New amended Qwest contract
TELM 8-K alertwizard.com
In December 2001, Tellium, Inc. amended its procurement agreement with Qwest Communications International Inc. Under the amended contract, Qwest is expected to have purchased almost one-quarter of its previously disclosed contract value by early 2002.
Qwest has further agreed to purchase the remainder by December 31, 2005, effective upon reaching agreement on pricing and technical specifications for Tellium's Aurora Full-Spectrum(TM) switches. Tellium has also agreed to give
Qwest additional flexibility to extend or terminate the remainder of the commitment in a variety of circumstances. Tellium has received, in connection with this amended contract, additional purchase orders from Qwest.
As part of Tellium's previous contract with Qwest, Tellium had issued three warrants to a wholly-owned subsidiary of Qwest to purchase an aggregate of 2,375,000 shares of Tellium common stock. Of those shares, one million relate to
the first warrant and are currently vested and exercisable. The remaining two warrants representing 1,375,000 shares were terminated coincident with the amended contract with Qwest. Tellium will take a one time non-cash charge of
approximately $19 million in the quarter ending December 31, 2001 to eliminate
charges associated with the terminated warrants from its balance sheet.
Old terms of Qwest - TELM
Under the terms of the agreement, as amended, Qwest has a minimum purchase commitment of $300 million over the first three years of the contract and, subject to extensions under a limited circumstance, an additional $100 million over the following two years of the contract for the deployment of our products |
