Document:

<PAGE>

                                February 19, 2003

                  Re:    SEPARATION AGREEMENT AND RELEASE
                         --------------------------------

Dear Mr. Scott:

         This letter, upon your signature, will constitute the agreement between
you and Digital Lightwave, Inc. ("Digital") on the terms of your separation from
employment with Digital.

         1. Wednesday, February 19, 2003, will be your last day of work. Your
employment terminates effective February 19, 2003 (the "separation date"). After
that date, you therefore will no longer represent to anyone that you are still
an employee of Digital and you will not say or do anything purporting to bind
Digital or any of its affiliates.

         2. You will be paid your earned salary, accrued vacation pay, and all
other amounts Digital owed to you through February 19, 2003.

         3. You are eligible to continue your health benefits under the Digital
Lightwave plans for a period of three (3) months.

         4. You may be entitled to benefits under the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA"). If you elect such coverage, you
shall be responsible for the cost of said coverage.

         5. You have returned or will immediately return to Digital any building
key(s), security pass, or other access or identification cards (including
business cards) and any Digital property that is currently in your possession,
including any credit cards, computer equipment, mobile phones, documents, and
any information you have about Digital's practices, procedures, trade secrets,
customer lists, or product marketing. You will continue to comply with Digital's
Proprietary Information and Inventions Agreement. By no later than February 28,
2003, you will also clear all expense accounts.

         6. You may exercise any vested stock options pursuant to the applicable
Digital Stock Option Plan under which they were granted. Options granted
pursuant to the 1996 Digital Stock Option Plan must be exercised within thirty
(30) days of May 19, 2003, options granted pursuant to the 2001 Digital Stock
Option Plan must be exercised within ninety (90) days of May 19, 2003. Failure
to timely exercise will result in the expiration of any such options.

<PAGE>

Mark Scott
February 19, 2003
Page 2

         7. Although you are not otherwise entitled to it, in consideration of
your acceptance of this Separation Agreement, Digital will provide you with
severance equal to three (3) months of salary at your normal rate for each year
of service. Payment of this amount will be made on Digital's regularly scheduled
payroll dates. The customary payroll deductions shall be made from these
severance payments.

         8. You waive and release and promise never to assert any and all claims
that you have or might have against Digital and its predecessors, subsidiaries,
related entities, officers, directors, shareholders, agents, attorneys,
employees, successors, or assigns, arising from or related to your employment
with Digital and/or the termination of your employment with Digital.

         These claims include, but are not limited to, claims arising under
federal, state and local statutory or common law, such as the Age Discrimination
in Employment Act, Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, the California Fair Employment and Housing Act, the Employee
Retirement and Income Security Act, and the law of contract and tort.

         You also waive and release and promise never to assert any such claims,
even if you do not believe that you have such claims. You therefore waive your
rights under ss. 1542 of the Civil Code of California, or any similar statute of
another state, which provides in words or substance:

          A general release does not extend to claims which the creditor does
          not know or suspect to exist in his favor at the time of executing the
          release, which if known to him must have materially affected his
          settlement with the debtor.

You understand and agree that claims or facts in addition to or different from
those which are now known or believed by you to exist may hereafter be
discovered, but it is your intention to release all claims you have or may have
against Digital, its officers, directors, employees or agents, whether known,
unknown, suspected, or unsuspected.

         9. You affirm that you have not filed or caused to be filed any claim,
complaint or action against Digital in any forum or form, and that you are not
presently a party to any such claim, complaint, or action.

         10. You agree that you will cooperate in providing continued assistance
to the Company for a period of at least thirty days following your separation,
including without limitation assistance in regard to the transition of any job
duties, to the extent such assistance relates to matters which occurred during
your tenure with the Company.

         11. You will not, unless required or otherwise permitted by law,
disclose to others any information regarding the following:

<PAGE>

Mark Scott
February 19, 2003
Page 3

               a. Any information regarding Digital's practices, procedures,
          trade secrets, customer lists, or product marketing. You acknowledge
          that, because of your position with Digital, you have specific
          knowledge of many types of information which is proprietary to
          Digital, including, without limitation, its current and planned
          technology; its current and planned corporate strategies; strategic
          customers and business partners; and the identity, skills and interest
          of its employees. You agree to keep and treat all such proprietary
          information as confidential. You acknowledge and reaffirm your
          obligations to Digital under the Proprietary Information & Invention
          Agreement signed by you, wherein you agreed to keep and treat all such
          proprietary these obligations survive your termination of employment
          with Digital. You also agree that for a period of six months following
          the effective separation date, you will not, directly or indirectly,
          on behalf of yourself or any other person or entity, solicit or
          recruit any employees of Digital, to leave Digital and/or perform work
          or services for another employer.

               b. The terms of this Separation Agreement, the benefit being paid
          under it or the fact of its payment, except that you may disclose this
          information to your attorney, accountant or other professional advisor
          to whom you must make the disclosure in order for them to render
          professional services to you. You will instruct them, however, to
          maintain the confidentiality of this information just as you must.

         12. You further agree that you will not disparage Digital, any of its
affiliates, related entities or any past or present officers, directors or
employees of Digital. You also agree that you will not do or say anything that
damages or impairs in any way the business organization, goodwill, or reputation
of Digital or any of its affiliates or related entities.

         13. Digital agrees that if asked the reason for your separation,
Digital, pursuant to Digital policy, will confirm that the reason is a lay off
due to business conditions and will confirm the dates of employment and normal
rate of pay.

         14. You agree that neither this Separation Agreement and Release, nor
the payment of severance in consideration for this release, shall be deemed or
construed at any time, for any purpose, as an admission by Digital of any
liability or unlawful conduct of any kind.

         15. In the event that you breach any of your obligations under this
Separation Agreement or as otherwise imposed by law, Digital will be entitled to
recover the benefit paid under the Agreement and to obtain all other relief
provided by law or equity.

         16. You and Digital will submit any disputes relating to this Agreement
(other than those relating to intellectual property) to binding arbitration
conducted by the American Arbitration Association in Pinellas County, Florida.

<PAGE>

Mark Scott
February 19, 2003
Page 4

         17. If a court of competent jurisdiction invalidates any part of this
Agreement, the remaining portions will remain in force.

         18. You agree that no promise, inducement or other agreement not
expressly contained in this Separation Agreement or referred to in this
Agreement, has been made conferring any benefit upon you, and that this
Agreement contains the entire agreement between you and Digital with respect to
any benefit conferred upon you. All prior agreements, understandings,
representations, oral agreements and writings are expressly superseded hereby
and are of no further force and effect, and you expressly agree that you are not
relying on any representations that are not contained in this Agreement. This
Agreement is entered into and governed by the laws of the State of Florida.

         19. THE FOLLOWING IS REQUIRED BY THE OLDER WORKERS BENEFIT PROTECTION
ACT:

         YOU HAVE UP TO FORTY-FIVE (45) DAYS FROM THE DATE OF THIS LETTER, OR
APRIL 5, 2003, TO ACCEPT THE TERMS OF THIS SEPARATION AGREEMENT, ALTHOUGH YOU
MAY ACCEPT IT AT ANY TIME WITHIN THOSE FORTY-FIVE (45) DAYS. YOU ARE ADVISED TO
CONSULT AN ATTORNEY ABOUT THE AGREEMENT. DETAILS REGARDING THE POSITIONS AND
AGES OF PERSONS WHO WERE AFFECTED BY THE LAY OFF ARE ATTACHED FOR YOUR
INFORMATION.

         TO ACCEPT THE AGREEMENT, PLEASE SIGN AND DATE THIS LETTER AND RETURN IT
TO ME. (AN EXTRA COPY FOR YOUR FILES IS ENCLOSED.) ONCE YOU SIGN AND DATE THIS
LETTER, YOU WILL HAVE SEVEN (7) CALENDAR DAYS FROM THE DATE YOU SIGN THIS LETTER
IN WHICH TO REVOKE YOUR ACCEPTANCE. TO REVOKE, YOU MUST SEND A WRITTEN STATEMENT
OF REVOCATION, WHICH SHOULD BE MAILED OR FAXED TO: JULIE HAYES AT 15550
LIGHTWAVE DRIVE, CLEARWATER, FLORIDA OR 727-442-4983. IF YOU DO NOT REVOKE, THE
EIGHTH DAY AFTER THE DATE YOU SIGNED AND DATED THIS LETTER WILL BE THE
"EFFECTIVE DATE" OF THE AGREEMENT.

         Mr. Scott, I am pleased that we were able to part ways on these
amicable terms. Digital and I wish you every success in your future endeavors.

                                       Sincerely,

                                       Jim Green
                                       President and Chief Executive Officer

Enclosures

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Mark Scott
February 19, 2003
Page 5

         By signing this letter, I acknowledge that I have had the opportunity
to review this Separation Agreement and Release carefully with an attorney of my
choice; that I understand the terms of the Agreement; and that I voluntarily
agree to them.

Date: ______________________________

                                           -----------------------------------
                                                        Mark Scott<PAGE>

                        SETTLEMENT AGREEMENT AND RELEASE

         This Settlement Agreement and Release ("Agreement") is made as of the
3rd day of January, 2003, by and between Glenn Dunlap ("Dunlap") and Digital
Lightwave, Inc. ("Digital") (collectively, the "Parties").

         1. This Agreement is based on the premises and mutual promises
contained herein. This Agreement is the entire Agreement of the parties
pertaining to its subject matter and supersedes any prior or contemporaneous
negotiations or agreements between the parties, whether written or oral. Each of
the Parties acknowledges representation by counsel throughout all negotiations
which preceded the execution of this Agreement. Each of the Parties acknowledges
that it has not relied on any promise, representation or warranty, expressed or
implied, not contained in this Agreement

         2. On or about February 22, 2001, the Parties entered into a written
employment agreement. On July 27, 2001, the parties entered into a written
addendum to the February 22, 2001 Employment Agreement. On October 2, 2001, the
parties entered a second written addendum to the February 22, 2001 Employment
Agreement. Collectively, these documents shall be referred to hereinafter as
"the Employment Agreement."

         3. On or about January 17, 2003, the Parties mutually agreed to and did
terminate the Employment Agreement.

         4. The Parties mutually desire to reach a full and final settlement and
resolution of all past, present and future claims, controversies and disputes
that Dunlap has or may have against Digital related in any way to his employment
with Digital, including but not limited to any claims he may have regarding the
Employment Agreement.

         5. This Agreement is entered into in connection with the compromise of
all claims between the parties. Neither this Agreement itself nor any acts taken
in connection with it will constitute an admission by either party or any
liability, nor will it constitute or be construed as an admission of any
violation of law or wrongdoing whatsoever.

         6. In consideration of this Agreement, the Parties agree as follows:
Digital agrees to pay Dunlap the sum of $20,000 (Twenty Thousand Dollar and No
Cents) (the "Payment") at a rate $3,333.00 (Three Thousand Three Hundred
Thirty-Three Dollars and No Cents) per month until paid in full. This payment
shall be in lieu of any obligation under the Employment Agreement by Digital for
outplacement services.

         7. The Parties agree that all tax obligations, if any, which may arise
from the Payment set forth above shall be the sole obligation of Dunlap.

         8. This Agreement shall be enforced and interpreted in accordance with
the laws of the State of Florida, without regard to rules for choice of law or
conflicts of law.

<PAGE>

         9. The Parties agree that neither this Agreement, the fact that the
Parties are entering into the settlement reflected herein, nor any of the terms
of this Agreement is or shall be construed as an admission that any claim made
in the Lawsuit is or is not meritorious or that any party has any liability of
any kind to any other party. The Parties agree that they will not directly or
indirectly, expressly, or by implication, assert the Agreement, the settlement
reflected herein, or any of the terms of the Agreement as an admission of merit,
lack of merit, or liability of or by any party.

         10. In consideration for the Agreement and as a full and final mutual
settlement, Dunlap releases and discharges Digital, its successors and assigns,
its current and former directors, officers, employees, principals, attorneys,
and agents, and their successors and assigns, from any and all claims, charges,
complaints, causes of action, or liabilities of any kind or nature whatsoever,
known or unknown, suspected or unsuspected, as to any events, acts or omissions
related in any manner to Dunlap's employment with Digital, as well as any and
all claims, charges, complaints, causes of action ,or liabilities of any kind or
nature as to any events, acts or omissions known or suspected as of the date
Dunlap executes this Agreement.

         11. The Parties understand that the releases contained in this
Agreement extend to all claims of every nature and kind whatsoever, known or
unknown, suspected or unsuspected related in any manner to the subject matter of
Dunlap's employment with Digital. Moreover, each party hereby expressly
acknowledges that each party is waiving all rights under Section 1542 of the
California Civil Code Section 1542 or any similar law of another state providing
in words or substance:

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

         12. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.

         13. This Agreement shall inure to the benefit of and be binding upon
the heirs, representatives, marital communities, successors and assigns of each
of the Parties to it.

         14. If any provision of this Agreement is held to be invalid, void, or
unenforceable, the remaining provisions shall remain in full force and effect.

         15. This document embodies the entire terms and conditions of the
Agreement by and among the Parties to this Agreement. This Agreement may not be
altered or amended except by a writing executed by all the Parties to this
Agreement.

         16. The Parties state that they have carefully read this Agreement,
that they know and understand the content of this Agreement, including the full
and final release of all claims as

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stated above, and that they have signed this Agreement of their own free act and
after having a full, unrestricted opportunity to consult with their own
attorneys. The Parties approve and accept the terms and provisions of this
Agreement and agree to be bound thereby.

         WHEREFORE, the Parties make this Agreement as of the date set forth
above.

                                             ------------------------------
                                             Glenn Dunlap

                                             -------------------------------
                                             James R. Green
                                             President & CEO,
                                             Digital Lightwave, Inc.

                             DIGITAL LIGHTWAVE, INC.

                         EXECUTIVE CONSULTING AGREEMENT

         This Executive Consulting Agreement (the "Agreement") is entered into
by and between Digital Lightwave, Inc. (the "Company") and Glenn Dunlap
("Consultant").

         1. CONSULTING RELATIONSHIP. For the duration of this Agreement,
Consultant will provide consulting services (the "Services") to the Company.
Consultant shall use Consultant's best efforts to perform the Services in a
manner satisfactory to the Company.

         2. FEES; SUPPORT. As consideration for the Services to be provided by
Consultant and other obligations, the Company shall pay to Consultant a salary
of $31,666.67 per month, paid on a semi-monthly basis.

         3. STOCK OPTIONS. All stock options, warrants, rights and other Company
stock-related awards Consultant was previously granted by Company while
Consultant was an employee, to the extent vested as of August 17, 2003, shall
remain exercisable for the lesser of a (1) one year period or the maximum period
permissible under the accounting regulations governing business combinations
following August 16, 2003.

         3. EXPENSES. Consultant shall not be authorized to incur on behalf of
the Company any expenses.

         4. TERM AND TERMINATION. Consultant shall serve as a consultant to the
Company for a period commencing on January 17, 2003, and terminating on August
17, 2003.

                                      -3-
<PAGE>

         5. INDEPENDENT CONTRACTOR. Consultant's relationship with the Company
will be that of an independent contractor and not that of an employee.
Consultant will be eligible for life, disability, accident and group medical and
dental benefits (substantially similar to those Consultant received as employee
prior to this consultancy) paid for by Company through January 16, 2004. From
January 16, 2004, through the term of this Agreement, Consultant will not be
eligible for any employee benefits. [THE COMPANY WILL NOT MAKE DEDUCTIONS FROM
PAYMENTS MADE TO CONSULTANT FOR TAXES, ALL OF WHICH WILL BE CONSULTANT'S
RESPONSIBILITY. CONSULTANT AGREES TO INDEMNIFY AND HOLD THE COMPANY HARMLESS
FROM ANY LIABILITY FOR, OR ASSESSMENT OF, ANY SUCH TAXES IMPOSED ON THE COMPANY
BY RELEVANT TAXING AUTHORITIES.] Consultant will have no authority to enter into
contracts that bind the Company or create obligations on the part of the Company
without the prior written authorization of the Company.

         6. SUPERVISION OF CONSULTANT'S SERVICES. All services to be performed
by Consultant, including but not limited to the Services, will be as agreed
between Consultant and the Company's President & CEO. Consultant will be
required to report to the President & CEO concerning the Services performed
under this Agreement. The nature and frequency of these reports will be left to
the discretion of the President & CEO.

         7. CONFIDENTIALITY AGREEMENT. Consultant shall sign, or has signed, a
Confidential Information and Invention Assignment Agreement prior to or on the
date on which Consultant's consulting relationship with the Company commences.

         8. CONFLICTS WITH THIS AGREEMENT. Consultant represents and warrants
that neither Consultant nor any of Consultant's partners, employees or agents is
under any pre-existing obligation in conflict or in any way inconsistent with
the provisions of this Agreement. Consultant warrants that Consultant has the
right to disclose or use all ideas, processes, techniques and other information,
if any, which Consultant has gained from third parties, and which Consultant
discloses to the Company in the course of performance of this Agreement, without
liability to such third parties. Consultant represents and warrants that
Consultant has not granted any rights or licenses to any intellectual property
or technology that would conflict with Consultant's obligations under this
Agreement. Consultant will not knowingly infringe upon any copyright, patent,
trade secret or other property right of any former client, employer or third
party in the performance of the services required by this Agreement.

         9. MISCELLANEOUS.

               (a) AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended or waived only with the written consent of the parties.

               (b) SOLE AGREEMENT. This Agreement, including the Exhibits
hereto, constitutes the sole agreement of the parties and supersedes all oral
negotiations and prior writings with respect to the subject matter hereof.

               (c) Notices. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient upon receipt, when delivered
personally or by courier, overnight delivery service or confirmed facsimile, 48
hours after being deposited in the regular mail as certified or registered mail
(airmail if sent internationally) with postage prepaid, if such

                                      -4-
<PAGE>

notice is addressed to the party to be notified at such party's address or
facsimile number as set forth below, or as subsequently modified by written
notice.

               (d) CHOICE OF LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Florida, without giving effect to the principles of conflict of laws.

               (e) SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of this
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of this Agreement shall be enforceable in accordance with its terms.

               (f) COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.

               (g) ARBITRATION. Any dispute or claim arising out of or in
connection with any provision of this Agreement, excluding Section 9 and 10
hereof, will be finally settled by binding arbitration in Tampa, Florida in
accordance with the rules of the American Arbitration Association by one
arbitrator appointed in accordance with said rules. The arbitrator shall apply
Florida law, without reference to rules of conflicts of law or rules of
statutory arbitration, to the resolution of any dispute. Judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. Notwithstanding the foregoing, the parties may apply to any court of
competent jurisdiction for preliminary or interim equitable relief, or to compel
arbitration in accordance with this paragraph, without breach of this
arbitration provision. This Section 11(g) shall not apply to the Confidentiality
Agreement.

               (h) ADVICE OF COUNSEL. EACH PARTY ACKNOWLEDGES THAT, IN EXECUTING
THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF
INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND
PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY
PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

         The parties have executed this Agreement on the respective dates set
forth below.

                                      -5-
<PAGE>

                                   Digital Lightwave, Inc.

                                   By:
                                      ------------------------------------------
                                                James Green
                                                President & CEO

                                   Address:  15550 Lightwave Drive
                                               Clearwater, FL  33760

                                   Date:
                                        ----------------------------------------

                                   ---------------------------------------------
                                   Glenn Dunlap (Signature)

                                   Address:
                                           -------------------------------------

                                   Date:
                                        ----------------------------------------

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