Ulletthe Restructuring Agreement

Exhibit 10.3

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

March 24, 2005

Mr. Steve Abely, CFO
Bookham, Inc.
1-10 Brewer Hunt Way
Ottawa, Ontario
Canada

You have requested that Nortel Networks Limited (" Nortel" ) provide certain commercial accommodations to Bookham, Inc. (" Bookham" ) in connection with certain agreements between Nortel and its affiliates and Bookham and its affiliates, including:

ullet The Restructuring Agreement entered into as of December 2, 2004, among Bookham Technology plc, Bookham, Inc., Bookham plc and its other subsidiaries whose names appear on the signature pages, Nortel Networks UK Limited and Nortel Networks Corporation, as amended (the " Restructuring Agreement" ) ullet Series A-2 Senior Secured Note Due 2007 U.S.$20,000,000 September 10, 2004 executed by BOOKHAM, INC., BOOKHAM TECHNOLOGY PLC, NEW FOCUS, INC., ONETTA, INC., BOOKHAM (US) INC., BOOKHAM (CANADA), INC., BOOKHAM (SWITZERLAND) AG, IGNIS OPTICS, INC.

and

Series B-1 Senior Secured Note Due 2006 U.S.$30,000,000.00 November 8, 2002 executed by BOOKHAM TECHNOLOGY PLC, NEW FOCUS, INC., ONETTA, INC., BOOKHAM (US) INC., BOOKHAM (CANADA) INC., BOOKHAM (SWITZERLAND) AG, IGNIS OPTICS, INC., BOOKHAM, INC.

(together the " Senior Secured Notes" )

The Restructuring Agreement, the Senior Secured Notes, the security agreements entered into pursuant thereto and in connection therewith (the " Security Agreements" ) and the other agreements and documents delivered pursuant thereto together are referred to hereinafter as the " Senior Note Documents" .

ullet Optical Components Supply Agreement between Bookham Technology plc and Nortel Networks Limited with Nortel Networks Agreement No. 011634, as amended (the " Supply Agreement" ).


Nortel is prepared to make certain of the requested accommodations available to Bookham on the terms and subject to the conditions contained herein (the " Proposal" ).

1. The Supply Agreement will be amended to provide that, for the twelve (12) month period beginning April 1, 2005 (the " Effective Date" ), the due date for payments by Nortel to Bookham under the Supply Agreement for product delivered during such 12-month term will be [**] calendar days following receipt by Nortel of the invoice to [**] calendar days (paid via wire transfer or in a similar manner) following receipt by Nortel of the invoice. For the avoidance of doubt, the foregoing does not allow Bookham to accelerate the issuance of invoices. The reduction of payment terms referenced in this paragraph will automatically expire upon the occurrence of an Expiration Event (defined below).

2. The Supply Agreement will also be amended to provide a price increase of [**]% on Last Time Buys (as such term is defined in the Supply Agreement Addendum dated February 7, 2005) and a price increase of [**]% on all other products purchased under the Supply Agreement, such price increases to remain in effect for no longer than twelve (12) months from the Effective Date. The price increases will apply to the prices in effect immediately prior to the Effective Date, and Nortel and Bookham will agree to a schedule which will set out the price increases by part and such schedule will be included in the written amendment to the Supply Agreement. Following such twelve (12) months (or shorter in the event that an Expiration Event occurs) time period, prices will return to those in effect under the Supply Agreement immediately prior to the Effective Date. The price increases referenced in this paragraph will automatically expire upon the occurrence of an Expiration Event.

The parties agree to work together to create a process which is acceptable to Nortel' s and Bookham' s auditors and finance department for implementing the above price increases.

3. Nortel will or will instruct its contract manufacturer to, no later than fifteen (15) business days after the Effective Date, issue non-cancelable purchase orders for all products Nortel estimates it will require for:

(i) eight (8) months against its twelve (12) month forecast current at April 1, 2005 for products other than Last Time Buys; and (ii) one hundred percent (100%) of the value of the Last Time Buys.

((i) and (ii) collectively the " Accelerated Purchase Orders" ). However, the foregoing will not prevent Nortel from issuing additional purchase orders in Nortel' s discretion. The product mix to be delivered by Bookham pursuant to the Accelerated Purchase Orders will be determined on a monthly basis by Nortel and Bookham and will be in agreement with the Supply Agreement Addendum dated ...