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Exhibit
10.3
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND HAVE
BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE APPLICABLE
SECURITIES LAWS OF ANY STATE.
SECURED GRID
CONVERTIBLE PROMISSORY NOTE
(NEW COMMITMENT
LOANS)
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$2,500,000.00
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April 4, 2008 |
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Boulder, Colorado |
For value received, Digital
Lightwave, Inc., a Delaware corporation (the “ Company
”), promises to pay to Optel Capital, LLC, a Delaware limited
liability company (the “ Holder ”), or its
registered assigns, the principal sum of Two Million, Five Hundred
Thousand Dollars ($2,500,000.00) or, if less, the principal amount
of all loans made by the Holder to the Company under the terms of
this Secured Grid Convertible Promissory Note (New Commitment
Loans) (this “ Note ”) (such loans, collectively
the “ New Commitment Loans ” and individually
each a “ New Commitment Loan ”), with interest
on the outstanding principal amount at a rate equal to the London
Interbank Offered Rate (as defined below) plus 100 basis points. As
used herein, the term “London Interbank Offered Rate”
means the fluctuating rate of interest equal to the rate per annum
equal to the British Bankers Association LIBOR rate (“ BBA
LIBOR ”), as published by Reuters (or such other
commercially available source providing quotations of BBA LIBOR as
selected by the Holder from time to time) as determined for each
business day at approximately 11:00 a.m. London time two
(2) business days prior to the date in question, for dollar
deposits (for delivery on the first day of such interest period)
with a three month term. If such rate is not available at such time
for any reason, then the rate for that interest period will be
determined by such alternate method as reasonably selected by the
Holder. The interest rate shall be computed on the basis of the
actual number of days elapsed and a year of 360 days. This Note is
issued pursuant to the Credit and Restructuring Agreement, dated as
of April 4, 2008 (as amended, restated or otherwise modified
from time to time, the “ Credit and Restructuring
Agreement ”), by and between the Company and the Holder.
Terms not otherwise defined herein shall have the meaning given to
them in the Credit and Restructuring Agreement. This Note is
subject to the following terms and conditions.
1. Borrowing
Procedures, Etc.
(a) Each New Commitment Loan
may be requested by the Company pursuant to a written notice in
accordance with Section 2.1(a) of the Credit and Restructuring
Agreement.
(b) The amount and the rate
of interest for each New Commitment Loan shall be endorsed by the
Holder on Schedule 1 attached hereto or, at the
Holder’s option, in its records, which schedule or records
shall be conclusive, absent manifest error.
2. Maturity
.
(a) Unless converted as
provided in Section 3, (i) the entire unpaid outstanding
principal amount shall be due and payable upon demand by the Holder
at any time the earlier to occur of (i) March 31, 2010
and (ii) the date on which written demand is made by the
Holder in accordance with Section 2.3(c) of the Credit and
Restructuring Agreement (the “ Maturity Date ”)
and (ii) the accrued and unpaid interest shall be due and
payable in quarterly installments on the last business day of each
of the Company’s fiscal quarters with the first interest
installment payment due and payable on June 30,
2008.
(b) Notwithstanding the
foregoing, the entire unpaid balance of principal and interest (the
“ Aggregate Debt ”) shall become immediately due
and payable upon demand by the Holder at any time on or following
the occurrence of an Event of Default (as defined in the Security
Agreement (as defined below)).
3. Conversion
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(a) Conversion into
Common Stock; Conversion Price . The Aggregate Debt, or any
portion thereof, shall be convertible at the option of the Holder
into shares of Common Stock of the Company (“ Conversion
Stock ”), at any time, and from time to time, following
the Stockholder Meeting, at a conversion price per share (the
“ Conversion Price ”) equal to the greater of
(a) $0.01 or (b) 100% of the average of the daily
volume-weighted average price of Common Stock quoted or traded on
the over-the-counter market as reported by Pink Sheets LLC (the
“ Pink Sheets ”) (or, if the Common Stock is not
quoted or traded on the Pink Sheets 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
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