PURCHASE AGREEMENT

ARTICLE I       DEFINITIONS

1.3      Rules of Construction . References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. The words “include”, “includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation”. Unless the context otherwise requires, references in this Agreement to Articles, Sections and Exhibits shall be deemed references to Articles and Sections of, and Exhibits to, this Agreement. Unless the context otherwise requires, the words “hereof”, “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement. All references to contracts, agreements, leases or other arrangements shall refer to oral as well as written matters. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

2.1      Transfer and Contribution of the Equity Interests and the Acquired Assets . Subject to the terms and conditions of this Agreement, on or prior to the Closing Date, the following transactions will occur in the following order:

(a)    Subject to Section 5.2, at the Closing, the Seller shall sell, convey, assign, transfer and deliver to the Buyer, and the Buyer shall purchase and acquire, all of the Seller’s direct and indirect right, title and interest in and to the Equity Interests.

(b)    At the Closing, the Seller shall sell, convey, assign, transfer and deliver to the Buyer, and the Buyer shall purchase and acquire all of the Seller’s direct and indirect right, title and interest in and to the following assets (all such assets, other than the Excluded Assets referred to in Section 2.2 hereof, being the “ Acquired Assets ”):

(i)    the Tangible Assets;

(ii)    the Assigned Intellectual Property;

(iii)    the Assumed Contracts;

(iv)    the Inventories;

(v)    a copy of the customer lists used primarily in the Business;

(vi)   all rights in and under all express or implied guarantees, warranties, representations, maintenance and similar rights in favor of the Seller with respect to the Acquired Assets described in clauses (i) through (v) above to the extent that such rights are transferable by the Seller to the Buyer.

2.2      Excluded Assets . Except to the extent listed on Section 1.1(ii) or 1.1(iv) of the Seller Disclosure Schedule, the Acquired Assets shall not include any of the following assets (collectively, the “ Excluded Assets ”):

(a)    intercompany assets and assets (including all rights, properties, claims and Contracts) utilized primarily in any business other than the Business;

(b)    capital stock owned by the Seller other than the Equity Interests;

(c)    cash and cash equivalents or similar type investments, bank accounts, certificates of deposit, Treasury bills and other securities and any proceeds therefrom and all accounts receivable relating to products shipped, or services performed, by the Business prior to the Closing Date;

(d)    rights relating to deposits and prepaid expenses and claims for refunds and rights to offset in respect thereof;

(e)    any current Taxes receivable, deferred Tax assets and prepaid Taxes, Tax payments due from Affiliates, and entitlements to refunds or credits for Taxes of the Seller;

(f)    all Contracts other than the Assumed Contracts;

(g)    all Intellectual Property of the Seller that is not specifically addressed by the Intellectual Property Agreement, including without limitation any Trademarks comprising or containing the terms “JDS Uniphase” or “JDSU” (subject to Section 5.7);

(h)    all real property, including all buildings, structures, fixtures and other improvements situated thereon;

(i)    all claims, demands, deposits, refunds, rebates, causes of action, choses in action, rights of recovery, rights of set-off and rights of recoupment to the extent relating to any of the Excluded Assets or Excluded Liabilities;

(j)    the corporate charter, qualifications to conduct business as a foreign corporation, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, seals, minute books, stock transfer books, shares of capital stock, blank stock certificates and other documents relating to the organization, maintenance and existence of the Seller as a corporation;

(k)    all personnel records and other records that the Seller is required by law to retain in its possession or is not permitted under law to be provided to the Buyer;

(l)    all rights in connection with, and assets of, any Benefit Plans;

(m)    all insurance policies and rights thereunder;

(n)    all rights of the Seller under this Agreement, or the transactions contemplated hereunder and thereunder; and

(o)    all records prepared in connection with the sale of the Business to the Buyer.

2.3      Assumed Liabilities .

(a)    Except to the extent specified in Section 2.3(b), the Buyer will not assume any Liability of the Seller whatsoever, and the Seller will retain responsibility for all of its Liabilities of the Business, including all Liabilities arising from the Business prior to the Closing, whether or not accrued and whether or not disclosed.

(b)    Effective as of the Closing, the Buyer hereby assumes and agrees to pay, perform and discharge when due all Liabilities (other than the Excluded Liabilities) of Seller, of every kind, nature, character and description (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated and whether due or to become due) which are set forth below (collectively, the “ Assumed Liabilities ”):

(i)    all Liabilities arising from the conduct of the Business or the operation of the Acquired Assets on and after the Closing Date, including, without limitation, Liabilities arising from the use of any Seller Trademarks after the Closing Date pursuant to Section 5.7 and Liabilities arising from claims by Fabrinet relating to the Venture Inventories;

(ii)    subject to and accordance with Section 5.11,   all Liabilities to Seller’s customers arising under warranty claims for products sold by the Business prior to the Closing which have not been satisfied by the Seller as of the Closing;

(iii)    all Liabilities to Seller’s customers incurred by Seller in the ordinary course of the Business for nondelinquent orders outstanding as of the Closing Date reflected on Seller’s Books and Records; and

(iv)    all Liabilities for which the Buyer has expressly assumed responsibility pursuant to this Agreement.

2.4      Excluded Liabilities . Buyer shall not assume or be obligated to pay, perform or otherwise assume or discharge any liabilities or obligations of Seller or any Affiliate of Seller, whether direct or indirect, known or unknown, absolute or contingent, except for the Assumed Liabilities (all of such liabilities and obligations not so assumed being referred to herein as the “ Excluded Liabilities ”). For the avoidance of doubt, the parties agree that the Excluded Liabilities include, but are not limited to, any and all liabilities or obligations set forth or described in paragraphs (a) through (h) below. Seller or a Subsidiary shall pay, perform and discharge all such Excluded Liabilities, including the following:

(a)    all Liabilities relating to the Excluded Assets (unless specifically included as an Assumed Liability under Section 2.3);

(b)    all Liabilities that are not expressly assumed by Buyer pursuant to Section 2.3;

(c)    any Taxes of the Seller for periods or portions thereof ending on or prior to the Closing Date;

(d)    all Liabilities for legal, accounting and audit fees and any other expenses incurred by the Seller in connection with this Agreement;

(e)    all Liabilities of the Business arising from or in connection with the conduct of the Business prior to the Closing Date, except as otherwise assumed by the Buyer pursuant to this Agreement;

(f)    all Liabilities related to Contracts that are not Assumed Contracts;

(g)    all Liabilities for raw materials, parts, components, or other supplies used in the Business that are owned by third parties, except where the subject of an Assumed Contract or where part of the Venture Inventories.

(h)    any action, suit, claim, demand, or proceeding regarding the Business arising or accruing prior to the Closing Date;

(i)    Environmental Liabilities (including, for the avoidance of doubt, the proceeding pursuant to the New Jersey Industrial Site Recovery Act resulting from the parties hereto entering into this Agreement) relating to the operation of the Business prior to the Closing Date;

(j)    all Liabilities relating to employee compensation or benefits (including without limitation obligations arising under retention or severance agreements, health care plans, insurance plans, 401k or pension plans, COBRA, WARN, or ERISA) of any Business Employee relating to employment with Seller;

(k)    all Liabilities relating to product defects for products shipped prior to the Closing Date;

(l)    all Liabilities relating to export of products prior to the Closing Date; and

(m)    any Liabilities or obligations of Seller arising out of or relating to its performance under this Agreement (regardless of whether such performance is required before or after the Closing Date), including without limitation any obligation arising under the Indemnification obligations of Seller under Article VI.

2.5      Further Assurances; Post-Closing Asset Transfers; Settlement of Accounts Receivable .

(a)    From time to time, at the request of the Buyer or the Seller, whether at or after the Closing Date, the Buyer or the Seller, as the case may be, shall, and shall cause their respective Affiliates to, execute and deliver such further instruments of conveyance, transfer, assignment and assumption, cooperate and assist in providing information for making and completing regulatory filings, and take such other actions as the Buyer or the Seller, as the case may be, may reasonably require of the other party to more effectively assign, convey and transfer to such party the Acquired Assets, and to have the Buyer assume the Assumed Liabilities, in each case as contemplated by this Agreement.

(b)    To the extent that the sale or assignment of any Assumed Contract or other Acquired Asset to the Buyer hereunder shall require the consent of another party, this Agreement shall not constitute an agreement to sell or assign the same if an attempted sale or assignment would constitute a breach thereof. The Seller will use its diligent efforts to obtain the consent of the other parties to such Assumed Contracts for the assignment thereof to the Buyer, provided , however , that the Seller shall not be obligated to make any payment or take any other action detrimental to the Seller to obtain any such consent. If any such consent is not obtained, the Seller shall, and shall cause its Affiliates to, cooperate with the Buyer in any arrangement reasonably requested by the Buyer to provide for the Buyer the benefits under any such Assumed Contract, including the enforcement at the cost of and for the benefit of the Buyer of any and all rights thereunder of the Seller or their respective Affiliates against the other party thereto. If and when such consents are obtained, the transfer of the applicable Assumed Contract or other Acquired Asset will be effected in accordance with the terms of this Agreement.

(c)    To the extent that any of the assets transferred to the Buyer as contemplated herein include rights or assets that (i) are necessary for the operation of any business (other than the Business) of the Seller or its Affiliates, and (ii) were used by the Seller or any of its Affiliates prior to Closing, the Buyer agrees, to the extent possible, to transfer, convey, assign, license, sublicense or enter into another arrangement with respect to such rights or assets so that the Seller and its Affiliates have the benefits (subject to the burdens) of such rights and assets for such other business; provided that the foregoing shall not require the Buyer to permit the Seller or its Affiliates to use such rights or assets in the Business or to transfer, convey, assign, license, sublicense or enter into such other arrangement if such action precludes the Buyer from using such rights or assets in the Business.

(d)    If and to the extent that the Buyer identifies any asset which is used primarily in the Business, but which was not included in the Acquired Assets and was not listed as an Excluded Asset, then, subject to Section 2.5(b) above, the Seller shall promptly transfer such asset to the Buyer at no additional cost and such transferred asset shall be considered an “Acquired Asset” for all purposes hereunder, including Section 2.3; provided that the Buyer shall also assume any obligations relating to any such Acquired Asset, including obligations under Contracts assigned to the Buyer pursuant to this Section 2.5(d).

(e)    In the event that the Buyer receives payment with respect to an account receivable of the Business arising from a product shipped, or a service performed, by the Business prior to the Closing Date, the Buyer shall promptly remit such payment to the Seller. In the event that the Seller receives payment with respect to an account receivable of the Business arising from a product shipped, or a service performed, by the Business on or after the Closing Date, the Seller shall promptly remit such payment to the Buyer.

3.1      Purchase Price . (a)   The aggregate consideration for the sale and transfer of the Acquired Assets and Equity Interests is equal to: (x) $1,000,000 (which is payable at Closing) plus the Inventory Amount (which is payable over two years as described below and subject to adjustment as described in Sections 3.1(b) and 5.2) (collectively, the “ Purchase Price ”), plus (y) the assumption of the Assumed Liabilities as provided in Section 2.3. At the Closing, the Buyer shall pay to the Seller by wire transfer $1,000,000 in immediately available funds (the “ Initial Purchase Price ”) to an account specified by the Seller.   In addition, subject to Section 3.1(b), the Buyer shall pay to the Seller by wire transfer in immediately available funds an amount equal to the Inventory Amount, payable as follows: (i) within thirty (30) days after the end of each of the seven fiscal quarters of the Seller occurring after the Closing Date (beginning with the fiscal quarter ending September 30, 2005, which shall cover the period from the Closing Date to the end of such fiscal quarter), an amount equal to the book value as listed on Section 1.1(ii) of the Seller Disclosure Schedule (or if not so listed, the book value recorded in the Books and Records of the Seller as of the Closing Date) (the “ Book Value ”) of any Inventories (other than E&O items described in Section 1.1(ii) of the Seller Disclosure Schedule, which shall have a Book Value of $0) utilized, consumed or otherwise disposed of by the Buyer in the conduct of the Business during each such fiscal quarter and (ii) within thirty (30) days after the second anniversary of the Closing (the “ Final Payment Date ”), the Buyer shall pay to the Seller an amount equal to the positive difference, if any, between the Inventory Amount (as finally determined in accordance with Section 3.1(b) and the Inventory Acceptance Plan), minus the aggregate amount of payments previously made by the Buyer pursuant to clause (i); provided, that, on the Final Payment Date, the Buyer shall be entitled to tender for return to the Seller any Inventories (other than E&O items described in Section 1.1(ii) of the Seller Disclosure Schedule), any Venture Inventories, or any raw materials, parts, components, or other supplies purchased by Buyer under the Acquired Contracts having an aggregate Book Value (or the price paid by Buyer, in the case of the Venture Inventories and items purchased by Buyer under the Assumed Contracts) of up to $1,000,000 (the “ Put Amount ”), subject to adjustment as described below, and the amount owed by the Buyer to the Seller on the Final Payment Date shall be reduced, dollar for dollar, by the value of any such tendered items; provided that the Seller may authorize the Buyer to dispose of such tendered items (including without limitation classifying any such items as E&O) in lieu of physically returning such items to the Seller. In the event that the Buyer cancels without any liability to Buyer any of the open vendor purchase orders of the Business identified in Section 1.1(i) of the Seller Disclosure Schedule (the “ Cancelled Vendor POs ”), the Put Amount shall be reduced by an amount equal to the product of (i) .15 and (ii) the aggregate value of any and all Cancelled Vendor Pos. Buyer shall use its best efforts to cancel any open vendor purchase orders that are not needed by the Buyer in the Business and can be cancelled without liability to the Buyer on or prior to June 30, 2005, and the Seller shall use its best efforts to assist the Buyer in such cancellation process.

3.2      Allocation of Purchase Price .  The Seller shall prepare and deliver to the Buyer an allocation of the Purchase Price (the “Allocation”) after the Closing in a manner consistent with the provisions of Section 1060 of the Code and the Treasury regulations promulgated thereunder. The Buyer shall have thirty (30) Business Days to review and object to such allocation by delivering to the Seller a written statement setting forth the Buyer’s reasonable objections. If the Buyer fails to deliver any objection within such period, the allocation prepared by the Seller shall be deemed to have been accepted by the Buyer. If the parties cannot timely agree on such allocation, the parties shall submit any dispute to a mutually acceptable, nationally recognized accounting firm. The Buyer and the Seller agree not to take any actions inconsistent with the Allocation in any relevant Tax returns or filings, including any forms or reports required to be filed pursuant to section 1060 of the Code, the Treasury Regulations promulgated thereunder or any provisions of local, state and foreign law, and to cooperate in the preparation of any such forms or reports and to file such forms and reports in the manner required by applicable law.

3.3      Closing . The closing of the transactions contemplated by this Agreement (the “ Closing ”, and the date on which the Closing occurs, the “ Closing Date ”) shall take place on the close of business on the date hereof at the offices of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York, unless another date, time or place is agreed to in writing by the parties hereto; provided, that, for the avoidance of doubt, no parties shall be obligated to attend the Closing.

3.4      Closing Deliveries .

(a)    At the Closing, the Seller shall deliver, or cause to be delivered, to the Buyer the following:

(i)    subject to Section 5.2, the stock certificates representing any Equity Interests, duly endorsed in blank or accompanied by stock transfer powers;

(ii)    a certificate of an officer of the Seller, dated the Closing Date, to the effect that the representations and warranties of the Seller contained in this Agreement are true and accurate and that the Seller has performed in all materials respects all obligations and agreements and complied in all material respects with all covenants and conditions contained in this Agreement to be performed or complied with by the Seller at the Closing Date;

(iii)    a bill of sale transferring under applicable laws all Tangible Assets and Inventories included in the Acquired Assets to the Buyer;

(iv)    bills of sale, assignments and any other appropriate instruments of sale and conveyance, in form and substance reasonably acceptable to the Seller and the Buyer, transferring all Assigned Intellectual Property to the Buyer (it being understood and agreed that Buyer, at its own expense, shall (a) prepare any and all individual assignment documents that are required in all applicable countries and are reasonably acceptable to the Seller, and (b) record such documents in all applicable government offices);

(v)    subject to Section 2.5, assignments or, where necessary, subleases, in form and substance reasonably acceptable to Buyer, assigning or subleasing to Buyer or its wholly-owned subsidiary under applicable laws all Assumed Contracts;

(vi)    the Intellectual Property Agreement, the Services Agreement, the Registration Rights Agreement and the Supply Agreement, in each case executed by the Seller; and

(vii)    FIRPTA certificates as required by Section 1445 of the code and the regulations promulgated thereunder indicating that no withholding is required in connection with the sale of the Acquired Assets.

(b)    At the Closing, the Buyer shall deliver, or cause to be delivered, to the Seller the following:

(i)    a certificate of an officer of the Buyer, dated the Closing Date, to the effect that the representations and warranties of the Buyer contained in this Agreement are true and accurate and that the Buyer has performed in all materials respects all obligations and agreements and complied in all material respects with all covenants and conditions contained in this Agreement to be performed or complied with by the Buyer at the Closing Date;

(ii)    an undertaking, in form and substance reasonably satisfactory to the Buyer and the Seller, pursuant to which the Buyer shall, on and as of the Closing Date, assume and agree to pay, perform and discharge when due, all of the Assumed Liabilities contemplated by Section 2.5(a) and such other instruments as the Seller may reasonably request in order to effect the assignment to and assumption by the Buyer of the Assumed Liabilities; and

(iii)   the Intellectual Property Agreement, the Services Agreement, the Registration Rights Agreement and the Supply Agreement, in each case executed by the Buyer.

4.1      Representations and Warranties of the Seller . The Seller hereby represents and warrants to the Buyer as follows:

(a)    Due Organization of Seller . The Seller is a corporation duly organized, validly existing and in good standing under the laws of Delaware. The Seller (i) has all requisite corporate power and authority to own the Acquired Assets and to carry on the Business as it is now being conducted, and (ii) is in good standing and is duly qualified to transact the Business in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect.

(b)    Authorization and Validity of Agreement . The Seller has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by the Seller of this Agreement and the consummation by the Seller of the transactions contemplated hereby (including the execution and delivery of the Ancillary Documents) have been duly authorized by all requisite action of the board of directors of the Seller, and no other corporate or other action on the part of the Seller is or will be necessary for the execution, delivery and performance by the Seller of this Agreement and the consummation by such Seller of the transactions contemplated hereby and thereby. This Agreement has been, and each of the Ancillary Documents will be, duly executed and delivered by the Seller and each such agreement is, or will be, a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except to the extent that its enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting creditors’ rights generally and by general equity principles.

(c)    No Conflict . Except as set forth in Section 4.1(c) of the Seller Disclosure Schedule, except as specifically contemplated in this Agreement, and except as would not have a Material Adverse Effect, the execution, delivery and performance by the Seller of this Agreement and the Ancillary Documents an