Document:

OPTION AGREEMENT

         This Option Agreement ("Agreement") is entered into as of the 7th day
of January, 2000, by and among WI-LAN INC. ("WLI"), a body corporate,
incorporated pursuant to the laws of the Canadian province of Alberta; and
FINOVA MEZZANINE CAPITAL INC. ("FINOVA"), a Tennessee corporation.

                                    RECITALS:

         WHEREAS, WLI and FINOVA have entered into that Purchase Agreement (the
"Purchase Agreement") dated December 29, 1999, providing for the sale and
purchase of certain property and pursuant to which FINOVA is to grant to WLI an
option with respect to one million three hundred fourteen thousand three hundred
thirty-three (1,314,333) shares of Series A Convertible Preferred Stock (the
"Stock") issued by Digital Transmission Systems, Inc. ("DTS"), a Delaware
corporation, which stock is presently evidenced by certificate number A-1 and is
presently owned and held by FINOVA;

         NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are acknowledged, it is agreed as follows:

         1.       Grant of Option to Purchase. FINOVA hereby grants to WLI an
option to purchase some or all of the Stock from FINOVA at any time and from
time to time from the date hereof until two (2) years from the date hereof. The
price paid to FINOVA by WLI as to any Stock being purchased shall be One Dollar
(U.S. $1.00) per share. WLI may exercise this option by delivering written
notice to FINOVA along with a wire transfer or cashier's check drawn on a
national bank with offices in the State of Tennessee. The notice shall state the
number of shares as to which WLI wishes to exercise its right to purchase and
shall include a statement of WLI's calculation of the remaining number of shares
as to which the option may be exercised, taking into account the newly submitted
exercise and all previous purchases. Upon receipt of the notice and funds,
FINOVA shall immediately tender its stock certificate to DTS along with such
powers of attorney or other documents as may be reasonably necessary to effect
the transfer of the elected Stock to WLI and the issuance of appropriate
certificates to reflect the resulting ownership of the Stock by WLI and FINOVA.

         2.       Agreement Not to Sell or Convert. FINOVA agrees that it will
not sell any of the Stock (except pursuant to this Agreement) or elect to
convert any of the Stock to common stock of DTS for a period of one (1) year
from the date hereof.

<PAGE>

         3.       Right of First Refusal. FINOVA agrees that if, after the
expiration of the restricted period described in Section 2 above but before the
expiration of the option granted in Section 1 above, FINOVA wishes to sell or
exercise its right of conversion with respect to any of the Stock, FINOVA will
first give WLI written notice of its intention describing the intended activity
(sale or conversion) and the number of shares of Stock to which the intention
applies and allow WLI a period of five (5) days after receipt of such notice
within which WLI may exercise its option to purchase such Stock and preclude the
sale or conversion by FINOVA. If WLI fails to duly exercise its option with
respect to the proposed transaction, FINOVA shall be free to enter into the
proposed sale or conversion, free of any interest in favor of WLI as to the
shares sold or converted or their proceeds, within thirty (30) days after the
date on which FINOVA gave notice of the proposed transaction to WLI.

         4.       Securities Laws. The parties shall take all necessary actions
in order to assure that any transfer of Stock pursuant to this Agreement is made
in full compliance with all applicable securities laws. WLI warrants that it is
an accredited investor under the United States Securities and Exchange
Commission's Regulation D with respect to the Stock and agrees to enter into
such additional representations and warranties as FINOVA may reasonably require
in connection with the transfer of any Stock to WLI including, but not limited
to, representations similar to those provided by WLI to FINOVA pursuant to the
Purchase Agreement.

         5.       Notices. Any notification to be given with respect to this
Agreement shall be made in the matter set forth in the Purchase Agreement.

         6.       General Provisions. This Agreement shall inure to the benefit
of and shall be binding upon the parties hereto and their respective heirs,
executives, successors, administrators and assigns. If any provision of this
Agreement is held invalid or unenforceable for any reason, the remaining
provisions shall remain in full effect. This Agreement may be executed in
several counterpart originals. The validity and construction of this Agreement
shall be determined according to the substantive laws of the state of Tennessee,
and the parties consent to the jurisdiction of state and federal courts sitting
in Nashville, Tennessee and agree that such courts shall have exclusive venue
over any disputes arising under this Agreement. Any litigation regarding this
Agreement shall be conducted by a judge as to matter of both law and fact and
the parties hereto hereby knowingly, voluntarily and with benefit of counsel
waive the right to demand a trial by jury in any such proceeding.

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         EXECUTED as of the date first written above.

                                        WI-LAN INC.

                                        By:       [Signature illegible]
                                              -------------------------
                                        Title:    [Signature illegible]
                                              -------------------------

                                        FINOVA MEZZANINE CAPITAL INC.

                                        By:       [Signature illegible]
                                              -------------------------
                                        Title:
                                              -------------------------

                                        3CERTIFICATE OF DESIGNATIONS
                           ---------------------------

                                       OF

                      SERIES A CONVERTIBLE PREFERRED STOCK
                      ------------------------------------

                                       OF

                       DIGITAL TRANSMISSION SYSTEMS, INC.
                       ----------------------------------

         Digital Transmissions Systems, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), in accordance with the provisions of Section 151(g) thereof,

         HEREBY CERTIFIES:

         That, the Corporation's Board of Directors adopted by unanimous written
consent dated February 4, 1999, the following resolution creating a series of
Preferred Stock designated as Series A Convertible Preferred Stock:

         RESOLVED, that pursuant to the authority granted to the Board of
Directors by Article FOURTH, of the Amended and Restated Certificate of
Incorporation of the Corporation (the "Certificate"), there is hereby created,
and the Corporation be, and it hereby is, authorized to issue, 1,314,333 shares
of a series of Preferred Stock which shall have the following designations,
powers, preferences, rights and restrictions:

         1. Designation. The authorized shares of preferred stock shall be known
and designated as Series A Redeemable Convertible Preferred Stock (the "Series A
Preferred Stock"), without par value per share and shall consist of 1,314,333
shares.

         2. Powers, Preferences and Rights. The powers, preferences and rights,
and the qualifications, limitations and restrictions of the Series A Preferred
Stock are as follows:

                  (a) Dividends. The holders of the Series A Preferred Stock
shall not be entitled to receive dividends on account of the Series A Preferred
Stock. No dividends may be paid on the common stock of the Corporation or on any
other class of stock as long as any Series A Preferred Stock remains
outstanding.

                  (b) Liquidation Preference. In the event of any voluntary or
involuntary sale of all or a substantial portion of the Corporation's capital
stock or all or a substantial portion of the Corporation's assets, or any merger
or consolidation of the Corporation with another entity, or any liquidation or
dissolution of the

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                                                                               2

Corporation, voluntary or involuntary (such events to be hereinafter
collectively referred to as the "Liquidation Events"), then the holders of the
Series A Preferred Stock shall be entitled to receive, prior to the receipt of
any assets by holders of all other equity securities of the Corporation, a cash
amount equal to $1.00 for each share of Series A Preferred Stock held (adjusted
for any stock dividends, combinations or splits with respect to such shares)
(the "Redemption Price"). Such payment with respect to the Series A Preferred
Stock shall constitute the extent of the participation of the holders of the
Series A Preferred Stock with respect to their shares of Series A Preferred
Stock, in any and all present or future corporate distributions, or the stock,
securities, or assets to be received by holders of equity securities of the
Corporation, and the shares of the Series A Preferred Stock shall thereafter be
redeemed and canceled and shall be so reflected on the books of the Corporation.

                  (c) Voting Rights. Except as otherwise provided by applicable
law, the shares of Series A Preferred Stock shall not entitle their holders to
any voting rights as stockholders of the Corporation prior to conversion
pursuant to Section 4 hereof.

         3. Redemption at the Option of the Corporation.

                  (a) Proportional Redemption. The Corporation may, at the
option of the Board of Directors, redeem up to all shares of the Series A
Preferred Stock by paying in cash therefor a sum equal to the Redemption Price.
Any redemption effected pursuant to this Subsection 3(a) shall be made on a pro
rata basis among the holders of the Series A Preferred Stock in proportion to
the number of shares of Series A Preferred Stock then held by them.

                  (b) Redemption Notice. At least fifteen (15) but not more than
thirty (30) days prior to the date on which the Corporation desires to redeem
shares of Series A Preferred Stock (a "Redemption Date"), written notice shall
be delivered via overnight courier to each holder of record (at the close of
business on the business day next preceding the day on which notice is given) of
the Series A Preferred Stock to be redeemed, at the address last shown on the
records of the Corporation for such holder, notifying such holder of the
redemption to be effected, specifying the number of shares to be redeemed from
such holder, the Redemption Date, the Redemption Price, the place at which
payment may be obtained and calling upon such holder to surrender to the
Corporation, in the manner and at the place designated, his, her or its
certificate or certificates representing the shares to be redeemed (the
"Redemption Notice"). Except as provided in Subsection 3(c), on or after the
Redemption Date, each holder of Series A Preferred Stock to be redeemed shall
surrender to the Corporation the certificate or certificates representing such
shares, in the manner and at the place designated in the Redemption Notice, and
thereupon the Redemption Price of such shares shall be payable to the order of
the person whose name appears on such certificate or certificates as the owner
thereof and

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                                                                               3

each surrendered certificate shall be canceled. In the event less than all the
shares represented by any such certificate are referenced, a new certificate
shall be issued representing the unredeemed shares.

                  (c) Closing and Effect of Redemption. From and after the
Redemption Date and provided that on or prior to the Redemption Date the
Corporation shall have irrevocably deposited funds for such redemption in trust
for the holders of shares of Series A Preferred Stock to be redeemed, unless
there shall have been a default in payment of the Redemption Price, all rights
of the holders of shares of Series A Preferred Stock designated for redemption
in the Redemption Notice as holders of Series A Preferred Stock (except the
right to receive the Redemption Price without interest upon surrender of their
certificate or certificates) shall cease with respect to such shares, and such
shares shall not thereafter be transferred on the books of the Corporation or be
deemed to be outstanding for any purpose whatsoever. If the funds of the
Corporation legally available for redemption of shares of Series A Preferred
Stock on any Redemption Date are insufficient to redeem the total number of
shares of Series A Preferred Stock to be redeemed on such date, those funds that
are legally available will be used to redeem the maximum possible number of such
shares ratably among the holders of such shares to be redeemed based upon their
holdings of Series A Preferred Stock. The shares of Series A Preferred Stock not
redeemed shall remain outstanding and entitled to all the rights and preferences
provided herein. At any time thereafter when additional funds of the Corporation
are legally available for the redemption of shares of Series A Preferred Stock,
such funds will immediately be used to redeem the balance of the shares which
the Corporation has become obliged to redeem on any Redemption Date but which it
has not redeemed.

         4. Conversion. The holdings of the Series A Preferred Stock shall have
conversion rights as follows (the "Conversion Rights"):

                  (a) Conversion Right. At any time up to and including the
third day prior to the Redemption Date, if any, as may have been fixed in any
Redemption Notice with respect to the Series A Preferred Stock, a holder of
Series A Preferred Stock may convert any or all of such shares into such number
of fully paid and nonassessable shares of Common Stock as is determined by
dividing $1.00 for each share of Series A Preferred Stock (the "Original Series
A Issue Price") by the Conversion Price applicable to such share, determined as
hereafter provided, in effect on the date the certificate is surrendered for
conversion.

                  (b) Procedure for Conversion. Before any holder of Series A
Preferred Stock shall be entitled to convert the same into shares of Common
Stock, such holder shall surrender the certificate or certificates therefor,
duly endorsed, at the office of the Corporation or of any transfer agent for the
Series A Preferred Stock, and shall give written notice to the Corporation at
its principal corporate office, of the election to convert the same and shall
state therein the name

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                                                                               4

or names in which the certificate or certificates for shares of Common Stock are
to be issued. The Corporation shall, as soon as practicable but not later than
fifteen (15) days thereafter, issue and deliver at such office to such holder of
Series A Preferred Stock, or to the nominee or nominees of such holder, a
certificate or certificates for the number of shares of Common Stock to which
such holder shall be entitled as aforesaid. Such conversion shall be deemed to
have been made immediately prior to the close of business on the date of such
surrender of the shares of Series A Preferred Stock to be converted, and the
person or persons entitled to receive the shares of Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock as of such date. If the conversion is in
connection with an underwritten offering of securities registered pursuant to
the Securities Act of 1933, as amended, the conversion may, at the option of any
holder tendering Series A Preferred Stock for conversion, be conditioned upon
the closing with the underwriters of the sale of securities pursuant to such
offering, in which event the person(s) entitled to receive the Common Stock
issuable upon conversion of the Series A Preferred Stock shall not be deemed to
have converted such Series A Preferred Stock until immediately prior to the
closing of such sale of securities.

                  (c) Conversion Price. The Conversion Price of the Series A
Preferred Stock shall equal the greater of (i) one dollar ($1.00 per share), or
(ii) the average price paid by MicroTel International, Inc. for a 57% interest
in Common Stock of the Corporation which brings its total holdings to 100% of
the total outstanding shares of the Common Stock, should such acquisition occur;
provided, however, the Conversion Price shall not in any event exceed $3.00 per
share.

                  (d) Stock Adjustments. If at any time or from time to time
there shall be a recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets transaction provided for elsewhere in
this Subsection 3(d)) provision shall be made so that the holders of the Series
A Preferred Stock shall thereafter be entitled to receive upon conversion of the
Series A Preferred Stock the number of shares of stock or other securities or
property of the Corporation or otherwise, to which a holder of Common Stock
deliverable upon conversion would have been entitled on such recapitalization.
In any such case, appropriate adjustments shall be made in the application of
the provisions of this Subsection 3(d) with respect to the rights of the holders
of the Series A Preferred Stock after the recapitalization to the end that the
provisions of this Subsection 3(d) (including adjustment of the Conversion Price
then in effect and the number of shares purchasable upon conversion of the
Series A Preferred Stock) shall be applicable after that event as nearly
equivalent as may be practicable.

                  (e) No Impairment. The Corporation will not, by amendment of
its Charter or through any reorganization, recapitalization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the

<PAGE>

                                                                               5

terms to be observed or performed hereunder by the Corporation, but will at all
times in good faith assist in the carrying out of all the provisions of this
Subsection 3(c) and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Series A Preferred Stock again impairment.

                  (f) Certificates.

                           (i) No fractional shares shall be issued upon the
         conversion of any share or shares of the Series A Preferred Stock, and
         the number of shares of Common Stock to be issued shall be rounded to
         the nearest whole share.

                           (ii) Upon the occurrence of each adjustment or
         readjustment of the Conversion Price of Series A Preferred Stock
         pursuant to this Subsection 3(f)(ii), the Corporation, at its expense,
         shall promptly compute such adjustment or readjustment in accordance
         with the terms hereof and prepare and furnish to each holder of Series
         A Preferred Stock a certificate setting forth such adjustment or
         readjustment and showing in detail the facts upon which such adjustment
         or readjustment is based. The Corporation shall, upon the written
         request at any time of any holder of Series A Preferred Stock, furnish
         or cause to be furnished to such holder a like certificate setting
         forth (A) such adjustment and readjustment, (B) the Conversion Price
         for such series of Preferred Stock at the time in effect, and (C) the
         number of shares of Common Stock and the amount, if any, of other
         property which at the time would be received upon the conversion of a
         share of Series A Preferred Stock.

         5. Certain Notices. In the event of any taking by the Corporation of a
record of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to (A) receive any dividend (other than a
cash dividend) or other distribution, any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or (B) vote on any reclassification or
recapitalization of the outstanding shares of the Corporation's Common Stock or
merger or consolidation with or into any other corporation or business entity or
sale, lease or conveyance of all or a substantial portion of the Corporation's
property or business or liquidation, dissolution or winding up of the
Corporation, then the Corporation shall deliver by overnight courier to each
holder of Series A Preferred Stock, at least twenty (20) days prior to the
record date specified therein, a notice specifying the date on which any such
record is to be taken and a description of the amount and character of any such
dividend, distribution or right or a description of any such matter to be voted
upon, as applicable.

<PAGE>

                                                                               6

         6. Reservation of Shares. The Corporation shall at all times reserve
and keep available out of its authorized but unissued shares of Common Stock,
solely for the purpose of effecting the conversion of the shares of the Series A
Preferred Stock, such number of its shares of Common Stock as shall from time to
time be sufficient to effect the conversion of all outstanding shares of the
Series A Preferred Stock; and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the conversion
of all then outstanding shares of the Series A Preferred Stock, in addition to
such other remedies as shall be available to the holder of such Preferred Stock,
the Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purposes,
including, without limitation, engaging in best efforts to obtain the requisite
shareholder approval of any necessary amendment to these articles.

         7. Methods of Notice. Any notice required to be given to the holders of
shares of Series A Preferred Stock shall be deemed upon its actual delivery to
the holders of Series A Preferred Stock, by mail, overnight courier or other
means at each shareholder's address as last provided by such shareholders.

         8. Protective Provisions. In addition to any other rights provided by
statute or common law, so long as any shares of Series A Preferred Stock are
outstanding, the Corporation shall not without first obtaining the approval (by
vote or written consent, as provided by law) of the holders of all of the then
outstanding shares of Series A Preferred Stock:

                  (a) alter or change the rights, preferences or privileges of
         the shares of Series A Preferred Stock so as to affect adversely the
         shares;

                  (b) increase or decrease (other than by redemption or
         conversion) the total number of authorized shares of Series A Preferred
         Stock or issue any additional shares of Series A Preferred Stock;

                  (c) authorize or issue, or obligate itself to authorize or
         issue, any other equity security of any class or series, including any
         other security convertible into or exercisable for any such equity
         security having a preference over, or being on a parity with, the
         Series A Preferred Stock with respect to voting, dividends,
         distributions or upon liquidations;

                  (d) declare or pay any dividend (including a dividend payable
         in stock of the Corporation), make any distribution with respect to,
         redeem, purchase or otherwise acquire (or pay into or set aside for a
         sinking fund for such purpose) any share or shares of Preferred Stock
         or Common Stock except as specifically authorized with respect to the
         Series A Preferred Stock; or

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                                                                               7

                  (e) effect any liquidation, dissolution or winding up on the
         Corporation.

         IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
executed by its duly authorized officers of the Corporation this 5th day of
February, 1999.

                              DIGITAL TRANSMISSION SYSTEMS, INC.

                              By: /s/ Andres Salazar
                                  -----------------------------
                                  Name: Andres Salazar
                                  Title:   President and Chief Executive Officer

Attest:

/s/ Clive Marsh
------------------------
Name:    Clive Marsh
Title:   Secretary

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