<SUBMISSION>
<ACCESSION-NUMBER>0000912093-00-000010
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>6
<PERIOD>19991231
<FILING-DATE>20000210
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>JDS UNIPHASE CORP /CA/
<CIK>0000912093
<ASSIGNED-SIC>3674
<IRS-NUMBER>942579683
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0630
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-22874
<FILM-NUMBER>529924
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>163 BAYPOINTE PKWY
<CITY>SAN JOSE
<STATE>CA
<ZIP>95134
<PHONE>4084341800
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>163 BAYPOINTE PARKWAY
<CITY>SAN JOSE
<STATE>CA
<ZIP>95134
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<DESCRIPTION>FORM 10-Q FOR PERIOD ENDED DECEMBER 31, 1999
<TEXT>

<HTML>
<head>
<TITLE>10Q doc</TITLE>
</head>

<body bgcolor=white>

<DIV align=left>
<HR align=left SIZE=2 width="100%">
</DIV>
<DIV align=left>
<HR align=left SIZE=2 width="100%">
</DIV>

<p align="center"><font size="3"><strong>UNITED STATES</br>
SECURITIES AND EXCHANGE COMMISSION</br>
Washington, D.C. 20549</strong></font></p>

<p align="center"><font size="3"><strong>FORM 10-Q</strong></font></p>
<p align="center"><font size="3"><strong>
   [X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934
</strong></font></p>
<p align="center"><font size="3" color="FF0000"><strong>
             For the quarterly period ended December 31, 1999
</strong></font></p>

<p align="center"><font size="3"><strong> OR </strong></font></p>

<p align="center"><font size="3"><strong>
[&nbsp;&nbsp;]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
</strong></font></p>
<p align="center"><font size="3"><strong>
 For the transition period from ________to _________
</strong></font></p>
<p align="center"><font size="3"><strong>
                       <u>Commission file number 0-22874</u>
</strong></font></p>
<p align="center"><font size="5" color="#0000FF"><strong>
                               <u>JDS Uniphase Corporation</u>
</strong></font></br>
<font size="2">
               (Exact name of Registrant as Specified in its Charter)
</font></p>

<P>&nbsp;
<TABLE COLS=2 WIDTH="100%" >
<TR>
<TD>
<font size="3"><strong>
<CENTER><u>Delaware</u></CENTER>
</font></strong>
</TD>
<TD>
<font size="3"><strong>
<CENTER><u>94-2579683</u></CENTER>
</font></strong>
</TD>
</TR>
<TR>
<TD>
<font size="2">
<CENTER>&nbsp; (State or Other Jurisdiction of Incorporation or Organization)&nbsp;</CENTER>
</font>
</TD>
<TD>
<font size="2">
<CENTER>(IRS Employer Identification Number)</CENTER>
</font>
</TD>
</TR>
</TABLE>
<BR>



<p align="center"><font size="3"><strong>
                        163 Baypointe Parkway<br>
                    <u> San Jose, California  95134
</strong></font></u><br>

<font size="2">
        (Address of Principal Executive Offices including Zip Code)
</font></p>

<p align="center"><font size="3"><strong><u>
                                   (408) 434-1800
</strong></font></u><br>

<font size="2">
                 (Registrant's Telephone Number, Including Area Code)
<br>
<br>
<br>
(Former name, former address and former fiscal year if changed
 since last report)

</font></p>




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<p>&nbsp;&nbsp;&nbsp;
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [&nbsp;&nbsp;] </p>

<P>Number of shares of Common Stock outstanding as of the latest practicable
date, January 31, 2000: 250,147,466.  In addition, as of such
date, there were outstanding 105,973,567 Exchangeable Shares of JDS Uniphase
Canada Ltd. which are exchangeable at any time into Common  Stock on a one-for-
one basis, entitle their holders to dividend and other rights economically
equivalent to those of the Common Stock, and through a voting trust, vote at
meetings of stockholders of the Registrant.</P>







<DIV align=left>
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</DIV>

<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
</strong></p>
<p align="center"><strong>

                              JDS Uniphase Corporation<br>
                                    FORM 10-Q<br>
                                     INDEX
</strong></p>
<p align="center"><strong>
PART I.  FINANCIAL INFORMATION
</strong></p>

<p>ITEM 1.   Financial Statements (Unaudited):

<BLOCKQUOTE>
<p><A HREF="#ops">
           Condensed Consolidated Statements of Operations
            Three and Six months ended December 31, 1999 and 1998</A>


<p><A HREF="#bs"> Condensed Consolidated Balance Sheets
            December 31, 1999 and June 30, 1999</A>

<p>
<A HREF="#flows">
          Condensed Consolidated Statements of Cash Flows
            Six months ended December 31, 1999 and 1998</A>

<p>
<A HREF="#notes">
         Notes to Condensed Consolidated Financial
         Statements</A>

</BLOCKQUOTE>


<p>ITEM 2.   Management's Discussion and Analysis of Financial Condition and Results of
          Operations

<BLOCKQUOTE>

<p>
<A HREF="#results">
         Results of Operations</A>

<p>
<A HREF="#segment">
         Operating Segment Information</A>

<p>
<A HREF="#liquid">
         Liquidity and Capital Resources</A>

<p>
<A HREF="#IPR&D">
         Current Status of Acquired In-process Research and Development Projects</A>


<p>
<A HREF="#risks">
         Risks</A>
</BLOCKQUOTE>

<A HREF="#item3">
<p>ITEM 3.   Quantitative and Qualitative Disclosure about Market Risks</A>


<p align="center"><strong>
PART II.  OTHER INFORMATION
</strong></p>

<p>ITEM 1:  Legal Proceedings

<p>ITEM 2:  Changes in Securities

<p>ITEM 3:  Defaults Upon Senior Securities

<p>ITEM 4:  Submission of Matters to a Vote of Security Holders

<p>ITEM 5:  Other Information

<p>ITEM 6:  Exhibits and Reports on Form 8-K

<p align="left"><strong>
<A HREF="#sign">
Signatures</A>
</strong></p>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>

<p align="center"><strong>
PART I -- FINANCIAL INFORMATION
</strong></p>
<p>Item 1.  Financial Statements


<br>
<br>
<HR WIDTH="85%">
<br>
<br>

<A NAME="ops"></A>
<p align="center"><strong>
                             JDS Uniphase Corporation
</strong><br>
<strong>
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS<br>
                                  (UNAUDITED)<br>
                                 (In millions,)
</strong>
<pre>








                                           Three Months Ended   Six Months Ended
                                              December 31,        December 31,
                                          ------------------- -------------------
                                             1999      1998      1999      1998
                                          --------- --------- --------- ---------

Net sales................................   $281.7     $63.8    $511.8    $121.2
Cost of sales............................    139.2      33.5     264.5      62.4
                                          --------- --------- --------- ---------
  Gross profit...........................    142.5      30.3     247.3      58.8
                                          --------- --------- --------- ---------

Operating expenses:
  Research and development...............     21.6       5.8      38.9      11.4
  Selling, general and administrative....     33.8       8.4      61.6      15.5
  Amortization of purchased intangibles..    185.1       4.0     358.0       7.9
  Acquired in-process research and
    development..........................     19.7       --       19.7       --
  Other operating expenses...............       --       6.3       --        6.3
                                          --------- --------- --------- ---------
Total operating expenses.................    260.2      24.5     478.2      41.1
                                          --------- --------- --------- ---------
Income (loss) from operations............   (117.7)      5.8    (230.9)     17.7
Interest and other income, net...........     10.7       0.8      16.2       1.8
                                          --------- --------- --------- ---------
  Income (loss) before income taxes......   (107.0)      6.6    (214.7)     19.5
Income tax expense.......................     24.2       4.2      30.5       8.9
                                          --------- --------- --------- ---------
Net income (loss)........................  ($131.2)     $2.4   ($245.2)    $10.6
                                          ========= ========= ========= =========

Basic earnings (loss) per share..........   ($0.38)    $0.02    ($0.72)    $0.07
                                          ========= ========= ========= =========

Dilutive earnings (loss) per share.......   ($0.38)    $0.01    ($0.72)    $0.06
                                          ========= ========= ========= =========
Weighted average common shares
  Outstanding............................    345.3     158.1     342.1     157.3

Dilutive effect of stock options
  Outstanding............................        --     10.9         --     11.1
                                          --------- --------- --------- ---------
Weighted average common shares
  Outstanding, assuming dilution.........    345.3     169.0     342.1     168.4
                                          ========= ========= ========= =========

</pre>
<p>   See accompanying notes.



<br>
<br>
<HR WIDTH="85%">
<br>
<br>

<A NAME="bs"></A>
<p align="center"><strong>
                             JDS Uniphase Corporation
</strong><br>
<strong>
                     CONDENSED CONSOLIDATED BALANCE SHEETS<br>
                (In millions, except share and per share data)
</strong>
<pre>

                                                      December 31,    June 30,
                                                          1999          1999
                                                      ------------  ------------
                                                      (unaudited)

                             Assets
Current assets:
   Cash and cash equivalents.........................       132.3          75.4
   Short-term investments............................       752.8         158.5
   Accounts receivable, less allowances for returns
     and doubtful accounts of $1.6 at December 31,
     $1.1 at June 30,................................       185.2         120.9
   Inventories.......................................       134.7          87.9
   Deferred income taxes.............................        12.5           7.9
   Other current assets..............................        10.8          13.0
                                                      ------------  ------------
      Total current assets...........................     1,228.3         463.6
Property, plant, and equipment, net..................       256.5         181.1
Intangible assets, including goodwill................     3,690.4       3,444.2
Long-term deferred income taxes and other assets.....        11.2           7.2
                                                      ------------  ------------
      Total assets...................................     5,186.4       4,096.1
                                                      ============  ============

                  Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable..................................        70.0          38.1
   Accrued payroll and related expenses..............        43.9          27.2
   Income taxes payable..............................        27.7          37.2
   Accrued expenses and other current liabilities....        80.7          46.3
                                                      ------------  ------------
      Total current liabilities......................       222.3         148.8

Deferred income taxes................................       289.4         318.2
Accrued pension and other non-current liabilities....        13.2           9.8

Commitments and contingencies

Stockholders' equity:
   Preferred stock...................................        --            --
   Common stock and additional paid-in capital.......     5,110.5       3,822.8
   Accumulated deficit...............................      (443.0)       (197.8)
   Accumulated other comprehensive loss..............        (6.0)         (5.7)
                                                      ------------  ------------
      Total stockholders' equity.....................     4,661.5       3,619.3
                                                      ------------  ------------
      Total liabilities and stockholders' equity.....     5,186.4       4,096.1
                                                      ============  ============
</pre>

<p>   See accompanying notes.



<br>
<br>
<HR WIDTH="85%">
<br>
<br>

<A NAME="flows"></A>
<p align="center"><strong>
                             JDS Uniphase Corporation
</strong><br>
<strong>
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS<br>
                                (UNAUDITED)<br>
                              (In millions)
</strong>
<pre>

                                                             Six Months Ended
                                                                December 31,
                                                          ----------------------
                                                              1999        1998
                                                          ----------  ----------

Operating activities
  Net income (loss).....................................    ($245.2)      $10.6
  Adjustments to reconcile net income to net cash
    provided by operating activities:
  Acquired in-process research and development..........       19.7          --
    Depreciation and amortization expense...............      372.8        14.6
    Deferred income taxes...............................      (31.6)         --
    Write off of asset product line.....................          --        2.0
    Change in operating assets and liabilities:
       Accounts receivable..............................      (55.3)        2.0
       Inventories......................................      (38.9)       (5.6)
       Other current assets.............................        2.8          --
       Accounts payable, accrued liabilities and
         other accrued expenses.........................       76.7         6.0
                                                          ----------  ----------
Net cash provided by operating activities...............      101.0        29.6
                                                          ----------  ----------
Investing activities
  Purchase of short-term investments....................   (1,370.9)     (153.4)
  Proceeds from sale of short-term investments..........      769.8       123.7
  Acquisition of businesses.............................     (131.9)       (0.1)
  Purchase of property, plant and equipment.............      (76.4)      (19.0)
  Other investments.....................................       (3.2)         --
  Decrease (increase) in other assets...................        0.4        (0.4)
                                                          ----------  ----------
Net cash used in investing activities...................     (812.2)      (49.2)
                                                          ----------  ----------
Financing activities
  Proceeds from issuance of common stock and private
        placement of exchangeable shares................      713.5           --
  Proceeds from issuance of common stock under
        stock option and stock purchase plans...........       54.6         9.0
  Pre-merger dividends paid on BCP stock................          --       (0.6)
                                                          ----------  ----------
Net cash provided by financing activities...............      768.1         8.4
                                                          ----------  ----------
Increase (decrease) in cash and cash equivalents........       56.9       (11.2)
Cash and cash equivalents at beginning of period........       75.4        40.5
                                                          ----------  ----------
Cash and cash equivalents at end of period..............     $132.3       $29.3
                                                          ==========  ==========
SUPPLEMENTAL CASH FLOW INFORMATION
     Tax benefits from stock option and stock
        purchase plans..................................      $28.0        $8.2


</pre>

<p>   See accompanying notes.



<br>
<br>
<HR WIDTH="85%">
<br>
<br>


<A NAME="notes"></A>
<p align="center"><strong>
                             JDS Uniphase Corporation
</strong><br>
<strong>
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
</strong>


<B><P>Note 1.&#9;Business Activities and Basis of Presentation</P>
</B>
<P>&#9;</P>
<P>&#9;The financial information at December 31, 1999 and for the three and six
month period ended December 31, 1999 and 1998 is unaudited, but includes all
adjustments (consisting only of normal recurring adjustments) that the Company
considers necessary for a fair presentation of the financial information set
forth herein, in accordance with generally accepted accounting principles for
interim financial information, the instructions to Form 10-Q and Article 10 of
Regulation S-X.  Accordingly, such information does not include all of the
information and footnotes required by generally accepted accounting principles
for annual financial statements.  For further information, refer to the
Consolidated Financial Statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the year ended June 30, 1999.</P>

<P>&#9;The results for the three and six month periods ended December 31, 1999
may not be indicative of results for the year ending June 30, 2000 or any future
period.</P>

<B><P>Fiscal Calendar Change</P>
</B>
<P><A NAME="_Hlk474205813">The Company will change its fiscal calendar effective
July 1, 2000. Fiscal periods thereafter will end on the Saturday nearest the
calendar month end.  The change will not result in any differences in fiscal
2001 financial results as compared to the Company's current fiscal calendar.</P>
<P></A></P>
<B>
<P>Note 2.  Comprehensive Income (loss)</P>
</B>
<P>&nbsp;</P>
<P>&#9;The components of comprehensive income (loss), net of tax, are as
follows (in millions):</P>


<pre>

                                        Three Months Ended   Six Months Ended
                                           December 31,         December 31,
                                          1999      1998       1999      1998
                                        --------- ---------  --------- ---------

Net income (loss)......................  ($131.2)     $2.4    ($245.2)    $10.6
Change in unrealized gain on
  available-for-sale investments.......     (2.2)      0.1       (1.9)      0.2
Change in foreign currency translation.     (6.2)        --       1.6       3.5
                                        --------- ---------  --------- ---------
Comprehensive income...................  ($139.6)     $2.5    ($245.5)    $14.3
                                        ========= =========  ========= =========
</pre>


<P>&#9;&#9;&#9;&#9;&#9;  </P>

<B><P>&nbsp;</P>
<P>Note 3.&#9;Inventories</P>
</B>
<P>&#9;The components of inventory consist of the following (in millions):</P>





<pre>

                                                December 31,  June 30,
                                                    1999        1999
                                                ------------ ----------

Raw materials and purchased parts...........          $55.6      $41.6
Work in process.............................           62.4       35.9
Finished goods..............................           16.7       10.4
                                                ------------ ----------
                                                     $134.7      $87.9
                                                ============ ==========
</pre>

<B><P>Note 4.&#9;Earnings (loss) per Share</P>
</B>
<P>&#9;On July 8, 1999, the Company's Board of Directors approved a two-for-one
stock split of the common stock and the Exchangeable shares effective for
holders of record as of July 23, 1999. On September 28, 1999, the Board of
Directors approved a second two-for-one stock split of the common stock and
Exchangeable shares that became effective for holders of record as of December
22, 1999.  All references to share and per-share data for all prior periods
presented have been restated to reflect these stock dividends and stock
splits.</P>

<P>&#9;As the Company incurred a loss for the three and six month periods ended
December 31, 1999, the effect of dilutive securities totaling 29.1 million and
27.0 million equivalent shares, respectively, has been excluded from the
computation as they are antidilutive.</P>

<B><P>Note 5.&#9;Stock Split</P>
</B>
<P>&#9;On January 3, 2000, the Board of Directors approved a two-for-one stock
split of all common stock and Exchangeable shares for holders of record as of
March 2, 2000. This split is subject to stockholder approval of an increase in
authorized capital to 3 billion shares from 600 million shares at a special
stockholders meeting scheduled for February 25, 2000.</P>

<B><P>Note 6.&#9;Income Tax Expense</P>

</B><P>&#9;The Company recorded a tax provision of $24.2 million in the second
quarter of 2000 as compared to $4.2 million in the same period of the prior
year. For the six months, the Company recorded a tax provision of $30.5 million
as compared to $8.5 million for the same period of the prior year. The tax
provision recorded in each quarter differs from the tax provision (benefit) that
otherwise would be calculated by applying the federal statutory rate to income
(loss) before income taxes primarily because of non-deductible acquisition-
related charges.</P>

<P>&nbsp;</P>
<B><P>Note 7.&#9;Operating Segments</P>
</B>
<P>&#9;During the first quarter of fiscal 2000, JDS Uniphase changed the
structure of its internal organization following the merger that became
effective on the close of business June 30, 1999.</P>

<P>The President and Chief Operating Officer has been identified as the Chief
Operating Decision Maker as defined by SFAS 131. The President allocates
resources to each segment based on their business prospects, competitive
factors, net sales and operating profits before interest, taxes, and certain
purchase accounting related costs.</P>

<P>JDS Uniphase designs, develops, manufactures and markets optical components
and modules at various levels of integration. The Company views its business as
having two principal operating segments:   Components and Modules.  The
Components Group consists primarily of source lasers, pump lasers, external
modulator products, packaged lasers for fiber-based data communications,
couplers, filters, isolators, circulators, switches, attenuators, fiber Bragg
gratings, and connector products used primarily in telecommunications
applications. The Modules Group includes transmitters, amplifiers, transceivers,
and test instruments used in telecommunications and cable TV. The Company's
other operating segments, which are below the quantitative threshold defined by
SFAS 131, are disclosed in the &quot;all other&quot; category and consist of gas
laser based products for industrial, biotechnology and semiconductor equipment
applications, certain corporate-level operating expenses and the Ultrapointe
product line that was sold in 1999. All of the Company's products are sold
directly to original equipment manufacturers and industrial distributors
throughout the world.</P>

<P>&nbsp;</P>
<P>Information on reportable segments is as follows (in millions):</P>






<pre>
                                         Three Months Ended   Six Months Ended
                                             December 31,         December 31,
                                         -------------------  -------------------
                                           1999      1999       1999      1999
                                         --------- ---------  --------- ---------

Components:
  Shipments..............................  $201.7     $36.9     $361.6     $71.3
  Intersegment sales.....................   (28.0)     (0.7)     (46.7)     (1.6)
                                         --------- ---------  --------- ---------
  Net sales to external customers........  $173.7     $36.2     $314.9     $69.7
  Operating income.......................   $66.9     $10.0     $121.8     $19.4


Modules:
  Shipments..............................   $94.0     $12.8     $170.3     $22.0
  Intersegment sales.....................      --        --         --        --
                                         --------- ---------  --------- ---------
  Net sales to external customers........   $94.0     $12.8     $170.3     $22.0
  Operating income.......................   $19.9      $3.7      $36.6      $5.5


  Net sales by reportable segment........  $267.7     $49.0     $485.2     $91.7
  All other net sales....................    14.0      14.8       26.6      29.5
                                         --------- ---------  --------- ---------
                                           $281.7     $63.8     $511.8    $121.2
                                         ========= =========  ========= =========

Operating income by reportable segments..   $86.8     $13.7     $158.4     $24.9
All other operating income (loss)........     0.3       2.4      (11.6)      7.0
Unallocated amounts:
  Acquisition related charges............  (204.8)    (10.3)    (377.7)    (14.2)
  Interest and other income, net.........    10.7       0.8       16.2       1.8
                                         --------- ---------  --------- ---------
Income (loss) before income taxes........ ($107.0)     $6.6    ($214.7)    $19.5
                                         ========= =========  ========= =========




</pre>

<B>
<P>Note 8.&#9;Acquisitions</P>

<P>Oprel Technologies Inc.</P>

</B><P>In December 1999, the Company acquired Oprel Technologies
Inc.(&quot;OPREL&quot;), a developer of optical amplifiers, test equipment and
optoelectronic packaging, located in Nepean, Ontario. The transaction was
accounted for as a purchase and accordingly, the accompanying financial
statements include the results of operations of OPREL subsequent to the
acquisition date. The Company paid $9.3 million in cash and issued a total of
95,458 exchangeable shares of its subsidiary, JDS Uniphase Canada Ltd., each of
which is exchangeable for one share of common stock. The total purchase cost was
$27.7 million. The purchase price allocation is preliminary and included net
tangible assets of $1.4 million and intangible assets (including goodwill) of
$26.3 million that are expected to be amortized over a five-year period. </P>
<FONT FACE="Courier New">
</FONT><B><P>SIFAM Limited</P>
</B><P>In December 1999, the Company acquired SIFAM Limited (&quot;SIFAM&quot;),
a supplier of fused components for fiberoptic telecommunications networks which
is based in the United Kingdom.  SIFAM products, which include couplers,
wavelength division multiplexers and gain flattening filters, are used for
advanced applications in optical amplifiers and network monitoring.  The
transaction was accounted for as a purchase and accordingly, the accompanying
financial statements include the results of operations of SIFAM subsequent to
the acquisition date. </P>

<P>The preliminary allocation of the purchase price is as follows (in
millions):</P>



<pre>





Purchase price allocation:
  Tangible net assets acquired.......................          $4.3
  Intangible assets acquired:
   Developed technology..............................          27.0
   Trade secrets and patents.........................           6.1
   Assembled workforce...............................           0.6
   Goodwill..........................................          56.6
  In-process research and development................           3.0
                                                         -----------
   Total purchase price allocation...................         $97.6
                                                         ===========

</pre>



<P>&#9;</P>
<P>&#9;The purchase price allocation is preliminary and is dependant upon the
Company's final analysis.</P>

<P>&#9;Tangible net assets acquired  includes cash, accounts receivable,
inventories and fixed assets. Liabilities assumed principally include accounts
payable, accrued compensation and accrued expenses.  Goodwill and intangible
assets acquired are each being amortized on a straight-line basis over estimated
useful lives ranging from three to five years. </P>

<P>&#9;A portion of the purchase price has been allocated to developed
technology and acquired in-process research and development (&quot;IPRD&quot;).
Developed technology and IPRD were identified and valued through extensive
interviews, analysis of data provided by SIFAM concerning developmental
products, their stage of development, the time and resources needed to complete
them, if applicable, their expected income generating ability, target markets
and associated risks. The Income Approach, which includes an analysis of the
markets, cash flows, and risks associated with achieving such cash flows, was
the primary technique utilized in valuing the developed technology and IPRD.</P>

<P>&#9;Where development projects had reached technological feasibility, they
were classified as developed technology and the value assigned to developed
technology was capitalized. Where the development projects had not reached
technological feasibility and had no future alternative uses, they were
classified as IPRD and charged to expense upon closing of the transaction. The
Company estimates that a total investment of $0.3 million in research and
development over the next 15 months will be required to complete the IPRD. The
nature of the efforts required to develop the purchased IPRD into commercially
viable products principally relate to the completion of all planning, designing,
prototyping, verification and testing activities that are necessary to establish
that the products can be produced to meet their design specifications, including
functions, features and technical performance requirements.</P>

<P>&#9;In valuing the IPRD, the Company considered, among other factors, the
importance of each project to the overall development plan projected incremental
cash flows from the projects when completed and any associated risks. The
projected incremental cash flows were discounted back to their present value
using  discount rates ranging from 14% to 22%. Discount rates were determined
after consideration of the Company's weighted average cost of capital and the
weighted average return on assets. Associated risks include the inherent
difficulties and uncertainties in completing each project and thereby achieving
technological feasibility, anticipated levels of market acceptance and
penetration, market growth rates and risks related to the impact of potential
changes in future target markets.</P>

<P>The acquired existing technology, which is comprised of products that are
already technologically feasible, includes products in the following areas:
fused couplers and attenuators, pump/signal wavelength division multiplexers,
polished products (polarizers, variable ratio couplers), and gain flattening
filters.  The Company expects to amortize the acquired existing technology of
approximately $27.0 million on a straight-line basis over an average estimated
remaining useful life of 5 years.</P>
<P>     </P>
<P>The acquired core technology represents SIFAM trade secrets and patents
developed through years of experience designing and manufacturing fused
components for fiber optic telecommunication networks.  This knowledge can be
leveraged by SIFAM to develop new and improved products and manufacturing
processes. The Company expects to amortize the acquired core technology of
approximately $6.1 million on a straight-line basis over an average estimated
remaining useful life of 5 years.</P>

<P>The acquired assembled workforce is comprised of approximately 50 skilled
employees across SIFAM's Sales and Marketing, Management, Supervision, Quality
&amp; Training, General &amp; Administrative, and Engineering groups. The
Company expects to amortize the value assigned to the assembled workforce of
approximately $0.6 million on a straight-line basis over an estimated remaining
useful life of 3 years.</P>

<P>Goodwill, which represents the excess of the purchase price of an investment
in an acquired business over the fair value of the underlying net identifiable
assets, is amortized on a straight-line basis over its estimated remaining
useful life of 5 years.</P>

<P>&nbsp;</P>
<B><P>EPITAXX, INC.</P>
</B><P>In November 1999, the Company acquired EPITAXX,
Inc.(&quot;EPITAXX&quot;), a supplier of optical detectors and receivers for
fiberoptic telecommunications and cable televisions networks.  The transaction
was accounted for as a purchase and accordingly, the accompanying financial
statements include the results of operations of EPITAXX subsequent to the
acquisition date. The Company issued cash in the amount of $9.3 million and a
total of approximately 4.5 million shares of common stock in exchange for all of
the outstanding shares of EPITAXX common stock.  Outstanding options to acquire
shares of EPITAXX common stock were converted into options to purchase shares of
the Company's common stock at the same exchange ratio. </P>


<pre>

The total purchase cost of EPITAXX is as follows (in millions):




  Value of securities issued.........................        $435.0
  Assumption of options..............................          61.9
                                                         -----------
    Total Equity Consideration.......................         496.9
  Cash paid to seller................................           9.3
  Direct transaction costs and expenses..............           1.0
                                                         -----------
  Total purchase cost................................        $507.2
                                                         ===========

The preliminary allocation of the purchase price is as follows (in millions):



Purchase price allocation:
  Tangible net assets acquired.......................         $14.2
  Intangible assets acquired:
   Developed technology..............................          63.4
   Trademark and tradename...........................           5.4
   Assembled workforce...............................           2.9
   Goodwill..........................................         403.4
  In-process research and development................          16.7
  Deferred tax asset, net............................           1.2
                                                         -----------
   Total purchase price allocation...................        $507.2
                                                         ===========

</pre>

<P>  </P>
<P>&#9;</P>
<P>&#9;The purchase price allocation is preliminary and is dependent upon the
Company's final analysis.</P>

<P>&#9;Tangible net assets acquired  includes cash, accounts receivable,
inventories and fixed assets. Liabilities assumed principally include accounts
payable, accrued compensation accrued expenses, and Industrial Revenue Bonds.
Goodwill and intangible assets acquired are each being amortized on a straight-
line basis over estimated useful lives ranging from four to seven years. </P>

<P>&#9;A portion of the purchase price has been allocated to developed
technology and acquired in-process research and development (&quot;IPRD&quot;).
Developed technology and IPRD were identified and valued through extensive
interviews, analysis of data provided by EPITAXX concerning developmental
products, their stage of development, the time and resources needed to complete
them, if applicable, their expected income generating ability, target markets
and associated risks. The Income Approach, which includes an analysis of the
markets, cash flows, and risks associated with achieving such cash flows, was
the primary technique utilized in valuing the developed technology and IPRD.</P>

<P>&#9;Where development projects had reached technological feasibility, they
were classified as developed technology and the value assigned to developed
technology was capitalized. Where the development projects had not reached
technological feasibility and had no future alternative uses, they were
classified as IPRD and charged to expense upon closing of the merger. The
Company estimates that a total investment of $0.8 million in research and
development over the next 13 months will be required to complete the IPRD. The
nature of the efforts required to develop the purchased IPRD into commercially
viable products principally relate to the completion of all planning, designing,
prototyping, verification and testing activities that are necessary to establish
that the products can be produced to meet their design specifications, including
functions, features and technical performance requirements.</P>

<P>&#9;In valuing the IPRD, the Company considered, among other factors, the
importance of each project to the overall development plan projected incremental
cash flows from the projects when completed and any associated risks. The
projected incremental cash flows were discounted back to their present value
using  discount rates ranging from 12% to 18%. Discount rates were determined
after consideration of the Company's weighted average cost of capital and the
weighted average return on assets. Associated risks include the inherent
difficulties and uncertainties in completing each project and thereby achieving
technological feasibility, anticipated levels of market acceptance and
penetration, market growth rates and risks related to the impact of potential
changes in future target markets. </P>

<P>The acquired existing technology, which is comprised of products that are
already technologically feasible, includes products in the following areas: high
speed receivers for the telecommunications market, optical network monitoring,
and optical detectors/receivers for access/datacom applications and cable
television fiber optic networks. The Company expects to amortize the acquired
existing technology of approximately $63.4 million on a straight-line basis over
an average estimated remaining useful life of 7 years.</P>
<P>     </P>
<P>The trademarks and trade names include the EPITAXX trademark and trade name.
The Company expects to amortize the trademark and trade names of approximately
$5.4 million on a straight-line basis over an estimated remaining useful life of
7 years.</P>

<P>The acquired assembled workforce is comprised of approximately 400 skilled
employees across EPITAXX's Executive, Research and Development, Manufacturing,
Quality Assurance, Sales and Marketing, and General and Administrative groups.
The Company expects to amortize the value assigned to the assembled workforce of
approximately $2.9 million on a straight-line basis over an estimated remaining
useful life of 4 years.</P>

<P>Goodwill, which represents the excess of the purchase price of an investment
in an acquired business over the fair value of the underlying net identifiable
assets, is amortized on a straight-line basis over its estimated remaining
useful life of 7 years.</P>

<B><P>Ramar Corporation</P>
</B>
<P>In October 1999, the Company acquired Ramar Corporation (&quot;Ramar&quot;)
of Northborough, Massachusetts for $1.0 million in cash and convertible debt as
described below, in a transaction accounted for as a purchase and accordingly,
the accompanying financial statements include the results of operations of Ramar
subsequent to the acquisition date. Ramar designs, develops and manufactures
lithium-niobate products for telecommunications applications. The convertible
debt is composed of $3.5 million in demand obligations and two performance-based
instruments totaling $1.0 million that become due upon achieving certain
milestones over the ensuing 12 to 24 months. The convertible debt bears interest
at 5.54% per annum and the principal can be exchanged for newly issued shares of
common stock at a price of $55.922 per share. The total purchase cost was $6.1
million. The purchase price allocation is preliminary and included net tangible
assets of $0.2 million and intangible assets (including goodwill) of $4.3
million (net of deferred tax) that are expected to be amortized over a five year
period. Convertible debt of $3.5 million is included in other current
liabilities.</P>

<B><P>Acquisition of AFC Technologies, Inc.</P>
</B>
<P>In August 1999, the Company acquired AFC Technologies, Inc. (&quot;AFC&quot;)
of Ottawa, Canada for $22.0 million in cash and common stock of $17.5 million in
a transaction accounted for as a purchase and accordingly, the accompanying
financial statements include the results of operations of AFC subsequent to the
acquisition date. AFC designs, develops and manufactures fiber amplifiers for
telecommunications applications. The purchase price allocation included net
tangible assets of $1.3 million and intangible assets (including goodwill) of
$38.2 million that are expected to be amortized over a five-year period.</P>

<B><P>Note 10.&#9;Subsequent Events</P>
</B>
<P>On February 4, 2000, the Company completed its acquisition of Optical Coating
Laboratory, Inc. (&quot;OCLI&quot;), in a transaction accounted for as a
purchase, and OCLI now operates as a wholly-owned subsidiary of JDS Uniphase. As
consideration for the transaction, each outstanding share of OCLI common stock
was exchanged for 1.856 shares of JDS Uniphase common stock and outstanding
options to acquire OCLI common stock were converted into options to purchase the
Company's common stock at the same exchange ratio. The transaction is valued at
approximately $2.8 billion. The Company will record a charge for in-process
research and development in the quarter ended March 31, 2000 estimated at $84.1
million. </P>

<P>On January 17, 2000 the Company announced the signing of a definitive merger
agreement with E-TEK Dynamics, Inc. (&quot;E-TEK&quot;) for approximately $15.5
billion in stock. The merger agreement provides for the exchange of 1.1 shares
of JDS Uniphase common stock for each common share of
E-TEK, subject to adjustment. E-TEK is a manufacturer of  passive components
and modules for fiberoptic systems. Following completion of the merger, E-TEK
will operate as a wholly owned subsidiary of the Company.  Completion of the
transaction is subject to customary closing conditions, including E-TEK
stockholder and regulatory approvals. This transaction will be accounted for as
a purchase with goodwill of approximately $14.6 billion which is expected to be
amortized over its estimated useful life of five years.</P>

<P>Concurrent with the signing of the merger agreement, the Company and E-TEK
signed a mutual supply agreement under which E-TEK is to supply certain products
to JDS Uniphase prior to completion of the merger. </P>

<P>&nbsp;</P>
<B><P>Item 2.    Management's Discussion and Analysis of Financial Condition and
Results of Operations</P>
</B>

<A NAME="results"></A>

<I><P>Net Sales. </I>For the quarter, net sales of  $281.7 million represented
an increase of $217.9 million or 342% compared to the same period of the prior
year.  For the six months, net sales were $511.8 million, an increase of $390.6
million or 322% compared to the same period of the prior year. The increase in
net sales reflected growth in each of our major operating segments and the
inclusion of  JDS FITEL (&quot;JDS&quot;) sales. We merged with JDS in a
transaction accounted for as a purchase which became effective at the close of
business on June 30, 1999. Separate discussions with respect to net sales and
operating profits for each of  our reportable operating segments can be found
under the heading operating segment information.</P>

<P>&#9;Net sales for the three and six-month periods ended December 31, 1999 are
not considered indicative of the results to be expected for any future period.
In addition, there can be no assurance that the market for our products will
grow in future periods at its historical percentage rate or that certain market
segments will not decline.  Further, there can be no assurance that we will be
able to increase or maintain our market share in the future or to achieve
historical growth rates.</P>

<I><P>Gross Profit</I>. For the quarter, gross profit of $142.5 million
represented an increase of $112.2 million or 371% compared to the same period of
the prior year.  For the six months, gross profit was $247.3 million, an
increase of $188.5 million or 321% compared to the same period of the prior
year. Strong demand for all our optical components and modules products combined
with the JDS merger contributed to the increases in gross profit.  As a percent
of net sales, gross profit declined to 48% in the first six months of 2000 from
49% during the same period in 1999.  The decline reflects the impact of an $11.6
million purchase accounting adjustment which increased JDS, EPITAXX and SIFAM
inventories. These adjustments flowed through to cost of sales during the first
six months. </P>

<P>&#9;There can be no assurance that we will be able to maintain gross profits
or gross margins at current levels in future periods.  We expect that periodic
fluctuations in our gross margins will continue because of changes in our sales
and product mix, manufacturing constraints, competitive pricing pressures,
higher costs resulting from new production facilities, manufacturing yields,
acquisitions of businesses that may have different margins than ours and
inefficiencies associated with new product introductions.</P>

<I><P>Research and Development Expense</I>. For the quarter, research and
development (R&amp;D) expense of $21.6 million or 8% of net sales represented an
increase of $15.8 million or 274% compared to the same period of the prior year.
R&amp;D expense for the six months was $38.9 million, an increase of $27.4
million or 240% compared to the same period of the prior year. The increase in
R&amp;D expenses is primarily due to the continued development and enhancement
of our fiber optic product lines and the inclusion of JDS.  As a percent of net
sales, R&amp;D expense declined to 8% in the first six months from 9% during the
same period in 1999. Due to the rapidly growing business, it is difficult to
scale R&amp;D programs at the same ratio as our sales growth.</P>

<P>&#9;We are committed to the continuation of making significant R&amp;D
expenditures and expect that the absolute dollar amount of R&amp;D expenses will
increase as we invest in developing new products and  in expanding and enhancing
our existing product lines, although R&amp;D expenses may vary as a percentage
of net sales in future periods.  In addition, there can be no assurance that
expenditures for R&amp;D will be successful or that improved processes or
commercial products will result from these projects.</P>

<I><P>Selling, General and Administrative Expense</I>. For the quarter, selling,
general and administrative (SG&amp;A) expense of $33.8 million or 12% of net
sales represented an increase of $25.4 million or 302% as compared to the same
period of the prior year. For the six months, SG&amp;A expense was $61.6
million, an increase of $46.2 million or 298% compared to the same period of the
prior year. The increase is primarily due to higher SG&amp;A costs to support
telecommunications products, and the inclusion of JDS. As a percentage of net
sales, SG&amp;A remained between 12% and 13% during the first six months of both
2000 and 1999, respectively.</P>

<P>&#9;We expect the amount of SG&amp;A expenses to increase in the future,
although such expenses may vary as a percentage of net sales in future periods.
We expect to continue incurring charges to operations, which to date have been
within management's expectations, associated with integrating Uniphase and JDS
operations.  We may also incur costs associated with the integration of other
acquired operations.</P>

<I><P>Amortization of Purchased Intangibles</I>.  For the quarter, amortization
of purchased intangibles (&quot;API&quot;) expense of $185.1 million or 66% of
net sales represented an increase of $181.1 million or 4,508% as compared to the
same period of the prior year. For the six months, API expense of $358.0
million, an increase of $350.1 million or 4,431% compared to the same period of
the prior year. The increase in API expense was primarily due to the intangible
assets recorded in connection with our merger in June 1999 with JDS in a
transaction accounted for as a purchase.</P>

<P>&#9;Our API expense will continue to generate net losses for the foreseeable
future.  Goodwill and other intangibles arising from the JDS merger totaled $3.4
billion, including the related deferred tax effect.  In addition, we have
recorded goodwill in connection with acquisitions of other business and will
record significant amounts of additional goodwill in connection with the
acquisition of OCLI and the pending E-TEK merger. API expense could change
because of other acquisitions or impairment of existing identified intangible
assets and goodwill in future periods.</P>

<I><P>Acquired In-process Research and Development.</I> The Company recorded
$19.7 million or 4% of net sales of acquired in-process research and development
resulting from the acquisition of EPITAXX ($16.7 million) and SIFAM ($3.0
million). See Note 9 of Notes to Consolidated Financial Statements. These
amounts were expensed on the acquisition dates because the acquired technology
had not yet reached technological feasibility and had no future alternative
uses. There can be no assurance that acquisitions of businesses, products or
technologies by us in the future will not result in substantial charges for
acquired in-process research and development that may cause fluctuations in our
quarterly or annual operating results.</P>

<P>A description of the acquired in-process technologies, stage of development,
estimated completion costs, and time to complete at the date of the EPITAXX and
SIFAM acquisitions, as well as the current status of acquired in-process
research and development projects for each acquisition can be found at the end
of this Management's Discussion and Analysis of Financial Condition and Results
of Operations.</P>

<I><P>Interest and Other Income</I>. For the quarter, net interest and other
income of $10.7 million or 3.8% of net sales represented an increase of $9.9
million or 1,172% as compared to the same period of the prior year.  For the six
months, net interest and other income was $16.2 million, an increase of $14.4
million or 820% compared to the same period of the prior year. The increase in
interest and other income was the result of higher investment balances obtained
through cash generated from operating activities, our merger with JDS and the
completion of a public offering of our common stock and a private placement of
Exchangeable shares in August 1999 that generated $713.9 million in cash, net of
transaction costs. </P>
<I>
</I><P>&nbsp;</P>
<I><P>Income Tax Expense</I>. We recorded a tax provision of $24.2 million in
the second quarter of 2000 as compared to $4.2 million in the same period of the
prior year. For the six months, we recorded a tax provision of $30.5 million as
compared to $8.5 million for the same period of the prior year. The tax
provision recorded in each quarter differs from the tax provision (benefit) that
otherwise would be calculated by applying the federal statutory rate to income
(loss) before income taxes primarily due to non-deductible acquisition-related
charges.</P>

<A NAME="segment"></A>

<P>&#9;</P>
<B><P>Operating Segment Information</P>
</B><I><P>Components.</I>  For the quarter and six months, net sales of
components increased 379% and 352%, respectively, compared to the same period of
the prior year primarily because of the inclusion of JDS and increased demand
for active products used in optical communications applications.  Operating
income increased 569% because of these same factors. Sales of components also
increased because of significantly higher use of our components in the modules
we build and contributions to net sales by SIFAM and EPITAXX during the second
quarter.</P>

<I><P>Modules.</I>  For the quarter and six months, net sales increased 636% and
673%, respectively, compared to the same period of the prior year primarily
because of the inclusion of JDS and increased demand for transmitters,
amplifiers and transceivers for CATV and telecommunications.  Operating income
improved 441% because of these same factors.</P>

<A NAME="liquid"></A>


<B>
<P>Liquidity and Capital Resources</P>

</B><P>&#9;Our combined balance of cash, cash equivalents and short-term
investments was $885.1 million. During the period, we met our liquidity needs
through cash generated from operating activities. Net cash provided by operating
activities was $101.0 million, compared with $29.6 million for the same period
of the prior year<FONT SIZE=2>.</P>
</FONT>
<P>&#9;Cash provided by operating activities was primarily generated from net
income before non-cash charges of $115.7 million.  Higher levels of operating
activity resulted in increases in accounts receivable, inventories and other
liabilities using $17.5 million (net) of cash. Cash flow from operating
activities also benefited from a decrease in other current assets of $2.8
million.</P>

<P>&#9;During the first six months of 2000, cash used in investing activities
was $812.2 million compared with $49.2 million during the same period of the
prior year.  The majority of this higher activity level was a result of
increased short term investments (net increase $601.1 million) following
completion of a public sale of our stock during the period.  Acquisitions of
EPITAXX, SIFAM, OPREL, AFC Technologies and Ramar used $131.9 million in cash.
In addition, we incurred capital expenditures of $76.4 million for facility
expansions and equipment purchases to increase our manufacturing capacity
worldwide.  We expect to continue to expand our worldwide manufacturing
capacity, primarily for telecommunications products, by making approximately
$110 million in additional capital expenditures during the remainder of the
year. </P>
<P>&#9;</P>
<P>&#9;Cash of $768.1 million was generated from financing activities as
compared to $8.4 million in the same period of the prior year.  The additional
cash was primarily attributable to our sale of common stock in a public offering
of common stock in August 1999.  The exercise of stock options and the sale of
stock through our employee stock purchase plan generated $54.6 million in
cash.</P>

<P>&#9;We have an unsecured $10 million revolving line of credit. Advances under
the line of credit bear interest at the bank's prime rate (8.5% at December 31,
1999).  There were no borrowings as of December 31, 1999. Under the terms of the
credit agreement, we are required to maintain certain minimum working capital,
net worth, profitability levels and other financial conditions. The agreement
also prohibits the payment of cash dividends and contains certain restrictions
on our ability to borrow money or purchase assets or interests in other entities
without the prior written consent of the bank. The line of credit expires in May
2000. </P>

<P>We believe that our existing cash balances and investments, together with
cash flow from operations and available lines of credit will be sufficient to
meet our liquidity and capital spending requirements at least through the end of
2000. However, possible investments in or acquisitions of complementary
businesses, products or technologies may require additional financing prior to
such time. There can be no assurance that additional debt or equity financing
will be available when required or, if available, can be secured on terms
satisfactory to us.</P>


<A NAME="IPR&D"></A>

<B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Current Status of Acquired In-Process Research and
Development Projects</P>
</B><P ALIGN="JUSTIFY"></P>
<P>We periodically review the stage of completion and likelihood of success of
each of the in-process research and development projects. The current status of
the in-process research and development projects for all major mergers and
acquisitions during the past three years are as follows:</P>

<B><P>SIFAM </P>

</B><P>PricewaterhouseCoopers LLP ("PwC") performed an allocation of the total
purchase price of SIFAM to its individual assets.  Of the total purchase price,
$3.0 million has been allocated to in-process research and development and was
charged to expense in the quarter ended December 31, 1999.  The remaining
purchase price has been allocated specifically to identifiable assets
acquired.</P>

<P>After allocating value to the in-process research and development projects
and SIFAM's tangible assets, specific intangible assets were then identified and
valued.  The identifiable assets include existing technology, proprietary know-
how or core technology, and assembled workforce.</P>

<P>The in-process research and development is comprised of three main
categories: (1) miniature couplers; (2) combined components; and (3) micro-optic
devices.  The following is a brief description of each acquired in-process
research and development project as of the date of the acquisition:</P>

<I><P>Miniature Couplers.</I>  SIFAM's current engineering efforts are focused
on reducing the coupler dimensions and building prototypes based on completed
feasibility studies.  SIFAM expects the development cycle to continue for
approximately 3 months with completion scheduled by the end of the first quarter
in calendar year 2000.  Development costs incurred on those products to date are
approximately $0.04 million with estimated cost to complete of approximately
$0.01 million, which SIFAM expects to incur ratably for the remainder of the
development cycle.  SIFAM believes the associated risks of developing these
products to commercial viability include potential difficulties meeting customer
and market performance specifications and competition from products using
competing technologies that offer comparable functionality.</P>

<I><P>Combined Components.</I>  Current development efforts relate to
integration of various components into a single package.  This will provide
customers with a single module that has multiple functionality previously
offered only in separate components.  Integrated components also improve overall
system performance and reliability.  SIFAM expects the development cycle to
continue for approximately 6 months with completion expected in the second
quarter of calendar year 2000.  SIFAM believes the associated risks of
developing these products to commercial viability include potential difficulties
meeting customer and market performance specifications and competition from
products using competing technologies that offer comparable functionality.</P>

<I><P>Micro-optic Devices.</I><B>  </B>Engineering effort in this area
encompasses development of other passive components used in optical
telecommunications networks.  SIFAM expects the development cycle to continue
for approximately 15 months with completion expected in the second quarter of
calendar year 2001.  Development costs incurred on those products to date are
approximately $0.06 million with estimated cost to complete of approximately
$0.14 million, which SIFAM expects to incur ratably for the remainder of the
development cycle.  SIFAM believes the associated risks of developing these
products to commercial viability include potential difficulties meeting customer
and market performance specifications and competition from products using
competing technologies that offer comparable functionality.</P>

<I><P>Value Assigned To In-Process Research And Development</P>
</I>
<P>The value assigned to in-process research and development was determined by
considering the importance of each project to the overall development plan,
estimating costs to develop the purchased in-process research and development
into commercially viable products, estimating the resulting net cash flows from
the projects when completed and discounting the net cash flows to their present
value.  The revenue estimates used to value the purchased in-process research
and development were based on estimates of relevant market sizes and growth
factors, expected trends in technology and the nature and expected timing of new
product introductions by SIFAM and its competitors.</P>

<P>The rates utilized to discount the net cash flows to their present value are
based on SIFAM's weighted average cost of capital.  Given the nature of the
risks associated with the difficulties and uncertainties in completing each
project and thereby achieving technological feasibility, anticipated market
acceptance and penetration, market growth rates and risks related to the impact
of potential changes in future target markets, the weighted average cost of
capital was adjusted.  Based on these factors, discount rates of 14% and 22%
were deemed appropriate for the existing and in-process technology,
respectively.</P>

<P>The estimates used in valuing in-process research and development were based
upon assumptions PwC believes to be reasonable but which are inherently
uncertain and unpredictable. PwC's assumptions may be incomplete or inaccurate,
and no assurance can be given that unanticipated events and circumstances will
not occur.  Accordingly, actual results may vary from the projected results.
Any such variance may result in a material adverse effect on SIFAM's financial
condition and results of operations.</P>

<P>With respect to the acquired in-process technologies, the calculations of
value were adjusted to reflect the value creation efforts of SIFAM prior to the
acquisition.  The range of estimated completion percentages and technology lives
are 25% to 75% and 5 years, respectively.</P>

<P>A portion of the purchase price has been allocated to developed technology
and acquired in-process research and development.  Developed technology and in-
process research and development were identified and valued through extensive
interviews, analysis of data provided by SIFAM concerning developmental
products, their stage of development, the time and resources needed to complete
them, if applicable, their expected income generating ability, target markets
and associated risks.  The Income Approach, which includes an analysis of the
markets, cash flows and risks associated with achieving such cash flows, was the
primary technique utilized in valuing the developed technology and in-process
research and development.</P>

<P>Where developmental projects had reached technological feasibility, they were
classified as developed technology, and the value assigned to developed
technology was capitalized.  Where the developmental projects had not reached
technological feasibility and had no future alternative uses, they were
classified as in-process research and development and charged to expense upon
closing of the acquisition.  SIFAM estimates that a total investment of
approximately $0.26 million in research and development over the next 15 months
will be required to complete the in-process research and development.  The
nature of the efforts required to develop the purchased in-process research and
development into commercially viable products principally relate to the
completion of all planning, designing, prototyping, verification and testing
activities that are necessary to establish that the products can be produced to
meet their design specifications, including functions, features and technical
performance requirements.</P>

<B><P>EPITAXX, Inc.</P>

</B><P>PricewaterhouseCoopers LLP ("PwC") performed an allocation of the total
purchase price of EPITAXX to its individual assets.  Of the total purchase
price, $16.7 million has been allocated to in-process research and development
and was charged to expense in the quarter ended December 31, 1999. The remaining
purchase price has been allocated to specifically identifiable assets
acquired.</P>

<P>After allocating value to the in-process research and development projects
and EPITAXX's tangible assets, specific intangible assets were then identified
and valued. The identifiable assets include existing technology, trademarks and
tradenames, and assembled workforce.</P>

<P>The in-process research and development relates to optical detectors and
receivers for long-haul terrestrial, submarine, and metro dense wavelength
division multiplexing (&quot;DWDM&quot;) applications.  The in-process research
and development is comprised of two main categories as mentioned above: (1) high
speed receivers, and (2) an optical spectrum analyzer product.</P>

<P>The following is a description of each acquired in-process research and
development project as of the date of the merger:</P>

<I><P>High Speed Receivers.</I>   Recently, the number of channels offered in
DWDM systems has grown from 4 to 160.  This trend has simultaneously multiplied
the number of receivers used in the network, since receivers are used for each
channel at both sides of the fiber optic link as wavelength translation is
required.  As channel and bit rates grow, increasing numbers of higher
performance receivers will be required.  EPITAXX's current engineering efforts
are focused on developing both a K package and a coplanar package, as well as
development of highly integrated optical receiver products.  The output of the K
package is easily accessible via a coax cable, while the output of the coplanar
device is via leads on the package which can be soldered directly onto a
receiver board, which simplifies large volume manufacturing.  Integration of
electronic functions in both multi-chip modules and at the circuit board
subsystem level will allow EPITAXX to offer a complete optical receiver solution
to DWDM system level end users who may not posses microwave and digital design
resources.  EPITAXX expects the development cycle to continue for approximately
6 and 12 months, with expected completion dates from the second through fourth
quarters of calendar year 2000.  Development costs incurred on those products to
date are approximately $0.4 million with estimated cost to complete of
approximately $0.5 million which EPITAXX expects to incur ratably for the
remainder of the development cycle.  EPITAXX believes the associated risks of
developing these products to commercial viability include potential difficulties
meeting customer and market performance specifications and competition from
products using competing technologies that offer comparable functionality.</P>

<I><P>Optical Spectrum Analyzer.</I>  This product has the ability to monitor
all wavelengths being used in a network and is an addition to the existing
product line related to network monitoring.  Current development efforts relate
to the creation of a photodiode array, read-out integrated circuit, and optics
integration.  EPITAXX expects the development cycle to continue for
approximately 13 months with completion expected in the fourth quarter of
calendar year 2000.  Development costs incurred to date are approximately $0.15
million with estimated cost to complete of approximately $0.3 million which
EPITAXX expects to incur ratably for the remainder of the development cycle.
EPITAXX believes the associated risks of developing these products to commercial
viability include potential difficulties meeting customer and market performance
specifications and competition from products using competing technologies that
offer comparable functionality.</P>

<P>&nbsp;</P>
<I><P> Value Assigned To In-Process Research And Development</P>
</I>
<P>The value assigned to in-process research and development was determined by
considering the importance of each project to the overall development plan,
estimating costs to develop the purchased in-process research and development
into commercially viable products, estimating the resulting net cash flows from
the projects when completed and discounting the net cash flows to their present
value.  The revenue estimates used to value the purchased in-process research
and development were based on estimates of relevant market sizes and growth
factors, expected trends in technology and the nature and expected timing of new
product introductions by EPITAXX and its competitors.</P>

<P> &#9;The rates utilized to discount the net cash flows to their present value
are based on EPITAXX weighted average cost of capital.  Given the nature of the
risks associated with the difficulties and uncertainties in completing each
project and thereby achieving technological feasibility, anticipated market
acceptance and penetration, market growth rates and risks related to the impact
of potential changes in future target markets, the weighted average cost of
capital was adjusted.  Based on these factors, discount rates of 12 and 18% were
deemed appropriate for the existing and in-process technology, respectively.</P>

<P> &#9;The estimates used in valuing in-process research and development were
based upon assumptions PwC believes to be reasonable but which are inherently
uncertain and unpredictable. PwC's assumptions may be incomplete or inaccurate,
and no assurance can be given that unanticipated events and circumstances will
not occur.  Accordingly, actual results may vary from the projected results.
Any such variance may result in a material adverse effect on EPITAXX's financial
condition and results of operations.</P>

<P>With respect to the acquired in-process technologies, the calculations of
value were adjusted to reflect the value creation efforts of EPITAXX prior to
the merger.  The range of estimated completion percentages and technology lives
are 32% to 38% and 7 years, respectively.</P>

<P>&#9;The value assigned to each acquired in-process research and development
is as follows (in millions):</P>

<pre>




  High Speed Receivers................................         $8.9
  Optical Network Monitoring..........................          7.8
                                                         -----------
  Total acquired in-process research and development..        $16.7
                                                         ===========


</pre>


<P>A portion of the purchase price has been allocated to developed technology
and acquired in-process research and development.  Developed technology and in-
process research and development were identified and valued through extensive
interviews, analysis of data provided by EPITAXX concerning developmental
products, their stage of development, the time and resources needed to complete
them, if applicable, their expected income generating ability, target markets
and associated risks.  The Income Approach, which includes an analysis of the
markets, cash flows and risks associated with achieving such cash flows, was the
primary technique utilized in valuing the developed technology and in-process
research and development.</P>

<P>&#9;Where developmental projects had reached technological feasibility, they
were classified as developed technology, and the value assigned to developed
technology was capitalized.  Where the developmental projects had not reached
technological feasibility and had no future alternative uses, they were
classified as in-process research and development and charged to expense upon
closing of the merger.  EPITAXX estimates that a total investment of
approximately $0.8 million in research and development over the next 13 months
will be required to complete the in-process research and development.  The
nature of the efforts required to develop the purchased in-process research and
development into commercially viable products principally relate to the
completion of all planning, designing, prototyping, verification and testing
activities that are necessary to establish that the products can be produced to
meet their design specifications, including functions, features and technical
performance requirements.</P>

<B><P>JDS </P>
</B>
<P>&#9;The products under development at the time of our merger included:  (i)
Thermo Optic Waveguide Attenuators, (ii) Solid State Switch, (iii) 50 GHz WDM,
and (iv) Erbium Doped Fiber Amplifiers (&quot;EDFA&quot;).  Attenuator
development is expected to continue for approximately 12 months at a cost of
approximately $0.9 million ratably until its completion.  Solid State Switch
development will continue for approximately six months at a cost of $1.4 million
incurred ratably over the period.  WDM and EDFA developments are substantially
complete at a cost consistent with our expectations.</P>

<B><P ALIGN="JUSTIFY">Uniphase Netherlands</P>
</B><P ALIGN="JUSTIFY"></P>
<P>The product introductions for the WDM lasers - CW and direct modulation and
DFB/EA and modulator are either on schedule or are approximately 6 months behind
schedule. The WDM laser - direct modulation is expected to have a lower revenue
growth rate than originally anticipated. The development of the semiconductor
optical amplifier technology has been delayed because of market demand for other
products. The development of the telecom technology is on schedule but the
revenue growth rate in initial periods is expected to be lower than originally
anticipated. Development of the CATV technologies is approximately 6 months
behind schedule and is expected to take a higher level of development effort to
achieve technological feasibility. We have incurred post-acquisition research
and development expenses of approximately $6.8<B> </B>million in developing the
acquired in-process technology and estimate the cost to complete this
technology, in combination with our other continuing research and development
expenses, will not be in excess of our historic expenditures for research and
development as a percentage of our net sales. The differences between the actual
outcome noted above and the assumptions used in the original valuation of the
technology are not expected to significantly impact our results of operations
and financial position.</P>

<P>&nbsp;</P>
<P>&nbsp;</P>
<B><P ALIGN="JUSTIFY">Uniphase Fiber Components</P>
</B><P ALIGN="JUSTIFY"></P>
<P>The initial products developed for submarine and unpackaged technology
projects were completed approximately on schedule and post-acquisition research
and development expenses approximately equaled the estimated cost to complete at
the acquisition date. The Company is experiencing higher levels of demand for
the submarine products than anticipated in the original estimates. The
temperature compensation project is behind schedule because of unforeseen
technical difficulties in maintaining specifications at the harshest
environmental test points, although we are satisfied with the developments
achieved to date. The dispersion compensation project is significantly behind
schedule and the market does not appear to be developing as anticipated. The
Add-Drop projects were discontinued concurrent with the merger with JDS. We have
incurred post-acquisition research and development expenses of approximately
$3.2<B> </B>million in developing the acquired in-process technology and
estimate the cost to complete this technology, in combination with our other
continuing research and development expenses, will not be in excess of our
historic expenditures for research and development as a percentage of our net
sales. The differences between the actual outcome noted above and the
assumptions used in the original valuation of the technology are not expected to
significantly affect our results of operations and financial position.</P>
<P ALIGN="JUSTIFY"></P>
<B><P ALIGN="JUSTIFY">Uniphase Laser Enterprise</P>
</B><P ALIGN="JUSTIFY"></P>
<P>The submount and RWG series products were released on schedule and post-
acquisition research and development expenses approximately equaled the
estimated cost to complete at the acquisition date.<B> </B>Actual revenue for
these products has significantly exceeded the estimates used in the valuation of
the technology. We did not pursue development of the distributed feedback laser
because of resources being redirected to expand the submount and RWG series
development program in response to strong market demand. The high power project
is somewhat delayed because of shifting R&amp;D resources to submount/RWG
because of RWG demand. We have incurred post-acquisition research and
development expenses of approximately $7.2 million in developing the acquired
in-process technology and estimate the cost to complete this technology, in
combination with our other continuing research and development expenses, will
not be in excess of our historic expenditures for research and development as a
percentage of our net sales. The differences between the actual outcome noted
above and the assumptions used in the original valuation of the technology are
not expected to significantly impact our results of operations and financial
position</P>

<A NAME="item3"></A>

<B>
<P>Item 3.&#9;<I>Quantitative and Qualitative Disclosure About Market Risks</P>

</B></I><P>&#9;<B>Foreign Exchange</P>

</B><P>&#9;We generate a significant portion of our sales from sales to
customers located outside the United States, principally in Europe.
International sales are made mostly from our foreign subsidiaries in the local
countries and are typically denominated in either U.S. dollars or the local
currency of each country. These subsidiaries also incur most of their expenses
in the local currency. Accordingly, all foreign subsidiaries use the local
currency as their functional currency.</P>

<P>&#9;Our international business is subject to risks typical of an
international business including, but not limited to differing economic
conditions, changes in political climate, differing tax structures, other
regulations and restrictions, and foreign exchange rate volatility. Accordingly,
our future results could be materially adversely affected by changes in these or
other factors.</P>
<P>&#9;We use forward foreign exchange contracts as the vehicle for hedging
certain assets and liabilities denominated in foreign currencies. In general,
these forward foreign exchange contracts have three months or less to maturity.
Gains and losses on hedges are recorded in non-operating other income as offset
against losses and gains on the underlying exposures. Management of the foreign
exchange hedging program is done in accordance with corporate policy.</P>

<P>&#9;At December 31, 1999, hedge positions totaled U.S. dollar $35.5 million
equivalent. All hedge positions are carried at fair value and all hedge
positions had maturity dates within three months.</P>
<FONT SIZE=2>
<P>&#9;</FONT><B>Interest Rates</P>

<P>&#9;</B>We invest our cash in a variety of financial instruments, including
floating rate bonds, municipal bonds, auction instruments and money market
instruments. These investments are denominated in U.S. dollars and Canadian
dollars. Cash balances in foreign currencies overseas are operating balances and
are only invested in short term deposits in local banks.</P>

<P>&#9;Investments in both fixed rate and floating rate interest earning
instruments carry a degree of interest rate risk. Fixed rate securities may have
their fair market value adversely affected by a rise in interest rates, while
floating rate securities may produce less income than expected if interest rates
fall. Due in part of these factors, the Company's future investment income may
fall short of expectations because of  changes in interest rates or the Company
may suffer loses in principal if forced to sell securities which have seen a
decline in market value prior to their maturities because of changes in interest
rates.</P>
<FONT SIZE=2>
</FONT><P>&#9;Our investments are made in accordance with an investment policy
approved by the Board of Directors. No investment securities have maturities
exceeding three years, and the average duration of the portfolio does not exceed
eighteen months.</P>

<B><P>Forward-Looking Statements </P>
</B>
<P>Statements contained in this Quarterly Report on Form 10-Q which are not
historical facts are forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended. A forward-looking
statement may contain words such as &quot;plans,&quot; &quot;hopes,&quot;
&quot;believes,&quot; &quot;estimates,&quot; &quot;will continue to be,&quot;
&quot;will be,&quot; &quot;continue to,&quot; &quot;expect to,&quot;
&quot;anticipate that,&quot; &quot; to be&quot; or &quot;can impact.&quot; These
forward-looking statements include statements relating to our expectations as to
(i) the timing of our proposed acquisition of E-TEK, (ii) the cost to complete
our acquired in-process research and development projects, the expected
amortization of such costs and the development cycles and timing of completion
of such projects, (iii) the amount (both in absolute dollars and as a percentage
of net sales) of our expenditures for research and development, selling, general
and administrative and capital acquisitions and improvements, (iv) the
sufficiency of existing cash balances and investments, together with cash flow
from operations and available lines of credit to meet our liquidity and capital
spending requirements at least through the end of the calendar year 2000, (v)
the development costs, anticipated completion, introduction and projected
revenues from new and developing products and technologies including the Thermo
Optic Waveguide Attenuator, Solid State Switch, WDM EDFA, WDM laser direct
modulation, the Submount and RWG series products and CATV technologies, and (vi)
costs associated with prior, pending and future acquisitions and plans relating
thereto. Management cautions that forward-looking statements are subject to
risks and uncertainties that could cause our actual results to differ materially
from those projected in such forward-looking statements. These risks and
uncertainties include the risk that (i) the proposed  E-TEK acquisition will not
be completed, (ii) R&amp;D expenditures will be materially greater or less than
those expected, (iii) funds will be insufficient to meet our liquidity and
capital resources requirements through the end of the calendar year 2000, (iv)
development costs, anticipated completion, introduction and projected revenues
from new and developing products and technologies may be materially different
than anticipated and (v) future acquisitions may not be completed as expected,
or at all. Further, our future business, financial condition and results of
operations are subject to risks and uncertainties including the risks set forth
below.</P>

<A NAME="risks"></A>

<B>
<P>Risk Factors</P>

</B><P>JDS Uniphase Corporation is the result of a merger between Uniphase
Corporation and JDS pursuant to which they combined their operations on June 30,
1999. Historic information described in these Risk Factors pertains only to
either Uniphase Corporation or JDS. In such instances, historic information that
is specific to Uniphase Corporation or JDS is specifically described as
&quot;Uniphase&quot; or &quot;JDS&quot; information, respectively. References to
&quot;we&quot; and &quot;us&quot; refer to the combined entity resulting from
the merger of Uniphase and JDS.</P>
<B>
<P>Difficulties We May Encounter Managing Our Growth Could Adversely Affect
Our</P>
<P>Results of Operations</P>

</B><P>Both JDS and Uniphase have historically achieved their growth through a
combination of internally developed new products and acquisitions. As part of
our strategy  to sustain growth, we expect to continue to pursue acquisitions of
other companies, technologies and complementary product lines. We also expect to
continue developing new components, modules and other products for our customer
base, seeking to further penetrate these markets. The success of each
acquisition will depend upon:</P>


<UL>
<LI>our ability to manufacture and sell the products of the businesses
acquired,</LI></UL>



<UL>
<LI>continued demand for these acquired products by our customers,</LI></UL>



<UL>
<LI>our ability to integrate the acquired business' operations, products and
personnel,</LI></UL>



<UL>
<LI>our ability to retain key personnel of the acquired businesses,
and</LI></UL>



<UL>
<LI>our ability to expand our financial and management controls and reporting
systems and procedures.</LI></UL>


<I><P>Difficulties in Integrating Uniphase and JDS Could Adversely Affect Our
Business</P>

</I><P>We are the result of the combination on June 30, 1999 of Uniphase
Corporation and JDS. We are currently continuing our integration programs.
However, if JDS Uniphase fails to successfully integrate the businesses of JDS
and Uniphase, the combined business will suffer. Uniphase and JDS have
complementary business operations located principally in the United States,
Canada and Europe. Our success depends in large part on the successful
integration of these geographically diverse operations and the technologies and
personnel of the two companies. As part of this integration, we need to combine
and improve our computer systems to centralize and better automate processing of
its financial, sales and manufacturing data. Our management came from the prior
management teams of both companies and many members of management did not
previously work with other members of management. The integration of the two
businesses may result in unanticipated operations problems, expenses and
liabilities and the diversion of management attention. The integration may not
be successful, and, if so, our operating results would suffer as a result.</P>

<P>&nbsp;</P>
<I><P>If We Fail to Efficiently Combine Uniphase's and JDS Sales and Marketing
Forces, Our Sales Could Suffer</P>

</I><P>We may experience disruption in sales and marketing in connection with
our efforts to integrate Uniphase's and JDS sales channels, and we may be unable
to efficiently or effectively correct such disruption or achieve our sales and
marketing objectives after integration. In addition, sales cycles and sales
models for Uniphase's and JDS various products may vary significantly from
product to product. Our sales personnel not accustomed to the different sales
cycles and approaches required for products newly added to their portfolio may
experience delays and difficulties in selling these newly added products.
Furthermore, it may be difficult to retain key sales personnel. As a result, we
may fail to take full advantage of the combined sales forces' efforts, and
Uniphase's and JDS respective sales approaches and distribution channels may be
ineffective in promoting the other entity's products, which may have a material
adverse effect on our business, financial condition or operating results.</P>

<I><P>Integration Costs and Expenses Associated with Uniphase's Combination with
JDS Have Been Substantial and We May Incur Additional Related Expenses in the
Future</P>
</I>
<P>JDS Uniphase has incurred direct costs associated with the combination of
approximately $12.0 million, which were included as a part of the total purchase
cost for accounting purposes. We may incur additional material charges in
subsequent quarters to reflect additional costs associated with the combination
which will be expensed as incurred.</P>

<I><P>Difficulties in Integrating Other Acquisitions Could Adversely Affect Our
Business</P>
</I>
<P>We have grown in large part through strategic acquisitions. Critical to the
success of such growth is the ordered, efficient integration of acquired
businesses into our organization. In March 1997, Uniphase acquired Uniphase
Laser Enterprise, which produces JDS Uniphase's 980-nanometer pump laser
products. In June 1998, Uniphase acquired Uniphase Netherlands. In the case of
both acquisitions, Uniphase acquired businesses that had previously been engaged
primarily in research and development and that needed to make the transition
from a research activity to a commercial business with sales and profit levels
that are consistent with our overall financial goals. This transition has not
yet been completed at Uniphase Netherlands, which continues to operate at higher
expense levels and lower gross margins than those required to meet our
profitability goals. In November 1998, Uniphase acquired Uniphase Broadband,
which manufactures test instruments, transmitter cards and transceivers for
telecommunications applications. In August 1999, we acquired AFC Technologies,
which products amplifiers for telecommunications applications. Also, in November
1999, we acquired EPITAXX, which supplies optical detectors and receivers for
fiber optic telecommunications and cable television networks. In December 1999,
we acquired SIFAM, a leading supplier of fused components for fiber optic
telecommunications networks which is based in the United Kingdom, and OPREL, a
developer of optical amplifiers, test equipment and optoelectronic packaging.
Also, in February 2000, we acquired OCLI, a leader manufacturer of optical thin
film coatings and components used to control and enhance light propagation to
achieve specific effects such as reflection, refraction, absorption and
wavelength separation. Finally, in January 2000, we signed a definitive
agreement to acquire E-TEK, a leader in the design and manufacturing of high
quality passive components and modules for fiberoptic systems. Each of these
acquisitions presents integration challenges, which we may fail to overcome. Any
failure of us to manage our growth and the integration challenges related to
that growth could materially harm its business, financial condition and
operating results.</P>

<P>&nbsp;</P>
<I><P>Difficulties in Commercializing New Product Lines</P>
</I>
<P>&#9;We intend to continue to develop new product lines to address our
customers' diverse needs and the several market segments in which it
participates. As we target new product lines and markets, it will further
increase its sales and marketing, customer support and administrative functions
to support anticipated increased levels of operations from these new products
and markets as well as growth from its existing products. We may not be
successful in creating this infrastructure nor may we realize any increase in
the level of our sales and operations to offset the additional expenses
resulting from this increased infrastructure. In connection with our recent
acquisitions, we have incurred expenses in anticipation of developing and
selling new products. Our operations may not achieve levels sufficient to
justify the increased expense levels associated with these new businesses.</P>

<P>&nbsp;</P>
<I><P>Any Failure of Our Information Technology Infrastructure Could Materially
Harm Our Results of Operations</P>

</I><P>Our success depends upon, among other things, the capacity, reliability
and security of our information technology hardware and software infrastructure.
Any failure relating to this infrastructure could significantly and adversely
impact our results of operations.  In connection with our growth, we have
identified the need to update our current information technology infrastructure
and expect to incur significant costs to complete this upgrade.  Currently, we
are (a) implementing a corporate-wide ERP system with integrated product data
management and manufacturing execution systems, (b) we are expanding and
enhancing our wide area network with higher bandwidth connections and redundant
links, and (c) integrating our voice communication systems. We must continue to
expand and adapt our system infrastructure to keep pace with our growth.
Demands on infrastructure that exceed our current forecasts could result in
technical difficulties.  Upgrading the network infrastructure will require
substantial financial, operational and management resources, the expenditure of
which could affect the results of our operations.  We may not successfully and
in a timely manner upgrade and maintain our information technology
infrastructure and a failure to do so could materially harm our business,
results of operations and financial condition.</P>

<B><P>We are Subject to Manufacturing Difficulties </P>

</B><I><P>If We Do Not Achieve Acceptable Manufacturing Volumes, Yields or
Sufficient Product Reliability, Our Operating Results Could Suffer</P>

</I><P>The manufacture of our products involves highly complex and precise
processes, requiring production in highly controlled and clean environments.
Changes in our manufacturing processes or those of our suppliers, or their
inadvertent use of defective or contaminated materials, could significantly
reduce our manufacturing yields and product reliability. Because the majority of
our manufacturing costs are relatively fixed, manufacturing yields are critical
to our results of operations. Certain of our divisions have in the past
experienced lower than expected production yields, which could delay product
shipments and impair gross margins. These divisions or any of our other
manufacturing facilities may not maintain acceptable yields in the future.</P>

<P>For example, our existing Uniphase Netherlands facility has not achieved
acceptable manufacturing yields since the June 1998 acquisition, and there is
continuing risk attendant to this facility and its manufacturing yields and
costs. Moreover, we recently completed construction of a new laser fabrication
facility at Uniphase Netherlands, and this facility has not yet reached targeted
yields, volumes or costs levels. Uniphase Netherlands may not successfully
manufacture laser products in the future at volumes, yields or cost levels
necessary to meet our customers' needs. To the extent we do not achieve
acceptable manufacturing yields or experience product shipment delays, our
business, operating results and financial condition would be materially and
adversely affected.</P>

<P>As our customers' needs for our products increase, we must increase our
manufacturing volumes to meet these needs and satisfy customer demand. Failure
to do so will have a material effect on our business, operating results and
financial condition. In some cases, existing manufacturing techniques, which
involve substantial manual labor, may be insufficient to achieve the volume or
cost targets of our customers. As such, we will need to develop new
manufacturing processes and techniques, which are anticipated to involve higher
levels of automation, to achieve the targeted volume and cost levels. In
addition, it is frequently difficult at a number of our manufacturing facilities
to hire qualified manufacturing personnel in a timely fashion, if at all, when
customer demands increase over shortened time periods. While we continue to
devote research and development efforts to improvement of our manufacturing
techniques and processes, we may not achieve manufacturing volumes and cost
levels in our manufacturing activities that will fully satisfy customer demands.
If we do not expand capacity rapidly enough, we will lose market share.</P>
<I>
<P>If Our Customers Do Not Qualify Our Manufacturing Lines For Volume Shipments,
Our Operating Results Could Suffer</P>
</I>
<P>Customers will not purchase any of our products (other than limited numbers
of evaluation units) prior to qualification of the manufacturing line for the
product. Each new manufacturing line must go through varying levels of
qualification with our customers. This qualification process determines whether
the manufacturing line achieves the customers' quality, performance and
reliability standards. Delays in qualification can cause a product to be dropped
from a long term supply program and result in significant lost revenue
opportunity over the term of that program. We may experience delays in obtaining
customer qualification of our new facility at Uniphase Netherlands. If we fail
in the timely qualification of these or other new manufacturing lines, our
operating results and customer relationships would be adversely affected.</P>

<B><P>Our Operating Results Suffer as a Result of Purchase Accounting Treatment,
Primarily due to the Impact of Amortization of Goodwill and Other Intangibles
Relating to Our Combination with JDS, the merger with OCLI and our Pending
Merger with E-TEK</P>
</B>
<P>Under U.S. generally accepted accounting principles that apply to us, we
accounted for a number of business combinations using the purchase method of
accounting, the most significant being the combination of Uniphase and JDS.
Under purchase accounting, we recorded the market value of our common shares and
the Exchangeable Shares issued in connection with Uniphase's combination with
JDS, the fair value of the options to purchase JDS common shares which became
options to purchase our common shares and the amount of direct transaction costs
as the cost of acquiring the business of JDS. That cost was allocated to the
individual assets acquired and liabilities assumed, including various
identifiable intangible assets such as in-process research and development,
acquired technology, acquired trademarks and trade names and acquired workforce,
based on their respective fair values. We allocated the excess of the purchase
cost over the fair value of the net assets to goodwill. We expensed in-process
research and development of $210.4 million as of June 30, 1999. Goodwill and
other intangible assets are being amortized over a five year period. The amount
of purchase cost allocated to goodwill and other intangibles was $3.4 billion,
including the related deferred tax effect. The amortization of goodwill and
other intangible assets in equal quarterly amounts over a five year period will
result in an accounting charge attributable to these items of $168 million per
quarter and $672 million per year.  Additionally, in the second quarter of 2000
our gross profit was adversely impacted by $11.6 million due to purchase
accounting adjustments to products sold in the period.  As a result, purchase
accounting treatment of Uniphase's combination with JDS will result in a net
loss for us in the foreseeable future, which could have a material and adverse
effect on the market value of our stock.</P>
<B>
</B><P>Additionally, as a result of the purchase accounting treatment of the
recent merger with OCLI and the pending merger with E-TEK, our earnings will
result in a net loss in the forseeable future which could have a material and
adverse effect on the market value of our stock.</P>
<B>
<P>Our Stock Price Could Fluctuate Substantially</P>

</B><I><P>The Unpredictability of Our Quarterly Operating Results Could Cause
Our Stock Price to be Volatile or Decline</P>

</I><P>We expect to continue to experience fluctuations in our quarterly
results, which in the future may be significant and cause substantial
fluctuations in the market price of our stock. All of the concerns we discuss
under Risk Factors could affect our operating results, including, among
others:</P>
differ materially from those projected in the forward-looking statements. </P></I>

<UL>
<LI>the timing of the receipt of product orders from a limited number of major
customers,</LI></UL>



<UL>
<LI>the loss of one or more of our major suppliers or customers,</LI></UL>



<UL>
<LI>competitive pricing pressures,</LI></UL>



<UL>
<LI>the costs associated with the acquisition or disposition of
businesses,</LI></UL>



<UL>
<LI>our ability to design, manufacture and ship technologically advanced
products with satisfactory yields on a timely and cost-effective
basis,</LI></UL>



<UL>
<LI>the announcement and introduction of new products by us, and</LI></UL>



<UL>
<LI>expenses associated with any intellectual property or other
litigation.</LI></UL>


<P>In addition to concerns potentially affecting our operating results addressed
elsewhere under Risk Factors, the following factors may also influence our
operating results:</P>


<UL>
<LI>our product mix,</LI></UL>



<UL>
<LI>the relative proportion of our domestic and international sales,</LI></UL>



<UL>
<LI>the timing differences between when we incur expenses to increase our
marketing and sales capabilities and when we realize benefits, if any, from such
expenditures, and</LI></UL>



<UL>
<LI>fluctuations in the foreign currencies of our foreign operations.</LI></UL>


<P>Furthermore, our sales often reflect orders shipped in the same quarter that
they are received, which makes our sales vulnerable to short term fluctuations
in customer demand and difficult to predict. Also, customers may cancel or
reschedule shipments, and production difficulties could delay shipments. In
addition, we sell our telecommunications equipment products to OEMs who
typically order in large quantities, and therefore the timing of such sales may
significantly affect our quarterly results. An OEM supplies system level network
products to telecommunications carriers and others and incorporates our products
in these system level products. The timing of such OEM sales can be affected by
factors beyond our control, such as demand for the OEMs' products and
manufacturing risks experienced by OEMs. In this regard, we have experienced
rescheduling of orders by customers in each of our markets and may experience
similar rescheduling in the future. As a result of all of these factors, our
results from operations may vary significantly from quarter to quarter.</P>

<P>In addition to the effect of ongoing operations on quarterly results,
acquisitions or dispositions of businesses, our products or technologies have in
the past resulted in, and may in the future, result in reorganization of our
operations, substantial charges or other expenses, which have caused and may in
the future cause fluctuations in our quarterly operating results and cash flows.
See, for example, "Item 1. Business - Risk Factors - Our Operating Results May
Suffer as a Result of Purchase Accounting Treatment, the Impact of Amortization
of Goodwill and Other Intangibles Relating to Our Combination with JDS.''</P>

<P>Finally, our net revenues and operating results in future quarters may be
below the expectations of public market securities analysts and investors. In
such event, the price of our common stock and the Exchangeable Shares would
likely decline, perhaps substantially.</P>

<I><P>Factors Other Than Our Quarterly Results Could Cause Our Stock Price to be
Volatile or Decline</P>

</I><P>The market price of our common stock has been and is likely to continue
to be highly volatile because of causes other than our historical quarterly
results, such as:</P>


<UL>
<LI>announcements by our competitors and customers of technological innovations
or new products,</LI></UL>



<UL>
<LI>developments with respect to patents or proprietary rights,</LI></UL>



<UL>
<LI>governmental regulatory action, and</LI></UL>



<UL>
<LI>general market conditions.</LI></UL>


<P>In addition, the stock market has from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of
particular companies, which may cause the price of our stock to decline.</P>

<B><P>Our Sales Would Suffer if One or More of Our Key Customers Substantially
Reduced Orders for Our Products</P>
</B>
<P>Our customer base is highly concentrated. Historically, orders from a
relatively limited number of OEM customers accounted for a substantial portion
of Uniphase's and JDS's net sales from telecommunications products. Two
customers, Lucent and Nortel, each accounted for over 10% of our net sales for
the quarter ended December 31, 1999. We expect that, for the foreseeable future,
sales to a limited number of customers will continue to account for a high
percentage of our net sales. Sales to any single customer may vary significantly
from quarter to quarter. If current customers do not continue to place orders we
may not be able to replace these orders with new orders from new customers. In
the telecommunications markets, our customers evaluate our products and
competitive products for deployment in their telecommunications systems. Our
failure to be selected by a customer for particular system projects can
significantly impact our business, operating results and financial condition.
Similarly, even if our customers select us, if our customers are not selected as
the primary supplier for an overall system installation, we can be similarly
adversely affected. Such fluctuations could have a material adverse effect on
our business, financial condition and operating results.</P>
<B>
<P>Interruptions Affecting Our Key Suppliers Could Disrupt Production,
Compromise Our Product Quality and Adversely Affect Our Sales</P>
</B>
<P>We currently 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 a price increase for these components would
have a material adverse effect on our results of operations, product quality and
customer relationships. We have a sole source supply agreement for a critical
material used in the manufacture of our passive products. This agreement may be
terminated by either party on six months prior notice. It is our objective to
maintain strategic inventory of the key raw material provided by this supplier.
We have been dependent on OCLI as our sole source for filters for our WDM
products, and following the OCLI merger, we continue to be dependent on this
source for filters. In addition, we currently utilize a sole source for the
crystal semiconductor chip sets incorporated in our solid state microlaser
products and acquire our pump diodes for use in our solid state laser products
from Opto Power Corporation and GEC. We obtain lithium niobate wafers, gallium
arsenide wafers, specialized fiber components and certain lasers used in our
telecommunications products primarily from Crystal Technology, Inc., Fujikura,
Ltd., Philips Key Modules and Sumitomo, respectively. We do not have long-term
or volume purchase agreements with any of these suppliers (other than for our
passive products supplier described in this paragraph), and these components may
not in the future be available in the quantities required by us, if at all.</P>

<B><P>We May Become Subject to Collective Bargaining Agreements</P>
</B>
<P>Our employees who are employed at manufacturing facilities located in North
America are not bound by or party to any collective bargaining agreements with
us. These employees may become bound by or party to one or more collective
bargaining agreements with us in the future. Certain of our employees outside of
North America, particularly in The Netherlands and Germany, are subject to
collective bargaining agreements. If, in the future, any such employees become
bound by or party to any collective bargaining agreements, then our related
costs and our flexibility with respect to managing our business operations
involving such employees may be materially adversely affected.</P>

<B><P>Any Failure to Remain Competitive in Our Industry Would Impair Our
Operating Results</P>

</B><I><P>If Our Business Operations are Insufficient to Remain Competitive in
Our Industry, Our Operating Results Could Suffer</P>
</I>
<P>The telecommunications and laser subsystems markets in which we sell our
products are highly competitive. In each of the markets we serve, we face
intense competition from established competitors. Many of these competitors have
substantially greater financial, engineering, manufacturing, marketing, service
and support resources than do we and may have substantially greater name
recognition, manufacturing expertise and capability and longer standing customer
relationships than do we. To remain competitive, we believe we must maintain a
substantial investment in research and development, marketing, and customer
service and support. We may not compete successfully in all or some of our
markets in the future, and we may not have sufficient resources to continue to
make such investments, or we may not make the technological advances necessary
to maintain our competitive position so that our products will receive market
acceptance. In addition, technological changes or development efforts by our
competitors may render our products or technologies obsolete or uncompetitive.
</P>

<I><P>Fiberoptic Component Average Selling Prices Are Declining</P>
</I>
<P>Prices for telecommunications fiberoptic components are generally declining
because of, among other things, increased competition and greater unit volumes
as telecommunications service providers continue to deploy fiberoptic networks.
Uniphase and JDS have in the past and we may in the future experience
substantial period to period fluctuations in average selling prices. We
anticipate that average selling prices will decrease in the future in response
to product introductions by competitors and us or to other factors, including
price pressures from significant customers. Therefore, we must continue to (1)
timely develop and introduce new products that incorporate features that can be
sold at higher selling prices and (2) reduce our manufacturing costs. Failure to
achieve any or all of the foregoing could cause our net sales and gross margins
to decline, which may have a material adverse effect on our business, financial
condition and operating results.</P>

<I><P>If We Fail to Attract and Retain Key Personnel, Our Business Could
Suffer</P>
</I>
<P>Our future depends, in part, on our ability to attract and retain certain key
personnel. In particular, our research and development efforts depend on hiring
and retaining qualified engineers. Competition for highly skilled engineers is
extremely intense, and we are currently experiencing difficulty in identifying
and hiring certain 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 officers and other key management and
technical personnel, each of whom would be difficult to replace. Continuing
uncertainty resulting from the JDS merger could further adversely affect our
ability to retain key employees. We do not maintain a key person life insurance
policy on our Chief Executive Officer, our Chief Operating Officer or any other
officer. The loss of the services of one or more of our executive officers or
key personnel or the inability to continue to attract qualified personnel could
delay product development cycles or otherwise have a material adverse effect on
our business, financial condition and operating results.</P>

<B><P>Market consolidation has created and continues to create companies that
are larger and have greater resources than us.</P>

</B><P>&#9;In the recent past, there have been a number of significant
acquisitions announced among our competitors and customers, including:</P>


<UL>
<LI>Motorola, Inc./General Instruments Corporation;<BR>
</LI>
<LI>Cisco Systems, Inc., Cerent Corporation;<BR>
</LI>
<LI>Cisco Systems, Inc., Monterey Networks, Inc.;<BR>
</LI>
<LI>Corning Incorporated/Oak Industries, Inc.;<BR>
</LI>
<LI>Cisco Systems, Inc./Pirelli S.p.A; </LI>





<LI>Nortel Networks Corp., Qtera Corp.; and<BR>
</LI>
<LI>Lucent Technologies, Inc., Ortel Corporation</LI></UL>

<P><BR>
The effect of these completed and pending acquisitions on us cannot be predicted
with accuracy, but some of these competitors are aligned with companies that are
larger or more well established than us. As a result, these competitors may have
access to greater financial, marketing and technical resources than us. Also,
consolidation of these and other companies may disrupt our marketing and sales
efforts.</P>
<B>
<P>Our Participation in International Markets Creates Risks to Our Business Not
Faced by Companies That Sell Their Products in the United States</P>
</B>
<P>International sales are subject to inherent risks, including:</P>


<UL>
<LI>unexpected changes in regulatory requirements,</LI></UL>



<UL>
<LI>tariffs and other trade barriers,</LI></UL>



<UL>
<LI>political and economic instability in foreign markets,</LI></UL>



<UL>
<LI>difficulties in staffing and management,</LI></UL>



<UL>
<LI>integration of foreign operations,</LI></UL>



<UL>
<LI>longer payment cycles,</LI></UL>



<UL>
<LI>greater difficulty in accounts receivable collection,</LI></UL>



<UL>
<LI>currency fluctuations, and</LI></UL>



<UL>
<LI>potentially adverse tax consequences.</LI></UL>


<P>International sales accounted for approximately 40%, 38% and 32% of
Uniphase's net sales in 1999, 1998 and 1997, respectively. International sales
(excluding sales to the U.S.) accounted for approximately 21%, 25% and 20% of
JDS's net sales in 1999, 1998 and 1997, respectively. We expect that
international sales will continue to account for a significant portion of our
net sales. We may continue to expand our operations outside of the United States
and to enter additional international markets, both of which will require
significant management attention and financial resources.</P>

<P>Since a significant portion of our foreign sales are denominated in U.S.
dollars, our products may also become less price competitive in countries in
which local currencies decline in value relative to the U.S. dollar. Our
business and operating results may also be materially and adversely affected by
lower sales levels that typically occur during the summer months in Europe and
certain other overseas markets. Furthermore, the sales of many of our OEM
customers depend on international sales and consequently further exposes us to
the risks associated with such international sales.</P>

<B><P>The year 2000 problem may disrupt JDS Uniphase's and its customers' and
suppliers' businesses</P>
</B><P>&#9;Many currently installed computer systems and software products are
coded to accept only two digit entries in the date code field. As a result,
software that records only the last two digits of the calendar year may not be
able to distinguish whether "00" means 1900 or 2000.  In addition, computer
programs may fail to recognize February 29, 2000 as a leap year date as a result
of an exception to the calculation of leap years that will occur in the year
2000 and otherwise occurs only once every 400 years. Residual Year 2000 problems
may result in miscalculations, data corruption, system failures or disruption of
operations. To date, we have not experienced any significant Year 2000 problems
in our internal technology systems or with the vendors of systems we believe to
be critical to our business. In addition, we believe that it is unlikely we will
experience any significant Year 2000 problems in the future. </P>

<P>&#9;However, our applications operate in complex network environments and
directly and indirectly interact with a number of other hardware and software
systems.  We cannot predict whether Year 2000 unknown errors or defects that
affect the operation of software and systems that we use in operating our
businesses will arise in the future.  If residual Year 2000 problems cause the
failure of any of the technology, software or systems necessary to operate our
business, We could lose customers, suffer significant disruptions in its
business, lose revenues and incur substantial liabilities and expenses.  We
could also become involved in costly litigation resulting from Year 2000
problems.  This could seriously harm our business, financial condition and
results of operations.</P>

<B><P>If We Have Insufficient Proprietary Rights or If We Fail to Protect Those
We Have, Our Business Would be Materially Impaired</P>

</B><I><P>We May Not Obtain the Intellectual Property Rights We Require</P>
</I>
<P>The telecommunications and laser markets in which we sell our products
experience frequent litigation regarding patent and other intellectual property
rights. Numerous patents in these industries are held by others, including
academic institutions and our competitors. In the past, Uniphase and JDS have
acquired and in the future we may seek to acquire license rights to these or
other patents or other intellectual property to the extent necessary for our
business. Unless we are able to obtain such licenses on commercially reasonable
terms, patents or other intellectual property held by others could inhibit our
development of new products for our markets. While in the past licenses
generally have been available to Uniphase and JDS where third-party technology
was necessary or useful for the development or production their 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 thereof. 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 certain of our telecommunications products and laser subsystems.</P>

<I><P>Our Products May Infringe the Property Rights of Others</P>

</I><P>The industry in which we operate experiences periodic claims of patent
infringement or other intellectual property rights. We have in the past and may
from time to time in the future receive notices from third parties claiming that
our products infringe upon third party proprietary rights. Any litigation to
determine the validity of any third-party claims, regardless of the merit of
these claims, could result in significant expense to us and divert the efforts
of our technical and management personnel, whether or not we are successful in
such litigation. If we are unsuccessful in any such litigation, 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.</P>

<I><P>Our Intellectual Property Rights May Not Be Adequately Protected</P>
</I>
<P>Our future depends in part upon our intellectual property, including trade
secrets, know-how and continuing technological innovation. We currently hold
approximately 150 U.S. patents on products or processes and corresponding
foreign patents and have applications for certain 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 ours. 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 certain
territories in which our products are or may be developed, manufactured or sold,
including Asia, Europe or Latin America, may not protect our products and
intellectual property rights to the same extent as the laws of the United
States.</P>

<B><P>If We Fail to Successfully Manage Our Exposure to the Worldwide Financial
Markets, Our Operating Results Could Suffer</P>
</B>
<P>We are exposed to financial market risks, including changes in interest
rates, foreign currency exchange rates and marketable equity security prices. We
utilize derivative financial instruments to mitigate these risks. We do not use
derivative financial instruments for speculative or trading purposes. The
primary objective 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. We hedge currency risks of investments denominated
in foreign currencies with forward currency contracts. Gains and losses on these
foreign currency investments are generally offset by corresponding gains and
losses on the related hedging instruments, resulting in negligible net exposure
to us. A substantial portion of our revenue, expense and capital purchasing
activities are transacted in U.S. dollars. However, we do enter into these
transactions 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 have established hedging
programs. Currency forward contracts are utilized in these hedging programs. Our
hedging programs reduce, but do not always entirely eliminate, the impact of
foreign currency exchange rate movements. Actual results on our financial
position may differ materially.</P>

<B><P>If We Fail to Obtain Additional Capital at the Times, in the Amounts and
Upon the Terms Required, Our Business Could Suffer</P>

</B><P>We are devoting substantial resources for new facilities and equipment to
the production of source lasers, fiber Bragg gratings and modules used in
telecommunications and for the development of new solid state lasers. Although
we believe existing cash balances, cash flow from operations, available lines of
credit and the proceeds from the recently completed public offering of our
common stock and the private placement of Exchangeable shares in Canada will be
sufficient to meet our capital requirements at least for the next 12 months, we
may be required to seek additional equity or debt financing to compete
effectively in these markets. We cannot precisely determine the timing and
amount of such capital requirements and will depend on several factors,
including our acquisitions and the demand for our products and products under
development. Such additional financing may not be available when needed, or, if
available, may not be on terms satisfactory to us.</P>

<B><P>Our Currently Outstanding Preferred Stock and Our Ability to Issue
Additional Preferred Stock Could Impair the Rights of Our Common
Stockholders</P>

</B><P>Our Board of Directors has the authority to issue up to 799,999 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 preferred stock under certain circumstances
could have the effect of delaying, deferring or preventing a change in control.
Each outstanding share of our common stock includes one right. Each right
entitles the registered holder, subject to the terms of the Rights Agreement, to
purchase from us one unit, equal to one one-thousandth of a share of Series B
Preferred Stock, at a purchase price of $600 per unit, subject to adjustment,
for each share of common stock held by the holder. The rights are attached to
all certificates representing outstanding shares of our common stock, and no
separate rights certificates have been distributed. The purchase price is
payable in cash or by certified or bank check or money order payable to our
order. The description and terms of the rights are set forth in a Rights
Agreement between us and American Stock Transfer &amp; Trust Company, as Rights
Agent, dated as of June 22, 1998, as amended from time to time.</P>

<P>Certain provisions contained in the rights plan, and in the equivalent rights
plan our subsidiary, JDS Uniphase Canada Ltd., has adopted with respect to its
exchangeable shares (&quot;Exchangeable Shares&quot;), 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 the 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.</P>
<B>
<P>Certain Anti-Takeover Provisions Contained in Our Charter and Under Delaware
Law Could Impair a Takeover Attempt</P>

</B><P>We are subject to the provisions of Section 203 of the Delaware General
Corporation Law prohibiting, under certain circumstances, publicly-held Delaware
corporations from engaging in business combinations with certain stockholders
for a specified period of time without the approval of the holders of
substantially all of its 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 certain 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.</P>

<P>&nbsp;</P>
<B><P>PART II--OTHER INFORMATION</P>

<P>Item 1.  Legal Proceedings</P>
</B>
<P>&#9;Reference is made to Item 3. Legal Proceedings, in the Registrant's
Annual Report on Form 10-K for the year ended June 30, 1999 and Part II, Item
1.</P>

<B><P>Item 2.  Changes in Securities</P>

<P>&#9;</B>In October 1999, the Company acquired Ramar Corporation for $1.0
million in cash and $3.5 million of convertible debt. Such convertible debt was
issued pursuant to an exemption from registration under Section 4(2) of the
Securities Act of 1933, as amended. The convertible debt is composed of $2.5
million of aggregated demand obligations and two performance-based instruments
totaling $1.0 million that become due upon achieving certain milestones over the
ensuing 12 months. The convertible debt bears interest at 5.59% and the
principal can be exchanged for newly issued shares of JDS Uniphase common stock
at a price of $55.922 per share. The convertible debt is unsecured .</P>

<P>In November 1999, the Company acquired EPITAXX, Inc. for $9.3 million in cash
and 4.5 million shares of our common stock valued at approximately $497.7
million.  The issuance of the common stock was exempt from registration pursuant
to Section 4(2) of the Securities Act of 1933, as amended.  The stock was issued
to former shareholders of EPITAXX.   </P>
<P>In December 1999, the Company amended its Certificate of Incorporation to
increase the number of authorized shares of Common Stock from 300,000,000 shares
to 600,000,000. </P>
<P>In December 1999, the Company acquired Oprel Technologies, Inc. for $9.4
million in cash and 95,458 exchangeable shares of its subsidiary, JDS Uniphase
Canada Ltd., each of which is exchangeable at the option of the holder for one
share of common stock.  The total value of the securities issued was $18.3
million.  The issuance of the exchangeable shares was exempt from registration
pursuant to Regulation S promulgated under the Securities Act of 1933, as
amended.  The stock was issued to former stockholders of Oprel Technologies,
Inc.  </P>
<P>&#9;In December 1999, the Company issued 10,892 shares of common stock in
exchange for $0.3 million of convertible debt issued in connection with its
purchase in 1998 of certain assets from Chassis Engineering, Inc.</P>

<B><P>Item 3.  Defaults upon Senior Securities</P>
</B>
<P>&#9;None</P>

<B><P>Item 4.  Submission of Matters to a Vote of Security Holders</P>

<P>&#9;</B>The Annual Meeting of Stockholders (the &quot;Annual Meeting&quot;)
of the Company was held on December 16, 1999.</P>

<P>&#9;At the Annual Meeting, three items were put to a vote of the
stockholders:</P>

<OL>

<LI>The election of the following four Class III directors of the Company to
serve until the 2002 Annual Meeting of Stockholders, and until their successors
are elected and qualified: Kevin Kalkhoven, Dr. Jozef Straus, Cazimir Skrzypczak
and Bruce Day.   The following directors continued as members of the Company's
Board: William J. Sinclair, Peter Guglielmi, Robert E. Enos, Martin Kaplan, John
A. MacNaughton and Wilson Sibbett, Ph.D.</LI>
<LI>An amendment to increase the aggregate number of shares of common stock
which the Company is authorized to issue from 300,000,000 to 600,000,000
shares.</LI>
<LI>The appointment of Ernst &amp; Young LLP as the independent auditors for the
Company for the fiscal year ending June 30, 2000.</LI></OL>


<P>The voting results were:</P>



<pre>




                      Item                  For        Against     Abstained
         ------------------------------ ------------ ------------ ------------

      1. Directors
         Kevin Kalkhoven................137,953,506                   128,662
         Dr. Jozef Straus...............137,953,506                   128,662
         Cazimir Skrzypczak.............137,953,506                   128,662
         Bruce Day......................137,953,506                   128,662

      2. Increase in authorized
           share capital................137,353,553       50,785      128,662

      3. Appointment of auditors........137,953,506      212,604      128,662

</pre>


<B><P>Item 5.  Other Information</P>
</B>
<P>&#9;None</P>

<B><P>Item 6.  Exhibits and Reports on Form 8-K</P>
</B>




<P>&#9;Exhibits

<P>&nbsp;</P>

<P>3.1(1)  &#9;Amended and Restated Certificate of Incorporation. <BR>
<P>3.2(2) &#9;Certificate of Amendment to Amended and Restated Certificate of
&#9;Incorporation.<BR>
<P>3.3(3)&#9;Certificate of Amendment to Amended and Restated Certificate of
&#9;Incorporation.<BR>
<P>3.4(4)&#9;Certificate of Amendment to Amended and Restated Certificate of
&#9;&#9;Incorporation.<BR>
<P>3.5(4) &#9;Certificate of Designation.<BR>
<P>3.6(2)&#9;Certificate of Designation.<BR>
<P>3.7(5)&#9;Certificate of Designation.<BR>
<P>3.8&#9;Certificate of Amendment to Amended and Restated Certificate of
&#9;Incorporation.<BR>
<P>3.9&#9;Certificate of Amendment to Amended and Restated Certificate of
&#9;Incorporation.<BR>



<P>10.1 &#9;Agreement and Plan of Merger by and among JDS Uniphase
&#9;&#9;&#9;&#9;&#9;Corporation, JDS Uniphase Acquisition, Inc., EPITAXX, Inc.
and the &#9;&#9;&#9;stockholders of EPITAXX, Inc., dated a of October 1,
1999.<BR>



<P>27.1 &#9;Financial Data Schedule.<BR>

<P>99.1 &#9;Security Ownership of Certain Beneficial Owners and Management

<P>&nbsp;</P>
<P>&nbsp;</P>


<P> ___________________________</P>

<P>&nbsp;</P>
<P>&nbsp;</P>



<P>(1)&#9;Incorporated by reference to the exhibits filed with the Registrant's
registration statement on Form S-1, which was declared effective November 17,
1993.<BR>
<P>(2)&#9;Incorporated by reference to the exhibit to the Company's Registration
Statement on Form S-3 filed July 14, 1999.<BR>
<P>(3)&#9;Incorporated by reference to the exhibit to the Company's Report on Form 10-
Q for the period ending December 31, 1998.<BR>
<P>(4)&#9;Incorporated by reference to the exhibit to the Company's Report of Form 10-
K filed September 28, 1998.<BR>
<P>(5)&#9;Incorporated by reference to the exhibit to the Company's current Report on
Form 8-K filed June 24, 1998.<BR>

<P>&nbsp;</P>

<P>&#9;b)  Reports on Form 8-K</P>

<P>&#9;&#9;&#9;Report on Form 8-K as filed on October 4, 1999.<BR>
<P>&#9;&#9;&#9;Report on Form 8-K/A as filed on November 3, 1999.<BR>
<P>&#9;&#9;&#9;Report on Form 8-K as filed on November 5, 1999.<BR>
<P>&#9;&#9;&#9;Report on Form 8-K/A as filed on November 30, 1999.<BR>

<P>&nbsp;</P>
<P>&nbsp;</P>
<P>Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.</P>

<pre>

                                     JDS Uniphase Corporation
                            ------------------------------------------
                                         (Registrant)

Date:  February 10, 2000              /s/ Anthony R. Muller
                            ------------------------------------------
                            Anthony R. Muller, Senior Vice President and CFO
                            (Principal Financial and Accounting Officer)

Date:  February 10, 2000              /s/ Kevin N. Kalkhoven
                            ------------------------------------------
                            Kevin N. Kalkhoven, Chairman and CEO
                            (Principal Executive Officer)


</pre>








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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.8
<SEQUENCE>2
<DESCRIPTION>CERTIFICATE OF AMENDMENT TO CERTIFICATE OF INCOPORATION
<TEXT>


<HTML>
<head>
<TITLE>Certificate</TITLE>
</head>
<body bgcolor=white>


<U><FONT FACE="Courier New" SIZE=2><P><A NAME="Letter"><A NAME="Date"><A
NAME="Privileged"></A></P>
</U></FONT><FONT SIZE=3><P ALIGN="RIGHT">Exhibit 3.8</P>
</FONT><FONT FACE="Courier New" SIZE=2><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">&nbsp;</P>
</FONT><B><FONT SIZE=3><P ALIGN="CENTER">CERTIFICATE OF AMENDMENT</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">TO</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">AMENDED AND RESTATED</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">CERTIFICATE OF INCORPORATION</P>
</B></FONT><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P>JDS Uniphase Corporation, a corporation organized and existing under the laws
of the State of Delaware, (the &quot;Corporation&quot; hereby certifies as
follows:</P>

<P>FIRST:  That, by their unanimous written consent as of August 4, 1999, the
Board of Directors adopted a resolution proposing and declaring advisable the
following amendment to the Amended and Restated Certificate of Incorporation of
the Corporation:</P>
<DIR>
<DIR>

<P>RESOLVED, that paragraph 4.1 of Article 4 of the Corporation's Amended and
Restated Certificate of Incorporation shall be amended, subject to stockholder
approval, to read in its entirety as follows:</P>
<DIR>
<DIR>

<P>&quot;4.1,  <U>Authorized Capital Stock</U>.  The Corporation is authorized
to issue two classes of stock to be designated, respectively, `Common Stock' and
`Preferred Stock.'  The total number of shares which the Corporation is
authorized to issue is three hundred one million (301,000,000) shares.  Three
hundred million (300,000,000) shares shall be Common Stock, each having a par
value of one-tenth of one cent ($.001).  One million (1,000,000) shares shall be
Preferred Stock, each having a par value of one-tenth of one cent
($.001).&quot;</P>
</DIR>
</DIR>
</DIR>
</DIR>

<P>SECOND:  That the stockholders of the Corporation have approved at the
Special Meeting of Stockholders held on September 28, 1999 said amendment in
accordance with the provisions of Section 228 of the General Corporation Law of
the State of Delaware.</P>

<P>THIRD:  That the aforesaid amendment was duly adopted in accordance with
applicable provisions of Sections 242 and 228 of the General Corporation Law of
the State of Delaware.</P>

<P>&nbsp;</P>
<P>&nbsp;</P>









<P>IN WITNESS WHEREOF, JDS Uniphase Corporation has caused this Certificate of
Amendment to Amended and Restated Certificate of Incorporation to be signed by
its Chief Executive Officer and attested to by its Secretary this <U>28<SUP>th</U></SUP> day
of <U>September</U>, 1999.</P>



<pre>

                                         JDS UNIPHASE CORPORATION


                                         By: /s/ KEVIN N. KALKHOVEN
                                            -----------------------
                                                 Kevin N. Kalkhoven
                                                 Chief Executive Officer

ATTEST:



By: /s/ ANTHONY R. MULLER
    ----------------------
        Anthony R. Muller
        Secretary

</pre>


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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.9
<SEQUENCE>3
<DESCRIPTION>CERTIFICATE OF AMENDMENT TO CERTIFICATE OF INCOPORATION
<TEXT>


<HTML>
<head>
<TITLE>Certificate</TITLE>
</head>
<body bgcolor=white>


<U><FONT FACE="Courier New" SIZE=2><P><A NAME="Letter"><A NAME="Date"><A
NAME="Privileged"></A></P>
</U></FONT><FONT SIZE=3><P ALIGN="RIGHT">Exhibit 3.9</P>
</FONT><FONT FACE="Courier New" SIZE=2><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">&nbsp;</P>
</FONT><B><FONT SIZE=3><P ALIGN="CENTER">CERTIFICATE OF AMENDMENT</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">TO</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">AMENDED AND RESTATED</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">CERTIFICATE OF INCORPORATION</P>
</B></FONT><FONT SIZE=3><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P>JDS Uniphase Corporation, a corporation organized and existing under the laws
of the State of Delaware, (the &quot;Corporation&quot; hereby certifies as
follows:</P>

<P>FIRST:  That, at a meeting of the Board of Directors of the Corporation held
on July 7, 1999, the
Board of Directors adopted a resolution proposing and declaring advisable the
following amendment to the Amended and Restated Certificate of Incorporation of
the Corporation:</P>
<DIR>
<DIR>

<P>RESOLVED, that paragraph 4.1 of Article 4 of the Corporation's Amended and
Restated Certificate of Incorporation shall be amended, subject to stockholder
approval, to read in its entirety as follows:</P>
<DIR>
<DIR>

<P>&quot;4.1,  <U>Authorized Capital Stock</U>.  The Corporation is authorized
to issue two classes of stock to be designated, respectively, `Common Stock' and
`Preferred Stock.'  The total number of shares which the Corporation is
authorized to issue is six hundred one million (601,000,000) shares.  Six
hundred million (600,000,000) shares shall be Common Stock, each having a par
value of one-tenth of one cent ($.001).  One million (1,000,000) shares shall be
Preferred Stock, each having a par value of one-tenth of one cent
($.001).&quot;</P>
</DIR>
</DIR>
</DIR>
</DIR>

<P>SECOND:  That the stockholders of the Corporation have approved at the
Special Meeting of Stockholders held on December 16, 1999 said amendment in
accordance with the provisions of Section 228 of the General Corporation Law of
the State of Delaware.</P>

<P>THIRD:  That the aforesaid amendment was duly adopted in accordance with
applicable provisions of Sections 242 and 228 of the General Corporation Law of
the State of Delaware.</P>

<P>&nbsp;</P>
<P>&nbsp;</P>









<P>IN WITNESS WHEREOF, JDS Uniphase Corporation has caused this Certificate of
Amendment to Amended and Restated Certificate of Incorporation to be signed by
its Chief Executive Officer and attested to by its Secretary this <U>16<SUP>th</U></SUP> day
of <U>December</U>, 1999.</P>

<pre>

                                         JDS UNIPHASE CORPORATION


                                         By: /s/ KEVIN N. KALKHOVEN
                                            -----------------------
                                                 Kevin N. Kalkhoven
                                                 Chief Executive Officer

ATTEST:



By: /s/ ANTHONY R. MULLER
    ----------------------
        Anthony R. Muller
        Secretary

</pre>


</body>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>4
<DESCRIPTION>MERGER AGREEMENT
<TEXT>

<HTML>
<head>
<TITLE>MERGER</TITLE>
</head>
<body bgcolor=white>

<p align="right">
                                             EXHIBIT 10.1 </p>




<TITLE>Merger Agreement - Execution Copy</TITLE>
</HEAD>
<BODY>

<U><P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;</P>
</U><P ALIGN="JUSTIFY">&#9;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="CENTER">AGREEMENT AND PLAN OF MERGER</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="CENTER">by and among</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="CENTER">JDS UNIPHASE CORPORATION,</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="CENTER">JDS UNIPHASE ACQUISITION, INC.,</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">EPITAXX, INC. and</P>
<P ALIGN="CENTER">THE STOCKHOLDERS OF EPITAXX, INC.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<U><P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;</P>
</U><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">October 1, 1999</P></DIR>
</DIR>

<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="CENTER">LIST OF EXHIBITS</P>
<U><P ALIGN="JUSTIFY"></P><DIR>
<DIR>
<DIR>
<DIR>

</U><P ALIGN="CENTER">EXHIBIT A --   Form of Non-Competition and Confidentiality
Agreement</P><DIR>
<DIR>
<DIR>
<DIR>

<P>EXHIBIT B --  Form of Employment Agreement Amendment</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<B><U><P ALIGN="CENTER">AGREEMENT AND PLAN OF MERGER</P>
</B></U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><A NAME="_Toc444482865"><A NAME="_Toc461384544">This
Agreement and Plan of Merger (this &quot;Agreement&quot;) is entered into this
1st day of October, 1999 by and among JDS Uniphase Corporation, a Delaware
corporation (&quot;ACQUIROR&quot;), JDS Uniphase Acquisition, Inc., a Delaware
corporation (&quot;Newco&quot;), EPITAXX, INC., a Delaware corporation
(&quot;EPITAXX&quot; or the &quot;Company&quot;), NSG Holding USA, Inc., a
Delaware corporation and the principal stockholder of EPITAXX (the
&quot;Principal Stockholder&quot;), and the persons executing this Agreement as
stockholders of EPITAXX (together with the Principal Stockholder, the
"Stockholders").</A></A></P>
<P ALIGN="CENTER"><A NAME="_Toc444482866"><A NAME="_Toc461384545">W I T N E S S
E T H :</A></A></P>
<P ALIGN="JUSTIFY"><A NAME="_Toc461384546"><A NAME="_Toc444482867">WHEREAS the
Stockholders are the registered and beneficial owners of all of the issued and
outstanding shares of capital stock of every kind and description of EPITAXX
(said shares being herein referred to as the &quot;EPITAXX Shares&quot;);</A>
</A></P>
<P ALIGN="JUSTIFY"><A NAME="_Toc444482868"><A NAME="_Toc461384547">WHEREAS the
parties wish to effect the acquisition of the Company by Acquiror through a
merger of Newco with and into the Company on the terms and conditions set forth
in this Agreement;</A> and</A></P>
<P ALIGN="JUSTIFY"><A NAME="_Toc444482869"><A NAME="_Toc461384548">WHEREAS this
Agreement is intended to be a taxable transaction pursuant to the Internal
Revenue Code of 1986, as amended (the &quot;Code&quot;)</A>.</A></P>
<P ALIGN="JUSTIFY"><A NAME="_Toc444482871"><A NAME="_Toc461384549">NOW
THEREFORE, in consideration of the promises and of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby mutually acknowledged, intending to
be legally bound the parties hereby agree as follows:</A></A></P>
<U><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER">ARTICLE I<A
NAME="_Toc444482872"></U><B><BR>
<BR>
<A NAME="_Toc461384550"><U>THE MERGER</A></A></P>
</B></U></FONT><P ALIGN="JUSTIFY">SECTION 1.1&#9;<A NAME="_Toc461384551"><A
NAME="_Toc444482873"><U>The Merger</U>.  On the basis of the representations,
warranties and undertakings set forth in this Agreement, on the terms and
subject to the conditions set forth in this Agreement, and in accordance with
the General Corporation Law of the State of Delaware (the &quot;DGCL&quot;),
Newco shall be merged with and into the Company (the &quot;Merger&quot;).  The
Merger shall occur at the Effective Time (as defined in</A> <A
NAME="_Toc461384552">Section 1.3).  Following the Merger, the Company shall be
the surviving corporation (the &quot;Surviving Corporation&quot;) and the
separate corporate existence of Newco shall cease.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 1.2&#9;<A NAME="_Toc461384553"><U>Conversion of
EPITAXX Shares</U>.<A NAME="_Toc444482874"></A></P>
<P ALIGN="JUSTIFY">(a)&#9;<A NAME="_Toc461384554">At the Effective Time, by
virtue of the Merger and without any action on the part of the Company, the
Stockholders, Newco or Acquiror:<A NAME="_Toc444482875"></A></A></P>
<P ALIGN="JUSTIFY">(i)&#9;All EPITAXX Shares outstanding immediately prior to
the Effective Time shall be converted into and become the right to receive the
Merger Consideration (as defined in Section 1.4 below)</A>.<A
NAME="_Toc444482876">  </P>
<P ALIGN="JUSTIFY">(ii)&#9;Each share of the common stock of Newco, $0.001 par
value per share (&quot;Newco Common Stock&quot;), outstanding immediately prior
to the Effective Time shall be converted into and become one validly issued,
fully paid and nonassessable share of Class A Common Stock (as hereinafter
defined).<A NAME="_Toc444482877"></A></P>
<P ALIGN="JUSTIFY">(b)&#9;<A NAME="_Toc461384555">The Merger Consideration shall
be allocated among the Stockholders in the manner set forth on <U>Schedule
1.2(b)</U>.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 1.3&#9;<A NAME="_Toc461384557"><A
NAME="_Toc444482879"><U>Effective Time</U>.  As soon as practicable after
satisfaction or waiver of all conditions to the Merger set forth in this
Agreement, but, in any event, no later than five (5) business days after such
satisfaction or waiver (unless otherwise agreed in writing by the parties), the
parties shall cause a certificate of merger (the &quot;Certificate of
Merger&quot;) with respect to the Merger to be filed and recorded in accordance
with Section 251(c) of the DGCL, in form and content reasonably acceptable to
the parties, and shall take all such further actions as may be required by law
to make the Merger effective.  The Merger shall be effective upon the filing and
acceptance of the Certificate of Merger<A NAME="_Toc461384558"></A> (the
&quot;Effective Time&quot;).  </A></A></P>
<P ALIGN="JUSTIFY">SECTION 1.4&#9;<A NAME="_Toc461384559"><U>Merger
Consideration</U>.<A NAME="_Toc444482880"></A></P>
<P ALIGN="JUSTIFY"></A>(a)&#9;The aggregate consideration payable by Acquiror in
connection with the Merger (the &quot;Merger Consideration&quot;) shall be (i)
the number of unregistered shares of Acquiror's common stock, $0.001 par <A
NAME="_Toc444482881">value per share (&quot;Acquiror Common Stock&quot;), equal
to (A) Three Hundred Ninety-Nine Million Nine Hundred Ninety-Nine Thousand
Dollars ($399,999,000) divided by the Market Value (as hereinafter defined)
rounded to the nearest whole share (the &quot;Total Acquiror Shares&quot;),
<U>minus</U> (B) the portion of such shares allocated to the outstanding
Employee Options (as hereinafter defined) pursuant to subsection (f) below, and
(ii) $1,000 payable in cash or cash equivalent.  <A NAME="_Toc461384560"></A>For
the purposes of this Agreement, the term &quot;Market Value&quot; shall mean the
average closing market price of one share of Acquiror Common Stock on the Nasdaq
National Market (as reported in the Wall Street Journal, Eastern Edition) for
the twenty (20) trading days ending on the third trading day prior to the
Closing Date<A NAME="_Toc444482882"></A>.  For the purposes of this Agreement,
the term &quot;Exchange Ratio&quot; shall mean the fraction obtained by dividing
the Total Acquiror Shares by the number of EPITAXX Shares and the number of
shares of the Company's capital stock subject to outstanding Employee Options.
</P>
<P ALIGN="JUSTIFY">(b)&#9;<A NAME="_Toc461384561"><U>Cancellation of EPITAXX
Shares Owned by EPITAXX</U>.  At the Effective Time, all shares of EPITAXX Class
A Common Stock, par value $0.01 per share (the &quot;Class A Common Stock&quot;)
and EPITAXX Class B Common Stock, $0.01 par value per share (the &quot;Class B
Common Stock&quot;) that are owned by the Company as treasury stock prior to the
Effective Time shall be canceled and extinguished without any conversion
thereof.<A NAME="_Toc444482883"></A></A></P>
<P ALIGN="JUSTIFY">(c)&#9;<A NAME="_Toc461384562"><U>Adjustments to Exchange
Ratio</U>.  The Exchange Ratio shall be adjusted to reflect fully the effect of
any stock split, reverse split, stock dividend (including any dividend or
distribution of securities convertible into Acquiror Common Stock),
reorganization, recapitalization or other like change with respect to Acquiror
Common Stock occurring after the date hereof and prior to the Effective Time.<A
NAME="_Toc444482884"></A></A></P>
<P ALIGN="JUSTIFY">(d)&#9;<A NAME="_Toc461384563"><U>Fractional Shares</U>.  No
fraction of a share of Acquiror Common Stock will be issued, but in lieu thereof
each holder of EPITAXX Shares who would otherwise be entitled to a fraction of a
share of Acquiror Common Stock (after aggregating all fractional shares of
Acquiror Common Stock to be received by such holder) shall receive from Acquiror
an amount of cash (rounded to the nearest whole cent) equal to the product of
(i) such fraction, multiplied by (ii) the Market Value.<A
NAME="_Toc444482885"></A></A></P>
<P ALIGN="JUSTIFY"></A>(e)&#9;<A NAME="_Toc461384566"><U>Treatment of Restricted
Shares</U>.  The EPITAXX Shares subject to restrictions pursuant to certain
Restricted Stock Agreements (the &quot;EPITAXX Stockholders' Agreements&quot;)
by and between the Company and each of its individual stockholders shall be
converted into shares of Acquiror Common Stock in accordance with the provisions
set forth in this Section 1 without further restriction.</A></P>
<P ALIGN="JUSTIFY">(f)&#9;<U>Options</U>.  At the Effective Time, any and all
outstanding and unexercised Employee Options shall cease to represent a right to
acquire shares of the Company's capital stock and shall be converted
automatically into options to purchase shares of Acquiror Common Stock
(&quot;Acquiror Options&quot;) in an amount and at an exercise price determined
as provided below:</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">&#9;(i)&#9;The number of shares of Acquiror Common Stock
subject to the new Acquiror Option shall be equal to the product of the number
of EPITAXX Shares subject to the Employee Option and the Exchange Ratio;
provided that any fractional shares of Acquiror Common Stock resulting from such
multiplication shall be rounded down to the nearest share; and</P>
<P ALIGN="JUSTIFY">&#9;(ii)&#9;The exercise price per share of Acquiror Common
Stock under the Acquiror Option shall be equal to the quotient obtained by
dividing the exercise price per EPITAXX Share subject to the Employee Option by
the Exchange Ratio, provided that such exercise price shall be rounded to the
nearest cent.  For this purpose, each EPITAXX Share issuable pursuant to an
Employee Option that is outstanding at the Effective Time will be deemed to be
outstanding immediately prior to the Effective Time.  From and after the
Effective Time, the Stock Option Plans (as defined below) shall be assumed by
Acquiror and shall continue in effect, provided that no further options shall be
granted under the Stock Option Plans.</P>
<P ALIGN="JUSTIFY">&#9;(iii)&#9;All shares of Acquiror Common Stock subject to
each New Acquiror Option shall be included in Acquiror's Registration Statement
on Form S-8 filed under the Securities Act of 1933, as amended (the
&quot;Securities Act&quot;), which Acquiror shall file with the Securities and
Exchange Commission no later than fifteen (15) days after the Effective Time, so
as to permit the immediate resale of any Acquiror Common Stock issued upon
exercise of a new Acquiror Option.</P></DIR>
</DIR>

<P ALIGN="JUSTIFY">SECTION 1.5&#9;<A NAME="_Toc425090164"><A
NAME="_Toc426971194"><A NAME="_Toc428173583"><A NAME="_Toc444482886"><A
NAME="_Toc461384567"><U>Surrender of Certificates</U>.<A
NAME="_Toc444482887"></A></A></A></A></A></P>
<P ALIGN="JUSTIFY">(a)&#9;<A NAME="_Toc461384568"><U>Acquiror to Provide Common
Stock and Cash</U>.  On the Closing Date, Acquiror shall make available for
exchange in accordance with this Article I, (i) the shares of Acquiror Common
Stock and cash issuable and payable, respectively, pursuant to Section 1.2(a) in
exchange for the EPITAXX Shares outstanding immediately prior to the Effective
Time, all of which EPITAXX Shares will be surrendered by the Stockholders at the
Closing, and (ii) cash in an amount sufficient to permit payment of cash in lieu
of fractional shares pursuant to Section 1.4(d).<A
NAME="_Toc444482888"></A></A></P>
<P ALIGN="JUSTIFY"></A>SECTION 1.6&#9;<A NAME="_Toc425090165"><A
NAME="_Toc426971195"><A NAME="_Toc428173584"><A NAME="_Toc461384575"><U>No
Further Ownership Rights in Shares</U>.</A></A></A>  All shares of Acquiror
Common Stock issued upon the surrender and exchange of EPITAXX Shares in
accordance with the terms hereof (including any cash paid in lieu of fractional
shares) and the cash portion of the Merger Consideration shall be deemed to have
been issued and paid in full satisfaction of all rights pertaining to such
EPITAXX Shares, and there shall be no further registration of transfers on the
records of the Surviving Corporation of EPITAXX  Shares which were outstanding
immediately prior to the Effective Time.  </A></P>
<P ALIGN="JUSTIFY">SECTION 1.7&#9;<A NAME="_Toc425090166"><A
NAME="_Toc426971196"><A NAME="_Toc428173585"><A NAME="_Toc461384576"><U>Lost,
Stolen or Destroyed Certificates</U>.</A></A></A>  In the event any Certificates
shall have been lost, stolen or destroyed, the Acquiror shall issue in exchange
for such lost, stolen or destroyed Certificates, upon the making of an affidavit
of that fact by the holder thereof, such shares of Acquiror Common Stock (and
cash in lieu of fractional shares) as may be required pursuant to Section 1.2;
provided, however, that Acquiror may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed Certificates to deliver a bond in such sum as it may reasonably direct
as indemnity against any claim that may be made against Acquiror, the Surviving
Corporation or the Exchange Agent with respect to the Certificates alleged to
have been lost, stolen or destroyed.</A></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">SECTION 1.8&#9;<A NAME="_Toc425090167"><A
NAME="_Toc426971197"><A NAME="_Toc428173586"><A NAME="_Toc461384577"><U>Tax And
Accounting Consequences</U>.</A></A></A>  It is intended by the parties hereto
that the Merger shall constitute a taxable transaction under the Code.  It is
intended by the parties that the Merger shall be accounted for under the
purchase method of accounting.   </P>
<P ALIGN="JUSTIFY">SECTION 1.9&#9;<A NAME="_Toc425090168"><A
NAME="_Toc426971198"><A NAME="_Toc428173587"><A
NAME="_Toc461384578"></A><U>Exemption from Registration</U>.</A></A></A>  The
shares of Acquiror Common Stock to be issued in connection with the Merger will
be issued in a transaction exempt from registration under the Securities Act by
reason of Section 4(2) thereof.  The shares of Acquiror Common Stock delivered
at the Closing will be &quot;restricted securities&quot; which have not been
registered under the Securities Act of 1933, as amended, and must be held until
they are either registered or an exemption from registration becomes available
for their resale.  The certificates representing such Acquiror Common Stock
shall, when issued, include such restrictive legends as reasonably required by
Acquiror evidencing the foregoing restrictions and any similar restrictions
required by applicable state law.</A>  Acquiror shall use reasonable efforts to
cause such Acquiror Common Stock to be registered under the Securities Act as
provided in Section 6.3.  </P>
<P ALIGN="JUSTIFY">SECTION 1.10&#9;<A NAME="_Toc461384579"><U>Effects of the
Merger</U>.  The Merger shall have the effects set forth in Sections 259, 260
and 261 of the DGCL .</A></P>
<P ALIGN="JUSTIFY">SECTION 1.11&#9;<A NAME="_Toc461384580"><U>Certificate of
Incorporation and By-laws</U>.  The Certificate of</A> <A
NAME="_Toc461384581">Incorporation and By-laws of the Company, in each case as
in effect immediately prior to the Effective Time, shall be the Certificate of
Incorporation and By-laws of the Surviving Corporation immediately after the
Effective Time.</A></P>
<P ALIGN="JUSTIFY">SECTION 1.12&#9;<A NAME="_Toc461384582"><U>Directors and
Officers</U>.  The directors and officers of Newco immediately prior to the
Effective Time shall be the directors and officers of the Surviving Corporation
immediately after the Effective Time.</A></P>
<P ALIGN="JUSTIFY">SECTION 1.13&#9;<A NAME="_Toc461384583"><U>Closing</U>.
Subject to the satisfaction or waiver of each of the conditions set forth in
Articles VII and VIII of this Agreement, the closing of the transactions
contemplated by this Agreement (the &quot;Closing&quot;) shall take place at the
offices of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., One Financial
Center, Boston, Massachusetts immediately prior to the Effective Time (the date
of the Closing, the &quot;Closing Date&quot;).</A></P>
<P ALIGN="JUSTIFY">At the Closing:</P>
<P ALIGN="JUSTIFY">(a)&#9;<A NAME="_Toc461384584">The Company and the
Stockholders shall deliver or cause to be delivered to Acquiror the
following:</A> </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">(i)&#9;Certificates for the EPITAXX Shares duly endorsed to
Acquiror, or accompanied by separate stock assignments with the signature of
each Stockholder duly guaranteed by a commercial bank or trust company or by a
member of the New York Stock Exchange;</P>
<P ALIGN="JUSTIFY">(ii)&#9;The certificates required by Sections 7.2, 7.3 and
7.5;</P>
<P ALIGN="JUSTIFY">(iii)&#9;The opinion of counsel required by Section 7.6; </P>
<P ALIGN="JUSTIFY">(iv)&#9;A copy of the resolutions of each of the Stockholders
and the Board of Directors of each of the Company and the Principal Stockholder,
certified by its Secretary, authorizing and approving the execution, delivery
and performance of this Agreement and the transactions contemplated hereby and
the acts of the officers and employees of the Company and the Principal
Stockholder in carrying out the terms and provisions hereof; and</P>
<P ALIGN="JUSTIFY">(v)&#9;All of the books, data, documents, instruments and
other records relating to the Company including without limitation the original
incorporation documents, foreign qualifications, by-laws, minute book, stock
record book, contracts and agreements referred to in Article II, licenses,
patent applications, trademark registrations and permits identified herein and
all laboratory notebooks and other notes and records relating to the Company's
intellectual property.</P>
<P ALIGN="JUSTIFY">(b)&#9;<A NAME="_Toc461384585">Acquiror shall deliver or
cause to be delivered to the Principal Stockholder and to the Representative (as
defined in Section 12.16) the following:</A></P>
<P ALIGN="JUSTIFY">(i)&#9;the Merger Consideration;</P>
<P ALIGN="JUSTIFY">(ii)&#9;The certificates required by Sections 8.1 and
8.2;</P>
<P ALIGN="JUSTIFY">(iii)&#9;The opinion of counsel required by Section 8.3;
and</P>
<P ALIGN="JUSTIFY">(iv)&#9;A copy of the resolutions of the Board of Directors
of each of Acquiror and Newco, certified by their respective Secretary,
authorizing and approving the execution, delivery and performance of this
Agreement and the transactions contemplated hereby and the acts of the officers
and employees of Acquiror and Newco in carrying out the terms and provisions
hereof.</P>
<P ALIGN="JUSTIFY">(c)&#9;<A NAME="_Toc461384586">The parties shall
deliver:</A></P>
<P ALIGN="JUSTIFY">(i)&#9;The Certificate of Merger and the Non-Competition and
Confidentiality Agreements referred to in Section 5.13 hereof; and</P>
<P ALIGN="JUSTIFY">(ii)&#9;Such further documents, resolutions, certificates and
instruments as any party or his, her or its counsel reasonably requests to
facilitate the consummation of the transactions contemplated hereby.</P>
<P ALIGN="JUSTIFY">SECTION 1.14&#9;<A NAME="_Toc461384587"><U>Further
Assurances</U>.  At any time and from time to time after the Closing Date, at
the request of Acquiror and without further consideration, each Stockholder will
execute and deliver such other instruments of sale, transfer, conveyance,
assignment and confirmation as may be reasonably requested in order to more
effectively transfer, convey and assign to Acquiror and to confirm Acquiror's
title to the EPITAXX Shares.</A></P>
<U><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER">ARTICLE II<A
NAME="_Toc461384588"></A></U><B><BR>
<BR>
<A NAME="_Toc461384589"><A NAME="_Toc444482894"><U>REPRESENTATIONS AND
WARRANTIES OF<A NAME="_Toc444482895"><A NAME="_Toc461384590"></A></A></U><BR>
<U>THE PRINCIPAL STOCKHOLDER</A> AND EPITAXX</A></P>
</B></U></FONT><P ALIGN="JUSTIFY"><A NAME="_Toc461384591"><A
NAME="_Toc444482896">In this Agreement, any reference to any event, change,
condition or effect being &quot;material&quot; with respect to any entity means
any material event, change, condition or effect related to the condition
(financial or otherwise), properties, assets (including intangible assets),
liabilities, business, operations or results of operations of such entity and
its subsidiaries, taken as a whole.  In this Agreement, any reference to a
&quot;Material Adverse Effect&quot; with respect to any entity means any event,
change or effect that is materially adverse to the condition (financial or
otherwise), properties, assets, liabilities, business, operations or results of
operations of such entity and its subsidiaries, taken as a whole.  In this
Agreement, any reference to &quot;Material Adverse Change&quot; with respect to
any entity means any</A> <A NAME="_Toc461384592">change which is, individually
or in the aggregate, materially adverse to the business, operations, properties,
assets, liabilities or condition (financial or otherwise) of such entity and its
subsidiaries, taken as a whole.</A>  Whenever the term &quot;to the Company's
knowledge&quot; or similar expression appears in any representation or warranty
in this Article&nbsp;II, it means to the actual knowledge of the officers and
directors of the Company and all management employees of the Company having
responsibility for the area of operations of the Company's business or the
financial or legal matters as to which the issue of knowledge relates under this
Agreement (all such persons, &quot;Knowledge Parties&quot;).  Whenever the term
&quot;the Company has received no notice&quot; or like expression appears in any
representation or warranty in this Article&nbsp;II, it means that none of the
Knowledge Parties has received actual oral or written notice of the matter to
which such term is applied.</P>
<P ALIGN="JUSTIFY"><A NAME="_Toc461384593">As an inducement to Acquiror to enter
into this Agreement and to consummate the transactions contemplated hereby, the
Principal Stockholder hereby represents and warrants to Acquiror
that:</A></A></P>
<P ALIGN="JUSTIFY">SECTION 2.1&#9;<A NAME="_Toc444482897"><A
NAME="_Toc461384594"><U>Title to EPITAXX Shares</U>.  The Principal Stockholder
owns such EPITAXX Shares beneficially and of record set forth opposite its name,
free and clear of all liens, encumbrances, claims, charges, security interests,
pledges, restrictions or rights in others (collectively, &quot;Liens&quot;), in
the manner specified on <U>Schedule 1.2(b)</U>.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 2.2&#9;<A NAME="_Toc444482898"><A
NAME="_Toc461384595"><U>Principal Stockholder's Authority to Execute and Perform
Agreement</U>. The Principal Stockholder has the full legal right and power and
all authority and approval required by law and its organizational documents to
enter into this Agreement and to perform its obligations hereunder.  The
Principal Stockholder has duly executed and delivered this Agreement, and this
Agreement is the legal, valid and binding obligation of the Principal
Stockholder enforceable in accordance with its terms.  On the Closing Date,
neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the performance of this Agreement in
compliance with its terms and conditions by the Principal Stockholder will
(a)&nbsp;conflict with or result in any material violation of any trust
agreement, certificate of incorporation, By-law, judgment, decree, order,
statute or regulation applicable to the Principal Stockholder or to the EPITAXX
Shares owned by the Principal Stockholder, or any material breach of any
agreement to which the Principal Stockholder is a party or by which the
Principal Stockholder or its EPITAXX Shares are bound, or constitute a material
default thereunder, or result in the creation of any claim of any kind or nature
on, or with respect to its EPITAXX Shares, or (b)&nbsp;result in any material
violation of, or be in conflict with, or constitute a material default under,
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to the Principal Stockholder.</A></A></P>
<P ALIGN="JUSTIFY"><A NAME="_Toc461384596">The Company and the Principal
Stockholder, jointly and severally, represent and warrant to the Acquiror as
follows:  </A></P>
<P ALIGN="JUSTIFY">SECTION 2.3&#9;<A NAME="_Toc461384597"><A
NAME="_Toc444482899"><U>Capitalization</U>.  The authorized, issued and
outstanding capital stock of EPITAXX consists on the date hereof, and will on
the Closing Date consist solely of, 12,500,000 authorized shares of Class A
Common Stock, of which 25,200 shares are issued and outstanding and owned by the
Stockholders, free and clear of all Liens, as set forth on
<U>Schedule&nbsp;2.3</U> delivered by the Company to the Acquiror concurrently
with the execution of this Agreement; 7,500,000 authorized shares of Class B
Common Stock, of which 5,088,000 shares are issued and outstanding and owned by
the Principal Stockholder, free and clear of all Liens, as set forth on
<U>Schedule 2.3</U>; and 5,000,000 authorized shares of Preferred Stock, of
which no shares are issued and outstanding, in each case with no personal
liability attaching to the ownership thereof.  All of such shares are duly
authorized,</A> <A NAME="_Toc461384598">validly issued, fully paid and non-
assessable and were issued in full compliance with all federal, state and local
rules, laws and regulations.  The designations, powers, preferences, rights,
qualifications, limitations and restrictions in respect of each class and series
of authorized capital stock of EPITAXX are as set forth in EPITAXX's Certificate
of Incorporation, as amended, a true, correct and complete copy of which has
been provided to Acquiror, and all such designations, powers, preferences,
rights, qualifications, limitations and restrictions are valid, binding and
enforceable in accordance with all applicable laws.  There are, and at the
Closing Date there will be, no shares held in the corporate treasury of EPITAXX
and no shares reserved for issuance.  Except as set forth on <U>Schedule
2.3</U>, as of the date hereof there are, and as of the Closing Date there will
be, no outstanding subscriptions, options, warrants, rights, calls or
convertible securities, stock appreciation rights (phantom or otherwise), joint
venture, partnership or other commitments of any nature relating to shares of
the capital stock of the Company.  As of the date hereof there is, and as of the
Closing Date the Company will have, no obligation (contingent or other) to
purchase, redeem or otherwise acquire any of its equity securities or any
interest therein or to pay any dividend or make any other distribution in
respect thereof.</A></A>  All stock option plans maintained by the Company
relating to options to purchase shares of the Company's capital stock, true,
complete and correct copies of which have been previously delivered to Acquiror,
are herein sometimes referred to as the &quot;Stock Option Plans.&quot;  All
options to purchase shares of the capital stock of the Company issued pursuant
to the Stock Option Plans, or otherwise, and listed on <U>Schedule 2.3</U> are
herein sometimes referred to as &quot;Employee Options.&quot;  As of the
Effective Time, other than the Employee Options, the Company will have no
outstanding options, warrants or other rights to purchase any shares of the
Company's capital stock or any securities convertible into or exchangeable for
such capital stock.</P>
<P ALIGN="JUSTIFY">SECTION 2.4&#9;<A NAME="_Toc444482900"><A
NAME="_Toc461384599"><U>Organization and Qualification</U>.  The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and is duly licensed or qualified to transact business
as a foreign corporation in each jurisdiction listed on <U>Schedule&nbsp;2.4</U>
delivered by the Company to the Acquiror concurrently with the execution of this
Agreement, such jurisdictions being the only jurisdictions in which the nature
of the Company's business or the character of the properties owned or leased by
the Company requires such licensing or qualification and where the failure to be
so licensed or qualified would have a Material Adverse Effect on the
Company.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 2.5&#9;<A NAME="_Toc444482901"><A
NAME="_Toc461384600"><U>Subsidiaries</U>.  </A>The Company has no subsidiaries
other than a foreign sales corporation, EPITAXX FSC, Inc., a U.S. Virgin Island
corporation (the `Subsidiary&quot;), which is not a material subsidiary.  The
Company holds beneficially and of record all of the outstanding capital stock of
the Subsidiary.  Except for the Subsidiary, the Company holds no equity or other
interest in any corporation, partnership, limited liability company, trust or
other entity.  Except as set forth on <U>Schedule 2.5</U> delivered by the
Company to the Acquiror concurrently with the execution of this Agreement, the
Company has not (i) made any investment in or advance of cash to any entity or
(ii) entered into any joint venture arrangement or agreement with any party.
</A> The Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the United States Virgin Islands, and is and is
duly licensed or qualified to transact business as a foreign corporation in each
jurisdiction where the failure to be so licensed or qualified would have a
Material Adverse Effect on the Company.</P>
<P ALIGN="JUSTIFY">SECTION 2.6&#9;<A NAME="_Toc461384601"><A
NAME="_Toc444482902"><U>Corporate Power and Authority</U>.  The Company has the
corporate power and authority to own and hold its properties and to carry on its
business as presently conducted and contemplated to be conducted.  The Company
has the corporate power and authority to execute, deliver and perform this
Agreement and the other documents and instruments contemplated hereby.  The
execution, delivery and performance of this Agreement and the documents
contemplated hereby and the consummation of the transactions contemplated hereby
and thereby have been duly authorized and approved by the board of directors and
stockholders of the Company, and no further corporate or stockholder action
is</A> <A NAME="_Toc461384602">required thereby to consummate the transactions
contemplated hereby.  Upon the filing of the Merger Certificate with the
Secretary of State for the State of Delaware, the Merger shall be immediately
and automatically effective without further action by any person or entity.
This Agreement, and each of the other agreements, documents</A> <A
NAME="_Toc444482903">and instruments to be executed and delivered by the Company
pursuant hereto have been duly executed and delivered by, and constitute the
legal, valid and binding obligation of, the Company and are enforceable against
the Company in accordance with their terms.</A></A>  </P>
<P ALIGN="JUSTIFY">SECTION 2.7&#9;<A NAME="_Toc444482904"><A
NAME="_Toc461384603"><U>Validity, Etc.</U>  Except as set forth on <U>Schedule
2.7</U> delivered by the Company to the Acquiror concurrently with the execution
of this Agreement, neither the execution and delivery of this Agreement and the
other documents and instruments contemplated hereby, the consummation of the
transactions contemplated hereby or thereby, nor the performance of this
Agreement and such other agreements in compliance with the material terms and
conditions hereof and thereof will (i)&nbsp;violate, conflict with or result in
any material breach of any trust agreement, Certificate of Incorporation, or
bylaw, applicable to the Company, (ii)&nbsp;require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, other than any notification and approval required under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the &quot;HSR
Act&quot;), (iii)&nbsp;violate, conflict with or result in a material breach of,
default under, amendment of, or acceleration or termination of any indebtedness,
mortgage, indenture, note, license, agreement or other instrument or obligation
related to the Company or any of its assets or the consummation of the
transactions contemplated hereby or thereby, except for such defaults (or rights
of termination, cancellation or acceleration) as to which requisite valid and
binding waivers or consents have been obtained in writing and provided to
Acquiror, (iv)&nbsp;violate any order, writ, injunction, decree, statute, law,
permit, license rule or regulation applicable to the Company  or (v)&nbsp;result
in the creation of any claim upon the EPITAXX Shares or any assets of the
Company.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 2.8&#9;<A NAME="_Toc461384604"><A
NAME="_Toc444482905"><U>Financial Statements</U>.  The Company has previously
furnished to Acquiror, the balance sheet of the Company at August 31, 1999 (the
&quot;Balance Sheet&quot;) and at March 31, 1998 and March 31, 1999 and the
related statements of income and cash flow and notes thereto for the fiscal
years ended March 31, 1998 and March 31, 1999 and for the five-month period
ended August 31, 1999 .  All such financial statements (the &quot;Financial
Statements&quot;) have been prepared in accordance with generally accepted
accounting principles (&quot;GAAP&quot;) consistently applied in accordance with
the Company's past practices (with the exception of the lack of notes thereto
for the interim Financial Statements) and were prepared from the books and
records of the Company, which books and records are complete and correct in all
material respects and accurately reflect in all material respects all
transactions of the Company's business.  The Financial Statements fairly present
the financial position of the Company as of the dates thereof, and the results
of its operations and cash flows for the periods ended on the dates thereof,
subject to normal year-end audit adjustments.  The reserves set forth in the
Financial Statements are appropriate and adequate for the purposes for which
they were established.</A>  </A><U>Schedule 2.8 </U>delivered by the Company to
the Acquiror concurrently with the execution of this Agreement sets forth all
assets which the Company believes could become impaired.</P>
<P ALIGN="JUSTIFY">SECTION 2.9&#9;<A NAME="_Toc461384605"><U>No Undisclosed
Liabilities</U>.  The Company has no liabilities or obligations of any nature
except (a) liabilities which are fully reflected or reserved against in the
Balance Sheet, (b)&nbsp;liabilities incurred in the ordinary course of business
operations since the date of the Balance Sheet, and (c)&nbsp;liabilities</A> <A
NAME="_Toc461384606">or obligations occurring prior to the date of the Balance
Sheet which, pursuant to GAAP consistently applied in accordance with past
practices of the Company are not required to be set forth in the Balance
Sheet.</A></P>
<P ALIGN="JUSTIFY">SECTION 2.10&#9;<A NAME="_Toc444482906"><A
NAME="_Toc461384607"><U>Absence of Certain Changes</U>.  </A>Since the date of
the Balance Sheet, the Company has conducted its business only in the ordinary
course consistent with past practices and there has not occurred:  (i) any
change, event or condition (whether or not covered by insurance) that has
resulted in, or might reasonably be expected to result in, a Material Adverse
Effect to the Company; (ii) any acquisition, sale or transfer of any asset of
the Company, other than sales of inventory in the ordinary course of business;
(iii) any change in accounting methods or practices (including any change in
depreciation or amortization policies or rates) by the Company or any
revaluation by the Company of any of its assets; (iv) any Material Contract (as
hereinafter defined) entered into by the Company, or any termination or
amendment of, any Material Contract; (v) any amendment to the Company's
Certificate of Incorporation or Bylaws; (vi) any increase in or modification of
the compensation or benefits payable or to become payable by the Company to any
of its officers, directors or employees other than in the ordinary course of
business consistent with past practices; or (vii)&nbsp;any issuance, sale or
pledge of (A) additional shares of the Company's capital stock of any class
(including the Company Shares), or securities convertible into any such shares,
or any rights, warrants or options to acquire any such shares or other
convertible securities, or grant or accelerate any right to convert or exchange
any securities of the Company for shares of capital stock of the Company, or
(B)&nbsp;any other securities in respect of, in lieu of or in substitution for
shares outstanding on the date thereof; (vii)&nbsp;any redemption, purchase or
other acquisition of, any of the Company's outstanding securities (including the
EPITAXX Shares); (viii)&nbsp;any declaration, set aside, or payment of any
dividend or distribution (whether in cash, stock or property) on or in respect
of any share of capital stock of the Company; (ix)&nbsp;any incurrance of any
long-term debt for borrowed money or any short-term debt for borrowed money
other than in the ordinary course of business consistent with past practice and
not in excess of $50,000; (x)&nbsp;any capital expenditures or commitments
thereto in excess of $100,000, individually or in the aggregate; (xi)&nbsp;any
entering into of any new employment agreements with any officers, directors or
employees; (xii)&nbsp;any loan or advance to any of the Company's officers,
directors, consultants, agents or employees or to any member of their families
or any other loan or advance otherwise than in the ordinary course of business;
(xiii)&nbsp;any charitable contributions or any non-business expense; (xiv)
mortgaging, pledging or encumbering any of its assets; (xv) any commencing,
settling or compromising of any litigation; (xvi)&nbsp;any hiring or termination
of employees, other than in the ordinary course of business consistent with past
practices; (xvii)&nbsp;any agreement in writing or orally to take any of the
foregoing actions; or (xviii) any negotiation by the Company to do any of the
things described in the preceding clauses (i) through (xvii) (other than
negotiations with Acquiror and its representatives regarding the transactions
contemplated by this Agreement).</A></P>
<P ALIGN="JUSTIFY">SECTION 2.11&#9;<A NAME="_Toc461384608"><A
NAME="_Toc444482933"><U>Inventories; Products</U>.  All of the Company's
inventory reflected on the Balance Sheet or thereafter acquired (and not
subsequently sold in the ordinary course of business) consist of items of a
quality and quantity</A> <A NAME="_Toc461384609">useable or saleable in the
ordinary course of the Company's business.  Each item of such inventory is
valued on the Balance Sheet at the lower of cost or market, by the first-in
first-out method, in accordance with GAAP.  The Company's  inventories and
supplies are on the date hereof, and will be on the Closing Date, at normal and
adequate levels for the continuation of such business in the ordinary course of
business consistent with past practice.</A></A>  There is, to the knowledge of
the Company, no design defect materially adverse to the functionality of any  of
the Company's products which have been shipped to customers (other than products
shipped for testing purposes) and, to the knowledge of the Company, each of such
products contains adequate warnings, presented in a reasonably prominent manner,
in accordance with applicable laws, rules and regulations and current industry
practice with respect to its contents and use.</P>
<P ALIGN="JUSTIFY">SECTION 2.12&#9;<A NAME="_Toc444482934"><A
NAME="_Toc461384610"><U>Accounts Receivables</U>.  </A>Subject to any reserves
set forth in the Balance Sheet, the accounts receivable set forth on the Balance
Sheet represent bona fide claims against debtors for sales and other charges,
are collectible in the ordinary course of business consistent with past
practices and are not subject to discount except for normal cash and immaterial
trade discounts.  The amount reserved for doubtful accounts and allowances
disclosed in the Balance Sheet is sufficient to provide for any losses which may
be sustained on realization of the receivables.</A></P>
<P ALIGN="JUSTIFY">SECTION 2.13&#9;<U>Taxes</U>.  </P>
<P ALIGN="JUSTIFY">(a)&#9;<A NAME="_Toc444482942"><A
NAME="_Toc461384612"><U>Definitions</U>.  For purposes of this Agreement:</P>
<P ALIGN="JUSTIFY">(i)&#9;The term &quot;Group&quot; shall mean, individually
and collectively, (1)&nbsp;the Company, (2) the Principal Stockholder, and (3)
any individual, trust, corporation, partnership or any other entity as to which
the Company is liable for Taxes incurred by such individual or entity either as
transferee, pursuant to Treasury Regulations Section 1.1502-6, or pursuant to
any other provision of federal, territorial, state, local or foreign law or
regulations.</P>
<P ALIGN="JUSTIFY">(ii)&#9;The term &quot;Taxes&quot; shall mean all taxes,
however denominated, including any interest, penalties or other additions to tax
that may become payable in respect thereof, imposed by any federal, territorial,
state, local or foreign government or any agency or subdivision of any such
government, which taxes shall include, without limiting the generality of the
foregoing, all income or profits taxes (including, but not limited to, federal
income taxes and state income taxes), payroll and employee withholding taxes,
unemployment insurance, social security taxes, sales and use taxes, ad valorem
taxes, excise taxes, franchise taxes, gross receipts taxes, business license
taxes, occupation taxes, real and personal property taxes, stamp taxes,
environmental taxes, transfer taxes, workers' compensation, Pension Benefit
Guaranty Corporation premiums and other governmental charges, and other
obligations of the same or of a similar nature to any of the foregoing, which
the Group is required to pay, withhold or collect. </P>
<P ALIGN="JUSTIFY">(iii)&#9;The term &quot;Returns&quot; shall mean all reports,
estimates, declarations of estimated tax, information statements and returns
relating to, or required to be filed in connection with, any Taxes, including
information returns or reports with respect to backup withholding and other
payments to third parties.</P>
<P ALIGN="JUSTIFY">(b)&#9;<U>Returns Filed and Taxes Paid</U>.  Except as
disclosed in Schedule 2.13 delivered by the Company to the Acquiror concurrently
with the execution of this Agreement:  All Returns required to be filed by or on
behalf of members of the Group have been duly filed on a timely basis and such
Returns are true, complete and correct.  All Taxes shown to be payable on the
Returns or on subsequent assessments with respect thereto have been paid in full
on a timely basis, and no other Taxes are payable by the Group with respect to
items or periods covered by such Returns (whether or not shown on or reportable
on such Returns) or with respect to any period prior to the date of this
Agreement or an adequate reserve established therefor.  Each member of the Group
has withheld and paid over all Taxes required to have been withheld and paid
over, and complied with all information reporting and backup withholding
requirements, including maintenance of required records with respect thereto, in
connection with amounts paid or owing to any employee, creditor, independent
contractor, or other third party. </P>
<P ALIGN="JUSTIFY">(c)&#9;<U>Pre-Closing Date Tax Liabilities Paid</U>.  Except
as disclosed in <U>Schedule 2.13</U> delivered by the Company to the Acquiror
concurrently with the execution of this Agreement, the Acquiror has paid or will
pay any and all taxes which are imposed on the Company in respect of its income,
business, property or operations or for which the Company may otherwise be
liable (i) for any taxable period ending prior to the Closing Date, (ii) for the
portion of a Straddle Period (as hereinafter defined) ending on the Closing
Date, (iii) resulting by reason of the several liability of the Company pursuant
to Treasury Regulations section 1.1502-6 or any analogous state, local or
foreign law or regulation or by reason of the Company having been a member of
any consolidated, combined or unitary group on or prior to the Closing Date,
(iv) resulting from the Company ceasing to be a member of the affiliated group
(within the meaning of Section 1504(a) of the Code) that includes Principal
Stockholder, (v) in respect of any post-Closing Date period, attributable to
events, transactions, sales, deposits, services or rentals occurring, received
or performed in a pre-Closing Date period, (vi) in respect of any post-Closing
Date period, attributable to any change in accounting method employed by the
Company during any of its four previous taxable years, (vii) in respect of any
post-Closing Date period, attributable to any items of income or gain of a
partnership reporting the Company as a partner, to the extent such items are
properly attributable to periods of the partnership ending on or before the
Closing Date, (viii) attributable to any discharge of indebtedness that may
result from any capital contributions by Principal Stockholder (or an affiliate
of Principal Stockholder) to the Company of any intercompany indebtedness owed
by the Company to Principal Stockholder (or an affiliate of Principal
Stockholder), and (ix) resulting from the making of the Code Section 338
election (or analogous provision of state, local or territorial law); provided,
however, that Principal Stockholder's liability under the foregoing provisions
of this paragraph shall be reduced as to any item to the extent that such item
was specifically and fully reserved for in the Closing Balance Sheet.  For
purposes of this Agreement, &quot;Straddle Period&quot; means a taxable period
which includes, but does not begin or end on, the Closing Date.</P>
<P ALIGN="JUSTIFY">(d)&#9;<U>Tax Reserves</U>.  Except as disclosed in
<U>Schedule 2.13</U> delivered by the Company to the Acquiror concurrently with
the execution of this Agreement, the amount of the Company's liability for
unpaid Taxes for all periods ending on or before the date of this Agreement does
not, in the aggregate, exceed the amount of the current liability accruals for
Taxes (excluding reserves for deferred Taxes) solely with respect to the
Company, as such accruals are reflected on the Balance Sheet, and the amount of
the Company's liability for unpaid Taxes for all periods ending on or before the
Closing Date shall not, in the aggregate, exceed the amount of the current
liability accruals for Taxes (excluding reserves for deferred Taxes), as such
accruals are reflected on the Balance Sheet, as adjusted for operations and
transactions in the ordinary course of business since the Balance Sheet date<B>
</B>in accordance with past custom and practice.    </P>
<P ALIGN="JUSTIFY">(e)&#9;<U>Returns Furnished</U>.  Acquiror has been furnished
by Principal Stockholder or the Company true and complete copies of
(i)&nbsp;relevant portions of income tax audit reports, statements of
deficiencies, closing or other agreements received by the Group or on behalf of
the Group relating to Taxes, and (ii)&nbsp;all federal and state income or
franchise tax returns of the Company (or including the Company) for all periods
ending on and after 1995.   Except as disclosed in <U>Schedule 2.13</U>
delivered by the Company to the Acquiror concurrently with the execution of this
Agreement, the Company is not obligated to file Returns in any jurisdiction
other than those jurisdictions for which Returns have been furnished to
Acquiror.</P>
<P ALIGN="JUSTIFY">(f)&#9;<U>Tax Deficiencies; Audits; Statutes of
Limitations</U>.  Except as disclosed in <U>Schedule 2.13</U> delivered by the
Company to the Acquiror concurrently with the execution of this Agreement:  The
returns of the Group have never been audited by a government or taxing
authority, nor is any such audit in process, pending or threatened (either in
writing or verbally, formally or informally).  No deficiencies exist or have
been asserted (either in writing or verbally, formally or informally) or are
expected to be asserted with respect to taxes of the Group, and no member of the
Group has received notice (either in writing or verbally, formally or
informally) or expects to receive notice that it has not filed a return or paid
taxes required to be filed or paid by it.  The Group is neither a party to any
action or proceeding for assessment or collection of taxes, nor has such event
been asserted or threatened (either in writing or verbally, formally or
informally) against the Group or any of its assets.  No waiver or extension of
any statute of limitations is in effect with respect to taxes or returns of the
Group.     </P>
<P ALIGN="JUSTIFY">(g)&#9;<U>Tax Sharing Agreements</U>.  Except as disclosed in
<U>Schedule 2.13</U> delivered by the Company to the Acquiror concurrently with
the execution of this Agreement, the Company is not liable for the taxes of any
person pursuant to any tax allocation or tax sharing agreement or pursuant to
any other contract.  The Principal Stockholder and the Company shall, as of the
Closing Date, terminate all tax allocation agreements or tax sharing agreements
with respect to the Company, shall cause any payments required thereunder to be
made, and shall ensure that such agreements are of no further force or effect as
to the Company on and after the Closing Date and there shall be no further
liability of the Company under any such agreement.  </P>
<P ALIGN="JUSTIFY">(h)&#9;<U>Tax Elections and Special Tax Status.</U>   Except
as disclosed in <U>Schedule 2.13</U> delivered by the Company to the Acquiror
concurrently with the execution of this Agreement: (A) the Company has not
entered into any compensatory agreements with respect to the performance of
services which payment thereunder would result in a nondeductible expense to the
Group pursuant to Sections 162(m) or 280G of the Code or an excise tax to the
recipient of such payment pursuant to Section&nbsp;4999 of the Code; (B) neither
the Company nor its Subsidiary has participated in an international boycott as
defined in Code Section&nbsp;999; (C)  The Company has not agreed, nor is it
required to make, any adjustment under Code Section&nbsp;481(a) by reason of a
change in accounting method or otherwise; (D) neither the Company nor its
Subsidiary has a permanent establishment in any foreign country, as defined in
any applicable Tax treaty or convention between the United States of America and
such foreign country; (E) neither the Company nor its Subsidiary is a party to
any joint venture, partnership or other agreement, contract or arrangement
(either in writing or verbally, formally or informally) which could be treated
as a partnership for federal income tax purposes; (F) the Company and its
Subsidiary are in compliance with the terms and conditions of any applicable Tax
exemptions, Tax agreements or Tax orders of any government to which it may be
subject or which it may have claimed, and the transactions contemplated by this
Agreement will not have any material effect on such compliance; and (F) the
Subsidiary is, and since its inception has been, an &quot;FSC&quot; within the
meaning of Section 922 of the Code.  </P>
<P ALIGN="JUSTIFY">(i)&#9;<U>Tax Attributes.</U>   Except as disclosed in
<U>Schedule 2.13</U> delivered by the Company to the Acquiror concurrently with
the execution of this Agreement:  (A) no portion of any consolidated loss
carryover or consolidated credit carryover of the Group is allocable to the
Company; or (B) the Company has no net operating losses or other tax attributes
presently subject to limitation under Code Sections 382, 383, or 384, or the
federal consolidated return regulations.    </P>
<P ALIGN="JUSTIFY">(j)&#9;<U>Section 6038A Compliance</U>.  Except as disclosed
in <U>Schedule 2.13 </U>delivered by the Company to the Acquiror concurrently
with the execution of this Agreement: (A) the Company has filed all reports and
has created and/or retained all records required under Section&nbsp;6038A of the
Code with respect to its ownership by and transactions with related parties; (B)
each related foreign person required to maintain records under Section 6038A
with respect to transactions between the Company and the related foreign person
has maintained such records; (C)  all documents that are required to be created
and/or preserved by the related foreign person with respect to transactions with
the Company are either maintained in the United States, or the Company is exempt
from the record maintenance requirements of Section 6038A with respect to such
transactions under Treasury Regulation section 1.6038A-1; (D) the Company is not
a party to any record maintenance agreement with the Internal Revenue Service
with respect to Section 6038A; and (E) each related foreign person that has
engaged in transactions with the Company has authorized the Company to act as
its limited agent solely for purposes of Sections 7602, 7603, and 7604 of the
Code with respect to any request by the Internal Revenue Service to examine
records or produce testimony related to any transaction with the Company, and
each such authorization remains in full force and effect.    </P>
<P ALIGN="JUSTIFY">(k)&#9;<U>Section 338 Election.</U>  The Principal
Stockholder has the authority under the Code (and under similar provisions of
state law) to consent to an election under Code Section&nbsp;338(h)(10) and
similar state elections with respect to any transaction constituting a
&quot;qualified stock purchase&quot; of the Company.</P>
<P ALIGN="JUSTIFY">SECTION 2.14&#9;<U>Litigation</U>.  Except as set forth on
<U>Schedule 2.14</U> delivered by the Company to the Acquiror concurrently with
the execution of this Agreement, there is no private or governmental action,
suit, proceeding, claim, arbitration or investigation pending before any agency,
court or tribunal, foreign or domestic, or to the knowledge of the Company,
threatened against the Company or any of its properties or any of its officers
or directors (in their capacity as such).  There is no judgment, decree or order
against the Company, or, to the knowledge of the Company, any of its directors
or officers (in their capacities as such), that could prevent, enjoin, alter or
materially delay any of the transactions contemplated by this Agreement, or that
could reasonably be expected to have a Material Adverse Effect on the Company.
<U>Schedule 2.14</U> also lists all litigation that the Company has pending
against other parties.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 2.15&#9;<A NAME="_Toc461384613"><A
NAME="_Toc444482943"><U>Certain Practices</U>.  Neither the Company nor any of
its directors, officers or employees has, directly or indirectly, given or
agreed to give any significant rebate, gift or similar benefit to any supplier,
customer, governmental employee or other person who was, is or may be in a
position to help or hinder the Company (or assist in connection with any actual
or proposed transaction) which</A> <A NAME="_Toc461384614">(i)&nbsp;could
subject the Company or Acquiror to any damage or penalty in any civil, criminal
or governmental litigation or proceeding, or (ii)&nbsp;if not continued in the
future, could reasonably be expected to have a Material Adverse Effect on the
Company.</A></A> </P>
<P ALIGN="JUSTIFY">SECTION 2.16&#9;<A NAME="_Toc444482944"><A
NAME="_Toc461384615"><U>Compliance with Law</U>.  The Company is not subject to
any judgment, order, writ, injunction, or decree that materially adversely
affects, individually or in the aggregate, its businesses, operations,
properties, assets or condition (financial or otherwise).  The Company has
complied with and is not in default under, all laws, ordinances, legal
requirements, rules, regulations and orders applicable to it, its operations,
properties, assets, products and services except where the lack of compliance
could not have a Material Adverse Effect on the Company.  There is no existing
law, rule, regulation or order, and the Company is not aware of any proposed
law, rule, regulation or order, whether federal or state, which would prohibit
or materially restrict the Company or Acquiror from, or otherwise have a
Material Adverse Effect on the Company or Acquiror in, conducting the Company's
business in any jurisdiction in which such business is now conducted or proposed
to be conducted.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 2.17&#9;<A NAME="_Toc444482945"><A
NAME="_Toc461384616"><U>Licenses, Permits and Regulatory Approvals</U>.  The
Company has obtained each federal, state, county, local or foreign governmental
consent, license, permit, grant or other authorization (i) pursuant to which the
Company currently operates or holds any interest in any of its properties or
(ii) that is required for the operation of its business or the holding of any
such interest (the forgoing collectively called the &quot;Governmental
Authorizations&quot;), and all of such Governmental Authorizations are in full
force and effect, except where the failure to obtain or have any such
Governmental Authorizations could not reasonably be expected to have a Material
Adverse Effect on the Company</A>.</A></P>
<P ALIGN="JUSTIFY">SECTION 2.18&#9;<A NAME="_Toc444482946"><A
NAME="_Toc461384617"><U>Labor and Employee Relations</U>.  The Company is not a
party to or bound by any collective bargaining agreement with any labor
organization, group or association covering any of its employees, and the
Company has no knowledge of any attempt to organize any of its employees by any
person, unit or group seeking to act as their bargaining agent.  There are no
pending or threatened charges (by employees, their representatives or
governmental authorities) of unfair labor practices or of employment
discrimination or of any other wrongful action with respect to any aspect of
employment of any person employed or formerly employed by the Company.  No union
representation elections relating to employees of the Company have been
scheduled by any governmental agency or authority, no organizational effort is
being made with respect to any of such employees, and there is no investigation
of the Company's employment policies or practices by any governmental agency or
authority pending or threatened.  The Company is not currently, and has not
within the last three years been, involved in labor negotiations with any unit
or group seeking to become the bargaining unit for any of its employees.  The
Company has not experienced any work stoppages during the last three years, and
no work stoppage is planned.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 2.19&#9;<A NAME="_Toc461384618"><A
NAME="_Toc444482947"><U>Certain Employees</U>.  <U>Schedule 2.19</U> delivered
by the Company to the Acquiror concurrently with the execution of this Agreement
sets forth a list of all of the Company's current employees and consultants,
together with the title or job classification of each such person and the base
annual</A> <A NAME="_Toc461384619">and the total compensation of such person as
of September 22, 1999. The increases, if any, in the base annual and the total
compensation to be paid to such person in fiscal year 2000 shall be consistently
given in the ordinary course of business, in accordance with past practices.
Except as specifically described on <U>Schedule&nbsp;2.19</U>, none of such
persons has an employment agreement or understanding, whether oral or written,
with the Company which is not terminable on notice by the Company without cost
or other liability to the Company.  No person listed on <U>Schedule 2.19</U>
with an annual salary of at least $75,000 has indicated that he or she intends
to terminate his or her employment with the Company or seek a material change in
his or her duties or status.</A>  All employees and consultants of the Company
have executed and delivered to the Company nondisclosure and proprietary
inventions agreements, in the forms previously provided to the Acquiror by the
Company, all of which agreements are, and after the Effective Time will be, in
full force and effect, binding upon and enforceable against the parties
thereto.</A></P>
<P ALIGN="JUSTIFY">SECTION 2.20&#9;<U>Employee Benefits</U>.</P>
<P ALIGN="JUSTIFY">(a)&#9;<U>Schedule 2.20</U> delivered by the Company to the
Acquiror concurrently with the execution of this Agreement lists (i) all
&quot;employee benefit plans&quot; within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended (&quot;ERISA&quot;),
(ii) all employment agreements, including, but not limited to, any individual
benefit arrangement, policy or practice with respect to any current or former
employee or director of the Company, and (iii) all other employee benefit, bonus
or other incentive compensation, stock option, stock purchase, stock
appreciation, severance pay, lay-off or reduction in force, change in control,
sick pay, vacation pay, salary continuation, retainer, leave of absence,
educational assistance, service award, employee discount, fringe benefit plans,
arrangements, policies or practices, whether legally binding or not, to which
the Company maintains, contributes to or has any obligation to or liability for
(collectively, the &quot;Plans&quot;).   Each Plan provides that it may be
amended or terminated at any time and, except for benefits protected under
Section 411(d) of the Code, all benefits payable to current or terminated
employees or any beneficiary may be amended or terminated by Seller at any time
without liability.  </P>
<P ALIGN="JUSTIFY">(b)&#9;None of the Plans for any &quot;employment benefit
plan&quot;, as that term is used in Section 2.20(a), or any trade or business,
whether or not incorporated, which would be treated as a single employer under
Section 4001 of ERISA or Sections 414(b), (c), (m) or (o) of the Internal
Revenue Code of 1986, as amended (the &quot;Code&quot;) (&quot;Member of the
Controlled Group&quot;) is (i) a plan described in Section 3(35) of ERISA or a
plan subject to the minimum funding standards set forth in Section 302 of ERISA
and Section 412 of the Code (&quot;Defined Benefit Plan&quot;) or (ii) a plan
described in Section 3(37) of ERISA (&quot;Multiemployer Plan&quot;) and neither
the Company nor any Member of the Controlled Group has ever  sponsored,
maintained or contributed to, or been obligated to contribute to, a Defined
Benefit Plan or contributed to, or been obligated to contribute to, a
Multiemployer Plan.</P>
<P ALIGN="JUSTIFY">(c)&#9;The Company does not maintain or contribute to any
welfare benefit plan that provides health benefits to an employee after the
employee's termination of employment or retirement except as required under
Section&nbsp;4980B of the Code and Sections&nbsp;601 through 608 of ERISA.</P>
<P ALIGN="JUSTIFY">(d)&#9;Each Plan which is an &quot;employee benefit
plan&quot;, as defined in Section&nbsp;3(3) of ERISA, has complied in all
material respects since its inception by its terms and in operation with the
requirements provided by any and all statutes, orders or governmental rules or
regulations currently in effect and applicable to the Plan, including but not
limited to ERISA and the Code.  No investigations or audits by a governmental
entity, or other actions, demands, proposals, negotiations or claims with
respect to any Plan have occurred, or are pending, threatened or imminent
against any employer who is participating (or who has participated) in any Plan
or any fiduciary (as defined in Section&nbsp;3(21) of ERISA) of the Plan or
which otherwise concern matters covered or that would be covered by the Plans.
</P>
<P ALIGN="JUSTIFY">(e)&#9;Each Plan intended to qualify under Section 401(a) of
the Code is the subject of a favorable determination letter issued by the
Internal Revenue Service, which provides that it so qualifies through the last
day of the &quot;TRA 86 Remedial Amendment Period,&quot; as such term is defined
in Section 3.02 of Revenue Procedure 96-55 issued by the Internal Revenue
Service.  To the Company's knowledge, nothing has occurred since the date of the
Internal Revenue Service's favorable determination letter that could adversely
affect the qualification of the Plan and its related trust.  The Company has
timely and properly applied for a written determination by the Internal Revenue
Service on the qualification of each such Plan and its related trust under
Section 401(a) of the Code, as amended by the Tax Reform Act of 1986 and
subsequent legislation enacted through the date hereof, and Section 501 of the
Code.</P>
<P ALIGN="JUSTIFY">(f)&#9;True, correct and complete copies of (i) all documents
creating or evidencing any Plan listed in <U>Schedule 2.20</U>, (ii) all
reports, forms and other documents required to be filed with any governmental
entity (including, without limitation, summary plan descriptions, Forms 5500 and
summary annual reports for all plans subject to ERISA), and (iii) the latest
favorable letters of determination from the Internal Revenue Service with
respect to the Plans that are intended to qualify under Section 401(a) of the
Code have been delivered to Acquiror.</P>
<P ALIGN="JUSTIFY">(g)&#9;All expenses and liabilities relating to all of the
Plans described in <U>Schedule 2.20</U> have been, and will on the Closing Date
be, fully and properly accrued on the Company's books and records and disclosed
on the current Financial Statements and such Plans have no unfunded liabilities
not reflected on such current Financial Statements.</P>
<P ALIGN="JUSTIFY">SECTION 2.21&#9;<A NAME="_Toc444482964"><A
NAME="_Toc461384621"><U>Title to Property</U>.  </A>The Company has good and
marketable title to all of its properties, interests in properties and assets,
real and personal, reflected in the Balance Sheet or acquired after the date of
the Balance Sheet (except properties, interests in properties and assets sold or
otherwise disposed of since the date of the Balance Sheet in the ordinary course
of business), or with respect to leased properties and assets, valid leasehold
interests in, free and clear of all Liens of any kind or character, except (i)
the Lien of current taxes not yet due and payable, (ii) such imperfections of
title, Liens and easements as do not and will not materially detract from or
interfere with the use of the properties subject thereto or affected thereby, or
otherwise materially impair business operations involving such properties and
(iii) Liens securing debt which is reflected on the Balance Sheet.  The fixed
assets, plants, property and equipment of the Company that are used in the
operations of its business are in good operating condition and repair, subject
to normal wear and tear.  All properties used in the operations of the Company
are reflected in</A> <A NAME="_Toc461384622">the Balance Sheet to the extent
GAAP applied on a consistent basis require the same to be so reflected.
<U>Schedule 2.21</U> delivered by the Company to the Acquiror concurrently with
the execution of this Agreement identifies each parcel of real property owned or
leased by the Company.</A></P>
<P ALIGN="JUSTIFY">SECTION 2.22&#9;<A NAME="_Toc461384623"><A
NAME="_Toc444482967"><U>Environmental Matters</A></A></U>.</P>
<P ALIGN="JUSTIFY">(a)&#9;<A NAME="_Toc461384624">Without limiting Section 2.16,
at all times the Company and its Subsidiary and their businesses and operations
have complied in all material respects with all applicable Environmental Laws
(as hereinafter defined) adopted, imposed or promulgated by any governmental or
regulatory entity having jurisdiction over any property at any time occupied,
owned or leased by the Company or the Subsidiary.  Except as set forth on
<U>Schedule 2.22</U> delivered by the Company to the Acquiror concurrently with
the execution of this Agreement (i) the Company and the Subsidiary have never
and do not currently generate, use, transport, handle or store any Hazardous
Materials (as hereinafter defined), the proper disposal of which has or will
require any material expenditure by the Company, (ii) there has been no
generation, use, handling, storage or disposal of any Hazardous Materials in
violation of common law or any applicable Environmental Law at any site or
premises owned, occupied or leased, at any time, by the Company or the
Subsidiary, nor (iii) has there been or is there threatened any release of any
Hazardous Materials on or at any such site or premises in violation of common
law or any applicable Environmental Law or which created or will create an
obligation to report or remediate such release, which release or failure to
report or remediate could have a Material Adverse Effect on the Company.</A>
All environmental licenses, permits, clearances, covenants and authorizations
required for the Business have been obtained by the Company and are in full
force and effect.  No wastes generated by the Company or Subsidiary have ever
been sent directly or, to the Company's knowledge, indirectly to any site listed
or formally proposed for listing federal or state list of hazardous substances
sites requiring investigation or clean-up.  Except as set forth on Schedule 2.22
delivered by the Company to the Acquiror concurrently with the execution of this
Agreement, the Company has no knowledge that any property at any time occupied,
owned or leased by the Company or Subsidiary, including, without limitation, the
soil and groundwater on or under such property, has been contaminated by
Hazardous Materials.  Neither the Company nor the Subsidiary has received from
any governmental authority or third party any requests for information, notices
of claim, demand letters, or other notification that they or it are or is or may
be potentially responsible with respect to any investigation or clean-up of
Hazardous Materials.  There is no fact or circumstance that to the knowledge of
the Company would be likely to involve the Company, Subsidiary or Acquiror in
any environmental litigation or proceeding or impose any environmental liability
upon the Company, Subsidiary or Acquiror.</P>
<P ALIGN="JUSTIFY">(b)&#9;<A NAME="_Toc461384625">The Company has previously
made available to the Acquiror copies of (i) all environmental surveys and
audits, risk assessments, tests and reports in its possession (or reasonably
obtainable by it) performed with respect to the property currently occupied,
owned or leased by the Company or the Subsidiary by or on behalf of the Company
or the Subsidiary (including, without limitation, all soil and groundwater
surveys, tests and reports), (ii) all other documents in its possession (or
reasonably obtainable by it) concerning any environmental or health and safety
matter that could have a Material Adverse Effect on the Company, if any, and
(iii) copies of any documentation in its possession (or reasonably obtainable by
it) regarding off-site disposal of Hazardous Materials, spill control plans and
material correspondence with any governmental agency regarding the
foregoing.</A></P>
<P ALIGN="JUSTIFY">(c)&#9;<A NAME="_Toc444482976"><A NAME="_Toc461384626">As
used in this Agreement, the term &quot;Hazardous Materials&quot; shall mean any
pollutant, hazardous substance, hazardous material, hazardous waste or toxic
waste, as defined in or regulated by any </A>current Environmental Law.   The
term &quot;Environmental Laws&quot; means any federal, state or local statute,
law, regulation, rule or ordinance, and any judicial interpretation thereof,
regulating the use, generation, handling, storage, transportation, discharge,
emission, spillage or other release of Hazardous Materials or relating to the
protection of the environment.</A></P>
<P ALIGN="JUSTIFY">SECTION 2.23&#9;<A NAME="_Toc444482977"><A
NAME="_Toc461384627"><U>Insurance</U>.  The Company is, and will be through the
Closing, adequately insured with responsible insurers in respect of its
properties, assets and businesses against risks normally insured against by
companies in similar lines of business under similar circumstances.  <U>Schedule
2.23</U> delivered by the Company to the Acquiror concurrently with the
execution of this Agreement correctly describes (by type and amount of coverage)
the insurance coverage carried by the Company, which insurance will remain in
full force and effect with respect to all events occurring prior to the Closing.
The Company has not  failed to give any notice or present any claim under any
such policy or binder in due and timely fashion, has not  received notice of
cancellation or non-renewal of any such policy or binder, is not aware of any
threatened or proposed cancellation or non-renewal of any such policy or binder,
has not received notice of any insurance premiums which will be materially
increased in the future, nor is aware of any insurance premiums which will be
materially increased in the future.  There are no outstanding claims under any
such policy which have gone unpaid for more than 45 days, or as to which the
insurer has disclaimed liability.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 2.24&#9;<A NAME="_Toc461384628"><U>Material
Contracts</U>.</A>  </P>
<P ALIGN="JUSTIFY">(a)&#9;<A NAME="_Toc461384629"><U>Schedule 2.24(a)</U>
delivered by the Company to the Acquiror concurrently with the execution of this
Agreement sets forth a description of all Material Contracts.  Except as
disclosed in <U>Schedule 2.24(a)</U>, all of the Material Contracts are valid,
binding and enforceable in accordance with their terms and in full force and
effect.  Except as otherwise indicated on <U>Schedule 2.24(a)</U>, the Company
is not, and to the knowledge of the Company, no other party to such Material
Contracts is, in material default thereunder, and to such knowledge, no event
has occurred or is threatened to occur, which, with or without the lapse of time
or the giving of notice or both, would constitute a material default thereunder.
For the purposes of this Agreement, the term &quot;Material Contract&quot; shall
mean:</A></P>
<P ALIGN="JUSTIFY">(i)&#9;any agreement or series of related agreements
requiring aggregate payments after the date hereof by or to the Company of more
than $50,000;</P>
<P ALIGN="JUSTIFY">(ii)&#9;any agreement with any labor union or association
representing any employee of the Company;</P>
<P ALIGN="JUSTIFY">(iii)&#9;any agreement for the purchase or sale of materials,
supplies, equipment, merchandise or services that contains an escalation,
renegotiation or redetermination clause or that obligates the Company to
purchase all or substantially all of its requirements of a particular product
from a supplier, or for periodic minimum purchases of a particular product from
a supplier; </P>
<P ALIGN="JUSTIFY">(iv)&#9;any agreement for sale of any of the assets or
properties of the Company other than in the ordinary course of business or for
the grant to any person of any options, rights of first refusal, or preferential
or similar rights to purchase any such assets or properties; </P>
<P ALIGN="JUSTIFY">(v)&#9;any partnership, joint venture or similar
agreement;</P>
<P ALIGN="JUSTIFY">(vi)&#9;any agreement of surety, guarantee or
indemnification, other than agreements in the ordinary course of business with
respect to obligations in an aggregate amount not in excess of $50,000;</P>
<P ALIGN="JUSTIFY">(vii)&#9;any agreement containing covenants of the Company
not to compete in any line of business, in any geographic area or with any
person or covenants of any other person not to compete with the Company or in
any line of business of the Company;</P>
<P ALIGN="JUSTIFY">(viii)&#9;any license relating to Company Proprietary Rights
(as hereinafter defined) and any other agreement granting or restricting the
right of the Company to use any Company Proprietary Rights or other intellectual
or intangible property;</P>
<P ALIGN="JUSTIFY">(ix)&#9;any agreement relating to the acquisition by the
Company of any operating business or the capital stock of any other person;</P>
<P ALIGN="JUSTIFY">(x)&#9;any agreement requiring the payment to any person of a
brokerage or sales commission or a finder's or referral fee (other than
arrangements to pay commission or fees to employees in the ordinary course of
business);</P>
<P ALIGN="JUSTIFY">(xi)&#9;any agreement or note relating to or evidencing
outstanding indebtedness for borrowed money;</P>
<P ALIGN="JUSTIFY">(xii)&#9;any lease, sublease or other agreement under which
the Company is lessor or lessee of any real property; and</P>
<P ALIGN="JUSTIFY">(xiii)&#9;any lease relating to equipment or other tangible
property with respect to obligations in excess of $50,000; and</P>
<P ALIGN="JUSTIFY">(xiv)&#9;any other agreement material to the Company.  </P>
<P ALIGN="JUSTIFY"><A NAME="_Toc444482980">(b)&#9;<A NAME="_Toc461384632">Except
as set forth on <U>Schedule 2.24(b)</U> delivered by the Company to the Acquiror
concurrently with the execution of this Agreement, no consent, waiver or
approval is required from, and no notification is required to be provided to,
any party to a Material Contract in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated
thereby.</A></P>
<P ALIGN="JUSTIFY">SECTION 2.25&#9;<A NAME="_Toc461384633"></A><U>Intellectual
Property</U><I>.  </I>Except as disclosed in <U>Schedule 2.25</U> delivered by
the Company to the Acquiror concurrently with the execution of this Agreement,
the Company owns, or possesses valid, binding and enforceable licenses to use,
or otherwise has the valid, binding and enforceable right to use, all patents,
trademarks, service marks, trade names, trade secrets, franchises, and
copyrights, and all applications for any of the foregoing, and all technology,
inventions, know-how and processes necessary for the conduct of its business as
presently conducted (collectively, the &quot;Company Proprietary Rights&quot;).
A list of all registered copyrights, trademarks, trade names and patents, and
all applications therefor, included in the Company Proprietary Rights, has been
previously delivered to the Acquiror.  <U>Schedule 2.25</U> lists all licenses,
agreements, obligations and contracts relating to the Company Proprietary Rights
to which the Company is a party or by which the Company is bound.  </A>All
registrations of the Company Proprietary Rights are valid and subsisting and all
necessary registration and renewal fees in connection with such registrations
have been filed with the relevant patent, copyright and trademark authorities in
the United States for the purposes of maintaining such registrations.  <A
NAME="_Toc461384634">The Company has complied with all applicable disclosure
requirements and, to the Company's knowledge, neither the Company nor any named
inventor or assignee has committed any fraudulent act in the application for or
maintenance of any patent, trademark or copyright of the Company.  Other than
Company Proprietary Rights licensed by the Company from third parties, as
identified on Schedule 2.25, the Company owns all Company Proprietary Rights
free and clear of all Liens.  No Company Proprietary Rights or product and/or
technology of the Company is subject to any outstanding decree, order, judgment,
stipulation, license or agreement restricting in any material manner the use or
licensing thereof by the Company.  Neither the execution or delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
limit, impair or otherwise affect, in any manner, any of the Company's right,
title or interest in or to or use of any of the Company Proprietary Rights.
Except as disclosed in Schedule 2.25 delivered by the Company to the Acquiror
concurrently with the execution of this Agreement, neither the Company's
products (nor the manufacture, distribution or sale thereof), designs,
developments or processes nor the operation of the business of the Company as
presently conducted, misappropriates or infringes upon the proprietary rights of
others, nor has the Company received any notice or claim from any third party of
such misappropriation or infringement by the Company. Except as disclosed in
Schedule 2.25 delivered by the Company to the Acquiror concurrently with the
execution of this Agreement, the Company has no knowledge of any infringement by
any third party on, or any competing claim of right to use or own any of, the
Company Proprietary Rights.  The Company has no knowledge that any of the
activities of the employees or consultants of the Company on behalf of the
Company violates any agreements or arrangements which any such employees or
consultants have with former employers in a way which would have a Material
Adverse Effect on the business of the Company.</A></P>
<P ALIGN="JUSTIFY">SECTION 2.26&#9;<A NAME="_Toc444482992"><A
NAME="_Toc461384635"><U>Proprietary Information of Third Parties</U>.</A>  <A
NAME="_Toc444482993">No third party has claimed or, to the knowledge of the
Company, has reason to claim that any person employed by or affiliated with the
Company has (i)&nbsp;violated or may be violating any of the terms or conditions
of such person's employment, non-competition or non-disclosure agreement with
such third party, (ii)&nbsp;disclosed or may be disclosing or utilized or may be
utilizing any trade secret or proprietary information or documentation of such
third party, or (iii)&nbsp;interfered or may be interfering in the employment
relationship between such third party and any of its present or former
employees.  No third party has requested information from which the Company
suggests that such a claim might be contemplated.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 2.27&#9;<A NAME="_Toc444482996"><A
NAME="_Toc461384636"><U>Significant Customers and Suppliers</U>.  Set forth on
<U>Schedule 2.27</U> delivered by the Company to the Acquiror concurrently with
the execution of this Agreement is a list of the ten (10) largest customers and
the ten (10) largest suppliers of the Company as of  August 31, 1999 and
September 23, 1999, respectively, together with the amount of sales or payments
attributable to such customers or suppliers expressed in dollars.  Except as set
forth on <U>Schedule 2.27</U>, no customer or supplier has terminated,
materially reduced or threatened to terminate or materially reduce its purchases
from or provision of products or services to the Company, as the case may be.
Copies of the standard forms of purchase or supply contracts of the Company and
sales contracts are set forth in <U>Schedule&nbsp;2.27</U>.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 2.28&#9;<A NAME="_Toc461384637"><A
NAME="_Toc444483001"><U>Assumptions, Guaranties, Etc. of Indebtedness of Other
Persons<A NAME="_Toc461384638"></A></U>.  The Company has not assumed,
guaranteed, endorsed or otherwise become directly or contingently liable on any
indebtedness of any other person (including, without limitation, liability by
way of agreement, contingent or otherwise, to purchase, to provide funds for
payment, to supply funds to or otherwise invest in the debtor, or otherwise to
assure the creditor against loss), except for guaranties by endorsement of
negotiable instruments for deposit or collection in the ordinary course of
business.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 2.29&#9;<A NAME="_Toc444483002"><A
NAME="_Toc461384639"><U>Transactions With Affiliates</U>.  No director, officer
or employee of the Company, or member of the family of any such person, or any
corporation, partnership, trust or other entity in which any such person, or any
member of the family of any such person, has a substantial interest or is an
officer, director, trustee, partner or holder of any equity interest, is a party
to any transaction with the Company, including any contract, agreement or other
arrangement providing for the employment of, furnishing of services by, rental
of real or personal property from or otherwise requiring payments or involving
other obligations to any such person or firm.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 2.30&#9;<A NAME="_Toc444483003"><A
NAME="_Toc461384640"><U>Records and Bank Accounts</U>.  The minute books, stock
certificate books and stock transfer ledgers of the Company are complete and
correct in all material respects with respect to the matters set forth therein
and have been maintained in a manner consistent with good business
practice.</A></A>  <U>Schedule 2.30</U> delivered by the Company to the Acquiror
concurrently with the execution hereof identifies all bank and brokerage
accounts of the Company, whether or not such accounts are held in the name of
the Company, lists the respective signatories therefor and lists the names of
all persons holding a power of attorney from the Company and a summary of the
terms thereof. </P>
<P ALIGN="JUSTIFY">SECTION 2.31&#9;<A NAME="_Toc461384641"><U>Commissions and
Fees</U>.  Except for fees payable to Soundview Technology Group, Inc., there
are no valid claims for brokerage commissions or finder's or similar fees in
connection with the transactions contemplated by this Agreement which may be now
or hereafter asserted against the Acquiror resulting from any action taken by
the Company or its stockholders, officers, directors or agents.</A></P>
<P ALIGN="JUSTIFY">SECTION 2.32&#9;<A NAME="_Toc461384642"><U>Year 2000
Compliance</U>. Except as set forth in <U>Schedule 2.32</U> delivered by the
Company to the Acquiror concurrently with the execution of this Agreement the
Company has no knowledge that any of its systems (including, without limitation,
the Company's telecommunications, automation and computer related systems),
assets or technology, including without limitation, the Company Proprietary
Rights (including, without limitation, all computer software and hardware owned
or licensed by the Company or used in its business) has or will have any Year
2000 Error (as hereinafter defined).  For the purposes hereof, the term
&quot;Year 2000 Error&quot; means (a) any failure of computer hardware or
software products or technology properly to record, store, process, calculate or
present calendar dates falling on and after (and if applicable, spans of time
including) January&nbsp;1,&nbsp;2000 as a result of the occurrence, or use of
data consisting of, such dates; (b)&nbsp;any failure of computer hardware or
software products or technology to calculate any information dependent on or
relating to dates on or after January 1, 2000 in the same manner, and with the
same functionality, data integrity and performance, as such computer hardware or
software products or technology records, stores, processes, calculates and
presents calendar dates on or before December 31, 1999, or information dependent
on or relating to such dates; or (c)&nbsp;any loss of functionality or
performance with respect to the introduction of records or processing of data
containing dates falling on or after January&nbsp;1,&nbsp;2000.</A></P>
<P ALIGN="JUSTIFY">SECTION 2.33&#9;<A NAME="_Toc444483005"><U>Representations
Complete</U><B>.  </B>The representations and warranties of the Company and the
Stockholders contained in this Article&nbsp;II do not contain any untrue
statement of a material fact and do not omit to state any material fact
necessary to make such representations and warranties, in light of the
circumstances under which they were made, not misleading.  </P>
<B><U><P ALIGN="CENTER"></P><DIR>
<DIR>

<P ALIGN="CENTER">ARTICLE III<BR>
<BR>
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS</P></DIR>
</DIR>

</U><P>&#9;</B>Each of the Stockholders, severally, but not jointly, represents
and warrants to Acquiror as follows:</P>
<P ALIGN="JUSTIFY">SECTION 3.1&#9;<U>Ownership of EPITAXX Shares</U>.  Such
Stockholder is the record and beneficial owner of all of the EPITAXX Shares
listed as owned by such Stockholder on <U>Schedule 2.3</U>, and such EPITAXX
Shares are owned by such Stockholder free and clear of all liens, claims,
encumbrances, interests and rights in others.  Except as set forth on
<U>Schedule 2.3</U>, such Stockholder has no options, warrants, subscriptions,
calls, convertible securities, stock appreciation rights (phantom or otherwise)
or other interests or rights of any nature relating to the capital stock of the
Company.</P>
<P ALIGN="JUSTIFY">SECTION 3.2&#9;<U>Authority to Execute and Perform
Agreement</U>.  Such Stockholder has the full legal right, capacity, power and
all authority and approval required by law and its organizational documents, if
applicable, to enter into this Agreement and to perform its obligations
hereunder.  Such Stockholder has duly executed and delivered this Agreement, and
this Agreement is the legal, valid and binding obligation of such Stockholder
enforceable in accordance with its terms.  </P>
<P ALIGN="JUSTIFY">SECTION 3.3&#9;<U>Investment Representations</U>.  Such
Stockholder has had the opportunity to discuss the transactions contemplated
hereby with Acquiror and has had the opportunity to obtain such information
pertaining to Acquiror, its business, operations, and finances as has been
requested, including but not limited to filings made by Acquiror with the SEC
under the Securities Exchange Act of 1934, as amended (the &quot;Exchange
Act&quot;).  Such Stockholder is an &quot;accredited investor&quot; within the
meaning of Regulation D promulgated under the Securities Act of 1933, as amended
(the &quot;Securities Act&quot;).  Such Stockholder has such knowledge and
experience in business or financial matters that he or she is capable of
evaluating the merits and risks of an investment in the Acquiror.  Such
Stockholder (i)&nbsp;is acquiring the Acquiror Common Stock for purposes of
investment and has no present intention to distribute such Acquiror Common
Stock, (ii)&nbsp;it has no contract, undertaking, agreement or arrangement to
sell or otherwise transfer or dispose of any Acquiror Common Stock or any
portion thereof to any person or entity and (iii)&nbsp;he or she can bear the
economic risk of losing his or her investment in the Acquiror Common Stock and
has adequate means for providing for its current financial needs and
contingencies. </P>
<P ALIGN="JUSTIFY">SECTION 3.4&#9;<U>No Knowledge of Breach</U>.  Such
Stockholder is not aware (without any investigation or inquiry) that any of the
representations or warranties set forth in Article II is untrue in any material
respect.</P>
<U><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER">ARTICLE Iv<A
NAME="_Toc461384644"></A></A><B><BR>
<BR>
<A NAME="_Toc444483006"><A NAME="_Toc461384645">REPRESENTATIONS AND WARRANTIES
OF ACQUIROR AND NEWCO</A></A></P>
</B></U></FONT><P ALIGN="JUSTIFY"><A NAME="_Toc444483007"><A
NAME="_Toc461384646">Acquiror and Newco represent and warrant to the Company and
the Stockholders as follows:</A></A></P>
<P ALIGN="JUSTIFY">SECTION 4.1&#9;<A NAME="_Toc444483008"><A
NAME="_Toc461384647"><U>Investment Intent</U>.  Acquiror is acquiring the
EPITAXX Shares for its own account and not with the view to the  distribution
thereof.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 4.2&#9;<A NAME="_Toc444483009"><A
NAME="_Toc461384648"><U>Organization</U>.  Acquiror is duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and is duly qualified to transact business as a foreign corporation in each
jurisdiction in which the failure to so qualify would have a material adverse
impact on Acquiror's ability to purchase the EPITAXX Shares.  Newco is duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 4.3&#9;<A NAME="_Toc444483010"><A
NAME="_Toc461384649"><U>Power and Authority</U>.  Each of Acquiror and Newco has
the corporate power and authority to execute, deliver and perform this Agreement
and the other documents and instruments contemplated hereby.  Subject to the
conditions set forth in Article VI which shall be satisfied prior to the Closing
if Closing occurs, (i) the execution, delivery and performance of this Agreement
and the documents contemplated hereby and the consummation of the transactions
contemplated hereby and thereby have been duly authorized and approved by each
of Acquiror and Newco and (ii) when executed and delivered by Acquiror and Newco
shall have been duly executed and delivered by, and constitute the valid and
binding obligation of each of Acquiror  and Newco enforceable against each of
them in accordance with their terms.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 4.4&#9;<A NAME="_Toc461384650"><A
NAME="_Toc444483011"><U>Validity, Etc</U>.  Neither the execution and delivery
of this Agreement and the other documents and instruments contemplated hereby,
the consummation of the transactions contemplated hereby or thereby, nor</A> <A
NAME="_Toc461384651">the performance of this Agreement and such other agreements
in compliance with the terms and conditions hereof and thereof will
(i)&nbsp;conflict with or result in any breach of any trust agreement,
certificate of incorporation, bylaw, judgment, decree, order, statute or
regulation applicable to Acquiror or Newco; (ii)&nbsp;require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, other than any notification and approval
required under the HSR Act; (iii)&nbsp;result in a breach of or default (or give
rise to any right of termination, cancellation or acceleration) under any law,
rule or regulation or any judgment, decree, order, governmental permit, license
or order or any of the terms, conditions or provisions of any mortgage,
indenture, note, license, agreement or other instrument to which Acquiror or
Newco is a party; or (v)&nbsp;violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Acquiror or Newco which in the case of
any of (i)&nbsp;- (v), would materially impair Acquiror or Newco's ability to
consummate the transactions contemplated hereby.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 4.5&#9;<A NAME="_Toc444483012"><A
NAME="_Toc461384652"><U>Corporate Status</U>.  Each of Acquiror and Newco has
the corporate power and authority to own, lease and operate all of its
properties and to carry on its business as it is now being
conducted.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 4.6&#9;<A NAME="_Toc461384653"><U>Acquiror
Subsidiaries; Newco Common Stock.<A NAME="_Toc461384655"></A></U><I>  </I>The
Acquiror indirectly owns, beneficially and of record, all of the issued and
outstanding shares of Newco, all of which are validly issued and outstanding,
fully paid and nonassessable, free and clear of all Liens and encumbrances.  The
Acquiror has the corporate power to cause the endorsement and surrender such
shares of Newco Common Stock for cancellation pursuant to the Plan of Merger.
The Acquiror has taken all such actions as may be required in its capacity as
the indirect sole stockholder of Newco.</A>  Acquiror is the sole record and
beneficial owner of all of the outstanding capital stock of Uniphase Holdings,
Inc., which in turn is the sole record and beneficial owner of all of the
outstanding capital stock of Newco.</P>
<P ALIGN="JUSTIFY">SECTION 4.7&#9;<A NAME="_Toc461384656"><A
NAME="_Toc444483013"><U>Reports</U>.  Acquiror has previously furnished or made
available to the Stockholders true and complete copies of (i) its most recent
Annual Report on Form 10-K as filed with the Securities Exchange Commission
(&quot;SEC&quot;) for its fiscal year ended June 30&nbsp;, 1999, and (ii) all
other reports and registration statements filed by Acquiror with the SEC since
June 30, 1999 (all such documents included in (i) and (ii) above being
collectively referred to as the &quot;Acquiror SEC Documents&quot;).  As of
their respective dates, the Acquiror SEC Documents did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.  Since June 30, 1999,
Acquiror has timely filed with the SEC all reports, registration statements and
other filings required to be filed with the SEC under Section 13(a) of the
Securities Exchange</A> <A NAME="_Toc461384657">Act of 1934, as amended (the
&quot;Exchange Act&quot;), and the rules and regulations promulgated
thereunder.</A>  As of their respective filing dates, the description of the
business, operations and financial condition of the Acquiror contained in the
Acquiror SEC Documents complied in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, and the rules and
regulations promulgated under such statutes.  The consolidated financial
statements contained in the Acquiror SEC Documents, together with the notes
thereto, have been prepared in accordance with GAAP consistently followed
throughout the periods indicated therein (except as indicated in the notes to
such financial statements and further subject, in the case of unaudited
statements, to normal, necessary year-end adjustments).  The balance sheet of
the Acquiror at except as indicated in the notes to such financial statements
and further included in the Acquiror's 10-K is herein referred to as the
&quot;Acquiror Balance Sheet&quot;.</A></P>
<P ALIGN="JUSTIFY">SECTION 4.8&#9;<A NAME="_Toc461384658"><A
NAME="_Toc444483014"><U>Subsequent Events</U><I>. </I>Except as disclosed in the
Acquiror SEC Documents or as otherwise permitted hereunder, the Acquiror has
not, since the date of the Acquiror Balance Sheet incurred any Material Adverse
Change</A>.</P>
<P ALIGN="JUSTIFY">SECTION 4.9&#9;<A NAME="_Toc461384659"><U>Legal
Proceedings</U><I>. </I>Except as described in the Acquiror SEC Documents, there
is no pending litigation, governmental investigation, condemnation or other
proceeding against or relating to or affecting the Acquiror or the transactions
contemplated by this Plan of Merger for which the Acquiror is uninsured or
which, if resolved adversely to the Acquiror, would have, individually or in the
aggregate, a Material Adverse Effect on the Acquiror.</A>  </P>
<P ALIGN="JUSTIFY">SECTION 4.10&#9;<A NAME="_Toc461384660"><U>Commissions and
Fees</U>.  There are no claims for brokerage commissions, investment bankers'
fees or finder's fees in connection with the transactions contemplated by this
Agreement resulting from any action taken by the Acquiror or any of its
stockholders, officers, directors or agents.</A></P>
<P ALIGN="JUSTIFY">SECTION 4.11&#9;<A NAME="_Toc461384661"><U>Status of Acquiror
Stock</U>.  Each share of Acquiror Common Stock issued to the Stockholders
pursuant to this Agreement will be, when so issued, duly authorized, validly
issued, fully paid and nonassessable.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 4.12&#9;<U>Representations Complete</U><B>.  </B>The
representations and warranties of the Acquiror and Newco contained in this
Article&nbsp;IV do not contain any untrue statement of a material fact and do
not omit to state any material fact necessary to make such representations and
warranties, in light of the circumstances under which they were made, not
misleading.  </P>
<U><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER">ARTICLE V<A
NAME="_Toc461384663"><A NAME="_Toc444483015"></A><B><BR>
<BR>
<A NAME="_Toc461384664">COVENANTS OF EPITAXX AND THE PRINCIPAL
STOCKHOLDER</A></A></P>
</B></U></FONT><P ALIGN="JUSTIFY"><A NAME="_Toc444483016"><A
NAME="_Toc461384665">EPITAXX and the Principal Stockholder covenant and agree
with Acquiror as follows:</A></A></P>
<P ALIGN="JUSTIFY">SECTION 5.1&#9;<A NAME="_Toc444483017"><A
NAME="_Toc461384666"><U>Cooperation; Consents</U>.  The Principal Stockholder
shall cause the Company to timely perform and fulfill, all covenants and
obligations to be fulfilled or performed by the Company hereunder.  The
Principal Stockholder and the Company shall use their reasonable best efforts to
satisfy all of the conditions to Closing set forth in Article VII to the end
that the transactions contemplated hereby will be fully and timely
consummated.</A></A>  On or prior to the Closing Date, the Company and the
Principal Stockholder shall (a)&nbsp;notify all persons required to be notified
pursuant to applicable law or any of the Governmental Authorizations or
contracts to which the Company is a party of the transactions contemplated
hereunder, in the form and manner required thereunder, and (b)&nbsp;obtain the
consent of all persons whose consent is required pursuant to applicable law or
any of the Governmental Authorizations or contracts to which the Company is a
party in connection with the consummation of the transactions contemplated
hereby, in the form and manner required thereunder, including, without
limitation, the all required consents under the HSR Act.</P>
<P ALIGN="JUSTIFY">SECTION 5.2&#9;<A NAME="_Toc461384667"><A
NAME="_Toc444483018"><U>Access</U>.  Until the Closing, the Company shall give
Acquiror, its attorneys, accountants and other authorized representatives
complete access to its offices, properties, customers, suppliers, employees,
products, technology, business and financial records, contracts, business plans,
budgets and projections, agreements, commitments and other documents and
information concerning the Company and persons employed by or doing business
with the Company for the purposes of confirming the accuracy of the
representations and warranties made by the Company herein.</A>  </A></P>
<P ALIGN="JUSTIFY">SECTION 5.3&#9;<A NAME="_Toc444483019"><A
NAME="_Toc461384668"><U>Insurance</U>. Until the Closing, the Company shall
maintain with financially sound and reputable insurers, insurance against such
casualties and contingencies and of such types and in such amounts as is
customary for companies similarly situated.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 5.4&#9;<A NAME="_Toc444483020"><A
NAME="_Toc461384669"><U>Compliance with Laws</U>.  Until the Closing, the
Company shall conduct its business in compliance with all applicable laws,
rules, regulations and orders.</A></A>  </P>
<P ALIGN="JUSTIFY">SECTION 5.5&#9;<A NAME="_Toc444483021"><A
NAME="_Toc461384670"><U>Keeping of Books and Records</U>.  Until the Closing,
the Company shall keep adequate records and books of account, in which complete
entries will be made in accordance with GAAP consistently applied, reflecting
all financial transactions and in which all proper reserves for depreciation,
depletion, obsolescence, amortization, taxes, bad debts and other purposes in
connection with its business shall be made.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 5.6&#9;<A NAME="_Toc461384671"><A
NAME="_Toc444483022"><U>Actions Prior to Closing</U>.  The Company shall conduct
its business pending the Closing only in the ordinary and usual course of
business consistent with past practice.  Without limiting the generality of the
foregoing, the Company shall conduct its business in a manner such that on the
Closing Date the Company will have no obligations or liabilities (fixed or
contingent) except (a)&nbsp;those consistent with the representation and
warranty made in Section 2.10 of this Agreement and (b)&nbsp;those incurred in
the ordinary course of business consistent with past practice after the date of
the Balance Sheet and prior to the Closing Date and reflected accurately in its
books and records.  Except as expressly contemplated by this Agreement or as
consented to in writing by Acquiror, which consent shall not be unreasonably
withheld or delayed, during the period from the date of this Agreement to the
Closing Date, the Company</A> <A NAME="_Toc461384672">shall not (i)&nbsp;issue,
sell or pledge, or authorize or propose the issuance, sale or pledge of (A)
additional shares of capital stock of any class (including the EPITAXX Shares),
or securities convertible into any such shares, or any rights, warrants or
options to acquire any such shares or other convertible securities, or grant or
accelerate any right to convert or exchange any securities of the Company for
shares of capital stock of the Company, or (B)&nbsp;any other securities in
respect of, in lieu of or in substitution for shares outstanding on the date
thereof; (ii)&nbsp;redeem, purchase or otherwise acquire, any of its outstanding
securities (including the Company Shares); (iii)&nbsp;declare, set aside, make
or pay any dividend or distribution (whether in cash, stock or property) on or
in respect of any share of capital stock of the Company; (iv) (A)&nbsp;make any
acquisition of assets or securities, any disposition of assets or securities or
any change in its equity capitalization or long term indebtedness, or
(B)&nbsp;enter into, terminate or modify any contract or release or relinquish
any contract or other rights except with respect to product sales made in the
ordinary course of business; (v)&nbsp;incur any long-term debt for borrowed
money or any short-term debt for borrowed money other than in the ordinary
course of business consistent with past practice and not in excess, individually
or in the aggregate, of $50,000; (vi)&nbsp;propose or adopt any amendments to
its Certificate of Incorporation or By-Laws; (vii) enter into any new employment
agreements with any officers, directors or employees or grant any increases in
the compensation or benefits to, or agree to pay any bonus, severance or
termination payment or other special compensation to, officers, directors and
employees; (viii)&nbsp;make any loan or advance to any of its officers,
directors, consultants, agents or employees or to any member of their families
or any other loan or advance otherwise than in the ordinary course of business;
(ix)&nbsp;make or incur any charitable contributions or any non-business</A> <A
NAME="_Toc444483023">expense; (x) mortgage, pledge or encumber any of its
assets; (xi) introduce or modify the Company's accounting practices, including,
without limitation, with respect to the treatment of inventory; (xii) commence,
settle or compromise any litigation; (xiii) hire or terminate employees except
in the ordinary course of business consistent with past practices; (xiv) making
any capital expenditures or commitments therefor in excess of $100,000,
individually or in the aggregate; or (xv)&nbsp;agree in writing or orally to
take any of the foregoing actions or any other action which would have made any
representation or warranty in this Agreement untrue in all material
respects.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 5.7&#9;<A NAME="_Toc444483024"><A
NAME="_Toc461384673"><U>Notice of Changes</U>.  Until the Closing, the Company
shall notify Acquiror of any material change in the business of the Company as
soon as it becomes apparent to the Company that any such change has or may
occur.</A>  </A></P>
<P ALIGN="JUSTIFY">SECTION 5.8&#9;<A NAME="_Toc444483025"><A
NAME="_Toc461384674"><U>Preservation of Business</U>.  Until the Closing, the
Company and the Principal Stockholder will cause the Company to use its best
efforts to preserve its business organization intact, and to preserve its
goodwill.  Without limiting the generality of the foregoing, the Company will,
and the Principal Stockholder will cause the Company to, timely perform all
obligations required of the Company or the Principal Stockholder under the
contracts and permits listed on the Schedules to this Agreement.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 5.9&#9;<A NAME="_Toc444483026"><A
NAME="_Toc461384675"><U>Litigation</U>.  Until the Closing, the Company will
promptly notify Acquiror of any lawsuits, claims, proceedings or investigations
which are threatened or commenced against or by the Company, the Principal
Stockholder or their affiliates, or against any employee, consultant or director
of the Company.</A>  </A></P>
<P ALIGN="JUSTIFY">SECTION 5.10&#9;<A NAME="_Toc444483027"><A
NAME="_Toc461384676"><U>Continued Effectiveness of Representations and
Warranties</U>.  Without limiting Section 4.6, from the date hereof up to and
including the Closing Date, (i)&nbsp;the Company will conduct its business in a
manner such that the representations and warranties contained herein shall
continue to be true and correct on and as of the Closing Date as if made on and
as of the Closing Date as and to the extent required by Section 7.2, and
(ii)&nbsp;the Principal Stockholder will advise Acquiror promptly in writing of
any condition or circumstance occurring from the date hereof up to and including
the Closing Date which could cause any representation or warranty of the
Principal Stockholder to become untrue.</A>  No such notice shall modify, limit
or impair, in any manner, (a) any representation or warranty of the Company or
the Principal Stockholder made hereunder or in connection herewith, or (b) any
rights or remedies of Acquiror with respect to any breach thereof.  </A></P>
<P ALIGN="JUSTIFY">SECTION 5.11&#9;<A NAME="_Toc444483028"><A
NAME="_Toc461384677"><U>Obligations of Affiliates</U>.  Except as specifically
set forth herein, on or before the Closing Date, the Company will cause its
affiliates to (i)&nbsp;cause all debts, claims and other obligations owed or
required to be performed by any Stockholder (or any affiliate of such
Stockholder) to the Company, or by the Company to any Stockholder or affiliate
of any stockholder, to be paid or discharged in full and (ii) except as provided
in this Section 5.11, terminate any ongoing agreements between the Company on
the one hand and its affiliates on the other, all without any expense to the
Company (or any reduction in the gross assets reflected on the Balance Sheet or
acquired since the date thereof) so that following the Closing Date the Company
shall have no obligations of any kind or nature to the Stockholders or their
affiliates except for those specified in this Agreement, provided, however, that
the liability of the Company to the Principal Stockholder in the amount of
$4,250,000 plus interest in respect of indebtedness for borrowed money and the
amount of $1,029,273 in respect of the Company's obligations under its Tax
Sharing Agreement with the Company (as reduced to reflect amounts paid by or
accrued against the Company prior to the Closing Date) may, at the election of
Acquiror, be paid of or prior to the Closing or continue as obligations of the
Company to be discharged in accordance with their terms subsequent to the
Closing.</A></A>  Notwithstanding the foregoing, the following agreements, each
in the form made available to Acquiror, between the Company and the parent
corporation of the Principal Stockholder, Nippon Sheet Glass Company Ltd.
(&quot;NSG&quot;) shall remain in full force and effect after the Closing Date
as follows: (x) that certain Research and Development Agreement, dated as of
April 1, 1997, shall remain in effect for two (2) years following the Closing
Date (and thereafter be terminable on ninety (90) days notice) and continue to
provide for the performance of Research and Development Services (as defined
therein) by NSG, which shall be performed in a manner consistent with prior
practice pursuant to such agreement and which shall consist of the supply of
approximately 20 wafers per year for a payment by the Company of $100,000 per
year; (y) NSG will continue for a period of two (2) years following the Closing
Date to supply to the Company, for the Company's 2.5 and 10 gigabit avalanche
photodetector receiver products, epitaxial wafers in a manner consistent with
prior practices at a price per wafer of $18,000; and (z) the Distribution
Agreement, dated as of April 1, 1997 shall continue following the Closing Date
and be terminable in accordance with its terms or otherwise at any time on
ninety (90) days prior notice given by either NSG or the Company.  </P>
<P ALIGN="JUSTIFY">SECTION 5.12&#9;<A NAME="_Toc444483029"><A
NAME="_Toc461384678"><U>No Negotiations</U>.  Until the Closing Date, or the
earlier termination of this Agreement in accordance with its terms, neither the
Company, the Principal Stockholder nor any of their affiliates, advisors, agents
or investment bankers shall, directly or indirectly, initiate discussions with,
engage in negotiations with, enter into any agreement with, or provide any
information to, any corporation, partnership, person or other entity or group
involving the possible sale, directly or indirectly, transfer or joint venture
of the Company, its business or assets, or the capital stock of the Company to
any person or entity other than Acquiror.</A>  The Company shall immediately
notify Acquiror of any solicitation or inquiry made by any third party with
respect to any such sale.<A NAME="_Toc444483030"></A></P>
<P ALIGN="JUSTIFY">SECTION 5.13&#9;<A NAME="_Toc461384679"><U>Non-Competition
and Employment Agreements</U>.  At the Closing, each of James D. Coleman, Yves
Dzialowski, George Roshon, Alka Swanson and Mark Itzler (the &quot;Applicable
Employees&quot;) will enter into (a) a Non-Competition and Confidentiality
Agreement (each, a &quot;Noncompetition and Confidentiality Agreement&quot;) in
substantially the form of <U>Exhibit A</U>, and (b) (i) amendments (the
&quot;Employment Agreement Amendments&quot;) to their current employment
agreements (the &quot;Employment Agreements&quot;) in substantially the form of
<U>Exhibit B</A></A></U>, or if they are not currently parties to such
Employment Agreement, new employment agreements (the &quot;New Employment
Agreements&quot;) substantially in form and content as the Employment
Agreements, as amended by the Employment Agreement Amendments.  </P>
<P ALIGN="JUSTIFY">SECTION 5.14&#9;<A NAME="_Toc444483031"><A
NAME="_Toc461384680"><U>Resignations</U>.  The Company will, to the extent that
Acquiror so requests, cause its officers and directors of the Company and the
trustees and administrators of each Employee Plan to resign on or before the
Closing Date.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 5.15&#9;<U>Section 338 Elections</U>.  </P>
<P ALIGN="JUSTIFY">(a)&#9;If requested by Acquiror, Acquiror and Principal
Stockholder shall join in an election to have the provisions of Section
338(h)(10) of the Code and similar provisions of state law (&quot;Section 338
Elections&quot;) apply to the acquisition of the Company. Acquiror shall be
responsible for, and control, the preparation and filing of such election.  The
allocation of purchase price among the assets of the Company shall be made in
accordance with Code Sections 338 and 1060 and any comparable provisions of
state, local or foreign law, as appropriate.  Principal Stockholder shall,
unless it would be unreasonable to do so, accept Acquiror's good faith
determination of such purchase price allocations and shall report, act, file in
all respects and for all purposes consistent with such good faith determination
of Acquiror.  Principal Stockholder shall execute and deliver to Acquiror such
documents or forms (including Section 338 Forms, as defined below) as Acquiror
shall request or as are required by applicable law for an effective Section 338
Election.  &quot;Section 338 Forms&quot; shall mean all returns, documents,
statements, and other forms that are required to be submitted to any federal,
state, county or other local taxing authority in connection with a Section 338
Election, including, without limitation, any &quot;statement of Section 338
election&quot; and IRS Form 8023 (together with any schedules or attachments
thereto) that are required pursuant to Treasury Regulations.</P>
<P ALIGN="JUSTIFY">(b)&#9;Principal Stockholder shall be responsible for and
shall pay any income, franchise or similar taxes arising as a result of any
Section 338 Election or any comparable or resulting election under state law
filed by Acquiror or Principal Stockholder.</P>
<P ALIGN="JUSTIFY">SECTION 5.16&#9;<U>Environmental Clearance</U>.  Without
limiting Section 5.1, prior to the Closing, the Company shall obtain, with
respect to the West Trenton, New Jersey facility owned by the Company (the
&quot;Facility&quot;), from the New Jersey Department of Environmental
Protection (&quot;NJDEP&quot;) any of a Letter of Nonapplicability, an approval
of a Negative Declaration, or any other confirmation of an approval, waiver or
exemption from NJDEP stating that the Facility is not subject to the Industrial
Site Recovery Act, N.J.S.A. 13:1K-6 <U>et seq</U>. (&quot;ISRA&quot;), any
successor legislation and regulation, as well as the regulations promulgated
pursuant to the Environmental Cleanup Responsibility Act, N.J.S.A. 13:1K-6 <U>et
seq</U>.  Notwithstanding the foregoing, the Acquiror shall be obliged to waive
compliance with the foregoing upon the receipt by the Company of any interim
determination, order or ruling, including but not limited to NJDEP's issuance of
a remediation agreement, permitting the consummation of the transactions
contemplated herein.  </P>
<U><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER">ARTICLE V<A
NAME="_Toc461384682"><A NAME="_Toc444483032"></A>I</U><B><BR>
<BR>
<A NAME="_Toc461384683"><U>COVENANTS OF ACQUIROR</A></A>, THE COMPANY<BR>
AND THE STOCKHOLDERS</P>
</B></U></FONT><P ALIGN="JUSTIFY">SECTION 6.1&#9;<A NAME="_Toc444483033"><A
NAME="_Toc461384684"><U>Cooperation</U>.  Acquiror shall timely perform and
fulfill all covenants and obligations to be fulfilled or performed by it
hereunder.  Acquiror shall use its reasonable best efforts to satisfy all of the
conditions set forth in Article VIII, to the end that the transactions
contemplated hereby will be fully and timely consummated.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 6.2&#9;<A NAME="_Toc444483034"><A
NAME="_Toc461384685"><U>Publicity</U>.  Between the date hereof and the Closing
Date, Acquiror, the Stockholders and the Company agree that, except as required
by applicable Federal and state securities laws and regulations, each
(a)&nbsp;will make no (and will cause its affiliates not to make any) public
announcement of further progress</A> <A NAME="_Toc444483035">regarding the
transactions contemplated hereby without the prior written consent of the other,
(b)&nbsp;will respond to all inquiries with respect to further progress
regarding the transactions contemplated hereby by stating that its policy is to
not comment on such matters, (c)&nbsp;will institute procedures to restrict
knowledge of further progress regarding the</A> <A
NAME="_Toc461384686">transactions contemplated hereby to those who need to know,
(d)&nbsp;will use its reasonable efforts to insure that no person who has
knowledge of further progress regarding the proposed transactions contemplated
hereby through it will trade in the securities of Acquiror, and (e)&nbsp;will
notify the other of any rumor with respect to the transactions contemplated
hereby received by it.  In the event Acquiror determines that public disclosure
of the progress of transactions contemplated hereby is necessary in public
documents required to be filed by it or pursuant to the exception in the
preceding sentence, it agrees to notify the Company of its intention to make
such disclosure and provide the other with the text of the disclosure in advance
of its release to the public.<A NAME="_Toc444483036"></A></A></P>
<P ALIGN="JUSTIFY">SECTION 6.3&#9;<A NAME="_Toc461384687"><U>Registration
Statement<A NAME="_Ref429434116"></U>.</A><U> </P>
</U><P ALIGN="JUSTIFY">(a)&#9;<A NAME="_Toc461384688">Acquiror shall use its
reasonable efforts to file or cause to be filed with the SEC on or prior to the
date that is fifteen (15) days after the Effective Time, a registration
statement on Form S-3 (the &quot;Registration Statement&quot;) to cover resales
of the shares (the &quot;Registered Shares&quot;) of Acquiror Common Stock
constituting Merger Consideration.  The Registered Shares shall be allocated pro
rata among the Stockholders based on the portion of the Merger Consideration
received by each.  Acquiror shall use its reasonable efforts to cause such
Registration Statement to be declared effective as soon as practicable
thereafter.  Acquiror shall use its reasonable efforts to keep such Registration
Statement continuously effective, supplemented and amended to the extent
necessary to ensure that it is available for resales of the Registered Shares
for a period ending on the earlier of (i) two years from the Closing Date, and
(ii) a date which is more than one (1) year from the Closing Date and on which
less than 20% of the original aggregate Registered Shares are held by the
Stockholders.</A></A></P>
<P ALIGN="JUSTIFY">(b)&#9;<A NAME="_Toc461384689">Acquiror will bear the costs
of all Registration Expenses.  For the purposes hereof, &quot;Registration
Expenses&quot; shall mean all expenses incident to Acquiror's preparation and
filing of the Registration Statement, including, without limitation, all
registration and filing fees, fees and expenses of compliance with federal
securities laws or state blue sky laws, printing expenses, messenger and
delivery expenses, fees and disbursements of custodians and fees and
disbursements of counsel for Acquiror and all independent certified public
accountants, and othe<A NAME="_Ref429433747">r persons retained by
Acquiror.</A></P>
<P ALIGN="JUSTIFY">(c)&#9;<A NAME="_Toc461384690">In connection with the
registration and sale of the Registered Shares Acquiror will:</A></A></P>
<P ALIGN="JUSTIFY">(i)&#9;prepare and file with the SEC the Registration
Statement as set forth above;</P>
<P ALIGN="JUSTIFY">(ii)&#9;provide to each holder of Registered Shares a copy of
the Registration Statement and related Prospectus, including each preliminary
Prospectus, and each amendment and supplement thereto; </P>
<P ALIGN="JUSTIFY">(iii)&#9;use its best efforts to register or qualify the
Registered Shares under such other securities or blue sky laws of such
jurisdictions as each holder of Registered Shares may reasonably request and do
any and all other acts and things which may be reasonably necessary or advisable
to enable each holder of Registered Shares to consummate the disposition in such
jurisdictions of the Registered Shares owned by such holder; provided, however,
that Acquiror will not be required to (A)&nbsp;qualify generally to do business
in any jurisdiction where it would not otherwise be required to qualify but for
this subparagraph, (B)&nbsp;subject itself to taxation in any such jurisdiction,
or (C)&nbsp;consent to general service of process in any such jurisdiction;
and</P>
<P ALIGN="JUSTIFY">(iv)&#9;Upon the occurrence of any event that would cause the
Registration Statement (A)&nbsp;to contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or (B)&nbsp;to be not effective
and useable for resale of the Registered Shares during the period that such
Registration Statement is required to be effective and useable, Acquiror upon
knowledge of such an event, shall as promptly as practicable file an amendment
to the Registration Statement, in the case of clause&nbsp;(A), correcting any
such misstatement or omission, and, in the case of either clause&nbsp;(A) or
(B), use its best efforts to cause such amendment to be declared effective and
such Registration Statement to become useable as soon as practicable thereafter.
</P>
<P ALIGN="JUSTIFY">(d)&#9;Notwithstanding anything to the contrary in this
Section&nbsp;6.3, Acquiror may prohibit offers and sales of the Registered
Shares pursuant to the  Registration Statement at any time if (A) (1)&nbsp;it is
in possession of material non-public information, (2)&nbsp;the Board of
Directors of Acquiror determines based on advice of counsel that such
prohibition is necessary in order to avoid a requirement to disclose such
material non-public information, and (3)&nbsp;the Board of Directors of Acquiror
determines in good faith that disclosure of such material non-public information
would not be in the best interests of Acquiror and its Stockholders or (B)
Acquiror has made a public announcement relating to an acquisition or business
combination transaction including Acquiror and/or one or more of its
subsidiaries (1)&nbsp;that is material to Acquiror and its subsidiaries taken as
a whole, and (2)&nbsp;the Board of Directors of Acquiror determines in good
faith that offers and sales of the Registered Shares pursuant to the
Registration Statement prior to the consummation of such transaction (or such
earlier date as the Board of Directors shall determine) is not in the best
interests of Acquiror and its Stockholders (the period during which any such
prohibition of offers and sales of Registered Shares pursuant to the
Registration Statement is in effect pursuant to clause (A) or (B) of this
Section 6.3(d) is referred to herein as a &quot;Suspension Period&quot;).  A
Suspension Period shall commence on and include the date on which Acquiror
provides written notice to holders of Company Stock covered by the Registration
Statement that offers and sales of Registered Shares cannot be made thereunder
in accordance with this Section&nbsp;6.3(d) and shall end three business days
after the earlier to occur of (x) the date on which such material information is
disclosed to the public or ceases to be material or Acquiror is able to so
comply with its disclosure obligations and SEC requirements, or (y) 90 days
after written notice is provided by Acquiror to the holders of Registered Shares
of such Suspension Period.  Each notice shall state to the extent, if any, as is
practicable, an estimate of the expected duration of the Suspension Period;</P>
<P ALIGN="JUSTIFY">(e)&#9;Each holder of Registered Shares shall furnish to
Acquiror such information regarding the distribution of its Registered Shares as
is required by law to be disclosed in the Registration Statement (the
&quot;Requisite Information&quot;) prior to effecting any sale pursuant to such
Registration Statement.  Each holder of Registered Shares  as to which any
Registration Statement is being effected agrees prior to effecting any sale of
the Registered Shares thereunder to furnish promptly to Acquiror all information
required to be disclosed in order to make any Requisite Information previously
furnished to Acquiror by such holder of Registered Shares  not materially
misleading or necessary to cause such Registration Statement not to omit a
material fact with respect to such holder of Registered Shares necessary in
order to make the statements therein not misleading.  </P>
<P ALIGN="JUSTIFY">(f)&#9;Each holder of  Registered Shares agrees that, upon
receipt of any notice from Acquiror of the existence of any fact of the kind
described in subparagraphs&nbsp;6.3(c)(iv) or 6.3(d) hereof (an &quot;Amendment
Notice&quot;), such holder of Registered Shares will forthwith discontinue
disposition of Registered Shares until such holder's receipt of (A) copies of
the supplemented or amended Prospectus contemplated by
subparagraph&nbsp;6.3(c)(iv) hereof, or until counsel for Acquiror shall have
determined that such disclosure is not required due to subsequent events,
(B)&nbsp;notice in writing from Acquiror that the use of the Prospectus may be
resumed, (C)&nbsp;copies of any additional or supplemental filings with respect
to the Prospectus, or (D)&nbsp;the expiration of the Suspension Period.  In the
event Acquiror shall give any such notice, the time period regarding the filing
of the Registration Statement set forth in subparagraph&nbsp;6.3(a) hereof shall
be extended by the number of days during the period from and including the date
of the giving of such notice pursuant to subparagraph&nbsp;6.3(d) hereof to and
including the date when each holder of Registered Shares covered by such
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by this subparagraph&nbsp;6.3(f).  </P>
<P ALIGN="JUSTIFY">(g)&#9;Acquiror agrees to use its best efforts to cause the
Registered Shares covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the holders of  Registered Shares to consummate the disposition of
such Registered Shares, subject to the proviso contained in
subparagraph&nbsp;6.3(c)(iii) above, and cause all Registered Shares to be
listed on each securities exchange or national quotation system on which
Acquiror's Registered Shares  is then listed.</P>
<P ALIGN="JUSTIFY">(h)&#9;<A NAME="_Toc461384691">Acquiror agrees to indemnify,
to the extent permitted by law, each holder of Registered Shares against all
losses, claims, damages, liabilities and expenses including, without limitation,
reasonable attorneys' fees, caused by any untrue or alleged untrue statement of
material fact contained in the Registration Statement, any prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same are caused by or contained in any information furnished in writing to
Acquiror by such holder expressly for use therein or by such holder's <A
NAME="_Toc461384692"></A>willful misconduct, negligent breach of its obligations
under this Section 6.3 or failure to deliver a copy of the Registration
Statement or prospectus or any amendments or supplements thereto.</A></P>
<P ALIGN="JUSTIFY">(i)&#9;<A NAME="_Toc461384693">In connection with the
Registration Statement, each holder of Registered Shares will furnish to
Acquiror in writing such information and affidavits as Acquiror reasonably
requests for use in connection with the Registration Statement or prospectus
contained therein and, to the extent permitted by law, will indemnify Acquiror,
its directors and officers and each person who controls Acquiror (within the
meaning of the Act) against any and all losses, claims, damages, liabilities and
expenses, including, without limitation, reasonable attorneys' fees, caused by
any untrue or alleged untrue statement of material fact contained in the
Registration Statement, any prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, insofar as such losses, claims, damages, liabilities and
expenses are caused by any such untrue statement or omission or alleged untrue
statement or omission furnished in writing to Acquiror for use therein or such
holder's failure to provide the prospective purchaser with a copy of the current
prospectus; provided, however, that the obligation to indemnify will be several,
not joint and several among the holders of Registered Shares, and the liability
of each holder will be limited to the net amount received by such holder of
Registered Shares from the sale of Registered Shares pursuant to the
Registration Statement.</A></P>
<P ALIGN="JUSTIFY">SECTION 6.4&#9;<U>338 Election Payment</U>.  At the Closing,
Acquiror shall pay to the Principal Stockholder the sum in cash of $5,000,000 in
consideration of Principal Stockholder's agreement to make the Section 338
Election.</P>
<P ALIGN="JUSTIFY">SECTION 6.5&#9;<U>Consent to Merger</U>.  Each of the
Stockholders, by their execution of this Agreement, hereby consents to the
transactions contemplated by this Agreement, including, without limitation, the
Merger and the change in control of the Company effected thereby.  Without
limiting the foregoing, such Stockholder waives (a) any and all notices required
by applicable laws or the articles of incorporation or bylaws of the Company in
connection with the consent set forth in this Section or the transactions
contemplated hereby, and (b) any and all dissenters', appraisal or similar
rights, available under the Company's articles of incorporation, bylaws or at
law or in equity, in connection with the Merger and the transactions
contemplated hereby.</P>
<U><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER">ARTICLE VI<A
NAME="_Toc461384694"></A>I<B><BR>
<BR>
<A NAME="_Toc461384695">CONDITIONS TO ACQUIROR'S OBLIGATIONS</A></A></P>
</B></U></FONT><P ALIGN="JUSTIFY"><A NAME="_Toc444483037"><A
NAME="_Toc461384696">The obligation of Acquiror to pay the Merger Consideration
on the Closing Date and to consummate the other transactions contemplated hereby
is subject to the satisfaction, on or before the Closing Date, of the following
conditions each of which may be waived by Acquiror in its sole
discretion:</A></A></P>
<P ALIGN="JUSTIFY">SECTION 7.1&#9;<A NAME="_Toc444483040"><A
NAME="_Toc461384697"><U>Consents</U>.  All material governmental approvals and
consents of third parties identified on <U>Schedule&nbsp;2.7</U> or otherwise
required to consummate the transactions described herein shall have been
obtained, including, without limitation, all approvals required under the HSR
Act and pursuant to Section 5.16.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 7.2&#9;<A NAME="_Toc444483041"><A
NAME="_Toc461384698"><U>Representations and Warranties True</U>.  All of the
representations and warranties of the Company and the Principal Stockholder
contained in Article II or in any Schedules or other documents attached hereto
or referred to herein or delivered pursuant hereto in connection with the
transactions contemplated hereby shall be true, correct and complete in all
material respects on and as of the date hereof and on and as of the Closing
Date, as if made on and as of the </A>Closing Date<A NAME="_Toc444483042">;
provided that any representation or warranty qualified by the term
&quot;material,&quot; or words to such effect, or otherwise qualified as to
materiality shall be true on the Closing Date in accordance with the terms
thereof.  On the</A> <A NAME="_Toc461384699">Closing Date, the President of the
Company shall have executed and delivered to Acquiror a certificate, in form and
substance reasonably satisfactory to Acquiror and its counsel, to such
effect.</A></A>  </P>
<P ALIGN="JUSTIFY">SECTION 7.3&#9;<A NAME="_Toc444483043"><A
NAME="_Toc461384700"><U>Performance</U>.  The Company and the Principal
Stockholder shall have performed and complied in all material respects with all
covenants and agreements contained herein required to be performed or complied
with by them prior to or at the Closing Date.  The President of the Company
shall have executed and delivered to Acquiror a certificate, in form and
substance satisfactory to Acquiror and its counsel, in writing to such effect
and to the further effect that all of the conditions set forth in this
Article&nbsp;VII have been satisfied.</A></A> </P>
<P ALIGN="JUSTIFY">SECTION 7.4&#9;<A NAME="_Toc461384701"><A
NAME="_Toc444483044"><U>No Material Adverse Change</U>.  No Material Adverse
Change with respect to the Company shall have occurred or be threatened.</A>
</A></P>
<P ALIGN="JUSTIFY">SECTION 7.5&#9;<U>Good Standing Certificates</U>.  The
Company shall have delivered to Acquiror certificates of good standing from the
Secretaries of the State of Delaware and all other States in which the Company
is qualified to do business dated no earlier than five (5) business days prior
to the Closing Date.</P>
<P ALIGN="JUSTIFY">SECTION 7.6&#9;<A NAME="_Toc444483045"><A
NAME="_Toc461384702"><U>Opinion of Counsel</U>.  Acquiror shall have received
the opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., in </A>form
and content reasonably acceptable to Acquiror.</A></P>
<P ALIGN="JUSTIFY">SECTION 7.7&#9;<A NAME="_Toc444483047"><A
NAME="_Toc461384703"><U>No Actions, Suits or Proceedings</U>.  As of the Closing
Date, no action, suit, investigation or proceeding brought by any person,
corporation, governmental agency or other entity shall be pending or, to the
knowledge of the parties to this Agreement, threatened, before any court or
governmental body (i)&nbsp;to restrain, prohibit, restrict or delay, or to
obtain damages or a discovery order with respect to this Agreement or the
consummation of the transactions contemplated hereby, or (ii)&nbsp;which has had
or may have a Materially Adverse Effect on the Company.  No order, decree or
judgment of any court or governmental body shall have been issued restraining,
prohibiting, restricting or delaying, the consummation of the transactions
contemplated by this Agreement.  No insolvency proceeding of any character
including, without limitation, bankruptcy, receivership, reorganization,
dissolution or arrangement with creditors, voluntary or involuntary, affecting
the Company or any Stockholder shall be pending, and neither the Company nor any
Stockholder shall have taken any action in contemplation of, or which would
constitute the basis for, the institution of any such proceedings.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 7.8&#9;<A NAME="_Toc444483051"><A
NAME="_Toc461384704"><U>Employment, Non-Competition and Confidentiality
Agreements</U>.  Each of the Applicable Employees shall have entered into a Non-
Competition and Confidentiality Agreement with Acquiror and the applicable
parties shall have entered into the Employment Agreement Amendments or the New
Employment Agreements, as applicable.</A></A>  </P>
<P ALIGN="JUSTIFY">SECTION 7.9&#9;<A NAME="_Toc444483052"><A
NAME="_Toc461384705"><U>Closing Documents</U>.  The Stockholders shall have
delivered the Certificates representing the EPITAXX Shares, duly endorsed to
Acquiror, and all of the resolutions, certificates, documents and instruments
required by this Agreement.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 7.10&#9;<U>Termination of Stockholder Agreements</U>.
The EPITAXX Stockholders' Agreements shall have been terminated prior to the
Closing Date and of no further force or effect.  </P>
<U><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER">ARTICLE VII<A
NAME="_Toc461384707"><A NAME="_Toc444483056"></A>I<B><BR>
<BR>
<A NAME="_Toc461384708">CONDITIONS TO THE STOCKHOLDERS' OBLIGATIONS</A></A></P>
</B></U></FONT><P><A NAME="_Toc444483057"><A NAME="_Toc461384709">The obligation
of the Company and the Stockholders to complete the Merger and to consummate the
other transactions contemplated hereby is subject to the satisfaction, on or
before the Closing Date, of the following conditions, each of which may be
waived by the Company and the Principal Stockholder, in their sole
discretion:</A></A></P>
<P ALIGN="JUSTIFY">SECTION 8.1&#9;<A NAME="_Toc444483058"><A
NAME="_Toc461384710"><U>Representations and Warranties to be True and
Correct</U>.  The representations and warranties contained in Article III shall
be true, complete and correct, in all material respects, on and as of the
Closing Date, as if made on and as of such date (other than those
representations and</A> <A NAME="_Toc444483059">warranties that are specifically
made as of another date, which shall be true, correct and complete in all
material respects as of such other date), provided that any representation or
warranty qualified by the term &quot;material,&quot; or words to such effect, or
otherwise qualified as to materiality shall be true on the Closing Date in
accordance with the terms thereof, and Acquiror shall have delivered to the
Company a certificate, in form and substance satisfactory to the Company, the
Principal Stockholder and its counsel, to such effect.</A></A> </P>
<P ALIGN="JUSTIFY">SECTION 8.2&#9;<A NAME="_Toc444483060"><A
NAME="_Toc461384711"><U>Performance</U>.  Acquiror shall have performed and
complied in all material respects with all agreements contained herein required
to be performed or complied with by it prior to or at the Closing Date, and
Acquiror shall have delivered a certificate to the Company, in form and
substance satisfactory to the Company and its counsel to such effect.</A></A>
</P>
<P ALIGN="JUSTIFY">SECTION 8.3&#9;<A NAME="_Toc444483061"><A
NAME="_Toc461384712"><U>Opinion of Acquiror's Counsel</U>.  The Company shall
have received from Morrison &amp; Foerster LLP an opinion dated the Closing
Date, in form and content reasonably acceptable to the Company.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 8.4&#9;<A NAME="_Toc461384713"><A
NAME="_Toc444483062"><U>No Actions, Suits or Proceedings</U>.  As of the Closing
Date, no action, suit, investigation or proceeding brought by any person,
corporation, governmental agency or other entity shall be pending or, to the
knowledge of the parties to this Agreement, threatened, before any court or
governmental body to restrain, prohibit, restrict or delay, or to obtain damages
or a discovery order in respect of this Agreement or the consummation of the
transactions contemplated hereby.  No order, decree or judgment of any court or
governmental body shall have been issued restraining, prohibiting, restricting
or delaying, the consummation of the transactions contemplated by this
Agreement.  No insolvency proceeding of any character including, without
limitation, bankruptcy, receivership, reorganization, dissolution or arrangement
with creditors, voluntary or involuntary, affecting</A> <A
NAME="_Toc461384714">Acquiror shall be pending, and Acquiror shall not have
taken any action in contemplation of, or which would constitute the basis for,
the institution of any such proceedings.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 8.5&#9;<A NAME="_Toc444483063"><A
NAME="_Toc461384715"><U>Closing Documents</U>.  Acquiror shall have delivered
the Merger Consideration and all of the resolutions, certificates, documents and
instruments required by this Agreement.</A></A></P>
<U><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER">ARTICLE IX<A
NAME="_Toc461384716"><A NAME="_Toc444483065"></A><B><BR>
<BR>
<A NAME="_Toc461384717">INDEMNIFICATION</A></A></P>
</B></U></FONT><P ALIGN="JUSTIFY">SECTION 9.1&#9;<A NAME="_Toc444483066"><A
NAME="_Toc461384718"><U>Survival</U>.  Except as set forth in the next sentence,
all representations and warranties, and all covenants to be performed at or
before the Closing, in this Agreement, or in any instrument or document
furnished in connection with this Agreement or the transactions contemplated
hereby, shall survive the Closing and any investigation at any time made by or
on behalf of any party for a period ending on August 31, 2001 (the &quot;Cutoff
Date).  All such representations, warranties and covenants shall expire on the
Cutoff  Date, except that (a)&nbsp;claims, if any, asserted in writing prior to
such Cutoff Date, identified as a claim for indemnification</A> <A
NAME="_Toc444483067">pursuant to this Article IX shall survive until finally
resolved and satisfied in full, and (b)&nbsp;claims, if any, which are
environmental in nature, which are based upon fraud, or which relate to title to
the EPITAXX Shares, the capitalization of the Company, title to the assets of
the Company, the Employee Plans, or which involve tax liability shall survive
for the full period of the applicable statute of limitations, and until finally
resolved and satisfied in full if asserted on or prior to such date.  All other
covenants and agreements contained herein shall survive until fully performed in
accordance with their terms.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 9.2&#9;<A NAME="_Toc461384719"><A
NAME="_Toc444483068"><U>Indemnification by the Company and the Principal
Stockholder</U>.  The Company and the Principal Stockholder shall, jointly and
severally, indemnify, defend, and hold Acquiror, the Surviving Company (upon
consummation of the Merger) and their respective Affiliates (as such term is
defined under Rule 405 of the Rules and Regulations of the Securities Act) and
the respective officers, directors, employees and stockholders (other than any
Stockholder, any affiliates of any Stockholder or any officer or director of the
Company prior to the Closing Date) of the foregoing, and their successors and
assigns (the &quot;Indemnitees&quot;) from, against and with respect to any
claim, liability, obligation, loss, damage, assessment, judgment, cost and
expense (including, without limitation, attorneys' and accountants' fees and
costs and expenses reasonably incurred in investigating, preparing, defending
against or prosecuting any litigation or claim, action, suit, proceeding or
demand) of</A> <A NAME="_Toc461384720">any kind or character (the
&quot;Damages&quot;), arising out of or in any manner incident, relating or
attributable to:<A NAME="_Toc444483069"></A></A></P>
<P ALIGN="JUSTIFY">(a)&#9;<A NAME="_Toc461384721">Any inaccuracy in any
representation or breach of warranty of the Company or the Principal Stockholder
contained in this Agreement or in any certificate, instrument of transfer or
other document or agreement executed by the Company or the Principal Stockholder
in connection with this Agreement or otherwise made or given in connection with
this Agreement;<A NAME="_Toc444483070"></A></A></P>
<P ALIGN="JUSTIFY">(b)&#9;<A NAME="_Toc461384722">Any failure by the Company or
the Principal Stockholder to perform or observe, or to have performed or
observed, in full, any covenant, agreement or condition to be performed or
observed by any of them under this Agreement or under any certificates or other
documents or agreements executed by the Company or the Principal Stockholder in
connection with this Agreement;<A NAME="_Toc444483073"></A>  provided, however,
that (i) any claim for indemnification hereunder shall be asserted prior to the
expiration of the survival period set forth in <U>Section 9.1;</U> <A
NAME="_Toc444483074"></A>and (ii) after the Closing, the rights of Acquiror
under this Section 9.2 shall be its sole remedy for any breach of any
representation or warranty contained in this Agreement, except for a claim for
fraud or reckless misrepresentation.</A></A>  In connection with any
indemnification obligation of the Principal Stockholder or the Company
hereunder, the Acquiror shall be entitled to be put in the same tax position as
if the indemnification obligation had not occurred including the reduction of
the amount of Damages by the amount of any tax benefit which may be realized by
Acquiror or the increase of the amount of Damages by the amount of any tax
detriment incurred by Acquiror; </P>
<P ALIGN="JUSTIFY">(c)&#9;Any and all taxes which are imposed on the Company in
respect of its income, business, property or operations or for which the Company
may otherwise be liable (i)&nbsp;for any taxable period ending prior to the
Closing Date, (ii) for the portion of a Straddle Period  ending on the Closing
Date, (iii) resulting by reason of the several liability of the Company pursuant
to Treasury Regulations section 1.1502-6 or any analogous state, local or
foreign law or regulation or by reason of the Company having been a member of
any consolidated, combined or unitary group on or prior to the Closing Date,
(iv) resulting from the Company ceasing to be a member of the affiliated group
(within the meaning of Section 1504(a) of the Code) that includes Principal
Stockholder, (v) in respect of any post-Closing Date period, attributable to
events, transactions, sales, deposits, services or rentals occurring, received
or performed in a pre-Closing Date period, (vi) in respect of any post-Closing
Date period, attributable to any change in accounting method employed by the
Company during any of its four previous taxable years, (vii) in respect of any
post-Closing Date, attributable to any items of income or gain of a partnership
reporting the Company as a partner, to the extent such items are properly
attributable to periods of the partnership ending on or before the Closing Date,
(viii)&nbsp;attributable to any discharge of indebtedness that may result from
any capital contributions by Principal Stockholder (or an affiliate of Principal
Stockholder) to the Company of any intercompany indebtedness owed by the Company
to Principal Stockholder (or an affiliate of Principal Stockholder), and (ix)
resulting from the making of the Code Section 338 election (or analogous
provision of state, local or territorial law); provided, however, that Principal
Stockholder's liability under the foregoing provisions of this paragraph shall
be reduced as to any item to the extent that such item was specifically and
fully reserved for in the Closing Balance Sheet; or</P>
<P ALIGN="JUSTIFY">(d) Any and all claims against any Indemnitee, made prior to
or after the Effective Time, by the holder of Patent No. 4368098 (the
&quot;Rockwell Patent&quot;), or any licensee of any rights thereunder, that the
products, technology, designs, processes, services, business or operations of
the Company as presently conducted infringe or misappropriate the Rockwell
Patent or any applications or rights thereunder or any proprietary rights
relating to, deriving from or arising under the Rockwell Patent, notwithstanding
that any such claims or potential claims are disclosed on any Schedule to this
Agreement or have otherwise been previously disclosed to Acquiror; provided that
any Damages incurred by the Indemnities pursuant to this Section 9.2(d) (i)
shall not include royalty payments for the use of the Rockwell Patent, if any,
agreed to be paid by Acquiror or which Acquiror becomes otherwise obligated to
make with respect to any activities after the Effective Time, and (ii) shall be
limited such that the Principal Stockholder shall be liable only for such
Damages to the extent that same are determined in a manner that is consistent
(considering the amount of such Damages and the activities of the Company with
respect to which such Damages are payable) with Acquiror's damage or future
royalty obligation, if any, pursuant to clause (i) above.  </P>
<P ALIGN="JUSTIFY">SECTION 9.3&#9;<U>Indemnification by Stockholders</U>.  Each
of the Stockholders shall, severally, but not jointly, indemnify, defend, and
hold harmless the Indemnitees from, against and with respect to any Damages
arising out of or in any manner incident, relating or attributable to:  (a) any
inaccuracy in any representation or breach of warranty of such Stockholder
contained in Article III of this Agreement; or (b) any breach by any such
Stockholder of any of its covenants set forth in this Agreement.</P>
<P ALIGN="JUSTIFY">SECTION 9.4&#9;<A NAME="_Toc425090257"><A
NAME="_Toc428173665"><A NAME="_Toc461384723"><A NAME="_Toc426971288"><A
NAME="_Toc444483075"><U>Limitations on Indemnification</U>.</A></A></A></P>
<P ALIGN="JUSTIFY">(a)&#9;<A NAME="_Toc461384724">Neither any Stockholder, on
the one hand as an indemnifying party, nor the Acquiror, on the other hand as
indemnifying party, shall be liable to the other in respect of any
indemnification hereunder unless, until and to the extent that the aggregate
damages claimed exceed $600,000 (the &quot;Basket Amount&quot;), whereupon the
indemnified party shall be entitled to indemnification for all damages suffered
or incurred by the indemnified party including those less than the Basket
Amount; provided, however, that no limitation shall apply with respect to (i)
any Damages incurred by an Indemnitee pursuant to Section 9.2(d) or with respect
to any taxes not reflected in or reserved against on the Balance Sheet, or (ii)
an intentional breach of the representations and warranties in this
Agreement.</A></P>
<P ALIGN="JUSTIFY">(b)&#9;<A NAME="_Toc461384725">Neither the Company and the
Principal Stockholder, on the one hand, nor the Acquiror, on the other hand,
shall be required to indemnify the other for an aggregate amount in excess of
$80,000,000 (the &quot;Liability Cap&quot;)</A>, except for Damages to Acquiror
resulting from the falsity of a representation or warranty of which any
Knowledge Party who is a management employee, officer or director of the
Principal Stockholder or its affiliates (other than EPITAXX) had actual
knowledge at the time such representation or warranty was made or at the time of
the Closing and as to which no disclosure was made as and when required
hereunder, which Damages shall be subject to a Liability Cap of $400,000,000
(reduced by any other Damages for which indemnification is provided hereunder).
With respect to Stockholders other than the Principal Stockholder, there shall
be a Liability Cap equal to the total amount of Merger Consideration received by
such Stockholder pursuant to this Agreement.</P>
<P ALIGN="JUSTIFY">&#9;(c)&#9;In calculating the Liability Cap, any insurance
recoveries received by the Indemnified Party shall be subtracted from the
aggregate Damages claimed.</P>
<P ALIGN="JUSTIFY">SECTION 9.5&#9;<A NAME="_Toc461384726"><A
NAME="_Toc444483077"></A></A><U>Indemnification by Acquiror</U>.  Acquiror shall
indemnify and hold harmless the Stockholders against any and all Damages arising
directly out of any breach of any representation, warranty, covenant, or
agreement of Acquiror contained in this Agreement, provided, however, that
(i)&nbsp;any claim for indemnification hereunder shall be asserted prior to the
expiration of the survival</A> <A NAME="_Toc461384727">period set forth in
Section 9.1, and (ii) after the Closing, the rights of the Stockholders under
this Section 9.4 shall be its sole remedy for any breach of this
Agreement.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 9.6&#9;<A NAME="_Toc444483078"><A
NAME="_Toc461384728"><U>Claims for Indemnification</U>.  Upon the occurrence of
any event which any party asserts is an indemnifiable event pursuant to this
Article&nbsp;IX, the party claiming indemnification (the &quot;Indemnified
Party&quot;) shall provide prompt notice to the party required to provide
indemnification (the &quot;Indemnifying Party&quot;), specifying in detail the
facts and circumstances with respect to such claim and the basis for which
indemnification is available hereunder.  If such event involves the claim of any
third party, Acquiror shall have the right to control the defense or settlement
of such claim; provided, however, that (a)&nbsp;the</A> <A
NAME="_Toc444483079">Principal Stockholder shall be entitled to participate in
the defense of such claim at its own expense, and or (b)&nbsp;each party shall
obtain the prior written approval of the other party (which approval shall not
be unreasonably withheld or delayed) before entering into any settlement of such
claim if, pursuant to or as a result of such settlement, injunctive or other
non-monetary relief would be imposed against the Indemnified Party, or the
proposed settlement is in excess of the Liability Cap.  In the event that the
Indemnifying Party shall be obligated to indemnify the Indemnified Party
pursuant to this Article IX, the Indemnifying Party shall, upon payment of such
indemnity in full, be subrogated to all rights of the Indemnified Party with
respect to the claim to which such indemnification relates.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 9.7&#9;<U>Indemnification for Letter of Credit
Obligations</U>.  Acquiror shall promptly reimburse the Principal Stockholder
for any principal and interest (exclusive of default amounts and penalties
accruing prior to the Closing Date) paid by the Principal Stockholder or any
affiliate of the Principal Stockholder pursuant to any guaranty by it or any
affiliate of the Principal Stockholder of the Company's obligation to reimburse
The Sumitomo Bank, Limited (&quot;Sumitomo&quot;) for any draw made by Sumitomo
Bank of New York Trust Company (&quot;Sumitomo Trust&quot;) under that certain
Letter of Credit dated August 29, 1998, as amended, issued by Sumitomo to
Sumitomo Trust in the amount of $5,250,000 (the &quot;Letter of Credit&quot;).
If the Principal Stockholder or any of its affiliates is required to make
payment under the Letter of Credit, then the Acquiror agrees that it will
promptly (a) obtain a substitute letter of credit from a bank to replace the
Letter of Credit, or (b) provide such other guaranties or assurances in
substitute for the Letter of Credit sufficient to cause the Letter of Credit to
be cancelled.  </P>
<U><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER">ARTICLE X<A
NAME="_Toc461384729"><A NAME="_Toc444483080"></A><B><BR>
<BR>
<A NAME="_Toc461384730">TERMINATION</A></A></P>
</B></U></FONT><P ALIGN="JUSTIFY">SECTION 10.1&#9;<A NAME="_Toc444483081"><A
NAME="_Toc461384731"><U>Termination</U>.  This Agreement may be terminated and
the transactions contemplated hereby may be abandoned at any time prior to the
Closing:</A></A>  <A NAME="_Toc444483082"></P>
<P ALIGN="JUSTIFY">(a)&#9;<A NAME="_Toc461384732">By mutual written consent duly
authorized by the Boards of Directors of Acquiror and the Company;<A
NAME="_Toc444483083"></A></A></P>
<P ALIGN="JUSTIFY">(b)&#9;<A NAME="_Toc461384733">By Acquiror or the Company</A>
<A NAME="_Toc444483084"></A>if </P>
<P ALIGN="JUSTIFY">(i)&#9;any court of competent jurisdiction or other
governmental body shall have issued an order, decree or ruling, or taken any
other action restraining, enjoining or otherwise prohibiting the transactions
contemplated hereby, provided that this Agreement shall not be terminated
pursuant to this paragraph unless the party terminating this Agreement has
utilized its best efforts to oppose the issuance of such order, decree or ruling
or the taking of such action;<A NAME="_Toc444483085"></A></P>
<P ALIGN="JUSTIFY">(ii)&#9;the Closing has not occurred on or prior to December
31, 1999 (as the same date may be extended as provided below) for any reason
other than the breach of any provision of this Agreement by the party
terminating this Agreement; or<A NAME="_Toc444483086"></A></P>
<P ALIGN="JUSTIFY">(iii)&#9;the other party breaches any of its representations,
warranties or covenants attached hereto and such breach is not promptly cured.<A
NAME="_Toc444483087"></A></P>
<P ALIGN="JUSTIFY">(c)&#9;<A NAME="_Toc461384734">By Acquiror if:<A
NAME="_Toc444483088"></A></A></P>
<P ALIGN="JUSTIFY">(i)&#9;Any of the conditions set forth in Article VI hereof
has not been satisfied on or before December 31, 1999 (as such date may be
extended as provided below) and shall not have been waived by Acquiror, for any
reason other than a breach by Acquiror of any of its representations, warranties
or agreements hereunder; or<A NAME="_Toc444483089"></A></P>
<P ALIGN="JUSTIFY">(ii)&#9;If in Acquiror's good faith judgment there is any
material inaccuracy in any representations or breach of any warranty contained
therein, or any material failure by the Stockholders to perform any commitment,
covenant or condition contained in this Agreement, or there exists any material
error, misstatement or omission with regard to any of the Exhibits, Schedules or
other documents referred to herein.<A NAME="_Toc444483090"></A></P>
<P ALIGN="JUSTIFY">(d)&#9;<A NAME="_Toc461384735">By the Company if any of the
conditions set forth in Article VII hereof has not been satisfied on or before
December 31, 1999 (as such date may be extended as provided below) and shall not
have been waived by the Company, for any reason other than a breach by the
Company or any Stockholder of any of their representations, warranties or
agreements hereunder;</A></A></P>
<P ALIGN="JUSTIFY"><A NAME="_Toc444483091"><A NAME="_Toc461384736">If any party
shall elect to terminate this Agreement pursuant to this Section 9.1 (other than
paragraph (a) hereof), written notice of such event shall forthwith be given by
the terminating party to the other parties to this Agreement, whereupon this
Agreement shall terminate.</A></A>  Notwithstanding the foregoing, the date set
forth in paragraphs (b)(ii), (c)(i) and (d) shall automatically be extended
until March 31, 2000 if the Closing has not occurred solely because (x) the
parties have not obtained the necessary consent under the HSR Act, or (b) any
required approvals pursuant to ISRA have not been obtained (or waived by
Acquiror as provided in Section 5.16).  </P>
<P ALIGN="JUSTIFY">SECTION 10.2&#9;<A NAME="_Toc444483092"><A
NAME="_Toc461384737"><U>Effect of Termination</U>.  In the event of the
termination and abandonment of this Agreement pursuant to Section 10.1, this
Agreement, except for the provisions of Articles IX, X , XI and XII shall
forthwith become void and be of no effect, without any liability on the part of
any party or its directors, officers or stockholders.  Nothing in this Section
10.2 shall relieve any party to this Agreement of liability for breach of this
Agreement.  If the Stockholders or the Company fail to fulfill their respective
obligations hereunder for any reason not excused by an express provision of this
Agreement, then Acquiror shall, in addition to any other remedies that it may
have, have the right to bring an action in any court of competent jurisdiction
to obtain specific performance of this Agreement, it being understood that the
parties agree that failure of the Stockholders to consummate the purchase and
sale of the EPITAXX Shares or failure of the Stockholders or the Company to
perform any of their obligations contemplated by this Agreement (except for a
failure excused by an express provision of this Agreement) would cause
irreparable injury to Acquiror and that money damages would not provide an
adequate remedy to Acquiror.  The Stockholders and the Company therefore waive
all objections to the award of equitable relief for such failure.<A
NAME="_Toc444483093"></A></A></P>
<U><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER">ARTICLE X<A
NAME="_Ref427725609">I</U><B><BR>
<BR>
<U>NONDISCLOSURE OF CONFIDENTIAL INFORMATION</A></P>
</B></U></FONT><P ALIGN="JUSTIFY">Each of the Parties agrees that it shall
exercise, and shall cause their respective Representatives and their respective
Affiliates to exercise, the same degree of care to prevent disclosure of
Information (as hereinafter defined) received by or disclosed to such Party
pursuant to this Agreement as it takes to preserve and safeguard its own
confidential information, data, technology or know-how but, in any event, no
less than a reasonable degree of care. As used herein, &quot;Information&quot;
means all documents and information concerning any other Party and the
Affiliates thereof furnished to a Party, its Affiliates or Representatives (in
any case, a &quot;Recipient&quot; by such other Party or its Representatives (in
any case, the &quot;Disclosing Party&quot;) in connection with the transactions
contemplated by this Agreement. Each Recipient shall not use any of such
Information except as permitted by this Agreement or release or disclose such
Information to any other Person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors in connection with this
Agreement. </P>
<P ALIGN="JUSTIFY">If this Agreement shall be terminated pursuant to Article IX
any documentary Information (including all copies thereof) shall be returned to
the Disclosing Party promptly at its request. In any event, Information shall be
safeguarded by the Recipient for not less than five (5) years from the date
hereof.</P>
<P ALIGN="JUSTIFY">The restrictions of this Article XI shall not apply to any
Information received by a Recipient (a) which such Recipient already possessed
at the time of receipt as shown by written records; (b) which was at the time of
receipt or subsequently becomes, publicly available though no fault of such
Recipient or any of its Affiliates or Representatives; (c) which such Recipient
rightfully received from a third party which the Recipient neither knows nor has
reason to know is prohibited from disclosing such information by a contractual,
legal or fiduciary obligation; (d) is furnished by the Disclosing Party to a
third party without a similar restriction of the third party's rights; or (e) is
as required to be disclosed pursuant to Law; <U>provided</U> <U>that</U>, if
practicable, the Recipient shall notify the Disclosing Party prior to disclosing
any Information pursuant to this clause (e) and shall cooperate with the
Disclosing Party in making reasonable efforts to resist such disclosure, if the
Disclosing Party so requests. </P>
<P ALIGN="JUSTIFY">In the event of a breach of any of the obligations stated
above in this Article X, the Disclosing Party may proceed against the breaching
Recipient in Law or in equity for such damages or other relief as a court may
deem appropriate. Nothing herein contained shall be construed as prohibiting the
Disclosing Party from pursuing, in addition, any other remedy for such breach or
threatened breach.</P>
<U><FONT FACE="Times New Roman Bold"><P ALIGN="CENTER">ARTICLE XI<A
NAME="_Toc461384738"></A>I<B><BR>
<BR>
<A NAME="_Toc461384739">MISCELLANEOUS</A></A></P>
</B></U></FONT><P ALIGN="JUSTIFY">SECTION 12.1&#9;<A NAME="_Toc444483094"><A
NAME="_Toc461384740"><U>Notices</U>.  All notices, requests, consents and other
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below</A> <A NAME="_Toc444483095">or to such
other address as a party may designate by notice hereunder, and shall be either
(i)&nbsp;delivered by hand, (ii)&nbsp;made by facsimile transmission,
(iii)&nbsp;sent by recognized overnight courier, or (iv)&nbsp;sent by registered
or certified mail, return receipt requested, postage prepaid.</A></A></P>
<P><A NAME="_Toc444483096">&#9;&#9;&#9;<A NAME="_Toc461384741">If to
Acquiror:&#9;&#9;</A>JDS Uniphase Corporation<BR>
&#9;&#9;&#9;&#9;&#9;&#9;163 Baypointe Parkway<BR>
&#9;&#9;&#9;&#9;&#9;&#9;San Jose, California  94134<BR>
&#9;&#9;&#9;&#9;&#9;&#9;Attn:  Michael C. Phillips<BR>
&#9;&#9;&#9;&#9;&#9;&#9;Fax No. (408) 954-0540.</A></P>
<P><A NAME="_Toc444483102">&#9;&#9;&#9;<A NAME="_Toc461384742">With a copy
to:&#9;</A>Morrison &amp; Foerster LLP</A><BR>
&#9;&#9;&#9;&#9;&#9;&#9;755 Page Mill Road<BR>
&#9;&#9;&#9;&#9;&#9;&#9;Palo Alto, California  94304<BR>
&#9;&#9;&#9;&#9;&#9;&#9;Attn:  Christopher S. Dewees<BR>
&#9;&#9;&#9;&#9;&#9;&#9;Fax No. (650) 813-5798</P>
<P ALIGN="JUSTIFY">&#9;&#9;<A NAME="_Toc461384743">If to the Company the</A></P>
<P>&#9;&#9;<A NAME="_Toc461384744">Representative or the <BR>
&#9;&#9;Stockholders: &#9;&#9;&#9;EPITAXX, Inc.</A><BR>
&#9;&#9;&#9;&#9;&#9;&#9;<A NAME="_Toc461384745">7 Graphics Drive</A><BR>
&#9;&#9;&#9;&#9;&#9;&#9;<A NAME="_Toc461384746">West Trenton, New Jersey
08628</A><BR>
&#9;&#9;&#9;&#9;&#9;&#9;<A NAME="_Toc461384747">Attn:&#9;Noboru Hiraguri</A><BR>
&#9;&#9;&#9;&#9;&#9;&#9;<A NAME="_Toc461384748">Fax No.:  (609) 538-
1684</A>&#9;</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;NSG Holding and USA, Inc.<BR>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;One Paragon Center<BR>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;2525 Harrodsburg Road<BR>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;Lexington, KY 46504<BR>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;Attn:  President<BR>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;Fax No.:  (606) 296-4120<BR>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P><A NAME="_Toc444483111">&#9;&#9;<A NAME="_Toc461384749">With a copy
to:&#9;&#9;</A>Mintz, Levin, Cohn, Ferris, Glovsky and</A> <BR>
&#9;&#9;<A NAME="_Toc444483103">&#9;&#9;&#9;&#9;  <A NAME="_Toc461384750">Popeo,
P.C.</A></A><BR>
&#9;&#9;<A NAME="_Toc444483104">&#9;&#9;&#9;&#9;<A NAME="_Toc461384751">One
Financial Center</A></A><BR>
&#9;&#9;<A NAME="_Toc444483105">&#9;&#9;&#9;&#9;<A NAME="_Toc461384752">Boston,
Massachusetts  02111</A></A><BR>
&#9;&#9;<A NAME="_Toc444483106">&#9;&#9;&#9;&#9;<A NAME="_Toc461384753">Attn:
Thomas J. Kelly, Esquire</A></A><BR>
<A NAME="_Toc444483107">&#9;&#9;&#9;&#9;&#9;&#9;<A NAME="_Toc461384754">Fax No.:
(617) 542-2241</A></A></P>
<P ALIGN="JUSTIFY"><A NAME="_Toc444483116"><A NAME="_Toc461384755">All notices,
requests, consents and other communications hereunder shall be deemed to have
been (i)&nbsp;if by hand, at the time of the delivery thereof to the receiving
party at the address of such party set forth above, (ii)&nbsp;if made by telex,
telecopy or facsimile transmission, at the time that receipt thereof has been
acknowledged by electronic confirmation or otherwise, (iii)&nbsp;if sent by
overnight courier, on the next business day following the day such notice is
delivered to the courier service, or (iv)&nbsp;if sent by registered or
certified mail, on the 5th business day following the day such mailing is
made.</A></A></P>
<P>SECTION 12.2&#9;<A NAME="_Toc461384756"><A NAME="_Toc444483117"><U>Entire
Agreement</U>.  This Agreement, together with the Exhibits and Schedules, and
the other documents</A> <A NAME="_Toc461384757">executed, subsequent to the date
hereof, in connection herewith (together, the &quot;Documents&quot;) embodies
the entire agreement and understanding between the parties with respect to the
subject matter hereof and supersedes all prior oral or written agreements and
understandings relating to the subject matter hereof.  No statement,
representation, warranty,</A> <A NAME="_Toc444483118">covenant or agreement of
any kind not expressly set forth in the Documents shall affect, or be used to
interpret, change or restrict, the express terms and provisions of this
Agreement.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 12.3&#9;<A NAME="_Toc444483119"><A
NAME="_Toc461384758"><U>Modifications and Amendments</U>.  The terms and
provisions of this Agreement may be modified or amended only by written
agreement executed by the parties.</A></A> </P>
<P ALIGN="JUSTIFY">SECTION 12.4&#9;<A NAME="_Toc444483120"><A
NAME="_Toc461384759"><U>Waivers and Consents</U>.  No failure or delay by a
party hereto in exercising any right, power or remedy under this Agreement, and
no course of dealing between the parties hereto, shall operate as a waiver of
any such right, power or remedy of the party.  No single or partial exercise of
any right, power or remedy under this Agreement by a party hereto, nor any
abandonment or discontinuance of steps to enforce any such right, power or
remedy, shall preclude such party from any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder.  The election of any
remedy by a party hereto shall not constitute a waiver of the right of such
party to pursue other available remedies.  No notice to or demand on a party not
expressly required under this Agreement shall entitle the party receiving such
notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.  The terms and provisions of this Agreement may be
waived, or consent for the departure therefrom granted, only by written document
executed by the party entitled to the benefits of such terms or provisions.  No
such waiver or consent shall be deemed to be or shall constitute a waiver or
consent with respect to any other terms or provisions of this Agreement, whether
or not similar.  Each such waiver or consent shall be effective only in the
specific instance and for the purpose for which it was given, and shall not
constitute a continuing waiver or consent.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 12.5&#9;<A NAME="_Toc444483121"><A
NAME="_Toc461384760"><U>Assignment</U>.  Neither this Agreement, nor any right
hereunder, may not be assigned by any of the parties hereto without the prior
written consent of the other parties</A>.</A></P>
<P ALIGN="JUSTIFY">SECTION 12.6&#9;<A NAME="_Toc444483122"><A
NAME="_Toc461384761"><U>Parties in Interest</U>.  This Agreement shall be
binding upon and inure solely to the benefit of each party hereto and their
permitted assigns, and nothing in this Agreement, express or implied, is
intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.  Nothing in this Agreement
shall be construed to create any rights or obligations except among the parties
hereto, and no person or entity shall be regarded as a third-party beneficiary
of this Agreement.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 12.7&#9;<A NAME="_Toc444483123"><A
NAME="_Toc461384762"><U>Governing Law</U>.  This Agreement and the rights and
obligations of the parties hereunder shall be construed in accordance with and
governed by the internal laws of the State of Delaware, without giving effect to
the conflict of law principles thereof.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 12.8&#9;<A NAME="_Toc444483124"><A
NAME="_Toc461384763"><U>Jurisdiction and Service of Process</U>.  Any legal
action or proceeding with respect to this Agreement shall be brought exclusively
in the courts of the State of Delaware<A NAME="_Toc444483125"></A> or of the
United States of America for the District of Delaware.  By execution and
delivery of this Agreement, each of the parties hereto accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts.  The parties hereby irrevocably waive any objection or defense
that they may now or hereafter have to the assertion of personal jurisdiction by
any such court in any such action or to the laying of the venue of any such
action in any such court, and hereby waive, to the extent not prohibited by law,
and agree not to assert, by way of motion, as a defense, or otherwise, in any
such proceeding, any claim that it is not subject to the jurisdiction of the
above-named courts for such proceedings.  Each of the parties hereto irrevocably
consents to the service of process of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by registered mail,
postage prepaid, to the party at its address set forth in Section&nbsp;12.1
hereof and irrevocably waive any objection or defense that it may now or
hereafter have to the sufficiency of any such service of process in any such
action.  Nothing in this Section 12.8 shall affect the rights of the parties to
commence any such action in any other forum or to serve process in any such
action in any other manner permitted by law.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 12.9&#9;<A NAME="_Toc444483126"><A
NAME="_Toc461384764"><U>Severability</U>.  If any court of competent
jurisdiction shall finally determine that any provision contained in this
Agreement shall be void or unenforceable in any respect, then such provision
shall be deemed limited to the extent that such court determines it enforceable,
and as so limited shall remain in full force and effect.  In the event that such
court shall determine any such provision, or portion thereof, wholly
unenforceable, the remaining provisions of this Agreement shall nevertheless
remain in full force and effect.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 12.10&#9;<A NAME="_Toc444483127"><A
NAME="_Toc461384765"><U>Interpretation</U>.  The parties hereto acknowledge and
agree that: (i)&nbsp;each party and its counsel reviewed and negotiated the
terms and provisions of this Agreement (except with respect to the disclosure
schedules regarding the Company's business which are the sole responsibility of
the Company) and have contributed to its revision; (ii)&nbsp;the rule of
construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement;
and (iii)&nbsp;the terms and provisions of this Agreement shall be construed
fairly as to all parties hereto and not in favor of or against any party,
regardless of which party was generally responsible for the preparation of this
Agreement.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 12.11&#9;<A NAME="_Toc461384766"><A
NAME="_Toc444483128"><U>Headings and Captions</U>.  The headings and captions of
the various subdivisions of this Agreement</A> <A NAME="_Toc461384767">are for
convenience of reference only and shall in no way modify, or affect, or be
considered in construing or interpreting the meaning or construction of any of
the terms or provisions hereof.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 12.12&#9;<A NAME="_Toc444483129"><A
NAME="_Toc461384768"><U>Enforcement</U>.  Each of the parties hereto
acknowledges and agrees that the rights acquired by each party hereunder are
unique and that irreparable damage would occur in the event that any of the
provisions of this Agreement to be performed by the other party were not
performed in accordance with their specific terms or were otherwise breached.
Accordingly, in addition to any other remedy to which the parties hereto are
entitled at law or in equity, each party hereto shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement by the other
party and to enforce specifically the terms and provisions hereof in any Federal
or state court to which the parties have agreed hereunder to submit to
jurisdiction.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 12.13&#9;<A NAME="_Toc444483130"><A
NAME="_Toc461384769"><U>Reliance</U>.  The parties hereto agree that,
notwithstanding any right of any party to this Agreement to investigate the
affairs of any other party to this Agreement, the party having such right to
investigate shall have the right to rely fully upon the representations and
warranties of the other party expressly contained in this Agreement and on the
accuracy of any schedule or other document attached hereto or referred to herein
or delivered by such other party or pursuant to this Agreement.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 12.14&#9;<A NAME="_Toc444483131"><A
NAME="_Toc461384770"><U>Expenses</U>.  Subject to the next sentence, each of the
parties hereto shall pay its own fees and expenses (including the fees and/or
commissions of any attorneys, advisors, brokers, finders, accountants,
appraisers or others engaged by such party) (collectively, &quot;Fees and
Expenses&quot;) in connection with this Agreement and the transactions
contemplated hereby whether or not the transactions contemplated hereby are
consummated</A>.  </A>Notwithstanding the foregoing, Principal Stockholder
shall, prior to the Closing, pay and be solely responsible for all Fees and
Expenses incurred by the Company, including, without limitation, all fees and
commissions payable to Soundview Technology Group, Inc.</P>
<P ALIGN="JUSTIFY">SECTION 12.15&#9;<A NAME="_Toc444483134"><A
NAME="_Toc461384771"><U>Counterparts</U>.  This Agreement may be executed in one
or more counterparts, and by different parties hereto on separate counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 12.16&#9;<A NAME="_Toc444483135"><A
NAME="_Toc461384772"><U>Appointment of Representatives</U>.  Each Stockholder
(other than the Principal Stockholder) hereby appoints Noboru Hiraguri (the
&quot;Representative&quot;), as his or its agent and attorney-in-fact to receive
all notices and service of process and to give notice and service of process to
Acquiror and/or the Company and to take any action and execute any and all
documents and instruments in connection with this Agreement (including, without
limitation, all documents to be executed by the Stockholders and delivered at
the Closing and contemplated hereby, together with all amendments hereto and
thereto) and the transactions contemplated herein as said Representative deems
necessary or desirable.  The Representative hereby represents that he has been
so appointed as agent and attorney-in-fact.  The parties recognize and
acknowledge that the powers and authority granted the Representative are
terminable upon delivery of written notice of termination to the</A> <A
NAME="_Toc444483136">Representative and Acquiror.  Acquiror shall be entitled to
rely upon, and shall be fully protected in so relying, as fully binding upon the
Stockholders, on any instrument or</A> <A NAME="_Toc461384773">document
executed, or any decision made, by the Representative prior to termination of
his authority.</A></A></P>
<P ALIGN="JUSTIFY">SECTION 12.17&#9;<A NAME="_Toc444483137"><A
NAME="_Toc461384774"><U>Further Assurances</U>.  In case at any time any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the parties hereto will take such further action (including the
execution and delivery of such further instruments and documents) as any other
party reasonably may request, all at the sole cost and expense of the requesting
party (unless the requesting party is entitled to indemnification therefor under
Article VIII above).</A></A></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="CENTER"><A NAME="_Toc444483138"><A NAME="_Toc461384775">[THIS SPACE
INTENTIONALLY LEFT BLANK</A>]</A></P>
<P ALIGN="CENTER">[SIGNATURE PAGE TO FOLLOW]</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><A NAME="_Toc444483139"><A NAME="_Toc461384776">IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.</A></A></P>


<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><A NAME="_Toc444483140"><A
NAME="_Toc461384777">&#9;&#9;&#9;&#9;&#9;</A>&#9;JDS UNIPHASE CORPORATION
</A></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;<A NAME="_Toc444483141">&#9;<A
NAME="_Toc461384778"><U>By: /s/ Michael C. Phillips</A></A>&#9;&#9;&#9;&#9;&#9;&#9;</P>
</U><P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;</P>

<P ALIGN="JUSTIFY"><A NAME="_Toc461384779">&#9;&#9;&#9;&#9;&#9;&#9;JDS UNIPHASE
ACQUISITION, INC. </A></P>
<P ALIGN="JUSTIFY"></P>
<P
ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;<U>By:/s/ Michael C. Phillips</U>&#9;&#9;&#9;&#9;&#9;&#9;</P>


<P ALIGN="JUSTIFY"><A NAME="_Toc461384779">&#9;&#9;&#9;&#9;&#9;&#9;EPITAXX, INC.
</A></P>
<P ALIGN="JUSTIFY"></P>
<P
ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;<U>By:/s/ Noboru Hiraguri</U>&#9;&#9;&#9;&#9;&#9;&#9;</P>












<P ALIGN="JUSTIFY"><A NAME="_Toc444483144"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;<A NAME="_Toc461384782">PRINCIPAL
STOCKHOLDER:</A></A></P>
<P ALIGN="JUSTIFY"><A NAME="_Toc461384783">&#9;&#9;&#9;&#9;&#9;&#9;NSG HOLDING
USA, INC.</A></P>
<P ALIGN="JUSTIFY"><A NAME="_Toc444483145"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;By:<U>&#9;&#9;&#9;&#9;&#9;&#9;</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;</A></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">Stockholders:</P>
<P ALIGN="JUSTIFY">/s/ Noboru Hiraguri</P>
<P ALIGN="JUSTIFY">____________________________________________</P>
<P ALIGN="JUSTIFY">Noboru Hiraguri</P>
<P ALIGN="JUSTIFY">/s/ Yves Dzialowski</P>
<P ALIGN="JUSTIFY">____________________________________________</P>
<P ALIGN="JUSTIFY">Yves Dzialowski</P>
<P ALIGN="JUSTIFY">/s/ James Coleman</P>
<P ALIGN="JUSTIFY">____________________________________________</P>
<P ALIGN="JUSTIFY">James Coleman</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<FONT SIZE=3></DIR>
</DIR>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27.1
<SEQUENCE>5
<DESCRIPTION>FINANCIAL DATA SCHEDULE
<TEXT>

<TABLE> <S> <C>

<ARTICLE>      5
<LEGEND>       THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
               EXTRACTED FROM CONSOLIDATED BALANCE SHEETS, CONSOLIDATED
               STATEMENTS OF OPERATIONS AND NOTES TO CONSOLIDTED FINANCIAL
               STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
               SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000


<PERIOD-TYPE>                             3-MOS         6-MOS
<FISCAL-YEAR-END>                         JUN-30-2000   JUN-30-2000
<PERIOD-START>                            JUL-01-1999   JUL-01-1999
<PERIOD-END>                              SEP-30-1999   DEC-31-1999
<CASH>                                           496           132
<SECURITIES>                                     464           753
<RECEIVABLES>                                    142           187
<ALLOWANCES>                                       1             2
<INVENTORY>                                       98           135
<CURRENT-ASSETS>                               1,219         1,228
<PP&E>                                           245           308
<DEPRECIATION>                                    36            52
<TOTAL-ASSETS>                                 4,745         5,186
<CURRENT-LIABILITIES>                            149           222
<BONDS>                                            0             5
<PREFERRED-MANDATORY>                              0             0
<PREFERRED>                                        0             0
<COMMON>                                           0             0
<OTHER-SE>                                     4,284         4,661
<TOTAL-LIABILITY-AND-EQUITY>                   4,745         5,186
<SALES>                                          230           512
<TOTAL-REVENUES>                                 230           512
<CGS>                                            125           265
<TOTAL-COSTS>                                    125           265
<OTHER-EXPENSES>                                 218           478
<LOSS-PROVISION>                                   0             0
<INTEREST-EXPENSE>                                 0             0
<INCOME-PRETAX>                                 (108)         (215)
<INCOME-TAX>                                       6            30
<INCOME-CONTINUING>                             (114)         (131)
<DISCONTINUED>                                     0             0
<EXTRAORDINARY>                                    0             0
<CHANGES>                                          0             0
<NET-INCOME>                                    (114)         (131)
<EPS-BASIC>                                 ($0.68)       ($0.72)
<EPS-DILUTED>                                 ($0.68)       ($0.72)


</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>6
<DESCRIPTION>SECURITY OWNERSHIP
<TEXT>

<HTML>
<head>
<TITLE>SECURITY</TITLE>
</head>
<body bgcolor=white>

<p align="right">
                                             EXHIBIT 99.1 </p>


<B><P ALIGN="CENTER">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</P>





</B><P>The following table sets forth certain information known to the Company with
respect to the beneficial ownership as of January 20, 2000, by (i) all persons
who are beneficial owners of five percent (5%) or more of the Company's Common
Stock, (ii) each director, (iii) certain executive officers, and (iv) all
directors and executive officers as a group.

<p>As of January 20, 2000, 248,261,467 shares of the Company's Common Stock were
outstanding, and as of the same date, 146,578,068 Exchangeable Shares were
outstanding.  The amounts and percentages of Common Stock beneficially owned
are reported on the basis of regulations of the Securities and Exchange
Commission  (the  Commission") governing the determination of beneficial
ownership of securities.  Under the rules of the Commission, a person is deemed
to be a "beneficial owner" of a security if that person has or shares "voting
power," which includes the power to vote or to direct the voting of such
security, or "investment power," which includes the power to dispose
of or to direct the disposition of such security.  A person is also deemed to
be a beneficial owner of any securities of which that person has a right to
acquire beneficial ownership within 60 days.  Under these rules, more than one
person may be deemed a beneficial owner of securities as to which such person
has no economic interest. </P>



<pre>

                                                   Number of Shares
                                                   Beneficially Owned
                                                ------------  ----------
                     Name                          Number     Percentage
----------------------------------------------  ------------  ----------

5% Stockholders
FEJ Holding Inc.(1).......................       72,367,040        18.3%
  c/o The Furukawa Electric Co., Ltd.
  6-1 Marunouchi 2 - Chome
  Chiyoda-Ku, Tokyo 100-8322
  Japan

Named Executive Officers and Directors
  Kevin N. Kalkhoven (2)..................        3,714,634         1.5%
  William J. Sinclair (3).................        1,734,669       *
  Jozef Straus, Ph.D. (4).................           23,902       *
  Dan E. Pettit (5).......................          856,808       *
  Anthony R. Muller (6)...................          620,298       *
  Frederick L. Leonberger, Ph.D. (7)......          438,488       *
  Bruce D. Day (8)........................          175,551       *
  Wilson Sibbett, Ph.D. (9)...............          135,000       *
  Russell A. Johnson(10)..................           64,860       *
  Casimir S. Skrzypczak(11)...............          156,777       *
  Robert E. Enos (12).....................          144,069       *
  Martin A. Kaplan (13)...................          109,444       *
  Peter A. Guglielmi (14).................           61,222       *
  John A. MacNaughton (15)................           43,691       *
All directors and executive officers
as a group (14 persons) (16)..............        8,279,413         3.2%


________________
     *  Less than 1%

</pre>


<OL>

<LI>As reported in a Schedule 13D/A fled December 14, 1999.  All shares are
issuable upon exchange of the Exchangeable Shares of JDS Uniphase Canada
Ltd.</LI>
<LI>Includes 3,464,408 shares subject to stock options currently exercisable or
exercisable within 60&nbsp;days of January 20, 2000.  </LI>
<LI>Includes 90,941 shares subject to stock options currently exercisable or
exercisable within 60&nbsp;days of January 20, 2000 and  1,643,728 shares
issuable upon exchange of the Exchangeable Shares of JDS Uniphase Canada
Ltd.</LI>
<LI>Includes 23,902 shares subject to stock options currently exercisable or
exercisable within 60&nbsp;days of January 20, 2000 </LI>
<LI>Includes 754,508 shares subject to stock options currently exercisable or
exercisable within 60 days of January 20, 2000 and 47,960 shares held by
Kelly&nbsp;A. Pettit, Mr.&nbsp;Pettit's spouse.</LI>
<LI>Includes 252,144 shares subject to stock options currently exercisable or
exercisable within 60&nbsp;days of January 20, 2000, and 19,040 shares held by
Mr.&nbsp;Muller's daughter.</LI>
<LI>Includes 411,432 shares subject to stock options currently exercisable or
exercisable within 60 days of January 20, 2000, and 800 shares held by Katharine
Leonberger and 800 shares held by Gregory Leonberger, Mr.&nbsp;Leonberger's
daughter and son, respectively.</LI>
<LI>Includes 169,451 shares subject to stock options currently exercisable or
exercisable within 60 days of January 20, 2000 and 6,100 shares issuable upon
exchange of the Exchangeable Shares of JDS Uniphase Canada Ltd.</LI>
<LI>Includes 135,000 shares subject to stock options currently exercisable or
exercisable within 60 days of January 20, 2000.</LI>
<LI>Includes 62,500 shares subject to stock options currently exercisable or
exercisable within 60 days of January 20, 2000.</LI>
<LI>Includes 152,777 shares subject to stock options currently exercisable or
exercisable within 60 days of January 20, 2000.</LI>
<LI>Includes 137,969 shares subject to stock options currently exercisable or
exercisable within 60 days of January 20, 2000 and 6,100 shares issuable upon
exchange of the Exchangeable Shares of JDS Uniphase Canada Ltd.</LI>
<LI>Includes 109,444 shares subject to stock options currently exercisable or
exercisable within 60 days of January 20, 2000.</LI>
<LI>Includes 53,222 shares subject to stock options currently exercisable or
exercisable within 60 days of January 20, 2000.</LI>
<LI>Includes35,555  shares subject to stock options currently exercisable or
exercisable within 60 days of January 20, 2000 and 8,136 shares issuable upon
exchange of the Exchangeable Shares of JDS Uniphase Canada Ltd.</LI>
<LI>Includes 5,853,253 shares subject to stock options currently exercisable or
exercisable within 60 days of January 20, 2000, and 1,664,064 shares issuable
upon exchange of the Exchangeable Shares of JDS Uniphase Canada Ltd.</LI></OL>


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