Exhibit



Exhibit 10.1




CONSENT MEMORANDUM



May 5, 2017


Dasan Zhone Solutions, Inc.
7195 Oakport Street
Oakland, California  94621
Attention:  Kirk Misaka, Chief Financial Officer


		
	Re:
	(i)  Credit and Security Agreement, dated March 13, 2012 (as heretofore amended, the “Domestic Credit Agreement”), among Dasan Zhone Solutions, Inc. (f/k/a Zhone Technologies, Inc.) and ZTI Merger Subsidiary III, Inc. (collectively, the “Borrowers”), Premisys Communications, Inc., Zhone Technologies International, Inc., Paradyne Networks, Inc., Paradyne Corporation, and Dasan Network Solutions, Inc. (collectively, the “Guarantors”), and Wells Fargo Bank, National Association (the “Lender”), and (ii) Credit and Security Agreement (Ex-Im Subfacility), dated March 13, 2012 (as heretofore amended, the “Ex-Im Credit Agreement”; and together with the Domestic Credit Agreement, collectively, the “Credit Agreements”), among the Borrowers, the Guarantors, and Lender


Ladies and Gentlemen:


Reference is made to the above-described Credit Agreements.  The Borrowers and the Guarantors are sometimes collectively referred to in this letter agreement as the “Loan Parties.”  Capitalized terms used but not defined in this letter agreement shall have the meanings set forth in the Domestic Credit Agreement.


The Credit Agreements (including, but not necessarily limited to, Schedule 6.1 thereto) require that the Borrowers provide audited annual financial statements within 120 days after the end of each fiscal year.  Borrowers and the Guarantors hereby request that Lender extend the due date for the annual audited financial statements and related items required by Schedule 6.1 of the Credit Agreements (collectively, the “2016 Annual Statement Items”) for the fiscal year ending December 31, 2016, from April 30, 2017 to June 30, 2017 (the “Extension”).


Subject to the terms hereof, Lender hereby consents to the Extension for the 2016 Annual Statement Items, subject to the following terms and conditions:  (i) Lender shall have received the countersignatures of the Borrowers and Guarantors on this letter agreement agreeing to the terms and conditions of this letter agreement; (ii) all representations and warranties of the Borrowers and the Guarantors in the Loan Documents and this letter agreement shall be true and correct in all material respects as of the date hereof (except for such representations and warranties that by their terms expressly speak as of an earlier date, in which case such representations and warranties shall continue to be true and correct in all material respects as of such earlier date); (iii) Borrowers shall deliver to Lender, no later than five (5) days after receipt by Borrowers (or any Borrower’s board of directors), a copy of the investigation report (relating to sales practices and internal controls) produced by Latham & Watkins LLP; and (iv) no later than June 8, 2017, Borrowers shall deliver to Lender the NASDAQ’s consent to or approval of the extension of the due date (to at least June 30, 2017) for submission of the Borrowers’ final 10-K report for the fiscal year ending December 31, 2016.  With respect to the foregoing clauses (iii) and (iv), Borrowers’ failure to timely comply with either such requirement shall constitute an immediate Event of Default under the Credit Agreements and other Loan Documents.  


In order to induce Lender to execute and deliver this letter agreement, the Loan Parties hereby (i) represent and warrant that no Default or Event of Default exists on the date hereof, (ii) ratify and confirm all of the Obligations of the Loan Parties pursuant to the Loan Documents, and (iii) acknowledge that no investigation by Lender shall affect any representations or warranties made by the Loan Parties in this letter agreement or the right of Lender to rely upon them.


Except as expressly set forth herein, (i) the Loan Documents remain in full force and effect, (ii) this letter agreement shall not be deemed to be a waiver, amendment or modification of, or consent to or departure from, any provisions of the Credit Agreements or any other Loan Document or to be a waiver of any Default or Event of Default under the Loan Documents whether arising before or after the date hereof or as a result of the transactions contemplated hereby (except for the specific consent referenced above in this letter agreement), and (iii) this letter agreement shall not preclude the future exercise of any right, remedy, power or privilege available to Lender whether under the Credit Agreements, the other Loan Documents or otherwise and shall not be construed or deemed to be a satisfaction, novation, cure, modification, amendment or release of the Obligations, Credit Agreements, or other Loan Documents.


To further induce Lender to enter into this letter agreement, the Loan Parties each hereby absolutely and unconditionally releases and forever discharges 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 law or otherwise, which any Loan Party has had, now has or has 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 letter agreement, whether such claims, demands and causes of action are matured or unmatured or known or unknown.  It is the intention of the Loan Parties 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 Loan Party 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.


This letter agreement (i) constitutes the entire understanding of the parties with respect to the subject matter hereof, and any other prior or contemporaneous agreements, whether written or oral, with respect hereto are expressly superseded hereby, (ii) shall be governed by and construed in accordance with the laws of the State of California, and (iii) shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto.  This letter agreement may be executed in one or more counterparts (which taken together shall constitute one and the same instrument) and by facsimile or email (pdf) transmission, which facsimile or pdf signatures shall be considered original executed counterparts.


This letter agreement shall be deemed to be a “Loan Document” for purposes of the Credit Agreements and the other Loan Documents.




[signatures on following pages]









Kindly acknowledge your agreement with the terms and conditions of this letter agreement, by executing one copy of this letter in the space provided and returning it to Lender.


Very truly yours,


DASAN ZHONE SOLUTIONS, INC.        ZTI MERGER SUBSIDIARY III, INC.


By:  /s/ KIRK MISAKA                By:  /s/ KIRK MISAKA     
Name:  Kirk Misaka                     Name:  Kirk Misaka 
Title:  Chief Financial Officer                Title:  Chief Financial Officer


PREMISYS COMMUNICATIONS, INC.        ZHONE TECHNOLOGIES 
                            INTERNATIONAL, INC.


By:   /s/ KIRK MISAKA                By:   /s/ KIRK MISAKA     
Name:  Kirk Misaka                     Name:  Kirk Misaka 
Title:  Chief Financial Officer                Title:  Chief Financial Officer


PARADYNE NETWORKS, INC.            PARADYNE CORPORATION


By:   /s/ KIRK MISAKA                By:   /s/ KIRK MISAKA     
Name:  Kirk Misaka                     Name:  Kirk Misaka 
Title:  Chief Financial Officer                Title:  Chief Financial Officer


DASAN NETWORK SOLUTIONS, INC.


By:   /s/ KIRK MISAKA     
Name:  Kirk Misaka                      
Title:  Chief Financial Officer                




[signatures continued on next page]



Acknowledged and agreed to by Lender
as of the date first above written:


WELLS FARGO BANK, NATIONAL ASSOCIATION




By:  /s/ HARRY L. JOE      
Name:  Harry L. Joe
Title:  Authorized Signatory