Document:

DIGITAL LIGHTWAVE EXHIBIT 10.3

 

Exhibit 10.3

                       

(Renewal Inventory Note)

 

This is a renewal promissory note. The document excise tax in the amount prescribed by law has been paid in connection with the promissory note renewed by this note. No additional excise taxes are due on this renewal note. 

PROMISSORY NOTE

DIGITAL LIGHTWAVE, INC.

 

	$2,227,500.00 	
Effective Date: May 11, 2004 

1.    Promise to Pay. Digital Lightwave, Inc. (“Maker” or “Digital”), a Delaware corporation, whose address is 15550 Lightwave Drive, Clearwater, Florida 33760, for value received, promises to pay to the order of Jabil Circuit, Inc. (“Jabil”), a Delaware corporation, at 10560 Dr. Martin Luther King Jr. Street North, St. Petersburg, Florida 33716, or at such other place as the holder of this Note designates in writing to Maker, the principal amount of TWO MILLION, TWO HUNDRED TWENTY-SEVEN THOUSAND, FIVE HUNDRED AND 00/100 DOLLARS (U.S. $2,227,500.00) and to pay interest as required under this Note. 

2.    Interest Rate. Maker shall pay interest on the outstanding principal amount of this Note at a rate of six percent (6%) per year. All interest on this Note will be computed on the basis of the actual number of days elapsed over a 360-day year.

3.    Payments. Maker shall make the following payments on this Note:

 

	a.	On July 1, 2004, Maker shall make a payment of $400,000.
	 	 
	b.	On October 1, 2004, Maker shall make a payment of $400,000.
	 	 
	c.	On December 31, 2005, Maker shall make a final payment of all outstanding principal and unpaid interest.

 

In addition, payments made by Maker to Jabil for certain “Existing Inventory” and any proceeds received from the sale of Existing Inventory to third parties will be credited as payments of principal on this Note as provided for in the Settlement Agreement between Maker and Jabil dated the same date as this Note. The date on which any such principal reduction shall take effect shall be the date of any such payment or the date any such proceeds are received by Jabil.

4.    Application and Form of Payments. Until maturity or an acceleration after default, payments will be applied to principal. At maturity or after acceleration, payments will be applied first to accrued interest and then to principal. Payments of interest and principal must be made in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts. Payments received after 2:00 p.m. will be treated as being received on the next banking day.

5.    Prepayment, Late Fee, Interest on Default, and Maximum Interest. Maker may prepay all or any portion of this Note without penalty. Partial prepayments will be applied against required principal installments in the inverse order of their maturities. Therefore, partial prepayments will not affect the due date of any required installments under this Note until this Note is paid in full. Maker agrees to pay a late fee equal to one percent (1%) of any payment of either principal or interest that is not paid within five (5) days of the date the payment is due. Interest on all amounts not paid when due after maturity, acceleration, or otherwise, will accrue and be payable at the rate of twelve percent (12%) per year. Notwithstanding anything in this Note to the contrary, the annual rate of interest payable on this Note is limited to the maximum rate of interest now allowed by applicable law or any higher rate of interest allowed because of a future amendment to applicable law. If any payment of interest, or any charge in the nature of interest, under this Note would cause the annual interest rate of this Note to exceed this limitation, Jabil shall credit the excess amount as a payment of principal under this Note or, if Maker so requests, return the excess amount to Maker.

6.    Default and Remedies. The occurrence of any of the following events constitutes a “Default”:

 

	a.	the nonpayment when due of any interest or principal under this Note, whether at maturity, by acceleration, or otherwise;
	 	 
	b.	a breach by Maker of any representation, warranty, or covenant contained in this Note or any other agreement between Maker and Jabil;
	 	 
	c.	the initiation of an action or proceeding for the dissolution, termination or liquidation of Maker;
	 	 
	d.	
the insolvency, appointment of a custodian, trustee or receiver for Maker, or Maker files (or any creditor files against Maker) a petition seeking relief under any bankruptcy, insolvency, reorganization, or other debtor relief law;

	

	 
	e.	
A lien not expressly approved in writing by Jabil is placed upon or attaches to any property of Maker, except: (i) liens and security interests of Jabil or Optel LLC; (ii) liens securing the payment of taxes, either not yet overdue or the validity of which are being contested in good faith by appropriate proceedings diligently pursued and available to Maker and with respect to which adequate reserves have been set aside on its books; (iii) non-consensual statutory liens (other than liens securing the payment of taxes) arising in the ordinary course of Maker’s business to the extent: (A) such liens secure indebtedness which is not overdue or (B) such liens secure indebtedness relating to claims or liabilities which are fully insured and being defended at the sole cost and expense and at the sole risk of the insurer or being contested in good faith by appropriate proceedings diligently pursued and available to Maker, in each case prior to the commencement of foreclosure or other similar proceedings and with respect to which adequate reserves have been set aside on its books; (iv) zoning restrictions, easements, licenses, covenants and other restrictions affecting the use of real property which do not interfere in any material respect with the use of such real property or ordinary conduct of the business of Maker as presently conducted thereon or materially impair the value of the real property which may be subject thereto; (v) purchase money security interests in equipment (including capital leases) and purchase money mortgages on real estate not to exceed $50,000 in the aggregate at any time outstanding so long as such security interests and mortgages do not apply to any property of Maker other than the equipment or real estate so acquired, and the indebtedness secured thereby does not exceed the cost of the equipment or real estate so acquired, as the case may be; and (vi) any lien on the property of Maker existing as of the date of this Note; or

	 	 
	f.	
The entry of a judgment or issuance of a writ of execution, garnishment, levy, attachment or similar process related to any judgment for the payment of money against Maker in excess of $50,000 in any one case or in excess of $50,000 in the aggregate and shall remain undischarged or unvacated for a period in excess of thirty (30) days or execution shall at any time not be effectively stayed, or any judgment other than for the payment of money, or injunction, attachment, garnishment or execution is rendered against Maker or any of its assets.

Upon the occurrence of a Default and at any time thereafter, Jabil, at its option and as often as it desires, may declare all liabilities, obligations, and indebtedness, including this Note, to be immediately due and payable without demand, notice, or presentment.

7.    Payment of Costs. Maker shall pay all costs incurred by the holder of this Note in enforcing or collecting this Note and enforcing each agreement executed in connection with this Note (including any agreement under which real or personal property is pledged as security for this Note), including without limitation all attorneys’ fees, costs, and expenses incurred in all matters of interpretation, enforcement, and collection, before, during, and after demand, suit, proceeding, trial, appeal, and post-judgment collection efforts as well as all costs and fees incurred by the holder of this Note in connection with any bankruptcy, reorganization, or similar proceeding (including efforts to obtain relief from any stay) if Maker or any other person or entity liable for the indebtedness represented by this Note becomes involved in any bankruptcy, reorganization, or similar proceeding.

8.    Waiver and Consents. Maker and every other person liable at any time for payment of this Note waives presentment, protest, notice of protest, and notice of dishonor. Maker expressly consents to all extensions and renewals of this Note (as a whole or in part) and all delays in time of payment or other performance under this Note that the holder of this Note grants at any time and from time to time, without limitation and without any notice to or further consent of Maker. Maker agrees that its obligations under this Note are independent of the obligations of any other person or entity that now or later is obligated to pay this Note. Maker also agrees that Jabil may release any security for or other obligor of this Note or waive, extend, alter, amend, or modify this Note or otherwise take any action that varies the risk of Maker without releasing or discharging Maker from Maker’s obligation to repay this Note.

9.    VENUE AND WAIVER OF JURY TRIAL. MAKER FURTHER AGREES THAT VENUE FOR EACH ACTION, SUIT, OR OTHER LEGAL PROCEEDING ARISING UNDER OR RELATING TO THIS NOTE OR ANY AGREEMENT SECURING OR RELATED TO THIS NOTE SHALL BE THE COUNTY COURT OR CIRCUIT COURT LOCATED IN HILLSBOROUGH COUNTY, FLORIDA, AND MAKER HEREBY WAIVES ANY RIGHT TO SUE OR BE SUED IN ANY OTHER COUNTY IN FLORIDA OR ANY OTHER STATE. MAKER AND JABIL KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ALL RIGHTS TO A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR OTHER LITIGATION ARISING UNDER OR RELATING TO THIS NOTE OR ANY AGREEMENT RELATING TO THIS NOTE. MAKER AND JABIL HAVE FULLY DISCUSSED THIS PROVISION AND AGREE THAT THIS WAIVER IS SUBJECT TO NO EXCEPTIONS AND WAS A MATERIAL INDUCEMENT FOR JABIL TO AGREE TO ACCEPT THIS NOTE.

10.    Miscellaneous. The headings preceding the text of the sections of this Note have been inserted solely for convenience of reference and do not limit or affect the meaning, interpretation, or effect of this Note or the sections. The validity, construction, interpretation, and enforceability of this Note are governed by the laws of the State of Florida, excluding its laws relating to the resolution of conflicts of laws of different jurisdictions. Each required notice, consent, or approval, if any, under this Note will be valid only if it is given in writing (or sent by telex, telegram, or telecopy and promptly confirmed in writing) and addressed by the sender to the recipient’s address that is listed in this Note or to such other address as either party may designate by written notice to the other party. A validly given notice, consent, or approval will be effective on receipt if hand delivered to the recipient or the day it (or the written confirmation of it) is postmarked for dispatch by first class, postage prepaid, United States mail. These notice provisions apply only if a notice is required by this Note. They do not apply if no notice is required. This Note is not assignable by Maker.

 

 

	 	DIGITAL LIGHTWAVE, INC.
	 	 
	 	By: /s/ James R. Green
	 	

	 	Name: James R. Green
	 	 
	 	Title: CEODIGITAL LIGHTWAVE EXHIBIT 10.4

 

Exhibit 10.4

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNEC­TION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBU­TION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

SECURED PROMISSORY NOTE

 

	$1,400,000.00	
May 13, 2004

	 	
Clearwater, Florida

For value received, Digital Lightwave, Inc., a Delaware corporation (the “Company”), promises to pay to Optel Capital, LLC (the “Holder”), the principal sum of One Million Four Hundred Thousand Dollars ($1,400,000.00). Interest shall accrue from the date of this Note on the unpaid principal amount at a rate equal to 10.0% per annum, compounded annually. This Note is subject to the following terms and conditions.

1.   Maturity. Principal and any accrued but unpaid interest under this Note shall be due and payable upon demand by the Holder at any time after July 31, 2004 (the “Maturity Date”). Notwithstanding the foregoing, the entire unpaid principal sum of this Note, together with accrued and unpaid interest thereon, shall become immediately due and payable immediately prior to the earlier to occur of (a) a Change of Control (as defined below), (b) the insolvency of the Company, (c) the commission of any act of bankruptcy by the Company, (d) the execution by the Company of a general assignment for the benefit of creditors, (e) the filing by or against the Company of a petition in bankruptcy or any petition for relief under the federal bankruptcy act or the continuation of such petition without dismissal for a period of 90 days or more, or (f) the appointment of a receiver or trustee to take possession of the property or assets of the Company. For purposes of this Note a “Change of Control” shall mean a sale of all or substantially all of the Company’s assets, or any merger or consolidation of the Company with or into another corporation; other than a merger or consolidation in which the holders of more than 50% of the shares of capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by the voting securities remaining outstanding or by their being converted into voting securities of the surviving entity) more than 50% of the total voting power represented by the voting securities of the Company, or such surviving entity, outstanding immediately after such transaction.

2.   Payment; Prepayment. All payments shall be made in lawful money of the United States of America at such place as the Holder hereof may from time to time designate in writing to the Company. Payment shall be credited first to the accrued interest then due and payable and the remainder applied to principal. Prepayment of this Note may be made at any time without penalty.

3.   Transfer; Successors and Assigns. The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. This Note may be transferred only upon surrender of the original Note for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Company. Thereupon, a new note for the same principal amount and interest will be issued to, and registered in the name of, the transferee. Interest and principal are payable only to the registered holder of this Note.

4.   Governing Law. This Note and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Florida, without giving effect to principles of conflicts of law.

5.   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, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such 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.

6.   Amendments and Waivers. Any term of this Note may be amended only with the written consent of the Company and the Holder. Any amendment or waiver effected in accordance with this Section 6 shall be binding upon the Company, each Holder and each transferee of any Note.

7.    Officers and Directors Not Liable. In no event shall any officer or director of the Company be liable for any amounts due or payable pursuant to this Note.

8.   Security Interest. This Note is secured by all of the assets of the Company in accordance with the Fifteenth Amended and Restated Security Agreement among the Company, the Holder and Optel, LLC dated as of the date hereof (the “Security Agreement”). In case of an Event of Default (as defined in the Security Agreement), the Holder shall have the rights set forth in the Security Agreement.

9.   Counterparts. This Note may be executed in any number of counterparts, each of which will be deemed to be an original and all of which together will constitute a single agreement.

10.   Action to Collect on Note. If action is instituted to collect on this Note, the Company promises to pay all costs and expenses, including reasonable attorney’s fees, incurred in connection with such action.

11.   Loss of Note. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Note or any Note exchanged for it, and indemnity satisfactory to the Company (in case of loss, theft or destruction) or surrender and cancellation of such Note (in the case of mutilation), the Company will make and deliver in lieu of such Note a new Note of like tenor.

 

	This Note was entered into as of the date set forth above.	 
	 	COMPANY:
	 	 
	 	DIGITAL LIGHTWAVE, INC.
	 	 
	 	By: /s/ James R. Green
	 	

	 	Name: James R. Green
	 	(print)
	 	
	 	
Title: CEO

	 	 
	 	 
	 	AGREED TO AND ACCEPTED: 
	 	 
	 	OPTEL CAPITAL, LLC
	 	 
	 	By: /s/ Chris Phillips
	 	

	 	Name: Chris Phillips
	 	
(print)

	 	 
	 	Title: CFO

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