EXHIBIT 10.31
FORM OF AMENDMENT NO. 1 TO
PURCHASE MONEY PROMISSORY NOTE
This AMENDMENT NO. 1 (this "Amendment") DATED AS OF JUNE 19, 2002 TO
THE PURCHASE MONEY PROMISSORY NOTE DATED AS OF ___, 2000, AS AMENDED (the
"Note"), by and between TELLIUM, INC., a Delaware corporation (the "Company"),
having its address at 0 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, and the
undersigned (the "Borrower").
WHEREAS, the Company and the Borrower are parties to the Note;
WHEREAS, in October 2001, the Company and the Borrower agreed to amend
the Note, as set forth in xx.xx. 3 and 4 below, but did not reduce such
agreement to writing; and
WHEREAS, the Company and the Borrower wish to reduce such agreement to
writing and further amend the Note, this Amendment to be effective as of June
19, 2002, except for xx.xx. 3 and 4 below, which are to be effective as of
October 1, 2001.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
1. Capitalized terms used and not otherwise defined in this Amendment
shall have the meanings given to such terms in the Note.
2. This Amendment is effective as of June 19, 2002, except for ss.ss.3
and 4 below, which were effective as of October 1, 2001.
3. The second sentence of Section 1 of the Note is hereby amended and
restated to read as follows:
The interest rate shall float on a quarterly basis and shall equal the
Internal Revenue Service established short-term Applicable Federal Rate
for a quarterly compounding period effective for the first month in
such quarterly period and published in a Revenue Ruling in the
Cumulative Bulletin in the month preceding the first month in such
quarterly period, provided that the rate shall not be less than 2.5%
per annum nor exceed 7.5% per annum.
4. The definition of Termination Date is hereby amended and restated to
be the fifth anniversary of the date of the Note.
5. The Company agrees that all payments due under and in connection
with the Note or any other documents or other agreements executed in connection
therewith, or any notes,
instruments or other evidence of indebtedness issued in exchange therefore or
upon conversion or refinancing thereof (including, without limitation, all
principal, interest, fees, charges, indemnities, costs, expenses, and other
indebtedness arising under or incidental to the Note), collectively (the
"Subordinated Debt"), are subordinated to the prior payment in full of all
present and future obligations, liabilities and indebtedness of the Borrower,
whether now or hereafter due, incurred or created in connection with (i) any
mortgage, home equity, or home improvement loan or similar obligation of the
Borrower, (ii) any consumer credit (as defined in the Truth in Lending Act (15
U.S.C. 1602), as amended from time to time) and (iii) any credit and charge
cards of the Borrower (i, ii, and iii collectively, the "Senior Debt"). Such
subordination is for the benefit of the creditors to whom the Senior Debt is
owed (the "Senior Creditors"). The Company hereby agrees to enter into a
subordination agreement at the request of any Senior Creditor.
6. The payment of principal and accrued interest on the Note shall be
due in the following installments over five (5) years beginning on the
Termination Date:
(i) Ten percent (10 %) of the principal and accrued interest shall be
due on the first year anniversary of the Termination Date;
(ii) Fifteen percent (15%) of the principal and accrued interest shall
be due on the second year anniversary of the Termination Date;
(iii) Twenty percent (20%) of the principal and accrued interest shall
be due on the third year anniversary of the Termination Date;
(iv) Twenty-five percent (25%) of the principal and accrued interest
shall be due on the fourth year anniversary of the Termination Date;
and
(v) The remaining balance of the principal and accrued interest shall
be due on the fifth year anniversary of the Termination Date.
7. Continuing Effect; No other Amendments. Except as expressly provided
herein, all of the terms and provisions of the Note are and shall remain in full
force and effect. This Amendment is limited to the specific definitions and
sections of the Note specified herein and shall not constitute a consent, waiver
of amendment of, or an indication of the Company's or the Borrower's willingness
to consent to any action requiring consent under or to waive or amend any other
provision of the Note.
8. Counterparts. This Amendment may be executed in counterparts, each
of which shall be deemed to be an original, but all of which, when taken
together, shall constitute one and the same instrument.
* * * *
IN WITNESS WHEREOF, the parties have executed this Amendment on the day
and year first above written.
THE COMPANY:
TELLIUM, INC.
By:
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Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer, Secretary and
Treasurer
THE BORROWER:
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Name:
