelf Registration Statement or prepare and, if required by applicable law, file a supplement to the related Prospectus or a supplement or amendment to any document incorporated therein by reference or file a new Shelf Registration Statement or any other required document so that the Holder delivering such Notice and Questionnaire is named as a selling securityholder in a Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of the Registrable Securities in accordance with applicable law and, if the Company shall file a post-effective amendment to a Shelf Registration Statement or shall file a new Shelf Registration Statement, the Company shall use its commercially reasonable efforts to cause such post-effective amendment or new Shelf Registration Statement to be declared effective under the Securities Act as promptly as is practicable, but in any event by the date (the "AMENDMENT EFFECTIVENESS Deadline") that is 45 days after the date such post-effective amendment or new Shelf Registration Statement is required by this clause to be filed; (ii) provide such Holder copies of any documents filed pursuant to Section 2(d)(i); and (iii) notify such Holder as promptly as practicable after the effectiveness under the Securities Act of any new Shelf Registration Statement or post-effective amendment filed pursuant to Section 2(d)(i); provided that if such Notice and Questionnaire is delivered during a Deferral Period, the Company shall so inform the Holder delivering such Notice and Questionnaire and shall take the actions set forth in clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in accordance with Section 3(h). Notwithstanding anything contained herein to the contrary, (i) the Company shall be under no obligation to name any Holder that is not a Notice Holder as a selling securityholder in any Shelf Registration Statement or related Prospectus and (ii) the Amendment Effectiveness Deadline shall be extended by up to ten Business Days from the expiration of a Deferral Period. 6 (e) The parties hereto agree that the Holders of Registrable Securities will suffer damages and that it would not be feasible to ascertain the extent of such damages with precision, if: (i) the Company has failed to perform its obligations set forth in the first sentence of Section 2(a) hereof on or prior to the Filing Deadline, (ii) a Shelf Registration Statement has not been declared effective under the Securities Act on or prior to the Effectiveness Deadline, (iii) the Company has failed to perform its obligations set forth in Section 2(d)(i) within the time period required therein, (iv) a new Shelf Registration Statement or a post-effective amendment to a Shelf Registration Statement has not become effective on or prior to the Amendment Effectiveness Deadline in accordance with Section 2(d)(i) hereof, (v) the aggregate duration of Deferral Periods in any period exceeds the number of days permitted in respect of such period pursuant to Section 3(h) hereof, or (vi) the number of Deferral Periods in any period exceeds the number permitted in respect of such period pursuant to Section 3(h) hereof. Each event described in any of the foregoing clauses (i) through (vi) is individually referred to herein as a "REGISTRATION DEFAULT." For purposes of this Agreement, each Registration Default set forth above shall begin and end on the dates set forth in the table set forth below:
Type of Registration Default by Clause Beginning Date Ending Date - ------------------------ ------------------------------------------ ------------------------------------------- (i) Filing Deadline the date a Shelf Registration Statement is filed (ii) Effectiveness Deadline the date a Shelf Registration Statement becomes effective under the Securities Act
7
Type of Registration Default by Clause Beginning Date Ending Date - ------------------------ ------------------------------------------ ------------------------------------------- (iii) the date by which the Company is required the date the Company performs its to perform its obligations under Section obligations set forth in Section 2(d)(i) 2(d)(i) (iv) the Amendment Effectiveness Deadline the date the applicable post-effective amendment to a Shelf Registration Statement or a new Shelf Registration Statement becomes effective under the Securities Act (v) the date on which the aggregate duration termination of the Deferral Period that of Deferral Periods in any period exceeds caused the limit on the aggregate duration the number of days permitted by Section of Deferral Periods to be exceeded 3(h) (vi) the date of commencement of a Deferral termination of the Deferral Period that Period that causes the number of Deferral caused the number of Deferral Periods to Periods to exceed the number permitted by exceed the number permitted by Section 3(h) Section 3(h)
For purposes of this Agreement, Registration Defaults shall begin on the dates set forth in the table above and shall continue until the ending dates set forth in the table above. Commencing on (and including) any date that a Registration Default has begun and ending on (but excluding) the next date on which there are no Registration Defaults that have occurred and are continuing (a "REGISTRATION DEFAULT PERIOD"), the Company shall be required to pay to Record Holders of Registrable Securities in respect of each day in the Registration Default Period additional interest (i) in respect of any Note, at a rate per annum equal to an additional one-quarter of one percent (0.25%) of the aggregate principal amount 8 of such Note and (ii) in respect of each share of outstanding Underlying Common Stock that is a Registrable Security at a rate per annum equal to an additional one-quarter of one percent (0.25%) on the Conversion Price on such date, to and including the 90th day following the date of such Registration Default, and one-half of one percent (0.5%) thereof with respect to each of (i) and (ii) of this sentence from and after the 91st day following the date of such Registration Default (the "ADDITIONAL INTEREST AMOUNT"); provided that in the case of a Registration Default Period that is in effect solely as a result of a Registration Default of the type described in clause (iii) or (iv) of the preceding paragraph, such Additional Interest Amount, as applicable, shall be paid only to the Holders (as set forth in the succeeding paragraph) that have delivered Notices and Questionnaires that caused the Company to incur the obligations set forth in Section 2(d) the non-performance of which is the basis of such Registration Default. In calculating the Additional Interest Amount on shares of Underlying Common Stock on any date on which no Notes are outstanding, the Conversion Price used shall be based on the Conversion Price that would be in effect if the Notes were still outstanding. Notwithstanding the foregoing, no Additional Interest Amount shall accrue as to any Registrable Security from and after the earlier of (x) the date such security is no longer a Registrable Security and (y) expiration of the Effectiveness Period. The rate of accrual of the Additional Interest Amount with respect to any period shall not exceed the rate provided for in this paragraph notwithstanding the occurrence of multiple concurrent Registration Defaults. The Additional Interest Amount shall accrue from the first day of the applicable Registration Default Period, and shall be payable on each Interest Payment Date during the Registration Default Period (and on the Interest Payment Date next succeeding the end of the Registration Default Period if the Registration Default Period does not end on a Interest Payment Date) to the Record Holders of the Registrable Securities entitled thereto; provided that any Additional Interest Amount accrued with respect to any Note or portion thereof redeemed by the Company on a redemption date, purchased by the Company on a repurchase date or converted into Underlying Common Stock on a conversion date prior to the Interest Payment Date, shall, in any such event, be paid instead to the Holder who submitted such Note or portion thereof for redemption, purchase or conversion on the applicable redemption date, repurchase date or conversion date, as the case may be, on such date (or promptly following the conversion date, in the case of conversion), unless the redemption date or the repurchase date, as the case may be, falls after November 1 or May 1 and on or prior to the corresponding Interest Payment Date; and provided further, that, in the case of a Registration Default of the type described in clause (iii) or (iv) of the first paragraph of this Section 2(e) such Additional Interest Amount shall be paid only to the Holders entitled thereto 9 by check mailed to the address set forth in the Notice and Questionnaire delivered by such Holder. The Trustee shall be entitled, on behalf of registered holders of Notes or Underlying Common Stock, to seek any available remedy for the enforcement of this Agreement, including for the payment of such Additional Interest Amount. Notwithstanding the foregoing, the parties agree that the sole damages payable for a violation of the terms of this Agreement with respect to which additional interest are expressly provided shall be such additional interest. Nothing shall preclude any Holder from pursuing or obtaining specific performance or other equitable relief with respect to this Agreement. All of the Company's obligations set forth in this Section 2(e) that are outstanding with respect to any Registrable Security at the time such security ceases to be a Registrable Security shall survive until such time as all such obligations with respect to such security have been satisfied in full (notwithstanding termination of this Agreement pursuant to Section 8(k)). The parties hereto agree that the additional interest provided for in this Section 2(e) constitute a reasonable estimate of the damages that may be incurred by Holders of Registrable Securities by reason of the failure of a Shelf Registration Statement to be filed or declared effective or available for effecting resales of Registrable Securities in accordance with the provisions hereof. Section 3. Registration Procedures. In connection with the registration obligations of the Company under Section 2 hereof, the Company shall: (a) Before filing any Shelf Registration Statement or Prospectus or any amendments or supplements thereto with the SEC, furnish to the Initial Purchasers and the Special Counsel of such offering, if any, copies of all such documents proposed to be filed at least three Business Days prior to the filing of such Shelf Registration Statement or amendment thereto or Prospectus or supplement thereto. (b) Subject to Section 3(h) prepare and file with the SEC such amendments and post-effective amendments to each Shelf Registration Statement as may be necessary to keep such Shelf Registration Statement continuously effective during the Effectiveness Period; cause the related Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and use its best efforts to comply with the provisions of the Securities Act applicable to it with respect to the disposition of all securities covered by such Shelf Registration Statement during the Effectiveness Period in accordance with the intended methods of disposition by the sellers thereof set 10 forth in such Shelf Registration Statement as so amended or such Prospectus as so supplemented. (c) As promptly as practicable give notice to the Notice Holders, the Initial Purchasers and the Special Counsel, (i) when any Prospectus, prospectus supplement, Shelf Registration Statement or post-effective amendment to a Shelf Registration Statement has been filed with the SEC and, with respect to a Shelf Registration Statement or any post-effective amendment, when the same has been declared effective, (ii) of any request, following the effectiveness of the initial Shelf Registration Statement under the Securities Act, by the SEC or any other federal or state governmental authority for amendments or supplements to any Shelf Registration Statement or related Prospectus or for additional information, (iii) of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of any Shelf Registration Statement or the initiation or threatening of any proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (v) of the occurrence of, but not the nature of or details concerning, a Material Event and (vi) of the determination by the Company that a post-effective amendment to a Shelf Registration Statement will be filed with the SEC, which notice may, at the discretion of the Company (or as required pursuant to Section 3(h)) state that it constitutes a Deferral Notice, in which event the provisions of Section 3(h) shall apply. (d) Use its best efforts to obtain the withdrawal of any order suspending the effectiveness of a Shelf Registration Statement or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction in which they have been qualified for sale, in either case at the earliest possible moment, and provide immediate notice to each Notice Holder and the Initial Purchasers of the withdrawal of any such order. (e) As promptly as practicable furnish to each Notice Holder, the Special Counsel and the Initial Purchaser, upon request and without charge, at least one conformed copy of each Shelf Registration Statement and any amendment thereto, including exhibits and all documents incorporated or deemed to be incorporated therein by reference. (f) During the Effectiveness Period, deliver to each Notice Holder, the Special Counsel, if any, and the Initial Purchaser, in connection with any sale of Registrable Securities pursuant to a Shelf Registration Statement, without charge, as many copies of the Prospectus relating to such Registrable Securities (including each preliminary prospectus) and any amendment or supplement 11 thereto as such Notice Holder may reasonably request; and the Company hereby consents (except during such periods that a Deferral Notice is outstanding and has not been revoked) to the use of such Prospectus or each amendment or supplement thereto by each Notice Holder in connection with any offering and sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto in the manner set forth therein. (g) Prior to any public offering of the Registrable Securities pursuant to a Shelf Registration Statement, use its best efforts to register or qualify or cooperate with the Notice Holders and the Special Counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Notice Holder reasonably requests in writing (which request may be included in the Notice and Questionnaire); prior to any public offering of the Registrable Securities pursuant to a Shelf Registration Statement, use its commercially reasonable efforts to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period in connection with such Notice Holder's offer and sale of Registrable Securities pursuant to such registration or qualification (or exemption therefrom) and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of such Registrable Securities in the manner set forth in the Shelf Registration Statement and the related Prospectus; provided that the Company will not be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Agreement or (ii) take any action that would subject it to general service of process in suits or to taxation in any such jurisdiction where it is not then so subject. (h) Upon (A) the issuance by the SEC of a stop order suspending the effectiveness of a Shelf Registration Statement or the initiation of proceedings with respect to a Shelf Registration Statement under Section 8(d) or 8(e) of the Securities Act, (B) the occurrence of any event or the existence of any fact (a "MATERIAL EVENT") as a result of which a Shelf Registration Statement shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or any Prospectus shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (C) the occurrence or existence of any pending corporate development that, in the reasonable discretion of the Company, makes it appropriate to suspend the availability of a Shelf Registration Statement and the related Prospectus: 12 (i) in the case of clause (B) above, as promptly as practicable prepare and file, if necessary pursuant to applicable law, a post-effective amendment to such Shelf Registration Statement or a supplement to the related Prospectus or any document incorporated therein by reference or file any other required document that would be incorporated by reference into such Shelf Registration Statement and Prospectus so that such Shelf Registration Statement does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and such Prospectus does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, and, in the case of a post-effective amendment to a Shelf Registration Statement, use its best efforts to cause it to be declared effective as promptly as is practicable, and (ii) give notice to the Notice Holders, and the Special Counsel, if any, that the availability of a Shelf Registration Statement is suspended (a "DEFERRAL NOTICE"). The Company will use its best efforts to ensure that the use of the Prospectus may be resumed (x) in the case of clause (A) above, as promptly as is practicable, (y) in the case of clause (B) above, as soon as, in the sole judgment of the Company, public disclosure of such Material Event would not be prejudicial to or contrary to the interests of the Company or, if necessary to avoid unreasonable burden or expense, as soon as practicable thereafter and (z) in the case of clause (C) above, as soon as in the reasonable discretion of the Company, such suspension is no longer appropriate. The Company shall be entitled to exercise its right under this Section 3(h) to suspend the availability of a Shelf Registration Statement or any Prospectus, without incurring or accruing any obligation to pay additional interest or liquidated damages pursuant to Section 2(e), no more than once in any three month period or three times in any twelve month period, and any such period during which the availability of the Shelf Registration Statement and any Prospectus is suspended (the "DEFERRAL PERIOD") shall, without incurring any obligation to pay additional interest or liquidated damages pursuant to Section 2(e), not exceed 30 days; provided that the aggregate duration of any Deferral Periods shall not exceed 30 days in any three month period (or 60 days in any three month period in the event of a Material Event pursuant to which the Company has delivered a second notice as required below) or 90 days in any 12 month period; provided that in the case of a Material Event relating to an 13 acquisition or a probable acquisition or financing, recapitalization, business combination or other similar transaction, the Company may, without incurring any obligation to pay additional interest or liquidated damages pursuant to Section 2(e), deliver to Notice Holders a second notice to the effect set forth above, which shall have the effect of extending the Deferral Period by up to an additional 30 days, or such shorter period of time as is specified in such second notice. (i) If requested in writing in connection with a disposition of Registrable Securities pursuant to a Shelf Registration Statement, make reasonably available for inspection during normal business hours by a representative for the Notice Holders of such Registrable Securities, any broker-dealers, attorneys and accountants retained by such Notice Holders, and any attorneys or other agents retained by a broker-dealer engaged by such Notice Holders, all relevant financial and other records and pertinent corporate documents and properties of the Company and its subsidiaries, and cause the appropriate officers, directors and employees of the Company and its subsidiaries to make reasonably available for inspection during normal business hours on reasonable notice all relevant information reasonably requested by such representative for the Notice Holders, or any such broker-dealers, attorneys or accountants in connection with such disposition, in each case as is customary for similar "due diligence" examinations; provided that such persons shall first agree in writing with the Company that any non-public information shall be used solely for the purposes of satisfying "due diligence" obligations under the Securities Act and exercising rights under this Agreement and shall be kept confidential by such persons, unless (i) disclosure of such information is required by court or administrative order or is necessary to respond to inquiries of regulatory authorities, (ii) in the opinion of Special Counsel, disclosure of such information is required by law (including any disclosure requirements pursuant to federal securities laws in connection with the filing of any Shelf Registration Statement or the use of any prospectus referred to in this Agreement), (iii) such information becomes generally available to the public other than as a result of a disclosure or failure to safeguard by any such person or (iv) such information becomes available to any such person from a source other than the Company and such source is not bound by a confidentiality agreement, and provided further that the foregoing inspection and information gathering shall, to the greatest extent possible, be coordinated on behalf of all the Notice Holders and the other parties entitled thereto by the Special Counsel. Any person legally compelled to disclose any such confidential information made available for inspection shall provide the Company with prompt prior written notice of such requirement so that the Company may seek a protective order or other appropriate remedy. 14 (j) Comply with all applicable rules and regulations of the SEC in all material respects and make generally available to its securityholders earning statements (which need not be audited) satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) for a 12-month period commencing on the first day of the first fiscal quarter of the Company commencing after the effective date of a Shelf Registration Statement, which statements shall be made available no later than 45 days after the end of the 12-month period or 90 days if the 12-month period coincides with the fiscal year of the Company. (k) Use its best efforts to cooperate with each Notice Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities sold or to be sold pursuant to a Shelf Registration Statement, which certificates shall not bear any restrictive legends, and cause such Registrable Securities to be in such denominations as are permitted by the Indenture and registered in such names as such Notice Holder may request in writing at least one Business Day prior to any sale of such Registrable Securities. (l) Provide a CUSIP number for all Registrable Securities covered by each Shelf Registration Statement not later than the effective date of such Shelf Registration Statement and provide the Trustee and the transfer agent for the Common Stock with printed certificates for the Registrable Securities that are in a form eligible for deposit with The Depository Trust Company. (m) Use its best efforts to cooperate and assist in any filings required to be made with the National Association of Securities Dealers, Inc. (n) Upon (i) the filing of the initial Shelf Registration Statement and (ii) the effectiveness of the initial Shelf Registration Statement, announce the same, in each case by release to Reuters Economic Services and Bloomberg Business News. Section 4. Holder's Obligations. (a) Each Holder agrees, by acquisition of the Registrable Securities, that no Holder shall be entitled to sell any of such Registrable Securities pursuant to a Shelf Registration Statement or to receive a Prospectus relating thereto, unless such Holder has furnished the Company with a Notice and Questionnaire as required pursuant to Section 2(d) hereof (including the information required to be included in such Notice and Questionnaire) and the information set forth in the next sentence. Each Notice Holder agrees promptly to furnish to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Notice Holder not misleading and any other information regarding such Notice Holder and the distribution of such Registrable Securities as the Company may from time to time 15 reasonably request. Any sale of any Registrable Securities by any Holder shall constitute a representation and warranty by such Holder that the information relating to such Holder and its plan of distribution is as set forth in the Prospectus delivered by such Holder in connection with such disposition, that such Prospectus does not as of the time of such sale contain any untrue statement of a material fact relating to or provided by such Holder or its plan of distribution and that such Prospectus does not as of the time of such sale omit to state any material fact relating to or provided by such Holder or its plan of distribution necessary to make the statements in such Prospectus, in the light of the circumstances under which they were made, not misleading. (b) Upon receipt of any Deferral Notice, each Notice Holder agrees not to sell any Registrable Securities pursuant to any Shelf Registration Statement until such Notice Holder's receipt of copies of the supplemented or amended Prospectus provided for in Section 3(h)(i), or until it is advised in writing by the Company that the Prospectus may be used. (c) In the event of a sale of Registrable Securities by the Holder under the Registration Statement, if requested by the Company, the Holder shall deliver to the Company's transfer agent, with a copy to the Company, a Certificate of Subsequent Sale substantially in the form attached here to as Exhibit A. Section 5. Registration Expenses. The Company shall bear all fees and expenses incurred in connection with the performance by the Company of its obligations under Sections 2 and 3 of this Agreement whether or not any Shelf Registration Statement is declared effective. Such fees and expenses shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (x) with respect to filings required to be made with the National Association of Securities Dealers, Inc. and (y) of compliance with federal and state securities or Blue Sky laws (including, without limitation, reasonable fees and disbursements of the Special Counsel in connection with Blue Sky qualifications of the Registrable Securities under the laws of such jurisdictions as Notice Holders of a majority of the Registrable Securities being sold pursuant to a Shelf Registration Statement may designate), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities in a form eligible for deposit with The Depository Trust Company), (iii) duplication expenses relating to copies of any Shelf Registration Statement or Prospectus delivered to any Holders hereunder, (iv) up to $3,000 in fees and disbursements of counsel for the Company in connection with any Shelf Registration Statement, (v) reasonable fees and disbursements of the Trustee and its counsel and of the registrar and transfer agent for the Common Stock, (vi) Securities Act liability insurance obtained by the Company in its sole discretion 16 and (vii) the reasonable fees and disbursements of Special Counsel. In addition, the Company shall pay the internal expenses of the Company (including, without limitation, all salaries and expenses of officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with the listing by the Company of the Registrable Securities on any securities exchange on which similar securities of the Company are then listed and the fees and expenses of any person, including special experts, retained by the Company. Notwithstanding the provisions of this Section 5, each seller of Registrable Securities shall pay any broker's commission, agency fee or underwriter's discount or commission in connection with the sale of the Registrable Securities under a Shelf Registration Statement. Section 6. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless each Notice Holder, each person, if any, who controls any Notice Holder within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of any Notice Holder within the meaning of Rule 405 under the Securities Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in any Shelf Registration Statement or any amendment thereof, any preliminary prospectus or any Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Holder furnished to the Company by such Holder expressly for use therein; provided that the foregoing indemnity shall not inure to the benefit of any Holder (or to the benefit of any person controlling such Holder) from whom the person asserting such losses, claims or liabilities purchased the Registrable Securities, if a copy of the Prospectus (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Holder to such person, if required by law so to have been delivered at or prior to the written confirmation of the sale of the Registrable Securities to such person, and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such losses, claims, damages or liabilities, unless such failure is the result of noncompliance by the Company with Section 2(c) hereof. 17 (b) Each Holder agrees severally and not jointly to indemnify and hold harmless the Company and its directors, its officers who sign any Shelf Registration Statement and each person, if any, who controls the Company (within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act) or any other Holder, to the same extent as the foregoing indemnity from the Company to such Holder, but only with reference to information relating to such Holder furnished to the Company by such Holder expressly for use in such Shelf Registration Statement or Prospectus or amendment or supplement thereto. In no event shall the liability of any Holder hereunder be greater in amount than the dollar amount of the proceeds received by such Holder upon the sale of the Registrable Securities pursuant to the Shelf Registration Statement giving rise to such indemnification obligation. (c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 6(a) or 6(b) hereof, such person (the "INDEMNIFIED PARTY") shall promptly notify the person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the reasonable fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by, in the case of parties indemnified pursuant to Section 6(a), the Holders of a majority (with Holders of Notes deemed to be the Holders, for purposes of determining such majority, of the number of shares of Underlying Common Stock into which such Notes are or would be convertible as of the date on which such designation is made) of the Registrable Securities covered by the Shelf Registration Statement held by Holders that are indemnified parties pursuant to Section 6(a) and, in the case of parties indemnified pursuant to Section 6(b), the Company. The 18 indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (d) To the extent that the indemnification provided for in Section 6(a) or 6(b) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party or parties on the other hand or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company shall be deemed to be equal to the total net proceeds from the initial placement pursuant to the Purchase Agreement (before deducting expenses) of the Registrable Securities to which such losses, claims, damages or liabilities relate. The relative benefits received by any Holder shall be deemed to be equal to the value of receiving registration rights under this Agreement for the Registrable Securities. The relative fault of the Holders on the one hand and the Company on the other hand shall be determined by reference to, among other things, whether the untrue or 19 alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Holders or by the Company, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Holders' respective obligations to contribute pursuant to this Section 6(d) are several in proportion to the respective number of Registrable Securities they have sold pursuant to a Shelf Registration Statement, and not joint. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding this Section 6(d), no indemnifying party that is a selling Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities sold by it and distributed to the public were offered to the public exceeds the amount of any damages that such indemnifying party has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (e) The remedies provided for in this Section 6 are not exclusive and shall not limit any rights or remedies which may otherwise be available to an indemnified party at law or in equity, hereunder, under the Purchase Agreement or otherwise. (f) The indemnity and contribution provisions contained in this Section 6 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Holder, any person controlling any Holder or any affiliate of any Holder or by or on behalf of the Company, its officers or directors or any person controlling the Company and (iii) the sale of any Registrable Securities by any Holder. Section 7. Information Requirements. The Company covenants that, if at any time before the end of the Effectiveness Period, the Company is not subject to the reporting requirements of the Exchange Act, it will cooperate with any Holder and take such further reasonable action as any Holder may reasonably request in 20 writing (including, without limitation, making such reasonable representations as any such Holder may reasonably request), all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 and Rule 144A under the Securities Act and customarily taken in connection with sales pursuant to such exemptions. Upon the written request of any Holder, the Company shall deliver to such Holder a written statement as to whether it has complied with such filing requirements, unless such a statement has been included in the Company's most recent report filed pursuant to Section 13 or Section 15(d) of Exchange Act. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to require the Company to register any of its securities (other than the Common Stock) under the Exchange Act. Section 8. Miscellaneous. (a) No Conflicting Agreements. The Company is not, as of the date hereof, a party to, nor shall it, on or after the date of this Agreement, enter into, any agreement with respect to its securities that conflicts with the rights granted to the Holders in this Agreement. The Company represents and warrants that the rights granted to the Holders hereunder do not in any way conflict with the rights granted to the holders of the Company's securities under any other agreements. (b) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of Holders of a majority of the then outstanding Underlying Common Stock constituting Registrable Securities (with Holders of Notes deemed to be the Holders, for purposes of this Section, of the number of outstanding shares of Underlying Common Stock into which such Notes are or would be convertible as of the date on which such consent is requested). Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose securities are being sold pursuant to a Shelf Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities being sold by such Holders pursuant to such Shelf Registration Statement; provided that the provisions of this sentence may not be amended, modified or supplemented except in accordance with the provisions of the immediately preceding sentence. Notwithstanding the foregoing sentence, this Agreement may be amended by written agreement signed by the Company and the Initial Purchaser, without the consent of the Holders of Registrable Securities, to cure any ambiguity or to correct or supplement any provision 21 contained herein that may be defective or inconsistent with any other provision contained herein, or to make such other provisions in regard to matters or questions arising under this Agreement that shall not adversely affect the interests of the Holders of Registrable Securities. Each Holder of Registrable Securities outstanding at the time of any such amendment, modification, supplement, waiver or consent or thereafter shall be bound by any such amendment, modification, supplement, waiver or consent effected pursuant to this Section 8(b) whether or not any notice, writing or marking indicating such amendment, modification, supplement, waiver or consent appears on the Registrable Securities or is delivered to such Holder. (c) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, by telecopier, by courier or by first-class mail, return receipt requested, and shall be deemed given (i) when made, if made by hand delivery, (ii) upon confirmation, if made by telecopier, (iii) one Business Day after being deposited with such courier, if made by overnight courier or (iv) on the date indicated on the notice of receipt, if made by first-class mail, to the parties as follows: (i) if to a Holder, at the most current address given by such Holder to the Company in a Notice and Questionnaire or any amendment thereto; (ii) if to the Company, to: JDS Uniphase Corporation 1768 Automation Parkway San Jose, California 95131 Attention: Christopher S. Dewees Telecopy No.: (408) 546-5430 with a copy to: Morrison & Foerster LLP 755 Page Mill Road Palo Alto, California 94304 Attention: Michael Phillips Telecopy No. (650) 494-0792 22 (iii) if to the Initial Purchaser, to: Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 Attention: Convertible Securities Desk Telecopy No.: (212) 761-0086 with a copy to: Skadden, Arps, Slate, Meagher & Flom LLP 525 University Avenue Suite 1100 Palo Alto, CA 94301 Attention: Thomas J. Ivey Telecopy No.: (650) 470-4570 or to such other address as such person may have furnished to the other persons identified in this Section 8(c) in writing in accordance herewith. (d) Approval of Holders. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company or its affiliates (as such term is defined in Rule 405 under the Securities Act) (other than the Initial Purchasers or subsequent Holders if such subsequent Holders are deemed to be such affiliates solely by reason of their holdings of such Registrable Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. (e) Successors and Assigns. Any person who purchases any Registrable Securities from an Initial Purchaser shall be deemed, for purposes of this Agreement, to be an assignee of such Initial Purchaser. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties and shall inure to the benefit of and be binding upon each Holder of any Registrable Securities, provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Indenture. If any transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities, such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such person shall be entitled to receive the benefits hereof. (f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which 23 when so executed shall be deemed to be original and all of which taken together shall constitute one and the same agreement. (g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. (i) Severability. If any term, provision, covenant or restriction of this Agreement is held to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law. (j) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and the registration rights granted by the Company with respect to the Registrable Securities. Except as provided in the Purchase Agreement, there are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein, with respect to the registration rights granted by the Company with respect to the Registrable Securities. This Agreement supersedes all prior agreements and undertakings among the parties with respect to such registration rights. No party hereto shall have any rights, duties or obligations other than those specifically set forth in this Agreement. In no event will such methods of distribution take the form of an underwritten offering of the Registrable Securities without the prior agreement of the Company. (k) Termination. This Agreement and the obligations of the parties hereunder shall terminate upon the end of the Effectiveness Period, except for any liabilities or obligations under Section 4, 5 or 6 hereof and the obligations to make payments of and provide for additional interest or liquidated damages under Section 2(e) hereof to the extent such damages accrue prior to the end of the Effectiveness Period, each of which shall remain in effect in accordance with its terms. 24 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. JDS UNIPHASE CORPORATION By: /s/ Christopher S. Dewees ---------------------------------- Name: Christopher S. Dewees Title: Senior Vice President Confirmed and accepted as of the date first above written: MORGAN STANLEY & CO. INCORPORATED By: /s/ William R. Salisbury ----------------------------------------- Name: William R. Salisbury Title: Managing Director GOLDMAN, SACHS & CO. By: /s/ George C. Lee II ----------------------------------------- Name: George C. Lee II Title: Managing Director CIBC WORLD MARKETS CORP. By: /s/ Andrew MacInnes ----------------------------------------- Name: Andrew MacInnes Title: Managing Director EXHIBIT A CERTIFICATE OF SUBSEQUENT SALE [Transfer Agent] [Address] Attention: [_______] JDS Uniphase Corporation 1768 Automation Parkway San Jose, California 95131 Attention: Christopher S. Dewees Telecopy No.: (408) 546-5430 Re: Sale of Registrable Securities of JDS Uniphase Corporation (the "Company") pursuant to the Company's Prospectus, dated October 27, 2003 (the "Prospectus") Ladies and Gentlemen: The undersigned hereby certifies, in connection with the transfer of Registrable Securities of the Company included in the table of Selling Securityholders in the Prospectus, that the undersigned has sold the number of the Company's Registrable Securities indicated below pursuant to the Prospectus and in a manner described under the caption "Plan of Distribution" in the Prospectus, and that such sale complies with all applicable securities laws, including, without limitation, the Prospectus delivery requirements of the Securities Act of 1933, as amended. Selling Securityholder (the beneficial owner): ---------------------------------- Record Holder (e.g., if held in name of nominee): ------------------------------- Number of Securities Sold: ------------------------------------------------------ Date of Sale: ------------------------------------------------------------------- Very truly yours, Dated: ---------------- - ------------------------------------------------------------------ Print Full Legal Name of Selling Stockholder or Nominee By: --------------------------------------------------------------- Name: ------------------------------------------------------------- Title: ------------------------------------------------------------ EX-5.1 5 f94556orexv5w1.txt EXHIBIT 5.1 EXHIBIT 5.1 [MORRISON & FOERSTER LLP LETTERHEAD] November 14, 2003 JDS Uniphase Corporation 1768 Automation Parkway San Jose, California 95131 Ladies and Gentlemen: At your request, we have examined the registration statement on Form S-3 filed by JDS Uniphase Corporation, a Delaware corporation (the "Company"), with the Securities and Exchange Commission on November 14, 2003 (the "Registration Statement"), relating to the registration under the Securities Act of 1933, as amended, of the resale by the holders thereof of $475,000,000 aggregate principal amount of Zero Coupon Senior Convertible Notes due 2010 (the "Notes") and the shares of the Company's common stock, $0.001 par value per share (the "Conversion Shares") issuable upon conversion of the Notes (the Conversion Shares together with the Notes, the "Securities"). The Notes were issued pursuant to an Indenture dated as of October 31, 2003 ("Indenture") by and between the Company and The Bank of New York, as Trustee. The Securities are being offered by certain selling securityholders specified in the Registration Statement. As counsel to the Company, we have examined such documents, records and matters of law as we have deemed relevant or necessary for purposes of this opinion, and based thereon we are of the opinion that: 1. The Notes have been duly authorized and are valid and binding obligations of the Company. 2. When issued upon conversion in accordance with the terms of the Notes and the Indenture, the Conversion Shares will be validly issued, fully paid and nonassessable. The opinions expressed herein are limited to the federal laws of the United States of America, the laws of the State of Delaware and the laws of the State of New York, as currently in effect, and we express no opinion of the effect of laws of any other jurisdiction on the opinions expressed herein. We consent to the use of this opinion as an exhibit to the Registration Statement and further consent to all references to us in the Registration Statement, the prospectus constituting a part thereof and any amendments thereto. Very truly yours, /s/ Morrison & Foerster LLP EX-12.1 6 f94556orexv12w1.txt EXHIBIT 12.1 EXHIBIT 12.1 RATIO OF EARNINGS TO FIXED CHARGES The following table shows the ratio of earnings to fixed charges for the three months ended September 30, 2003 and each of the five most recent fiscal years (in thousands).
THREE MONTHS ENDED SEPTEMBER 30, FISCAL YEAR ENDED JUNE 30, ------------ -------------------------- 2003 2003 2002(1) 2001(2)(3) ---- ---- ---- ---- Net earnings (loss) before income tax provision (benefit), minority interest (benefit) and cumulative $(38,032) $(920,293) $(8,501,090) $(56,493,762) effect of change in accounting principle Fixed charges: Interest Expense 18 1,342 1,842 3,071 Portion of rent expense deemed to represent interest 817 3,380 5,390 3,453 Total fixed charges 835 4,722 7,232 6,524 Net earnings (loss) before fixed charges $(37,197) $(915,571) $(8,493,858) $(56,487,238) Deficiency of net earnings to cover fixed charges $(38,032) $(920,293) $(8,501,090) $(56,493,762) FISCAL YEAR ENDED JUNE 30, -------------------------- 2000 1999 ---- ---- Net earnings (loss) before income tax provision (benefit), minority interest (benefit) and cumulative $(829,811) $(149,589) effect of change in accounting principle Fixed charges: Interest Expense 506 21 Portion of rent expense deemed to represent interest 1,090 458 Total fixed charges 1,596 479 Net earnings (loss) before fixed charges $(828,215) $(149,110) Deficiency of net earnings to cover fixed charges $(829,811) $(149,589) - ------------ (1) We acquired IBM's optical transceiver business on December 28, 2001 in a transaction accounted for as a purchase. The summary financial data for fiscal 2002 included the results of operations of the optical transceiver business subsequent to December 28, 2001. (2) We acquired SDL on February 13, 2001 in a transaction accounted for as a purchase. The summary financial data for fiscal 2001 included the results of operations of SDL subsequent to February 13, 2001. (3) On February 13, 2001, we completed the sale of our Zurich, Switzerland subsidiary to Nortel for 65.7 million shares of Nortel common stock valued at $1,953.3 million. After adjusting for the net costs of the assets sold and for the expenses associated with the divestiture, we realized a gain of $1,770.2 million from the transaction. We subsequently sold 41.0 million shares of Nortel common stock for total proceeds of $659.2 million, resulting in a realized loss of $559.1 million during fiscal 2001.
EX-23.1 7 f94556orexv23w1.txt EXHIBIT 23.1 Exhibit 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3) and related Prospectus of JDS Uniphase Corporation for the registration of 96,153,846 shares of its common stock and to the incorporation by reference therein of our report dated July 21, 2003, with respect to the consolidated financial statements and schedule of JDS Uniphase Corporation included in its Annual Report (Form 10-K) for the year ended June 30, 2003, filed with the Securities and Exchange Commission. ERNST & YOUNG LLP San Jose, California November 14, 2003 EX-25.1 8 f94556orexv25w1.txt EXHIBIT 25.1 EXHIBIT 25.1 ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) JDS UNIPHASE CORPORATION (Exact name of obligor as specified in its charter) Delaware 94-2579683 (State or other jurisdiction of (I.R.S. employer identification no.) incorporation or organization) 1768 Automation Parkway 95131 San Jose, California (Zip code) (Address of principal executive offices) ---------- Senior Notes (Title of the indenture securities) ================================================================================ 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
- -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of New York 2 Rector Street New York, N.Y. 10006 and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, N. Y. 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. YES. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. NONE. 3. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 2. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 3. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 4. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. -2- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the day of November, 2003. THE BANK OF NEW YORK By: /s/ ROBERT A. MASSIMILLO ---------------------------------- Name: ROBERT A. MASSIMILLO Title: VICE PRESIDENT -3- EXHIBIT 7 - -------------------------------------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 2003, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts In Thousands -------------- ASSETS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin .................. 4,257,371 Interest-bearing balances ........................................... 6,048,782 Securities: Held-to-maturity securities ......................................... 373,479 Available-for-sale securities ....................................... 18,918,169 Federal funds sold and securities purchased under agreements to resell: Federal funds sold in domestic offices .............................. 6,689,000 Securities purchased under agreements to resell ..................... 5,293,789 Loans and lease financing receivables: Loans and leases held for sale ...................................... 616,186 Loans and leases, net of unearned income ............................ 38,342,282 LESS: Allowance for loan and lease losses .......................... 819,982 Loans and leases, net of unearned income and allowance .............. 37,522,300 Trading assets ............................................................ 5,741,193 Premises and fixed assets (including capitalized leases) .................. 958,273 Other real estate owned ................................................... 441 Investments in unconsolidated subsidiaries and associated companies ....... 257,626 Customers' liability to this bank on acceptances outstanding .............. 159,995 Intangible assets: Goodwill ............................................................ 2,554,921 Other intangible assets ............................................. 805,938 Other assets .............................................................. 6,285,971 ----------- Total assets .............................................................. $96,483,434 =========== LIABILITIES Deposits: In domestic offices ................................................. 37,264,787 Noninterest-bearing ................................................. 15,357,289
Interest-bearing .................................................... 21,907,498 In foreign offices, Edge and Agreement subsidiaries, and IBFs ....... 28,018,241 Noninterest-bearing ................................................. 1,026,601 Interest-bearing .................................................... 26,991,640 Federal funds purchased and securities sold under agreements to repurchase: Federal funds purchased in domestic offices ......................... 739,736 Securities sold under agreements to repurchase ...................... 465,594 Trading liabilities ....................................................... 2,456,565 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) ..................................................... 8,994,708 Bank's liability on acceptances executed and outstanding .................. 163,277 Subordinated notes and debentures ......................................... 2,400,000 Other liabilities ......................................................... 7,446,726 ----------- Total liabilities ......................................................... $87,949,634 =========== Minority interest in consolidated subsidiaries ............................ 519,472 EQUITY CAPITAL Perpetual preferred stock and related surplus ............................. 0 Common stock .............................................................. 1,135,284 Surplus (exclude all surplus related to preferred stock) .................. 2,056,273 Retained earnings ....................................................... 4,694,161 Accumulated other comprehensive income .................................. 128,610 Other equity capital components ........................................... 0 Total equity capital ...................................................... 8,014,328 ----------- Total liabilities, minority interest, and equity capital .................. $96,483,434 ===========

I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct. Thomas A. Renyi } Gerald L. Hassell } Directors Alan R. Griffith } GRAPHIC 9 f94556orf9455600.gif GRAPHIC begin 644 f94556orf9455600.gif M1TE&.#EANP`F`/?_````````,P``9@``F0``S```_P`S```S,P`S9@`SF0`S MS``S_P!F``!F,P!F9@!FF0!FS`!F_P"9``"9,P"99@"9F0"9S`"9_P#,``#, M,P#,9@#,F0#,S`#,_P#_``#_,P#_9@#_F0#_S`#__S,``#,`,S,`9C,`F3,` MS#,`_S,S`#,S,S,S9C,SF3,SS#,S_S-F`#-F,S-F9C-FF3-FS#-F_S.9`#.9 M,S.99C.9F3.9S#.9_S/,`#/,,S/,9C/,F3/,S#/,_S/_`#/_,S/_9C/_F3/_ MS#/__V8``&8`,V8`9F8`F68`S&8`_V8S`&8S,V8S9F8SF68SS&8S_V9F`&9F M,V9F9F9FF69FS&9F_V:9`&:9,V:99F:9F6:9S&:9_V;,`&;,,V;,9F;,F6;, MS&;,_V;_`&;_,V;_9F;_F6;_S&;__YD``)D`,YD`9ID`F9D`S)D`_YDS`)DS M,YDS9IDSF9DSS)DS_YEF`)EF,YEF9IEFF9EFS)EF_YF9`)F9,YF99IF9F9F9 MS)F9_YG,`)G,,YG,9IG,F9G,S)G,_YG_`)G_,YG_9IG_F9G_S)G__\P``,P` M,\P`9LP`FEWK55`K@=5F^KQ62U@R:&GSHA7$EFU8@G%ITJU%N.Y= MO259`5C,"K'$OFP=CNTXN'#A9!`7+[8BT(IFS2NL-&;H^3,`S@5+,QZH6#-J MB9]?1U0-("L-R&TC6K.6S++EB+&OM38-NN!PX@MI$U1.,?C$%9^G=L6=@&)O MWX0A'N=,FSB`%:R];_].'GT@\XG.8;N>>AOW7XG"L->%R+R[=]30Q8\F^!G\ MP/X5L6+%@!6EM]1TN+TUD7RU8/80-@1":YA]IY4&I MF8=1HC@FDFWZYZ28QQ''F7CXB7=FCM59QZ!VP='6(G-5KD;>DFI*^6:4G!DY MYY)MNAGI-;2%IJB2*R@IT);N510?=@XZ5%^:`FE::I8+67@JI"HZ*F1PI@[_ M:22FE$97:4%/:HH@;A8Q&&I#A)*ZJ**K1HBKF$R.YRJ&V(X_RA>ELLFXF^IUQ5::*[+*KE?GML'E2*&BM%!K);K%-MLG*KI!U MZ>6?#\F;7IU$TFON>`+#JZBZ*+Y[''BCNONDO-<4:K"9C64+V8X--#!&P`M] M:9DP#+'2&)5/*MR=?S9>:.R1ZRX,+LK%S1OL>D#6NYZ2'EZH*6T="M<8GX*P MDO'0&SOTJ6^_FB>>N%&.'.?`38.+6J"Y]E?NO#)/^N:`.YN9WVM@07;-&$.7 MK7'`/3)4J)MK#TDO<0%?>Z9S5#>KG]1XUXGN\1@# M)7-T80UY-W>;LMG;4-MGOOMNK%%/S.::;VNJYVA^A]N0T(8;C@/B`D&C^'QH MNC;HB#;VG!S/-Q:I9(@N$BC(FO`IILS[[A.&9ASM$>%0^O,- MG.Y83N=-WQ#TV*-N_4O5;U^0\]B7[CU,JHYO'-GAFVV^2P:N7]`8X*?OODF\ MA#C\/]_!/%2OR%TU[_!JB3_)5-@`1,X$W^=T`%.K"`&7N@!!<2$``[ ` end GRAPHIC 10 f94556orf9455601.gif GRAPHIC begin 644 f94556orf9455601.gif M1TE&.#EAL0%8`/?_````````,P``9@``F0``S```_P`S```S,P`S9@`SF0`S MS``S_P!F``!F,P!F9@!FF0!FS`!F_P"9``"9,P"99@"9F0"9S`"9_P#,``#, M,P#,9@#,F0#,S`#,_P#_``#_,P#_9@#_F0#_S`#__S,``#,`,S,`9C,`F3,` MS#,`_S,S`#,S,S,S9C,SF3,SS#,S_S-F`#-F,S-F9C-FF3-FS#-F_S.9`#.9 M,S.99C.9F3.9S#.9_S/,`#/,,S/,9C/,F3/,S#/,_S/_`#/_,S/_9C/_F3/_ MS#/__V8``&8`,V8`9F8`F68`S&8`_V8S`&8S,V8S9F8SF68SS&8S_V9F`&9F M,V9F9F9FF69FS&9F_V:9`&:9,V:99F:9F6:9S&:9_V;,`&;,,V;,9F;,F6;, MS&;,_V;_`&;_,V;_9F;_F6;_S&;__YD``)D`,YD`9ID`F9D`S)D`_YDS`)DS M,YDS9IDSF9DSS)DS_YEF`)EF,YEF9IEFF9EFS)EF_YF9`)F9,YF99IF9F9F9 MS)F9_YG,`)G,,YG,9IG,F9G,S)G,_YG_`)G_,YG_9IG_F9G_S)G__\P``,P` M,\P`9LP`FW*3S MZ]AA"DK`G88@Z=545_^WGKV\^9#X<-Y."#(-82 M(8`4EL6*%2A:P4J)++6"X87?472<7-0,)$R(.$(H(8M8K0#`CT"NR.-(%KY8 M8$;\*3=0CDR".*)E)Z9HA64^`FFED$-^Y**1^,4(VH+2`-;DF`^&9.694Q8D MY9ELKH`BEAJAR.:9;EK$RIP_IHG0G7CJN9(5>`*PPDN!`M`"-*,T'I+9 MI#`@\3FGG]<`6FB@*\!)D:676DGI0YRR^2E!H:+I4I5X$AHH<_8ANEY+'SK_ MBF,R()7JJ9J=%IHI19+F"N2H"-D:)*B!:IK2I:I.RIRK]T7'4JRR@DCK1\+^ MJ"FJOLXY:$389FLH185"%*Y+NKI4+0#`UM8JLQJV%&V.9JY:D+?E/M1MMMM. M-*Y#^[)T[Z_F%DO),@NMMT-K7 M%/ZSE(9#)#B*<:;8N$,@I^>LNW!#^K3-`P$N$-YYVSVG2%#SBV>^`G&\][\3 MURTOTZ*B_3KK%WDM\<2P5SRY0+9KZ_0U;;O:;DLCP^VS1TI_GKQ!7_L9<4B( M'[Z\O%^C'G:;U]_Z-=>FIUI]X-LC31`KX;><=*K\AE.:'ER7/E&=[1<`0N`64.(U*;6/KA! M;WGGVEV]>'>I].F/#$>_JU?+OR1!_\QXKG.@1"%#F3>$1&8P`86#2$Q'%KB'':0*%HI M?P*9(+-BXC[X<<1O11S(U[*GLHV4#B%GK!03T?5#*:IQC0)$X*BL&#LC>NM3 M2`2<#=WVDN*1S(MF/!W]TDBQNN51AA6!(.Z61T<&^D];9&29IM;(QD$R<6P. MTU00D660]7'G"UC>C(!.F.)^S1'+1Z&\9S]F^4J M*W+_S[MM\(VT!"@ZTRFH2$)3H`'DH#.5E\9^16QWU^"8]2!8D.!MD8O&6Y@C M\6FEB(!S3U&$*$?-U[V-(O1,<(J>(?UVPI4N-*+^?"D*A[A+WZ4HE=?8([/B M*4^XC;(CA"1D'$TZU`Z"ZZ4&*64ZK:?2)2+UI`B MQ8O"9)F."HE2K5K':/J0?@N<>G#JO;0F/V2Z@R->Q6%&-X?9V`[7F.NT[#53&\(TSJ^A3NWK\\C:V\FR MMJ/Z["YW^X5`Z[T3GC-Q'VKI%%SV.N261)1F=?'4.,V.%Y'>_2Y)>7NE84)2 MC#RL*P_MF]3RZ:EHFD*NJP@R!I%NA+!CTFANUQJ^PTE$NL&2;URIF[H`PS*@ MDMUP;UD*PI@^%:VOE>WM!G>0\WII#`V(<8-WECF0?.VM)R9?IS39S2K>\[[X M%?$5VWLF_W*XJ;ONDM^;I$)NJO>S;F[8U6Q M[W(5MCJI=J&W%#.G`"N(*K_HLXLO" M^:ZQO@?_)WG*6,GL(4LZV)1]N+%"7>QVGWK'"R7XLCO8NGRE+5R-#$NNA M#YW6NSMZTN&U=,:6U-P.UCFQXR3PR46/YK;-Y'3A/.P'7FI%U=(3P;-Z.(GHGLH-%29&!!-]K3?2(W;'7E-!'>.9OO:Q;'SL6P6QWH<(Q?*WG_SNA]\I MUCR_1:)/?NFKWRT8?W]!QM]^Q` M8`%^"(@08\!_!8AH![B`5Y%^$IA(!/B`$5B!5+%[PZ>!&=&`#YAE&>B!),@8 MK'"!VU>"*@@E#IB"*_B"E(&"L`>#-#@9K-""BH<#-;B#C2&#'3>"/!B$>7&" ML`>$0GB$=P&"0V>$2-B$;T&$'N>$4C@82FAM4WB%UD>`.HB%7(@7-RB"71B& +>!%K3"B&8A@0`#L_ ` end -----END PRIVACY-ENHANCED MESSAGE-----


Delaware		94-2579683
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)






				Proposed Maximum			Proposed Maximum
Title of Each Class of	Amount to Be			Offering Price			Aggregate Offering		Amount of
Securities to Be Registered	Registered			Per Unit(1)			Price(2)		Registration Fee


Zero Coupon Senior Convertible Notes	$	475,000,000			100	%	$	475,000,000	$	38,428
		face amount

Common stock, $0.001 par value per share(3)		96,153,846	(4)		—			—		—	(4)


FORWARD LOOKING STATEMENTS
WHERE YOU CAN FIND MORE INFORMATION
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
SUMMARY
RISK FACTORS
RATIO OF EARNINGS TO FIXED CHARGES
USE OF PROCEEDS
SELLING SECURITYHOLDERS
PLAN OF DISTRIBUTION
DESCRIPTION OF NOTES
DESCRIPTION OF CAPITAL STOCK
MATERIAL UNITED STATES FEDERAL TAX CONSIDERATIONS
LEGAL MATTERS
EXPERTS
SIGNATURES
EXHIBIT INDEX
EXHIBIT 4.7
EXHIBIT 4.9
EXHIBIT 5.1
EXHIBIT 12.1
EXHIBIT 23.1
EXHIBIT 25.1


Designation and Amount		$475,000,000 aggregate principal amount Zero Coupon Senior Convertible Notes due 2010.

Maturity		November 15, 2010.

Interest		Interest on the Notes is zero unless the Company defaults on specified obligations under the registration rights agreement. See “Description of Notes — Registration Rights of the Noteholders.”

Conversion		A holder of Notes may convert the Notes into shares of our Common Stock at a conversion rate of 202.4291 shares per $1,000 principal amount of Notes, subject to adjustment, prior to the close of business on the final maturity date under any of the following circumstances:

		• during any fiscal quarter commencing after December 31, 2003, if the closing sale price of our Common Stock exceeds 110% of the conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter;

		• after November 15, 2008 until maturity, on any date on which the closing sale price of our Common Stock exceeds 110% of the conversion price, and at all times thereafter;

		• during the five business day period after any five consecutive trading day period in which the trading price per Note for each day of such period was less than 98% of the product of the closing sale price of our Common Stock and the number of shares issuable upon conversion of $1,000 principal amount of the Notes; provided that you will receive an amount of cash or Common Stock, or any combination thereof, equal to the principal amount of Notes being converted pursuant to this contingency if the closing sale price of our Common Stock exceeds the conversion price;

		• if we call the Notes for redemption; or

		• upon the occurrence of specified corporate events described under “Description of Notes.”

		Upon conversion, we have a right to deliver cash, or a combination of cash and shares of Common Stock, in lieu of shares of our Common Stock. See “Description of Notes — Payment Upon Conversion.”

Redemption		We may redeem any of the Notes beginning November 15, 2008 by giving a holder of Notes at least 30 days’ notice. We may redeem the Notes either in whole or in part at a redemption price equal to 100% of the principal amount of the Notes, plus accrued and unpaid additional interest, if any, resulting from a default under the registration rights agreement.

Designated Event		If a designated event, as described under “Description of Notes — Repurchase at Option of the Holder Upon a Designated Event,” occurs prior to maturity, a holder of Notes may require us to repurchase all or part of such Notes at a repurchase price equal to


	Aggregate					Number of
	Principal					Shares of
	Amount of		Percentage			Common		Common Stock
	Notes at		of Notes			Stock		Registered
	Maturity That		Outstanding			Beneficially		Hereby That
Name and Address of	May Be		Prior to			Owned Prior		May Be
Beneficial Owner	Sold(1)		Resale			to Conversion		Sold(2)

Argent Classic Convertible Arbitrage Fund (Bermuda) Ltd.	$	6,200,000		1.31	%		1,255,060		1,255,060
Bear, Stearns & Co. Inc.(4)	$	2,500,000		*			506,072		506,072
Context Convertible Arbitrage Fund, LP	$	900,000		*			182,186		182,186
Context Convertible Arbitrage Offshore, Ltd.	$	2,100,000		*			425,101		425,101
DKR Saturn Event Driven Holding Fund Ltd.	$	7,500,000		1.58	%		1,518,218		1,518,218
DKR Saturn Special Situations Holding Fund Ltd	$	7,500,000		1.58	%		1,518,218		1,518,218
JMG Capital Partners, L.P.	$	5,500,00		1.16	%		1,113,360		1,113,360
National Bank of Canada	$	500,000		*			101,214		101,214
White River Securities L.L.C.(4)	$	2,500,000		*			506,072		506,072
All other holders of Notes or future transferees, pledges, donees or successors of any such holders(3)

Total	$	475,000,000		100.00	%		—		96,153,846


Christopher S. Dewees, Esq. Senior Vice President and General Counsel JDS Uniphase Corporation 1768 Automation Parkway San Jose, California 95131 (408) 546-5000		Michael C. Phillips, Esq. P. Rupert Russell, Esq. Morrison & Foerster LLP 755 Page Mill Road Palo Alto, California 94304 (650) 813-5620


	Page

Forward Looking Statements		i
Where You Can Find More Information		ii
Incorporation of Certain Documents by Reference		ii
Summary		1
Risk Factors		6
Ratio of Earnings to Fixed Charges		25
Use of Proceeds		26
Selling Securityholders		26
Plan of Distribution		28
Description of Notes		31
Description of Capital Stock		46
Material United States Federal Tax Considerations		50
Legal Matters		57
Experts		57


Ranking		The Notes are general unsecured obligations of the Company. The Notes are also effectively subordinated to the existing and future indebtedness and other liabilities, including trade payables, of our subsidiaries. As of September 30, 2003, our subsidiaries had outstanding indebtedness of approximately $6.0 million, other than intercompany indebtedness and trade payables. We and our subsidiaries are not prohibited from incurring senior indebtedness or other debt under the indenture.


	*The continuing unstable economic environment has significantly harmed and may continue to significantly harm our industries.*


	Our revenue levels are unstable, we are not currently profitable, and we have difficulty predicting future operating results.


	Our customers’ businesses have been harmed by the economic downturn.


	Our Global Realignment Program may be unsuccessful in aligning our operations to current market conditions.


	Our cost reduction programs may be insufficient to achieve long-term profitability.


	We have incurred, and may in the future incur, inventory-related charges, the amounts of which are difficult to predict accurately.


	*Any failure of our major telecommunications systems manufacturing customers, or their telecommunications carrier customers, to service their debt would materially harm our business.*


	If our customers fail to meet their financial obligations to us, our business will suffer.


	*We depend on recovery and long-term growth in our markets for our success.*


	If the Internet does not continue to grow as expected, our business will suffer.


	We depend on stability or growth in the markets for our products outside communications for growth in the revenue of this group of products.


	*Our business and financial condition could be harmed by our long-term growth strategy.*


	If we fail to manage or anticipate our long-term growth, our business will suffer.


	If we fail to commercialize new product lines, our business will suffer.


	*Changes in accounting rules have had and may continue to have a material effect on our financial results.*


	Our financial results could be affected by potential changes in the accounting rules governing the recognition of stock-based compensation expense.


	Implementation of FIN 46 could affect our financial results


	*Our total net revenue is dependent upon a few key customers.*


	*Any failure to remain competitive would harm our operating results.*


	If we are not competitive, our operating results could suffer.


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


	*We have concerns regarding the manufacturing, quality and distribution of our products.*


	If we do not achieve acceptable manufacturing volumes, yields and costs, our business will suffer.


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


	If our products fail to perform, our business will suffer.


	Certain of our non-telecommunications products are subject to governmental and industry regulations, certifications and approvals.


	We may not be able to enter into necessary strategic alliances to effectively commercialize our products.