Document:

Exhibit 4.04

 Exhibit 4.04 
  
 [FORM OF ADDITIONAL WARRANTS] 
  

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II)
UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

  
 CORVIS CORPORATION 
  
 WARRANT TO PURCHASE
COMMON STOCK 
  
 Warrant No.: 

 Number of Shares:             1 
 Date of Issuance:
                 , 200_ (the “Issuance Date”) 
  
 Corvis Corporation, a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged,                     , the registered holder hereof or its permitted assigns (the “Holder”), is
entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon surrender of this Warrant to Purchase Common Stock (including all Warrants to Purchase Common Stock issued in
exchange, transfer or replacement hereof, the “Warrant”), at any time or times on or after the date hereof, but not after 11:59 P.M., New York Time, on the Expiration Date (as defined below),
                    
(                    )2 fully paid nonassessable shares of Common Stock (as defined below) (the “Warrant Shares”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 15. This
Warrant is one of the Warrants to Purchase Common Stock (the “SPA Warrants”) issued pursuant to Section 1 of that certain Securities Purchase Agreement, dated as of February 9, 2004 (the “Subscription Date”), among
the Company and the buyers (the “Buyers”) referred to therein (the “Securities Purchase Agreement”). 

	1	Insert number of shares equal to the product of (A)0.15 and (B) the quotient determined by dividing the principal amount of Additional Notes being purchased by the
Holder at the applicable Additional Closing by the Additional Valuation Price (as defined in the Securities Purchase Agreement). 

	2	Same as previous footnote. 

 1. EXERCISE OF WARRANT. 
  
 (a) Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations
set forth in Section 1(f)), this Warrant may be exercised by the Holder on any day, in whole or in part, by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the
Holder’s election to exercise this Warrant and (ii) (A) payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate
Exercise Price”) in cash or wire transfer of immediately available funds or (B) by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to
deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance
of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. On or before the first Business Day following the date on which the Company has received each of the Exercise Notice and the Aggregate Exercise Price (or
notice of a Cashless Exercise) (the “Exercise Delivery Documents”), the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of the Exercise Delivery Documents to the Holder and the Company’s
transfer agent (the “Transfer Agent”). On or before the third Business Day following the date on which the Company has received all of the Exercise Delivery Documents (the “Share Delivery Date”), the Company shall
(X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock to
which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the Transfer Agent is not participating in the DTC Fast
Automated Securities Transfer Program, issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock to which
the Holder is entitled pursuant to such exercise. Upon delivery of the Exercise Notice and Aggregate Exercise Price referred to in clause (ii)(A) above or notification to the Company of a Cashless Exercise referred to in Section 1(d), the Holder
shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates evidencing such Warrant Shares. If
this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise,
then the Company shall as soon as practicable and in no event later than three Business Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant
Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but
rather the number of shares of Common Stock to be 

  

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issued shall be rounded up to the nearest whole number. The Company shall pay any and all taxes, including without limitation, all documentary stamp,
transfer or similar taxes, or other incidental expense that may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. 
  
 (b) Exercise Price. For purposes of this Warrant, “Exercise Price” means
$            3, subject to adjustment as provided
herein. 
  
 (c) Company’s Failure to Timely Deliver
Securities. Subject to Section 1(f), if the Company shall fail for any reason or for no reason to issue to the Holder within three (3) Business Days of receipt of the Exercise Delivery Documents, a certificate for the number of shares of Common
Stock to which the Holder is entitled or to credit the Holder’s balance account with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise of this Warrant, then, in addition to all other
remedies available to the Holder, the Company shall pay in cash to the Holder on each day after such third Business Day that the issuance of such shares of Common Stock is not timely effected an amount equal to 0.5% of the product of (A) the sum of
the number of shares of Common Stock not issued to the Holder on a timely basis and to which the Holder is entitled and (B) the Closing Sale Price of the shares of Common Stock on the trading day immediately preceding the last possible date which
the Company could have issued such shares of Common Stock to the Holder without violating Section 1(a). 
  
 (d) Cashless Exercise. Notwithstanding anything contained herein to the contrary, if at any time during the period commencing ten (10)
Business Days prior to the Holder’s delivery of an Exercise Notice and ending on the day of delivery of the Exercise Notice, a Registration Statement (as defined in the Registration Rights Agreement) covering the Warrant Shares that are the
subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available for the resale of such Unavailable Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of
making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined
according to the following formula (a “Cashless Exercise”): 
  
 Net Number = (A x B) - (A x C) 
 B 
  
 For purposes of the foregoing formula: 
  
 A= the total number of shares with respect to which 
 this Warrant is then being exercised. 
  
 B= the Closing Sale Price of the Common Stock (as 
 reported by Bloomberg) on the date immediately 
 preceding the date of the Exercise Notice. 

	3	Insert 125% of the Additional Valuation Price. 

  

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 C= the Exercise Price then in effect for the 
 applicable Warrant Shares at the time of such 
 exercise. 
  
 (e) Disputes. In the case of a
dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with
Section 12. 
  
 (f) Limitations on Exercises. 

 
 (i) Beneficial Ownership. The Company shall not effect the
exercise of this Warrant, and no Holder shall have the right to exercise this Warrant, to the extent that after giving effect to such exercise, such Person (together with such Person’s affiliates) would beneficially own in excess of 4.99% (the
“Maximum Percentage”) of the shares of the Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such
Person and its affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be
issuable upon (i) exercise of the remaining, unexercised portion of this Warrant beneficially owned by such Person and its affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company
beneficially owned by such Person and its affiliates (including, without limitation, any debentures, convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation
contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this
Warrant, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Form 10-Q, Form 10-K or other public filing with the
Securities and Exchange Commission, as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or its Transfer Agent setting forth the number of shares of Common Stock outstanding. For any reason
at any time, upon the written or oral request of the Holder, the Company shall within one Business Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares
of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including the SPA Securities and the SPA Warrants, by the Holder and its affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. By written notice to the Company, the Holder may increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% specified in such notice; provided that any such increase
will not be effective until the 61st day after such notice is delivered to the Company, and (ii) any such increase or decrease will apply only to the Holder and not to any other holder of Warrants. 
  

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 (ii) Principal Market Regulation. The Company shall not be obligated to issue any shares of Common
Stock upon exercise of this Warrant if the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue upon exercise of this Warrant and the SPA Securities (including, as applicable, any
shares of Common Stock issued upon conversion of or as payment of any interest under the SPA Securities) without breaching the Company’s obligations under the rules or regulations of the Principal Market (the “Principal Market
Cap”), except that such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders as required by the applicable rules of the Principal Market for issuances of Common Stock in excess of such amount
or (B) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of the SPA Warrants representing at least a majority of the shares of Common Stock
underlying the SPA Warrants then outstanding. Until such approval or written opinion is obtained, no Holder shall be issued, upon exercise of any SPA Warrants or conversion of any SPA Securities, shares of Common Stock in an amount greater than the
product of the Principal Market multiplied by a fraction, the numerator of which is the total number of shares of Common Stock underlying the SPA Warrants issued to such Purchaser pursuant to the Securities Purchase Agreement on the Initial Closing
Date (as defined in the Securities Purchase Agreement) and the denominator of which is the aggregate number of shares of Common Stock underlying all the SPA Warrants issued to the Buyers pursuant to the Securities Purchase Agreement on the Initial
Closing Date (with respect to each Purchaser, the “Principal Market Cap Allocation”). In the event that any Purchaser shall sell or otherwise transfer any of such Purchaser’s SPA Warrants, the transferee shall be allocated a
pro rata portion of such Purchaser’s Principal Market Cap Allocation, and the restrictions of the prior sentence shall apply to such transferee with respect to the portion of the Principal Market Cap Allocation allocated to such transferee. In
the event that any holder of SPA Warrants shall exercise all of such holder’s SPA Warrants into a number of shares of Common Stock which, in the aggregate, is less than such holder’s Principal Market Cap Allocation, then the difference
between such holder’s Principal Market Cap Allocation and the number of shares of Common Stock actually issued to such holder shall be allocated to the respective Principal Market Cap Allocations of the remaining holders of SPA Warrants on a
pro rata basis in proportion to the shares of Common Stock underlying the SPA Warrants then held by each such holder. In the event that the Company is prohibited from issuing any Warrant Shares for which an Exercise Notice has been received as a
result of the operation of this Section 1(f)(ii), the Company shall pay cash in exchange for cancellation of such Warrant Shares, at a price per Warrant Share equal to the difference between the Closing Sale Price and the Exercise Price as of the
date of the attempted exercise. 
  

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 2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of
Warrant Shares shall be adjusted from time to time as follows: 
  
 (a) Adjustment upon Issuance of Common Stock. If and whenever on or after the Subscription Date the Company issues or sells, or in accordance with this Section 2 is deemed to have issued or sold, any shares of Common Stock (including
the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding Excluded Securities (as defined in the SPA Securities)) for a consideration per share less than a price (the “Applicable
Price”) equal to the Exercise Price in effect immediately prior to such issue or sale or deemed issuance or sale (the foregoing, a “Dilutive Issuance”), then immediately after such Dilutive Issuance the Exercise Price then
in effect shall be reduced to an amount equal to the product of (x) the Exercise Price in effect immediately prior to such Dilutive Issuance and (y) the quotient determined by dividing (1) the sum of the product of the Applicable Price and the
number of shares of Common Stock Deemed Outstanding immediately prior to such Dilutive Issuance and the consideration, if any, received by the Company upon such Dilutive Issuance, by (2) the product of the Applicable Price multiplied by the number
of shares of Common Stock Deemed Outstanding immediately after such Dilutive Issuance. Upon each such adjustment of the Exercise Price hereunder, the number of Warrant Shares shall be adjusted to the number of shares of Common Stock determined by
multiplying the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares acquirable upon exercise of this Warrant immediately prior to such adjustment and dividing the product thereof by the Exercise Price
resulting from such adjustment. For purposes of determining the adjusted Exercise Price under this Section 2(a), the following shall be applicable: 
  
 (i) Issuance of Options. If the Company in any manner grants any Options and the lowest price per share for which one share of Common Stock is
issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For purposes of this Section 2(a)(i), the “lowest price per share for which one share of Common Stock is
issuable upon exercise of such Options or upon conversion, exercise or exchange of such Convertible Securities” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any
one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option. No further adjustment of the Exercise Price
or number of Warrant Shares shall be made upon the actual issuance of such Common Stock or of such Convertible Securities upon the exercise of such Options or upon the actual issuance of such Common Stock upon conversion, exercise or exchange of
such Convertible Securities. 
  
 (ii) Issuance of Convertible
Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section
2(a)(ii), the “lowest price per share for which one share of Common Stock is 

  

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issuable upon the conversion, exercise or exchange” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by
the Company with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of such Convertible Security. No further adjustment of the Exercise Price or number of Warrant
Shares shall be made upon the actual issuance of such Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise of any Options for which
adjustment of this Warrant has been or is to be made pursuant to other provisions of this Section 2(a), no further adjustment of the Exercise Price or number of Warrant Shares shall be made by reason of such issue or sale. 
  
 (iii) Change in Option Price or Rate of Conversion. If the purchase
price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible Securities are convertible into or exercisable or
exchangeable for Common Stock increases or decreases at any time, the Exercise Price and the number of Warrant Shares in effect at the time of such increase or decrease shall be adjusted to the Exercise Price and the number of Warrant Shares which
would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially
granted, issued or sold. For purposes of this Section 2(a)(iii), if the terms of any Option or Convertible Security that was outstanding as of the date of issuance of this Warrant are increased or decreased in the manner described in the immediately
preceding sentence, then such Option or Convertible Security and the Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant
to this Section 2(a) shall be made if such adjustment would result in an increase of the Exercise Price then in effect or a decrease in the number of Warrant Shares. 
  
 (iv) Calculation of Consideration Received. If case any Option is issued in connection with the issue or sale of
other securities of the Company, together comprising one integrated transaction in which no specific consideration is allocated to such Options by the parties thereto, the Options will be deemed to have been issued for a consideration of $0.01. If
any Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the net amount received by the Company therefor. If any Common Stock,
Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where such consideration consists of securities,
in which case the amount of consideration received by the Company will be the Closing Sale Price of such security on the date of receipt. If any Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in
connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such
Common Stock, Options or Convertible 

  

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Securities, as the case may be. The fair value of any consideration other than cash or securities will be determined jointly by the Company and the holders
of SPA Warrants representing at least a majority of the shares of Common Stock obtainable upon exercise of the SPA Warrants then outstanding. If such parties are unable to reach agreement within 10 days after the occurrence of an event requiring
valuation (the “Valuation Event”), the fair value of such consideration will be determined within fifteen Business Days after the tenth day following the Valuation Event by an independent, reputable appraiser jointly selected by the
Company and the holders of SPA Warrants representing at least a majority of the shares of Common Stock obtainable upon exercise of the SPA Warrants then outstanding. The determination of such appraiser shall be final and binding upon all parties
absent manifest error and the fees and expenses of such appraiser shall be borne by the Company. 
  
 (v) Record Date. If the Company takes a record of the holders of Common Stock for the purpose of entitling them (A) to receive a dividend or other
distribution payable in Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issue or sale of the shares of
Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be. 
  
 (vi) This Warrant Deemed Outstanding. If during the period beginning
on and including the Subscription Date and ending on the date immediately preceding the date of issuance of this Warrant, the Company entered into, or in accordance with Section 2(a) would have been deemed to have entered into (had this Warrant been
outstanding at such time), any Dilutive Issuance, then solely for purposes of determining any adjustment under this Section 2(a) as a result of such Dilutive Issuance or deemed Dilutive Issuance, this Warrant shall be deemed to have been outstanding
at the time of each such Dilutive Issuance or deemed Dilutive Issuance. 
  
 (b) Adjustment upon Subdivision or Combination of Common Stock. If the Company at any time after the Subscription Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company
at any time on or after the Subscription Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior
to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(b) shall become effective at the close of business on the date the subdivision or
combination becomes effective. 
  
 (c) Other Events. If any
event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions (including, without 

  

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limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s Board of Directors
will make an appropriate adjustment in the Exercise Price and the number of Warrant Shares so as to protect the rights of the Holder; provided that no such adjustment pursuant to this Section 2(c) will increase the Exercise Price or decrease the
number of Warrant Shares as otherwise determined pursuant to this Section 2. 
  
 3. RIGHTS UPON DISTRIBUTION OF ASSETS. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Common Stock, by way of return of
capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement or other similar transaction) (a
“Distribution”), at any time after the issuance of this Warrant, then, in each such case: 
  
 (a) any Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of Common Stock
entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying such Exercise Price by a fraction of which (i) the numerator shall be the Closing Bid Price of the
Common Stock on the trading day immediately preceding such record date minus the value of the Distribution (as determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (ii) the denominator shall
be the Closing Bid Price of the Common Stock on the trading day immediately preceding such record date; and 
  
 (b) the number of Warrant Shares shall be increased to a number of shares equal to the number of shares of Common Stock obtainable immediately prior to
the close of business on the record date fixed for the determination of holders of Common Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding paragraph (a); provided that in
the event that the Distribution is of common stock (“Other Common Stock”) of a company whose common stock is traded on a national securities exchange or a national automated quotation system, then the Holder may elect to receive a
warrant to purchase Other Common Stock in lieu of an increase in the number of Warrant Shares, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable into the number of shares of Other Common
Stock that would have been payable to the Holder pursuant to the Distribution had the Holder exercised this Warrant immediately prior to such record date and with an aggregate exercise price equal to the product of the amount by which the exercise
price of this Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding paragraph (a) and the number of Warrant Shares calculated in accordance with the first part of this paragraph (b). 
  
 4. PURCHASE RIGHTS; ORGANIC CHANGE. 
  
 (a) Purchase Rights. In addition to any adjustments pursuant to
Section 2 above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the
“Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if such holder had held the number of shares of
Common Stock 

  

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acquirable upon complete exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) immediately before the date on which a
record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights. 

 
 (b) Organic Change. Any recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or substantially all of the Company’s assets to another Person or other transaction, in each case which is effected in such a way that holders of Common Stock are entitled to receive
securities or assets with respect to or in exchange for Common Stock is referred to herein as an “Organic Change.” Prior to the consummation of any (i) sale of all or substantially all of the Company’s assets to an acquiring
Person or (ii) other Organic Change following which the Company is not a surviving entity, the Company will secure from the Person purchasing such assets or the Person issuing the securities or providing the assets in such Organic Change (in each
case, the “Acquiring Entity”) a written agreement (in form and substance reasonably satisfactory to the holders of SPA Warrants representing at least a majority of the shares of Common Stock obtainable upon exercise of the SPA
Warrants then outstanding) to deliver to the Holder in exchange for this Warrant, a security of the Acquiring Entity evidenced by a written instrument substantially similar in form and substance to this Warrant and reasonably satisfactory to the
holder of this Warrant (including an adjusted exercise price equal to the value for the Common Stock reflected by the terms of such consolidation, merger or sale, and exercisable for a corresponding number of shares of Common Stock acquirable and
receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant), if the value so reflected is less than the Exercise Price in effect immediately prior to such consolidation, merger or sale). In the event
that an Acquiring Entity is directly or indirectly controlled by a company or entity whose common stock or similar equity interest is listed, designated or quoted on a securities exchange or trading market, the Holder may elect to treat such Person
as the Acquiring Entity for purposes of this Section 4(b). Prior to the consummation of any other Organic Change, the Company shall make appropriate provision (in form and substance reasonably satisfactory to the holders of SPA Warrants representing
at least a majority of the shares of Common Stock obtainable upon exercise of the SPA Warrants then outstanding) to insure that the Holder thereafter will have the right to acquire and receive in lieu of or in addition to (as the case may be) the
shares of Common Stock immediately theretofore acquirable and receivable upon the exercise of this Warrant (without regard to any limitations on the exercise of this Warrant), such shares of stock, securities or assets that would have been issued or
payable in such Organic Change with respect to or in exchange for the number of shares of Common Stock which would have been acquirable and receivable upon the exercise of this Warrant as of the date of such Organic Change (without regard to any
limitations on the exercise of this Warrant). 
  
 5.
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be
required to protect the rights of the Holder. Without 

  

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limiting the generality of the foregoing, the Company (i) will not increase the par value of any shares of Common Stock receivable upon the exercise of this
Warrant above the Exercise Price then in effect, (ii) will take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this
Warrant, and (iii) will, so long as any of the SPA Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting the exercise of the SPA
Warrants, 125% of the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of the SPA Warrants then outstanding (without regard to any limitations on exercise). 
  
 6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise
specifically provided herein, the Holder, solely in such Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of shares of the Company for any purpose, nor shall anything
contained in this Warrant be construed to confer upon the Holder, solely in such Person’s capacity as the Holder, any of the rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action (whether
any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant
Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company will provide the Holder with copies of the same notices and
other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders. 
  
 7. REISSUANCE OF WARRANTS. 
  
 (a) Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if
less then the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

  
 (b) Lost, Stolen or Mutilated Warrant. Upon receipt by
the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in
customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares
then underlying this Warrant. 
  

 - 11 - 

 (c) Warrant Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender
hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such
new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no Warrants for fractional shares of Common Stock shall be given. 

 
 (d) Issuance of New Warrants. Whenever the Company is required to
issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying
this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants issued in
connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant, which is the same as the Issuance Date, and (iv) shall have
the same rights and conditions as this Warrant. 
  
 8.
NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with
prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefore. Without limiting the generality of the foregoing, the Company will give written notice to the
Holder (i) promptly upon any adjustment of the Exercise Price or number of Warrant Shares or number or kind of securities purchasable upon exercise of this Warrant, setting forth in reasonable detail, and certifying, the facts requiring such
adjustment and the calculation of such adjustment and (ii) at least fifteen days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to
any grants, issues or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of Common Stock or (C) for determining rights to vote with respect to any Change of Control (as defined
in the SPA Securities), dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder. 
  
 9. AMENDMENT AND WAIVER. Except as otherwise provided herein, the
provisions of this Warrant may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the holders of SPA Warrants
representing at least a majority of the shares of Common Stock obtainable upon exercise of the SPA Warrants then outstanding; provided that no such action may increase the exercise price of any SPA Warrant or decrease the number of shares or class
of stock obtainable upon exercise of any SPA Warrant without the written consent of the Holder. No such amendment shall be effective to the extent that it applies to less than all of the holders of the SPA Warrants then outstanding. 
  

 - 12 - 

 10. GOVERNING LAW. This Warrant shall be construed and enforced in accordance with, and all
questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. 
  
 11. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and all the holders of
SPA Warrants and shall not be construed against any person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant. 
  
 12. DISPUTE RESOLUTION. In the case of a dispute as to the
determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two Business Days of receipt of the Exercise Notice giving
rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three Business Days of such disputed determination
or arithmetic calculation being submitted to the Holder, then the Company shall, within two Business Days submit via facsimile (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the Company
and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall use reasonable best efforts to cause the investment bank or the accountant, as the
case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or
accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error. 
  
 13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant and the other Transaction Documents (as defined in the Securities Purchase Agreement) at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein
shall limit the right of the Holder right to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the
holder of this Warrant and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required. 
  
 14. TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, except as may otherwise be
required by Sections 2(f) and 2(g) of the Securities Purchase Agreement. 
  

 - 13 - 

 15. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the
following meanings: 
  
 (a) “Bloomberg” means
Bloomberg Financial Markets. 
  
 (b) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed. 
  
 (c) “Closing Bid Price” and “Closing Sale Price” means, for any security as of any date,
the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing
bid price or the closing trade price, as the case may be, then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg, or, if the Principal Market is not the principal
securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by
Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing
bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the “pink sheets” by Pink Sheets
LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the
case may be, of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be
resolved pursuant to Section 12. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period. 
  
 (d) “Common Stock” means (i) the Company’s common
stock, par value $0.01 per share, and (ii) any capital stock into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock. 
  
 (e) “Common Stock Deemed Outstanding” means, at any given
time, the number of shares of Common Stock actually outstanding at such time, plus the number of shares of Common Stock deemed to be outstanding pursuant to Sections 2(a)(i) and 2(a)(ii) hereof regardless of whether the Options or Convertible
Securities are actually exercisable or convertible at such time, but excluding any shares of Common Stock owned or held by or for the account of the Company or issuable upon conversion of the SPA Securities or exercise of the SPA Warrants.

  
 (f) “Convertible Securities” means any stock
or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for Common Stock. 
  

 - 14 - 

 (g) “Expiration Date” means the date three years after the applicable Closing Date (as
defined in the Securities Purchase Agreement) at which the Company’s obligation to issue this Warrant arose or, if such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a
“Holiday”), the next date that is not a Holiday. 
  
 (h) “Options” means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities. 
  
 (i) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated
organization, any other entity and a government or any department or agency thereof. 
  
 (j) “Principal Market” means the Nasdaq National Market. 
  
 (k) “Registration Rights Agreement” means that certain registration rights agreement dated as of February 9, 2004, by and among the
Company and the Buyers, as the same may be amended from time to time in accordance with the provisions thereof. 
  
 (l) “SPA Securities” means the senior convertible notes issued or issuable pursuant to the Securities Purchase Agreement. 
  
 [Signature Page Follows] 
  

 - 15 - 

 IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly
executed as of the Issuance Date set out above. 
  

			
	 CORVIS CORPORATION

		
	 By:
	 	  

	 	 	 Name:

	 	 	 Title:

 EXHIBIT A 
  

EXERCISE NOTICE 
  
 TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS 
 WARRANT TO PURCHASE COMMON STOCK 
  
 CORVIS CORPORATION 
  
 The undersigned holder
hereby exercises the right to purchase              of the shares of Common Stock (“Warrant Shares”) of Corvis Corporation, a Delaware corporation (the
“Company”), evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

  
 1. Form of Exercise Price. The Holder intends that payment of
the Exercise Price shall be made as: 
  
              a “Cash Exercise” with respect to              Warrant Shares; 

and/or 
  
              a “Cashless Exercise” with respect to
             Warrant Shares. 
  
 2. Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $                     to the Company in accordance with the
terms of the Warrant. 
  
 3. Delivery of Warrant Shares. The
Company shall deliver to the holder              Warrant Shares in accordance with the terms of the Warrant. 
  
 Date:                     
    ,          
  

			
	  

	 Name of Registered Holder

  

			
	By:	 	

	 	 	 Name:

	 	 	 Title:

 ACKNOWLEDGMENT 
  
 The Company hereby acknowledges this Exercise Notice and hereby directs Continental Stock Transfer & Trust Company to
issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated February         , 2004 from the Company and acknowledged and agreed to by Continental
Stock Transfer & Trust Company. 
  

			
	 CORVIS CORPORATION

		
	 By:
	 	  

	 	 	 Name:

	 	 	 Title:Exhibit 10.1

 Exhibit 10.1 
  
 SECURITIES PURCHASE AGREEMENT 
  

SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of February 9, 2004 by and among Corvis Corporation, a Delaware
corporation, with headquarters located at 7015 Albert Einstein Drive, Columbia, Maryland 21046 (the “Company”), and the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and
collectively, the “Buyers”). 
  
 WHEREAS:

  
 A. The Company and each Buyer are executing and delivering
this Agreement in reliance upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of Regulation D (“Regulation D”) as
promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act. 
  
 B. The Company has authorized a new series of senior convertible notes of the Company in the form attached hereto as Exhibit A (together with any
senior convertible notes issued in replacement thereof in accordance with the terms thereof, the “Initial Notes”), which Initial Notes shall be convertible into shares of the Company’s common stock, par value $0.01 per share
(the “Common Stock”) (as converted, the “Initial Conversion Shares”), in accordance with the Initial Notes. 
  
 C. The Company has authorized a new series of senior convertible notes of the Company in the form attached hereto as Exhibit B (together with any
senior convertible notes issued in replacement thereof in accordance with the terms thereof, the “Additional Notes”), which Additional Notes shall be convertible into shares of the Common Stock (as converted, the “Additional
Conversion Shares” and, collectively with the Initial Conversion Shares and any Common Stock issued upon any redemption or amortization of, or other payment (other than interest) under, any of the Notes (as defined below), the
“Conversion Shares”) in accordance with the terms of the Additional Notes. 
  
 D. The Initial Notes and the Additional Notes collectively are referred to in this Agreement as the “Notes”. 
  
 E. The Notes bear interest, which at the option of the Company, subject to certain conditions, may be paid in shares of Common Stock (the
“Interest Shares”). 
  
 F. Each Buyer wishes to
purchase, severally but not jointly, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, (i) that aggregate principal amount of Initial Notes set forth opposite such Buyer’s name in column (3) on the Schedule
of Buyers (which aggregate principal amount for all Buyers shall be $225,000,000) and (ii) warrants, in substantially the form attached hereto as Exhibit C (the “Initial Warrants”), to acquire that number of shares of Common
Stock for each $1,000 of principal amount of Initial Notes purchased (as exercised, collectively, the “Initial Warrant Shares”) equal to the quotient of (i) $250 divided by (ii) the lesser of (x) $2.55 and (y) the arithmetic average
of the Weighted Average Price (as defined in the Notes) of the Common Stock on each of the three (3) consecutive Trading Days (as defined in the Notes) immediately preceding the Initial Closing Date (as defined below)(the “Initial Valuation
Price”). 

 G. Subject to the terms and conditions set forth in this Agreement, each Buyer may be required to
purchase, and the Company may have the right or each Buyer may elect to purchase and the Company may be required to sell (i) up to that aggregate principal amount of Additional Notes set forth opposite such Buyer’s name in column (4) on the
Schedule of Buyers (which aggregate principal amount for all Buyers shall be up to $75,000,000) and (ii) warrants, in substantially the form attached hereto as Exhibit D (the “Additional Warrants” and, collectively with the
Initial Warrants, the “Warrants”), to acquire that number of shares of Common Stock for each $1,000 of principal amount of Additional Notes purchased (as exercised, collectively, the “Additional Warrant Shares”)
equal to the quotient of (i) $150 divided by (ii) the arithmetic average of the Weighted Average Price (as defined in the Notes) of the Common Stock on each of the five (5) consecutive Trading Days immediately preceding the Additional Closing Date
(as defined below) (the “Additional Valuation Price”). 
  
 H. Contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement, substantially in the form attached hereto as Exhibit E (the
“Registration Rights Agreement”), pursuant to which the Company has agreed to provide certain registration rights with respect to the Conversion Shares, the Warrant Shares and the Interest Shares under the 1933 Act and the rules and
regulations promulgated thereunder, and applicable state securities laws. 
  
 I. The Notes, the Conversion Shares, the Interest Shares, the Warrants and the Warrant Shares collectively are referred to herein as the “Securities”. 
  
 NOW, THEREFORE, the Company and each Buyer hereby agree as follows:

  
 1. PURCHASE AND SALE OF NOTES AND WARRANTS.

  
 (a) Purchase of Notes and Warrants. 
  
 (i) Initial Notes and Initial Warrants. Subject to the
satisfaction (or waiver) of the conditions set forth in Sections 6(a) and 7(a) below, the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Initial Closing Date (as
defined below), a principal amount of Initial Notes as is set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers, along with Initial Warrants to acquire that number of Initial Warrant Shares for each $1,000 principal
amount of Initial Notes purchased equal to the quotient of (A) $250 divided by (B) the Initial Valuation Price. 
  
 (ii) Additional Notes and Additional Warrants. Subject to satisfaction (or waiver) of the conditions set forth in Sections 1(c), 6(b) and
7(b) below, the Company may elect to issue and sell (or may be required by any Buyer to issue and sell), and each Buyer severally, but not jointly, if so elected by the Company (or if so required by such Buyer), shall be required to purchase on the
applicable Additional Closing Date a principal amount of Additional Notes not to exceed such principal amount of Additional Notes as is set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers, along with Additional Warrants
to 
  

 2 

 acquire that number of Additional Warrant Shares for each $1,000 principal amount of Additional Notes purchased equal to
the quotient of (A) $150 divided by (B) the Additional Valuation Price. 
  
 (iii) Closings. The closing of the purchase of the Initial Notes and Initial Warrants (the “Initial Closing”) shall occur on the Initial Closing Date and the closing of the purchase of any
Additional Notes and any Additional Warrants (each, an “Additional Closing”) shall occur on the applicable Additional Closing Date at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New York 10022. The
Initial Closing and the Additional Closings collectively are referred to in this Agreement as the “Closings.” The Initial Closing Date and the Additional Closing Dates collectively are referred to in this Agreement as the
“Closing Date.” 
  
 (iv) Purchase Price.
The purchase price for each Buyer (the “Purchase Price”) of the Notes and related Warrants to be purchased by each such Buyer at each Closing shall be equal to $1.00 for each $1.00 of principal amount of Notes being purchased by
such Buyer at such Closing. 
  
 (b) Initial Closing Date.
The date and time of the Initial Closing (the “Initial Closing Date”) shall be 10:00 a.m., New York City Time, on the fourth Trading Day following, but not including the Trading Day of, the public announcement by the Company of its
earnings for the fourth quarter of 2003 (the “2003 Earnings”), subject to notification of satisfaction (or waiver) of the conditions to the Initial Closing set forth in Sections 6(a) and 7(a) below (or such other time or date as is
mutually agreed to by the Company and each Buyer). 
  
 (c)
Additional Closing Date. 
  
 (i) Subject to timely
delivery by the Company to the Buyers of a valid Company Additional Note Notice (as defined below) or by any Buyer to the Company of a Buyer’s Additional Note Notice (as defined below), the date and time of each Additional Closing (each, an
“Additional Closing Date”) shall be 10:00 a.m., New York Time, on the date specified in the applicable Company Additional Note Notice or Buyer’s Additional Note Notice, as applicable, subject to satisfaction (or waiver) of the
conditions to the Additional Closing set forth in Sections 6(b) and 7(b) below and the conditions set forth in this Section 1(c) (or such other date or time as is mutually agreed to by the Company and the Buyers). Subject to the requirements of
Sections 6(b) and 7(b) below and the conditions contained in this Section 1(c), the Company on one occasion may require each Buyer severally, but not jointly, to purchase up to such principal amount of Additional Notes as is set forth opposite such
Buyer’s name in column (4) on the Schedule of Buyers on the Additional Closing Date by delivering written notice (the “Company Additional Note Notice”) to each Buyer on any date from and after the nine-month anniversary of the
Initial Closing Date and prior to the twenty-two month anniversary of the Initial Closing Date (the “Additional Note Notice Period”; and the date of receipt of the Company Additional Note Notice, the “Additional Note Notice
Date”). The Company Additional Note Notice shall be irrevocable and must be delivered to each Buyer. The Company Additional Note Notice shall set forth (i) each Buyer’s pro rata allocation (based on the principal amount of Additional
Notes as is set forth opposite each such Buyer’s name in column (4) on the Schedule of Buyers in relation to $75,000,000) of the aggregate principal amount of Additional Notes (which aggregate principal amount shall not exceed $75,000,000) and
related 
  

 3 

 Additional Warrants which the Company is requiring all of the Buyers to purchase at the Additional Closing, (ii) the
aggregate Purchase Price for each such Buyer’s Additional Notes and related Additional Warrants and (iii) the Additional Closing Date, which Additional Closing Date shall be on the sixth (6th) Trading Day after the Additional Note Notice Date. Notwithstanding anything in this Agreement to the contrary, the Company shall not be entitled to require
the Buyers to purchase the Additional Notes unless, in addition to the requirements of Sections 6(b) and 7(b) below, the following Conditions to Company Additional Note Notice are satisfied. 
  
 (ii) “Conditions to Company Additional Note Notice” means:
(i) on the Additional Note Notice Date, the Registration Statement (as defined in the Registration Rights Agreement) covering the Initial Registrable Securities (as defined in the Registration Rights Agreement) (the “Initial Registration
Statement”) shall be effective and available for the sale of at least all of the Registrable Securities (as defined in the Registration Rights Agreement) required to be included in such Registration Statement; (ii) during the ninety (90)
Trading Days immediately preceding each of the Additional Note Notice Date and the Additional Closing Date, the Initial Registration Statement shall be effective and available for the sale of at least all of the Registrable Securities required to be
included in such Registration Statement; (iii) the Company shall have no knowledge of any fact that would cause the Initial Registration Statement not to continue to be effective and available for the sale of at least all of the Registrable
Securities in accordance with the terms of the Registration Rights Agreement; (iv) on each day during the period beginning on the date hereof and ending on and including the Additional Closing Date, the Common Stock is designated for quotation on an
Eligible Market (as defined in the Notes) and delisting or suspension by such market or exchange shall not have been threatened or pending either (A) in writing by such market or exchange or (B) by falling below for at least the requisite period the
applicable minimum listing maintenance requirements of such market or exchange; (v) during the ninety (90) Trading Days immediately preceding each of the Additional Note Notice Date and the Additional Closing Date, (A) the Common Stock shall not
have been suspended from trading on the applicable Eligible Market (other than suspensions of not more than one day and occurring prior to the first day of the Measuring Period (as defined below) due to business announcements by the Company) and (B)
the Common Stock shall not have fallen below, on any day during such period, the minimum listing maintenance requirements of such market or exchange and (vi) during the forty-five (45) Trading Days immediately preceding each of the Additional Note
Notice Date and the Additional Closing Date there shall not have been any Grace Periods (as defined in the Registration Rights Agreement); (vii) during the period beginning on the date hereof and ending on and including the Additional Closing Date,
there shall not have occurred (A) an Event of Default (as defined in the Notes) other than an Event of Default that is capable of being cured that has been so cured, or (B) the public announcement of a pending, proposed or intended Change of Control
(as defined in the Notes), unless such pending, proposed or intended Change of Control has been terminated, abandoned or consummated and the Company has publicly announced such termination, abandonment or consummation of such Change of Control prior
to the beginning of the Measuring Period; (viii) during the ninety (90) Trading Days immediately preceding each of the Additional Note Notice Date and the Additional Closing Date there shall not have been an event that with the passage of time and
without being cured would be reasonably likely to constitute an Event of Default; (ix) during the period beginning on the Initial Closing Date and ending on and including the Additional Closing Date, the Company shall have delivered Initial
Conversion 
  

 4 

 Shares upon conversion, redemption or amortization, if applicable, of the Initial Notes and Initial Warrant Shares upon
exercise of the Initial Warrants on a timely basis as set forth in the Initial Notes and the Initial Warrants, respectively; (x) on or before delivery of the Company Additional Note Notice, the Company shall have received the Stockholder Approval
(as defined in Section 4(n) below); (xi) the Company otherwise shall have been in material compliance with and shall not have materially breached any provision, covenant, representation or warranty of any Transaction Document (as defined in Section
3(b) below) or any document governing any Indebtedness (as defined in Section 3(k) below); and (xii) the Weighted Average Price (as defined in the Additional Notes) of the Common Stock exceeds $1.35 (as appropriately adjusted for any stock splits,
stock dividends, stock combinations and other similar transactions of the Common Stock which occur after the date of this Agreement) on each of the 20 consecutive Trading Days immediately prior to the Additional Note Notice Date (the
“Measuring Period”). 
  
 (iii) In addition to
the foregoing, any Buyer shall be allowed to deliver to the Company a notice of such Buyer’s election (the “Buyer’s Additional Note Notice”) at any time during the Additional Note Notice Period to purchase at an Additional
Closing all, but not less than all, of the principal amount of Additional Notes as is set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers (or such lesser amount remaining as a result of an exercise by the Company of its
rights pursuant to Section 3(c)(i)), along with Additional Warrants to acquire that number of Additional Warrant Shares for each $1,000 principal amount of Additional Notes purchased equal to the quotient of (A) $150 divided by (B) the Additional
Valuation Price; provided, however, that in order to deliver a Buyer’s Additional Note Notice, the Weighted Average Price of the Common Stock must exceed 200% of the Initial Valuation Price (as appropriately adjusted for any stock
splits, stock dividends, stock combinations and other similar transactions of the Common Stock which occur after the date of this Agreement) on each of not less than ten (10) Trading Days in the twenty (20) consecutive Trading Day period immediately
preceding delivery of the Buyer’s Additional Note Notice. The Buyers’ Additional Note Notice shall set forth the applicable Additional Closing Date, which Additional Closing Date shall be on the sixth (6th) Trading Day after delivery of the Buyer’s Additional Note Notice. Promptly, and in any event within one Trading Day, after receipt of a
Buyer’s Additional Note Notice, the Company shall deliver a copy of such notice to all of the Buyers. 
  
 (d) Form of Payment. On each Closing Date, (i) each Buyer shall pay its Purchase Price to the Company for the Notes and Warrants to be issued and
sold to such Buyer at such Closing, by wire transfer of immediately available funds in accordance with the Company’s written wire instructions, and (ii) the Company shall deliver to each Buyer the Notes (in the principal amounts as such Buyer
shall request) which such Buyer is then purchasing along with the Warrants (in the amounts as such Buyer shall request) such Buyer is purchasing, duly executed on behalf of the Company and registered in the name of such Buyer or its designee.

  
 2. BUYER’S REPRESENTATIONS AND WARRANTIES.

  
 Each Buyer represents and warrants with respect to only itself
that: 
  
 (a) No Public Sale or Distribution. Such Buyer
is (i) acquiring the Notes and the Warrants, and (ii) upon conversion of the Notes and exercise of the Warrants will acquire the Conversion Shares issuable upon conversion of the Notes and the Warrant Shares issuable upon exercise of the Warrants,
for its own account and not with a view towards, or for resale in 
  

 5 

 connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the 1933
Act; provided, however, that by making the representations herein, such Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an exemption under the 1933 Act. Such Buyer is acquiring the Securities hereunder in the ordinary course of its business. Such Buyer presently does not have any agreement or understanding,
directly or indirectly, with any Person to distribute any of the Securities. 
  
 (b) Accredited Investor Status. Such Buyer is an “accredited investor” (as that term is defined in Rule 501(a) of Regulation D). 
  
 (c) Reliance on Exemptions. Such Buyer understands that the Securities
are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Buyer’s
compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire the Securities.

  
 (d) Information. Such Buyer and its advisors, if any,
have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by such Buyer. Such Buyer and its advisors, if any, have
been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect such Buyer’s
right to rely on the Company’s representations and warranties contained herein. Such Buyer understands that its investment in the Securities involves a high degree of risk. Such Buyer has sought such accounting, legal and tax advice as it has
considered necessary to make an informed investment decision with respect to its acquisition of the Securities. 
  
 (e) No Governmental Review. Such Buyer understands that no United States federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities. 
  
 (f) Transfer or Resale. Such Buyer understands that except as provided
in the Registration Rights Agreement: (i) the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered
thereunder, (B) such Buyer shall have delivered to the Company an opinion of counsel reasonably acceptable to the Company, in a form reasonably acceptable to the Company, to the effect that such Securities to be sold, assigned or transferred may be
sold, assigned or transferred pursuant to an exemption from such registration, (C) transferred to an Affiliate (as defined in Rule 144, an “Affiliate”) of such Buyer that certifies that it is an accredited investor or (D) such Buyer
provides the Company with reasonable assurance, including any reasonably requested opinion of counsel, that such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended 

 

 6 

 (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the Securities made in
reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the Person (as defined in Section 3(e)) through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor
any other Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. 
  
 (g) Legends. Such Buyer understands that the certificates or other instruments representing the Notes and the
Warrants and, until such time as the resale of the Conversion Shares and the Warrant Shares have been registered under the 1933 Act as contemplated by the Registration Rights Agreement, the stock certificates representing the Conversion Shares and
the Warrant Shares, except as set forth below, shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of
such stock certificates): 
  
 [NEITHER THE ISSUANCE AND SALE OF
THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE][EXERCISABLE] HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR
RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. 
  
 The legend set forth above shall be removed and the Company shall issue a certificate without
such legend to the holder of the Securities upon which it is stamped, if, unless otherwise required by state securities laws, (i) upon transfer such Securities are registered for resale under the 1933 Act, (ii) in connection with a sale, assignment
or other transfer, such holder provides the Company with an opinion of counsel reasonably acceptable to the Company, in a form reasonably acceptable to the Company, to the effect that such legend is not required under the applicable requirements of
the 1933 Act, or (iii) such holder provides the Company with reasonable assurance that the Securities can be sold, assigned or transferred pursuant to Rule 144(k). 
  

 7 

 (h) Validity; Enforcement. This Agreement and the Registration Rights Agreement have been duly and
validly authorized, executed and delivered on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer, enforceable against such Buyer in accordance with their respective terms, except as such enforceability
may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and
remedies and except that the indemnification provisions under the Transaction Documents may further be limited by principles of public policy. 
  
 (i) No Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the Registration Rights Agreement and the
consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Buyer or (ii) conflict with, or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to perform its obligations hereunder. 
  
 (j) Residency. Such Buyer is a resident of that jurisdiction specified below its address on the Schedule of Buyers. 
  
 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. 
  
 The Company hereby represents and warrants to each of the Buyers as follows
(which representations and warranties shall be deemed to apply, where appropriate, to each Subsidiary of the Company): 
  
 (a) Subsidiaries. The Company has no direct or indirect Subsidiaries other than those listed in the SEC Report on Form 10-K for the year ended
December 28, 2002 (the “2002 Form 10-K”) or Schedule 3(a). Except as disclosed in the 2002 Form 10-K or in Schedule 3(a), the Company owns, directly or indirectly, the capital stock or comparable equity interests of
each Subsidiary free and clear of any Lien (as defined in Section 3(f) below) and all the issued and outstanding shares of capital stock or comparable equity interest of each Subsidiary are validly issued and are fully paid, non-assessable and free
of preemptive and similar rights. For purposes of this Agreement, “Subsidiary” means a direct or indirect Significant Subsidiary (as defined in Rule 1-02(w) of Regulation S-X promulgated by the SEC pursuant to the Securities
Exchange Act of 1934, as amended (the “1934 Act”)) of the Company. 
  
 (b) Organization and Qualification. Each of the Company and the Subsidiaries is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or
organization (as applicable), with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other organizational or charter 
  

 8 

 documents. Each of the Company and the Subsidiaries is duly qualified to do business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could
not, individually or in the aggregate, (i) adversely affect the legality, validity or enforceability of any Transaction Document, (ii) reasonably be expected to have or result in a material adverse effect on the results of operations, assets,
business or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole on a consolidated basis, or (iii) adversely impair the Company’s ability to perform fully on a timely basis its obligations under any of the
Transaction Documents (any of (i), (ii) or (iii), a “Material Adverse Effect”). For purposes of this Agreement, “Transaction Documents” means, collectively, this Agreement, the Notes, the Warrants, the Registration
Rights Agreement, the Irrevocable Transfer Agent Instructions (as defined in Section 5(b)), the Voting Agreement (as defined in Section 4(s)) and each of the other documents entered into or delivered by the parties hereto in connection with the
transactions contemplated by this Agreement. 
  
 (c)
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its
obligations hereunder and thereunder. Except for the Stockholder Approval (as defined below), the execution and delivery of each of the Transaction Documents to which it is a party by the Company and the consummation by it of the transactions
contemplated hereby and thereby, including, without limitation, the issuance of the Notes and Warrants and the reservation for issuance of the Conversion Shares and the Warrant Shares issuable upon conversion, redemption, amortization, other payment
or exercise thereof, have been duly authorized by all necessary action on the part of the Company and no further consent or action is required by the Company, its Board of Directors or its stockholders. Each of the Transaction Documents has been
(or, if executed after the date hereof, upon delivery will be) duly executed by the Company and is, or when delivered in accordance with the terms hereof, will constitute, the legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors’ rights and remedies and except that the indemnification provisions under the Transaction Documents may further be limited by principles of public policy. 
  
 (d) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Notes and Warrants and the reservation for issuance of the Conversion
Shares and the Warrant Shares issuable upon conversion, redemption, amortization, other payment or exercise thereof, do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or
articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a debt of the Company or a Subsidiary or otherwise) or other 
  

 9 

 understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any
Subsidiary is bound or affected, except to the extent that such conflict, default or termination right could not reasonably be expected to have a Material Adverse Effect, or (iii) except as set forth on Schedule 3(d), result in a violation of
any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations and the rules and
regulations of the Nasdaq National Market (the “Principal Market”) or any other self-regulatory organization to which the Company or its securities are subject), or by which any property or asset of the Company or a Subsidiary is
bound or affected, except to the extent that such violation could not reasonably be expected to have a Material Adverse Effect. 
  
 (e) Consents. Except as disclosed in Schedule 3(e), the Company is not required to obtain any consent, authorization or order of, or make
any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents,
in each case in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the
applicable Closing Date. The Company and its Subsidiaries are unaware of any facts or circumstances which might prevent the Company from obtaining or effecting any of the foregoing. For purposes of this Agreement, “Person” means an
individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof. 
  
 (f) Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with
the Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all liens, charges, claims, security interests, encumbrances, rights of first refusal or other restrictions (“Liens”) and
shall not be subject to preemptive rights or similar rights of stockholders. As of the applicable Closing, the Company shall have reserved from its duly authorized capital stock not less than the sum of (i) 175% of the maximum number of shares of
Common Stock issuable upon conversion of the Notes (assuming for purposes hereof, that the Notes are convertible at the Initial Valuation Price and without taking into account any limitations on the conversion of the Notes set forth in the Notes)
and (ii) 125% of the maximum number of shares of Common Stock issuable upon exercise of the Warrants (without taking into account any limitations on the exercise of the Warrants set forth in the Warrants). 
  
 (g) Dilutive Effect. The Company understands and acknowledges that the
number of Conversion Shares issuable upon conversion, redemption or amortization of the Notes and the Warrant Shares issuable upon exercise of the Warrants will increase in certain circumstances. Subject to obtaining the Stockholder Approval (as
defined in Section 4(n) below), the Company further acknowledges that its obligation to issue Conversion Shares upon conversion, redemption or amortization of the Notes in accordance with this Agreement and the Notes and its obligation to issue the
Warrant Shares upon exercise of the Warrants in accordance with this Agreement and the Warrants is, in each case, absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other
stockholders 
  

 10 

 of the Company. Furthermore, the Company understands and acknowledges that the Transaction Documents do not in any manner
preclude any Buyer from trading or otherwise transacting in the Common Stock or any other security of the Company at any time from and after the Initial 8-K Filing (as defined in Section 4(i) below) with the SEC and the public announcement of the
2003 Earnings, including during any Measuring Period (as defined in the Notes), and that the Measuring Periods permit each Buyer to realize a return on its investment in the Notes. 
  
 (h) Capitalization. As of January 31, 2004, the capital stock of the Company consists of 2,100,000,000 shares,
1,900,000,000 shares of which are Common Stock, and 200,000,000 shares of which are preferred stock, $0.01 par value per share. As of January 31, 2004, there were approximately 503,116,102 shares of Common Stock issued and approximately 490,834,302
shares of Common Stock outstanding. There were no shares of preferred stock outstanding on the date hereof. The Company shall provide the exact number of shares issued and the exact number of shares outstanding as of January 31, 2004 by no later
than February 10, 2004, which number shall not be materially different the aforementioned numbers. There has been no material change in the Company’s capitalization since January 31, 2004. All outstanding shares of capital stock are duly
authorized, validly issued, fully paid and nonassessable and have been issued in compliance with all applicable securities laws. Except as disclosed in Schedule 3(h), there are no outstanding options, warrants, script rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock. The
issue and sale of the Securities (including the Conversion Shares and the Warrant Shares) will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Buyers) and will not result in a right of any
holder of securities of the Company to adjust the exercise, conversion, exchange or reset price under such securities. To the knowledge of the Company, except as specifically disclosed in the proxy statement for the Company’s annual meeting of
stockholders held on May 9, 2003, no Person or group of related Persons beneficially owns (as determined pursuant to Rule 13d-3 under the 1934 Act), or has the right to acquire, by agreement with or by obligation binding upon the Company, beneficial
ownership of in excess of 5% of the outstanding Common Stock, ignoring for such purposes any limitation on the number of shares of Common Stock that may be owned at any single time. 
  
 (i) SEC Reports; Financial Statements. The Company has filed all reports required to be filed by it under the 1934
Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof, or in connection with any Closing subsequent to the date hereof, filed two years preceding the date of such Closing, (the foregoing materials
(together with any materials filed by the Company under the 1934 Act, whether or not required) being collectively referred to herein as the “SEC Reports” and, together with this Agreement and the Schedules to this Agreement, the
“Disclosure Materials”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. The Company has informed each Buyer prior to the
date hereof of any filing by the Company of any SEC Reports within the 10 days preceding the date hereof. The Company has delivered to each Buyer or their respective representatives true, 
  

 11 

 correct and complete copies of the SEC Reports not available on the EDGAR system. Except as set forth on Schedule
3(i), as of their respective dates, the SEC Reports complied in all material respects with the requirements of the 1933 Act and the 1934 Act and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Reports, when
filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not
misleading. Except as set forth on Schedule 3(i), the financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with
respect thereto as in effect at the time of filing. Except as set forth on Schedule 3(i), such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis
during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Company and its consolidated
subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. All material agreements to which
the Company or any Subsidiary is a party or to which the property or assets of the Company or any Subsidiary are subject are included as part of or specifically identified in the SEC Reports to the extent required by the rules and regulations of the
SEC as in effect at the time of filing. 
  
 (j) Material
Changes. Since the date of the audited financial statements included in the 2002 Form 10-K, except as specifically disclosed in the Company’s Quarterly Report on Form 10-Q for the period ended March 29, 2003, the Company’s Quarterly
Report on Form 10-Q for the period ended June 30, 2003, the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2003 (the “Third Quarter Form 10-Q”) or any of the other Disclosure Materials, (i) there has
been no event, occurrence or development that, individually or in the aggregate, has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other
than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or required to be
disclosed in filings made with the SEC, (iii) the Company has not altered its method of accounting or the identity of its auditors, except as disclosed in its SEC Reports, (iv) the Company has not declared or made any dividend or distribution of
cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, (v) the Company has not sold any assets, individually or in the aggregate, in excess of $5,000,000
outside of the ordinary course of business and (vi) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock-based plans. 
  
 (k) Indebtedness. Except as disclosed in Schedule 3(k), neither
the Company nor any of its Subsidiaries has any outstanding Indebtedness in excess of $100,000 in the aggregate (as defined below). Except as disclosed in Schedule 3(k), no Indebtedness of the Company individually in excess of $50,000 is
senior to or ranks pari passu with the Notes in right of payment, whether with respect of payment of redemptions, interest, damages or upon liquidation or dissolution or otherwise. For purposes of this Agreement: (i)
“Indebtedness” of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all 
  

 12 

 obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business), (C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred
as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession
or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in accordance with GAAP, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such
assets or property has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above; and (ii)
“Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary
purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be
complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto. 
  
 (l) Absence of Litigation. Except as disclosed in the Third Quarter Form 10-Q, there is no action, suit, claim, proceeding, inquiry or
investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries that could, individually
or in the aggregate, reasonably be expected to result in a Material Adverse Effect. 
  
 (m) Compliance. Neither the Company nor any Subsidiary (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in
a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received written notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been
in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as could not, individually or in the aggregate, reasonably be expected to have or result in a Material Adverse Effect. 
  
 (n) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real
property owned by them that is material to the business of the Company and the Subsidiaries and good and marketable title in all personal property 
  

 13 

 owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for Liens that do not materially affect the value of such property, do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and could not, individually or in the
aggregate, have or result in a Material Adverse Effect. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases of which the Company and the Subsidiaries
are in compliance except, in each case, as could not reasonably be expected to result in a Material Adverse Effect. 
  
 (o) Certain Fees. Other than fees payable to Banc of America Securities LLC as placement agent (the “Agent”), no brokerage or
finder’s fees or commissions or any other payment, whether in the form of cash, securities or other consideration, or any combination of the foregoing, are or will be payable, directly or indirectly, by the Company, any Subsidiary or any
Affiliate thereof to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person directly or indirectly with respect to the transactions contemplated by this Agreement or any of the other Transaction
Documents, and the Company has not taken any action that would cause any Buyer to be liable for any such fees or commissions pursuant to any agreement or arrangement to which the Company is a party. The Company shall pay, and hold each Buyer
harmless against, any liability, loss or expense (including, without limitation, attorney’s fees and out-of-pocket expenses) arising in connection with any claim against any Buyer relating thereto. 
  
 (p) Private Placement. Neither the Company nor any Person acting on
the Company’s behalf has sold or offered to sell or solicited any offer to buy the Securities by means of any form of general solicitation or advertising. Neither the Company nor any of its Affiliates nor any person acting on the Company’s
behalf has, directly or indirectly, at any time within the past six months, made any offer or sale of any security or solicitation of any offer to buy any security under circumstances that would (i) eliminate the availability of the exemption from
registration under Regulation D in connection with the offer and sale by the Company of the Securities as contemplated hereby or (ii) cause the offering of the Securities pursuant to the Transaction Documents to be integrated with prior offerings by
the Company for purposes of any applicable law, regulation or stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company
are listed or designated. None of the Company, its Subsidiaries, their Affiliates and any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would require the registration of any of the Securities
under the 1933 Act or cause the offering to be integrated with the other offerings for purposes of any applicable law, regulation or stockholder approval provisions. The Company is not, and is not an Affiliate of, an “investment company”
within the meaning of the Investment Company Act of 1940, as amended. The Company is not a United States real property holding corporation within the meaning of the Foreign Investment in Real Property Tax Act of 1980. No consent, license, permit,
waiver approval or authorization of, or designation, declaration, registration or filing with, the SEC or any state securities regulatory authority is required in connection with the offer, sale, issuance or delivery of the Securities, other than
the possible filing of a Form D with the SEC. 
  

 14 

 (q) Form S-3 Eligibility. The Company is eligible to register the Conversion Shares, the Warrant
Shares and the Interest Shares for resale by the Buyers using Form S-3 promulgated under the 1933 Act. 
  
 (r) Listing and Maintenance Requirements. Since January 1, 2003, the Company has been in compliance with all listing and maintenance requirements
for the Principal Market except, in each case, as could not reasonably be expected to result in a Material Adverse Effect. The Company has no knowledge of any facts or circumstances which would reasonably lead to delisting or suspension of the
Common Stock by the Principal Market in the foreseeable future. Since January 1, 2003, the Company has not received any communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Common Stock
from the Principal Market. 
  
 (s) Registration
Rights. The Company has not granted or agreed to grant to any Person any rights (including “piggy-back” registration rights) to have any securities of the Company registered with the SEC or any other governmental authority that have
not been satisfied. 
  
 (t) Application of Takeover
Protections. There is no control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s charter documents or the laws of its
state of incorporation that is or could become applicable to any of the Buyers solely as a result of the Buyers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including, without limitation,
as a result of the Company’s issuance of the Securities and the Buyers’ ownership of the Securities. 
  
 (u) Disclosure. Except as disclosed in Schedule 3(u), the Company confirms that neither it nor any other Person acting on its behalf has
provided any of the Buyers or their agents or counsel with any information that constitutes or might constitute material, nonpublic information. The Company understands and confirms that each of the Buyers will rely on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the Company, its business and the transactions contemplated hereby, including the Schedules to this Agreement, furnished by or on behalf of the
Company taken as a whole is true and correct and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they
were made, not misleading. No event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or financial conditions, which, under
applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed. The Company acknowledges and agrees that no Buyer makes or has made any representations or
warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2. 
  
 (v) Acknowledgment Regarding Buyers’ Purchase of Company Securities. The Company acknowledges and agrees that each of the Buyers is acting
solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby. The Company further acknowledges that no Buyer is acting 
  

 15 

 as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents
and the transactions contemplated hereby and thereby and any advice given by any Buyer or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely
incidental to the Buyers’ purchase of the Securities. The Company further represents to each Buyer that the Company’s decision to enter into the Transaction Documents has been based solely on the independent evaluation of the transactions
contemplated hereby and thereby by the Company and its representatives. 
  
 (w) Patents and Trademarks. Except as disclosed in the Third Quarter Form 10-Q, to the knowledge of the Company, the Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar rights that are necessary or material for use in connection with their respective businesses as described in the 2002 Form 10-K and which the failure to so have could
have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary has received a written notice that the Intellectual Property Rights used by the Company or any Subsidiary
violates or infringes upon the rights of any Person except as may be described in the Third Quarter Form 10-Q or as could not reasonably be expected to result in a Material Adverse Effect. To the knowledge of the Company, all such Intellectual
Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights, in each case except as may be described in the Third Quarter Form 10-Q or as could not reasonably be expected to
result in a Material Adverse Effect. 
  
 (x) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the
SEC Reports, except where the failure to possess such permits could not, individually or in the aggregate, have or result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any
written notice of proceedings relating to the revocation or modification of any Material Permit except as described in the SEC Reports or as could not reasonably be expected to result in a Material Adverse Effect. 
  
 (y) Transactions With Affiliates and Employees. Except as set forth in
the SEC Reports, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as
employees, officers and directors) exceeding $60,000, including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner. 
  
 (z) Insurance. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. Neither the Company nor any Subsidiary has any
reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business. 
  

 16 

 (aa) Solvency. Based on the financial condition of the Company as of the appropriate Closing Date,
both prior to and after giving effect to the transactions contemplated by this Agreement to occur on such Closing Date, (i) the Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of
the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature; (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now
conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii)
the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect
of its debt when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).

  
 (bb) Internal Accounting Controls. The Company and the
Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 
  
 (cc) Tax Status. The Company and each of the Subsidiaries (i) has made
or filed all federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown
or determined to be due on such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to
which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim. 
  
 (dd) Employee Relations. Neither the Company nor any of the
Subsidiaries is a party to any collective bargaining agreement or employs any member of a union. The Company and the Subsidiaries believe that their relations with their employees are good. No executive officer of the Company (as defined in Rule
501(f) of the 1933 Act) has notified the Company that such officer intends to leave the Company or otherwise terminate such officer’s employment with the Company. No executive officer of the Company, to the knowledge of the Company, is, or is
now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant, and the
continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. 
  

 17 

 (ee) Foreign Corrupt Practices Act. Neither the Company, nor any Subsidiaries, nor any director,
officer, agent, employee or, to the Company’s knowledge, other Person acting on behalf of the Company or any Subsidiaries has, in the course of its actions for, or on behalf of, the Company (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or
employee, except in each case where such noncompliance would not have, individually or in the aggregate, a Material Adverse Effect. 
  
 (ff) Sarbanes-Oxley Act. The Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 and any and all
applicable rules and regulations promulgated by the SEC thereunder, in each case which are currently applicable to it, except where such noncompliance would not have, individually or in the aggregate, a Material Adverse Effect. 
  
 (gg) Financial Position. None of the Company, its Subsidiaries nor any
of their Affiliates has received any communication, written or oral, from the Company’s independent auditors that such auditors intend to include a “going concern” or other qualification in their opinion with respect to Company’s
financial statements for the year ended December 31, 2003, nor does the Company have any knowledge of any facts or circumstances which would reasonably require their auditors in include such a “going concern” or other qualification in such
opinion. 
  
 4. COVENANTS. 
  
 (a) Reasonable Best Efforts. Each party shall use its reasonable best
efforts timely to satisfy each of the conditions to be satisfied by it as provided in Sections 6 and 7 of this Agreement. 
  
 (b) Form D and Blue Sky. The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide a copy
thereof to each Buyer promptly after such filing. The Company shall, on or before each Closing Date, take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Securities for sale to
the Buyers at each Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so
taken to the Buyers on or prior to each Closing Date. The Company shall make all filings and reports relating to the offer and sale of the Securities required under applicable securities or “Blue Sky” laws of the states of the United
States following each Closing Date. 
  
 (c) Reporting
Status. Except in accordance with the applicable provisions of the Notes, until the date on which the Investors (as defined in the Registration Rights 
  

 18 

 Agreement) shall have sold all the Conversion Shares, Interest Shares and Warrant Shares and none of the Notes or the
Warrants is outstanding (the “Reporting Period”), the Company shall file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status as an issuer required to file reports
under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would otherwise permit such termination. 
  
 (d) Use of Proceeds. The Company will use the proceeds from the sale of the Securities for working capital purposes and not for the (i) repayment
of any outstanding Indebtedness of the Company or any of its Subsidiaries or (ii) redemption or repurchase of any of its equity securities. 
  
 (e) Financial Information. Unless the following are filed with the SEC through EDGAR and are available to the public through the EDGAR system, the
Company agrees to send the following to each Investor during the Reporting Period (i) within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q, any Current
Reports on Form 8-K and any registration statements (other than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) on the same day as the release thereof, facsimile copies of all press releases issued by the Company or any of its
Subsidiaries, and (iii) copies of any notices and other information made available or given to the stockholders of the Company generally, contemporaneously with the making available or giving thereof to the stockholders. As used herein,
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed. 
  
 (f) Listing. The Company shall use its reasonable best efforts to
promptly secure the listing of all of the Registrable Securities (as defined in the Registration Rights Agreement) upon each national securities exchange and automated quotation system, if any, upon which shares of Common Stock are then listed
(subject to official notice of issuance) and shall use its reasonable best efforts to maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Registrable Securities from time to time issuable under the terms of
the Transaction Documents. The Company shall use its reasonable best efforts to maintain the Common Stock’s authorization for quotation on the Principal Market. Neither the Company nor any of its Subsidiaries shall take any action which would
be reasonably expected to result in the delisting or suspension of the Common Stock on the Principal Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(f). 
  
 (g) Fees. Subject to Section 8 below, at the Initial Closing upon
submission of evidence of expenditure thereof, the Company shall pay an expense allowance not to exceed $75,000 (in addition to any amounts previously paid) to Smithfield Fiduciary LLC (a Buyer) or its designee(s) for reimbursement of reasonable
legal and due diligence expenses incurred in connection with the transactions contemplated by the Transaction Documents, which amount shall be withheld by such Buyer from its Purchase Price at the Initial Closing. The Company shall be responsible
for the payment of any placement agent’s fees, financial advisory fees, or broker’s commissions relating to or arising out of the transactions contemplated hereby, including, without limitation, any fees or commissions payable to the
Agent. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in connection with any 
  

 19 

 claim relating to any such payment. Except as otherwise set forth in the Transaction Documents, each party to this
Agreement shall bear its own expenses in connection with the sale of the Securities to the Buyers. 
  
 (h) Pledge of Securities. The Company acknowledges and agrees that the Securities may be pledged by an Investor in connection with a bona fide
margin agreement or other loan or financing arrangement that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Investor effecting a pledge of
Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document, including, without limitation, Section 2(f) of this Agreement;
provided that an Investor and its pledgee shall be required to comply with the provisions of Section 2(f) hereof in order to effect a sale, transfer or assignment of Securities to such pledgee. The Company hereby agrees to execute and deliver such
documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such pledgee by an Investor. 
  
 (i) Disclosure of Transactions and Other Material Information. On or before 8:30 a.m., New York City Time, on the second Trading Day following the
date of this Agreement (but in no event later than the public announcement of the 2003 Earnings), the Company shall file a Current Report on Form 8-K describing the terms of the transactions contemplated by the Transaction Documents in the form
required by the 1934 Act, and attaching the material Transaction Documents (including, without limitation, this Agreement (and all schedules to this Agreement), the form of each of the Notes, the form of each of the Warrants, the Registration Rights
Agreement and the Voting Agreement) as exhibits to such Form 8-K (including all attachments, the “Initial 8-K Filing”). On or before 8:30 a.m., New York City Time, on the first Trading Day following each Additional Closing Date, the
Company shall file a Current Report on Form 8-K with the SEC describing the transaction consummated on such date (the “Additional 8-K Filing,” and together with the Initial 8-K Filing, the “8-K Filings”). As of the
Initial 8-K Filing with the SEC and the public announcement of the 2003 Earnings, no Buyer shall be in possession of any material, nonpublic information received from the Company, any of its Subsidiaries or any of its or their respective officers,
directors, employees or agents, that is not disclosed in the Initial 8-K Filing or in the public announcement of the 2003 Earnings. From and after the Initial 8-K Filing with the SEC and the public announcement of the 2003 Earnings, the Company
shall not, and shall cause each of its Subsidiaries and its and each of their respective officers, directors, employees and agents, not to, provide any Buyer with, and no Buyer shall request, any material, nonpublic information regarding the Company
or any of its Subsidiaries without the express written consent of such Buyer. Subject to the foregoing, neither the Company nor any Buyer shall issue any press releases or any other public statements with respect to the transactions contemplated
hereby; provided, however, that the Company shall be entitled, without the prior approval of any Buyer, to make any press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K
Filings and contemporaneously therewith and (ii) as is required by applicable law and regulations (provided that in the case of clause (i) each Buyer shall be consulted by the Company in connection with any such press release or other public
disclosure prior to its release). 
  

 20 

 (j) Restriction on Redemption and Cash Dividends. So long as any Notes are outstanding, the
Company shall not, directly or indirectly, redeem (other than pursuant to the terms of any employee benefit plan that does not relate to an officer or director or an Affiliate of an officer or director beneficially owning more than 5% of the Common
Stock, which has been approved by the Board of Directors of the Company), or declare or pay any cash dividend or distribution on, the Common Stock without the prior express written consent of the holders of Notes representing not less than a
majority of the aggregate principal amount of the then outstanding Notes. 
  
 (k) Additional Notes. For so long as any Buyer owns any Notes or Warrants or may be required to purchase any Additional Notes, the Company will not issue any additional Notes (other than the Additional Notes)
and the Company shall not issue any other securities that would cause a breach or default under the Notes. 
  
 (l) Conduct of Business. So long as any Buyer owns any Notes or Warrants or may be required to purchase any Additional Notes, the business of the
Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or regulation of any governmental entity, except where such violations would not result, either individually or in the aggregate, in a Material Adverse Effect.

  
 (m) Variable Securities. So long as any Buyer owns any
Notes or Warrants or may be required to purchase any Additional Notes, the Company shall not, in any manner, issue or sell any rights, warrants or options to subscribe for or purchase Common Stock or directly or indirectly convertible into or
exchangeable or exercisable for Common Stock at a price which varies or may vary with the market price of the Common Stock, including by way of one or more reset(s) to any fixed price unless the conversion, exchange or exercise price of any such
security cannot be less than the then applicable Conversion Price (as defined in the Notes) and the then applicable Exercise Price (as defined in the Warrants) with respect to the Common Stock under any Note or any Warrant. 
  
 (n) Proxy Statement. The Company shall provide each stockholder
entitled to vote at the next meeting of stockholders of the Company, which shall not be later than May 15, 2004 (the “Stockholder Meeting Deadline”), a proxy statement, which has been previously reviewed by the Buyers and a counsel
of their choice, soliciting each such stockholder’s affirmative vote at such stockholder meeting for approval of the Company’s issuance of all of the Securities as described in the Transaction Documents in accordance with applicable law
and the rules and regulations of the Principal Market (such affirmative approval being referred to herein as the “Stockholder Approval”), and the Company shall use its reasonable best efforts to solicit its stockholders’
approval of such issuance of the Securities and to cause the Board of Directors of the Company to recommend to the stockholders that they approve such proposal. The Company shall be obligated to seek the Stockholder Approval by the Stockholder
Meeting Deadline and if it fails to obtain such Stockholder Approval by the Stockholder Meeting Deadline to continue to seek such Stockholder Approval at no less than four (4) successive meetings of stockholders of the Company held every four (4)
months thereafter. 
  
 (o) Corporate Existence. So long as
any Buyer beneficially owns any Notes or Warrants or may be required to purchase any Additional Notes, the Company shall maintain its corporate existence and shall not sell all or substantially all of the Company’s assets, except in 

 

 21 

 the event of a merger or consolidation or sale of all or substantially all of the Company’s assets, where the
surviving or successor entity in such transaction (i) assumes the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded corporation whose common stock or
equivalent security is quoted on or listed for trading on an Eligible Market, the American Stock Exchange or a recognized foreign trading market or exchange with trading facilities and rules akin to those of an Eligible Market. 
  
 (p) Incurrence of Liens. Except in accordance with the applicable
provisions of the Notes, so long as any Notes are outstanding, the Company shall not, directly or indirectly, allow or suffer to exist any Lien, other than Permitted Liens (as defined in the Note), upon any property or assets (including accounts and
contract rights) owned by the Company. 
  
 (q) Reservation of
Shares. So long as any Buyer owns any Notes or Warrants or may be required to purchase any Additional Notes, the Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, no less than the
sum of (i) 175% of the number of shares of Common Stock issuable upon conversion of, or as payment for interest on, the Notes (assuming for purposes hereof, that the Notes are convertible at the Initial Valuation Price and without taking into
account any limitations on the conversion of the Notes set forth in the Notes) and (ii) 125% of the number of shares of Common Stock issuable upon exercise of the Warrants (without taking into account any limitations on the exercise of the Warrants
set forth in the Warrants). 
  
 (r) Incurrence of
Indebtedness. During the period commencing on the date of this Agreement until the later of (i) ninety (90) days after the Initial Closing Date and (ii)thirty (30) days after the effective date of the Registration Statement registering the
Initial Registrable Securities, the Company shall not, and the Company shall not permit any Subsidiary to, directly or indirectly, other than in the ordinary course of business consistent with past practice, incur or guarantee, assume or suffer to
exist any Indebtedness, other than the Indebtedness evidenced by the Notes. 
  
 (s) Voting Agreement. The Company shall use its reasonable best efforts to effectuate the transactions contemplated by the Voting Agreement, substantially in the form attached hereto as Exhibit F,
executed by the Company and the parties set forth therein (the “Voting Agreement”), and to have the Voting Agreement executed and delivered by all the parties thereto to the Buyers by no later than February 11, 2004. 
  
 5. REGISTER; TRANSFER AGENT INSTRUCTIONS. 
  
 (a) Register. The Company shall maintain at its principal executive
offices (or such other office or agency of the Company as it may designate by notice to each holder of Notes or Warrants), a register for the Notes and the Warrants, in which the Company shall record the name and address of the Person in whose name
the Notes and the Warrants have been issued (including the name and address of each transferee), the principal amount of Notes held by such Person and the number of Warrant Shares issuable upon exercise of the Warrants held by such Person. The
Company shall keep the register open and available at all times during business hours for inspection by any Buyer or its legal representatives. 
  

 22 

 (b) Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer
agent, and any subsequent transfer agent, to issue certificates or credit shares to the applicable balance accounts at The Depository Trust Company (“DTC”), registered in the name of each Buyer or its respective nominee(s), for the
Conversion Shares, the Interest Shares, if any, and the Warrant Shares in such amounts as specified from time to time by each Buyer to the Company upon conversion of the Notes or exercise of the Warrants in the form of Exhibit G attached
hereto (the “Irrevocable Transfer Agent Instructions”). The Company warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5(b), and stop transfer instructions to give effect
to Section 2(g) hereof, will be given by the Company to its transfer agent, and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the other
Transaction Documents. If a Buyer effects a sale, assignment or transfer of the Securities in accordance with Section 2(f), the Company shall permit the transfer and shall promptly instruct its transfer agent to issue one or more certificates or
credit shares to the applicable balance accounts at DTC in such name and in such denominations as specified by such Buyer to effect such sale, transfer or assignment. In the event that such sale, assignment or transfer involves Conversion Shares,
Interest Shares or Warrant Shares sold, assigned or transferred pursuant to an effective registration statement or pursuant to Rule 144, the transfer agent shall issue such Securities to the Buyer, assignee or transferee, as the case may be, without
any restrictive legend. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section
5(b) will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 5(b), that a Buyer shall be entitled, in addition to all other available remedies, to an order and/or injunction
restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required. 
  
 6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL. 
  
 (a) Initial Closing Date. The obligation of the Company hereunder to issue and sell the Initial Notes and the related
Initial Warrants to each Buyer at the Initial Closing is subject to the satisfaction, at or before the Initial Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be
waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof: 
  
 (i) Such Buyer shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company. 
  
 (ii) Such Buyer shall have delivered to the Company the Purchase Price
(less, in the case of Smithfield Fiduciary LLC, the amounts withheld pursuant to Section 4(g)) for the Initial Notes and the related Initial Warrants being purchased by such Buyer at the Initial Closing by wire transfer of immediately available
funds pursuant to the wire instructions provided by the Company. 
  
 (iii) The representations and warranties of such Buyer shall be true and correct in all material respects as of the date when made and as of the Initial Closing Date as though made at that time (except for representations and warranties
that speak as of a specific 
  

 23 

 date), and such Buyer shall have performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Buyer at or prior to the Initial Closing Date. 
  
 (b) Additional Closing Date. The obligation of the Company hereunder to issue and sell the Additional Notes and the related Additional Warrants to
each Buyer at an Additional Closing is subject to the satisfaction, at or before the applicable Additional Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by
the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof: 
  
 (i) Such Buyer shall have delivered to the Company the Purchase Price for the Additional Notes and the related Additional Warrants being purchased by
such Buyer at the applicable Additional Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company. 
  
 (ii) The representations and warranties of such Buyer shall be true and correct in all material respects as of the date when made and as of the
applicable Additional Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and such Buyer shall have performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Buyer at or prior to the applicable Additional Closing Date. 
  
 7. CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE. 
  
 (a) Initial Closing Date. The obligation of each Buyer hereunder to
purchase the Initial Notes and the related Initial Warrants at the Initial Closing is subject to the satisfaction, at or before the Initial Closing Date, of each of the following conditions, provided that these conditions are for each Buyer’s
sole benefit and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof: 
  
 (i) The Company shall have executed and delivered to such Buyer (i) each of the Transaction Documents and (ii) the Initial Notes (in such principal
amounts as such Buyer shall request) and the related Initial Warrants (in such amounts as such Buyer shall request), in each case which are being purchased by such Buyer at the Initial Closing pursuant to this Agreement. 
  
 (ii) Such Buyer shall have received the opinion of (x) Mayer, Brown, Rowe
& Maw LLP, the Company’s counsel, dated as of the Initial Closing Date, in form, scope and substance reasonably satisfactory to such Buyer and in substantially the form of Exhibit H-1 attached hereto, and (y) the General Counsel to
the Company, dated as of the Initial Closing Date, in form, scope and substance reasonably satisfactory to such Buyer and in substantially the form of Exhibit H-2 attached hereto. 
  
 (iii) The Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form of
Exhibit G attached hereto, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent. 
  

 24 

 (iv) The Company shall have delivered to such Buyer a certificate evidencing the incorporation and good
standing of the Company and each Subsidiary in such corporation’s state of incorporation issued by the Secretary of State of such state of incorporation as of a date within 10 days of the Initial Closing Date. 
  
 (v) The Company shall have delivered to such Buyer a certificate evidencing
the Company’s qualification as a foreign corporation and good standing issued by the Secretary of State of Maryland as of a date within 10 days of the Initial Closing Date. 
  
 (vi) The Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation as certified by
the Secretary of State of the State of Delaware within 10 days of the Initial Closing Date. 
  
 (vii) The Company shall have delivered to such Buyer a certificate, executed by the Secretary of the Company and dated as of the Initial Closing Date, as to (i) the resolutions consistent with Section 3(c) as adopted
by the Company’s Board of Directors in a form reasonably acceptable to such Buyer (the “Resolutions”), (ii) the Certificate of Incorporation and (iii) the Bylaws, each as in effect at the Initial Closing, in the form attached
hereto as Exhibit I. 
  
 (viii) The representations and
warranties of the Company shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the
date when made and as of the Initial Closing Date as though made at that time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Initial Closing Date. Such Buyer shall have received a certificate, executed by the Chief
Executive Officer of the Company, dated as of the Initial Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the form attached hereto as Exhibit J. 
  
 (ix) The Company shall have delivered to such Buyer a letter from the
Company’s transfer agent certifying the number of shares of Common Stock outstanding as of a date within five days of the Initial Closing Date. 
  
 (x) The Common Stock (I) shall be designated for quotation or listed on the Principal Market and (II) shall not have been suspended by the SEC, as of the
Initial Closing Date, or the Principal Market from trading on the Principal Market nor shall suspension by the SEC or the Principal Market have been threatened, as of the Initial Closing Date, either (A) in writing by the SEC or the Principal Market
or (B) by falling below the minimum listing maintenance requirements of the Principal Market. 
  

 25 

 (xi) The Company shall have obtained all governmental, regulatory or third party consents and approvals,
if any, necessary for the sale of the Initial Notes and the Initial Warrants. 
  
 (xii) The Company shall have delivered to such Buyer such other documents relating to the transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request. 
  
 (xiii) The Voting Agreement shall have been executed and delivered to the
Buyers by the parties thereto no later than February 11, 2004, and shall be in full force and effect as of the Initial Closing Date. 
  
 (b) Additional Closing Date. The obligation of each Buyer hereunder to purchase the Additional Notes and the related Additional Warrants at an
Additional Closing is subject to the satisfaction, at or before the applicable Additional Closing Date, of each of the following conditions, provided that these conditions are for each Buyer’s sole benefit and may be waived by such Buyer at any
time in its sole discretion by providing the Company with prior written notice thereof: 
  
 (i) The Company shall have executed and delivered to such Buyer the Additional Notes (in such principal amounts as such Buyer shall request) and related Additional Warrants (in such amounts as such Buyer shall
request), in each case which are being purchased by such Buyer at the applicable Additional Closing pursuant to this Agreement. 
  
 (ii) Such Buyer shall have received the opinion of (x) Mayer, Brown, Rowe & Maw LLP, the Company’s counsel, dated as of the applicable
Additional Closing Date, in form, scope and substance reasonably satisfactory to such Buyer and in substantially the form of Exhibit H-1 attached hereto, and (y) the General Counsel to the Company, dated as of the applicable Additional
Closing Date, in form, scope and substance reasonably satisfactory to such Buyer and in substantially the form of Exhibit H-2 attached hereto. 
  
 (iii) The Irrevocable Transfer Agent Instructions shall remain in effect as of the applicable Additional Closing Date and the Company shall cause its
transfer agent to deliver a letter to such Buyer to that effect. 
  
 (iv) The Company shall have delivered to such Buyer a certificate evidencing the incorporation and good standing of the Company and each Subsidiary in such corporation’s state of incorporation issued by the Secretary of State of such
state of incorporation as of a date within 10 days of the applicable Additional Closing Date. 
  
 (v) The Company shall have delivered to such Buyer a certificate evidencing the Company’s qualification as a foreign corporation and good standing issued by the Secretary of State of the State of Maryland as of a
date within 10 days of the applicable Additional Closing Date. 
  
 (vi) The Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation as certified by the Secretary of State of the State of Delaware within 10 days of the applicable Additional Closing Date. 

 

 26 

 (vii) The Company shall have delivered to such Buyer a certificate, executed by the Secretary of the
Company dated as of the applicable Additional Closing Date, as to (i) the Resolutions, (ii) the Certificate of Incorporation and (iii) the Bylaws, each as in effect at the applicable Additional Closing, in the form attached hereto as Exhibit
I. 
  
 (viii) The representations and warranties of the
Company shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the date when made and
as of the applicable Additional Closing Date as though made at that time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the applicable Additional Closing Date. Such Buyer shall have received a certificate, executed by
the Chief Executive Officer of the Company, dated as of the applicable Additional Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the form attached hereto as Exhibit J.

  
 (ix) In the event that the Company is requiring the purchase
of Additional Notes pursuant to a Company Additional Note Notice, such Buyer shall have received a certificate, executed by the Chief Executive Officer of the Company, dated as of the applicable Additional Closing Date, stating that the Conditions
to Company Additional Note Notice set forth in Section 1.3(c)(i) have been satisfied. 
  
 (x) The Company shall have delivered to such Buyer a letter from the Company’s transfer agent certifying the number of shares of Common Stock outstanding as of a date within five days of the applicable Additional
Closing Date. 
  
 (xi) The Common Stock (I) shall be designated
for quotation or listed on the Principal Market, (II) shall not have been suspended, as of the applicable Additional Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the SEC or the
Principal Market have been threatened, as of the applicable Additional Closing Date, either (A) in writing by the SEC or the Principal Market or (B) by falling below the minimum listing maintenance requirements of the Principal Market for the
requisite period and (III) during any day during the ninety (90) Trading Days prior to the applicable Additional Closing Date, shall not have fallen below the minimum listing maintenance requirements of the Principal Market. 
  
 (xii) The Company shall have obtained all governmental, regulatory or third
party consents and approvals, if any, necessary for the sale of the applicable Additional Notes and the applicable Additional Warrants. 
  
 (xiii) During the period beginning on the Initial Closing Date and ending on and including the applicable Additional Closing Date, neither the Company
nor any of its Subsidiaries shall have been in material default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness of the Company or any of its Subsidiaries.

  

 27 

 (xiv) The Company shall have delivered to such Buyer such other documents relating to the transactions
contemplated by this Agreement as such Buyer or its counsel may reasonably request. 
  
 8. TERMINATION. In the event that the Initial Closing shall not have occurred with respect to a Buyer (i) on or before February 24, 2004, due to the Company’s or such Buyer’s failure to satisfy the
conditions set forth in Sections 6 and 7 above or (ii) on or before February 19, 2004, due to the Company’s failure to announce the 2003 Earnings (and the nonbreaching party’s failure to waive such unsatisfied condition(s)), the
nonbreaching party shall have the option to terminate this Agreement with respect to such breaching party at the close of business on such date without liability of any party to any other party; provided, however, this if this
Agreement is terminated pursuant to this Section 8, the Company shall remain obligated to reimburse the non-breaching Buyers for the expenses described in Section 4(g) above. 
  
 9. MISCELLANEOUS. 
  
 (a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the non-exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 
  
 (b) Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force
and effect as if the signature were an original, not a facsimile signature. 
  
 (c) Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. 
  

 28 

 (d) Severability. If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

  
 (e) Entire Agreement; Amendments. This Agreement and
the other Transaction Documents supersede all other prior oral or written agreements between the Buyers, the Company, their Affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement, the other
Transaction Documents and the instruments referenced herein and therein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the
Company nor any Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the holders of Initial
Notes representing at least a majority of the aggregate principal amount of the Initial Notes, or, if prior to the Initial Closing Date, the Company and the Buyers listed on the Schedule of Buyers as being obligated to purchase at least a majority
of the aggregate principal amount of the Initial Notes. No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought. No such amendment shall be effective to the extent that it
applies to less than all of the holders of the Notes then outstanding. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same
consideration also is offered to all of the parties to the Transaction Documents, holders of Notes or holders of the Warrants, as the case may be. The Company has not, directly or indirectly, made any agreements with any Buyers relating to the terms
or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, the Company confirms that, except as set forth in this Agreement, no Buyer has made any
commitment or promise or has any other obligation to provide any financing to the Company or otherwise. 
  
 (f) Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one Business Day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: 
  
 If to the Company: 
  
 Corvis Corporation 
 7015 Albert Einstein Drive 
 Columbia, Maryland 21046 
 Telephone:    (443) 259-4000 
 Facsimile:      (443) 259-4417 
 Attention:     General Counsel 
  

 29 

 with a copy to: 
  

Mayer, Brown, Rowe & Maw LLP 
 190 S. LaSalle Street 
 Chicago, Illinois 60603 
 Telephone:    (312) 701-7843 
 Facsimile:     (312) 701-7711 
 Attention:     Philip J. Niehoff, Esq. 
  
 If to the Transfer Agent: 
  
 Continental Stock Transfer & Trust Company 
 17 Battery Place, 8th Floor 
 New York, New York 10004 
 Telephone:    (212) 509-4000 
 Facsimile:     (212) 616-7616 
 Attention:     Roger Bernhammer 
  
 If to a Buyer, to its address and facsimile number set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as
set forth on the Schedule of Buyers, 
  
 with a copy (for
informational purposes only) to: 
  
 Schulte Roth
& Zabel LLP 
 919 Third Avenue 
 New York, New York 10022 
 Telephone:    (212) 756-2000 
 Facsimile:     (212) 593-5955 
 Attention:     Eleazer N. Klein,
Esq. 
  
 or to such other address and/or facsimile number and/or to the attention
of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver
or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an overnight
courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively. 
  
 (g) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns, including any purchasers of the Notes or the Warrants. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written
consent of the holders of Notes representing at least a majority of the aggregate principal amount of the Notes then outstanding, including by merger or consolidation, except in accordance with the applicable provisions of the Notes and the Warrants
with respect to which the Company is in compliance with such provisions of the Notes and the Warrants. A Buyer may assign, without the consent of the Company, some or all of its rights hereunder to any Person to whom such Buyer assigns or transfers
Securities, or the right to acquire Securities, in accordance herewith, provided such transferee agrees in writing to be bound with respect to the transferred Securities to the provisions hereof that apply to the transferring Buyer, in which event
such assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights. 
  

 30 

 (h) No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 
  
 (i) Survival. Unless this Agreement is terminated under Section 8, the representations and warranties of the Company and the Buyers contained in
Sections 2 and 3 and the agreements and covenants set forth in Sections 4, 5 and 9 shall survive each Closing. Each Buyer shall be responsible only for its own representations, warranties, agreements and covenants hereunder. 
  
 (j) Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated hereby. 
  
 (k) Indemnification. In consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities hereunder and thereunder and in addition to all of the Company’s
other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless each Buyer and each other holder of the Securities and all of their stockholders, partners, members, officers, directors, employees and
direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the
“Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a
party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or
relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or (c)
any cause of action, suit or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising out of or resulting from (i) other than those arising from or
resulting from a misrepresentation or breach of any representation or warranty made by such Indemnitee contained in the Transaction Documents or a breach of any covenant, agreement or obligation by such Indemnitee contained in the Transaction
Documents or from the gross negligence, willful misconduct or bad faith of such Indemnitee, the execution, delivery, performance or enforcement of the Transaction Documents, (ii) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of the issuance of the Securities, or (iii) other than those arising from or resulting from a misrepresentation or breach of any representation or warranty made by such Indemnitee contained in the
Transaction Documents or a breach of any covenant, agreement or obligation by such Indemnitee contained in the Transaction Documents or from the gross negligence, willful misconduct or bad faith of such Indemnitee, the status of such Buyer or holder
of the Securities as an investor in the Company. To the extent that the foregoing undertaking by the Company 
  

 31 

 may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of
each of the Indemnified Liabilities which is permissible under applicable law. Except as otherwise set forth herein, the mechanics and procedures with respect to the rights and obligations under this Section 9(k) shall be the same as those set forth
in Section 6 of the Registration Rights Agreement. 
  
 (l) No
Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. 
  
 (m) Remedies. Each Buyer and each holder of the Securities shall have
all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which such holders have under any law. Other than
in connection with Sections 4(a), (c), (d), (e), (l), (n) and (o), any Person having any rights under any provision of any of the Transaction Documents shall be entitled to enforce such rights specifically (without posting a bond or other security),
to recover damages by reason of any breach of any provision of any of the Transaction Documents and to exercise all other rights granted by law. Furthermore, the Company recognizes that in the event that it fails to perform, observe, or discharge
any or all of its obligations under any of the Transaction Documents, any remedy at law may prove to be inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled to seek temporary and permanent injunctive relief
in any such case without the necessity of proving actual damages and without posting a bond or other security. 
  
 (n) Payment Set Aside. To the extent that the Company makes a payment or payments to the Buyers hereunder or pursuant to any of the other
Transaction Documents or the Buyers enforce or exercise their rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not
been made or such enforcement or setoff had not occurred. 
  
 (o)
Independent Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under any Transaction Document are several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the
performance of the obligations of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as
a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Buyers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction
Documents. Each Buyer confirms that it has independently participated in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and enforce its
rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose.

  
 [Signature Pages Follow] 
  

 32 

 IN WITNESS WHEREOF, each Buyer and the Company has caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	COMPANY:
		
	 By:
	 	     /s/ KIM D LARSEN

	 	 	 Name: Kim D. Larsen

	 	 	 Title:   SVP, Bus. Dev. & General Counsel

 IN WITNESS WHEREOF, each Buyer and the Company has caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	BUYERS:
	
	SMITHFIELD FIDUCIARY LLC
		
	 By:
	 	     /s/ ADAM J. CHILL

	 	 	 Name: Adam J. Chill

	 	 	 Title:   Authorized Signatory

 IN WITNESS WHEREOF, each Buyer and the Company has caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	BUYERS:
	
	MAINFIELD ENTERPRISES INC.
		
	 By:
	 	     /s/ AWI VIGDER

	 	 	 Name: Awi Vigder

	 	 	 Title:   Authorized Signatory

 IN WITNESS WHEREOF, each Buyer and the Company has caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	BUYERS:
	
	THE RIVERVIEW GROUP LLC
		
	 By:
	 	     /s/ TERRY FEENEY

	 	 	 Name: Terry Feeney

	 	 	 Title:   Chief Operating Officer

 IN WITNESS WHEREOF, each Buyer and the Company has caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	BUYERS:
	
	 PORTSIDE GROWTH AND
 OPPORTUNITY
FUND

		
	 By:
	 	     /s/ JEFF SMITH

	 	 	 Name: Jeff Smith

	 	 	 Title:   Authorized Signatory

 IN WITNESS WHEREOF, each Buyer and the Company has caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	BUYERS:
	
	ELLIOTT ASSOCIATES, L.P.
	By:    Elliott Capital Advisors, L.P., as general partner
	 By:    Braxton Associates, Inc., as general
 partner

		
	 By:
	 	     /s/ ELLIOTT GREENBERG

	 	 	 Name:     Elliot Greenberg

	 	 	 Title:       Vice President

 IN WITNESS WHEREOF, each Buyer and the Company has caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	BUYERS:
	
	ELLIOTT INTERNATIONAL, L.P.
	 By:    Elliott International Capital Advisors Inc.,
 as Attorney-in-Fact

		
	 By:
	 	     /s/ ELLIOT GREENBERG

	 	 	 Name:     Elliot Greenberg

	 	 	 Title:       Vice President

 IN WITNESS WHEREOF, each Buyer and the Company has caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	BUYERS:
	
	HEIMDALL INVESTMENTS LTD.
		
	 By:
	 	     /s/ KEVIN O’NEAL

	 	 	 Name:    Kevin O’Neal

	 	 	 Title:      Authorized Signatory

 IN WITNESS WHEREOF, each Buyer and the Company has caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	BUYERS:
	
	CEDRIC, LLC
		
	 By:
	 	     /s/ JOSEPH R. WEKSELBLATT

	 	 	 Name:    Joseph R. Wekselblatt

	 	 	 Title:     Chief Financial Officer, Angelo,
     Gordon & Co., L.P. Manager

 IN WITNESS WHEREOF, each Buyer and the Company has caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	BUYERS:
	
	AMARANTH PARTNERS L.L.C.
	By Amaranth Advisors L.L.C., Manager
		
	 By:
	 	 /s/ KARL J. WACHTER

	 	 	 Name:    Karl J. Wachter

	 	 	 Title:      Authorized Signatory

 SCHEDULE OF BUYERS 
  

									
	(1)	  	(2)	  	(3)	  	(4)	  	(5)
	 Buyer

	  	 Address and Facsimile Number

	  	 Aggregate
Principal
Amount of
Initial Notes

	  	 Maximum
Aggregate
Principal
Amount of
Additional
Notes

	  	 Legal Representative’s
 Address and
Facsimile Number

	 Smithfield Fiduciary LLC
	  	 c/o Highbridge Capital
 Management, LLC
 9 West 57th Street, 27th Floor
 New York, New York
10019
 Attention: Ari J. Storch
                    Adam J. Chill
 Facsimile: (212)
751-0755
 Telephone: (212) 287-4720
 Residence: Cayman
Islands
	  	$45,000,000	  	$15,000,000	  	 Schulte Roth & Zabel LLP
 919 Third Avenue

New York, New York 10022
 Attention: Eleazer Klein, Esq.
 Facsimile: (212) 593-5955
 Telephone: (212) 756-2376

					
	 Mainfield Enterprises Inc.
	  	 c/o Sage Capital Growth, Inc.
 660 Madison
Avenue, 18th Floor
 New
York, New York 10021
 Attention: Eldad Gal
 Facsimile: (212)
651-9010
 Telephone: (212) 651-9008
 Residence: British Virgin
Islands
	  	$40,500,000	  	$13,500,000	  	 Proskauer Rose LLP
 1585 Broadway
 New York, New York 10036
 Attention: Adam J. Kansler, Esq.
 Facsimile: (212) 969-2900
 Telephone: (212) 969-3000

					
	 The Riverview Group LLC
	  	 666 Fifth Avenue, 8th Floor
 New York, New York 10103
 Attention:
Daniel Cardella
 Facsimile: (212) 977-1667
 Telephone: (212)
841-4100
 Residence: Delaware
	  	$10,000,000	  	$3,333,333	  	 
					
	 Portside Growth and
 Opportunity Fund
	  	 c/o Ramius Capital Group, L.L.C.
 666 Third
Avenue, 26th Floor
 New
York, New York 10017
 Attention: Jeffrey Smith
                    Roger Anscher
 Facsimile: (212)
845-7999
 Telephone: (212) 845-7955
 Residence: Cayman
Islands
	  	$15,000,000	  	$5,000,000	  	 
					
	 Elliott Associates, L.P.
	  	 c/o Elliott Management Corporation
 712 Fifth Avenue,
35th Floor
 New York,
New York 10019
 Attention: Elliot Greenberg
                    Brett Cohen
 Nadav
Manham
 Facsimile: (212) 974-2092
 Telephone: (212)
506-2999
 Residence: Delaware
	  	$10,000,000	  	$3,333,333	  	 

									
	 Elliott International, L.P.
	  	 c/o Elliott Management Corporation
 712 Fifth Avenue,
35th Floor
 New York,
New York 10019
 Attention: Elliot Greenberg
                    Brett Cohen
 Nadav
Manham
 Facsimile:    (212) 974-2092
 Telephone: (212) 506-2999
 Residence: Cayman Islands
	    	$15,000,000	  	$5,000,000	    	 
					
	 Heimdall Investments Ltd.
	  	 c/o HBK Investments Ltd.
 300 Crescent Court, Suite
700
 Dallas, Texas 75201
 Attention: General Counsel

Facsimile:    (214) 758-1207
 Telephone: (214)
758-6107
 Residence: Cayman Islands
	    	$27,500,000	  	$9,166,667	    	 
					
	 Cedric, LLC
	  	 c/o Angelo, Gordon & Co.
 245 Park
Avenue
 New York, New York 10167-0094
 Attention: Gary I.
Wolf
 Facsimile:    (212) 867-6449
 Telephone: (212) 692-2058
 Residence: Delaware
	    	$42,500,000	  	$14,166,667	    	 Paul, Weiss, Rifkind, Wharton & Garrison LLP
 1285 Avenue of the Americas
 New York, New York 10019-6064
 Attention: Douglas A. Cifu, Esq.
 Facsimile: (212) 757-3990
 Telephone: (212) 373-3000

					
	 Amaranth Partners L.L.C.
	  	 One American Lane
 Greenwich, Connecticut
06831
 Attention: General Counsel
 Facsimile:    (203) 422-3500
 Telephone: (203) 422-3300
 Residence: Delaware
	    	$19,500,000	  	$6,500,000	    	 

 Schedule 3(a) 
  
 ADDITIONAL SIGNIFICANT SUBSIDIARIES 
  

C III Communications LLC (100% voting; approximately 97% economic ownership) 
 Broadwing Communications LLC 
 Broadwing Communications IRU LLC 
 Broadwing Communications Assets LLC 
 Broadwing
Communications Employees LLC 
 Broadwing Communications Real Estate Services LLC 
 Broadwing Communications Real Estate LLC 

 Schedule 3(d) 
  
 NO CONFLICTS 
  
 The Company and Buyers currently intend to close before the 15-day period has run with respect to the Nasdaq Notification: Listing of Additional Shares.

 Schedule 3(e) 
  
 CONSENTS 
  

	1)	Registration and other obligations as contemplated by the Registration Rights Agreement. 

  

	2)	Possible filing of Form D 

  

	3)	The Stockholder Approval 

  

	4)	See also Schedule 3(d) 

 Schedule 3(h) 
  
 OPTIONS/WARRANTS 
  

	1)	Additional Investment Rights issued in connection with the August 28, 2003 PIPES transaction. 

  

	2)	Options issued in connection with the Company’s employee benefit plans. 

  

	3)	Warrant for the purchase of 7,250,000 Common Shares issued to Cequel III, together with a covenant to issue up to 2,750,000 Common Shares if the Common Shares are not trading at a
minimum price at the time the related resale registration rights agreement becomes effective. 

 Schedule 3(i) 
  
 SEC REPORTS/FINANCIAL STATEMENTS 
  
 On June 13, 2003, Corvis Corporation acquired the assets of Broadwing, Inc. (“Broadwing”) from Cincinnati Bell Inc. (“Cincinnati
Bell”). We then completed a PIPE’s offering in August 2003 wherein we agreed, pursuant to a registration rights agreement, to file and make effective a registration statement relating to the shares of common stock sold in the PIPEs
offering. In order to register those securities, we need to include certain historical financial statements of Broadwing. In that regard, we previously sought and obtained the consent of PricewaterhouseCoopers LLP (“PwC”) to incorporate
these historical financial statements by reference. Recently, PwC indicated that it was not willing to provide this consent because of allegations contained in an amended lawsuit filed against Cincinnati Bell, Broadwing and certain of its former
officers in December 2003. 
  
 As has been publicly disclosed,
Cincinnati Bell is conducting an investigation into these claims, including plaintiffs’ allegations regarding recognition of revenue from network construction agreements in 2000 and 2001. Broadwing announced its intention to exit the network
construction business in late 2001 and no revenues were received in connection with this business in 2002 and 2003. We did not acquire this line of business as part of our asset purchase of Broadwing in June 2003. Since the acquisition, we have not
applied the revenue recognition practices alleged to have been applied to IRU revenue prior to the acquisition. We do no believe that there will be a material impact on our financial statements, results of operations or conduct of our business for
the periods since we acquired the Broadwing assets. As soon as PwC consents to the incorporation by reference of the required historical financial statements, we hope to proceed with the registration of the securities issued in the PIPEs
transaction. 

 Schedule 3(k) 
  
 INDEBTEDNESS 
  
 The Company has no Indebtedness individually or in the aggregate in excess of $15 million. This Indebtedness includes Corvis notes to landlords in the
approximate amount of $2.3 million, approximately $4.5 million of capital leases at the Broadwing level and cash collateralized letters of credit in an approximate amount of $7 million. 

 Schedule 3(u) 
  
 FINANCIAL STATEMENTS 
  
 See disclosure on Schedule 3(i)

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