Terayon Communication receives default notice on 5% convertible notes due 2007

By Caroline Salls

Pittsburgh, Jan. 13 - Terayon Communication Systems, Inc. received written notice of default from holders of more than 25% of its outstanding 5% convertible subordinated notes due 2007 based on the company's failure to file its 10-Q report with the Securities and Exchange Commission, according to a company news release.

If the default is not cured within 60 days of the notice, an event of default will occur and the trustee or holders of at least 25% of the notes may declare the entire principal amount of the notes to be due and payable immediately.

There are $65 million of the notes outstanding.

"We were aware of our obligations under the indenture and have already considered alternative actions," chief financial officer Mark Richman said in the release.

"Given our cash position and reduction in cash usage as a result of our restructuring of the business, we are comfortable with our cash position and we have several options available."

Terayon is a Santa Clara, Calif.-based broadband systems company.

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