Document:

<PAGE>

                                                                    EXHIBIT 10.1

                              INDEMNITY AGREEMENT

          This Indemnity Agreement, dated as of August __, 2000, is made by and
between [ZHONE QSPE NAME], a Delaware corporation (the "Company"), and
__________________ (the "Indemnitee").

                                   RECITALS
                                   --------

          A.  The Company is aware that competent and experienced persons are
increasingly reluctant to serve as directors, officers or agents of corporations
unless they are protected by comprehensive liability insurance or
indemnification, due to increased exposure to litigation costs and risks
resulting from their service to such corporations, and due to the fact that the
exposure frequently bears no reasonable relationship to the compensation of such
directors, officers and other agents.

          B.  The statutes and judicial decisions regarding the duties of
directors and officers are often difficult to apply, ambiguous, or conflicting,
and therefore fail to provide such directors, officers and agents with adequate,
reliable knowledge of legal risks to which they are exposed or information
regarding the proper course of action to take.

          C.  Plaintiffs often seek damages in such large amounts and the costs
of litigation may be so enormous (whether or not the case is meritorious), that
the defense and/or settlement of such litigation is often beyond the personal
resources of directors, officers and other agents.

          D.  The Company believes that it is unfair for its directors, officers
and agents and the directors, officers to assume the risk of huge judgments and
other expenses which may occur in cases in which the director, officer or agent
received no personal profit and in cases where the director, officer or agent
was not culpable.

          E.  The Company recognizes that the issues in controversy in
litigation against a director, officer or agent of a corporation such as the
Company are often related to the knowledge, motives and intent of such director,
officer or agent, that he is usually the only witness with knowledge of the
essential facts and exculpating circumstances regarding such matters, and that
the long period of time which usually elapses before the trial or other
disposition of such litigation often extends beyond the time that the director,
officer or agent can reasonably recall such matters; and may extend beyond the
normal time for retirement for such director, officer or agent with the result
that he, after retirement or in the event of his death, his spouse, heirs,
executors or administrators, may be faced with limited ability and undue
hardship in maintaining an adequate defense, which may discourage such a
director, officer or agent from serving in that position.

          F.  Based upon their experience as business managers, the Board of
Directors of the Company (the "Board") has concluded that, to retain and attract
talented and experienced individuals to serve as directors, officers and agents
of the Company and to encourage such individuals to take the business risks
necessary for the success of the Company, it is necessary for the Company to
contractually indemnify its directors, officers and agents and to assume for
itself maximum liability for expenses and damages in connection with claims
against such

                                       1
<PAGE>

directors, officers and agents in connection with their service to the Company
and has further concluded that the failure to provide such contractual
indemnification could result in great harm to the Company and the Company's
stockholders.

          G.  Section 145 of the General Corporation Law of Delaware, under
which the Company is organized ("Section 145"), empowers the Company to
indemnify its directors, officers, employees and agents by agreement and to
indemnify persons who serve, at the request of the Company, as the directors,
officers, employees or agents of other corporations or enterprises, and
expressly provides that the indemnification provided by Section 145 is not
exclusive.

          H.  The Company desires and has requested the Indemnitee to serve or
continue to serve as a director, officer or agent of the Company free from undue
concern for claims for damages arising out of or related to such services to the
Company.

          I.  Indemnitee is willing to serve, or to continue to serve, the
Company provided that he is furnished the indemnity provided for herein.

                                   AGREEMENT
                                   ---------

          NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:

          1.   Definitions.
               -----------

               (a) Agent.  For the purposes of this Agreement, "agent" of the
                   -----
Company means any person who is or was a director, officer, employee or other
agent of the Company or is or was serving at the request of, for the convenience
of, or to represent the interests of the Company as a director, officer,
employee or agent of another foreign or domestic corporation, partnership, joint
venture, trust or other enterprise; or was a director, officer, employee or
agent of a foreign or domestic corporation which was a predecessor corporation
of the Company, or was a director, officer, employee or agent of another
enterprise at the request of, for the convenience of, or to represent the
interests of such predecessor corporation.

               (b) Expenses.  For purposes of this Agreement, "expenses" include
                   --------
all out-of-pocket costs of any type or nature whatsoever (including, without
limitation, all attorneys' fees and related disbursements), actually and
reasonably incurred by the Indemnitee in connection with either the
investigation, defense or appeal of a proceeding or establishing or enforcing a
right to indemnification under this Agreement or Section 145 or otherwise;
provided, however, that "expenses" shall not include any judgments, fines, ERISA
excise taxes or penalties, or amounts paid in settlement of a proceeding.

               (c) Proceeding.  For the purposes of this Agreement, "proceeding"
                   ----------
means any threatened, pending, or completed action, suit or other proceeding,
whether civil, criminal, administrative, or investigative.

               (d) Subsidiary.  For purposes of this Agreement, "subsidiary"
                   ----------
means any corporation of which more than 50% of the outstanding voting
securities is owned directly or

                                       2
<PAGE>

indirectly by the Company, by the Company and one or more other subsidiaries, or
by one or more other subsidiaries.

          2.   Agreement to Serve.  The Indemnitee agrees to serve and/or
               ------------------
continue to serve as agent of the Company, at its will (or under separate
agreement, if such agreement exists), in the capacity Indemnitee currently
serves as an agent of the Company, so long as he is duly appointed or elected
and qualified in accordance with the applicable provisions of the Bylaws of the
Company or until such time as he tenders his resignation in writing; provided,
however, that nothing contained in this Agreement is intended to create any
right to continued employment by Indemnitee.

          3.   Liability Insurance.
               -------------------

               (a) Maintenance of D&O Insurance.  The Company hereby covenants
                   ----------------------------
and agrees that, so long as the Indemnitee shall continue to serve as an agent
of the Company and thereafter so long as the Indemnitee shall be subject to any
possible proceeding by reason of the fact that the Indemnitee was an agent of
the Company, the Company, subject to Section 3(c), shall promptly obtain and
maintain in full force and effect directors' and officers' liability insurance
("D&O Insurance") in reasonable amounts from established and reputable insurers.

               (b) Rights and Benefits.  In all policies of D&O Insurance, the
                   -------------------
Indemnitee shall be named as an insured in such a manner as to provide the
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's directors, if the Indemnitee is a director; or of the
Company's officers, if the Indemnitee is not a director of the Company but is an
officer; or of the Company's key employees, if the Indemnitee is not a director
or officer but is a key employee.

               (c) Limitation on Required Maintenance of D&O Insurance.
                   ---------------------------------------------------
Notwithstanding the foregoing, the Company shall have no obligation to obtain or
maintain D&O Insurance if the Company determines in good faith that such
insurance is not reasonably available, the premium costs for such insurance are
disproportionate to the amount of coverage provided, the coverage provided by
such insurance is limited by exclusions so as to provide an insufficient benefit
or the Indemnitee is covered by similar insurance maintained by an affiliate of
the Company.

          4.   Mandatory Indemnification.  Subject to Section 9 below, the
               -------------------------
Company shall indemnify the Indemnitee as follows:

               (a) Successful Defense.  To the extent the Indemnitee has been
                   ------------------
successful on the merits or otherwise in defense of any proceeding (including,
without limitation, an action by or in the right of the Company) to which the
Indemnitee was a party by reason of the fact that he is or was an agent of the
Company at any time, against all expenses of any type whatsoever actually and
reasonably incurred by him in connection with the investigation, defense or
appeal of such proceeding.

               (b) Third Party Actions.  If the Indemnitee is a person who was
                   -------------------
or is a party or is threatened to be made a party to any proceeding (other than
an action by or in the right of the Company) by reason of the fact that he is or
was an agent of the Company, or by reason of anything done or not done by him in
any such capacity, the Company shall indemnify the

                                       3
<PAGE>

Indemnitee against any and all expenses and liabilities of any type whatsoever
(including, but not limited to, judgments, fines, ERISA excise taxes and
penalties, and amounts paid in settlement) actually and reasonably incurred by
him in connection with the investigation, defense, settlement or appeal of such
proceeding, provided the Indemnitee acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company
and its stockholders, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful.

               (c) Derivative Actions.  If the Indemnitee is a person who was
                   ------------------
or is a party or is threatened to be made a party to any proceeding by or in the
right of the Company by reason of the fact that he is or was an agent of the
Company, or by reason of anything done or not done by him in any such capacity,
the Company shall indemnify the Indemnitee against all expenses actually and
reasonably incurred by him in connection with the investigation, defense,
settlement, or appeal of such proceeding, provided the Indemnitee acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company and its stockholders; except that no indemnification
under this subsection 4(c) shall be made in respect to any claim, issue or
matter as to which such person shall have been finally adjudged to be liable to
the Company by a court of competent jurisdiction unless and only to the extent
that the court in which such proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such amounts which the court shall deem proper.

               (d) Actions where Indemnitee is Deceased.  If the Indemnitee is a
                   ------------------------------------
person who was or is a party or is threatened to be made a party to any
proceeding by reason of the fact that he is or was an agent of the Company, or
by reason of anything done or not done by him in any such capacity, and if prior
to, during the pendency of after completion of such proceeding Indemnitee
becomes deceased, the Company shall indemnify the Indemnitee's heirs, executors
and administrators against any and all expenses and liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes
and penalties, and amounts paid in settlement) actually and reasonably incurred
to the extent Indemnitee would have been entitled to indemnification pursuant to
Sections 4(a), 4(b), or 4(c) above were Indemnitee still alive.

               (e) Notwithstanding the foregoing, the Company shall not be
obligated to indemnify the Indemnitee for expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes
and penalties, and amounts paid in settlement) for which payment is actually
made to or on behalf of Indemnitee under a valid and collectible insurance
policy of D&O Insurance, or under a valid and enforceable indemnity clause, by-
law or agreement.

          5.  Partial Indemnification.  If the Indemnitee is entitled under any
              -----------------------
provision of this Agreement to indemnification by the Company for some or a
portion of any expenses or liabilities of any type whatsoever (including, but
not limited to, judgments, fines, ERISA excise taxes and penalties, and amounts
paid in settlement) incurred by him in the investigation, defense, settlement or
appeal of a proceeding, but not entitled, however, to indemnification for all of
the total amount hereof, the Company shall nevertheless indemnify the Indemnitee
for such total amount except as to the portion hereof to which the Indemnitee is
not entitled.

                                       4
<PAGE>

          6.   Mandatory Advancement of Expenses.  Subject to Section 8(a)
               ---------------------------------
below, the Company shall advance all expenses incurred by the Indemnitee in
connection with the investigation, defense, settlement or appeal of any
proceeding to which the Indemnitee is a party or is threatened to be made a
party by reason of the fact that the Indemnitee is or was an agent of the
Company. Indemnitee hereby undertakes to repay such amounts advanced only if,
and to the extent that, it shall be determined ultimately that the Indemnitee is
not entitled to be indemnified by the Company as authorized hereby. The advances
to be made hereunder shall be paid by the Company to the Indemnitee within
twenty (20) days following delivery of a written request therefor by the
Indemnitee to the Company.

          7.  Notice and Other Indemnification Procedures.
              -------------------------------------------

              (a) Promptly after receipt by the Indemnitee of notice of the
commencement of or the threat of commencement of any proceeding, the Indemnitee
shall, if the Indemnitee believes that indemnification with respect thereto may
be sought from the Company under this Agreement, notify the Company of the
commencement or threat of commencement thereof.

              (b) If, at the time of the receipt of a notice of the commencement
of a proceeding pursuant to Section 7(a) hereof, the Company has D&O Insurance
in effect, the Company shall give prompt notice of the commencement of such
proceeding to the insurers in accordance with the procedures set forth in the
respective policies. The Company shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of the Indemnitee, all
amounts payable as a result of such proceeding in accordance with the terms of
such policies.

              (c) In the event the Company shall be obligated to pay the
expenses of any proceeding against the Indemnitee, the Company, if appropriate,
shall be entitled to assume the defense of such proceeding, with counsel
approved by the Indemnitee, upon the delivery to the Indemnitee of written
notice of its election so to do. After delivery of such notice, approval of such
counsel by the Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to the Indemnitee under this Agreement for any fees
of counsel subsequently incurred by the Indemnitee with respect to the same
proceeding, provided that (i) the Indemnitee shall have the right to employ his
counsel in any such proceeding at the Indemnitee's expense; and (ii) if (A) the
employment of counsel by the Indemnitee has been previously authorized by the
Company, (B) the Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Company and the Indemnitee in the conduct of
any such defense, or (C) the Company shall not, in fact, have employed counsel
to assume the defense of such proceeding, then the fees and expenses of
Indemnitee's counsel shall be at the expense of the Company.

          8.  Exceptions.  Any other provision herein to the contrary
              ----------
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:

               (a) Claims Initiated by Indemnitee.  To indemnify or advance
                   ------------------------------
expenses to the Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by the Indemnitee and not by way of defense, unless (i) such
indemnification is expressly required to be made by law, (ii) the proceeding was
authorized by the Board, (iii) such indemnification is provided by the Company,
in its sole discretion, pursuant to the powers vested in the Company under

                                       5
<PAGE>

the General Corporation Law of Delaware or (iv) the proceeding is brought to
establish or enforce a right to indemnification under this Agreement or any
other statute or law or otherwise as required under Section 145;

               (b) Lack of Good Faith.  To indemnify the Indemnitee for any
                   ------------------
expenses incurred by the Indemnitee with respect to any proceeding instituted by
the Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous; or

               (c) Unauthorized Settlements.  To indemnify the Indemnitee under
                   ------------------------
this Agreement for any amounts paid in settlement of a proceeding unless the
Company consents to such settlement, which consent shall not be unreasonably
withheld.

          9.  Non-exclusivity.  The provisions for indemnification and
              ---------------
advancement of expenses set forth in this Agreement shall not be deemed
exclusive of any other rights which the Indemnitee may have under any provision
of law, the Company's Certificate of Incorporation or Bylaws, the vote of the
Company's stockholders or disinterested directors, other agreements, or
otherwise, both as to action in his official capacity and to action in another
capacity while occupying his position as an agent of the Company, and the
Indemnitee's rights hereunder shall continue after the Indemnitee has ceased
acting as an agent of the Company and shall inure to the benefit of the heirs,
executors and administrators of the Indemnitee.

          10. Enforcement.  Any right to indemnification or advances granted by
              -----------
this Agreement to Indemnitee shall be enforceable by or on behalf of Indemnitee
in any court of competent jurisdiction if (i) the claim for indemnification or
advances is denied, in whole or in part, or (ii) no disposition of such claim is
made within ninety (90) days of request therefor.  Indemnitee, in such
enforcement action, if successful in whole or in part, shall be entitled to be
paid also the expense of prosecuting his claim.  It shall be a defense to any
action for which a claim for indemnification is made under this Agreement (other
than an action brought to enforce a claim for expenses pursuant to Section 6
hereof, provided that the required undertaking has been tendered to the Company)
that Indemnitee is not entitled to indemnification because of the limitations
set forth in Sections 4 and 8 hereof.  Neither the failure of the Corporation
(including its Board of Directors or its stockholders) to have made a
determination prior to the commencement of such enforcement action that
indemnification of Indemnitee is proper in the circumstances, nor an actual
determination by the Company (including its Board of Directors or its
stockholders) that such indemnification is improper, shall be a defense to the
action or create a presumption that Indemnitee is not entitled to
indemnification under this Agreement or otherwise.

          11.  Subrogation.  In the event of payment under this Agreement, the
               -----------
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.

                                       6
<PAGE>

          12.  Survival of Rights.
               ------------------

               (a) All agreements and obligations of the Company contained
herein shall continue during the period Indemnitee is an agent of the Company
and shall continue thereafter so long as Indemnitee shall be subject to any
possible claim or threatened, pending or completed action, suit or proceeding,
whether civil, criminal, arbitrational, administrative or investigative, by
reason of the fact that Indemnitee was serving in the capacity referred to
herein.

               (b) The Company shall require any successor to the Company
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of the Company, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place.

          13.  Interpretation of Agreement.  It is understood that the parties
               ---------------------------
hereto intend this Agreement to be interpreted and enforced so as to provide
indemnification to the Indemnitee to the fullest extent permitted by law
including those circumstances in which indemnification would otherwise be
discretionary.

          14.  Severability.  If any provision or provisions of this Agreement
               ------------
shall be held to be invalid, illegal or unenforceable for any reason whatsoever,
(i) the validity, legality and enforceability of the remaining provisions of the
Agreement (including without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby, and (ii) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable and to give
effect to Section 13 hereof.

          15.  Modification and Waiver.  No supplement, modification or
               -----------------------
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.

          16.  Notice.  All notices, requests, demands and other communications
               ------
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee or (ii) if mailed by
certified or registered mail with postage prepaid, on the third business day
after the mailing date. Addresses for notice to either party are as shown on the
signature page of this Agreement, or as subsequently modified by written notice.

          17.  Governing Law.  This Agreement shall be governed exclusively by
               -------------
and construed according to the laws of the State of Delaware as applied to
contracts between Delaware residents entered into and to be performed entirely
within Delaware.

          The parties hereto have entered into this Indemnity Agreement
effective as of the date first above written.

                                       7
<PAGE>

                                        [ZHONE QSPE NAME]

                                        _______________________________________

                                        By_____________________________________
                                        Title__________________________________
                                        Address 7677 Oakport Street, Suite 1040
                                                -------------------------------
                                                Oakland, CA 94621
                                                -------------------------------
                                                Attn:__________________________

                                        INDEMNITEE:

                                        _______________________________________
                                        [Indemnitee's Printed Name]
                                        Address________________________________
                                               ________________________________
                                               ________________________________

                                       8<PAGE>

                                                                    EXHIBIT 10.4

                             EMPLOYMENT AGREEMENT
                             --------------------

          THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into on
October 20, 1999, by and between Zhone Technologies, Inc., a Delaware
corporation (the "Company") and Mory Ejabat ("Executive").

          WHEREAS, the Company desires to engage Executive as Chief Executive
Officer ("Title") of the Company and Executive desires to be so engaged by the
Company in such positions, on the terms and conditions set forth and described
herein;

          WHEREAS, the parties desire to enter into this Agreement setting forth
the terms and conditions of the employment relationship of Executive with the
Company.

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties agree as follows:

          1.  Employment.  The Company hereby agrees to employ Executive, and
              ----------
Executive hereby agrees to serve, subject to the provisions of this Agreement,
as an employee of the Company in the position of Chief Executive Officer.
Executive shall perform all services and acts necessary to fulfill the duties
and responsibilities of his position and shall render such services on the terms
set forth herein and shall report to the Company's Board of Directors (the
"Board of Directors").  In addition, Executive shall have such other executive
and managerial powers and duties with respect to the Company as may reasonably
be assigned to him by the Board of Directors, to the extent consistent with his
positions and status as set forth above.  Except as otherwise approved by a
majority of the Board of Directors, Executive agrees to devote all his business
time, attention and energies to the performance of the duties assigned
hereunder, and to perform such duties diligently, faithfully and to the best of
his abilities.  Except as otherwise approved by a majority of the Board of
Directors, Executive agrees to refrain from any business activity that does',
will or could reasonably be deemed to materially conflict with the best
interests of the Company.

          2.  Term.  The term of Executive's employment pursuant to this
              ----
Agreement is for the four-year period (the "Term") commencing on the date hereof
and terminating on the fourth anniversary of such date, or upon the date of
earlier termination of employment pursuant to Section 8 of this Agreement;
provided, however, that commencing on the fourth anniversary of the date hereof
and each anniversary thereafter the Term shall automatically be extended for one
additional year unless, not later than 90 days prior to any such anniversary,
either party hereto shall have notified the other party in writing hereto that
such extension shall not take effect.

          3.  Place of Performance.  The Executive shall perform his duties and
              --------------------
conduct his business at the principal executive offices of the Company, except
for required travel on the Company's business.

                                       1
<PAGE>

          4.  Compensation.
              ------------

              (a) Salary. Executive's salary shall be determined on at least an
                  ------
annual basis by the Compensation Committee of the Board of Directors (the
"Annual Salary") and payable in accordance with the Company's regular payroll
practices.  All applicable withholding taxes shall be deducted from such
payments.

              (b) Bonus.  During each year of the Term, the Board of Directors
                  -----
shall review the Executive's performance, and may, in its sole discretion, cause
to be paid to Executive a bonus in addition to the Annual Salary.

          5.  Business Expenses.  During the Term, the Company will reimburse
              -----------------
Executive for all ordinary and necessary business expenses incurred by him in
connection with his employment upon timely submission by the Executive of
receipts and other documentation in conformance with the Company's normal
procedures.

          6.  Vacation, Holidays and Sick Leave.  During the Term, Executive
              ---------------------------------
shall be entitled to paid vacation, paid holidays and sick leave in accordance
with the Company's standard policies for its officers.

          7.  Benefits.  During the Term, Executive shall be eligible to
              --------
participate fully in all health benefits, insurance programs, pension and
retirement plans and other employee benefit and compensation arrangements
(collectively, the "Employee Benefits") available to officers of the Company
generally.

          8.  Termination of Employment.
              -------------------------

              (a)  Notwithstanding any provision of this Agreement to the
contrary, employment of Executive hereunder shall terminate on the first to
occur of the following dates:

                   (i)    the date of Executive's death or adjudicated
incompetency;

                   (ii)   the date on which Executive shall have experienced a
Disability (as defined below), and the Company gives Executive notice of
termination on account of Disability;

                   (iii)  the date on which Cause (as defined below) exists for
Executive's termination;

                   (iv)   expiration of the Term;

                   (v)    the date on which the Company shall give Executive
notice of termination for any reason other than the reasons set forth in (1)
through (iv) above;

                   (vi)   the date on which Good Reason (as defined below)
exists for Executive's termination; or

                   (vii)  the date on which Executive gives the Company notice
of termination for a reason other than Good Reason.

                                       2
<PAGE>

          (b)  For purposes of this Agreement, "Disability" shall mean an
illness, injury or other incapacitating condition as a result of which Executive
is substantially unable to perform the services required to be performed under
this Agreement for (i) one hundred eighty (180) consecutive days during the
Term; or (ii) a period or periods aggregating more than two hundred forty (240)
days in any period of twelve (12) consecutive months during the Term.  In the
event the Company seeks to terminate Executive's employment due to Disability,
the Company shall give notice to Executive of the termination of Executive's
employment for Disability.  Executive agrees to submit to such medical
examinations as may be necessary to determine whether a Disability exists,
pursuant to such reasonable requests made by the Company from time to time.  Any
determination as to the existence of a Disability shall be made by a physician
approved by the Board of Directors and by Executive (or, if Executive is unable
to give such approval, by Executive's representative), which approval shall not
be unreasonably withheld by the Board of Directors or Executive.

          (c)  For purposes of this Agreement, "Cause" shall mean the occurrence
of any of the following events:

               (i)   The reasonable determination of the Board of Directors that
Executive has willfully or continually failed to substantially perform his
duties with the Company.

Notwithstanding the foregoing, Cause shall only exist under this Section 8(c)(i)
if:

                     (A) the Board of Directors has given Executive written
notice that it has reasonably determined Executive has willfully or continually
failed to substantially perform his duties with the Company, which notice shall
identify with specificity the duties the Board of Directors has reasonably
determined Executive to have willfully or continually failed to substantially
perform; and

                     (B) at the end of the period ending sixty (60) days from
the date on which the notice in Section 8(c)(i)(A) is given by the Board of
Directors to Executive, the Board of Directors reasonably determines that
Executive has failed to cure the willful or continual failure to substantially
perform his duties identified with specificity in the written notice described
in Section 8(c)(i)(A);

               (ii)  Executive's conviction of, guilty plea to, or entry of a
nolo contendere plea to a felony.

Notwithstanding the foregoing, the parties acknowledge and agree that:

                     (A) at the end of two hundred seventy (270) days from the
date of the finding of an indictment or filing of an information against
Executive for a felony, any vesting of the "Unvested Interest" described in the
Class B Member Interest Purchase Agreement shall be suspended pending the
outcome of the criminal proceedings, including the appeals. If, subsequent to
the finding of indictment or filing of information, (1) Executive is found not
guilty of the felony charge, (2) the felony charge against Executive is
dismissed for any reason, or (3) a conviction of Executive for the felony is
reversed or vacated on appeal, any unvested portions of

                                       3
<PAGE>

the "Unvested Interest" described in the Class B Member Interest Purchase
Agreement shall immediately vest.

               (iii)  The reasonable determination of the Board of Directors
that Executive has engaged in willful or reckless misconduct that has caused or
is reasonably likely to cause demonstrable and material financial injury to the
Company.

Notwithstanding the foregoing, Cause shall only exist under this Section
8(c)(iii) if.

                      (A) the Board of Directors has given Executive written
notice that the Board of Directors has reasonably determined that Executive has
committed willful or reckless misconduct which has caused or is reasonably
likely to cause demonstrable and material financial injury to the Company, which
notice shall identify with specificity the willful or reckless misconduct the
Board of Directors has reasonably determined Executive to have committed; and

                      (B) at the end of the period ending sixty (60) days after
the date on which the notice described in Section 8(c)(iii)(A) is given by the
Board of Directors to Executive, the Board of Directors reasonably determines
that Executive has failed to cure the willful or reckless misconduct identified
with specificity in the notice described in Section 8(c)(iii)(A); or

               (iv)   Executive's willful and material breach of Sections 11,
12, or 13 of this Agreement;

Notwithstanding the foregoing, Cause shall only exist under this Section
8(c)(iv) only if

                      (A) the Board of Directors have given written notice to
Executive of their intent to terminate Executive for Executive's willful and
material breach of Section 11, 12, or 13 of this Agreement; and

               (v)    Executive has failed to cure the adverse effects of
Executive's willful and material breach of Section 11, 12, or 13 of this
Agreement within the time period afforded Executive in the Board of Directors'
notice described in Section 8(c)(iv)(A), which time period shall be no less than
sixty (60) days after the Company provides Executive with notice of the Board of
Directors' intent to terminate Executive for Cause.

For purposes of Sections 8(c)(i), (iii) and (iv), an act on Executive's part
shall not be deemed "willful," "reckless," or "continual" if done by Executive
in good faith and with reasonable belief that the act was in the best interest
of the Company.

          (d)  For purposes of this Agreement, "Good Reason" shall mean the
occurrence of any of the following events, as reasonably determined by
Executive:

               (i)    if anyone other than Executive is asked to report to the
Board of Directors, except where Executive has been temporarily replaced by
another executive or director of the Company when Executive is incarcerated or
incapacitated due to illness, injury or other incapacitating condition;

                                       4
<PAGE>

               (ii)   a failure by the Company to pay Executive any portion of
his total Annual Salary in a timely manner;

               (iii)  a reduction by the Company of Executive's total Annual
Salary;

               (iv)   the Company's breach of any material term of this
Agreement; or

               (v)    the relocation of the Company's principal executive
offices more than 50 miles from Oakland, California.

Notwithstanding the foregoing, Good Reason shall only exist if Executive shall
-----------------------------
have provided the Company with notice of the existence of Good Reason, and the
Company fails to eliminate the conditions constituting Good Reason within
fifteen (15) days after Executive gives the Company such notice.

     9.   Compensation in Event of Termination.  Upon termination of the Term
          ------------------------------------
for any reason, the Company shall have no further obligation to Executive except
to pay the amounts set forth in this Section 9.

          (a)  In the event Executive's employment is terminated pursuant to
Sections 8(a)(i), (ii), (iii) (iv), or (vii) during or at the expiration of the
Term, Executive or his estate, conservator or designated beneficiary, as the
case may be, shall be entitled to payment of any earned but unpaid Annual Salary
through the date of termination, as well as any accrued vested benefits to which
Executive is entitled.  Following any such termination, neither Executive nor
his estate, conservator or designated beneficiary shall be entitled to receive
any other payment provided for hereunder with respect to any period after such
termination, except as Executive may otherwise be entitled pursuant to any
employee benefit plan.

          (b)  In the event Executive's employment is terminated pursuant to
Section 8(a)(v) or (vi) during the Employment Term, Executive shall be entitled
to receive, as his sole and exclusive remedy, (x) payment of any earned but
unpaid Annual Salary through the date of termination, as well as any accrued
vested benefits to which Executive is entitled and (y) a lump sum payment equal
to the Annual Salary that Executive would have been entitled to receive had he
continued his employment hereunder for the balance of the Term.

     10.  Representations.
          ---------------

          (a)  The Company represents and warrants that this Agreement has been
authorized by all necessary corporate action of the Company and is a valid and
binding agreement of the Company enforceable against them in accordance with its
terms.

          (b)  The Executive represents and warrants that he is not a party to
any agreement or instrument which would prevent him from entering into or
performing his duties in any way under this Agreement.

                                       5
<PAGE>

     11.  Disclosure and Assignment of Inventions.
          ---------------------------------------

          (a)  Executive has provided on Exhibit A, attached hereto, a list
                                         ---------
describing all inventions, original works of authorship, developments,
improvements, and trade secrets which were made by Executive prior to employment
with the Company, which belong to Executive alone or jointly with others, which
relate to the Company's proposed business, products or research and development,
and which are not assigned to the Company; if "none" is stated on Exhibit A,
                                                                  ---------
Executive therefore represents that there are no such inventions, works of
authorship, developments, improvements or trade secrets.

          (b)  Executive agrees to promptly make full written disclosure to the
Company, will hold in trust for the sole right and benefit of Company, and
hereby assigns to Company all right, title, and interest in and to any and all
inventions (and patent rights with respect thereto), original works of
authorship (including all copyrights with respect thereto), developments,
improvements or trade secrets which Executive may solely or jointly conceive or
develop or reduce to practice, or cause to be conceived or developed or reduced
to practice during the Term.

          (c)  Executive understands that the provisions of this Agreement
requiring assignment to the Company do not apply to any invention made by an
employee of the Company which qualifies fully under the provisions of Section
2870 of the California Labor Code which provides:

          "(a) Amy provision in an employment agreement which provides
          that an employee shall assign, or offer to assign, any of
          his or her rights in an invention to his or her employer
          shall not apply to an invention that the employee developed
          entirely on his or her own time without using the employer's
          equipment, supplies, facilities, or trade secret information
          except for those inventions that either: (1) Relate at the
          time of conception or reduction to practice of the invention
          to the employer's business, or actual or demonstrably
          anticipated research or development of the employer; or (2)
          Result from any work performed by the employee for the
          employer. (b) To the extent a provision in an employment
          agreement purports to require an employee to assign an
          invention otherwise excluded from being required to be
          assigned under Subdivision (a), the provision is against the
          public policy of this state and is unenforceable."

Executive agrees to advise the Company promptly in writing of any inventions
that he believes meet the criteria of Section 2870 of the California Labor Code,
and will also provide at that time to the Company in writing all evidence
necessary to substantiate that belief.  The Company will keep in confidence and
will not disclose to third parties without Executive's consent any confidential
information disclosed in writing to the Company relating to inventions that
qualify full under the provisions of Section 2870 of the California Labor Code.

                                       6
<PAGE>

     12.  Confidentiality.  Executive acknowledges that in his employment
          ---------------
hereunder he will occupy a position of trust and confidence.  The Executive
covenants and agrees that he will not at any time during and after the end of
the Term, directly or indirectly, use for his own account, or disclose to any
person, firm or corporation, other than authorized officers, directors and
employees of the Company or its subsidiaries, Confidential Information (as
hereinafter defined) of the Company and its subsidiaries or affiliates.  As used
herein, "Confidential Information" means information about the Company and its
subsidiaries or affiliates of any kind, nature or description, including but not
limited to, any proprietary knowledge, trade secrets, data, formulae,
information and client and customer lists and all papers, resumes, and records
(including computer records) which is disclosed to or otherwise known to the
Executive as a direct or indirect consequence of his association with the
Company, which information is not generally known to the public or in the
businesses in which the Company is engaged or which information relates to
specific investment opportunities within the scope of the Company's business
which were considered by the Executive or the Company during the term of this
Agreement.  Executive acknowledges that such Confidential Information is
specialized, unique in nature and of great value to the Company and its
subsidiaries, and that such information gives the Company and its subsidiaries a
competitive advantage.  Executive agrees to deliver or return to the Company, at
the Company's request at any time or upon termination or expiration of his
employment or as soon thereafter as possible, all documents, computer tapes and
disks, records, lists, data, drawings, prints, notes and written information
(and all copies thereof) furnished by the Company and its subsidiaries or
affiliates or prepared by Executive during the term of his employment by the
Company and its subsidiaries or affiliates.

     13.  Nonsolicitation.
          ---------------

          (a) Customers and Suppliers.  During the Term and, for a period of
              -----------------------
nine (9) months beyond the expiration of the Term, Executive shall not, directly
or indirectly, influence or attempt to influence customers or suppliers of the
Company or any of its subsidiaries or affiliates to divert their business to any
competitor of the Company.

          (b) Employees.  Executive recognizes that he will possess confidential
              ---------
information about other employees of the Company and its subsidiaries and
affiliates relating to their education, experience, skills, abilities,
compensation and benefits, and inter-personal relationships with customers of
the Company and its subsidiaries and affiliates.  Executive recognizes that the
information he will possess about these other employees is not generally known,
is of substantial value to the Company and its subsidiaries in developing its
business and in securing and retaining customers, and will be acquired by him
because of his business position with the Company and its subsidiaries and
affiliates.  Executive agrees that, during the Term and for a period of nine (9)
months beyond the expiration of the Term, he will not, directly or indirectly,
induce, solicit or recruit any employee of the Company or its subsidiaries or
affiliates for the purpose of being employed by him or by any competitor of the
Company on whose behalf he is acting as an agent, representative or employee,
and that he will not convey any such confidential information or trade secrets
about other employees of the Company and its subsidiaries or affiliates to any
other person.

          (c) Reasonableness of Relief; Blue Penciling.  Executive acknowledges
              ----------------------------------------
and agrees that the covenants and agreements contained herein are reasonable and
valid in

                                       7
<PAGE>

geographic and temporal scope and in all other respects and are reasonably
necessary to protect the Company. If any court determines that any of the
covenants and Agreements contained herein, or any part thereof, is unenforceable
because of the duration or geographic scope of such provision, such court shall
have the power to reduce the duration or scope of such provision, as the case
may be, and, in its reduced form, such provision shall then be enforceable to
the maximum extent permitted by applicable law.

     14.  Rights and Remedies upon Breach.  In the event Executive breaches, or
          -------------------------------
threatens to commit a breach of, any of the provisions of this Agreement, the
Company and its subsidiaries, affiliates, successors or assigns shall have the
following rights and remedies, each of which shall be independent of the others
and severally enforceable, and each of which shall be in addition to, and not in
lieu of, any other rights or remedies available to the Company or its
subsidiaries, affiliates, successors or assigns at law or in equity under this
Agreement or otherwise:

          (a) Specific Performance.  The right and remedy to have each and every
              --------------------
one of the covenants in this Agreement specifically enforced and the right and
remedy to obtain injunctive relief, it being agreed that any breach or
threatened breach of any of the nonsolicitation or other restrictive covenants
and agreements contained herein would cause irreparable injury to the Company
and its subsidiaries, affiliates, successors or assigns and that money damages
would not provide an adequate remedy at law to the Company and its subsidiaries,
affiliates, successors or assigns.

          (b) Accounting.  The right and remedy to require Executive to account
              ----------
for and pay over to the Company and its subsidiaries, affiliates, successors or
assigns, as the case may be, all compensation, profits, monies, accruals,
increments or other benefits derived or received by Executive that result from
any transaction or activity constituting a breach of this Agreement.

          (c) Enforceability in all Jurisdictions.  Executive intends to and
              -----------------------------------
hereby confers jurisdiction to enforce each and every one of the covenants and
agreements contained herein upon the courts of any jurisdiction within the
geographic scope of such covenants and agreements.  If the courts of any one or
more of such jurisdictions hold any such covenant or agreement unenforceable by
reason of the breadth or such scope or otherwise, it is the intention of
Executive and the Company that such determination shall not bar or in any way
affect the Company's or any of its subsidiaries', Affiliates', successors' or
assigns' right to the relief provided above in the courts of any other
jurisdiction within the geographic scope of such covenants and agreements, as to
breaches of such covenants and agreements in such other respective
jurisdictions, such covenants and agreements as they relate to each jurisdiction
being, for this purpose, severable into diverse and independent covenants and
agreements.

     15.  Key Person Insurance.  Upon Executive passing any required physical
          --------------------
examination, the Company shall use reasonable efforts to procure and keep at its
expense an insurance policy or policies on the life of Executive in an amount of
$100,000,000, or such lesser amount as the Board of Directors may determine,
payable to such beneficiaries as the Company may from time to time designate.
Such policies shall be owned by the Company, and Executive shall cooperate in
the obtaining of all such insurance policies as the Company may desire to

                                       8
<PAGE>

apply for and own for its own purposes. This insurance is in addition to any
group life coverage which may be provided to Executive by the Company.

          16.  Binding Agreement.  This Agreement is a personal contract and the
               -----------------
rights and interests of the Executive hereunder may not be sold, transferred,
assigned, pledged, encumbered, or hypothecated by him.  This Agreement shall
inure to the benefit of and be enforceable by the Executive and his personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.  If the Executive should die while any
amount would still be payable to him hereunder had the Executive continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to his devisee, legatee or other
designee or, if there is no such designee, to his estate.

          17.  Return of Company Property.  Executive agrees that following the
               --------------------------
termination of his employment for any reason, he shall return all property of
the Company, its subsidiaries, affiliates and any divisions thereof he may have
managed which is then in or thereafter comes into his possession, including, but
not limited to, documents, contracts, agreements, plans, photographs, books,
notes, electronically stored data and all copies of the foregoing as well as any
materials or equipment supplied by the Company to Executive.

          18.  Entire Agreement.  This Agreement contains all the understandings
               ----------------
between the parties hereto pertaining to the matters referred to herein, and
supersedes all undertakings and agreements, whether oral or in writing,
previously entered into by them with respect thereto.  Executive represents
that, in executing this Agreement, he does not rely and has not relied upon any
representation or statement not set forth herein made by the Company with regard
to the subject matter, bases or effect of this Agreement or otherwise.

          19.  Amendment or Modification, Waiver.  No provision of this
               ---------------------------------
Agreement may be amended or waived unless such amendment or waiver is agreed to
in writing, signed by Executive and by a duly authorized officer of the Company.
The failure of either party to this Agreement to enforce any of its terms,
provisions or covenants shall not be construed as a waiver of the same or of the
right of such party to enforce the same.  Waiver by either party hereto of any
breach or default by the other party of any term or provision of this Agreement
shall not operate as a waiver of any other breach or default.

          20.  Notices.  Any notice to be given hereunder shall be in writing
               -------
and shall be deemed given when delivered personally, sent by courier or fax or
registered or certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such other
address as such party may subsequently give notice of hereunder in writing:

                                       9
<PAGE>

          To Executive at:

               Mory Ejabat
               369 Marina Blvd.
               San Francisco, CA 94123

          To the Company at:

               Zhone Technologies, Inc.
               7677 Oakport Street, Suite 1040
               Oakland, CA 94621
               Fax:  (510) 777-7010

Any notice delivered personally or by courier under this Section 20 shall be
deemed given on the date delivered and any notice sent by telecopy or registered
or certified mail, postage prepaid, return receipt requested, shall be deemed
given on the date telecopied or mailed.

          21.  Severability.  In the event that any one or more of the
               ------------
provisions of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remainder of the
Agreement shall not in any way be affected or impaired thereby.  Moreover, if
any one or more of the provisions contained in this Agreement shall be held to
be excessively broad as to duration, activity or subject, such provisions shall
be construed by limiting and reducing them so as to be enforsceable to the
maximum extent allowed by applicable law.

          22.  Survivorship.  The respective rights and obligations of the
               ------------
parties hereunder, including but not limited to Executive's obligations under
Sections 12 and 13, shall survive any termination of this Agreement to the
extent necessary to the intended preservation of such rights and obligations.

          23.  Each Party the Drafter.  This Agreement and the provisions
               ----------------------
contained in it shall not be construed or interpreted for or against any party
to this Agreement because that party drafted or caused that party's legal
representative to draft any of its provisions.

          24.  Governing Law.  This contract shall be governed by the laws of
               -------------
the State of California as they are applied to contracts between California
residents to be performed completely within California.

          25.  Binding Arbitration.  Except as provided in Section 14(a) of this
               -------------------
Agreement, the parties agree that any disputes arising out of or related to this
Agreement shall be settled by binding arbitration, and judgment upon the award
may be entered in any court having jurisdiction.  The arbitration shall be in
Palo Alto, California and in accordance with the rules of the Judicial
Arbitration and Mediation Services/Endispute in San Francisco, California.  A
single arbitrator shall be selected according to the corresponding arbitration
rules within thirty (30) days of submission of the dispute to the arbitrator.
The arbitrator shall conduct the arbitration in accordance with the California
Evidence Code.  Except as expressly provided above, no discovery of any kind
shall be taken by either party without the written consent of the other party,
provided, however, that any party may seek the arbitrator's permission to take
any

                                       10
<PAGE>

deposition which is necessary to preserve the testimony of a witness who either
is, or may become, outside the subpoena power of the arbitrator or otherwise
unavailable to testify at the arbitration. The arbitrator shall have the power
to enter any award that could be entered by a Judge of the Superior Court of the
State of California sitting without a jury, and only such power, except that the
arbitrator shall not have the power to award punitive damages, treble damages,
or any other damages which are not compensatory, even if permitted under the
laws of the State of California or any other applicable law. The arbitration
award may be enforced in any court having jurisdiction over the parties and the
subject matter of the arbitration.

Notwithstanding the forgoing, the parties irrevocably submit to the non-
exclusive jurisdiction of the Superior Court of the State of California, Santa
Clara County, and the United States District Court for the Northern District of
California, Branch nearest to Palo Alto, California, in any action to enforce an
arbitration award.  Each party further agrees that personal jurisdiction over it
may be effected by service of process by registered or certified mail addressed
as provided in Section 20 of this Agreement, and that when so made shall be as
if served upon it personally within the State of California.

          26.  Attorney Fees.  In the event that any dispute between the Company
               -------------
and Executive should result in arbitration, the arbitrator may award to one or
more of the Prevailing Persons such reasonable attorney fees, costs and
expenses, as determined by the arbitrator.  Any judgment or order enforcing such
arbitration may, in the discretion of the court entering such judgment or order
contain, a specific provision providing for the recovery of attorney fees and
costs incurred in enforcing such judgment or order and an award of prejudgment
interest from the date of the breach at the maximum rate of interest allowed by
law.  For the purposes of this Section 26:

               (a)  "attorney fees" shall include, without limitation, attorney
fees incurred in the following:

                    (i)    arbitration;

                    (ii)   post-arbitration order or judgment motions;

                    (iii)  contempt proceedings;

                    (iv)   garnishment, levy, and debtor and third party
examinations;

                    (v)    discovery; and

                    (vi)   bankruptcy litigation;

               (b)  "Prevailing Person" shall mean any person who is determined
by the arbitrator in the proceeding to have prevailed or who prevails by
dismissal, default or otherwise.

          27.  Headings.  All descriptive headings of sections and paragraphs in
               --------
this Agreement are intended solely for convenience, and no provision of this
Agreement is to be construed by reference to the heading of any section or
paragraph.

                                       11
<PAGE>

          28.  Counterparts.  This Agreement may be executed in counterparts,
               ------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.

ZHONE TECHNOLOGIES, INC.                    EXECUTIVE

By: /s/ Jeanette Symons                     /s/ Mory Ejabat
    -----------------------------------     ------------------------------------

                                       12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}]]