<PAGE>
Exhibit 10.1
AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT
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THIS AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT (the "Agreement"),
dated as of February 10, 1999, and effective as of December 30, 1998, between
TELLIUM, INC., a Delaware corporation (the "Company"), and each of the
Purchasers set forth on the "Schedule of Purchasers" attached hereto as Schedule
A (the "Purchasers").
RECITAL
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This is the Amended and Restated Securities Purchase Agreement relating to
the purchase and sale of the Senior Notes and the Warrants (as each such term is
defined below).
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Securities:
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(a) Sale and Issuance of Senior Notes. Subject to the terms and
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conditions of this Agreement, each Purchaser agrees to purchase, effective as of
the Closing (as defined below), and the Company agrees to sell and issue to each
Purchaser, effective as of the Closing, Senior Convertible Notes in the form of
Exhibit A attached hereto (the "Senior Notes") of the Company specified opposite
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such Purchaser's name on the Schedule of Purchasers. The Schedule of Purchasers
sets forth the maximum principal of the Senior Note being acquired by each
Purchaser, the amount being paid by such Purchaser at the Closing, and the
maximum additional amount which the Purchasers shall be obligated to advance to
the Company pursuant to the terms and conditions hereof (including Sections 1(c)
and 6).
(b) Sale and Issuance of Warrants.
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(i) Subject to the terms and conditions of this Agreement, each
Purchaser agrees to purchase, effective as of the Closing, and the Company
agrees to sell and issue to each Purchaser, effective as of the Closing,
warrants to purchase the Company's Series A Preferred Stock in the form of
Exhibit B attached hereto (the "Warrants" and, together with the Senior
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Notes, the "Securities") specified opposite such Purchaser's name on the
Schedule of Purchasers.
(ii) If the Company does not complete its next round of equity
financing of shares of preferred stock for an aggregate purchase price of
at least $23,000,000 (including preferred stock issued or issuable upon
conversion of the total aggregate amount advanced, plus accrued interest,
under the Senior Notes) on or prior to February 22, 1999, then, subject to
the terms and conditions of this Agreement, the Company agrees to issue to
each Purchaser on or about February 22, 1999, the additional Warrants
specified opposite such Purchaser's name on the Schedule of Purchasers.
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(c) Closing; Additional Advances. The initial purchase and sale of
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the Securities shall take place, effective as of December 30, 1998, at the
offices of Finn Dixon & Herling LLP in Stamford, Connecticut, or at such other
time and place as shall be mutually agreed upon between the Purchasers and the
Company (the "Closing"). At the Closing, the Company shall deliver to each
Purchaser his, her or its Senior Note and Warrant. Subject to the conditions set
forth in Section 6 hereof, upon request of the Company (delivered in writing to
the Purchasers at least three (3) business days in advance), the Company may
(upon resolution of at least four directors), at any time prior to March 31,
1999, request that the Purchasers advance additional amounts, up to an aggregate
amount equal to $16,000,000 (including amounts advanced to the Company at the
initial Closing). At the Closing, each Purchaser shall provide the amount set
forth opposite such Purchaser's name under the column "Amount Advanced at
Closing" on the Schedule of Purchasers. Each Purchaser is obligated to provide
additional amounts, as requested by the Company, not to exceed the amount set
forth opposite such Purchaser's name under the column "Amount Subject to Further
Advances" on the Schedule of Purchasers.
2. Representations and Warranties of the Company. Except for the
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exceptions set forth on the Schedule of Exceptions attached hereto as Exhibit C,
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which exceptions shall be deemed to be representations and warranties as if made
hereunder, the Company hereby represents and warrants to the Purchasers, as of
the Closing and as of the date of any additional advances, that:
(a) Organization, Good Standing, Qualification and Corporate Power.
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(i) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to carry on its business as now
conducted and as proposed to be conducted. The Company is duly qualified to
transact business, and is in good standing in each jurisdiction in which the
failure so to qualify would have a material adverse effect on its business or
properties. True and correct copies of the Company's Certificate of
Incorporation and Bylaws have been provided to the counsel for the Purchasers.
(ii) The Company has all requisite legal and corporate power and
authority to execute and deliver this Agreement, each Senior Note and each
Warrant (collectively, the "Documents"), to issue and sell the Senior Notes and
the Warrants and to carry out and perform its obligations under the terms of the
Documents and to consummate the transactions contemplated hereby and thereby.
All necessary corporate action has been taken by the Company with respect to the
execution, delivery and performance by the Company of the Documents and the
consummation of the transactions contemplated hereby and thereby.
(b) Capitalization and Voting Rights.
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(i) The authorized capital of the Company consists of:
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(A) Preferred Stock. 18,166,667 shares of Preferred
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Stock,par value $.001 per share (the "Preferred Stock"), of which
10,916,667 shares have been designated Series A Preferred Stock (the
"Series A Preferred Stock"), 9,183,334 of which are issued and
outstanding as of the date hereof, 250,000 shares have been designated
Series B Preferred Stock (the "Series B Preferred Stock"), 233,333 of
which are issued and outstanding as of the date hereof, and 7,000,000
shares have been designated Series C Preferred Stock (the "Series C
Preferred Stock"), none of which are issued and outstanding as of the
date hereof
(B) Common Stock. 40,000,000 shares of Common Stock, par
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value $.001 per share (the "Common Stock"), of which 868,000 shares
are issued and outstanding.
(ii) Except as set forth on Exhibit C, there are not outstanding
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any options, warrants, rights (including conversion or preemptive rights) or
agreements for the purchase or acquisition from the Company of any shares of its
capital stock. The Company is not a party or subject to any agreement or
understanding, and, to the Company's knowledge, there is no agreement or
understanding between any persons and/or entities, which affects or relates to
the acquisition, disposition or voting or giving of written consents with
respect to any security or by a director of the Company.
(c) Subsidiaries; Interests of the Company. The Company does not
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presently own or control, directly or indirectly, any interest in any other
corporation, association, or other business entity.
(d) Authorization. The Documents have been duly authorized, executed
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and delivered by the Company and constitute the legal, valid and binding
obligations of the Company, enforceable in accordance with their respective
terms.
(e) Valid Issuance of Existing Preferred and Common Stock.
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(i) The outstanding shares of Common Stock and Preferred Stock
are duly and validly authorized and issued, fully paid, and non-assessable, and
were issued in compliance with all applicable federal and state securities laws.
(ii) Except as set forth in this Agreement and on Exhibit C and
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except as provided in the Senior Notes and the Warrants, no other shares of
Common Stock or Preferred Stock have been reserved for issuance by the Company.
(iii) The Board of Directors of the Company has reserved
7,000,000 shares of Series C Preferred Stock for issuance upon conversion of the
Senior Notes, 7,000,000 shares of
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Common Stock for issuance upon conversion of such shares of Series C Preferred
Stock, 1,500,000 shares of Series A Preferred Stock for issuance upon exercise
of the Warrants, and 1,500,000 shares of Common Stock for issuance upon
conversion of such shares of Series A Preferred Stock. The Company covenants to
amend its certificate of incorporation on or before March 15, 1999 to increase
the number of shares of Series C Preferred Stock by such additional amount as is
necessary to fully convert the total aggregate principal amount of the Senior
Notes, plus accrued interest, into shares of Series C Preferred Stock. Upon
issuance in accordance with the terms of this Agreement and the Restated
Certificate of Incorporation of the Company, and any amendment thereto or
restatement thereof, as applicable, all of such shares will be duly and validly
authorized and issued, fully paid and non-assessable.
(f) Compliance with Other Instruments. Except as noted in Exhibit C
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hereto, the Company is not in violation or default of any provisions of its
Certificate of Incorporation or Bylaws or of any instrument, judgment, order,
writ, decree, or contract to which it is a party or by which it is bound or, to
its knowledge, of any provision of federal or state statute, rule or regulation,
license, or permit applicable to the Company, the violation or default of which
would have a material adverse effect on the Company. The execution, delivery,
and performance of the Documents and the consummation of the transactions
contemplated hereby and thereby will not result in any such violation or be in
conflict with or constitute, with or without the passage of time and giving of
notice, either a default under any such provision, instrument, judgment, order,
writ, decree, or material contract or an event which results in the creation of
any lien, charge, or encumbrance upon any assets of the Company.
3. Representations and Warranties of the Purchasers. Each Purchaser
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hereby represents and warrants to the Company that:
(a) Authorization. This Agreement constitutes its valid and legally
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binding obligation, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization and moratorium laws and other
laws of general application affecting the enforcement of creditors' rights
generally and general principles of equity, and the discretion of the court
before which any proceeding therefor may be brought. Each Purchaser represents
that it has full power and authority to enter into this Agreement.
(b) Purchase Entirely for Own Account. The Securities will be
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acquired for investment for such Purchaser's own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and such Purchaser has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, such Purchaser further represents and warrants that it does not have
any contract, undertaking, agreement, or arrangement with any person to sell,
transfer, or grant participations to such person or to any third person, with
respect to the Securities.
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(c) Restricted Securities. Such Purchaser understands that each of
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the Securities is characterized as "restricted securities" under the federal
securities laws inasmuch as it is being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations the Senior Note or the Warrant may be resold without
registration under the Securities Act of 1933, as amended (the "Act"), only in
certain limited circumstances.
(d) Accredited Investor Status. Such Purchaser represents and
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warrants that it is an "accredited investor" within the meaning of Rule 501(a)
of Regulation D, promulgated under the Act.
(e) Legends. It is understood that the certificates evidencing the
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Senior Notes and the Warrants and the securities underlying the Senior Notes and
Warrants may bear one or more of the following legends:
(i) THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS
AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE SECURITIES EVIDENCED BY
THIS CERTIFICATE, FILED AND MADE EFFECTIVE UNDER THE SECURITIES ACT OF 1933 AND
SUCH APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE COMPANY RECEIVES AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER
SUCH ACT AND SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
(ii) Any legend required by the Blue Sky laws of any state.
The legend referred to in clause (i) above shall be removed by the Company
from any certificate at such time as the holder of the securities represented by
the certificate delivers an opinion of counsel reasonably satisfactory to the
Company to the effect that such legend is not required in order to establish
compliance with any provisions of the Act, or at such time as the holder of such
securities satisfies the requirements of Rule 144(k) under the Act, provided
that Rule 144(k) as then in effect does not differ substantially from Rule
144(k) as in effect as of the date of this Agreement, and provided further that
the Company has received from the holder a written representation that (i) such
holder is not an affiliate of the Company and has not been an affiliate during
the preceding two (2) months, (ii) such holder has beneficially owned the shares
represented by the certificate for a period of at least two (2) years, and (iii)
such holder otherwise satisfies the requirements of Rule 144(k) as then in
effect with respect to such shares.
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4. Covenants of the Company. The Company agrees that, so long
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as the Senior Notes remain outstanding:
(a) Inspection of Property, Books and Records. The Company will keep
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proper books of record and account in which full, true and correct entries shall
be made of all dealings and transactions in relation to its business and
activities, and will permit representatives of each Purchaser, at such
Purchaser's expense, to visit and inspect any of its properties, to examine and
make abstracts from any of its books and records and to discuss its affairs,
finances and accounts with its officers, employees and independent public
accountants, all at such reasonable times and as often as may reasonably be
desired.
(b) Maintenance of Existence. The Company shall at all times (i)
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preserve, renew and keep in full, force and effect its legal existence and
rights and franchises with respect thereto; and (ii) maintain in full force and
effect all material permits, licenses, trademarks, trade names, approvals,
authorizations, leases and contracts necessary to carry on the business as
presently or proposed to be conducted.
(c) Payment of Obligations. The Company shall pay and discharge at
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or before maturity, all of its material obligations and liabilities, including,
without limitation, tax liabilities, except where the same may be contested in
good faith by appropriate proceedings or as waived, forgiven or modified by the
creditor, and will maintain, in accordance with generally accepted accounting
principles as they then exist, appropriate reserves for the accrual of any of
the same.
(d) Sale of Assets. The Company shall not consolidate or merge with
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or into, or sell, lease, convey or otherwise dispose of all or substantially all
of its assets, in one transaction or a series of related transactions without
the written consent of a majority in interest of the Purchasers.
5. Conditions To Closing Of The Purchasers
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The obligation of each Purchaser to purchase the Senior Notes and Warrants
at the Closing is, at the option of each Purchaser, subject to the fulfillment
on or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and
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warranties made by the Company in Section 2 of this Agreement shall have been
true and correct when made, and shall be true and correct in all respects as of
the Closing Date.
(b) Covenants. All covenants, agreements, and conditions contained
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in this Agreement to be performed by the Company on or prior to the Closing
shall have been fully performed or complied with in all respects.
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(c) Restated Certificate. The Restated Certificate of Incorporation
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of the Company, in a form acceptable to the Purchasers and their special
counsel, shall have been approved by the requisite stockholders and Board of
Directors of the Company. The Company covenants to file such Restated
Certificate of Incorporation of the Company promptly after the Closing. In
addition, the Company covenants to amend its certificate of incorporation on or
before March 15, 1999 to increase the number of shares of Series C Preferred
Stock by such additional amount as is necessary to fully convert the total
aggregate principal amount of the Senior Notes, plus accrued interest, into
shares of Series C Preferred Stock.
(d) Proceedings and Documents. All corporate and other proceedings
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in connection with the transactions contemplated hereby and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to counsel for the Purchasers.
(e) Amendment to Stockholders Agreement. The Company and each of the
-----------------------------------
Purchasers who are parties to the Stockholders Agreement (as defined below)
shall have executed and delivered an amendment to the Stockholders Agreement,
dated May 8, 1997, between the Company and certain of its stockholders (the
"Stockholders Agreement") on terms satisfactory to the Purchasers and their
special counsel.
6. Conditions to Additional Advances. The making of any subsequent
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advances by the Purchasers to the Company, as contemplated by Section 1(c),
shall be subject to the following additional conditions precedent:
(a) Representations and Warranties True and Correct; No Event of
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Default. (i) All of the representations and warranties made or deemed to be
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made under this Agreement, the Senior Notes or the Warrant shall be true and
correct at the time of the advances, with and without giving effect to the
making of the advances and the application of the proceeds thereof, and (ii) no
Event of Default (as defined in the Senior Notes) or event that with notice or
passage of time could become an Event of Default shall have occurred at such
time, with and without giving effect to the making of the advances and the
application of the proceeds thereof. The Purchasers may, without waiving this
condition, consider it fulfilled, and a representation and warranty by the
Company to such effect made to the Purchasers, if no written notice to the
contrary is received by the Purchasers from the Company prior to the making of
the advances.
(b) Additional Matters. All corporate and other proceedings, and all
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documents, instruments and other legal matters in connection with such
additional advances shall be satisfactory in form and substance to the
Purchasers, and the Purchasers shall have received such other documents and
legal opinions in respect of any aspect or consequence of the transactions
contemplated hereby or thereby as they shall reasonably request.
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7. Miscellaneous.
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(a) Survival of Warranties. The warranties, representations, and
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covenants of the Company and the Purchasers contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing for a period of 24 months and shall in no way be affected by any
investigation of the subject matter thereof made by or on behalf of the
Purchaser or the Company.
(b) Governing Law. This Agreement shall be governed by and construed
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under the laws of the State of New York, without regard to principles of
conflicts of laws and rules of such state.
(c) Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(d) Notices. Unless otherwise provided, any notice required or
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permitted under this Agreement shall be given in writing and shall be deemed
effectively given (i) upon personal delivery to the party to be notified, (ii)
four (4) days after deposit with the United States Post Office, by registered or
certified mail, postage prepaid, or (iii) one day after deposit with a reputable
overnight courier service and addressed to the party to be notified at the
address indicated for such party on the signature page hereof or the address set
forth on the Schedule of Purchasers, or at such other address as such party may
designate by ten (10) days' advance written notice to the other parties; in any
case, with a copy to:
Steven M. Cohen, Esq. Michael J. Herling, Esq.
Morgan, Lewis & Bockius LLP Finn Dixon & Herling LLP
100 Overlook Center One Landmark Square, Suite 1400
Princeton, NJ 08540 Stamford, CT 06901-2689
Telecopy: (609) 520-6639 Telecopy: (203) 348-5777
(e) Finder's Fee. Each party represents that it neither is nor will
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be obligated for any finder's fee or commission in connection with this
transaction. The Company and the Purchasers agree to indemnify and hold harmless
the other party hereto from any liability for any commission or compensation in
the nature of a finder's fee (and the costs and expenses of defending against
such liability or asserted liability) for which the Purchaser or the Company or
any of their officers, employees, or representatives is responsible.
(f) Entire Agreement; Amendments and Waivers. This Agreement
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constitutes the full and entire understanding and agreement between the parties
with regard to the subjects hereof and fully replaces, amends and restates any
prior agreement among the parties with regard
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to the subjects hereof Subject to Section 1(c) hereof, any term of this
Agreement maybe amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and 66 2/3% of the
Purchasers (based upon principal amount of Senior Notes then held by each such
purchaser). Any amendment or waiver effected in accordance with this Section
shall be binding upon each holder of any securities purchased under this
Agreement at the time outstanding, each future holder of all such securities,
and the Company.
(g) Expenses. The Company shall, upon receipt of an invoice,
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reimburse the reasonable fees and expenses of Finn Dixon & Herling LLP, counsel
to the Purchasers. The Company shall also, upon receipt of invoices, reimburse
up to an additional $10,000 of reasonable fees and expenses of other counsel to
the Purchasers (but no more than $5,000 shall be paid to any one law firm).
[Remainder of page intentionally blank, next page is signature page.]
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IN WITNESS WHEREOF. the parties have executed this Agreement as of the date
first above written.
TELLIUM, INC.
By: /s/ Michael Hodges
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Name: Michael Hodges
Title: President and CEO
Address: 2 Crescent Place
P.O. Box 901
Oceanport, NJ 07757-0901
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[Tellium, Inc. Amended and Restated Securities Purchase Agreement Signature
Page]
PURCHASERS:
OAK INVESTMENT PARTNERS VII,
LIMITED PARTNERSHIP
By: Oak Associates VII, LLC
Its General Partner
By: /s/ Edward F. Glassmeyer
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Name: Edward F. Glassmeyer
Title: Managing Member
OAK VII AFFILIATES FUND,
LIMITED PARTNERSHIP
By: Oak VII Affiliates, LLC
Its General Partner
By: /s/ Edward F. Glassmeyer
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Name: Edward F. Glassmeyer
Title: Managing Member
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[Tellium, Inc. Amended and Restated Securities Purchase Agreement Signature
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ACCEL INVESTORS '96 L.P.
By: /s/
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GENERAL PARTNER
ACCEL VL.P.
By: ACCEL V ASSOCIATES L.L.C.
ITS GENERAL PARTNER
By: /s/
----------------------------
MANAGING MEMBER
Accel Internet/Strategic Technology Fund L.p.
By: Accel Internet/Strategic
Technology Fund Associates L.L.C.
Its General Partner
By: /s/
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Managing Member
ACCEL KEIRETSU VL.P.
By: Accel Keiretsu V Associates L.L.C.
Its General Partner
By: /s/
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Managing Member
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[Tellium, Inc. Amended and Restated Securities Purchase Agreement Signature
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BELL COMMUNICATIONS RESEARCH INC.
By: /s/ J.R. Beyster
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Name: J.R. Beyster
Title: Chairman
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[Tellium, Inc. Amended and Restated Securities Purchase Agreement Signature
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SCIENCE APPLICATIONS INTERNATIONAL
CORPORATION
By: /s/ J.R. Beyster
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Name: J.R. Beyster
Title: President, CEO, & Chairman
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[Tellium, Inc. Amended and Restated Securities Purchase Agreement Signature
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WORLDVIEW TECHNOLOGY INTERNATIONAL
I, L.P.
By: Worldview Capital I, L.P., its General
Partner
Worldview Capital I, L.L.C., its
General Partner
By: /s/ James Wei
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Name: James Wei
Title: Member
WORLDVIEW TECHNOLOGY PARTNERS I, L.P.
By: Worldview Capital I, L.P., its General
Partner
Worldview Equity I, L.L.C., its
General Partner
By: /s/ James Wei
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Name: James Wei
Title: Member
WORLDVIEW STRATEGIC PARTNERS I, L.P.
By: Worldview Capital I, L.P., its General
Partner
Worldview Equity I, L.L.C., its
General Partner
By: /s/ James Wei
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Name: James Wei
Title: Member
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[Tellium, Inc. Amended and Restated Securities Purchase Agreement Signature
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BLUE ROCK CAPITAL, L.P.
By: Blue Rock Partners, L.P., its General
Partner
By: Blue rock, Inc., its General Partner
By /s/ Terry Collison
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Name: Terry Collison
Title: Vice President
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[Tellium, Inc. Amended and Restated Securities Purchase Agreement Signature
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ELLMORE C. PATTERSON PARTNERS
By: /s/ Arthur C. Patterson
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Name: Arthur C. Patterson
Title: General Partner
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[Tellium, Inc. Amended and Restated Securities Purchase Agreement Signature
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By: /s/ L Ury
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Name: L Ury
Title: Technology Officer
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[Tellium, Inc. Amended and Restated Securities Purchase Agreement Signature
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By: /s/ John Wallace
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Name: John Wallace
