Stock Purchase Agreement between Tellium, Inc. and Series E Preferred Stock Investors

Summary

This agreement is between Tellium, Inc. and certain investors for the purchase of Series E Convertible Preferred Stock. Tellium agrees to issue and sell, and the investors agree to purchase, these preferred shares under specified terms. The agreement outlines representations and warranties by both parties, conditions for closing, post-closing obligations, restrictions on transfer, and indemnification provisions. It also includes requirements for corporate approvals, delivery of documents, and compliance with applicable laws. The agreement is effective as of September 19, 2000.

EX-10.25 15 0015.txt STOCK PURCHASE AGREEMENT Exhibit 10.25 STOCK PURCHASE AGREEMENT by and among TELLIUM, INC. and CERTAIN INVESTORS ------------------------ SERIES E CONVERTIBLE PREFERRED STOCK ------------------------ Dated as of September 19, 2000 TABLE OF CONTENTS ----------------- Page ---- SECTION 1. Definitions.........................................................1 - ---------- ----------- 1.1. Affiliate..............................................................1 --------- 1.2. Person.................................................................1 ------ SECTION 2. Certificate of Incorporation........................................1 - ---------- ---------------------------- SECTION 3. Issuance and Sale of Preferred Shares and Reservation of Reserved - ---------- ----------------------------------------------------------------- Shares; Closing.....................................................1 --------------- 3.1. Issuance of Preferred Shares and Reservation of Reserved Shares........1 --------------------------------------------------------------- 3.2. Agreement to Sell and Purchase Preferred Shares........................1 ----------------------------------------------- 3.3. The Closing............................................................2 ----------- 3.4. Conveyances at Closing.................................................2 ---------------------- SECTION 4. Representations and Warranties of the Corporation...................2 - ---------- ------------------------------------------------- 4.1. Corporate Organization.................................................2 ---------------------- 4.2. Capitalization; Issuance of Preferred Shares...........................2 -------------------------------------------- 4.3. Subsidiaries...........................................................4 ------------ 4.4. Authority..............................................................4 --------- 4.5. No Violation; No Consent or Approval Required..........................5 --------------------------------------------- 4.6. Financial Information..................................................5 --------------------- 4.7. Conduct of Business....................................................6 ------------------- 4.8. Litigation.............................................................6 ---------- 4.9. Labor Agreements and Actions...........................................6 ---------------------------- 4.10. Absence of Certain Changes or Events..................................7 ------------------------------------ 4.11. Title to Properties; Absence of Liens and Encumbrances................7 ------------------------------------------------------ 4.12. Intellectual Property.................................................8 --------------------- 4.13. Material Contracts...................................................10 ------------------ 4.14. Certain Agreements and Employee Benefit Plans........................11 --------------------------------------------- 4.15. Taxes................................................................12 ----- 4.16. Preferred Stock Offering.............................................13 ------------------------ 4.17. Insurance............................................................13 --------- 4.18. Disclosure...........................................................13 ---------- 4.19. Brokers..............................................................14 ------- 4.20. Suppliers and Customers..............................................14 ----------------------- 4.21. Affiliate Matters....................................................14 ---------------- 4.22. Use of Proceeds.....................................................14 --------------- SECTION 5. Representations and Warranties of the Investors....................14 - ---------- ----------------------------------------------- 5.1. Power and Authority...................................................14 ------------------- 5.2. No Consent or Approval Required.......................................14 ------------------------------- 5.3. Investment Representations............................................15 -------------------------- SECTION 6. Conditions to the Closing..........................................15 - ---------- ------------------------- 6.1. Corporate Proceedings.................................................16 --------------------- 6.2. No Action.............................................................16 --------- 6.3. Filing of Certificate of Incorporation................................16 -------------------------------------- 6.4. Stockholders Agreement................................................16 ---------------------- 6.5. Certificates, Instruments and Documents...............................16 --------------------------------------- 6.6. Opinion of Counsel....................................................16 ------------------ SECTION 7. Post-Closing Covenants.............................................16 - ---------- ---------------------- 7.1. Access to Records and Management......................................16 -------------------------------- 7.2. Financial Reports.....................................................17 ----------------- 7.3. Qualified IPO.........................................................19 ------------- SECTION 8. Restriction on Transfer............................................19 - ---------- ----------------------- SECTION 9. Transfer Taxes.....................................................21 - ---------- -------------- SECTION 10. Exchanges; Lost, Stolen or Mutilated Certificates.................21 - ----------- ------------------------------------------------- SECTION 11. Survival of Representations, Warranties and Agreements, Etc.......22 - ----------- ----------------------------------------------------------- SECTION 12. Indemnification........... .......................................22 - ----------- --------------- SECTION 13. Remedies..........................................................22 - ----------- -------- -i- SECTION 14. Successors and Assigns............................................22 - ---------------------------------- SECTION 15. Entire Agreement..................................................23 - ----------- ---------------- SECTION 16. Notices...........................................................23 - ----------- ------- SECTION 17. Changes...........................................................23 - ----------- ------- SECTION 18. Counterparts......................................................24 - ----------- ------------ SECTION 19. Headings..........................................................24 - ----------- -------- SECTION 20. Nouns and Pronouns................................................24 - ----------- ------------------ SECTION 21. Governing Law.....................................................24 - ----------- ------------- SECTION 22. Expenses..........................................................24 - ----------- -------- -ii- ATTACHMENTS ----------- SCHEDULES - --------- Corporation Disclosure Schedule Schedule I - Investors EXHIBITS - -------- Exhibit A - Form of Amended and Restated Certificate of Incorporation Exhibit B - Form of Amended and Restated Stockholders' Agreement Exhibit C - Form of Opinion -iii- STOCK PURCHASE AGREEMENT This Stock Purchase Agreement (this "Agreement"), dated as of September 19, 2000, is entered into by and among Tellium, Inc., a Delaware corporation (the "Corporation"), and the investors listed on Schedule I attached hereto (the "Investors"). SECTION 1. Definitions. As used herein, the terms below shall have the --------- ----------- following meanings. Any of such terms, unless the context otherwise requires, may be used in the singular or the plural, depending upon the reference. 1.1. Affiliate. The term "Affiliate" shall mean with respect to any --------- person or entity, any other person or entity directly or indirectly controlling, controlled by or under common control with such first person or entity (for purposes of this definition, "control" as used with respect to a person or entity, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of such person or entity, whether by ownership of voting securities, by contract or otherwise). 1.2. Person. The term "Person" shall mean any individual, firm, ------ corporation, partnership, limited liability company, trust, joint venture, Governmental Entity or other entity. SECTION 2. Certificate of Incorporation. Prior to the execution and --------- ---------------------------- delivery of this Agreement, the Corporation shall have filed with the Secretary of State of the State of Delaware an Amended and Restated Certificate of Incorporation (the "Certificate of Incorporation"), a true and complete copy of which is attached hereto as Exhibit A. Article Four thereof, among other things, --------- (i) authorizes 26,661,150 shares of Preferred Stock, $0.001 par value (the "Preferred Stock"), and designates 7,500,000 shares as Series E Preferred Stock (the "Series E Preferred Stock") and (ii) sets forth the terms, designations, powers, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions, of the Series E Preferred Stock. SECTION 3. Issuance and Sale of Preferred Shares and Reservation of --------- -------------------------------------------------------- Reserved Shares; Closing. - ------------------------ 3.1. Issuance of Preferred Shares and Reservation of Reserved Shares. --------------------------------------------------------------- Subject to the terms and conditions hereof, the Corporation has authorized the issuance on the Closing Date (as defined in Section 3.3 hereof) of an aggregate of up to 7,500,000 shares of Series E Preferred Stock (such shares of Series E Preferred Stock being sometimes hereinafter referred to as the "Preferred Shares"), and the reservation of up to 7,500,000 shares of common stock, $0.001 par value (the "Common Stock"), of the Corporation for issuance upon conversion of the Preferred Shares (such reserved Common Stock being sometimes hereinafter referred to as the "Reserved Shares"). 3.2. Agreement to Sell and Purchase Preferred Shares. Subject to the ----------------------------------------------- terms and conditions hereof, the Corporation shall issue to each Investor and each Investor, severally and -1- not jointly, shall acquire from the Corporation at the Initial Closing (as defined in Section 3.3 hereof) the number of Preferred Shares set forth opposite the name of such Investor on Schedule I hereto free and clear of all liens, encumbrances and restrictions of any kind (except for those imposed by the Certificate of Incorporation, the Stockholders Agreement, this Agreement or applicable securities laws). The per share purchase price to be paid by such Investor shall be $30.00 (the "Purchase Price"). Any expenses of the Investors in connection with the transactions contemplated hereby which are borne by the Corporation shall be treated as a purchase price adjustment. 3.3. The Closing. The closing (the "Closing") hereunder with respect to ----------- the transactions contemplated hereby is taking place on the date hereof at the offices of Fried, Frank, Harris, Shriver and Jacobson, 1001 Pennsylvania Avenue, N.W., Suite 800, Washington, D.C. 20004 (the date hereof sometimes being referred to herein as the "Closing Date"). 3.4. Conveyances at Closing. At the Closing, the Corporation shall ---------------------- deliver to each Investor a certificate or certificates, registered in the name of such Investor, representing that number of Preferred Shares being purchased by such Investor against receipt by the Corporation of a check payable to the Corporation or a wire transfer to an account designated by the Corporation in the full amount of the aggregate Purchase Price for the Preferred Shares being purchased by such Investor at the Closing. SECTION 4. Representations and Warranties of the Corporation. As of the --------- ------------------------------------------------- date hereof, the Corporation hereby represents and warrants to each Investor, except as and to the extent set forth in a disclosure schedule (the "Corporation Disclosure Schedule") attached hereto setting forth exceptions specified therein to the representations and warranties contained in this Section 4, as follows: 4.1. Corporate Organization. The Corporation is a corporation duly ---------------------- organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority and all necessary governmental franchises, licenses, permits, authorizations and approvals to own or lease and operate its properties and assets and to carry on its business as it is now being conducted, and is duly qualified or licensed as a foreign corporation to do business and in good standing in each jurisdiction in which the conduct or nature of the business conducted by it or the character or location of the properties owned or leased by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed would not have a Material Adverse Effect. As used herein the term "Material Adverse Effect" means any change or effect that, individually or in the aggregate, is or is reasonably likely to be materially adverse to the business, assets, prospects, results of operations or condition (financial or otherwise) of the Corporation taken as a whole or on the ability of the Corporation to consummate the transactions contemplated hereby. 4.2. Capitalization; Issuance of Preferred Shares. -------------------------------------------- (a) As of the date hereof, the authorized capital stock of the Corporation consists of the following: -2- (i) 26,661,150 shares of Preferred Stock, of which (A) 10,322,917 shares are designated as Series A Preferred Stock, 10,089,584 of which are issued and outstanding, and 233,333 of which are reserved for issuance upon conversion of the Series B Preferred Stock, (B) 233,333 shares are designated Series B Preferred Stock, all of which are issued and outstanding, (C) 2,593,974 shares are designated Series C Preferred Stock, of which 2,564,465 are outstanding and 29,509 are reserved for issuance upon exercise of warrants issued or issuable to Comdisco, Inc. pursuant to the Comdisco Warrants (as defined in the Stockholders Agreement), (D) 6,010,926 shares are designated Series D Preferred Stock, all of which are issued and outstanding and (E) 7,500,000 shares are designated as Series E Preferred Stock, of which the number of shares set forth on Schedule I hereto will be issued and outstanding after giving effect to the Closing. Such shares of outstanding Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock have been duly authorized and validly issued, are nonassessable and fully paid and are convertible into an aggregate of 56,694,924 shares of Common Stock and are free of restrictions on transfer other than restrictions on transfer under the purchase agreements under which such shares were purchased and under the Amended and Restated Stockholders Agreement dated as of the date hereof among the Corporation, the Investors and the other stockholders party thereto in the form of Exhibit B hereto (the "Stockholders Agreement") and under applicable --------- state and federal securities laws. None of the outstanding shares of Preferred Stock were issued, offered or sold by the Corporation in violation of any applicable federal or state securities laws. The Preferred Shares that are being purchased by the Investors hereunder, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly authorized and validly issued, nonassessable and fully paid and will be convertible into shares of Common Stock in accordance with the Certificate of Incorporation free and clear of all liens, encumbrances and restrictions of any kind (except for those imposed by the Certificate of Incorporation, the Stockholders Agreement, this Agreement or applicable securities laws). (ii) 250,000,000 shares of Common Stock, 24,718,122 shares of which are outstanding and are duly authorized and validly issued, nonassessable and fully paid. None of the outstanding shares of Common Stock were issued, offered or sold by the Corporation in violation of any applicable federal or state securities laws. (b) Section 4.2 of the Corporation Disclosure Schedule contains capitalization tables for the Corporation showing the current ownership of the Common Stock and Preferred Stock, without giving effect to the transactions contemplated by this Agreement. There are no treasury shares held by the Corporation. (c) Section 4.2 of the Corporation Disclosure Schedule sets forth a summary of all outstanding stock options and warrants of the Corporation, indicating the number of shares and type of capital stock issuable upon exercise thereof. As of the date hereof, 24,648,734 shares of Common Stock have been reserved for issuance upon exercise of such stock options and warrants (or upon conversion of shares of Series C Preferred Stock issuable upon exercise of such warrants). Section 4.2 of the Corporation Disclosure Schedule sets forth true and complete forms of warrant and forms of employee option agreement and there are no outstanding warrants or employee options other than in the forms set forth in Section 4.2 of the Corporation Disclosure Schedule or as expressly described therein. Except as noted in Section 4.2 of the Corporation -3- Disclosure Schedule, all holders of such stock options and warrants have agreed to restrictions attached to such Section 4.2. (d) The Common Stock issuable upon conversion of the issued and outstanding Preferred Stock and the Preferred Stock to be issued hereunder has been duly and validly reserved for issuance and, when and if issued upon such conversion in accordance with the terms of the Certificate of Incorporation, will be validly issued, fully paid and nonassessable and will be free of restrictions on transfer other than restrictions on transfer under the purchase agreements pursuant to which the Preferred Stock was issued, this Agreement and the Stockholders Agreement and under applicable state and federal securities laws. The Corporation has reserved sufficient authorized, but unissued, Common Stock for issuance upon conversion of the Preferred Stock. (e) Except for (i) the conversion privileges of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock, (ii) outstanding options ("Stock Options") to purchase that number of shares of Common Stock set forth in Section 4.2 of the Corporation Disclosure Schedule pursuant to the Corporation's Amended and Restated 1997 Stock Option Plan (the "Stock Option Plan"), (iii) the Extant Warrants and the Comdisco Warrants (each as defined in the Stockholders Agreement) and (iv) the rights provided in the Stockholders Agreement, there are no preemptive rights or options, warrants, conversion privileges or other rights (or agreements, arrangements, commitments or understandings for any such rights) outstanding to purchase or otherwise obtain from the Corporation any of the Corporation's Common Stock (all such rights, options, warrants, conversion privileges or other rights, collectively, "Common Stock Equivalents"), or other securities. There are no outstanding or authorized stock appreciation, phantom stock or similar rights with respect to the Corporation. (f) Except for the Certificate of Incorporation and the Stockholders Agreement, there are no voting trusts or other agreements or understandings to which the Corporation or, to the knowledge of the Corporation, any shareholder is a party with respect to the voting of the capital stock of the Corporation or relating to dividends or dispositions or providing for registration rights of any kind. 4.3. Subsidiaries. Except as set forth in Section 4.3 of the ------------ Corporation Disclosure Schedule, the Corporation does not own, directly or indirectly, any equity or similar interest in, or any interest convertible into or exchangeable for, any equity or similar interest in, any corporation, partnership, joint venture or other business association or entity. 4.4. Authority. The Corporation has the full power and authority to --------- enter into this Agreement and the Stockholders Agreement, to issue and sell the Series E Preferred Stock to be sold hereunder, to perform its obligations hereunder and to consummate the transactions contemplated hereby. All necessary action has been taken by the Corporation with respect to the execution and delivery of this Agreement and the Stockholders Agreement and the consummation of the transactions contemplated hereby. Each of this Agreement and the Stockholders Agreement has been duly executed and delivered by, and, assuming the due authorization, execution and delivery thereof by each of the Investors, constitutes a valid and -4- binding obligation of, the Corporation, enforceable against the Corporation in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability affecting creditors' rights and to general equity principles. 4.5. No Violation; No Consent or Approval Required. --------------------------------------------- (a) Neither the execution and delivery of this Agreement or the Stockholders Agreement by the Corporation nor the consummation by the Corporation of the transactions contemplated hereby will (i) conflict with or result in any breach or violation of any provision of the Certificate of Incorporation or Bylaws of the Corporation, or (ii) violate or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or give rise to a right of termination, cancellation or acceleration of any obligation contained in, or result in the creation of any lien or other encumbrance upon any of the properties or assets of the Corporation under or require any notice, consent or waiver under, any of the terms, conditions or provisions of (x) any Material Contract (as defined in Section 4.13), note, bond, mortgage, indenture, deed of trust, lease, agreement or other instrument or obligation to which the Corporation is a party or by which any of its properties or assets are bound or (y) any permit, concession, grant, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Corporation or to which it or any of its properties or assets may be subject. (b) No consent, approval or authorization of, or declaration to or filing with, any court, administrative agency, commission or other governmental or regulatory authority or instrumentality, domestic or foreign (a "Governmental Entity"), or other third party is required to be made by or obtained for consummation of the transactions contemplated hereby, other than (i) the filing of the Certificate of Incorporation with the Secretary of State of the State of Delaware, which has been accomplished, and (ii) those consents, approvals, authorizations, declarations or filings which have been or will timely be obtained or made, as the case may be, and which are identified on Section 4.5 of the Corporation Disclosure Schedule. The Corporation has obtained all requisite consents to amend the Certificate of Incorporation into the form attached hereto as Exhibit A. The Certificate of Incorporation has been duly filed and is in --------- full force and effect. 4.6. Financial Information. Section 4.6 of the Corporation Disclosure --------------------- Schedule consists of the following financial statements of the Corporation: (i) audited financial statements for the year ended December 31, 1999; and (ii) an unaudited internally prepared balance sheet, operating statement and cash flow statement as of and for the six months ended June 30, 2000. The audited financial statements referred to in clause (i) of this Section 4.6 and the unaudited financial statements referred to in clause (ii) of this Section 4.6, together with the footnotes and supporting schedules in respect of such financial statements, are collectively referred to as the "Financial Statements." (a) The Financial Statements have been prepared in accordance with United States generally accepted accounting principles ("GAAP") applied on a consistent basis (except as may be indicated therein or in the notes thereto) and fairly present in all material respects the financial position of the Corporation as of the respective dates thereof and the results -5- of operations and cash flows for the respective periods then ended, subject to normal year-end adjustments with respect to the interim financial statements and are materially consistent with the books and records of the Corporation. (b) The Financial Statements set forth all the liabilities of the Corporation (whether direct or indirect, absolute or contingent, liquidated or unliquidated, due or to become due or accrued or unaccrued) of whatever nature at the date thereof, whether arising out of contract, tort, statute or otherwise, except liabilities and obligations under contracts, commitments, agreements set forth on the Corporation Disclosure Schedule (but not liabilities for breaches thereof), and except for contractual liabilities and obligations (but not liabilities for breaches thereof) which are not required under GAAP to be set forth on the Financial Statements and which in the aggregate are not material. 4.7. Conduct of Business. ------------------- (a) The business of the Corporation, as presently conducted, is not being conducted in default or violation of any term, condition or provision of (i) the Certificate of Incorporation or Bylaws of the Corporation, or (ii) any Material Contract, note, bond, mortgage, indenture, deed of trust, lease, agreement, or other instrument or obligation to which the Corporation is a party or by which the Corporation or any of its properties or assets may be bound, or (iii) any federal, state, local or foreign statute, law, ordinance, rule, regulation, judgment, decree, order, concession, grant, franchise, permit or license or other governmental authorization or approval applicable to the Corporation, excluding from the foregoing clauses (ii) and (iii) defaults or violations that would not be material. (b) The Corporation is in compliance in all material respects with all federal, state, local and foreign laws, ordinances, regulations and orders applicable to it, its business and the ownership of its assets. The Corporation has all certificates, authorizations, licenses, permits, orders or approvals of, and has made all required registrations with, any Governmental Entity that are material to the conduct of the business of the Corporation (collectively, "Permits"). (i) All Permits are in full force and effect, (ii) no material violations are or have been recorded in respect of any Permit, and (iii) no proceeding is pending or, to the knowledge of the Corporation, threatened to revoke or limit any Permit. 4.8. Litigation. There is no private or governmental action, suit, ---------- proceeding, claim, arbitration or investigation before any agency, court or tribunal, foreign or domestic, pending or, to the knowledge of the Corporation, threatened against the Corporation or any of its properties or pending or threatened against any of its respective officers or directors (in their capacities as such). There is no judgment, decree or order against the Corporation, or, to the knowledge of the Corporation, any of its directors or officers (in their capacities as such), that could prevent, enjoin, or materially alter or delay any of the transactions contemplated by this Agreement or the Stockholders Agreement, or that could reasonably be expected to have a Material Adverse Effect. Section 4.8 lists all litigation that the Corporation has commenced and is pending against other parties. 4.9. Labor Agreements and Actions. ---------------------------- -6- (a) The Corporation is not bound by or subject to any written contract, commitment or arrangement with any labor union, and no labor union has requested or, to the knowledge of the Corporation, has sought to represent any of the employees, representatives or agents of the Corporation. There is no strike or other labor dispute involving the Corporation pending, or to the knowledge of the Corporation, threatened, nor is the Corporation aware of any labor organization activity involving its employees. (b) Except as set forth in Section 4.9 of the Corporation Disclosure Schedule, the employment of each officer and employee of the Corporation is terminable at the will of the Corporation, and the Corporation has not entered into any oral or written agreements with any of its officers or employees that provide for severance or termination pay or acceleration of vesting on stock options or restricted stock. (c) The Corporation has complied in all material respects with all applicable state and federal equal employment opportunity laws and with other laws related to employment. The Corporation has withheld all amounts required by law or agreement to be withheld from the wages, salaries or other payments made to any individual and has paid all required amounts over to the appropriate governmental authority. 4.10. Absence of Certain Changes or Events. Since June 30, 2000, except ------------------------------------ as set forth in Section 4.10 of the Corporation Disclosure Schedule, and except for the transactions contemplated by this Agreement, the Corporation has conducted its business only in the ordinary course consistent with past practice, and there has not been (i) any material damage, destruction or loss, whether covered by insurance or not, (ii) any declaration, setting aside or payment of any dividend (whether in cash, stock or property) with respect to Preferred Stock or Common Stock or Common Stock Equivalent or any redemption, purchase or other acquisition by the Corporation of any of its securities, (iii) any change in the business, operations, properties, prospects, condition (financial or otherwise) or assets of the Corporation having a Material Adverse Effect, (iv) any labor dispute, other than routine matters, none of which is material to the Corporation, (v) any entry into any commitment or transaction (including, without limitation, any borrowing or capital expenditure) other than in the ordinary course of business consistent with past practice, (vi) any material change by the Corporation in its accounting methods, principles or practices, (vii) any revaluation by the Corporation of any asset (including, without limitation, any writing down of the value of inventory or writing off of notes or accounts receivable), or (viii) any increase in or establishment of any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including, without limitation, the granting of stock options, stock appreciation rights, performance awards, or restricted stock awards), stock purchase or other employee benefit plan, or any other increase in the compensation payable or to become payable to any officers or key employees of the Corporation. 4.11. Title to Properties; Absence of Liens and Encumbrances. ------------------------------------------------------ (a) The Corporation does not own any real property. -7- (b) Section 4.11 of the Corporation Disclosure Schedule sets forth a complete and accurate list of all real property leased by the Corporation. Such leases are valid and enforceable by the Corporation in accordance with their terms. The Corporation has not received any notice of any event that, with the passage of time or the giving of notice or both, would constitute a default under any such leases and such property or assets are in good operating condition and repair (subject to normal wear and tear) and are suitable for the purposes for which they are presently used. (c) The Corporation owns or has valid leasehold interests in all of its tangible properties and assets (real, personal and mixed) used in its business, free and clear of any liens (other than liens for taxes that are not yet delinquent), charges, pledges, security interests or other encumbrances, except for such imperfections of title and encumbrances, if any, that do not materially detract from the value, or interfere with the use of, the property subject thereto or affected thereby and such property or assets are in good operating condition and repair (subject to normal wear and tear) and are suitable for the purposes for which they are presently used. 4.12. Intellectual Property. --------------------- (a) The Corporation either owns, has a valid license, sublicense, agreement or permission, has filed a valid application with respect to, (i) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereon, and all patents, patent applications and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions and reexaminations thereof, (ii) all trademarks, service marks, trade dress, logos, trade names, domain names, and corporate names, together with all translations, adaptations, derivations and combinations thereof and including all goodwill associated therewith, and all applications, registrations and renewals in connection therewith, (iii) all copyrights and all applications, registrations and renewals in connection therewith, (iv) all mask works and all applications, registrations and renewals in connection therewith, (v) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, methods, schematics, technology, technical data, designs, drawings, flowcharts, block diagrams, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals), (vi) all computer software (including data and related documentation), and (vii) all other proprietary rights (collectively defined herein as "Intellectual Property") necessary for the operation or conduct of its business as presently conducted or as currently proposed to be conducted (such intellectual property and the rights thereto are collectively referred to herein as the "Corporation Intellectual Property Rights") and has taken, through the date hereof, all action which is reasonably required to preserve, renew and extend all such Intellectual Property rights which in the Corporation's reasonable business judgment is necessary for the operation or conduct of its business as presently conducted or as currently proposed to be conducted. The Corporation has not licensed any of the Corporation Intellectual Property Rights in source code form owned by the Corporation to any third party or entered into any exclusive agreement relating to the Corporation Intellectual Property Rights owned by the Corporation with any third party. Nothing in this Section 4.12(a) is intended to constitute a representation with respect to any of the matters addressed by Section 4.12(c)(ii), and -8- to the extent that there is a conflict between this Section 4.12(a) and Section 4.12(c)(ii), Section 4.12(c)(ii) shall control. (b) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not constitute a breach of any instrument or agreement to which the Corporation or any of its employees is a party governing any Corporation Intellectual Property Rights, including but not limited to any patent, copyright, trademark, trade secret or other Intellectual Property Rights licensed by, or to, the Corporation, will not cause the forfeiture or termination or give rise to a right of forfeiture or termination of any Corporation Intellectual Property Rights or materially impair the right of the Corporation in or to use, sell, enforce, license or otherwise exploit any Corporation Intellectual Property Rights or portion thereof. (c) Except as set forth in Section 4.12 of the Corporation Disclosure Schedule, neither the operation of the Corporation's business, nor the manufacture, marketing, license, sale or offer for sale or use or intended use of any product, service or technology currently licensed, manufactured, distributed, used, sold, offered for sale or under development by the Corporation (i) knowingly (after reasonable inquiry into the matter) violates in any material respect any intellectual property license or intellectual property agreement between the Corporation and any third party or (ii) to the Corporation's knowledge, infringes any patents, copyright, trademark, trade secret or other intellectual property right of any third party. There is no pending or, to the knowledge of the Corporation, threatened claim or litigation involving the Corporation contesting the validity, ownership or right to use, sell, enforce, license or dispose of any Corporation Intellectual Property Rights nor is any Corporation Intellectual Property Right subject to any outstanding injunction, judgment, order, decree ruling or charge. Except as set forth in Section 4.12 of the Corporation Disclosure Schedule, the Corporation has not received any notice asserting that any Corporation Intellectual Property Rights or the proposed use, sale, license or disposition thereof conflicts with the rights of any other party. To the knowledge of the Corporation, no third party is infringing on any of the Corporation Intellectual Property Rights. (d) Section 4.12 of the Corporation Disclosure Schedule lists all patents, patent applications, federally registered trademarks and service marks, pending or abandoned applications for federal trademark or service mark registration, material unregistered trademarks, service marks, corporate names and trade names, domain names, copyright registrations, copyright applications, mask work registrations, mask work applications, licenses, sublicense agreements and permissions included in the Corporation Intellectual Property Rights, in each case pending or issued, including, in the case of patents and patent applications, the jurisdictions in which each such Corporation Intellectual Property Rights has been issued or registered or in which any application for such issuance and registration has been filed. (e) The Corporation is not aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with the use such employee's best efforts to promote the interest of the Corporation or -9- that would conflict with the Corporation's business as presently conducted or as presently proposed to be conducted or the Corporation Intellectual Property Rights. (f) The Corporation does not and will not need, in order to conduct the Corporation's business as presently conducted and as presently proposed to be conducted, to utilize any inventions of any of its employees, former employees (or persons it currently intends to hire) made while not employed by the Corporation and rights to which have not been provided to the Corporation. (g) The Corporation has obtained valid and effective assignments, or has the right pursuant to a written agreement to obtain an assignment, from all of its employees, former employees, independent contractors, and former independent contractors (collectively defined herein as "Inventors") of all of such Inventors' rights in any Intellectual Property developed by such Inventors while employed by or under contract with the Corporation. (h) For each item of Corporation Intellectual Property Rights which is an application, including but not limited to patent applications, trademark applications, service mark applications, copyright applications, or mask work applications, the Corporation has the right to require the applicant to transfer ownership to the Corporation of the application and of the registration once it issues. (i) The Corporation has taken all reasonable precautions to protect the secrecy, confidentiality, and value of its trade secrets, and has entered into confidential information/non-disclosure agreements in the form attached to Section 4.12 of the Corporation Disclosure Schedule with each of its officers, employees, and independent contractors. 4.13. Material Contracts. Except for grants under the Stock Option Plan ------------------ and except as identified in Section 4.13 of the Corporation Disclosure Schedule, there are no agreements, understandings or proposed transactions between the Corporation and any of its officers, directors, affiliates, or any affiliate thereof. Except for the contracts identified in Section 4.13 of the Corporation Disclosure Schedule (the "Material Contracts"), there are no agreements, understandings, instruments, contracts or proposed transactions to which the Corporation is a party or by which it is bound, that involve (i) obligations (contingent or otherwise) of, or payments to, the Corporation in excess of two hundred fifty thousand ($250,000) dollars, other than purchase orders in individual amounts of less than five hundred thousand ($500,000) dollars received in the ordinary course of business, (ii) the license of any patent, copyright, trade secret or other proprietary right to or from the Corporation, (iii) the grant of rights to manufacture, produce, assemble, license, market, or sell the Corporation's products to any third person, (iv) any agreement (other than in the ordinary cause) relating to the acquisition or disposition of any assets; (v) any agreement granting a lien or encumbrance on the Corporation's assets or properties; (vi) any indenture, mortgage, note, bond or other evidence of indebtedness, any credit or similar agreement (including any capitalized lease obligations) under which the Corporation has borrowed any money, and any guarantee of or agreement to acquire any such obligation, of any other Person; (vii) any written arrangement requiring the Corporation to perform research and development activities with respect to any product or proposed product or to develop or market any product or proposed product; or (viii) any arrangement under which the consequences -10- of a default or termination could have a Material Adverse Effect or could result in the granting to any third party of any rights in or to any material assets of the Corporation. Each Material Contract is in full force and effect except as the same may have expired in accordance with its terms, the Corporation has not received any written assertion of default under any Material Contract, and the Corporation has not received any notice related to any termination or material change to, nor is there any right or consent under, any of the Material Contracts as a result of the transactions contemplated by this Agreement or otherwise. The Corporation is not (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect of any of the Material Contracts (provided, however, that nothing in this sentence is intended to constitute a representation with respect to any of the matters addressed by Section 4.12(c)(i), and to the extent that there is a conflict between this sentence and Section 4.12(c)(i), Section 4.12(c)(i) shall control). The Corporation has not received any notice of the intention of any party to the Material Contracts to terminate any such contract. The Corporation is not a party to, nor has it any obligation under, any contract or agreement, written or oral, which contains any covenants limiting in any material respect the freedom of the Corporation to engage in its business as currently conducted anywhere in the world or to compete in its business with any entity anywhere in the world or to enter into any new line of business. 4.14. Certain Agreements and Employee Benefit Plans. --------------------------------------------- (a) Except as set forth in Section 4.14 of the Corporation Disclosure Schedule, the Corporation is not a party to any (i) employment, severance, collective bargaining or consulting agreement not terminable on 60 days' or less notice without material liability to the Corporation, (ii) agreement with any executive officer or other key employee of the Corporation (A) the benefits of which are contingent, or the terms of which are materially altered, upon the occurrence of a transaction involving the Corporation of the nature of any of the transactions contemplated by this Agreement, (B) providing any term of employment or compensation guarantee extending for a period longer than one year, or (C) providing severance benefits or other benefits after the termination of employment of such executive officer or key employee regardless of the reason for such termination of employment, (iii) agreement, plan or arrangement under which any person may receive payments subject to the tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or (iv) any stock option plan, stock appreciation right plan, restricted stock plan or stock purchase plan or other plan or agreement, the benefits of which would be increased, or the vesting of benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement. (b) Section 4.14 of the Corporation Disclosure Schedule contains a true and complete summary or list of, or otherwise describes, (i) all employee benefit plans (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) and all bonus, stock option, stock purchase, restricted stock incentive, deferred compensation, retiree medical or life insurance, supplemental retirement, severance or other benefit plans, programs or arrangements, and all employment, termination, severance or other contracts or agreements to which the Corporation is a party, with respect to which the Corporation has any obligations which are material in amount and which are maintained, -11- contributed to or sponsored by the Corporation for the benefit of any current or former employee, officer or director of the Corporation and (ii) each employee benefit plan for which the Corporation could incur liability under Section 4069 of ERISA, in the event such plan were terminated, or under Section 4212(c) of ERISA, or in respect of which the Corporation remains secondarily liable under Section 4204 of ERISA (collectively, the "Material Plans"). The Corporation has no commitment (i) to create, incur liability with respect to or cause to exist any other employee benefit plan, program or arrangement, other than the Material Plans, (ii) to enter into any contract or agreement to provide compensation or benefits to any individual, or (iii) to modify, change or terminate any Material Plan, other than with respect to a modification, change or termination required by ERISA or the Code. To the extent applicable, the Material Plans comply with the requirements of ERISA and the Code, and any Material Plan intended to be qualified under Section 401(a) of the Code has been determined by the Internal Revenue Service to be so qualified and nothing has occurred with respect to such Material Plan which could be reasonably expected to cause the loss of such qualification. The Corporation has no liability (contingent or otherwise) with respect to any employee benefit plan covered by Title IV of ERISA whether or not such plan is maintained, contributed to or sponsored by the Corporation. Neither the Corporation nor, to the Corporation's knowledge, any officer or director of the Corporation or any fiduciary of any Material Plan has incurred any liability or penalty under Sections 4975 through 4980 of the Code or Title I of ERISA. Each Material Plan has been maintained and administered in all material respects in compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations, including but not limited to ERISA and the Code, which are applicable to such Material Plans. There are no pending or, to the Corporation's knowledge, threatened claims which have been asserted or instituted against or otherwise involving any of the Material Plans and no suit, action or other litigation (excluding claims for benefits incurred in the ordinary course of Material Plan activities) has been brought or, to the knowledge of the Corporation, is threatened against or with respect to any such Material Plan. No Material Plan is under audit or investigation by any governmental agency or authority. All material contributions, reserves or premium payments required to be made or accrued as of the date hereof to the Material Plans have been made or accrued. (c) Operating Company. Immediately following each Closing, the ----------------- Corporation will be primarily engaged in the production or sale of a product or service other than the investment of capital within the meaning of Department of Labor Regulation Sections 2510.3-101(c), (d) or (e). (d) The Corporation has entered into an agreement with each of its employees substantially in the form attached to Section 4.14 of the Corporation Disclosure Schedule. 4.15. Taxes. ----- (a) The Corporation has timely filed (taking into account any extension of time within which to file) all federal income Tax Returns and all other material Tax Returns that are required to be filed by it and all such Tax Returns are true and correct in all material respects. The Corporation has paid, or adequately provided for on its Financial Statements, all Taxes that are due from the Corporation. No material tax liens have been filed and no material deficiencies or claims are being proposed or asserted in writing with respect to any Taxes. All Taxes which -12- the Corporation is obligated to withhold from amounts owing to any employee, creditor or third party have been withheld and timely paid over to the appropriate taxing authority. (b) The income Tax Returns of the Corporation have not been examined by the Internal Revenue Service ("IRS") or any other taxing authority, and no such examination is pending or, to the knowledge of the Corporation, threatened. No waivers, extensions or comparable consents of the time to assess any Income Taxes of the Corporation are currently outstanding. (c) The Corporation has never been a member of an affiliated group filing consolidated returns for federal income Tax purposes. The Corporation is not a party to any Tax allocation, Tax indemnity or Tax sharing agreement and is not liable for the Taxes of any other Person by operation of law. (d) For purposes of this Agreement: (i) "Tax" or "Taxes" means any and all taxes, fees, levies, duties, tariffs, imposts and other charges of any kind (together with any interest, penalties, additions to tax or additional amounts imposed by any taxing authority with respect thereto), imposed by any government or taxing authority, including, without limitation, taxes or other charges on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers' compensation, unemployment compensation, or net worth; taxes or other charges in the nature of excise, withholding, ad valorem, escheat, stamp, transfer, value added or gains taxes, license, registration and documentation fees; and customs' duties, tariffs and similar charges; (ii) "Income Tax" means federal income Tax and state and local income and franchise Taxes imposed on or measured by net income; and (iii) "Tax Return" means all returns, declarations, reports, estimates, information returns and statements required to be filed in respect of any Taxes. 4.16. Preferred Stock Offering. Subject to the truth and accuracy of ------------------------ the representations and warranties of the Investors set forth in Section 5, the offer, sale and issuance of the Preferred Shares as contemplated by this Agreement are exempt from the registration requirements of any applicable state and federal securities laws, subject to any post-Closing filings required by state "blue sky" laws. 4.17. Insurance. All the insurable properties of the Corporation are --------- insured for the benefit of the Corporation in such amounts, with such deductibles and against such risks and losses as are reasonably deemed adequate by the Corporation with respect to risks usually insured against by persons operating similar properties in the localities in which such properties are located under policies in effect and issued by insurers of recognized responsibility. 4.18. Disclosure. Except as set forth in Section 4.18 of the ---------- Corporation Disclosure Schedule, neither this Agreement nor any certificate, instrument or written statement furnished or made to the Investors by or on behalf of the Corporation in connection with this Agreement contains any untrue statement of a material fact or, taken as a whole with all other statements, omits to state a material fact necessary in order to make the statements contained herein and therein not misleading, in light of the circumstances under which they were made. -13- 4.19. Brokers. Such person has not nor have any of its officers, ------- directors, employees or stockholders employed any broker, finder or placement agent, other than Goldman, Sachs & Co. and Thomas Weisel Partners LLC (the "Placement Agents"), in connection with the transactions contemplated by this Agreement. 4.20. Suppliers and Customers. The Corporation has no knowledge of any ----------------------- termination, cancellation or threatened termination or cancellation or limitation of, or any material modification or change in, or expressed material dissatisfaction with the business relationship between the Corporation and any supplier, vendor, customer or client of the Corporation, in each case, in which termination, cancellation or material adverse modification would have a material adverse effect on any material business relationship. 4.21. Affiliate Matters. Except as set forth in Section 4.21 of the ----------------- Corporation Disclosure Schedule, no Affiliate of the Corporation (a) owns or has any interest in any property or right, tangible or intangible, which is used by or pertains to the business of the Corporation, (b) to the Corporation's knowledge, has any claim or cause of action against the Corporation, (c) owes any money to the Corporation, or (d) is a party to, or, to the knowledge of the Corporation, has a direct or indirect ownership or economic interest in any Person who is a party to, any contract or other arrangement (written or oral) or business relationship with the Corporation (the agreements, arrangements and relationships described in this sentence are hereinafter referred to as "Related Party Transactions"). Section 4.21 of the Corporation Disclosure Schedule summarizes any Related Party Transactions between the Corporation and any such Affiliate which are currently in effect or reflected in the Financial Statements. 4.22. Use of Proceeds. The net proceeds from the sale of Preferred --------------- Shares will be used for general corporate purposes. SECTION 5. Representations and Warranties of the Investors. Each --------- ----------------------------------------------- Investor hereby, severally as to itself only, represents and warrants to the Corporation as follows: 5.1. Power and Authority. Such Investor has full power and authority to ------------------- enter into this Agreement, to purchase Preferred Shares to be sold by the Corporation hereunder, to perform its obligations hereunder and to consummate the transactions contemplated hereby. All necessary action has been taken by such Investor with respect to the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. This Agreement has been duly executed and delivered by, and, assuming the due authorization, execution and delivery thereof by the Corporation and the other Investors, constitutes a valid and binding obligation of, such Investor, enforceable against such Investor in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability affecting creditors' rights and to general equity principles. 5.2. No Consent or Approval Required. No consent, approval or ------------------------------- authorization of, or declaration to or filing with, any Governmental Entity or other third party is required for consummation of the transactions contemplated hereby. -14- 5.3. Investment Representations. -------------------------- (a) Such Investor is and will be acquiring the Preferred Shares to be purchased by such Investor hereunder and, in the event that such Investor should acquire any Reserved Shares, that such Investor will be acquiring such Reserved Shares, for its own account, for investment and not with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended (the "Securities Act") except that such Investor may make certain transfers as provided herein and under the Stockholders Agreement. (b) Such Investor understands that (i) the Preferred Shares have not been, and that the Reserved Shares will not be, registered under the Securities Act, by reason of their issuance by the Corporation in transactions exempt from the registration requirements of the Securities Act and the Corporation's reliance on such exemption is predicated upon such Investor's representations set forth herein and (ii) the Preferred Shares and the Reserved Shares must be held by such Investor indefinitely unless a subsequent disposition thereof is registered under the Securities Act or is exempt from registration. (c) Such Investor further understands that, with respect to the Reserved Shares, the exemption from registration afforded by Rule 144 (the provisions of which are known to such Investor) promulgated under the Securities Act depends on the satisfaction of various conditions, and that, if applicable, Rule 144 may afford a basis for sales only in limited amounts. (d) Such Investor is a "qualified institutional buyer" as such term is defined in Rule 144A promulgated under the Securities Act, or an "accredited investor" as such term is defined in Rules 501(a)(1), 501(a)(2), 501(a)(3) and 501(a)(7) promulgated under the Securities Act, with its principal executive office located at the address set forth under such Investor's name on Schedule I. (e) Such Investor agrees that the Corporation may place a legend on the certificates delivered hereunder stating that (i) the Preferred Shares and any Reserved Shares have not been registered under the Securities Act, and, therefore cannot be offered, sold or transferred unless they are registered under the Securities Act or an exemption from such registration is available, and that the Corporation may place stop transfer orders on the transfer books of the Corporation and (ii) the securities represented by such certificate are subject to certain restrictions on transfer, voting provisions, and other provisions set forth in the Stockholders Agreement, as amended from time to time, and that a copy of the Stockholders Agreement may be obtained from the Corporation upon request. (f) Such Investor is not relying on any representation or warranty made by the Placement Agents in connection with the transactions contemplated hereby. SECTION 6. Conditions to the Closing. The several obligations of each --------- ------------------------- Investor to purchase and pay for Preferred Shares at the Closing are subject to satisfaction of the following conditions, any of which may be waived by each Investor, as to itself only: -15- 6.1. Corporate Proceedings. All corporate and other proceedings to be taken --------------------- and all waivers and consents, approvals, qualifications and/or registrations required to be obtained or effected in connection with the execution, delivery and performance of the transactions contemplated thereby, including, but not limited to, the issuance, sale and delivery of the Preferred Shares and the reservation of the Reserved Shares, shall have been taken, obtained or effected (except for the filing of any notice subsequent to such Closing which may be required under applicable federal and state securities or "blue sky" laws which, if required, shall be filed on a timely basis as may be so required), and all documents incident thereto shall be satisfactory in form and substance to the Investor and to its counsel. The Investor shall have received all such originals or certified or other copies of such documents as have been reasonably requested. 6.2. No Action. No action or proceeding shall have been instituted before a --------- court or other governmental body or by any governmental agency or public authority to restrain or prohibit the transactions contemplated by this Agreement or to obtain an amount of damages or other material relief in connection with the execution of this Agreement or the consummation of the transactions contemplated hereby; and no governmental agency shall have given notice to any party hereto to the effect that consummation of the transactions contemplated by this Agreement would constitute a violation of any law or that it intends to commence proceedings to restrain consummation of such transactions. 6.3. Filing of Certificate of Incorporation. The Certificate of -------------------------------------- Incorporation shall have been filed with and accepted by the Secretary of State of the State of Delaware, and a copy of the Certificate of Incorporation, certified by the Secretary of State of the State of Delaware, shall have been delivered to the Investor. 6.4. Stockholders Agreement. The Existing Stockholders Agreement (as ---------------------- defined in the Stockholders Agreement) shall have been amended and restated by the parties thereto in accordance with its terms and the Stockholders Agreement shall have been executed and delivered by the Corporation, the Investors and the other stockholders party thereto. In addition, the Corporation and such parties shall have complied with all of the terms and conditions of the Stockholders Agreement, including, among other things, the placement of the legends required to be placed on securities owned by such parties. 6.5. Certificates, Instruments and Documents. The Corporation and the --------------------------------------- Investor shall have delivered the certificates and instruments referred to in Section 3.4 hereof. 6.6. Opinion of Counsel. The Corporation shall have delivered to the ------------------ Investor an opinion of counsel dated the Closing Date in form and substance reasonably satisfactory to the Investor, in the form attached hereto as Exhibit C. - --------- SECTION 7. Post-Closing Covenants. --------- ---------------------- 7.1. Access to Records and Management. The Corporation shall afford to each -------------------------------- Investor which, alone or together with its Affiliates, holds at least 10% of the issued shares of Series E Preferred Stock (as of the date hereof, including the Preferred Shares), or Common -16- Stock issued upon conversion of such Preferred Shares, and their authorized representatives free and full access during normal business hours, upon reasonable advance notice, to all of the books, records and properties of the Corporation and to all executive officers of the Corporation, for any reasonable business purpose whatsoever. Such Investors shall be entitled as often as is reasonably necessary to consult with and advise management of the Corporation on significant business issues, including management's proposed annual operating plans, and management will meet with representatives of such Investors (the "Representatives") at the Corporation's facilities at mutually agreeable times for such consultation and advice, including to review progress in achieving said plans. The Corporation shall give such Investors reasonable advance written notice of any significant new initiatives or material changes to existing operating plans and shall afford Investors adequate time to meet with management to consult on such initiatives or changes prior to implementation. The Corporation agrees to give due consideration to the advice given and any proposals made by such Investors. Each Investor shall use reasonable efforts to maintain the confidentiality of any confidential and proprietary information so obtained by it; provided, however, that the foregoing shall in no way limit or -------- ------- otherwise restrict the ability of any Investor or such Representatives to disclose any such information concerning the Corporation which (i) was previously known to be free of any obligation to keep confidential, (ii) has become generally known to the public, provided that such public knowledge was not the result of any act attributable to the Investor or its Representatives, or (iii) is required by law and notice thereof (if practicable) is given to the Corporation prior to such disclosure so it may seek to obtain a protective order. 7.2. Financial Reports. The Corporation agrees to furnish each Investor ----------------- which, alone or together with its Affiliates, holds at least 10% of the issued shares of Series E Preferred Stock (as of the date hereof, including the Preferred Shares) or Common Stock issued upon conversion of such Preferred Shares, with the following: (a) Quarterly Reports. As soon as available, but not later than 45 ----------------- days after the end of each quarterly accounting period, (x) an unaudited consolidated financial report of the Corporation, prepared in accordance with generally accepted accounting principles consistently applied, and which shall include the following: (i) a consolidated profit and loss statement for such quarterly accounting period, together with a cumulative profit and loss statement from the first day of the current year to the last day of such quarterly accounting period; (ii) a consolidated balance sheet as at the last day of such quarterly accounting period; (iii) a consolidated cash flow analysis for such quarterly accounting period on a cumulative basis for the fiscal year to date; (iv) a schedule showing all expenditures of a capital nature in excess of $100,000 individually during such quarterly accounting period; and -17- (v) a comparison between the actual figures for such quarterly accounting period and the comparable figures for the prior year (if any) for such quarterly accounting period, with an explanation of any material differences between them; certified by the chief executive officer and chief financial officer of the Corporation as being prepared in accordance with GAAP (except that such financial statements shall not include footnotes and shall be subject to normal year-end audit adjustments, including, with respect to such quarterly accounting period, the statements and comparisons referred to in Section 7.2(a)(x)(v)), and (y) a report by management of the Corporation of the operating and financial highlights of the Corporation for such quarterly accounting period which shall include (A) a comparison between operating and financial results and the Budget and (B) an analysis of the operations of the Corporation for the prior quarterly accounting period. (b) Annual Audit. As soon as available, but not later than 90 days ------------ after the end of each fiscal year of the Corporation, audited consolidated financial statements of the Corporation, which shall include a consolidated statement of cash flows and consolidated statement of operations for such fiscal year and a consolidated balance sheet as at the last day thereof; each prepared in accordance with generally accepted accounting principles, consistently applied, and accompanied by the report of and any final management letter issued by a firm of independent certified public accountants of recognized standing selected by the Board of Directors of the Corporation. The Corporation shall maintain a system of accounting sufficient to enable its independent certified public accountants to render the report referred to in this Section 7.2(b). (c) Subsidiaries. If for any period the Corporation shall have any ------------ subsidiary or subsidiaries whose accounts are consolidated with those of the Corporation, then in respect of such period the financial statements delivered pursuant to the foregoing Sections 7.2(a) and (b) shall be the consolidated (and, in the case of the cash flow statement delivered pursuant to Section 7.2(b), consolidating if normally prepared by the Corporation) financial statements of the Corporation and all such consolidated subsidiaries. (d) Miscellaneous. Promptly upon becoming available: ------------- (i) upon request, copies of all financial statements, reports, press releases, notices, proxy statements and other documents sent by the Corporation to its stockholders generally or released to the public; (ii) reports of the Board and committees thereof; and (iii) upon request, copies of (A) all reports prepared for or delivered to the management of the Corporation by its independent public accountants and (B) all reports, material notices and other material documents sent by the Corporation to its lenders. (e) Notice of Certain Events. Written notice to the Investors ------------------------ promptly following its receipt of notice of the commencement of any action, suit, claim, legal or -18- administrative or arbitration proceeding or investigation and notice of any default, any of which could reasonably be expected, on the basis of current economic conditions and other facts and circumstances known to the Corporation at the time, to have a Material Adverse Effect. In making such determination, the Corporation may rely on the advise of its counsel regarding the likelihood and extent of an adverse decision in any litigation, administrative or arbitration proceeding or investigation against the Corporation. (f) Key Man Insurance; D&O. The Corporation shall maintain, with ---------------------- financially sound and reputable insurers, "key man" term life insurance on the life of the CEO in the amount of $5,000,000, in form reasonably satisfactory to TWCP. Such "key man" term life insurance policy shall be owned by the Corporation and the Corporation shall be named as the payee of all benefits thereunder. The Corporation shall cause to be maintained, provided the same is available at reasonable cost, directors' and officers' liability insurance covering all directors and officers of the Corporation and covering the Non-Voting Observer providing coverage in an amount of at least $10 million. (g) Disclosure of Investment. The Corporation agrees that it will ------------------------ not (i) except as may be required by law or required to be included in any registration statement or other public filing filed by the Corporation, publicly disclose or issue any press release with respect to the transactions contemplated hereby or any of the terms thereof without the prior written consent of the Investors who, together with their Affiliates, hold at least 10% or more of the then outstanding Series E Preferred Stock (or shares of Common Stock issued upon conversion thereof), which consent shall not be unreasonably withheld, or (ii) use in advertising or publicity the name of any party hereto, or any partner or employee of such party hereto or any of its respective Affiliates, or any trade name, trademark, trade device, service mark, symbol or any abbreviation, contraction or simulation thereof owned by any party hereto or any of its Affiliates, in any case without the prior written consent of such party. 7.3. Qualified IPO. Notwithstanding Sections 7.1 and 7.2 above, the ------------- rights of the Investors and the obligations of the Corporation under such Sections, shall terminate upon the consummation of a firm commitment underwritten public offering of the Corporation's Common Stock under the Securities Act, which results in gross proceeds to the Corporation of not less than Fifty Million Dollars ($50,000,000) at an offering price per share of not less than $7.63 (as adjusted for stock splits, reverse splits, and similar recapitalizations). SECTION 8. Restriction on Transfer. ---------- ----------------------- (a) Preferred Shares held by an Investor and/or any Reserved Shares issued upon conversion of Preferred Shares held by an Investor shall not be sold, transferred, assigned, pledged, encumbered or otherwise disposed of (each, a "Transfer") except upon the conditions specified in this Section 8, which conditions are intended to ensure compliance with the provisions of the Securities Act. (b) Each certificate for shares of the capital stock of the Corporation held by an Investor and each certificate for any -19- such securities issued to subsequent transferees of any such certificate shall (unless otherwise permitted by the provisions of Sections 8(c) and 8(d)) be stamped or otherwise imprinted with a legend in substantially the following form: "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 8 OF A STOCK PURCHASE AGREEMENT AMONG TELLIUM, INC. AND THE OTHER PARTIES THERETO, 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. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER, VOTING PROVISIONS, AND OTHER PROVISIONS SET FORTH IN AN AMENDED AND RESTATED STOCKHOLDERS AGREEMENT, AS AMENDED FROM TIME TO TIME. A COPY OF SUCH AGREEMENT MAY BE OBTAINED FROM THE COMPANY UPON REQUEST" (c) Each Investor agrees, prior to any Transfer of such shares, to give written notice to the Corporation of such Investor's intention to effect such Transfer and to comply in all other respects with the provisions of this Section 8. Each such notice shall describe the manner and circumstances of the proposed Transfer and shall be accompanied by the written opinion, addressed to the Corporation, of counsel for the holder of such shares, stating that in the opinion of such counsel (which opinion and counsel shall be reasonably satisfactory to the Corporation) such proposed Transfer does not involve a transaction requiring registration or qualification of such shares under the Securities Act or the securities "blue sky" laws of any relevant state of the United States; provided, however, that no such opinion of counsel shall be -------- ------- necessary for a Transfer by an Investor to an Affiliate or by an Investor that is a partnership to a liquidating trust for the benefit of its partners or to a partner of such Investor, or a retired partner of such Investor who retires after the date hereof, or the estate of any such partner or retired partner if the transferee agrees in writing to be subject to the terms of this Section 8 to the same extent as if such transferee were originally a signatory to this Agreement. Such Investor shall thereupon be -20- entitled to Transfer such shares in accordance with the terms of the notice delivered by it to the Corporation. Each certificate or other instrument evidencing the securities issued upon the Transfer of any such shares (and each certificate or other instrument evidencing any untransferred balance of such shares) shall bear the legend set forth in Section 8(b) unless (x) in such opinion of counsel registration of any future Transfer is not required by the applicable provisions of the Securities Act or (y) the Corporation shall have waived the requirement of such legends; provided, however, that such legend -------- ------- shall not be required on any certificate or other instrument evidencing the securities issued upon such Transfer in the event such Transfer shall be made in compliance with the requirements of Rule 144 and the transferee is not an affiliate of the Corporation. No Investor shall Transfer any shares until such opinion of counsel has been given (unless waived by the Corporation or unless such opinion is not required in accordance with the provisions of this Section 8(c)). (d) Notwithstanding the foregoing provisions of this Section 8, the restrictions imposed by this Section 8 upon the transferability of any shares of the capital stock of the Corporation held by an Investor shall cease and terminate when (i) any such shares are sold or otherwise disposed of pursuant to an effective registration statement under the Securities Act or as otherwise contemplated by Section 8(c) and, pursuant to Section 8(c), the securities so transferred are not required to bear the legend set forth in Section 8(b) or (ii) the holder of such shares has met the requirements for Transfer of such shares pursuant to paragraph (k) of Rule 144. Whenever the restrictions imposed by this Section 8 shall terminate, as herein provided, each Investor holding shares as to which such restrictions have terminated shall be entitled to receive from the Corporation, without expense, a new certificate not bearing the restrictive legend set forth in Section 8(b) and not containing any other reference to the restrictions imposed by this Section 8. SECTION 9. Transfer Taxes. The Corporation agrees that it will pay, and --------- -------------- will hold the Investors harmless from, any and all liability with respect to any stamp, transfer or similar taxes which may be determined to be payable in connection with the execution, delivery and performance of this Agreement, or any modification, amendment or alteration of the terms or provisions of this Agreement, and that it will similarly pay and hold the Investors harmless from all issue taxes in respect of the issuance of the Reserved Shares to the Investors. SECTION 10. Exchanges; Lost, Stolen or Mutilated Certificates. Upon ---------- ------------------------------------------------- surrender by any Investor to the Corporation of any certificate representing Preferred Shares or Reserved Shares, the Corporation at its expense will issue in exchange therefor, and deliver to such Investor, a new certificate or certificates representing such shares, in such denominations as may be requested by such Investor. Upon receipt of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of any certificate representing any Preferred Shares or Reserved Shares purchased or acquired by an Investor upon conversion of the Preferred Shares, and in case of any such loss, theft or destruction, upon delivery of any indemnity agreement satisfactory to the Corporation, or in case of any such mutilation, upon surrender and cancellation of such certificate, the Corporation at its expense will issue and deliver to such Investor a new certificate for such shares of like tenor, in lieu of such lost, stolen or mutilated certificate. -21- SECTION 11. Survival of Representations, Warranties and Agreements, Etc. ---------- ----------------------------------------------------------- All representations and warranties hereunder shall survive the Closing and expire on the date that is two years after the Closing Date, and all agreements contained herein shall survive indefinitely until, by their respective terms, they are no longer operative. SECTION 12. Indemnification. ----------- --------------- (a) The Corporation shall defend, indemnify and hold each Investor and its Affiliates harmless from all damages, costs (including reasonable attorney's fees), liabilities and penalties (collectively, "Losses") incurred by or awarded against such Investor or its Affiliates arising out of or incident to any breach of the representations and warranties made by the Corporation in or pursuant to Section 4 of this Agreement, but only to the extent that the Losses incurred by each such Investor in connection with all such breaches exceed $250,000 in the aggregate (in which case the Corporation's liability shall extend to all such Losses); provided, however, that the Corporation's liability to any Investor for Losses which are limited to the diminution in the value of the Preferred Shares purchased by the Investor hereunder shall in no event exceed the product of $30.00 multiplied by number of Preferred Shares purchased by such Investor hereunder; provided further that the Losses of affiliated Investors shall be aggregated for purposes of the $250,000 threshold. (b) Each Investor shall severally defend, indemnify and hold the Corporation and its Affiliates harmless from all damages, costs (including reasonable attorney's fees), liabilities and penalties incurred by or awarded against the Corporation or its Affiliates arising out of or incident to any breach of the representations and warranties made by such Investor in or pursuant to Section 5 of this Agreement. SECTION 13. Remedies. In case any one or more of the covenants and/or ---------- -------- agreements set forth in this Agreement shall have been breached by a party hereto, the other parties may proceed to protect and enforce its or their rights either by suit in equity and/or by action at law, including, but not limited to, an action for damages as a result of any such breach and/or an action for specific performance of any such covenant or agreement contained in this Agreement. SECTION 14. Successors and Assigns. This Agreement shall bind and inure to ---------- ---------------------- the benefit of the Corporation, the Investors and the respective successors and assigns of the Corporation and the Investors. The rights and duties of an Investor as set forth herein may not be assigned, in whole or in part, by the Investor without the prior written consent of the Corporation; provided, however, that an Investor may assign its rights and duties hereunder to its Affiliate without the consent of the Corporation, provided that any such assignment shall not release such Investor from any of its obligations hereunder, including, without limitation, pursuant to Section 12(b). Any transferee (other than an Investor) to whom rights under Section 7.1 or 7.2 are transferred shall, as a condition to such transfer, deliver to the Corporation a written instrument by which such transferee identifies itself, gives the Corporation notice of the transfer of such rights, identifies any securities of the Corporation owned or acquired by it and agrees to be bound by the obligations imposed hereunder and under the Stockholders Agreement upon Stockholders (as defined therein) to the same extent as if such transferee were an Investor hereunder and a Stockholder thereunder. A transferee to whom rights are transferred pursuant to -22- this Section 14 may not again transfer such rights to any other person or entity, other than as provided in this Section 14. SECTION 15. Entire Agreement. Subject to the following sentence, this ---------- ---------------- Agreement and the other writings referred to herein or delivered pursuant hereto which form a part hereof contain the entire agreement among the parties with respect to the subject matter hereof and supersede all prior and contemporaneous arrangements or understandings with respect thereto. SECTION 16. Notices. All notices, requests, consents and other ---------- ------- communications hereunder to any party shall be deemed to be sufficient if contained in a written instrument delivered in person or sent by telecopy, nationally-recognized overnight courier or first class registered or certified mail, return receipt requested, postage prepaid, addressed to such party at the address set forth below or such other address as may hereafter be designated in writing by such party to the other parties: (a) if to the Corporation, to: Tellium, Inc. 2 Crescent Place Oceanport, NJ 07757 with a copy to: Fried, Frank, Harris, Shriver and Jacobson 1001 Pennsylvania Avenue, NW Suite 800 Washington, DC 20004 Attention: Richard A. Steinwurtzel Andrew P. Varney (b) if to the Investors, to their respective addresses set forth on Schedule I hereto. All such notices, requests, consents and other communications shall be deemed to have been delivered (a) in the case of personal delivery or delivery by telecopy, on the date of such delivery, (b) in the case of dispatch by nationally-recognized overnight courier, on the next business day following such dispatch and (c) in the case of mailing, on the third business day after the posting thereof. SECTION 17. Changes. The terms and provisions of this Agreement may not be ---------- ------- modified or amended, nor may any of the provisions hereof be waived, temporarily or permanently, except pursuant to a written instrument executed by the Corporation and Investors, if such parties are holding at least 66-2/3% of the Preferred Shares (or shares issued upon conversion thereof) then outstanding and then held by the Investors. -23- SECTION 18. Counterparts. This Agreement may be executed in any ---------- ------------ number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. SECTION 19. Headings. The headings of the sections of this Agreement ---------- -------- have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement. SECTION 20. Nouns and Pronouns. Whenever the context may require, ---------- ------------------ any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice-versa. SECTION 21. Governing Law. This Agreement shall be governed by and ---------- ------------- construed in accordance with the internal laws of the State of Delaware, without regard to principles of conflict of laws. SECTION 22. Expenses. The Corporation shall bear its own legal and ---------- -------- other costs and expenses with respect to the transactions contemplated hereby and shall pay the reasonable fees and expenses of Goodwin, Procter & Hoar LLP, as special counsel to the Investors, at Closing. (BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK) -24- [Tellium, Inc. Series E Stock Purchase Agreement] IN WITNESS WHEREOF, the parties have executed this Stock Purchase Agreement as of the day and year first written above. TELLIUM, INC. By: /s/ ------------------------------- Name: Title: -25- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein ACAPPELLA VENTURES, LLC By: /s/ ------------------------------ Name: Title: -26- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein AIM EQUITY FUNDS, on behalf of its portfolio, AIM EMERGING GROWTH FUND By: /s/ ------------------------------ Name: Title: AIM GROWTH SERIES, on behalf of its portfolio, AIM SMALL CAP GROWTH FUND By: /s/ ------------------------------ Name: Title: AIM SPECIAL OPPORTUNITIES, on behalf of its portfolio, AIM SMALL CAP OPPORTUNITIES FUND By: /s/ ------------------------------ Name: Title: AIM SPECIAL OPPORTUNITIES, on behalf of its portfolio, AIM MID CAP OPPORTUNITIES FUND By: /s/ ------------------------------ Name: Title: AIM SPECIAL OPPORTUNITIES, on behalf of its portfolio, AIM LARGE CAP OPPORTUNITIES FUND By: /s/ ------------------------------ Name: Title -27- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein ALLIANCE TECHNOLOGY PARTNERS, L.P. By: Alliance Capital Global Derivatives Corporation, General Partner By: /s/ ------------------------------ Secretary ACM TECHNOLOGY HEDGE FUND By: Alliance Capital Management L.P., its Investment Adviser By: /s/ ------------------------------ Authorized Officer ACM STRATEGIC INVESTMENTS - TECHNOLOGY PORTFOLIO By: Alliance Capital Management L.P., its Investment Adviser By: /s/ ------------------------------ Authorized Person -28- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein WORLD TECHNOLOGIES PORTFOLIO, a series of WORLD TRUST By: /s/ ------------------------------ Name: Frederick C. Quirsfeld Title: Vice President, World Trust EQUITY PORTFOLIO a series of IDS LIFE SERIES FUND, INC. By: /s/ ------------------------------ Name: Frederick C. Quirsfeld Title: Vice President, IDS Life Series Fund, Inc. AXP STRATEGY AGGRESSIVE FUND a series of AXP STRATEGY SERIES, INC. By: /s/ ------------------------------ Name: Frederick C. Quirsfeld Title: Vice President, AXP Strategy Series, Inc. AXP VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND, a series of AXP VARIABLE PORTFOLIO INVESTMENT SERIES, INC. By: /s/ ------------------------------ Name: Frederick C. Quirsfeld Title: Vice President, AXP Variable Portfolio Investment Series, Inc. -29- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein AMERINDO TECHNOLOGY GROWTH FUND II, INC. By: /s/ ------------------------------ Name: Gary Tanaka Title: Director AMERINDO INTERNET FUND PLC By: /s/ ------------------------------ Name: Gary Tanaka Title: Manager eMERGING TECHNOLOGY PORTFOLIO By: /s/ ------------------------------ Name: Gary Tanaka Title: Attorney-in-fact -30- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein BROADBAND HOLDINGS (BVI) LIMITED By: /s/ ----------------------------------------- Name: Edwin J. Wang Title: Authorized Signatory -31- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein CORNING INCORPORATED By: /s/ ----------------------------------------- Name: Title: -32- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein FIDELITY SELECT PORTFOLIOS: COMPUTER PORTFOLIO By: /s/ ----------------------------------------- Name: Title: FIDELITY ADVISOR SERIES VII: FIDELITY ADVISOR TECHNOLOGY FUND By: /s/ ----------------------------------------- Name: Title: FIDELITY SMALL CAP AMERICA FUND By: /s/ ----------------------------------------- Name: Title: FIDELITY FOCUS TECHNOLOGY FUND By: /s/ ----------------------------------------- Name: Title: FIDELITY MT. VERNON STREET TRUST: FIDELITY AGGRESSIVE GROWTH FUND By: /s/ ----------------------------------------- Name: Title: -33- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein FIDELITY HASTINGS STREET TRUST: FIDELITY FUND By: /s/ ----------------------------------------- Name: Title: FIDELITY ADVISOR SERIES I: FIDELITY ADVISOR VALUE STRATEGIES FUND By: /s/ ----------------------------------------- Name: Title: FIDELITY SELECT PORTFOLIOS: TECHNOLOGY PORTFOLIO By: /s/ ----------------------------------------- Name: Title: PENSION RESERVES INVESTMENT MANAGEMENT BOARD BY: FIDELITY MANAGEMENT TRUST COMPANY, AS INVESTMENT MANAGER, UNDER POWER OF ATTORNEY By: /s/ ----------------------------------------- Name: Title: -34- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein GOLDMAN, SACHS & CO. By: /s/ ----------------------------------------- Name: Title: -35- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein INVESCO TECHNOLOGY FUND By: /s/ ----------------------------------------- Name: Title: INVESCO TELECOMMUNICATIONS FUND By: /s/ ----------------------------------------- Name: Title: -36- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein -37- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein MUNDER NETNET FUND, a series of The Munder Funds, Inc. By: /s/ ----------------------------------------- Name: Stephen J. Shenkenberg Title: Vice President and Secretary -38- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein OPPENHEIMER VARIABLE ACCOUNT FUNDS FOR THE ACCOUNT OF OPPENHEIMER AGGRESSIVE GROWTH FUND By: /s/ ----------------------------------------- Name: Title: OPPENHEIMER MIDCAP FUND By: /s/ ----------------------------------------- Name: Title: OPPENHEIMER EMERGING TECHNOLOGIES FUND By: /s/ ----------------------------------------- Name: Title: OPPENHEIMER ENTERPRISE FUND By: /s/ ----------------------------------------- Name: Title: -39- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein PALANTIR PARTNERS LP By: /s/ ----------------------------------------- Name: Title: PALANTIR INVESTMENTS LDC By: /s/ ----------------------------------------- Name: Title: -40- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein PEQUOT TECHNOLOGY PERENNIAL FUND, L.P. By: Pequot Capital Management, Inc. its Investment Manager By: /s/ ----------------------------------------- Name: Kevin E. O'Brien Title: General Counsel PEQUOT ENDOWMENT FUND, L.P. By: Pequot Capital Management, Inc. its Investment Manager By: /s/ ----------------------------------------- Name: Kevin E. O'Brien Title: General Counsel -41- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein ROTHCHILD TECHNOLOGY PARTNERS, LP By: /s/ ----------------------------------------- Name: Mark J. McCall Title: Managing Director -42- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein THE PAISLEY FUND, L.P. By: /s/ ----------------------------------------- Name: Title: THE PAISLEY PACIFIC FUND, L.P. By: /s/ ----------------------------------------- Name: Title: -43- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein TAILWIND INVESTMENT PARTNERS (QP), L.P. By: Thomas Weisel Capital Partners LLC, its general partner By: /s/ ----------------------------------------- Name: Title: TAILWIND INVESTMENT PARTNERS (AI), L.P. By: Thomas Weisel Capital Partners LLC, its general partner By: /s/ ----------------------------------------- Name: Title: TAILWIND INVESTMENT PARTNERS INTERNATIONAL, L.P. By: Thomas Weisel Capital Partners LLC, its general partner By: /s/ ----------------------------------------- Name: Title: TAILWIND INVESTMENT PARTNERS EMPLOYEE FUND, L.P. By: Thomas Weisel Capital Partners LLC, its general partner By: /s/ ----------------------------------------- Name: Title: THOMAS WEISEL PARTNERS By: /s/ ----------------------------------------- Name: Title: -44- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein VAN WAGONER FUNDS By: /s/ ----------------------------------------- Name: Title: VAN WAGONER CAPITAL PARTNERS, L.P. By: /s/ ----------------------------------------- Name: Title: VAN WAGONER CROSSOVER FUND, LP By: /s/ ----------------------------------------- Name: Title: -45- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein QUISSET PARTNERS, L.P. by Wellington Management Company, LLP, Its Investment Advisor By: /s/ ----------------------------------------- Name: Peter L. Curry Title: Vice President QUISSET INVESTORS (BERMUDA) L.P. by Wellington Management Company, LLP, Its Investment Advisor By: /s/ ----------------------------------------- Name: Peter L. Curry Title: Vice President RAYTHEON MASTER PENSION TRUST, by Wellington Management Company, LLP, Its Investment Advisor By: /s/ ----------------------------------------- Name: Peter L. Curry Title: Vice President -46- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein WIT SOUNDVIEW PHOTONICS FUND 2000, LLC By: /s/ ----------------------------------------- Name: Title: WIT SOUNDVIEW FUND 2000, LLC By: /s/ ----------------------------------------- Name: Title: -47- Counterpart Signature Page to Stock Purchase Agreement dated September __, 2000 by and among Tellium, Inc. and the investors named therein SUAIMHNEAS LLC By: /s/ ----------------------------------------- Name: Michael M. Connors Title: Manager -48-