Exec Payoffs Dog Zhone/Tellium Merger

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newbee2002 12/4/2012 | 11:32:54 PM

re: Exec Payoffs Dog Zhone/Tellium Merger +$150M - TELM cash as of Jun 30, 2003
- $40M - Zhone's debt
- $56M - Early Xmas gifts for TELM execs.
- $20M - TELM + Zhone "combined" CASH burn in Q3
- $20M - TELM + Zhone "combined" CASH burn in Q3
------------------------------------------------
+ $14M - Cash level by year end.

Assume that Zhone acquires TELM because of some "secret" products, the combined company will die before the purchase order.

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alex2003 12/4/2012 | 11:32:52 PM

re: Exec Payoffs Dog Zhone/Tellium Merger zhone: mcginn investd in this while lu ceo.

tellium: lots of lu head honchos. at least one ran back to lu 1-2 year ago. forget name of vp moved fro nj to ih. triec pulling out some bellheads with him initlty, inc one bl fellow, famoyus guy

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mc2 12/4/2012 | 11:32:47 PM

re: Exec Payoffs Dog Zhone/Tellium Merger You forgot to include Zhone/Telm revenue stream. They will probably bring in somewhere between 20M and 30M, so that would be about break-even.

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newbee2002 12/4/2012 | 11:32:42 PM

re: Exec Payoffs Dog Zhone/Tellium Merger Tellium side won't bring in any revenue in the near future. Its contract with C&W was ended last Q, and cash burn rate ~ $15M/quarter.

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manoflalambda 12/4/2012 | 11:32:37 PM

re: Exec Payoffs Dog Zhone/Tellium Merger Hey all,

Does Lucent still own 8-9% of Tellium or so (came via Lucent's acquistion of Ortel or Octel or somesuch)?

Salute,
Manoflalambda

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lightmaster 12/4/2012 | 11:32:37 PM

re: Exec Payoffs Dog Zhone/Tellium Merger newbee2002,

The numbers don't work that way. Zhones debt may not be paid off right away or may be re-negotiated. The $56M in gifts for TELM execs is not entirely a cash burn (some of it is already gone in the form of loans, therefore not part of the 150M)). You can also erase much or all of the TELM cash burn as most will be laid off.

I expect that Zhone will inherit enough to keep them going for a few more years. The question is, why is this a good deal for TELM shareholders?

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WiserNow 12/4/2012 | 11:31:36 PM

re: Exec Payoffs Dog Zhone/Tellium Merger Mory is offering Tellium shareholders another chance. If they don't agree to a buy out, Tellium will simply burn their cash reserves down, then declare BK. The shareholders get next to nothing.

With Zhone, they get a chance. The question is whether the Zhone folks can ever get working product and make a sale that counts.

Mory & Jeanette's history at Ascend is enlightening. The MAX was **** the TNT was worse. The company was headed down hard in 1997. If Mory hadn't bought Cascade and killed the Cascade access product, Ascend would have been history. LU bought Ascend for the Cascade product set, not the Ascend products.

I don't think hisory will repeat itself with the Tellium acquisition. Shareholders beware!

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sevenbrooks 12/4/2012 | 11:30:09 PM

re: Exec Payoffs Dog Zhone/Tellium Merger
No Tellium can do an ASC....shut down and distribute the remaining cash to the shareholders.

seven

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techoriginol 12/4/2012 | 11:13:09 PM

re: Exec Payoffs Dog Zhone/Tellium Merger Top Turkey Award - who took all the stuffing? It's gone ... all of it. Nothing's left.

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