Document:

Loan and Restructuring Agreement

 Exhibit 10.1 
  
 EXECUTION COPY 
  

  
 LOAN AND RESTRUCTURING AGREEMENT

  
 BETWEEN 
  
 DIGITAL LIGHTWAVE, INC.

  
 AND 
  
 OPTEL CAPITAL, LLC 
  
 SEPTEMBER 16, 2004 
  

 LOAN AND RESTRUCTURING AGREEMENT 
  
 This Loan and Restructuring Agreement (this “Agreement”) is
entered into as of September 16, 2004, by and between Digital Lightwave, Inc., a Delaware corporation (“Borrower”), and Optel Capital, LLC, a Delaware limited liability company (“Lender”). 
  
 RECITALS 
  
 A. Whereas Lender and/or Optel, LLC has advanced funds to Borrower pursuant
to those several secured promissory notes listed on Schedule A attached hereto (the “Prior Secured Promissory Notes”); 
  
 B. Whereas Lender has acquired all Prior Secured Promissory Notes originally made payable to Optel, LLC pursuant to various allonges entered into between
Lender and Optel, LLC; 
  
 C. Whereas as of the date hereof, (i)
the total outstanding principal amount owed by Borrower to Lender pursuant to the Prior Secured Promissory Notes equals $25,650,000 (collectively, the “Outstanding Principal”), all of which is currently due and payable in full upon
demand by Lender at any time, and (ii) the total outstanding accrued and unpaid interest thereon equals $1,972,305.69 (the “Outstanding Interest,” and collectively with the Outstanding Principal, the “Outstanding
Debt”); 
  
 D. Whereas, Borrower currently has
insufficient capital resources to satisfy the Outstanding Debt and desires that Lender restructure such debt and advance Borrower additional proceeds to fund its short-term working capital needs; 
  
 E. Whereas, in order to induce Lender to restructure the Outstanding Debt and
make the new advance, Lender desires to make the Outstanding Debt and new advance convertible into Common Stock on the terms and subject to the conditions set forth herein. 
  
 AGREEMENT 
  
 In consideration of the mutual promises contained herein and other good and valuable consideration, receipt of which is hereby acknowledged, the parties
to this Agreement agree as follows: 
  
 1.
Definitions. As used in this Agreement, the following terms have the following meanings: 
  
 “Accredited Investor” means an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

  
 “Affiliate” means, with respect to any
Person, a relative, partner, shareholder, director, officer, or employee of such Person, or any parent or subsidiary of such Person, or any Person controlling, controlled by or under common control with such Person. 
  
 “Borrower” has the meaning set forth in the introductory
paragraph. 

 “Borrower’s Address” means 15550 Lightwave Drive, Clearwater, FL 33760. 

 
 “Business Day” means a day other than a Saturday or a
Sunday on which financial institutions in Clearwater, Florida are open for business. 
  
 “Bylaws of Borrower” means the bylaws of the Borrower, as amended from time to time. 
  
 “Cash” means all cash, money, currency, and liquid funds, wherever held, in which Borrower now or hereafter acquires any right, title, or
interest. 
  
 “Certificate of Amendment” means
the certificate of amendment of Borrower. 
  
 “Certificate
of Incorporation” means the certificate of incorporation of Borrower, as amended from time to time. 
  
 “Change of Control” means a sale of all or substantially all of Borrower’s assets, or any merger or consolidation of Borrower with
or into another corporation; other than a merger or consolidation in which the holders of the shares of capital stock of Borrower 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 Borrower, or such surviving entity, outstanding immediately after such
transaction. 
  
 “Closing” means the action,
execution and delivery of such agreements and other instruments and documents as necessary or appropriate to effect the transactions contemplated by this Agreement and the other Credit Documents in accordance with the terms hereof and thereof.

  
 “Closing Date” has the meaning set forth in
Section 2.4. 
  
 “Collateral” has the meaning set
forth in the Security Agreement. 
  
 “Common
Stock” means the common stock, par value $0.0001 per share, of Borrower. 
  
 “Compliance Certificate” has the meaning set forth in Section 5.3. 
  
 “Conversion Feature” has the meaning set forth in Section 2.3(a). 
  
 “Conversion Price” means 100% of the average of the daily volume-weighted average price of Common Stock
quoted or traded on the Nasdaq National Market or the Nasdaq Small Cap Market (or, if the Common Stock is not quoted or traded on the Nasdaq National Market or the Nasdaq Small Cap Market at the time of conversion, such other primary market on which
the Common Stock is quoted or traded) during the period of five consecutive trading days ending on the date immediately prior to the date of the conversion of the Secured Convertible Promissory Note, from time to time. 
  

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 “Credit Documents” means and includes this Agreement, the Secured Convertible Promissory
Note, the Security Agreement and the Registration Rights Agreement and all other documents, instruments and agreements delivered by Borrower in connection with any of the foregoing. 
  
 “Disinterested Stockholders” means those stockholders of Borrower that are not Affiliates of Lender and are
not otherwise interested parties in any of the transactions set forth herein. 
  
 “Disinterested Stockholder Approval” has the meaning set forth in Section 2.3(a). 
  
 “Equipment” means any “Equipment,” as such term is defined in the UCC, now owned or hereafter acquired by Borrower or in which
Borrower now holds or hereafter acquires any interest and any and all additions, upgrades, substitutions and replacements of any of the foregoing, together with all attachments, components, parts, equipment and accessories installed thereon or
affixed thereto, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires an interest. 
  
 “Governmental Authority” means any domestic or foreign national, state or local government, any political subdivision thereof, any
department, agency, authority or bureau of any of the foregoing, or any other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. 
  
 “Intellectual Property” means, collectively, all rights,
priorities and privileges of Borrower relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including copyrights, copyright licenses, inventions, patents, patent licenses, trademarks,
trademark licenses and trade secrets (including customer lists), domain names, Web sites and know-how. 
  
 “Initial Interest Maturity Date” has the meaning set forth in 2.2(b). 
  
 “Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security
interest, encumbrance, levy, lien or charge of any kind, whether voluntarily incurred or arising by operation of law or otherwise, against any property, any conditional sale or other title retention agreement, any lease in the nature of a security
interest, and the filing of any financing statement (other than a precautionary financing statement with respect to a lease that is not in the nature of a security interest) under the UCC or comparable law of any jurisdiction. 
  
 “Material Adverse Effect” means a material adverse effect on
(i) the business, assets, operations, prospects or financial or other condition of Borrower and its subsidiaries, taken as a whole and considered in light of Borrower’s financial condition as in existence on the date hereof; (ii) the ability of
Borrower to pay or perform the Obligations in accordance with the terms of this Agreement and the other Credit Documents considered in light of Borrower’s financial condition as in existence on the date hereof; (iii) the rights and remedies of
Lender under this Agreement, the other Credit Documents or any related document, instrument or agreement; or (iv) the value of the Collateral considered in light of Borrower’s financial condition as in existence on the date hereof,
Lender’s security interest in the Collateral or the perfection or priority of such security interests; provided, however, that, in no event shall any of 
  

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 the following, alone or in combination, be deemed to constitute, nor taken into account in determining whether a Material
Adverse Effect has occurred: (i) the announcement or pendency of the transactions contemplated by this Agreement and the other Credit Documents, (ii) compliance with the terms and conditions of this Agreement and the other Credit Documents, (iii)
any change in accounting requirements or principles or any change in applicable laws, rules or regulations or the interpretation thereof or (iv) any litigation or other similar proceeding arising out of or in connection with this Agreement or the
other Credit Documents or the transactions contemplated hereby and thereby. 
  
 “Maturity Date” has the meaning set forth in Section 2.2(a). 
  
 “New Advance” has the meaning set forth in Section 2.1(a). 
  
 “Obligations” means the New Advance, all other advances, debts, liabilities, obligations, guaranties,
covenants, duties and indebtedness at any time owing by Borrower to Lender, whether evidenced by this Agreement, any other Credit Document or any note or other instrument or document, whether arising from an extension of credit, loan, guaranty,
indemnification or otherwise, whether direct or indirect (including, without limitation, those acquired by assignment and any participation by Lender in Borrower’s debts owing to others), absolute or contingent, due or to become due, including
without limitation all interest, fees, charges, expenses, attorneys’ fees and accountants’ fees chargeable to Borrower or payable by Borrower thereunder. 
  
 “Outstanding Interest” has the meaning set forth in Recital C. 
  
 “Outstanding Principal” has the meaning set forth in
Recital C. 
  
 “Outstanding Debt” has the
meaning set forth in Recital C. 
  
 “Permitted
Liens” has the meaning set forth in the Security Agreement. 
  
 “Person” means an individual, a partnership, a corporation (including a business trust), a joint stock company, an unincorporated association, a limited liability company, a joint venture, a trust or other entity or a
Governmental Authority. 
  
 “Prior Secured Promissory
Notes” has the meaning set forth in Recital A. 
  
 “Proposals” has the meaning set forth in Section 7.1. 
  
 “Registration Rights Agreement” has the meaning set forth in Section 2.1(d). 
  
 “Requirement of Law” applicable to any Person means (i) the articles or certificate of incorporation and by-laws, partnership agreement
or other organizational or governing documents of such Person, (ii) any rule of any Governmental Authority applicable to such Person, (iii) any license, permit, approval or other authorization granted by any Governmental Authority to or for the
benefit of such Person or (iv) any judgment, decision or determination of any Governmental Authority or arbitrator, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is
subject. 
  

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 “Schedules” means and includes all schedules attached hereto, including the Schedule of
Exceptions. 
  
 “Secretary Certificate” has the
meaning set forth in Section 5.6. 
  
 “Secured Convertible
Promissory Note” has the meaning set forth in Section 2.1(b). 
  
 “Security Agreement” has the meaning set forth in Section 2.1(e). 
  
 “Securities” means collectively the Secured Convertible Promissory Note and the shares of Common Stock issuable upon conversion thereof. 
  
 “Securities Act” means the Securities Act of 1933, as amended. 
  
 “Special Committee” means the special committee of the Board
of Directors of Borrower consisting of Robert Moreyra, Gerald A. Fallon and Jeffrey S. Chisholm. 
  
 “Stockholder Meeting” means the meeting of stockholders of Borrower at which the Proposals are voted upon. 
  
 “Taxes” has the meaning set forth in Section 2.5.

  
 “UCC” means the Uniform Commercial Code as
the same may, from time to time, be in effect in the State of Florida; provided, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, Secured
Party’s Lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of Florida, the term “UCC” shall mean the Uniform Commercial Code as enacted and in effect, from
time to time, in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions. 
  
 2. New Advance and Secured Convertible Promissory Note.

  
 2.1 Obligations at Closing. Subject to the
terms and conditions of this Agreement, at the Closing the following events shall occur: 
  
 (a) Lender shall advance to Borrower $1,350,000 (the “New Advance”) in immediately available funds. 
  
 (b) Borrower shall issue to Lender a secured convertible promissory note in favor of Lender, or any of its Affiliates as Lender may designate, in
substantially the form attached hereto as Exhibit A (the “Secured Convertible Promissory Note”). 
  
 (c) Lender shall return the Prior Secured Promissory Notes to Borrower and Borrower shall cancel the Prior Secured Promissory Notes; provided,
however, that the execution and delivery of the Secured Convertible Promissory Note shall not (i) operate as a waiver of any right, power or remedy of Lender under the Prior Secured Promissory Notes, or (ii) extinguish or impair any
obligations of Borrower under the Prior Secured Promissory Notes. 
  

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 (d) Lender and Borrower shall enter into a registration rights agreement in substantially the form
attached hereto as Exhibit B (as amended, restated or otherwise modified from time to time, the “Registration Rights Agreement”). 
  
 (e) Lender and Borrower shall enter into an amended and restated security agreement in substantially the form attached hereto as Exhibit C (as
amended, restated or otherwise modified from time to time, the “Security Agreement”). 
  
 2.2. Terms of Secured Convertible Promissory Note and Outstanding Interest. 
  
 (a) The principal amount of the Secured Convertible Promissory Note shall equal the sum of the Outstanding Principal plus
the principal amount of the New Advance (i.e., $27,000,000). The conversion price of the Secured Convertible Promissory Note shall equal the Conversion Price. The outstanding principal amount of the Secured Convertible Promissory Note shall be due
and payable in full upon demand by Lender any time after December 31, 2005 (the “Maturity Date”). 
  
 (b) The full amount of the Outstanding Interest and the aggregate amount of the accrued and unpaid interest on the Secured Convertible Promissory Note as
of the one year anniversary of the date hereof (the “Initial Interest Maturity Date”) shall be due and payable in full upon demand by Lender at any time on or after the Initial Interest Maturity Date. The remainder of the accued and
unpaid interest on the Secured Convertible Promissory Note shall be due and payable in full upon demand by Lender at any time after the Maturity Date. 
  
 2.3. Conversion Feature and Accelerated Maturity Date. 
  
 (a) It shall be a condition precedent to the Secured Convertible Promissory Note becoming convertible in accordance with
Section 2(a) thereof (the “Conversion Feature”), that the Proposals be approved at the Stockholder Meeting by the affirmative vote in person or by proxy of a majority of the outstanding shares of Common Stock beneficially owned by
the Disinterested Stockholders (“Disinterested Stockholder Approval”). 
  
 (b) In the event Borrower does not obtain Disinterested Stockholder Approval of the Proposals, then the Secured Convertible Promissory Note shall not become convertible and the entire outstanding principal amount and
unpaid and accrued interest under the Secured Convertible Promissory Note and the entire amount of the Outstanding Interest shall immediately become due and payable in full upon demand by Lender at any time on or after the date of such Stockholder
Meeting. 
  
 2.4 Closing. Subject to the terms and
conditions of this Agreement, the Closing shall take place on September 16, 2004, unless otherwise agreed in writing by both parties (the “Closing Date”). At the Closing, Borrower and Lender shall take such actions and execute and
deliver such agreements and other instruments and documents set forth above and as necessary or appropriate to effect the transactions contemplated by this Agreement and the other Credit Documents in accordance with the terms hereof and thereof.

  

 6 

 2.5 Taxes on Payments. All payments made by Borrower under this Agreement and the other
Credit Documents shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp, documentary or other taxes, any duties, or any other levies, imposts, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority (except net income taxes and franchise taxes in lieu of net income taxes imposed on Lender by its jurisdiction of incorporation) (all such
non-excluded taxes, duties, levies, imposts, charges, fees, deductions and withholdings being hereinafter called “Taxes”). If any Taxes are required to be withheld from any amounts payable to Lender hereunder or under the other
Credit Documents, the amounts so payable to Lender shall be increased to the extent necessary to yield to Lender (after payment of all Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the other Credit Documents. Whenever any Taxes are payable by Borrower, as promptly as possible thereafter, Borrower shall send to Lender a certified copy of an original official receipt received by Borrower showing payment thereof. If
Borrower fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to Lender the required receipts or other required documentary evidence, Borrower shall indemnify Lender for any taxes, interest or penalties that may
become payable by Lender as a result of any such failure. The obligations of Borrower under this Section 2.5 shall survive the payment and performance of the Obligations and the termination of this Agreement. 
  
 2.6 Use of Proceeds. The proceeds of each Advance shall only be
used by Borrower for its general corporate purposes. 
  
 2.7
Security Agreement. Borrower’s payment and performance obligations under this Agreement and the Secured Convertible Promissory Note are secured by all of the personal property assets of Borrower in accordance with the terms of
Security Agreement. 
  
 3. Representations and Warranties of
Borrower. In order to induce Lender to enter into this Agreement and to make the New Advance, Borrower represents and warrants to Lender as follows (except as set forth on a Schedule of Exceptions attached hereto as Schedule 3 and
delivered separately by the Borrower to Lender, which exceptions shall be deemed to be representations and warranties as if made hereunder), and Borrower covenants that the following representations will continue to be true, and that Borrower will
at all times comply with all of the following covenants: 
  
 3.1
Corporate Existence. Borrower is and will continue to be, duly organized, validly existing and in good standing under the laws of the State of Delaware. Borrower’s organizational identification number issued by the State of
Delaware is and will continue to be #2578459. To the best of Borrower’s knowledge, Borrower is and will continue to be qualified and licensed to do business in all jurisdictions in which any failure to do so could reasonably be expected to
result in a Material Adverse Effect. 
  

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 3.2 Legal Authority. The execution, delivery and performance by Borrower of this Agreement
and the other Credit Documents, the consummation of the transactions contemplated thereby and issuance and delivery of the Securities (a) are within the corporate power of Borrower, and (b) have been duly authorized by all necessary corporate
actions on the part of Borrower. 
  
 3.3
Enforceability. Each of this Agreement and the other Credit Documents executed, or to be executed, by Borrower has been, or will be, duly executed and delivered by Borrower and constitutes, and will constitute, a legal, valid and
binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally
and general principles of equity. 
  
 3.4 No
Contravention. Except as set forth on Schedule 3.4, the execution and delivery by Borrower of this Agreement and the other Credit Documents executed by Borrower and the performance and consummation of the transactions contemplated
thereby do not (a) violate any Requirement of Law applicable to Borrower; (b) violate any provision of, or result in the breach or the acceleration of, or entitle any other Person to accelerate (whether after the giving of notice or lapse of time or
both), any contractual obligation of Borrower; or (c) result in the creation or imposition of any Lien (or the obligation to create or impose any Lien) upon any property, asset or revenue of such Borrower (except such Liens as may be created in
favor of Lender pursuant to this Agreement and the other Credit Documents). 
  
 3.5 Approvals. Except as set forth on Schedule 3.5, no consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Authority or other Person
(including, without limitation, the stockholders of any Person) is required in connection with the execution and delivery of this Agreement and the other Credit Documents executed by Borrower or the performance or consummation of the transactions
contemplated hereby and thereby, except for those which have been made or obtained and are in full force and effect, the Disinterested Stockholder Approval required by Section 7.2 hereof and the approval required by the rules of The Nasdaq Stock
Market. 
  
 3.6 Valid Issuance of Securities. The
Securities, when issued and delivered in accordance with the terms of the Credit Documents for the consideration expressed herein, will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than
restrictions on transfer under this Agreement, the Registration Rights Agreement or applicable state and federal securities laws. The Securities will be issued in compliance with all applicable federal and state securities laws. The Common Stock
issuable upon conversion of the Secured Convertible Promissory Note has been duly and validly reserved for issuance. 
  
 3.7 No Violation or Default. Except as disclosed and set forth in Schedule 3.7, Borrower is not in violation of or in default with
respect to (a) any Requirement of Law applicable to Borrower or (b) any contractual obligation of Borrower (nor is there any waiver in effect which, if not in effect, would result in such a violation or default), where, in each case, such violation
or default is reasonably likely to have a Material Adverse Effect. 
  

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 3.8 Intellectual Property. To the best of Borrower’s knowledge, Borrower owns or
possesses sufficient legal rights to all Intellectual Property necessary for its business as now conducted and as presently contemplated to be conducted without any conflict with, or infringement of, the rights of others. Except as set forth on
Schedule 3.8, there are no outstanding options, licenses, or agreements of any kind relating to the foregoing, nor is Borrower bound by or a party to any options, licenses or agreements of any kind with respect to the patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses, information, proprietary rights and processes of any other person or entity except, in any case, options, licenses, or agreements entered into by Borrower in the ordinary course of
business. Borrower has not received any communications alleging that Borrower has violated or, by conducting its business, would violate any of the patents, trademarks, service marks, tradenames, copyrights, trade secrets or other proprietary rights
or processes of any other Person. Borrower is not aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any
court or administrative agency, that would interfere with the use of such employee’s best efforts to promote the interest of Borrower or that would conflict with Borrower’s business. Neither the execution or delivery of this Agreement, nor
the carrying on of Borrower’s business by the employees of Borrower, nor the conduct of Borrower’s business as proposed, will, to Borrower’s knowledge, conflict with or result in a breach of the terms, conditions, or provisions of, or
constitute a default under, any contract, covenant or instrument under which any such employee is now obligated. Borrower does not believe it is or will be necessary to use any inventions of any of its employees (or persons it currently intends to
hire) made prior to their employment by Borrower. 
  
 3.9
Title to Collateral; Permitted Liens. Borrower is now, and will at all times in the future be, the sole owner of all the Collateral, except for items of Equipment which are leased by Borrower. The Collateral now is and will remain free
and clear of any and all Liens, charges, security interests, encumbrances and adverse claims, except for Permitted Liens and the Liens granted to Lender pursuant to the Security Agreement. Except as otherwise set forth on Schedule 3.9, Lender
now has, and will continue to have, a first-priority perfected and enforceable security interest in all of the Collateral, subject only to the Permitted Liens, and Borrower will at all times defend Lender and the Collateral against all claims of
others. Except to the extent previously disclosed to Lender, none of the Collateral now is or will be affixed to any real property in such a manner, or with such intent, as to become a fixture. Borrower is not and will not become a lessee under any
real property lease pursuant to which the lessor may obtain any rights in any of the Collateral and no such lease now prohibits, restrains, impairs or will prohibit, restrain or impair Borrower’s right to remove any Collateral from the leased
premises. Whenever any Collateral is located upon premises in which any third party has an interest (whether as owner, bailee, mortgagee, beneficiary under a deed of trust, Lien or otherwise), upon request of Lender, Borrower shall use its
commercially reasonable efforts to cause such third party to execute and deliver to Lender, in form acceptable to Lender, such waivers, acknowledgements and subordinations as Lender shall specify, so as to ensure that Lender’s rights in the
Collateral are, and will continue to be, superior to the rights of any such third party and so as to acknowledge that such Person holds such Collateral for the benefit of Lender pursuant to Section 9-313(c) of the UCC. Borrower will keep in full
force and effect, and will comply with all the terms of, any lease of real property where any of the Collateral now or in the future may be located. 
  

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 3.10 Books and Records. Borrower has maintained and will maintain at Borrower’s
Address books and records which are complete and accurate in all material respects. 
  
 3.11 Litigation. Except as disclosed and set forth on the Schedule 3.11, there is no claim, suit, litigation, proceeding or investigation pending or (to best of Borrower’s knowledge)
threatened by or against or affecting Borrower in any court or before any Governmental Authority (or any basis therefor known to Borrower) which may result, either separately or in the aggregate, in any Material Adverse Effect. Borrower will
promptly inform Lender in writing of any claim, proceeding, litigation or investigation in the future threatened or instituted by or against Borrower involving any claim. 
  
 3.12 Financial Condition, Statements and Reports. Except as set forth on Schedule 3.12, all financial
statements now or in the future delivered to Lender have been, and will be, prepared in conformity with generally accepted accounting principles and now and in the future will present fairly, in all material respects, the financial condition and
results of operations of Borrower, at the times and for the periods therein stated. Between the last date covered by any such statement provided to Lender and the date hereof, there has been no Material Adverse Effect. 
  
 3.13 Tax Returns and Payments; Pension Contributions. Except as
set forth on Schedule 3.13, Borrower has timely filed, and will timely file, all tax returns and reports required by foreign, federal, state and local law, and Borrower has timely paid, and will timely pay, all foreign, federal, state and
local taxes, assessments, deposits and contributions now or in the future owed by Borrower. Borrower may, however, defer payment of any contested taxes, provided that Borrower (a) in good faith contests Borrower’s obligation to pay the taxes by
appropriate proceedings promptly and diligently instituted and conducted, (b) notifies Lender in writing of the commencement of, and any material development in, the proceedings, and (c) posts bonds or takes any other steps required to keep the
contested taxes from becoming a Lien upon any of the Collateral. Borrower is unaware of any claims or adjustments proposed for any of Borrower’s prior tax years which could result in additional taxes becoming due and payable by Borrower.
Borrower has paid, and shall continue to pay all amounts necessary to fund all present and future pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has not and will not withdraw from participation
in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any such plan which could result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its
successors or any other Governmental Authority. 
  
 3.14
Compliance with Law. Borrower has complied, and will comply, in all material respects, with all provisions of all foreign, federal, state and local laws and regulations relating to Borrower, including, but not limited to, those
relating to Borrower’s ownership of real or personal property, the conduct and licensing of Borrower’s business, and all environmental matters. The representations and warranties set forth in this Section 3.14 shall not be deemed or
construed to apply to any matter covered by the representations and warranties set forth in Sections 3.6 or 3.7. 
  
 3.15 Accuracy of Information Furnished. The Credit Documents and the other certificates, statements and information (excluding projections)
furnished by Borrower in 
  

 10 

 connection with the Credit Documents and the transactions contemplated thereby, taken as a whole, do not intentionally
contain any untrue statement of a material fact and do not intentionally omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. All projections furnished by
Borrower in connection with the Credit Documents and the transactions contemplated thereby have been based upon reasonable assumptions and represent, as of their respective dates of presentations, Borrower’s good faith estimates of the future
performance of Borrower. 
  
 4. Representations and
Warranties of Lender. Lender hereby represents and warrants to Borrower that: 
  
 4.1 Legal Authority. The execution, delivery and performance by Lender of each Credit Document executed, or to be executed, by Lender and the consummation of the transactions contemplated thereby (a) are
within the power of Lender and (b) have been duly authorized by all necessary actions on the part of Lender. 
  
 4.2 Enforceability. Each Credit Document executed, or to be executed, by Lender has been, or will be, duly executed and delivered by Lender
and constitutes, or will constitute, a legal, valid and binding obligation of Lender, enforceable against Lender in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting
the enforcement of creditors’ rights generally and general principles of equity. 
  
 4.3 No Contravention. The execution and delivery by Lender of the Credit Documents executed by Lender and the performance and consummation of the transactions contemplated thereby do not (a) violate any
Requirement of Law applicable to Lender; (b) violate any provision of, or result in the breach or the acceleration of, or entitle any other Person to accelerate (whether after the giving of notice or lapse of time or both), any contractual
obligation of Lender; or (c) result in the creation or imposition of any Lien (or the obligation to create or impose any Lien) upon any property, asset or revenue of Lender. 
  
 4.4 Approvals. No consent, approval, order or authorization of, or registration, declaration or filing with,
any Governmental Authority or other Person (including, without limitation, the stockholders of any Person) is required in connection with the execution and delivery of the Credit Documents executed by Lender or the performance or consummation of the
transactions contemplated thereby, except for those which have been made or obtained and are in full force and effect. 
  
 4.5 Purchase Entirely for Own Account. This Agreement is made with Lender in reliance upon Lender’s representation to Borrower, which
by Lender’s execution of this Agreement, Lender hereby confirms, that the Securities to be acquired by Lender will be acquired for investment for Lender’s own account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof in violation of any applicable securities laws, and that Lender has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, Lender further
represents that Lender does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Securities. Lender has not
been formed for the specific purpose of acquiring any of the Securities. 
  

 11 

 4.6 Knowledge. Lender is aware of Borrower’s business affairs and financial condition
and has acquired sufficient information about Borrower to reach an informed and knowledgeable decision to acquire the Securities. 
  
 4.7 Accredited Investor. Lender is an Accredited Investor. 
  
 5. Conditions to Lender’s Obligations at Closing. The obligations of Lender under this Agreement are
subject to the fulfillment, on or before the Closing Date, of each of the following conditions, unless otherwise waived in writing by Lender in its sole discretion: 
  
 5.1 Representations and Warranties. The representations and warranties of Borrower contained in Section 3 of
this Agreement and in the other Credit Documents shall be true and correct in all material respects on and as of the Closing Date. 
  
 5.2 Performance. Borrower shall have performed and complied in all material respects with all material covenants, agreements, obligations
and conditions contained in all of this Agreement and the other Credit Documents that are required to be performed or complied with by it on or before the Closing Date. 
  
 5.3 Compliance Certificate. President of Borrower shall deliver to Lender a certificate, dated as of the
Closing Date, in substantially the form attached hereto as Exhibit D (the “Compliance Certificate”), certifying that the conditions specified in Sections 5.1 and 5.2 have been fulfilled. 
  
 5.4 Legal Requirements. All Requirements of Law by all
Governmental Authorities that are required in connection with the lawful issuance of the Secured Convertible Promissory Note pursuant to this Agreement shall be obtained and effective as of the Closing Date. 
  
 5.5 Legal Opinion. Lender shall have received from Fowler White
Boggs Banker P.A., counsel for Borrower, an opinion, dated as of the Closing Date, in substantially the form attached hereto as Exhibit E. 
  
 5.6 Secretary Certificate. The Secretary of Borrower shall have delivered to Lender at the Closing a certificate in substantially the form
attached hereto as Exhibit F (the “Secretary Certificate”) certifying (i) the Certificate of Incorporation, (ii) the Bylaws of Borrower, and (iii) resolutions of the Board of Directors of Borrower approving this Agreement and
the other Credit Documents and the transactions contemplated hereby and thereby, including the approval of a majority of the independent and disinterested directors of Borrower. 
  
 5.7 Fairness Opinion. Lender shall have received a copy of an opinion, in a form acceptable to Lender, issued
to Borrower and the Special Committee by an independent and reputable financial advisor as to the fairness, from a financial point of view, to the Disinterested Stockholders of each of the transactions contemplated herein. 
  

 12 

 5.8 Secured Convertible Promissory Note. Borrower shall have executed and delivered to
Lender the Secured Convertible Promissory Note. 
  
 5.9
Security Agreement. Borrower shall have executed and delivered to Lender the Security Agreement. 
  
 5.10 Registration Rights Agreement. Borrower shall have executed and delivered to Lender the Registration Rights Agreement. 
  
 6. Conditions to Borrower’s Obligations at Closing. The
obligations of Borrower under this Agreement are subject to the fulfillment, on or before the Closing Date, of each of the following conditions, unless otherwise waived in writing by Borrower in its sole discretion: 
  
 6.1 Representations and Warranties. The representations and
warranties of Lender contained in Section 4 shall be true and correct in all material respects on and as of the Closing Date. 
  
 6.2 Performance. All covenants, agreements and conditions contained in this Agreement and the other Credit Documents to be performed by
Lender on or prior to the Closing Date shall have been performed or complied with in all material respects. 
  
 6.3 Legal Requirements. All Requirements of Law by all Governmental Authorities that are required in connection with the lawful issuance of
the Secured Convertible Promissory Note pursuant to this Agreement shall be obtained and effective as of the Closing Date. 
  
 6.4 Fairness Opinion. Borrower shall have received a copy of an opinion, in a form acceptable to Borrower, issued to Borrower and the
Special Committee by an independent and reputable financial advisor as to the fairness, from a financial point of view, to the Disinterested Stockholders of each of the transactions contemplated herein.  
  
 7. Covenants of Borrower. 
  
 7.1 Stockholder Meeting. Borrower agrees to hold the
Stockholder Meeting as soon as reasonably possible following the date hereof at which Borrower shall include (i) a proposal to approve the Conversion Feature and (ii) a proposal to increase the number of authorized shares of Common Stock under the
Certificate of Incorporation from 200,000,000 to 300,000,000 (collectively, the “Proposals”). 
  
 7.2 Management and Board Support. The management and Board of Directors of the Company, including the Special Committee, but not including
Dr. Bryan J. Zwan, shall support the Proposals and shall use commercially reasonable efforts to obtain stockholder approval of the Proposals, including Disinterested Stockholder Approval. 
  

 13 

 8. Miscellaneous. 
  
 8.1 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original and all of which together shall constitute one instrument. 
  
 8.2 Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of Lender and Borrower. 
  
 8.3 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 order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and
enforceable replacement for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance of the Agreement shall be interpreted as if such provision were so excluded and (c) the balance of the Agreement shall be
enforceable in accordance with its terms. 
  
 8.4 Entire
Agreement. This Agreement and the documents referred to herein constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements existing between the parties
hereto are expressly canceled. 
  
 8.5 Notices.
Except as otherwise provided herein, all notices, requests, demands, consents, instructions or other communications to or upon Borrower or Lender under this Agreement or the other Credit Documents shall be in writing and faxed, mailed or delivered,
if to Borrower, at Borrower’s address or facsimile number set forth below, or if to Lender, at the address or facsimile number set forth below (or to such other facsimile number or address for any party as indicated in any notice given by that
party to the other party). All such notices and communications shall be effective (a) when sent by an overnight courier service of recognized standing, on the second Business Day following the deposit with such service; (b) when mailed, first class
postage prepaid and addressed as aforesaid through the United States Postal Service, upon receipt; (c) when delivered by hand, upon delivery; and (d) when faxed, upon confirmation of receipt: 
  
 Lender: 
  
 Optel, LLC 
 3000 Bayport Drive 
 Tampa, FL 33607 
 Tel No. (813) 287-6337 
 Fax No. (813) 287-2886 
 Attn: Chief Financial Officer 
  
 Borrower: 
  
 Digital Lightwave, Inc. 
 15550 Lightwave
Drive 
 Clearwater, FL 33760 
 Tel No. (727) 442-6677 
 Fax No. (727) 467-0702 
 Attn: President 
  

 14 

 In any case where this Agreement authorizes notices, requests, demands or other communications by
Borrower to Lender to be made by telephone or facsimile, Lender may conclusively presume that anyone purporting to be a person designated in any incumbency certificate or other similar document received by Lender is such a person. 
  
 8.6 Waivers. The failure of Lender at any time or times to
require Borrower to strictly comply with any of the provisions of this Agreement or any other present or future agreement between Borrower and Lender shall not waive or diminish any right of Lender later to demand and receive strict compliance
therewith. Any waiver of any default shall not waive or affect any other default, whether prior or subsequent, and whether or not similar. None of the provisions of this Agreement or any other agreement now or in the future executed by Borrower and
delivered to Lender shall be deemed to have been waived by any act or knowledge of Lender or its agents or employees, but only by a specific written waiver signed by an authorized officer of Lender and delivered to Borrower. Borrower waives demand,
protest, notice of protest and notice of default or dishonor, notice of payment and nonpayment, release, compromise, settlement, extension or renewal of any commercial paper, instrument, account, general intangible, document or guaranty at any time
held by Lender on which Borrower is or may in any way be liable, and notice of any action taken by Lender, unless expressly required by this Agreement. 
  
 8.7 Indemnification. To the fullest extent permitted by law, Borrower agrees to protect, indemnify, defend and hold harmless Lender and its
partners, managers, members, directors, officers and employees and their respective directors, officers, employees, agents and advisors (“Indemnitees”) from and against any and all liabilities, losses, damages or expenses of any
kind or nature and from any suits, claims or demands (including in respect of or for reasonable attorney’s fees and other expenses) arising on account of or in connection with any matter or thing or action or failure to act by Indemnitees, or
any of them, arising out of or relating to this Agreement and all of the other Credit Documents or any transaction contemplated thereby, including without limitation the issuance of the Secured Convertible Promissory Note, except to the extent such
liability arises from the willful misconduct or gross negligence of such Indemnitee. Upon receiving knowledge of any suit, claim or demand asserted by a third party that Lender believes is covered by this indemnity, Lender shall give Borrower notice
of the matter and shall defend such action with its own legal counsel, at Borrower’s sole cost and expense. Lender may also require Borrower to defend the matter. Any failure or delay of Lender to notify Borrower of any such suit, claim or
demand shall not relieve Borrower of its obligations under this Section 8.7 but shall reduce such obligations to the extent of any increase in those obligations caused solely by any such failure or delay which is unreasonable. The obligations of
Borrower under this Section 8.7 shall survive the payment and performance of the Obligations and the termination of this Agreement. 
  
 8.8 Benefit of Agreement. The provisions of this Agreement shall be binding upon and inure to the benefit of the respective successors,
assigns, heirs, beneficiaries and representatives of Borrower and Lender; provided, however, that Borrower may not assign or 
  

 15 

 transfer any of its rights under this Agreement without the prior written consent of Lender, and any prohibited
assignment shall be void. No consent by Lender to any assignment shall release Borrower from its liability for the Obligations. Lender may, at any time, sell and assign, or grant participating interests in, to any other Person not a direct
competitor of Borrower, all or a portion of its rights and obligations under this Agreement and the other Credit Documents. Borrower agrees that it shall perform such acts, and provide such information, as Lender may reasonably request to assist
Lender with any such assignment or participation. 
  
 8.9
Limitation of Actions. Any claim or cause of action by Borrower against Lender, its directors, officers, employees, agents, accountants or attorneys, based upon, arising from, or relating to this Agreement or any other transaction
contemplated hereby or relating hereto, shall be barred unless asserted by Borrower by the commencement of an action or proceeding in a court of competent jurisdiction by the filing of a complaint within one year after the first act, occurrence or
omission upon which such claim or cause of action, or any part thereof, is based, and the service of a summons and complaint on an officer of Lender, or on any other person authorized to accept service on behalf of Lender, within thirty (30) days
thereafter. Borrower agrees that such one-year period is a reasonable and sufficient time for Borrower to investigate and act upon any such claim or cause of action. The one-year period provided herein shall not be waived, tolled, or extended except
by the written consent of Lender in its sole discretion. This provision shall survive any termination of this Agreement or any other present or future agreement. 
  
 8.10 Schedule of Exceptions and Exhibits. The Schedules and Exhibits to this Agreement are hereby incorporated
into this Agreement and are hereby made a part of this Agreement as if set out in full in this Agreement. The representations and warranties of Borrower set forth in this Agreement are made and given subject to the disclosures contained in the
Schedule of Exceptions delivered in connection herewith. Borrower shall not be deemed to be in breach of any such representations and warranties (and no claim of right to indemnification shall lie in respect thereof) in respect of any such matter so
disclosed in the Schedule of Exceptions. Where brief particulars only of a matter are set out or referred to in the Schedule of Exceptions, or a reference is made to a particular part only of a disclosed document, full particulars of the matter and
the full contents of the document are deemed to be disclosed provided that the document in its entirety has been provided to the Lender as of the date of this Agreement. The specific disclosures set forth in the Schedules have been organized to
correspond to section references in this Agreement to which the disclosure may be most likely to relate, but such disclosure shall apply to and shall be deemed to be exceptions to or modifications or qualifications of all representations and
warranties contained herein to the extent applicable. Lender shall be deemed to be aware of and there are deemed to have been disclosed to Lender as if herein set forth (i) all matters fairly disclosed or referred to or contained in this Agreement
and in all documents specifically referred to therein and (ii) the contents of and all matters referred to in the documents specifically listed in the Schedules and provided to Lender. No reference to or disclosure of any item or other matter in the
Schedules shall be construed as an admission or indication that such item or other matter is material or that such item or other matter is required to be referred to or disclosed in the Schedules. No disclosure in the Schedules relating to any
possible breach or violation of any agreement, law or regulation shall be construed as an admission or indication that any such breach or violation exists or has actually occurred. 
  

 16 

 8.11 Section Headings; Construction. Section headings are only used in this Agreement for
convenience. Borrower and Lender acknowledge that the headings may not describe completely the subject matter of the applicable section, and the headings shall not be used in any manner to construe, limit, define or interpret any term or provision
of this Agreement. The term “including”, whenever used in this Agreement, shall mean “including (but not limited to)”. This Agreement has been fully reviewed and negotiated between the parties and no uncertainty or ambiguity in
any term or provision of this Agreement shall be construed strictly against Lender or Borrower under any rule of construction or otherwise. 
  
 8.12 Governing Law; Jurisdiction; Venue. This Agreement and all acts and transactions hereunder and all rights and obligations of Lender and
Borrower shall be governed by the laws of the State of Florida. As a material part of the consideration to Lender to enter into this Agreement, Borrower (i) agrees that all actions and proceedings relating directly or indirectly to this Agreement
shall, at Lender’s option, be litigated in courts located within Pinellas County, Florida and that the exclusive venue therefor shall be Pinellas County; (ii) consents to the jurisdiction and venue of any such court and consents to service of
process in any such action or proceeding by personal delivery or any other method permitted by law; and (iii) waives any and all rights Borrower may have to object to the jurisdiction of any such court, or to transfer or change the venue of any such
action or proceeding. 
  
 8.13 MUTUAL WAIVER OF JURY
TRIAL. BORROWER AND LENDER EACH HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY CONDUCT, ACTS OR OMISSIONS RELATING TO THIS AGREEMENT OF LENDER
OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH LENDER OR BORROWER, IN ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. 
  
 [Signature Pages Follow] 
  

 17 

 The parties have executed this Loan and Restructuring Agreement as of the date first written above.

  

			
	BORROWER:
	
	Digital Lightwave, Inc., a Delaware corporation
		
	By:	 	 /S/ JAMES GREEN

	 	 	James Green
	 	 	President
		
	LENDER:	 	 
	
	Optel Capital, LLC, a Delaware limited liability company
		
	By:	 	 /S/ PAUL RAGAINI

	Name:	 	Paul Ragaini
	Title:	 	Chief Financial Officer

  
 SIGNATURE PAGE
TO LOAN AND RESTRUCTURING AGREEMENT 

 LIST OF EXHIBITS 
  

			
	Exhibit A -	  	Form of Secured Convertible Promissory Note
		
	Exhibit B -	  	Form of Registration Rights Agreement
		
	Exhibit C -	  	Form of Security Agreement
		
	Exhibit D -	  	Form of Compliance Certificate
		
	Exhibit E -	  	Form of Legal Opinion of Fowler White
		
	Exhibit F -	  	Form of Secretary Certificate

  
 LIST OF SCHEDULES

  

			
	 	  	 
	Schedule A -	  	Prior Secured Promissory Notes
		
	Schedule 3 -	  	Schedule of Exceptions
		
	Schedule 3.4 -	  	No Contravention
		
	Schedule 3.5 -	  	Approvals
		
	Schedule 3.7 -	  	Violations or Defaults of Obligations
		
	Schedule 3.8 -	  	Intellectual Property
		
	Schedule 3.9 -	  	Title to Collateral
		
	Schedule 3.11 -	  	Litigation
		
	Schedule 3.12 -	  	Financial Statements
		
	Schedule 3.13 -	  	Tax Returns and PaymentsTwenty Second Amended and Restated Security Agreement

 Exhibit 10.2 
  
 EXECUTION COPY 
  
 DIGITAL LIGHTWAVE, INC. 
  
 TWENTY SECOND AMENDED AND RESTATED SECURITY AGREEMENT 
  
 This Twenty Second Amended and Restated Security Agreement (this “Agreement”) is made as of September 16,
2004, by and between Digital Lightwave, Inc., a Delaware corporation (the “Debtor”), in favor of Optel Capital, LLC, a Delaware limited liability company (the “Secured Party”). 
  
 RECITALS 
  
 A. The Debtor, the Secured Party and Optel, LLC, a Delaware limited liability
company (“Optel LLC”) previously entered into that certain Twenty First Amended and Restated Security Agreement, dated as of September 13, 2004 (the “Existing Security Agreement”), pursuant to which the Debtor
granted to each of the Secured Party and Optel, LLC a security interest in all of the Debtor’s assets upon the terms and subject to the conditions therein, to secure Debtor’s timely repayment of its obligations under those several secured
promissory notes made payable to the Secured Party and Optel LLC in the aggregate principal amount of $25,650,000, plus accrued interest (the “Prior Secured Promissory Notes”). 
  
 B. Pursuant to various allonges between the Secured Party and Optel LLC,
Optel LLC has assigned to the Secured Party all of Optel LLC’s right, title and interest in and to certain of the Prior Secured Promissory Notes (the “Assigned Notes”) and the Existing Security Agreement pertaining to the
Assigned Notes. 
  
 C. Debtor and the Secured Party have entered
into that certain Loan and Restructuring Agreement, dated as of the date hereof (as amended, restated or otherwise modified from time to time, the “Loan and Restructuring Agreement”), pursuant to which Optel Capital agreed to
restructure its outstanding debt evidenced by the Prior Secured Promissory Notes and to make a new advance to Debtor (the “New Advance”) in accordance with the terms of that agreement and that certain secured convertible promissory
note of even date herewith (as amended, restated or otherwise modified from time to time, the “Secured Convertible Promissory Note” or the “Note”). 
  
 D. The Secured Party’s obligation to enter into the Loan and Restructuring Agreement and the Secured Convertible
Promissory Note and to make the New Advance is subject, among other conditions, to receipt by the Secured Party of this Security Agreement, duly executed by the Debtor. 

 AGREEMENT 
  
 In consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Debtor hereby agrees with the Secured Parties as follows: 
  
 1. Grant of Security Interest. 
  
 (a) To secure the Debtor’s full and timely payment and performance of the Obligations, the Debtor hereby grants to the Secured Party a continuing Lien on and security interest (the “Security
Interest”) in, all of the Debtor’s right, title and interest in and to all of its personal property and assets (both tangible and intangible), including, without limitation, the following, whether now owned or hereafter acquired and
wherever located: (a) all Receivables; (b) all Equipment; (c) all Fixtures; (d) all General Intangibles; (e) all Inventory; (f) all Investment Property; (g) all Deposit Accounts; (h) all Cash; (i) all other Goods of the Debtor; (j) all Intellectual
Property; and (l) all Proceeds of each of the foregoing and all accessions to, and replacements for, each of the foregoing (collectively, the “Collateral”). The Security Interest shall be a first and prior interest in all of the
Collateral, subject to the Permitted Liens. 
  
 (b) The following
terms shall have the following meanings for purposes of this Agreement: 
  
 “Account” means any “Account,” as such term is defined in the UCC, now owned or hereafter acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest and, in
any event, shall include, without limitation, all accounts receivable, book debts, rights to payment and other forms of obligations (other than forms of obligations evidenced by Chattel Paper, Documents or Instruments) now owned or hereafter
received or acquired by or belonging or owing to the Debtor whether or not arising out of goods or software sold or services rendered by the Debtor or from any other transaction, whether or not the same involves the sale of goods or services by the
Debtor and all of the Debtor’s rights in, to and under all purchase orders or receipts now owned or hereafter acquired by it for goods or services, and all of the Debtor’s rights to any goods represented by any of the foregoing, and all
monies due or to become due to the Debtor under all purchase orders and contracts for the sale of goods or the performance of services or both by the Debtor or in connection with any other transaction (whether or not yet earned by performance on the
part of the Debtor), now in existence or hereafter occurring, including, without limitation, the right to receive the proceeds of said purchase orders and contracts, and all collateral security and guarantees of any kind given by any Person with
respect to any of the foregoing. 
  
 “Cash” has
the meaning set forth in the Loan and Restructuring Agreement. 
  
 “Chattel Paper” means any “Chattel paper,” as such term is defined in the UCC, now owned or hereafter acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest. 
  
 “Credit Documents” means this Agreement, the Prior Secured
Promissory Notes, the Secured Convertible Promissory Note, the Loan and Restructuring Agreement and any UCC-1 Financing Statement filed herewith. 
  
 “Deposit Accounts” means any “Deposit accounts,” as such term is defined in the UCC, and includes any checking account, savings
account, or certificate of deposit, now owned or hereafter acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest. 
  

 -2- 

 “Documents” means any “Documents,” as such term is defined in the UCC, now
owned or hereafter acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest. 
  
 “Electronic Chattel Paper” means any “Electronic chattel paper,” as such term is defined in the UCC, now owned or hereafter
acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest. 
  
 “Equipment” has the meaning set forth in the Loan and Restructuring Agreement. 
  
 “Extraordinary Transaction” means any transaction or a series of related transactions, including, without limitation, a sale of assets of
Borrower, a license or transfer of Borrower’s intellectual property, pursuant to which Borrower receives at the time of such transaction(s), or could receive during the term of such transaction(s), gross proceeds equal to or in excess of
$10,000,000. 
  
 “Fixtures” means any
“Fixtures,” as such term is defined in the UCC, together with all right, title and interest of the Debtor in and to all extensions, improvements, betterments, accessions, renewals, substitutes, and replacements of, and all additions and
appurtenances to any of the foregoing property, and all conversions of the security constituted thereby, immediately upon any acquisition or release thereof or any such conversion, as the case may be, now owned or hereafter acquired by the Debtor or
in which the Debtor now holds or hereafter acquires any interest. 
  
 “General Intangible” means any “General intangible,” as such term is defined in the UCC, now owned or hereafter acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest and, in
any event, shall include, without limitation, all right, title and interest that the Debtor may now or hereafter have in or under any contracts, rights to payment, payment intangibles, confidential information, interests in partnerships, limited
liability companies, corporations, joint ventures and other business associations, permits, goodwill, claims in or under insurance policies, including unearned premiums and premium adjustments, uncertificated securities, deposit, checking and other
bank accounts, but shall not include any Intellectual Property (including the right to receive all proceeds and damages therefrom), rights to receive tax refunds and other payments and rights of indemnification. 
  
 “Goods” means any “Goods,” as such term is defined
in the UCC, now owned or hereafter acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest. 
  
 “Instruments” means any “Instrument,” as such term is defined in the UCC, now owned or hereafter acquired by the Debtor or in
which the Debtor now holds or hereafter acquires any interest. 
  
 “Intellectual Property” means, collectively, all rights, priorities and privileges of the Debtor relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, inventions, patents, patent licenses, trademarks, trademark licenses and trade secrets (including customer lists), domain names, Web sites and know-how, including, but not limited to, the patents, trademarks
and copyrights set forth on Schedule 1 . 
  

 -3- 

 “Inventory” means any “Inventory,” as such term is defined in the UCC, now
owned or hereafter acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest, and, in any event, shall include, without limitation, all inventory, goods and other personal property that are held by or on behalf of
the Debtor for sale or lease or are furnished or are to be furnished under a contract of service or that constitute raw materials, work in process or materials used or consumed or to be used or consumed in the Debtor’s business, or the
processing, packaging, promotion, delivery or shipping of the same, and all finished goods, whether or not the same is in transit or in the constructive, actual or exclusive possession of the Debtor or is held by others for the Debtor’s
account, including, without limitation, all goods covered by purchase orders and contracts with suppliers and all goods billed and held by suppliers and all such property that may be in the possession or custody of any carriers, forwarding agents,
truckers, warehousemen, vendors, selling agents or other Persons. 
  
 “Investment Property” means any “Investment property,” as such term is defined in the UCC, and includes certificated securities, uncertificated securities, money market funds and U.S. Treasury bills or notes, now
owned or hereafter acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest. 
  
 “Letter of Credit Right” means any “Letter-of-credit right,” as such term is defined in the UCC, now owned or hereafter
acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest, including any right to payment or performance under any letter of credit. 
  
 “Lien” has the meaning set forth in the Loan and Restructuring Agreement. 
  
 “Obligations” has the meaning set forth in the Loan and
Restructuring Agreement. 
  
 “Permitted Liens”
shall mean (a) Liens for taxes or other governmental charges not at the time delinquent or thereafter payable without penalty or being contested in good faith, provided that adequate reserves for the payment thereof have been established in
accordance with generally accepted accounting principles, (b) Liens of carriers, warehousemen, mechanics, materialmen, vendors, and landlords and other similar Liens imposed by law incurred in the ordinary course of business for sums not overdue
more than 90 days or being contested in good faith, provided that adequate reserves for the payment thereof have been established in accordance with generally accepted accounting principles, (c) deposits under workers’ compensation,
unemployment insurance and social security laws or to secure the performance of bids, tenders, contracts (other than for the repayment of borrowed money) or leases, or to secure statutory obligations of surety or appeal bonds or to secure indemnity,
performance or other similar bonds in the ordinary course of business, (d) zoning restrictions, easements, rights-of-way, title irregularities and other similar encumbrances, which alone or in the aggregate are not substantial in amount and do not
materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of the Debtor, (e) banker’s Liens and similar Liens (including set-off rights) in respect of bank deposits, (f) Liens in
favor of customs 
  

 -4- 

 and revenue authorities arising as a matter of law to secure payment of customs duties and in connection with the
importation of goods in the ordinary course of the Debtor’s business, (g) Liens on the property or assets of any subsidiary of the Debtor in favor of the Debtor, (h) purchase money Liens that will be discharged upon the Debtor’s payment of
the purchase price for the applicable property, to the extent such Liens relate solely to the property so purchased, (i) leases of specific items of Equipment so long as such Liens do not extend beyond the equipment so leased and any proceeds
applicable thereto, (j) additional security interests or Liens consented to in writing by Lender, (k) Liens being terminated substantially concurrently on the date of this Agreement, (l) Liens incurred in connection with the extension, renewal or
refinancing of the indebtedness secured by Liens of the type described in clauses (h) and (i) above, provided that any extension, renewal or replacement Lien is limited to the property encumbered by the existing Lien and the principal amount of the
indebtedness being extended, renewed or refinanced does not increase and (m) the Liens set forth on Schedule 2. 
  
 “Person” has the meaning set forth in the Loan and Restructuring Agreement. 
  
 “Proceeds” means “Proceeds,” as such term is defined in the UCC and, in any event, shall include,
without limitation, (a) any and all Accounts, Chattel Paper, Instruments, cash or other forms of money or currency or other proceeds payable to the Debtor from time to time in respect of the Collateral, (b) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to the Debtor from time to time with respect to any of the Collateral, (c) any and all payments (in any form whatsoever) made or due and payable to the Debtor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any Person acting under color of governmental authority), (d) the proceeds, damages, or recovery based on any claim
of the Debtor against third parties (i) for past, present or future infringement of any copyright, patent or patent license or (ii) for past, present or future infringement or dilution of any trademark or trademark license or for injury to the
goodwill associated with any trademark, trademark registration or trademark licensed under any trademark license and (e) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral. 
  
 “Receivables” means all of the Debtor’s Accounts,
Instruments, Documents, Chattel Paper, Supporting Obligations, and letters of credit and Letter of Credit Rights. 
  
 “Supporting Obligation” means any “Supporting obligation,” as such term is defined in the UCC, now owned or hereafter acquired
by the Debtor or in which the Debtor now holds or hereafter acquires any interest. 
  
 “UCC” has the meaning set forth in the Loan and Restructuring Agreement. 
  
 Unless otherwise defined herein, all capitalized terms used herein and defined in the Loan and Restructuring Agreement, the Prior Secured Promissory Notes
and Secured Convertible Promissory Note shall have the respective meanings given to those terms therein, and terms that are defined in the UCC and used herein shall have the meanings given to them in the UCC. 
  

 -5- 

 2. Representations and Warranties. The Debtor hereby represents and warrants to the Secured
Party that: 
  
 (a) Ownership of Collateral. The
Debtor is the legal and beneficial owner of the Collateral (or, in the case of after-acquired Collateral, at the time the Debtor acquires rights in the Collateral, will be the legal and beneficial owner thereof). Except for the Security Interest
granted to the Secured Party pursuant to this Agreement, the Debtor has rights in or the power to transfer the Collateral free and clear of any adverse Lien, security interest or encumbrance except for Permitted Liens. Except for the financing
statements listed in Schedule 2, no financing statements covering any Collateral or any proceeds thereof are on file in any public office (other than filings listing the Secured Party as the secured party). 
  
 (b) Valid Security Interest. Other than with respect to the
Collateral set forth on Schedule 2, the Security Interest granted pursuant to this Agreement will constitute a valid and continuing first priority, perfected security interest in favor of the Secured Party in the Collateral for which
perfection is governed by the UCC or filing with the United States Copyright Office or United States Patent and Trademark Office. Such Security Interest will be prior to all other Liens on the Collateral, subject to the Permitted Liens. 

 
 (c) Organization and Good Standing. Except as set forth on
Schedule 2(c), the Debtor has been duly incorporated, and is validly existing and in good standing, under the laws of the State of Delaware. 
  
 (d) Location, State of Organization and Name of the Debtor. The Debtor’s state of organization is Delaware and the Debtor’s exact
legal name as it appears in the official filings in the State of Delaware is as set forth in the first paragraph of this Agreement. The Debtor has only one jurisdiction of organization. 
  
 (e) Location of Equipment and Inventory. All Equipment and
Inventory are (i) located at the locations indicated on Schedule 3 (ii) in transit to such locations or (iii) in transit to a third party purchaser which will become obligated on a Receivable to the Debtor upon receipt. Except for Equipment
and Inventory referred to in clauses (ii) and (iii) of the preceding sentence, the Debtor has exclusive possession and control of the Inventory and Equipment. 
  

(g) Delivery of Items. Schedule 4 lists all Instruments (other than checks received in the ordinary course of business),
Letter-of-Credit Rights, Electronic Chattel paper and Chattel Paper of the Debtor as of the date hereof. Upon the written request of the Secured Party, the Debtor will deliver to the Secured Party, together with all necessary stock powers,
endorsements, assignments and other necessary instruments of transfer, the originals of all Receivables consisting of instruments and Chattel Paper and the originals of all certificated securities owned directly by the Debtor. 
  
 (h) Receivables. Each Receivable is genuine and enforceable
against the party obligated to pay the same (an “Account Debtor”) free from any right of rescission, defense, setoff or discount. 
  

 -6- 

 (i) Insurance. Each insurance policy maintained by the Debtor is validly existing and is in
full force and effect. The Debtor is not in default in any material respect under the provisions of any insurance policy, and there are no facts which, with the giving of notice or passage of time (or both), would result in such a default under any
material provision of any such insurance policy. Set forth in Schedule 5 is a complete and accurate list of the insurance of the Debtor in effect on the date of this Agreement covering fire, public liability, property damage and worker’s
compensation, showing as of such date, (i) the type of insurance carried, (ii) the name of the insurance carrier, and (iii) the amount of each type of insurance carried. 
  
 (j) Creation of Lien. This Agreement is effective to create a valid and continuing Lien upon the Collateral.
Upon the written request of the Secured Party, the Debtor shall take all action necessary to protect and perfect such Lien on each item of the Collateral. 
  
 3. [Reserved.] 
  
 4. Covenants. The Debtor covenants and agrees with the Secured Party that, from and after the date of this Agreement until the Obligations
are paid in full: 
  
 (a) Other Liens. Except for
the Security Interest and Permitted Liens, the Debtor has rights in or the power to transfer the Collateral and its title and will be able to do so hereafter free from any adverse Lien, security interest or encumbrance, and the Debtor will defend
the Collateral against the claims and demands of all persons at any time claiming the same or any interest therein.  
  
 (b) Further Documentation. At any time and from time to time, upon the written request of the Secured Party, and at the sole expense of the
Debtor, the Debtor will promptly and duly authenticate and deliver such further instruments and documents and take such further action as the Secured Party may reasonably request for the purpose of obtaining or preserving the full benefits of this
Agreement and of the rights and powers herein granted including, without limitation, filing any financing or continuation statements under the UCC in effect with respect to the Liens created hereby. The Debtor also hereby authorizes the Secured
Party to file any such financing, amendment or continuation statement without the authentication of the Debtor to the extent permitted by applicable law. A reproduction of this Agreement shall be sufficient as a financing statement (or as an exhibit
to a financing statement on form UCC-1) for filing in any jurisdiction. 
  
 (c) Indemnification. The Debtor agrees to defend, indemnify and hold harmless the Secured Party against any and all liabilities, costs and expenses (including, without limitation, legal fees and expenses)
(“Liabilities”): (i) with respect to, or resulting from, any delay in paying, any and all excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral, (ii) with respect to, or
resulting from, any delay in complying with any law, rule, regulation or order of any governmental authority applicable to any of the Collateral or (iii) in connection with any of the transactions contemplated by this Agreement. 
  
 (d) Maintenance of Records. The Debtor will keep and maintain
at its own expense complete and satisfactory, in all material respects, records of the Collateral. 
  

 -7- 

 (e) Inspection Rights. The Secured Party shall have full access during normal business
hours, upon prior notice and in a manner that will not interfere with the normal business operations of the Debtor, to all the books, correspondence and other records of the Debtor relating to the Collateral. The Secured Party or its representatives
may examine such records and make photocopies or otherwise take extracts from such records. The Debtor agrees to render to the Secured Party, at the Debtor’s expense, such clerical and other assistance as the Secured Party may reasonably
request with regard to the exercise of its rights pursuant to this paragraph. 
  
 (f) Compliance with Laws, etc. The Debtor (i) will comply with all laws, rules, regulations and orders of any governmental authority applicable to any part of the Collateral or to the operation of the
Debtor’s business, the failure of which to comply with will have a material adverse effect on the Debtor, and (ii) shall not use or permit any Collateral to be used in violation of any provision of any Credit Document, any law, rule or
obligation or order of any governmental authority, or any policy of insurance covering the Collateral; provided, however, that in each case, the Debtor may contest any such law, rule, regulation or order; in any reasonable manner which
does not, in the reasonable opinion of the Secured Party, adversely affect the Secured Party’s rights or the priority of its Liens on the Collateral. 
  
 (g) Payment of Obligations. The Debtor will pay promptly when due all taxes, assessments and governmental charges or levies imposed upon the
Collateral or with respect to any of its income or profits derived from the Collateral, as well as all claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except for
amounts contested by the Debtor in good faith through appropriate proceedings. 
  
 (h) Limitation on Liens on Collateral. The Debtor will not create, incur or permit to exist, will defend the Collateral against, and will take such other action as is necessary to remove, any Lien or
claim on or to the Collateral, other than the Security Interest and Permitted Liens, and will defend the right, title and interest of the Secured Party in and to any of the Collateral against the claims and demands of all other persons. 

 
 (i) Limitations on Dispositions of Collateral. The Debtor
will not sell, transfer, lease, or otherwise dispose of any of the Collateral, or attempt, offer or contract to do so other than (i) dispositions of Inventory in the ordinary course of the Debtor’s business or (ii) the sale of obsolete or
unneeded Equipment in the ordinary course of business; provided, however, that the Debtor will be allowed to grant licenses to its products and related documentation in the ordinary course of business and to establish or provide for
escrows of related intellectual property in connection therewith. 
  
 (j) Further Identification of Collateral. The Debtor will furnish to the Secured Party from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the
Collateral as the Secured Party may reasonably request, all in detail acceptable to the Secured Party. 
  
 (k) Notice of Change of State of Incorporation. Without 30 days’ prior written notice to the Secured Party, the Debtor shall not (i)
change the Debtor’s name, state of 
  

 -8- 

 incorporation or organization, organizational identification number or place of business (or, if the Debtor has more than
one place of business, its chief executive office), or the office in which the Debtor’s records relating to Receivables are kept, or (ii) keep Collateral consisting of Chattel Paper and documents at any location other than its chief executive
office. 
  
 (l) Future Commercial Tort Claims. The
Debtor will promptly give notice to the Secured Party upon the initiation of any commercial tort claim. The Debtor hereby authorizes the Secured Party to amend this Agreement (without any further action or consent from the Debtor) to include any
such commercial tort claim as Collateral hereunder. 
  
 (m)
Deposit Accounts. Upon the written request of the Secured Party, for each deposit account maintained by the Debtor, the Debtor shall, along with the bank or other depository institution at which such deposit account is maintained (the
“Depositary Bank”), execute and deliver to the Secured Party a Deposit Account Control Agreement in form and substance reasonably satisfactory to the Secured Party. If requested by the Secured Party, the Debtor shall also obtain a
blocked account, lockbox or similar agreement with all or certain Depository Banks. Without ten days prior written notice to the Secured Party, the Debtor shall not establish any deposit account not set forth on Schedule 6. 

 
 (n) Collection of Receivables. The Debtor shall collect,
enforce and receive delivery of the Receivables in accordance with past practice. 
  
 (q) Insurance. The Debtor shall (i) maintain and keep in force insurance of the types and in amounts customarily carried from time to time during the term of this Agreement in its lines of business,
including fire, public liability, property damage and worker’s compensation, such insurance to be carried with companies and in amounts satisfactory to the Secured Party, (ii) deliver to the Secured Party from time to time, as the Secured Party
may request, schedules setting forth all insurance then in effect, and (iii) deliver to the Secured Party copies of each policy of insurance which replaces, or evidences the renewal of, each existing policy of insurance at least 15 days prior to the
expiration of such policy. The Secured Party shall be named as additional insured or additional loss payee, as appropriate, on all liability and property insurance of the Debtor and such policies shall contain such additional endorsements as shall
be required by the Secured Party. 
  
 (r) Mortgagee
Waivers. The Debtor shall use its commercially reasonable efforts to obtain waivers or subordinations of Liens from landlords and mortgagees, and the Debtor shall, in all instances, obtain signed acknowledgements of the Secured Party’s
Liens from bailees having possession of any of the Debtor’s Collateral that they hold such Collateral for the benefit of the Secured Party pursuant to Section 9-313(c) of the UCC. 
  
 (s) Letters of Credit. If the Debtor is or becomes the beneficiary of a letter of credit, the Debtor shall
promptly, and in any event within two business days after becoming a beneficiary, notify the Secured Party thereof and enter into a tri-party agreement with the Secured Party and the issuer or confirmation bank with respect to such Letter of Credit
Rights assigning such Letter of Credit Rights to the Secured Party and directing all payments thereunder to the Secured Party, all in form and substance satisfactory to the Secured Party. 
  

 -9- 

 (t) Electronic Chattel Paper. The Debtor shall take all steps reasonably necessary to grant
the Secured Party control of all Electronic Chattel Paper in accordance with the UCC and all “transferable records” as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce
Act. 
  
 (u) Intellectual Property Matters. The
Debtor shall notify the Secured Party immediately if it knows or has reason to know (i) that any application or registration relating to any of its Intellectual Property that is material to the operation of its business may become abandoned or
dedicated, or (ii) of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any
court) regarding the Debtor’s ownership of any Intellectual Property that is material to the operation of its business, its right to register the same, or to keep and maintain the same. 
  
 (v) Intellectual Property Applications. In no event shall the
Debtor, either itself or through any agent, employee, licensee or designee, file an application for the registration of any patent, trademark or copyright with the United States Patent and Trademark Office, the United States Copyright Office or any
similar office or agency without giving the Secured Party prior written notice thereof, and, upon request of the Secured Party, the Debtor shall execute and deliver any and all security documents as the Secured Party may request to evidence the
Secured Party’s Lien on such Intellectual Property and the general intangibles of the Debtor relating thereto or represented thereby. The Debtor hereby authorizes the Secured Party to amend this Agreement (without any further action or consent
from the Debtor) to include any such patent, trademark or copyright as Collateral hereunder. 
  
 (w) Intellectual Property Abandonment. The Debtor shall take all actions reasonably necessary or requested by the Secured Party to maintain and pursue each application, to obtain the relevant
registration and to maintain the registration of its Intellectual Property, including the filing of applications for renewal, affidavits of use, affidavits of noncontestability and opposition and interference and cancellation proceedings.

  
 (x) Protection of Intellectual Property. In the
event that any of the Debtor’s Intellectual Property is infringed upon, or misappropriated or diluted by a third party, the Debtor shall notify the Secured Party promptly after the Debtor learns thereof. The Debtor shall, unless the Secured
Party shall determine that such Intellectual Property is in no way material to the conduct of its business or operations, promptly sue for, and seek recovery of any and all damages resulting from such infringement, misappropriation or dilution, and
shall take such other actions as the Secured Party shall deem necessary under the circumstances to protect such Intellectual Property. 
  
 (y) Chattel Paper. The Debtor shall type, print or stamp conspicuously on the face of all original copies of all Collateral consisting of
Chattel Paper and Documents not in the possession of the Secured Party having a value in excess of $100,000 a legend satisfactory to the Secured Party indicating that such Chattel Paper is subject to the security interest granted hereby. 

 

 -10- 

 (z) Limitation on Filing of Financing Statements. The Debtor acknowledges that it is not
authorized to file any financing statement or amendment or termination statement with respect to any financing statement without the prior written consent of the Secured Party and agrees that it will not do so without the prior written consent of
the Secured Party, subject to the Debtor’s rights under Section 9-509(d)(2) of the UCC. 
  
 (aa) Negative Covenants. Without the Secured Party’s prior written consent, Debtor shall not do any of the following: 
  
 (i) Merge or consolidate with another corporation or entity (except that any wholly-owned subsidiary of Debtor may merge
into Debtor or into any other wholly-owned subsidiary of Debtor); 
  
 (ii) Acquire any material assets, except in the ordinary course of business; 
  
 (iii) Enter into any Extraordinary Transaction or any other transaction outside the ordinary course of business; 
  
 (iv) Sell or transfer any assets, except for the (i) sale of finished Inventory in the ordinary course of Debtor’s business, (ii) the sale of
obsolete or unneeded Equipment in the ordinary course of business; or (iii) the consummation of an Extraordinary Transaction which has received the Secured Party’s prior written consent; 
  
 (v) Make any loans of any money or other assets, except for loans to
subsidiaries of the Debtor; 
  
 (vi) Except as otherwise set
forth on Schedule 4(vi) (both with respect to existing debts and future debts), incur and/or have outstanding any debts, outside the ordinary course of business; 
  
 (vii) Guarantee or otherwise become liable with respect to the obligations of another party or entity, except for (i) the
endorsement of instruments for collection or deposit in the ordinary course of business or (ii) guarantees for the benefit of subsidiaries of the Debtor; 
  
 (viii) Grant any Liens on any of its assets or property, other than Permitted Liens; 
  
 (ix) pay or declare any dividends on Debtor’s stock (except for dividends payable solely in stock of Debtor);

  
 (x) Redeem, retire, purchase or otherwise acquire, directly
or indirectly, any of Debtor’s stock (other than repurchases from employees and consultants in connection with the termination of such Person’s employment or consulting arrangement with Debtor); 
  
 (xi) Dissolve or elect to dissolve; 
  

 -11- 

 (xii) Prepay, redeem, purchase, defease or otherwise satisfy in any manner prior to the scheduled
payment thereof any indebtedness for borrowed money (other than the Obligations) or lease obligations in an aggregate amount equal to or greater than $10,000; 
  

(xiii) Amend, modify or otherwise change the terms of any document, instrument or agreement evidencing indebtedness for borrowed money (other than the
Obligations) or lease obligations or settle or otherwise restructure any outstanding liabilities with any creditor of Debtor in an aggregate amount equal to or greater than $10,000 other than as set forth on Schedule 4(xiii) attached hereto;
or 
  
 (xiv) amend, modify or otherwise change any of the
subordination or other provisions of any document, instrument or agreement evidencing subordinated debt in an aggregate amount equal to or greater than $10,000 in a manner which adversely affects the rights of the Secured Party. 
  
 5. Event of Default; the Secured Party’s Appointment as
Attorney-in-Fact. 
  
 (a) Event of Default.
For purposes of this Agreement, the occurrence of any one of the following events (each an “Event of Default”) shall constitute a default hereunder and under the Note or any of the other Credit Documents: 
  
 (i) Debtor shall (1) fail to pay when due any principal of, or interest on,
any Obligation or (2) fail to pay within five (5) days after the same becomes due, any other amount required under the terms of Note or any of the other Credit Documents; 
  
 (ii) Debtor shall fail to perform any other non-monetary Obligation set forth in this Agreement or any other Credit
Document which by its nature cannot be cured; 
  
 (iii) Debtor
shall fail to perform any other non-monetary Obligation set forth in this Agreement or any other Credit Document, which failure is not cured within ten (10) Business Days after written notice of such failure is provided to Debtor or if such failure
cannot be cured within such time period, if work on such cure is not begun within such time period and continuously prosecuted thereafter on a commercially reasonable basis until cured; 
  
 (iv) Any representation, warranty, certificate, information or other statement (financial or otherwise) made or furnished
by or on behalf of Debtor to the Secured Party in or in connection with this Agreement, the Note, the Loan and Security Agreement or any of the other Credit Documents, or as an inducement to the Secured Party to enter into this Agreement, shall be
false, incorrect, incomplete or misleading in any material respect when made or furnished; 
  
 (v) Any levy, assessment, attachment, seizure, Lien or encumbrance (other than a Permitted Lien) is made on all or any part of the Collateral which is not cured or contested within twenty (20) Business Days after the
occurrence of the same; 
  
 (vi) Except as otherwise disclosed in
writing to and approved in advance by the Secured Party, Debtor breaches any contract or obligation, which has or may reasonably be expected to have a Material Adverse Effect; 
  

 -12- 

 (vii) Borrower shall breach any covenant, in any material respect, in this Agreement, the Loan and
Security Agreement, under the Note or any of the other Credit Documents or any other agreement entered into between the Debtor and the Secured Party in connection therewith. 
  
 (viii) Dissolution, termination of existence, or appointment of a receiver, trustee or custodian, for all or any part of
the property of, assignment for the benefit of creditors by, or the commencement of any proceeding by Debtor under any reorganization, bankruptcy, arrangement, dissolution or liquidation law or statute of any jurisdiction, now or in the future in
effect; 
  
 (ix) Commencement of any proceeding against Debtor
under any reorganization, bankruptcy, arrangement, dissolution or liquidation law or statute of any jurisdiction, now or in the future in effect, which is not cured by the dismissal thereof within ninety (90) days after the date commenced;

  
 (x) Revocation or termination of, or limitation or denial of
liability under, any Credit Document by Debtor; 
  
 (xi) A Change
of Control shall have occurred without the prior written consent of the Secured Party; 
  
 (xii) Debtor shall conceal, remove or transfer any part of its property, with intent to hinder, delay or defraud its creditors, or make or suffer any transfer of any of its property which may be fraudulent under any
bankruptcy, fraudulent conveyance or similar law; or 
  
 (xiii)
Debtor shall be in default beyond any applicable period of grace or cure under any other agreement involving the borrowing of money, the purchase of property, the advance of credit or any other monetary liability of any kind to any lender or to any
Person which results in the acceleration of payment of such obligation in an amount in excess of $150,000. 
  
 (b) Powers. The Debtor hereby appoints the Secured Party and any officer or agent of the Secured Party, with full power of substitution, as
its attorney-in-fact with full irrevocable power and authority in the place of the Debtor and in the name of the Debtor or its own name, from time to time in the Secured Party’s discretion so long as an Event of Default has occurred and is
continuing, for the purpose of carrying out the terms of this Agreement, to take any appropriate action and to authenticate any instrument which may be necessary or desirable to accomplish the purposes of this Agreement. Without limiting the
foregoing, so long as an Event of Default has occurred and is continuing, the Secured Party shall have the right, without notice to, or the consent of, the Debtor, to do any of the following on the Debtor’s behalf: 
  
 (i) to pay or discharge any taxes or Liens levied or placed on or
threatened against the Collateral; 
  
 (ii) to direct any party
liable for any payment under any of the Collateral to make payment of any and all amounts due or to become due thereunder directly to the Secured Party or as the Secured Party directs; 
  

 -13- 

 (iii) to ask for or demand, collect, and receive payment of and receipt for, any payments due or to
become due at any time in respect of or arising out of any Collateral; 
  
 (iv) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to enforce any right in respect of any Collateral; 
  
 (v) to defend any suit, action or proceeding brought against the Debtor with respect to any Collateral; 
  
 (vi) to settle, compromise or adjust any suit, action or proceeding
described in subsection (v) above and to give such discharges or releases in connection therewith as the Secured Party may deem appropriate; 
  
 (vii) to assign any patent right included in the Collateral of the Debtor (along with the goodwill of the business to which any such patent right
pertains), throughout the world for such term or terms, on such conditions, and in such manner, as the Secured Party shall in its sole discretion determine; and 
  

(viii) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral and to take, at the
Secured Party’s option and the Debtor’s expense, any actions which the Secured Party deems necessary to protect, preserve or realize upon the Collateral and the Secured Party’s Liens on the Collateral and to carry out the intent of
this Agreement, in each case to the same extent as if the Secured Party were the absolute owner of the Collateral for all purposes. 
  
 The Debtor hereby ratifies whatever actions the Secured Party shall lawfully do or cause to be done in accordance with this Section 5. This power of
attorney shall be a power coupled with an interest and shall be irrevocable. 
  
 (c) No Duty on the Secured Party’s Part. The powers conferred on the Secured Party by this Section 5 are solely to protect the Secured Party’s interests in the Collateral and shall not impose
any duty upon it to exercise any such powers. The Secured Party shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither the Secured Party nor any of its officers, directors, employees
or agents shall, in the absence of willful misconduct or gross negligence, be responsible to the Debtor for any act or failure to act pursuant to this Section 5. 
  
 6. Performance by the Secured Party of the Debtor’s Obligations. If the Debtor fails to perform or comply
with any of its agreements or covenants contained in this Agreement and the Secured Party performs or complies, or otherwise causes performance or compliance, with such agreement or covenant in accordance with the terms of this Agreement, then the
expenses of the Secured Party incurred in connection with such performance or compliance shall be payable by the Debtor to the Secured Party on demand and shall constitute Obligations secured by this Agreement. 
  
 7. Remedies. If an Event of Default has occurred and is
continuing, the Secured Party may exercise, in addition to all other rights and remedies granted to it in this Agreement 
  

 -14- 

 and in any other instrument or agreement relating to the Obligations, all rights and remedies of a secured party under
the UCC. Without limiting the foregoing, the Secured Party, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law) to or upon the Debtor or any other person (all
of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances collect, receive, appropriate and realize upon any or all of the Collateral, and/or may sell, lease, assign, give an option or options to purchase,
or otherwise dispose of and deliver any or all of the Collateral (or contract to do any of the foregoing), in one or more parcels at a public or private sale or sales, at any exchange, broker’s board or office of the Secured Party or elsewhere
upon such terms and conditions as the Secured Party may deem advisable, for cash or on credit or for future delivery without assumption of any credit risk. The Secured Party shall have the right upon any such public sale or sales and, to the extent
permitted by law, upon any such private sale or sales, to purchase all or any part of the Collateral so sold, free of any right or equity of redemption in the Debtor, which right or equity is hereby waived or released. The Secured Party shall apply
the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all reasonable expenses incurred therein or in connection with the care or safekeeping of any of the Collateral or in any way relating to
the Collateral or the rights of the Secured Party under this Agreement (including, without limitation, reasonable attorneys’ fees and expenses) to the payment in whole or in part of the Obligations, in such order as the Secured Party may elect,
and only after such application and after the payment by the Secured Party of any other amount required by any provision of law, need the Secured Party account for the surplus, if any, to the Debtor. To the extent permitted by applicable law, the
Debtor waives all claims, damages and demands it may acquire against the Secured Party arising out of the exercise by the Secured Party of any of its rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at least ten days before such sale or other disposition. The Debtor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay the Obligations and the fees and disbursements of any attorneys employed by the Secured Party to collect such deficiency. 
  
 8. Limitation on Duties Regarding Preservation of Collateral. The Secured Party’s sole duty with respect to the custody, safekeeping
and preservation of the Collateral, under Section 9-207 of the UCC or otherwise, shall be to deal with it in the same manner as the Secured Party deals with similar property for its own account. Neither the Secured Party nor any of its directors,
officers, employees or agents shall be liable for failure to demand, collect or realize upon all or any part of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Debtor or otherwise. 
  
 9. Powers Coupled
with an Interest. All authorizations and agencies contained in this Agreement with respect to the Collateral are irrevocable and are powers coupled with an interest. 
  
 10. No Waiver; Cumulative Remedies. The Secured Party shall not by any act (except by a written instrument
pursuant to Section 12(a) hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any default under the Note or any of the other Credit Documents or in any breach of any of
the terms 
  

 -15- 

 and conditions of this Agreement. No failure to exercise, nor any delay in exercising, on the part of the Secured Party,
any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Secured Party of any right or remedy under this Agreement on any one occasion shall not be construed as a bar to any right or remedy which the Secured Party would otherwise have on any subsequent occasion. The rights and
remedies provided in this Agreement are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law. 
  
 11. Termination of Security Interest. Upon satisfaction of the Debtor’s obligations pursuant to the Note, the security interest granted
herein shall terminate and all rights to the Collateral shall revert to the Debtor. Upon any such termination, the Secured Party shall authenticate and deliver to the Debtor such documents as the Debtor may reasonably request to evidence such
termination. 
  
 12. Miscellaneous. 
  
 (a) Amendments and Waivers. Any term of this Agreement may be
amended with the written consent of the Debtor and of Secured Parties. Any amendment or waiver effected in accordance with this Section 12(a) shall be binding upon the parties and their respective successors and assigns. 
  
 (b) Transfer; Successors and Assigns. The terms and
conditions of this Agreement shall be binding upon the Debtor and its successors and assigns, as well as all persons who become bound as a debtor to this Agreement and inure to the benefit of the Secured Party and its successors and assigns. Nothing
in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement. 
  
 (c) Governing
Law. This Agreement 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. 
  
 (d)
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. 
  
 (e) Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 
  
 (f) 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. 
  

 -16- 

 (h) Payments Free of Taxes, Etc. All payments made by the Debtor under this Agreement shall
be made by the Debtor free and clear of and without deduction for any and all present and future taxes, levies, charges, deductions and withholdings. In addition, the Debtor shall pay upon demand any stamp or other taxes, levies or charges of any
jurisdiction with respect to the execution, delivery, registration, performance and enforcement of this Agreement. Upon request by the Secured Party, the Debtor shall furnish evidence satisfactory to the Secured Party that all requisite
authorizations and approvals by, and notices to and filings with, governmental authorities and regulatory bodies have been obtained and made and that all requisite taxes, levies and charges have been paid. 
  
 (i) 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 order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered
unenforceable. 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 the Agreement shall be interpreted as
if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms. 
  
 (j) Entire Agreement. This Agreement, and the documents referred to herein constitute the entire agreement between the parties hereto
pertaining to the subject matter hereof, and any and all other written or oral agreements existing between the parties hereto concerning such subject matter are expressly canceled. 
  
 (k) Amendment and Restatement. Effective upon execution of this Agreement by the Debtor and the Secured Party,
the Twenty First Amended and Restated Security Agreement by and among the Debtor, Optel LLC, and the Secured Party dated as of September 13, 2004, is hereby amended and restated in its entirety to read as set forth in this Agreement;
provided, however, that the execution and delivery of this Agreement and the other Credit Documents shall not (a) operate as a waiver of any right, power or remedy of the Secured Party under the Existing Security Agreement and the
Prior Secured Promissory Notes, except to the extent expressly waived in this Agreement and the other Credit Documents, or (b) extinguish or impair any obligations of the Debtor under the Existing Security Agreement or the Prior Secured Promissory
Notes except to the extent any such obligation is actually satisfied by the Debtor. 
  
 [Signature Page Follows] 
  

 -17- 

 The Debtor and the Secured Party have caused this Agreement to be duly executed and delivered as of the
date first above written. 
  

			
	DEBTOR:
	
	DIGITAL LIGHTWAVE, INC.
		
	 By:
	 	 /s/ JAMES GREEN

	 	 	 James Green

	 	 	 President and Chief Executive Officer

	
	SECURED PARTY:
	
	OPTEL CAPITAL, LLC
		
	 By:
	 	 /s/ PAUL RAGAINI

	 Name:
	 	 Paul Ragaini

	 Title:
	 	 Chief Financial Officer

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