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.
EXHIBIT 10.26
AMENDMENT TO WARRANT TO PURCHASE COMMON STOCK,
DATED AS OF SEPTEMBER 21, 1999, BETWEEN
TELLIUM, INC. ("TELLIUM") AND
DYNEGY GLOBAL COMMUNICATIONS, INC. ("DYNEGY")
(AS SUCCESSOR TO EXTANT, INC.)
(THE "WARRANT AGREEMENT")
This Amendment to the Warrant Agreement is made as of November 2, 2000 by
and between Dynegy and Tellium. All capitalized terms that are used herein but
not defined shall have the meaning ascribed to them in the Warrant Agreement.
In consideration of the mutual covenants set forth herein, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties agree as
follows:
1. Section 3(a) shall be deleted in its entirety and replaced with the
following:
3. Exercise of Warrant.
(a) All of the shares subject to the Warrant (the "Warrant Shares") are
irrevocably and fully vested immediately upon execution and delivery of the
Purchase Agreement by Extant. The purchase rights represented by this Warrant as
to the vested shares are exercisable pursuant to the exercise schedule attached
hereto as Annex 1 (the "Exercise Schedule"). Such shares exercisable pursuant to
the Exercise Schedule are exercisable by the Holder in whole or in part at any
time, or from time to time, during the term hereof as described in Section 1
above, by the surrender of this Warrant and Notice of Exercise attached as Annex
II hereto duly completed and executed on behalf of the Holder, at the principal
offices of the Company (or such other office or agency of the Company as it may
designate by notice in writing to the Holder at the address of the Holder
appearing on the books of the Company), upon payment (i) in cash payable to the
Company, (ii) by wire transfer of immediately available funds, (iii) by
cancellation by the Holder of indebtedness of the Company to the Holder, or (iv)
by some combination of (i), (ii) and (iii), in each case, of the purchase price
of the shares to be purchased.
2. Annex I shall be deleted in its entirety and replaced with the
Annex I attached hereto.
3. The parties acknowledge that all of the prior amendments to the
Warrant Agreement are as follows:
. Amendment dated December, 1999.
. Supplemental Letter Agreement dated November 2, 2000 among
Dynegy Connect, L.P., DCP Leasing L.L.C. (as Construction
Agent), Tellium, and Dynegy, Inc.
. Amended and Restated Letter Agreement dated November 2, 2000
among Dynegy Connect, L.P., Tellium, and Polaris Connect
Statutory Trust.
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.
4. This Agreement may be executed in two or more counterparts, and it
shall not be necessary that the signatures of all parties hereto be contained on
any one counterpart hereof; each counterpart shall be deemed an original, but
all of which together shall constitute one and the same instrument. Delivery of
an executed signature page of this Letter Agreement by facsimile transmission
shall be effective as delivery of a manually-executed counterpart hereof.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the first date above written.
TELLIUM, INC.
By: /s/ Xxxxxxxx XxXxxx
---------------------------
Name: Xxxxxxxx XxXxxx
Title: VP Business Development
DYNEGY GLOBAL COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxx
---------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
DYNEGY CONNECT, L.P.
By: /s/ Xxxxxxx X. Xxxx
---------------------------
Name: Xxxxxxx X. Xxxx
Title: Executive Vice President
AGREED AND ACCEPTED
AS OF THE ABOVE DATE
BY THE FOLLOWING
BENEFICIAL OWNERS:
DYNEGY STRATEGIC INVESTMENTS, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Assistant Treasurer
TELSTRA HOLDINGS Pty Limited
By:_________________________________
Name:
Title:
-3-
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.
ANNEX I
-------
EXERCISE SCHEDULE
(* * *) of the shares subject to the Warrant (the "Warrant Shares") shall
irrevocably be exercisable immediately upon execution and delivery of the
Purchase Agreement. (* * *) of the Warrant Shares shall irrevocably be
exercisable upon delivery of an order by Dynegy and acceptance thereof by
Tellium for a least (* * *) (such order to be coincident with signed Purchase
Agreement and to include (* * *) already in Dynegy's possession for testing),
and an additional (* * *) of the Warrant Shares shall irrevocably be exercisable
upon payment therefor. (* * *) of the Warrant Shares shall irrevocably be
exercisable on delivery of one or more orders by Dynegy and acceptance thereof
by Tellium for a least (* * *) in the aggregate.
The remaining Warrant Shares shall irrevocably be exercisable at a rate of
(* * *) for each (* * *) of products and services (including, without
limitation, the (* * *) referenced above) delivered under the Purchase Agreement
and acceptance and payment therefor and thereunder, provided that, subject to
the terms of this schedule, Authorized Purchasers purchase at least (* * *) of
products and services during the (* * *) anniversary years (as defined below)
during which the Warrant is outstanding; provided, further, that such (* * *)
purchase requirement shall not apply to (* * *). Notwithstanding the foregoing,
if Authorized Purchasers pay any (* * *) with respect to any Purchase Agreement
products to any contractor other than Tellium, such (* * *) shall be excluded in
calculating whether Authorized Purchasers accepted and paid for any (* * *)
increment of products and services for purposes of determining the
exercisability of Warrant Shares. The Warrant Shares shall irrevocably be
exercisable with respect to each such (* * *) of products and services on the
date upon which Authorized Purchasers complete payment for such (* * *) of
products and services, and not at the end of the anniversary year during which
such payment is made. Notwithstanding the foregoing, in the event that
Authorized Purchasers fail to purchase at least (* * *) of products and services
during any such anniversary year, (i) the exercisability of previously
exercisable Warrant Shares shall be unaffected, and (ii) Warrant Shares shall
continue to irrevocably exercisable at the rate of (* * *) for each (* * *) of
products and services purchased by Authorized Purchasers pursuant to the
Purchase Agreement, so long as the quotient obtained by dividing (a) the
aggregate amount purchased by Authorized Purchasers for products and services
under the Purchase Agreement during such year and each prior year during the
term of his Warrant (collectively, the "Completed Years") by (b) the Completed
Years, is equal to or in excess of (* * *), For purposes of this exercise
schedule, the term "anniversary year" is based on the effective date of the
Purchase Agreement.
Example 1: If Dynegy (and its Authorized Purchasers) purchases products and
services during anniversary years (* * *) equal to (* * *), (* * *), (* * *), (*
* *) and (* * *), respectively, the following exercisability would result: (* *
*) of the Warrant Share would irrevocably be exercisable during Year (* * *)
because (* * *) of purchases had been made by the date; the Warrant Shares would
continue to be eligible to be exercisable through Year (* * *) even though an
additional (* * *) had not been purchased, because the average of Years (* * *)
through (* * *) is (* * *); no Warrant Shares would be exercisable in Year (* *
*) even though the
-4-
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.
average purchases of Years (* * *) through (* * *) is (* * *) because an
additional (* * *) of purchases would not have been made by such date; however,
the Warrant Shares should still be eligible to be exercisable at a later date;
(* * *) would be exercisable during Year (* * *) (because the average of Years
(* * *) through (* * *) is (* * *) and because a total of (* * *) of purchases
would have been made); and (* * *) would be exercisable during Year (* * *)
because the average of Years (* * *) through (* * *) is (* * *) and because a
total of (* * *) of purchases would have been made). However, if Dynegy (and its
Authorized Purchasers) purchased (* * *) in Year (* * *) of this example rather
than (* * *), the Warrant Shares would cease being exercisable at the end of
Year (* * *) because the average purchases during years (* * *) through (* * *)
would be (* * *) and only (* * *) of purchases would have been by such date; the
(* * *) became exercisable during Year (* * *) would be unaffected.
Example 2: If Dynegy (and its Authorized Purchasers) purchases
products and services in anniversary years (* * *) through (* * *) equal to (* *
*), (* * *), (* * *), (* * *) and (* * *), respectively the following
exercisability schedule would result: No Warrant Shares would be exercisable in
Year (* * *) (because purchases were less than (* * *)); (* * *) would be
exercisable in Years (* * *) (because the average for Years (* * *) and (* * *)
is (* * *) and a total of (* * *) in purchases would have been made); (* * *)
would be exercisable in Year (* * *) (because less than an additional (* * *) in
purchases were made after the last exercisability of Warrant Shares and the
average of Years (* * *) through (* * *) is (* * *); (* * *) would be
exercisable in Year (* * *) (because the average for Years (* * *) though (* *
*) is (* * *) and an aggregate of (* * *) in purchases would have been made ((*
* *) - (* * *) = (* * *))); and (* * *) would be exercisable in Year (* * *)
(because the average for Years (* * *) through (* * *) is (* * *) and an
aggregate of (* * *) in purchases would have been made).
Notwithstanding anything to the contrary hereunder, and subject to
prior exercisability, the Warrant shall be fully exercisable after March 31,
2005 during its term.
-5-
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.
ANNEX II
--------
NOTICE OF EXERCISE
To: TELLIUM, INC.
(1) The undersigned hereby irrevocably elects to purchase _____ shares of
Common Stock of TELLIUM, INC., pursuant to the terms of the attached Warrant,
and tenders herewith payment of the purchase price for such shares in full.
(2) In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock are being acquired solely for the
account of the undersigned and not as a nominee for any other party, and for
investment, and that the undersigned shall not offer, sell or otherwise dispose
of any such shares of Common Stock except under circumstances that will not
result in a violation of the Securities Act of 1933, as amended, or any state
securities laws.
(3) Please issue a certificate or certificates representing said shares of
Common Stock, and pay any cash for any fractional share to:
Name Address No. Shares
---- ------- ----------
(4) Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned and/or, if the undersigned has completed
an Assignment Form in the form of Annex II to this Warrant, in such other names
and amounts as is specified in such Assignment Form.
Dated: _____________________ Holder: ____________________________
By: ________________________________
Name:
Title:
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