Exhibit 10.12.1

FIRST AMENDMENT TO

CREDIT AND SECURITY AGREEMENTS

THIS FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENTS (the “Amendment”), dated
as of March 13, 2013, is entered into by and among ZHONE TECHNOLOGIES, INC., a
Delaware corporation (“Zhone Technologies”), ZTI MERGER SUBSIDIARY III, INC., a
Delaware corporation (“ZTI”; Zhone Technologies and ZTI are sometimes referred
to herein individually as a “Borrower” and collectively as the “Borrowers”),
PREMISYS COMMUNICATIONS, INC., a Delaware corporation (“Premisys”), ZHONE
TECHNOLOGIES INTERNATIONAL, INC., a Delaware corporation, (“Zhone
International”), PARADYNE NETWORKS, INC., a Delaware corporation (“Paradyne
Networks”), PARADYNE CORPORATION, a Delaware corporation (“Paradyne
Corporation”; Premisys, Zhone International, Paradyne Networks, and Paradyne
Corporation are sometimes referred to herein individually as a “Guarantor” and
collectively as the “Guarantors”), and WELLS FARGO BANK, NATIONAL ASSOCIATION
(“Lender”).

RECITALS

A. Borrowers, Guarantors, and Lender are parties to (i) a Credit and Security
Agreement, dated March 13, 2012 (as amended from time to time, the “Domestic
Credit Agreement”), and (ii) a Credit and Security Agreement (Ex-Im
Subfacility), dated March 13, 2012 (as amended from time to time, the “Ex-Im
Credit Agreement”; and together with the Domestic Credit Agreement,
collectively, the “Credit Agreements”). Capitalized terms used in this Amendment
have the meanings given to them in the Credit Agreements unless otherwise
specified in this Amendment.

B. Borrowers and Guarantors have requested that certain amendments be made to
the Credit Agreements, and Lender is willing to agree to such amendments
pursuant to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, it is agreed as follows:

1. Amendments to Credit Agreements. The Credit Agreements are amended as
follows:

1.1 Section 8 of the Credit Agreements. Section 8 of the Credit Agreements is
amended to read in its entirety as follows:

“8 FINANCIAL COVENANTS.

Each Borrower covenants and agrees that, until termination of all obligations of
Lender to provide extensions of credit hereunder and payment in full of the
Obligations, Borrowers will comply with each of the following financial
covenants:

(a) Minimum Liquidity. Have Liquidity of at least the following:

 

Minimum Liquidity

   Applicable Period/Test Date

    $3,000,000

   At all times

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(b) Minimum EBITDA. If a Liquidity Trigger Event shall occur, Borrowers shall
achieve EBITDA, for the periods described below, of at least the required amount
set forth in the following table for the applicable period set forth opposite
thereto (it being understand that such requirement shall be effective
immediately and retroactively) (numbers appearing between “< >” are negative):

 

Applicable Amount

   Applicable Period

$<1,750,000>

   Three-month period ending March 31, 2013

$<2,000,000>

   Six-month period ending June 30, 2013

$<2,500,000>

   Nine-month period ending September 30, 2013

$<2,000,000>

   Twelve-month period ending December 31, 2013

(c) Maximum Capital Expenditures. Shall not incur or contract to incur
Non-Financed Capital Expenditures in excess of $500,000 in payments in the
aggregate during the fiscal year ending December 31, 2013. Borrowers shall
provide a report to Lender on the status of their Non-Financial Capital
Expenditures each month.

Borrowers shall deliver their Projections for subsequent fiscal years to Lender
as required in Section 6.1 and shall work with Lender to set financial covenants
for periods beyond those set forth above. Failure to set financial covenants
prior to December 31 for each subsequent fiscal year shall constitute an Event
of Default.”

2. No Other Changes. Except as explicitly amended by this Amendment or the other
Loan Documents delivered in connection with this Amendment, all of the terms and
conditions of the Credit Agreements and the other Loan Documents shall remain in
full force and effect and shall apply to any advance or letter of credit
thereunder. This Amendment shall be deemed to be a “Loan Document” (as defined
in the Credit Agreements).

3. Accommodation Fee. [Intentionally Omitted].

4. Conditions Precedent. This Amendment shall be effective when Lender shall
have receiveda duly executed original hereof, together with each of the
following, each in substance and form acceptable to Lender in its sole
discretion and duly executed by all relevant parties:

4.1 Certificates of Authority from the corporate secretaries of the Borrowers
and Guarantors; and

 

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4.2 Such other matters as Lender may require.

5. Representations and Warranties. Borrowers and Guarantors hereby represent and
warrant to Lender as follows:

5.1 Borrowers and Guarantors have all requisite power and authority to execute
this Amendment and any other agreements or instruments required hereunder and to
perform all of their obligations hereunder, and this Amendment and all such
other agreements and instruments have been duly executed and delivered by
Borrowers and Guarantors and constitute the legal, valid and binding obligation
of Borrowers and Guarantors, enforceable in accordance with its terms.

5.2 The execution, delivery and performance by Borrowers and Guarantors of this
Amendment and any other agreements or instruments required hereunder have been
duly authorized by all necessary corporate action and do not (i) require any
authorization, consent or approval by any governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any
provision of any law, rule or regulation or of any order, writ, injunction or
decree presently in effect, having applicability to Borrowers or Guarantors, or
the certificates of incorporation or by-laws of Borrowers or Guarantors, or
(iii) result in a breach of or constitute a default under any indenture or loan
or credit agreement or any other agreement, lease or instrument to which
Borrowers or Guarantors are a party or by which Borrowers and Guarantors or
their respective properties may be bound or affected.

5.3 All of the representations and warranties contained in Section 5 and Exhibit
D of the Credit Agreements are true and correct on and as of the date hereof as
though made on and as of such date, except to the extent that such
representations and warranties relate solely to an earlier date (in which case
such representations and warranties continue to be true and correct as of such
earlier date).

6. References. All references in the Credit Agreements to “this Agreement” shall
be deemed to refer to the Credit Agreements as amended hereby; and any and all
references in the other Loan Documents to the Credit Agreements shall be deemed
to refer to the Credit Agreements as amended hereby.

7. No Waiver. The execution of this Amendment and the acceptance of all other
agreements and instruments related hereto shall not be deemed to be a waiver of
any Default or Event of Default under the Credit Agreements or a waiver of any
breach, default or event of default under any Loan Document or other document
held by Lender, whether or not known to Lender and whether or not existing on
the date of this Amendment.

8. Release. Borrowers and Guarantors hereby absolutely and unconditionally
release and forever discharge Lender, and any and all participants, parent
corporations, subsidiary corporations, affiliated corporations, insurers,
indemnitors, successors and assigns thereof, together with all of the present
and former directors, officers, agents, attorneys, and employees of any of the
foregoing, from any and all claims, demands or causes of action of any kind,
nature or description, whether arising in law or equity or upon contract or tort
or under any state or federal

 

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law or otherwise, which Borrowers or Guarantors have had, now have or have made
claim to have against any such person for or by reason of any act, omission,
matter, cause or thing whatsoever arising from the beginning of time to and
including the date of this Amendment, whether such claims, demands and causes of
action are matured or unmatured or known or unknown. It is the intention of the
Borrowers and Guarantors in executing this release that the same shall be
effective as a bar to each and every claim, demand and cause of action specified
and in furtherance of this intention each of the Borrowers and Guarantors waives
and relinquishes all rights and benefits under Section 1542 of the Civil Code of
the State of California, which provides:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MIGHT HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

The parties acknowledge that each may hereafter discover facts different from or
in addition to those now known or believed to be true with respect to such
claims, demands, or causes of action and agree that this instrument shall be and
remain effective in all respects notwithstanding any such differences or
additional facts.

9. Costs and Expenses. Borrowers agree to pay all fees and disbursements of
counsel to Lender for the services performed by such counsel in connection with
the preparation of this Amendment and the documents and instruments incidental
hereto. Borrowers hereby agree that Lender may, at any time or from time to time
in its sole discretion and without further authorization by Borrowers, make a
loan to Borrowers under the Credit Agreements, or apply the proceeds of any
loan, for the purpose of paying any such fees, disbursements, costs and
expenses.

10. Miscellaneous. This Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original and all
of which counterparts, taken together, shall constitute one and the same
instrument. Transmission by facsimile or “pdf” file of an executed counterpart
of this Amendment shall be deemed to constitute due and sufficient delivery of
such counterpart. Any party hereto may request an original counterpart of any
party delivering such electronic counterpart. This Amendmentand the rights and
obligations of the parties hereto shall be construed in accordance with, and
governed by, the laws of the State of California. In the event of any conflict
between this Amendment and the Credit Agreements, the terms of this Amendment
shall govern.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.

 

BORROWERS:   ZHONE TECHNOLOGIES, INC.  

By:

 

/s/ KIRK MISAKA

  Name:   Kirk Misaka   Title:   Chief Financial Officer   ZTI MERGER SUBSIDIARY
III, INC.   By:  

/s/ KIRK MISAKA

  Name:   Kirk Misaka   Title:   Chief Financial Officer

 

GUARANTORS:   PREMISYS COMMUNICATIONS, INC.   By:  

/s/ KIRK MISAKA

  Name:   Kirk Misaka   Title:   Chief Financial Officer   ZHONE TECHNOLOGIES  
INTERNATIONAL, INC.   By:  

/s/ KIRK MISAKA

  Name:   Kirk Misaka   Title:   Chief Financial Officer   PARADYNE NETWORKS,
INC.   By:  

/s/ KIRK MISAKA

  Name:   Kirk Misaka   Title:   Chief Financial Officer   PARADYNE CORPORATION
  By:  

/s/ KIRK MISAKA

  Name:   Kirk Misaka   Title:   Chief Financial Officer LENDER:   WELLS FARGO
BANK, NATIONAL ASSOCIATION   By:  

/s/ HARRY L. JOE

  Name:   Harry L. Joe   Title:   Authorized Signatory

 

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