EXHIBIT 10.17
Note: Redacted portions have been marked with (***). The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.
WARRANT CERTIFICATE
TELLIUM, INC.
"A" WARRANTS TO
PURCHASE COMMON STOCK
Certificate Certificate for
No. 1 1,000,000 "A" Warrants
THIS WARRANT CERTIFICATE CERTIFIES THAT U.S. TELESOURCE, INC., a Delaware
corporation ("U.S. Telesource"), or its registered assigns, is the registered
holder of the number of "A" Warrants (the "Warrants") set forth above which were
sold and granted to U.S. Telesource pursuant to the Warrant Purchase Agreement,
dated as of the date hereof, between U.S. Telesource and TELLIUM, INC., a
Delaware corporation (the "Company"). Each Warrant entitles the holder thereof
to subscribe for and purchase one fully paid and nonassessable share of common
stock, par value $.001 per share (the "Common Stock") (as adjusted pursuant to
Section 5, a "Warrant Share") of the Company, at any time and from time to time
after the date such Warrant becomes exercisable pursuant to Section 4.1 and
prior to the Expiration Time, at the purchase price of $30.00 per share (as such
price may be adjusted pursuant to Section 5, the "Warrant Price"), subject to
the provisions and upon the terms and conditions hereinafter set forth. Terms
not otherwise defined herein have the meanings stated in Section 24.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT. ADDITIONALLY, THE
TRANSFER OF THESE SECURITIES IS SUBJECT TO THE CONDITIONS
SPECIFIED IN SECTION 7 OF THE WARRANT PURCHASE AGREEMENT, AND
NO TRANSFER OF THESE SECURITIES SHALL BE VALID OR EFFECTIVE
UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. UPON THE
FULFILLMENT OF CERTAIN SUCH CONDITIONS, THE SECRETARY OF
TELLIUM, INC. HAS AGREED TO DELIVER TO THE HOLDER HEREOF A
NEW CERTIFICATE, NOT BEARING THIS LEGEND, FOR THE SECURITIES
REPRESENTED HEREBY REGISTERED IN THE NAME OF THE HOLDER
HEREOF. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST
BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS
CERTIFICATE TO THE SECRETARY OF TELLIUM, INC.
1. Vesting of Warrants.
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Pursuant to the Warrant Purchase Agreement, the Company sold and granted
the Warrants to U.S. Telesource. Each Warrant is fully vested, shall be subject
to adjustment pursuant to Section 5, and shall become exercisable as set forth
in Section 4.
2. Transferability of Warrants.
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2.1 Warrant Register and Registration. The Secretary of the Company will
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keep or cause to be kept at the office of the Company books for the
registration and transfer (the "Warrant Register") of this Warrant
Certificate and any other Warrant certificate issued hereunder
(collectively, including the initial Warrant, the "Warrants"). The
Warrant Certificates will be numbered and will be registered in the
Warrant Register as they are issued. The Company and the Secretary of
the Company will be entitled to treat a person as the owner in fact
for all purposes of each Warrant registered in such person's name
(each registered owner is herein referred to as a "holder" of such
Warrant) and will not be bound to recognize any equitable or other
claim to or interest in such Warrant on the part of any other person
and will not be liable for any registration of transfer of Warrants
that are registered or to be registered in the name of a fiduciary or
the nominee of a fiduciary.
2.2 Transfer. The Warrants (and the Warrant Shares) will be transferable
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only to the extent of, and in accordance with, Section 7 of the
Warrant Purchase Agreement.
2.3 Form of Warrant. The Warrant Certificates will be executed on behalf
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of the Company by the Chairman of the Board of Directors of the
Company (the "Board"), its President or one of its Vice Presidents and
attested to by the Secretary of the Company or an Assistant Secretary.
The signature of any of such officers on the Warrants may be manual or
facsimile.
3. Exchange of Warrants. Each Warrant may be exchanged at the option of the
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holder thereof for another Warrant or Warrants entitling the holder thereof
to purchase a like aggregate number of Warrant Shares as the Warrant or
Warrants surrendered then entitle such holder to purchase. Any holder
desiring to exchange a Warrant or Warrants will make such request in
writing delivered to the Secretary of the Company and will surrender,
properly endorsed, the Warrant or Warrants to be so exchanged at the office
of the Secretary of the Company. Thereupon, a new Warrant or Warrants, as
the case may be, as so requested, will be delivered to the person entitled
thereto.
4. Term of Warrants; Exercise of Warrants.
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4.1 Exercisability of Warrants. The Warrants represented by this Warrant
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Certificate are (***).
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4.2 Term. THE WARRANTS EXPIRE AT THE EXPIRATION TIME.
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4.3 Exercise of Warrants.
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(a) A Warrant that has become exercisable pursuant to Section 4.1 may
be exercised prior to the Expiration Time upon surrender to the
Company, in care of the Secretary of the Company, of the Warrant
to be exercised, together with the duly completed and signed
Election to Purchase in substantially the form attached hereto as
Exhibit B (the "Election to Purchase"), and upon payment to the
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Company of the Warrant Price for the number of Warrant Shares in
respect of which such Warrant is then exercised. Payment of the
aggregate Warrant Price will be made by wire transfer of
immediately available funds in accordance with written wire
transfer instructions to be provided by the Company or by
converting this Warrant Certificate, or any portion thereof
pursuant to Section 4.2(b) ("Warrant Conversion").
(b) A Warrant may be exercised in a cashless manner (a "Cashless
Exercise") with respect to a particular number of Warrant Shares
subject to the Warrant (the "Converted Warrant Shares") through
Warrant Conversion by specifying such election in the Election to
Purchase. In such event, the Company will issue and cause to be
delivered (without payment of any Warrant Price or any cash or
other consideration) that number of Warrant Shares equal to the
quotient obtained by dividing (1) the value of the Warrant (or
the specified portion hereof) on the date of exercise, which
value will be determined by subtracting (A) the aggregate Warrant
Price of the Converted Warrant Shares immediately prior to the
exercise of the Warrant from (B) the aggregate fair market value
of the Converted Warrant Shares issuable upon exercise of the
Warrant on the date of exercise, by (2) the fair market value of
one Warrant Share on the date of exercise. For purposes of this
Section 3.2, fair market value of a Warrant Share as of a
particular date will be the Closing Price on the Business Day
immediately prior to the exercise of the applicable Warrant (or,
if not publicly traded, the fair market value as determined in
clause (B) of term "Fair Market Value").
(c) Upon such surrender of the Warrant and payment of the Warrant
Price (or upon a Cashless Exercise), the Company will issue and
cause to be delivered with all reasonable dispatch to or upon the
written order of the holder and in such name or names as the
holder may designate, a certificate or certificates for the
number of full Warrant Shares so purchased upon the exercise of
such Warrants, together with a check or cash in respect of any
fraction of a share of Common Stock otherwise deliverable upon
such exercise, as provided in Section 6. Such certificate
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or certificates will be deemed to have been issued and any person
so designated to be named therein will be deemed to have become a
holder of record of such Warrant Shares as of the date of the
surrender of such Warrants and payment of the Warrant Price;
provided, however, that if, at the date of surrender of such
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Warrant and payment of such Warrant Price, the transfer books for
the Warrant Shares or other class of stock purchasable upon the
exercise of such Warrant will be closed, the certificates for the
Warrant Shares in respect of which such Warrant is then exercised
will be issuable as of the date on which such books will next be
opened (whether before or after the Expiration Time) and until
such date the Company will be under no duty to deliver any
certificate for such Warrant Shares; provided, further, that the
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transfer books, unless otherwise required by law, will not be
closed at any one time for a period longer than twenty (20) days.
(d) The rights of purchase represented by the Warrant that have
become exercisable pursuant to Section 4.1, will be exercisable
at the election of the holders thereof, either in full or from
time to time in part. If a Warrant is exercised in respect of
less than all of the Warrant Shares purchasable on such exercise
at any time prior to the Expiration Time, a new Warrant
evidencing the remaining Warrant Shares will be issued, and the
Company will deliver the new Warrant pursuant to the provisions
of this Section 4.2.
(e) Notwithstanding any other provision hereof, if an exercise of any
portion of this Warrant is to be made in connection with a public
offering of the Common Stock or a Business Combination, such
exercise may at the election of the holder be conditioned upon
the conclusion of such transaction, in which case such exercise
will not be deemed to be effective until the conclusion of such
transaction.
5. Adjustment of Warrant Price and Number of Warrant Shares. The number and
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kind of securities purchasable upon the exercise of each Warrant and the
Warrant Price will be subject to adjustment from time to time as follows:
5.1 Subdivisions, Combinations and Other Issuances. If the Company will
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at any time prior to the expiration of each Warrant subdivide the
Common Stock, by split-up or otherwise, or combine the Common Stock,
or issue additional shares of the Common Stock as a dividend with
respect to any shares of the Common Stock, the number of Warrant
Shares issuable on the exercise of the Warrant will forthwith be
proportionately increased in the case of a subdivision or stock
dividend, or proportionately decreased in the case of a combination.
Appropriate adjustments will also be made to the Warrant Price, but
the aggregate purchase price payable for the total number of Warrant
Shares purchasable under the Warrant (as adjusted) will remain the
same. Any adjustment under this
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Section 5.1 will become effective at the close of business on the date
the subdivision or combination becomes effective, or as of the record
date of such dividend, or in the event that no record date is fixed,
upon the making of such dividend.
5.2 Recapitalization, Reclassification, Reorganization and Consolidation.
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In case of any recapitalization, reclassification, capital
reorganization or change in the Common Stock of the Company (other
than as a result of a subdivision, combination, or stock dividend
provided for in Section 5.1), then, as a condition of such
recapitalization, reclassification, reorganization or change, lawful
provision will be made, and duly executed documents evidencing the
same from the Company or its successor will be delivered to the
holder, so that the holder will have the right at any time prior to
the expiration of the Warrant to purchase, at a total price equal to
that payable upon the exercise of the Warrant, the kind and amount of
shares of stock and other securities and property receivable in
connection with such recapitalization, reclassification,
reorganization, or change by a holder of the same number of shares of
Common Stock as were purchasable by the holder immediately prior to
such recapitalization, reclassification, reorganization or change. In
any such case appropriate provisions will be made with respect to the
rights and interest of the holder so that the provisions hereof will
thereafter be applicable with respect to any shares of stock or other
securities and property deliverable upon exercise hereof, and
appropriate adjustments will be made to the Warrant Price payable
hereunder, provided the aggregate purchase price will remain the same.
5.3 Issuances Below $30.00 Per Share. If the Company at any time prior to
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the Company's initial public offering of its Common Stock shall issue,
or shall be deemed to issue (as provided in Section (E)(3)(b)(3) of
Article IV of the Company's Amended and Restated Certificate of
Incorporation), any shares of Common Stock (other than (i) "Excluded
Stock," as defined in Article IV of the Company's Amended and Restated
Certificate of Incorporation as of the date hereof, and (ii) the
Series E Preferred Stock to be issued by the Corporation and subject
to its Private Placement Investment Memorandum dated September 18,
2000) at a price less than the Warrant Price then in effect, and if
such issuance is not addressed by Sections 5.1, 5.2, or 5.5, the
Warrant Price shall be reduced to reflect this lower price; provided,
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however, the aggregate number of Warrant Shares purchasable under the
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Warrant will remain the same. Consideration other than cash shall be
determined in accordance with Section (E)(3)(b)(2) of Article IV of
the Company's Amended and Restated Certificate of Incorporation as of
the date hereof.
5.4 Notice of Adjustment. When any adjustment is required to be made in
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the number or kind of shares purchasable upon exercise of each
Warrant, or in the Warrant Price, the Company will promptly notify the
holder of such event and of
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the number of shares of Common Stock or other securities or property
thereafter purchasable upon exercise of the Warrant.
5.5 Other Distributions. In the event that the Company will, in respect
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of its outstanding shares of Common Stock, declare a distribution
payable in securities of other persons, evidences of indebtedness
issued by the Company or other persons, assets (excluding cash
dividends) or options or rights not referred to in Sections 5.1 and
5.2, then, in each such case for purposes of this Section 5.5, upon
exercise of each Warrant the holder will be entitled to a
proportionate share of any such distribution as though it were the
holder of the number of shares of Common Stock of the Company
underlying the Warrant as of the record date fixed for the
determination of the holders of Common Stock of the Company entitled
to receive such distribution.
5.6 No Impairment. The Company will not, by amendment of its Amended and
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Restated Certificate of Incorporation or through any reorganization,
recapitalization, 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 to be observed or performed hereunder by the Company, but
will at all times in good faith assist in the carrying out of all the
provisions of this Warrant Certificate and in the taking of all such
action as may be necessary or appropriate in order to protect the
exercise rights of the Holder against impairment.
5.7 Minimum Adjustment. The adjustments required by the preceding
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sections of this Section 5 shall be made whenever and as often as any
specified event requiring an adjustment shall occur. Subject to
Section 6, adjustments of the Warrant Price or the number of shares of
Common Stock issuable upon exercise of this Warrant shall be
calculated to the nearest cent or to the nearest one hundredth of a
share, as the case may be. For the purpose of any adjustment, any
specified event shall be deemed to have occurred at the close of
business on the date of its occurrence.
5.8 Adjustment to Warrant Certificate. This Warrant Certificate need not
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be changed because of any adjustment made pursuant to this Section 5,
and Warrant Certificates issued after such adjustment may state the
same Warrant Price and the same number of shares of Common Stock
issuable upon exercise of the Warrants as are stated in the Warrant
Certificates initially issued pursuant to this Warrant Agreement. The
Company, however, may at any time in its sole discretion make any
change in the form of Warrant Certificate that it may deem appropriate
to give effect to such adjustments and that does not affect the
substance of the Warrant Certificate, and any Warrant Certificate
thereafter issued or countersigned, whether in exchange or
substitution for any outstanding Warrant Certificate or otherwise, may
be in the form as so changed.
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6. Fractional Interests. No fractional Warrant Shares or scrip will be issued
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upon the exercise of Warrants, but in lieu thereof the Company pay therefor
in cash an amount equal to the product obtained by multiplying the Fair
Market Value per Warrant Share on the Business Day immediately preceding
the date of exercise of the Warrants times such fraction. If more than one
Warrant will be presented for exercise in full at the same time by the same
holder, the number of full Warrant Shares that will be issuable upon the
exercise thereof will be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented.
7. Taxes. The Company will pay any and all issue, transfer, documentary,
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stamp and other similar taxes that may be payable in respect of any issue
or delivery of Warrant Shares upon the exercise of each Warrant; provided,
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however, that the Company will not be required to pay any tax or taxes that
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may be payable in respect of any transfer involved in the issue or delivery
of any Warrant or certificates for Warrant Shares in a name other than that
of the registered holder of such Warrant, and no such issue or delivery
will be made unless and until the person requesting the issuance thereof
will have paid to the Company the amount of such tax or will have
established to the satisfaction of the Company that such tax has been paid.
8. Reservation of Shares; Validity; Purchase and Cancellation of Warrants.
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8.1 Reservation of Warrant Shares. There have been reserved, and the
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Company will at all times reserve and keep available, free from
preemptive rights, out of its authorized and unissued Common Stock,
solely for the purpose of effecting the exercise of the Warrants, the
number of shares of Common Stock that will from time to time be
sufficient to provide for the exercise of the rights of purchase
represented by the outstanding Warrants. All Warrants surrendered in
the exercise of the rights thereby evidenced will thereupon be
cancelled by the Company and retired. Promptly after the Expiration
Time, the Secretary of the Company will certify to the Company the
aggregate number of Warrants then outstanding, and thereafter no
shares of Common Stock will be subject to reservation in respect of
such Warrants. The Company will from time to time, in accordance with
the laws of the State of Delaware, use its commercially reasonable
best efforts to increase the authorized amount of its Common Stock if
at any time the number of shares of Common Stock remaining unissued
will not be sufficient to permit the exercise of all the then
outstanding Warrants.
8.2 Valid Issuance. Except for those restrictions set forth in the
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Stockholder's Agreement, all shares of Common Stock or other
securities issuable upon exercise of the Warrants will, upon issuance
in accordance with the terms hereof, be validly issued, fully paid and
nonassessable, free from all liens, charges, security interests and
encumbrances created by the Company with respect to the issuance and
delivery thereof and not subject to preemptive rights.
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8.3 Purchase of Warrants by the Company. Any of the Company and its
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Subsidiaries will have the right, except as limited by law, other
agreements or herein, to purchase or otherwise acquire Warrants at
such times, in such manner and for such consideration as it may deem
appropriate.
8.4 Cancellation of Warrants. If any of the Company and its Subsidiaries
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will purchase or otherwise acquire Warrants, the same will thereupon
be cancelled by the Company and retired. The Company will cancel any
Warrant surrendered for exchange, substitution, transfer or exercise
in whole or in part.
9. Mutilated or Missing Warrants. If any Warrant is mutilated, lost, stolen
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or destroyed and the Company receives evidence thereof reasonably
satisfactory to it, the Company will issue and deliver in exchange and
substitution for and upon cancellation of the mutilated Warrant, or in lieu
of and substitution for the Warrant lost, stolen or destroyed, a new
Warrant of like tenor and representing an equivalent right or interest. An
applicant for such a substitute Warrant will comply with such other
reasonable requirements and pay such reasonable charges as the Company may
prescribe.
10. Rights as Stockholder. Nothing contained in this Warrant Certificate or in
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any of the Warrants will be construed as conferring upon the holders or
their transferees the right to vote or to receive dividends or to consent
or to receive notice as stockholders in respect of any meeting of
stockholders for the election of directors of the Company or any other
matter, or any rights whatsoever as stockholders of the Company.
11. Notice to Holders. At any time prior to the expiration of the Warrants and
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prior to their exercise, if any of the following events will occur:
(a) the Company will declare any dividend (or any other distribution) on
Common Stock other than a cash dividend or will declare or authorize
repurchase of in excess of 10% of the then outstanding shares of
Common Stock; or
(b) the Company will authorize the granting to all holders of Common Stock
of rights or warrants to subscribe for or purchase any shares of
Common Stock or any Derivative Securities; or
(c) the Company will propose any capital reorganization, recapitalization,
subdivision or reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a
change in par value, or from par value to no par value or from no par
value to par value), or any consolidation or merger to which the
Company is a party for which approval of any stockholders of the
Company will be required, or the sale, transfer or lease of all or
substantially all of the assets of the Company, or any event described
in Section 5; or
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(d) the voluntary or involuntary dissolution, liquidation or winding up of
the Company (other than in connection with a consolidation, merger, or
sale of all or substantially all of its property, assets and business
as an entirety) will be proposed;
then the Company will give notice in writing of such event to the holders
at least fifteen (15) days prior to the date fixed as a record date or the
date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, or subscription
rights, or for the determination of stockholders entitled to vote on such
proposed consolidation, merger, sale, transfer or lease of assets,
dissolution, liquidation or winding up. No failure to give such notice or
any defect therein or in the mailing thereof will affect the validity of
the corporate action required to be specified in such notice.
12. Notices. All notices, requests and other communications with respect to
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the Warrants will be in writing. Communications may be made by telecopy or
similar writing. Each communication will be given to the holder at the
address in the Warrant Register, and to the Company at its offices in
Oceanport, New Jersey, or at any other address as the holder or the
Company, as the case may be, may specify for this purpose by notice to the
other party. Each communication will be effective (a) if given by telecopy,
when the telecopy is transmitted to the proper address and the receipt of
the transmission is confirmed, (b) if given by mail, 72 hours after the
communication is deposited in the mails properly addressed with first class
postage prepaid, (c) if given by nationally-recognized overnight courier,
on the next Business Day after the date when sent, or (d) if given by any
other means, when delivered to the proper address and a written
acknowledgement of delivery is received.
13. No Waivers; Remedies; Specific Performance.
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13.1 No Waivers; Remedies. Prior to the Expiration Time, no failure or
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delay by any holder in exercising any right, power or privilege with
respect to the Warrants will operate as a waiver of the right, power
or privilege. A single or partial exercise of any right, power or
privilege will not preclude any other or further exercise of the
right, power or privilege or the exercise of any other right, power
or privilege. The rights and remedies provided in the Warrants will
be cumulative and not exclusive of any rights or remedies provided by
law.
13.2 Specific Performance. In view of the uniqueness of the Warrants, a
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holder would not have an adequate remedy at law for money damages in
the event that any of the obligations arising under the Warrants is
not performed in accordance with its terms, and the Company therefore
agrees that the holder will be entitled to specific enforcement of
the terms of the Warrants in addition to any other remedy to which
they may be entitled, at law or in equity.
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14. Amendments, Etc. No amendment, modification, termination, or waiver of any
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provision of this Warrant Certificate, and no consent to any departure from
any provision of this Warrant Certificate, will be effective unless it will
be in writing and signed and delivered by the Company and the holders of a
majority of the outstanding Warrants (other than the Company), and then it
will be effective only in the specific instance and for the specific
purpose for which it is given. Any permitted transferee must agree in
writing, as a condition of such transfer, to be bound by the terms and
conditions of any amendment, modification, termination, or waiver of any
provision of this Warrant Certificate which has been agreed to in writing
by the transferor. The rights of the holder and the terms and provisions of
this Warrant Certificate including, without limitation, the performance of
the obligations of the Company hereunder, will not be affected in any
manner whatsoever by the terms and provisions of any other agreement other
than the Stockholder's Agreement, whether entered into prior to or after
the date of this Warrant.
15. Governing Law. This Warrant Certificate will be governed by and construed
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in accordance with the internal laws of the State of New York without
regard to the principles of conflicts of law thereof.
16. Severability of Provisions. Any provision of this Warrant Certificate that
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is prohibited or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of the prohibition or
unenforceability without invalidating the remaining provisions of this
Warrant Certificate or affecting the validity or enforceability of the
provision in any other jurisdiction.
17. Headings and References. Headings in this Warrant Certificate are included
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for the convenience of reference only and do not constitute a part of the
Warrant for any other purpose. References to parties and sections in this
Warrant Certificate are references to the parties or the sections of this
Warrant Certificate, as the case may be, unless the context will require
otherwise.
18. Exclusive Jurisdiction. Each of the Company and the holder, by acceptance
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hereof, (a) agrees that any legal action with respect to this Warrant
Certificate will be brought exclusively in the courts of the State of New
York or of the United States of America, in each case within the County of
New York, (b) accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of those courts, and (c) irrevocably
waives any objection, including, without limitation, any objection to the
laying of venue or based on the grounds of forum non conveniens, which it
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may now or hereafter have to the bringing of any legal action in those
jurisdictions; provided, however, that any party may assert in a legal
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action in any other jurisdiction or venue each mandatory defense, third-
party claim or similar claim that, if not so asserted in such legal action,
may thereafter not be asserted by such party in an original legal action in
the courts referred to in clause (a) above.
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19. Waiver of Jury Trial. Each of the Company and the holder waives, by
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acceptance hereof, any right to a trial by jury in any legal action to
enforce or defend any right under this Warrant Certificate or any
amendment, instrument, document or agreement delivered, or which in the
future may be delivered, in connection with this Warrant Certificate and
agrees that any legal action will be tried before a court and not before a
jury.
20. Merger or Consolidation of the Company. The Company will not merge or
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consolidate with or into any other corporation or other entity where the
Company is not the resulting or surviving corporation unless the entity
resulting from such merger or consolidation, or its parent if the parent
issues securities to the Company's security holders in such merger or
consolidation, will expressly assume, by supplemental agreement, the due
and punctual performance and observance of each and every covenant and
condition of this Warrant Certificate to be performed and observed by the
Company.
21. Definitions. For purposes of this Warrant Certificate, the following terms
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have the following meanings:
(a) "Average Market Price" on any date means the average of the daily
Closing Prices for the fifteen (15) consecutive Trading Days
commencing twenty (20) Trading Days before such date.
(b) "Business Day" means any day excluding Saturday, Sunday and any day on
which banking institutions located in the City of New York or Denver,
Colorado are generally closed.
(c) "Business Combination" means, whether concluded or intended to be
concluded in one transaction or series of transactions, each of the
following:
(1) the merger or consolidation of any of the Company and its
Subsidiaries with or into any person other than the Company or a
wholly-owned Subsidiary of the Company;
(2) the transfer of all or substantially all of the assets of any of
the Company and its Subsidiaries to any person or group other
than the Company or a wholly-owned Subsidiary of the Company;
(3) an acquisition from any of the Company, its Subsidiaries and its
stockholders of any shares of Common Stock or other Securities of
the Company; or
(4) any tender offer (including a self-tender offer) or exchange
offer, recapitalization, liquidation, dissolution or similar
transaction involving any of the Company and its Subsidiaries.
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(d) "Closing Price" means, as applied to any security on any date, the
last reported sales price, regular way, per share of such security on
such day, or if no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in each case, as
reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if shares of such security are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on
which the shares of such security are listed or admitted to trading,
or, if the shares of such security are not listed or admitted to
trading on any national securities exchange, the last quoted sale
price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations Systems
("NASDAQ") or, if not so reported, as reported by any similar
interdealer system then in general use, or, if on any such date the
shares of security are not quoted or reported by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the shares
of stock selected by the Board.
(e) "Derivative Securities" means securities convertible into or
exchangeable or exercisable for shares of Common Stock, rights or
warrants to subscribe for or purchase shares of Common Stock, options
for the purchase of, or calls, commitments or other claims of any
character relating to, shares of Common Stock or any securities
convertible into or exchangeable for any of the foregoing.
(f) "Expiration Time" means 5:00 p.m., New York time, on September 18,
2005, (or, if not a Business Day, the next Business Day).
(g) "Fair Market Value" of any property will mean the fair market value
thereof as determined in good faith by the Board; provided, however,
-------- -------
that the value of any securities will be determined as follows:
(A) If publicly held or listed on an exchange or through the
NASDAQ National Market, the Average Market Price; and
(B) If not publicly held or so listed or publicly traded, the
value will be the fair market value thereof, as mutually
determined in good faith by the Board and the holders of a
majority of the Warrants and/or Warrant Shares purchasable
upon exercise thereof.
(h) "Stockholder's Agreement" means the Supplemental Stockholders'
Agreement, dated as of the date hereof, by and between the Company,
U.S. Telesource, Inc., and certain other persons.
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(i) "Subsidiary" means (1) any corporation or other entity of which
securities or other ownership interests having ordinary voting power
to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly
owned by the Company, or (2) a partnership or limited liability
company in which the Company or a Subsidiary of the Company is, at the
date of determination, a general or limited partner of such
partnership or a member of such limited liability company, but only if
the Company or its Subsidiary is entitled to receive more than fifty
percent of the assets of such partnership or limited liability company
upon its dissolution.
(j) "Trading Day" means, as applied to any class of stock, any day on
which the New York Stock Exchange or, if shares of such stock are not
listed or admitted to trading on the New York Stock Exchange, the
principal national securities exchange on which the shares of such
stock are listed or admitted for trading or, if the shares of such
stock are not listed or admitted for trading on any national
securities exchange, the NASDAQ or, if the shares of such stock are
not included therein, any similar interdealer system then in general
use in which the shares of such stock are included, is open for the
trading of securities generally and with respect to which information
regarding the sale of securities included therein, or with respect to
which sales information is reported, is generally available.
[Remainder of Page Intentionally Left Blank]
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THIS WARRANT CERTIFICATE is executed and delivered by the Company on the
date set forth below in Oceanport, New Jersey.
Dated: September 18, 2000 TELLIUM, INC.
By: ____________________________
Name: __________________________
Title: _________________________
Attested to:
-----------
By: ____________________________
Name: __________________________
Title: _________________________
-1-
Exhibit A
---------
ASSIGNMENT
(To be signed only upon assignment of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
______________________________
(Name)
______________________________
______________________________
(Address)
______________________________
(Social Security Number)
the Warrant in the name of the undersigned and hereby appoints the Secretary of
the Company as the undersigned's attorney-in-fact to transfer said Warrant on
the books of the Company, with full power of substitution in the premises.
Date: __________, 20___
Signature of Registered Holder: _____________________________________________
Note: The above signature must correspond with the name as written upon the face
of this Warrant Certificate in every particular without alteration or
enlargement or any change whatever unless this Warrant has been assigned.
-1-
Exhibit B
---------
ELECTION TO PURCHASE
Tellium, Inc.
2 Crescent Place
P.O. Box 901
Oceanport, NJ 07757-0901
Attn: Chief Financial Officer
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant for and to purchase thereunder, shares of the
stock provided for herein, and requests that certificates for such shares be
issued in the name of
______________________________
(Name)
______________________________
______________________________
(Address)
______________________________
(Social Security Number)
and, if said number of shares will not be all the shares purchasable thereunder,
that a new Warrant Certificate for the balance remaining of the shares
purchasable under the within Warrant Certificate be registered in the name of
the undersigned holder of this Warrant or his Assignee as below indicated and
delivered to the address stated below. By placing an X in the following blank,
the undersigned hereby elects to exercise the purchase right with respect to
__________ shares of such Common Stock through Warrant Conversion, as set forth
in Section 3 of the within Warrant.
Date: __________, 20___
Name of holder of this Warrant Certificate or Assignee: ________________________
Address: _______________________________________________________________________
Signature: _____________________________________________________________________
Note: The above signature must correspond with the name as written upon the face
of this Warrant Certificate in every particular without alteration or
enlargement or any change whatever unless this Warrant has been assigned.
-1-