STOCKHOLDER AGREEMENT

This STOCKHOLDER AGREEMENT (this “ Agreement ”), dated as of September 9, 2016 is entered into by and between DASAN Zhone Solutions, Inc., a Delaware corporation (the “ Company ”), and DASAN Networks, Inc., a company incorporated under the laws of Korea (the “ Stockholder ”).

WHEREAS, the Company, Dragon Acquisition Corporation, a Delaware corporation (“ Merger Sub ”), the Stockholder and Dasan Network Solutions, Inc., a California corporation (“ DNS ”), previously entered into an Agreement and Plan of Merger, dated as of April 11, 2016 (the “ Merger Agreement ”), pursuant to which, on the date hereof, Merger Sub merged with and into DNS, with DNS as the surviving corporation (the “ Merger ”);

WHEREAS, as more fully described in the Merger Agreement, at the effective time of the Merger (the “ Effective Time ”), the outstanding shares of DNS’ capital stock held by the Stockholder were converted into the right to receive shares of common stock, $0.001 par value per share, of the Company (“ Company Common Stock ”), on the terms and subject to the conditions set forth in the Merger Agreement; and

WHEREAS, as a condition of and inducement to the Company’s and Merger Sub’s willingness to enter into the Merger Agreement, the Company and Merger Sub have required that the Stockholder enter into this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement, and intending to be legally bound hereby, the parties hereto agree as follows:

1. Certain Definitions . Capitalized terms used herein and not otherwise defined have the meanings set forth in the Merger Agreement. As used in this Agreement, the following terms shall have the following respective meanings:

“ Additional Owned Shares ” means all shares of the Company Common Stock and any other equity securities of the Company that are beneficially owned by the Stockholder or any of its affiliates and are acquired after the date hereof and prior to the termination of this Agreement.

“ affiliate ” has the meaning set forth in the Merger Agreement; provided, however , that the Company shall be deemed not to be an affiliate of the Stockholder.

“ beneficial ownership ” (and related terms such as “beneficially owned” or “beneficial owner”) has the meaning set forth in Rule 13d-3 under the Exchange Act.

“ Board ” means the Board of Directors of the Company.

“ business day ” has the meaning set forth in the Merger Agreement.

“ Covered Shares ” means the Owned Shares and Additional Owned Shares.

“ Director Nominee ” means each person that is nominated by the Board or any committee thereof for election to the Board in accordance with Article V, Section 2 of the Amended and Restated Bylaws of the Company.

“ Disclosed Owned Shares ” has the meaning assigned thereto in Section 5(a) hereof.

“ Initial Director ” means each person that is a member of the Board immediately after the Effective Time, as designated and appointed in accordance with Section 1.7(b) of the Merger Agreement.

“ Owned Shares ” means all shares of the Company Common Stock and any other equity securities of the Company which are beneficially owned by the Stockholder or any of its affiliates as of the date hereof.

“ person ” means an individual, corporation, limited liability company, partnership, association, trust, unincorporated organization or other entity or group (as defined in Section 13(d) of the Exchange Act).

“ Term ” has the meaning assigned thereto in Section 6 hereof.

“ Transfer ” means, with respect to a security, the transfer, pledge, hypothecation, encumbrance, assignment or other disposition (whether by sale, merger, consolidation, liquidation, dissolution, dividend, distribution or otherwise) of such security or the beneficial ownership thereof, the offer to make such a transfer or other disposition, and each option, agreement, arrangement or understanding, whether or not in writing, to effect any of the foregoing. As a verb, “ Transfer ” shall have a correlative meaning.

2.     Company Directors .

(a)    At any meeting of the stockholders of the Company, however called, or at any postponement or adjournment thereof, or in any other circumstance in which the vote, consent or other approval of the stockholders of the Company is sought, in each case with respect to the election or removal of any director(s) of the Company, the Stockholder shall, and shall cause any other holder of record to, (x) appear at each such meeting or otherwise cause all Covered Shares to be counted as present thereat for purposes of calculating a quorum and (y) vote (or cause to be voted), or execute and deliver a written consent (or cause a written consent to be executed and delivered) covering, all Covered Shares:

(i)    in favor of each Director Nominee; and

(ii)    against the removal from the Board of any Initial Director or any Director Nominee, unless, in each case, such removal is recommended by a resolution approved by the affirmative vote of at least two-thirds of the entire Board.

3.     Irrevocable Proxy . Concurrently with the execution of this Agreement, the Stockholder agrees to execute and deliver, or cause to be executed and delivered by the holder of record thereof, to the Company an irrevocable proxy in the form attached as Exhibit A hereto (subject to the proviso to this sentence, each a “ Proxy ”), which shall be irrevocable to the extent permitted by applicable law, covering all of the Covered Shares; provided, however , that, in the event that the number of Covered Shares is modified, including due to the acquisition of Additional Owned Shares, the Stockholder shall execute and deliver, or cause to be executed and delivered by the holder of record thereof, to the Company an irrevocable proxy in the form attached as Exhibit A hereto, except that the definition of “Covered Shares” therein will be updated accordingly, and, upon delivery of such new proxy to the Company, the Company will destroy any existing Proxy superseded by such proxy and such new proxy will be deemed the Proxy for the purposes of this Agreement. The Stockholder hereby represents to the Company that no proxies have heretofore been given in respect of the Stockholder’s Covered Shares. The Stockholder hereby affirms that its Proxy is given in connection with the execution of the Merger Agreement and that such irrevocable proxy is given to secure the performance of the duties of the Stockholder under this Agreement. The Stockholder hereby further affirms that its Proxy is coupled with an interest and may under no circumstances be revoked. The Stockholder hereby ratifies and confirms all that such irrevocable proxy may lawfully do or cause to be done by virtue

hereof. If for any reason the proxy granted herein is not irrevocable, the Stockholder agrees to vote the Stockholder’s Covered Shares in accordance with Section 2(a) hereof.

4.     Additional Agreements .

(a)     No Disposition . The Stockholder hereby covenants and agrees that, except as contemplated by this Agreement and the Merger Agreement, during the period from the date hereof through the first anniversary of the Effective Time, the Stockholder shall not (i) offer to Transfer, Transfer or consent to any Transfer of any or all of the Covered Shares or any interest therein without the prior written consent of the Special Committee of the Board, (ii) enter into any contract, option or other agreement or understanding with respect to any Transfer of any or all Covered Shares or any interest therein without the prior written consent of the Special Committee of the Board, (iii) grant any proxy, power-of-attorney or other authorization or consent in or with respect to any or all of the Covered Shares, (iv) deposit any or all of the Covered Shares into a voting trust or enter into a voting agreement or arrangement with respect to any or all of the Covered Shares or (v) take any other action that would make any representation or warranty of the Stockholder contained herein untrue or incorrect in any material respect or in any way restrict, limit or interfere in any material respect with the performance of the Stockholder’s obligations hereunder. Any attempted Transfer of Covered Shares or any interest therein in violation of this Section 4(a) shall be null and void. Nothing in this Section 4(a) shall prohibit a Transfer of the Stockholder’s Covered Shares by the Stockholder to an affiliated corporation under common control with the Stockholder or to a wholly owned subsidiary of the Stockholder; provided , however, that any Transfer referred to in this Section 4(a) shall be permitted only if the transferee agrees in writing, reasonably satisfactory in form and substance to the Special Committee of the Board, to be bound by the terms of this Agreement. Notwithstanding the foregoing limitations, the Stockholder will be permitted at any time and from time to time to Transfer the Stockholder’s Covered Shares pursuant to a bona fide sale into the public market in compliance with applicable securities laws.

(b)     Stock Splits . In the event of any stock split, stock dividend, merger, reorganization, recapitalization or other change in the capital structure of the Company affecting the Covered Shares or the acquisition of Additional Owned Shares or other securities or rights of the Company by the Stockholder or any of its affiliates, (i) the type and number of Covered Shares shall be adjusted appropriately, and (ii) this Agreement and the obligations hereunder shall automatically attach to any additional Covered Shares or other securities or rights of the Company issued to or acquired by the Stockholder or any of its affiliates.

(c)     Additional Owned Shares . The Stockholder hereby agrees to notify the Company promptly in writing of the number and description of any Additional Owned Shares of the Stockholder or its affiliates (other than Additional Owned Shares issued to the Stockholder by the Company).

5.     Representations and Warranties of the Stockholder . The Stockholder hereby represents and warrants to the Company as follows:

(a)     Title . Except as may be set forth on Schedule I : (i) the Stockholder is the sole record and beneficial owner of the shares of the Company Common Stock set forth on Schedule I (the “ Disclosed Owned Shares ”) and (ii) the Stockholder has sole voting power, sole power of disposition and sole power to issue instructions with respect to the matters set forth in Sections 3 and 4 hereof and all other matters set forth in this Agreement, in each case with respect to all of the Disclosed Owned Shares with no limitations, qualifications or restrictions on such rights, subject to applicable securities laws and the terms of this

Agreement. Except as permitted by this Agreement, the Owned Shares of the Stockholder and the certificates representing such shares, if any, are now, and at all times during the term hereof will be, held by the Stockholder, or by a nominee or custodian for the benefit of the Stockholder, free and clear of any and all Liens (other than as created by this Agreement).

(b)     Authority . The Stockholder has all necessary power and authority and legal capacity to execute, deliver and perform all of its obligations under this Agreement, and consummate the transactions contemplated hereby, and no other proceedings or actions on the part of the Stockholder are necessary to authorize the execution, delivery or performance of this Agreement or the consummation of the transactions contemplated hereby.

(c)     Due Execution and Delivery . This Agreement has been duly and validly executed and delivered by the Stockholder and, assuming due authorization, execution and delivery hereof by the Company, constitutes a legal, valid and binding agreement of the Stockholder, enforceable against it in accordance with its terms.

6.     Termination . The term (the “ Term ”) of this Agreement shall commence on the date hereof and shall terminate on the second anniversary of the Effective Time; provided , that (A) the obligations in Section 2(a) with respect to the Director Nominee who is also Chief Executive Officer of the Company immediately prior to the Effective Time shall terminate on the first anniversary of the Effective Time, (B) nothing in this Section 6 shall relieve any party hereto from liability for any breach of this Agreement and (C) this Section 6 and Section 7 shall survive any termination of this Agreement.  

7.     Miscellaneous .

(a)     Entire Agreement . This Agreement (together with any and all schedules and exhibits hereto) and the Proxy constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the parties hereto with respect to the subject matter hereof.

(b)     Reasonable Efforts . Subject to the terms and conditions of this Agreement, each of the parties hereto agrees to use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws to consummate and make effective the transactions contemplated hereby. At another party’s reasonable request and without further consideration, each party hereto shall execute and deliver such additional documents and take all such further lawful action as may be necessary or desirable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated hereby. Without limiting the foregoing, the Stockholder shall, or shall cause its affiliates to (as applicable), execute and deliver to the Company and any of its designees any additional proxies, including with respect to the Covered Shares, reasonably requested by the Company in furtherance of this Agreement.

(c)     No Assignment . This Agreement shall not be assigned (other than by operation of law) without the prior written consent of the other party hereto.

(d)     Binding Successors . Without limiting any other rights the Company may have hereunder in respect of any Transfer of the Covered Shares, the Stockholder agrees that this Agreement and the obligations hereunder shall attach to the Covered Shares beneficially owned by the Stockholder and its affiliates and shall be binding upon any person to which legal or beneficial ownership of such Covered Shares

shall pass, whether by operation of law or otherwise, including, without limitation, the Stockholder’s successors.

(e)     Amendments . This Agreement may not be amended, changed, supplemented or otherwise modified except by an instrument in writing signed on behalf of the Stockholder and the Company.

(f)     Notice . All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly received) (i) upon receipt, if delivered personally or by first class mail, postage pre-paid, (ii) on the date of transmission, if sent by facsimile transmission (with confirmation of receipt), or (iii) on the next business day (or, with respect to international delivery, the third business day) after dispatch , if sent by nationally recognized, documented delivery service, as follows:

If to the Company :

DASAN Zhone Solutions, Inc.

7195 Oakport Street

Oakland, California 94621

Attention: Kirk Misaka
Fax: +1 (510) 777-7593

Copy to :

Latham & Watkins LLP

12670 High Bluff Drive

San Diego, California 92130

Attention: Craig M. Garner, Esq.

Fax: +1 (858) 523-5450

If to the Stockholder :

DASAN Networks, Inc.
Dasan Tower, 49 Daewangpangyo-ro 644beon-gil, Bundang-gu, Seongnam-si

Gyeonggi-do, Korea
Attention: JaeHoon Joo
Facsimile No.: +82 (31) 622-6501

or to such other address or facsimile number as the person to whom notice is given may have previously furnished to the other parties hereto in writing in the manner set forth above.

(g)     Severability . This Agreement shall be deemed severable; the invalidity, illegality or unenforceability of any term or provision of this Agreement shall not affect the validity, legality or enforceability of the balance of this Agreement or of any other term hereof, which shall remain in full force and effect. If any of the provisions hereof are determined to be invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible.

(h)     Remedies . All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the

exercise of any such right, power or remedy by any party hereto shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party.

(i)     No Waiver . The failure of any party hereto to exercise any right, power or remedy provided under this Agreement or otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other party hereto with such party’s obligations hereunder, and any custom or practice of the parties at variance with the terms hereof, shall not constitute a waiver by such party of such party’s right to exercise any such or other right, power or remedy or to demand such compliance.

(j)     No Third Party Beneficiaries . This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement.

(k)     Governing Law . This Agreement, and all matters arising hereunder or in connection herewith, shall be governed by, and construed in accordance with, the internal laws of the State of Delaware without giving effect to the principles of conflict of laws.

(l)     Submission to Jurisdiction . Each party to this Agreement hereby irrevocably and unconditionally (i) consents to the submission to the exclusive jurisdiction of the courts of the State of Delaware sitting in Wilmington, Delaware and the United States District Court for the District of Delaware for any actions, suits or proceedings arising out of or relating to this Agreement or the transaction contemplated hereby, (ii) agrees not to commence any action, suit or proceeding relating thereto except in such courts and in accordance with the provisions of this Agreement, (iii) agrees that service of any process, summons, notice or document by U.S. registered mail, or otherwise in the manner provided for notices in Section 7(f) hereof, shall be effective service of process for any such action, suit or proceeding brought against it in any such court, (iv) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such action, suit or proceeding in such courts and (v) agrees not to plead or claim in any court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. Each of the parties hereto agrees that a final judgment in any such action, suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

(m)     Waiver of Jury Trial . EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7(m) .

(n)     Specific Performance . The parties hereto agree that the Company would be irreparably damaged in the event that any of the provisions of this Agreement were not performed by the Stockholder in accordance with their specific terms or were otherwise breached by the Stockholder, and that

the Company would not have an adequate remedy at law for money damages in such event. It is accordingly agreed that the Company shall be entitled, without posting any bond or other undertaking, to specific performance and injunctive and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which the Company is entitled at law or in equity.

(o)     Interpretation . The descriptive headings used herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. The words “include,” “includes” and “including” shall be deemed to be followed by “without limitation” whether or not they are in fact followed by such words or words of like import. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. No provision of this Agreement shall be interpreted for or against any party hereto because that party or its legal representatives drafted the provision. The words “hereof,” “hereto,” “hereby,” “herein,” “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not any particular section in which such words appear.

(p)     Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constitute one and the same agreement.

(q)     Expenses . Except as otherwise provided herein, each party hereto shall pay such party’s own expenses incurred in connection with this Agreement.

(r)     No Ownership Interest . Nothing contained in this Agreement shall be deemed, upon execution, to vest in the Company any direct or indirect ownership or incidence of ownership of or with respect to any Covered Shares. All rights, ownership and economic benefits of and relating to the Covered Shares shall remain vested in and belong to the Stockholder, and the Company shall have no authority to direct the Stockholder in the voting of any of the Covered Shares, except as otherwise provided herein.

[Signature page follows.]

IN WITNESS WHEREOF, the Stockholder and the Company have caused this Agreement to be duly executed as of the day and year first above written.

THE STOCKHOLDER:

DASAN NETWORKS, INC.

Name:    Min Woo Nam

Title:    Chief Executive Officer

THE COMPANY:

DASAN ZHONE SOLUTIONS, INC.

Name: Kirk Misaka

Title: Chief Financial Officer

 

SCHEDULE I

DISCLOSED OWNED SHARES

The Stockholder is the sole record and beneficial owner of 47,465,082 shares of Company Common Stock.

EXHIBIT A

FORM OF IRREVOCABLE PROXY

Effective as of the Effective Time (as defined below), the undersigned stockholder (the “ Stokholder ”) of DASAN Zhone Solutions, Inc., a Delaware corporation (the “ Company ”), hereby (i) irrevocably grants to, and appoints, the Company, and any person designated in writing by the Company, and each of them individually, as the Stockholder’s proxy and attorney-in-fact (with full power of substitution), for and in the name, place and stead of the Stockholder, to vote all of the Stockholder’s Covered Shares or grant a consent or approval in respect of the Stockholder’s Covered Shares, in accordance with the terms of this Proxy and (ii) revokes any and all proxies given prior to the Effective Time in respect of Stockholder’s Covered Shares.

This Proxy is granted, effective as of the Effective Time, pursuant to that certain Stockholder Agreement, dated as of the date hereof, by and between the Company and the Stockholder (the “ Stockholder Agreement ”). For the purposes of this Proxy, “ Covered Shares ” means (i) all shares of common stock, par value $0.001 per share, of the Company (“ Company Common Stock ”) and any other equity securities of the Company which are beneficially owned by the Stockholder or any of its affiliates (as defined in the Stockholder Agreement) as of the Effective Time and (ii) all shares of the Company Common Stock and any other equity securities of the Company which are beneficially owned by the Stockholder or any of its affiliates and are acquired after the Effective Time and prior to the termination of the Stockholder Agreement. The Stockholder’s Covered Shares as of the date hereof are set forth on the signature page hereof.

The Stockholder hereby affirms that the irrevocable proxy set forth in this Proxy is given in connection with the consummation of the merger (the “ Merger ”) contemplated by that certain Agreement and Plan of Merger (the “ Merger Agreement ”), dated as of April 11, 2016, by and among the Company, Dragon Acquisition Corporation, a California corporation, the Stockholder and Dasan Network Solutions, Inc., a California corporation, and that such irrevocable proxy is given to secure the performance of the duties of the Stockholder under the Stockholder Agreement. References herein to the “ Effective Time ” refer to the effective time of the Merger. The Stockholder hereby further affirms that the irrevocable proxy set forth in this Proxy is coupled with an interest and may under no circumstances be revoked. The Stockholder hereby ratifies and confirms all that such irrevocable proxy may lawfully do or cause to be done by virtue hereof.

The attorneys-in-fact and proxies named above are hereby authorized and empowered by the undersigned at any time after the Effective Time and prior to the termination of the Stockholder Agreement to act as the undersigned’s attorney-in-fact and proxy to vote the Stockholder’s Covered Shares, and to exercise all voting, consent and similar rights of the undersigned with respect to the Stockholder’s Covered Shares (including, without limitation, the power to execute and deliver written consents), at every annual, special, adjourned or postponed meeting of the stockholders of the Company and in every written consent in lieu of such a meeting:

(i)    in favor of each person that is nominated by the Board of Directors of the Company (the “ Board ”) or any committee thereof for election to the Board in accordance with Article V, Section 2 of the Amended and Restated Bylaws of the Company (each, a “ Director Nominee ”); and

(ii)    against the removal from the Board of (x) any person who is a member of the Board immediately after the Effective Time, as designated and appointed in accordance with Section 1.7(b) of the Merger Agreement, or (y) any Director Nominee, unless, in the case of each of clauses (x)

and (y), such removal is recommended by a resolution approved by the affirmative vote of at least two-thirds of the entire Board.

All obligations of the undersigned hereunder shall attach to the Stockholder’s Covered Shares and shall be binding upon any person to which legal or beneficial ownership of such of the Stockholder’s Covered Shares shall pass, whether by operation of law or otherwise, including, without limitation, the Stockholder’s successors.

[ Signature Page Follows ]

Dated: September 9, 2016    

THE STOCKHOLDER:

DASAN NETWORKS, INC.

Name: Min Woo Nam

Title: Chief Executive Officer

Covered Shares: 47,465,082 shares

LOCK-UP AGREEMENT

This LOCK-UP AGREEMENT, dated as of September 9, 2016 (this “ Agreement ”), is by and among DASAN Zhone Solutions, Inc., a Delaware corporation (the “ Company ”), DASAN Networks, Inc., a company incorporated under the laws of Korea (the “ Stockholder ”), the NEA Entities and each of the current and former directors and executive officers of the Company listed on the signature pages hereto (together with the Stockholder and the NEA Entities, the “ Company Stockholders ”).

WHEREAS, the Company and the Stockholder previously entered into that certain Agreement and Plan of Merger, dated as of April 11, 2016 (the “ Merger Agreement ”) with Dragon Acquisition Corporation, a Delaware corporation (“ Merger Sub ”), and Dasan Network Solutions, Inc., a California corporation (“ DNS ”), pursuant to which, on the date hereof, Merger Sub merged with and into DNS, with DNS as the surviving corporation (the “ Merger ”); and

WHEREAS, in connection with the Merger, each of the Company Stockholders has agreed to be subject to certain restrictions with respect to the offer, sale or other disposition of shares of common stock of the Company, $0.001 par value per share (“ Common Stock ”) on the terms and subject to the conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual conditions and agreement set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:    

1.     Defined Terms . As used in this Agreement, the following terms shall have the following respective meanings:

“ Lock-Up Period ” shall mean: (i) with respect to the NEA Entities, the period commencing on the date hereof and ending at 11:59 p.m. Eastern Time on December 8, 2016 and (ii) with respect to each of the other Company Stockholders, the period commencing on the date hereof and ending at 11:59 p.m. Eastern Time on March 8, 2017.

“ NEA Entities ” shall mean each of New Enterprise Associates VIII, L.P., New Enterprise Associates 8A, L.P., New Enterprise Associates 9, L.P., New Enterprise Associates 10, L.P. and NEA Ventures 2000, L.P.

“ Person ” shall mean an individual, a corporation, a partnership, a joint venture, a trust, an unincorporated organization, a limited liability company or partnership, a government and any agency or political subdivision thereof.

2.     Lock-Up . Each Company Stockholder hereby agrees, severally and not jointly, that during the Lock-Up Period it will not offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any shares of Common Stock, or any options or warrants to purchase any shares of Common Stock, or any securities convertible into, exchangeable for or that represent the right to receive shares of Common Stock, whether now owned or hereinafter acquired, owned directly by such Company Stockholder (including holding as a custodian) or with respect to which such Company Stockholder has beneficial ownership within the rules and regulations of the Securities and Exchange Commission (collectively, such Company Stockholder’s “ Shares” ). The foregoing restriction is expressly agreed to preclude any Company Stockholder from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the Shares of such Company Stockholder even if such Shares would be disposed of by a Person other than such Company

Stockholder. Such prohibited hedging or other transactions would include without limitation any short sale or any purchase, sale or grant of any right (including without limitation any put or call option) with respect to any Shares of such Company Stockholder or with respect to any security that includes, relates to, or derives any significant part of its value from such Shares.

3.     Exceptions . Notwithstanding Section 2, each Company Stockholder may transfer its Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of such Company Stockholder or (if such Company Stockholder is an individual) the immediate family of such Company Stockholder, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided, further that any such transfer shall not involve a disposition for value or (iii) with the prior written consent of both the Special Committee (as defined in the Merger Agreement) and (with respect to Company Stockholders other than the Stockholder only) the Stockholder. For purposes of this Agreement, “ immediate family ” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin to a Company Stockholder who is an individual.

4.     Covenants . Each Company Stockholder represents and covenants, severally and not jointly, that it has, and, except as contemplated by clause (i), (ii), or (iii) of Section 3 above, for the duration of the Lock-Up Period will have, good and marketable title to its Shares, free and clear of all liens, encumbrances, and claims whatsoever (other than arising under this Agreement). Each Company Stockholder, severally and not jointly, also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of its Shares except in compliance with and as contemplated by Section 3. Each Company Stockholder further understands and acknowledges that this Agreement is irrevocable and shall be binding upon its heirs, legal representatives, successors and assigns.

5.     Notices . Any notices or other communications required or permitted under, or otherwise in connection with this Agreement, shall be in writing and shall be deemed to have been duly given when delivered in person or upon confirmation of receipt when transmitted by facsimile transmission (but only if followed by transmittal by courier or hand for delivery) or on receipt after dispatch by registered or certified mail, postage prepaid, addressed, or on the next business day (or, with respect to international delivery, the third business day) after dispatch, if sent by nationally recognized, documented delivery service, in each case as follows: if to the Company, at: DASAN Zhone Solutions, Inc., 7195 Oakport Street, Oakland, California 94621, Attention: Kirk Misaka, Fax: +1 (510) 777-7593, and if to a Company Stockholder, to the address on file for such Company Stockholder with the Company.

6.     Miscellaneous . The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. This Agreement may be amended only by a written instrument executed by each of the parties hereto. No waiver shall be valid against any party hereto unless made in writing and signed by the party against whom enforcement of such waiver is sought and then only to the extent expressly specified therein. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect to the greatest extent legally possible. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, between the parties, or any of them, with respect to the subject matter hereof. Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by any Company Stockholder, in whole or in part (whether by operation of law or otherwise), without the prior written consent of the Company, and any attempt to make any such assignment without such consent shall be null and void. This Agreement shall be binding upon and inure solely to the benefit of each of the parties and their respective successors and permitted

assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to laws that may be applicable under conflicts of laws principles. The parties further hereby waive any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or relating to this Agreement. This Agreement may be executed in multiple counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

[Signature pages follow]

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

THE COMPANY:

DASAN ZHONE SOLUTIONS, INC.

Name:    Kirk Misaka

Title:    Chief Financial Officer

COMPANY STOCKHOLDERS:

THE STOCKHOLDER:

DASAN NETWORKS, INC.

Name: Min Woo Nam

Title: Chief Executive Officer

COMPANY STOCKHOLDERS:

THE NEA ENTITIES:

NEW ENTERPRISE ASSOCIATES 10, LIMITED PARTNERSHIP

By: NEA Partners 10, Limited Partnership

By: /s/ LOUIS S. CITRON        

Name: Louis S. Citron

Title: Chief Legal Officer / Attorney-in-Fact

NEW ENTERPRISE ASSOCIATES 9, LIMITED PARTNERSHIP

By: NEA Partners 9, Limited Partnership

By: /s/ LOUIS S. CITRON        

Name: Louis S. Citron

Title: Chief Legal Officer / Attorney-in-Fact

NEW ENTERPRISE ASSOCIATES 8A, LIMITED PARTNERSHIP

By: NEA Partners 10, Limited Partnership

By: /s/ LOUIS S. CITRON        

Name: Louis S. Citron

Title: Chief Legal Officer / Attorney-in-Fact

NEW ENTERPRISE ASSOCIATES VIII, LIMITED PARTNERSHIP

By: NEA Partners VIII, Limited Partnership

By: /s/ LOUIS S. CITRON        

Name: Louis S. Citron

Title: Chief Legal Officer / Attorney-in-Fact

NEA VENTURES 2000, LIMITED PARTNERSHIP

By: /s/ LOUIS S. CITRON        

Name: Louis S. Citron

Title: Chief Legal Officer / Attorney-in-Fact

COMPANY STOCKHOLDERS:

/s/ JAMES NORROD ______________

Name: James Norrod

                        

COMPANY STOCKHOLDERS:

/s/ MICHAEL CONNORS ______________

Name: Michael Connors

                        

COMPANY STOCKHOLDERS:

/s/ ROBERT DAHL ______________

Name: Robert Dahl

                        

COMPANY STOCKHOLDERS:

/s/ RICHARD KRAMLICH ______________

Name: C. Richard Kramlich

                        

COMPANY STOCKHOLDERS:

/s/ MAHVASH YAZDI ______________

Name: Mahvash Yazdi

                        

COMPANY STOCKHOLDERS:

/s/ KIRK MISAKA ______________

Name: Kirk Misaka

                        

COMPANY STOCKHOLDERS:

/s/ YUNG KIM ______________

Name: Yung Kim

COMPANY STOCKHOLDERS:

/s/ SEONG GYUN KIM ______________

Name: Seong Gyun Kim

COMPANY STOCKHOLDERS:

/s/ MIN WOO NAM ______________

Name: Min Woo Nam

COMPANY STOCKHOLDERS:

/s/ SUNGBIN PARK ______________

Name: Sung Bin Park

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT, dated as of September 9, 2016 (this “ Agreement ”), is by and between DASAN Zhone Solutions, Inc., a Delaware corporation (the “ Company ”), and DASAN Networks, Inc., a company incorporated under the laws of Korea (the “ Stockholder ”).

WHEREAS, the Company and the Stockholder previously entered into that certain Agreement and Plan of Merger, dated as of April 11, 2016 (the “ Merger Agreement ”) with Dragon Acquisition Corporation, a Delaware corporation (“ Merger Sub ”), and Dasan Network Solutions, Inc., a California corporation (“ DNS ”), pursuant to which, on the date hereof, Merger Sub merged with and into DNS, with DNS as the surviving corporation (the “ Merger ”) and the Company issued to the Stockholder 47,465,082 shares of the Company’s common stock, US$0.001 par value per share (the “ Shares ”); and

WHEREAS, the Company desires to enter into this Agreement in order to grant the Stockholder the registration rights contained herein.

NOW, THEREFORE, in consideration of the mutual conditions and agreement set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. Certain Definitions . As used in this Agreement, the following terms shall have the following respective meanings:

“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time.

“ Lock-Up Period ” shall have the meaning set forth in that certain Lock-Up Agreement, dated on or about the date of this Agreement, by and among the Company, the Stockholder and the other parties thereto.

“ Material Disclosure Event ” means, as of any date of determination, any pending or imminent event relating to the Company or any of its subsidiaries, which, in the good faith determination of the Company: (i) requires disclosure of material, non-public information relating to such event in any registration statement or related prospectus (including documents incorporated by reference therein) so that such registration statement would not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, (ii) is otherwise not required to be publicly disclosed at that time (e.g., on Forms 10-K, 8-K, or 10-Q) under applicable federal or state securities laws and (iii) if publicly disclosed at the time of such event, could reasonably be expected to have a material adverse effect on the business, financial condition or prospects of the Company and its subsidiaries or would materially adversely affect a pending or proposed acquisition, merger, recapitalization, consolidation, reorganization, financing or similar transaction, or negotiations with respect thereto.

“ Person ” shall mean an individual, a corporation, a partnership, a joint venture, a trust, an unincorporated organization, a limited liability company or partnership, a government and any agency or political subdivision thereof.

“ Registrable Securities ” shall mean the Shares, as well as any of the Company’s securities that may be issued or distributed in respect of the Shares by way of stock dividend or stock split or in connection with a combination of shares, recapitalization or other reorganization of the Company; provided , that such Shares or other securities shall cease to be Registrable Securities when (i) a registration statement with respect to the sale of such Registrable Securities shall have become effective under the Securities Act and such Registrable Securities shall have been disposed of in accordance with such registration statement; (ii) such Registrable Securities shall have been sold in accordance with Rule 144 (or any successor provision) under the Securities Act in a transaction where the restrictive legend is removed from such Shares; (iii) such Registrable Securities shall have become eligible to be publicly sold without limitation as to amount or manner of sale pursuant to Rule 144 (or any successor provision) under the Securities Act or (iv) such Registrable Securities shall have ceased to be outstanding.

“ SEC ” shall mean the United States Securities and Exchange Commission, or any other federal agency administering the Securities Act and the Exchange Act at the time.

“ Securities Act ” shall mean the Securities Act of 1933, as amended, or any similar successor federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time.

2. Shelf Registration .

(a) The Company shall use commercially reasonable efforts to prepare and file with the SEC, within 60 days following the request of the Stockholder with respect to any Registrable Securities, one or more registration statements under the Securities Act for the offer and sale from time to time on a continuous or delayed basis of such Registrable Securities (each, a “ Shelf Registration Statement ”); provided , that the Company shall not be required to file a Shelf Registration Statement prior to the expiration of the Lock-Up Period. Such request shall be in writing and shall state the number of shares of Registrable Securities to be disposed of and the intended method of disposition of such shares by the Stockholder. The Company shall file each such Shelf Registration Statement on Form S-3 or, if the Company or the offering of such Registrable Securities does not satisfy the requirements for use of such form, such other form as may be appropriate; provided , that if any such Shelf Registration Statement is not filed on Form S-3, the Company shall, promptly upon meeting the requirements for use of such form, file an appropriate amendment to such Shelf Registration Statement to convert it to Form S-3. Subject to the provisions contained in Sections 9 and 10 hereof, the Company shall use commercially reasonable efforts to cause each such Shelf Registration Statement to be declared effective by the SEC or to otherwise become effective as soon as practicable after the filing thereof.    

(b) Notwithstanding the foregoing, subject to the Company’s compliance with its obligations under Section 4 hereof, (x) the Company shall not be obligated to take any action to effect a Shelf Registration Statement during the period commencing with the Company’s issuance of a notice of a proposed registration of an underwritten offering of equity securities (or the filing of an initial prospectus supplement to a registration statement for an underwritten offering of equity securities) of the Company for its own account (except pursuant to registrations on Form S-4 or any successor form, or on Form S-8 or any successor form relating solely to securities issued pursuant to any benefit plan) to the Stockholder pursuant to Section 4(a) hereof, continuing while the Company uses commercially reasonable efforts to pursue such registered underwritten offering, and ending upon the earliest to occur of: (i) 60 days immediately following the Company’s issuance of the notice of such proposed registered underwritten offering pursuant to Section 4(a) hereof, unless, within such 60-day period, the Company shall have filed the registration statement or prospectus supplement for such proposed underwritten offering, or shall have issued a press release disclosing such proposed underwritten offering pursuant to Rule 135 (or its successor) promulgated under the Securities

Act thereby enabling the Stockholder to sell its Registrable Securities then registered pursuant to the Shelf Registration Statement; (ii) the abandonment, cessation or withdrawal of such proposed registered underwritten offering; or (iii) 90 days immediately following the effective date of the registration statement or amendment to registration statement pertaining to such underwritten offering or, if applicable, 90 days immediately following the date of the final prospectus supplement to a registration statement pertaining to such underwritten offering; and (y) subject to Section 10 , the Company will not be obligated to take any action to effect any amendment to the Shelf Registration Statement during the period commencing on the effective date of a registration statement or amendment to registration statement for an underwritten offering of equity securities (or the filing of the final prospectus supplement to a registration statement for an underwritten offering of equity securities) of the Company for its own account (except pursuant to registrations on Form S-4 or any successor form, or on Form S-8 or any successor form relating solely to securities issued pursuant to any benefit plan) and ending 90 days immediately following the effective date of the registration statement or amendment to registration statement pertaining to such underwritten offering or, if applicable, 90 days immediately following the date of the final prospectus supplement to a registration statement pertaining to such underwritten offering. If the Company issues a notice of a proposed underwritten public offering of equity securities of the Company for its own account pursuant to Section 4(a) hereof and subsequently abandons, ceases or withdraws such offering, the Company will not issue a notice of a subsequent proposed registered underwritten offering of equity securities of the Company for its own account pursuant to Section 4(a) hereof during any period in which a registration request pursuant to Section 2(a) is outstanding unless and until such amendment to the Shelf Registration Statement or such Shelf Registration Statement is first declared effective by the SEC or otherwise becomes effective.

(c)    The Company shall (i) cause each such Shelf Registration Statement to include a resale prospectus intended to permit the Stockholder to sell, at the Stockholder’s election, all or part of the Registrable Securities held by the Stockholder without restriction, (ii) use its commercially reasonable efforts to prepare and file with the SEC such supplements, amendments and post-effective amendments to each such Shelf Registration Statement as may be necessary to keep such Shelf Registration Statement continuously effective (subject to any Black-Out Period(s) referred to below) for so long as the securities registered thereunder constitute Registrable Securities, and (iii) use its commercially reasonable efforts to cause the resale prospectus to be supplemented by any required prospectus supplement (subject to any Black-Out Period(s) referred to below).

3. Demand Registration .

(a) At any time and from time to time, the Stockholder may request that the Company effect the registration under the Securities Act of a specified number of Registrable Securities held by the Stockholder (a “ Demand Registration ”); provided , however , that the Company shall in no event be required (x) to effect more than two Demand Registration in any 12-month period or (y) to effect a Demand Registration prior to the expiration of the Lock-Up Period. The Company will use commercially reasonable efforts to expeditiously effect (but in any event no later than 60 days after such request) the registration of such portion of the Stockholder’s Registrable Securities as requested by the Stockholder, but only to the extent provided for in this Agreement. Notwithstanding anything to the contrary contained herein, no request may be made under this Section 3 (i) within 90 days after the effective date of a registration statement filed by the Company covering a firm commitment underwritten public offering in which the Stockholder shall have been entitled to join pursuant to Section 4 and in which there shall have been effectively registered all Registrable Securities as to which registration shall have been requested or (ii) if a Shelf Registration Statement is then effective and such Shelf Registration Statement may be utilized by the Stockholder for the offering and sale of all Registrable Securities then held by the Stockholder without a requirement under SEC rules and regulations for a post-effective amendment thereto. A registration will not count as a requested registration under this

Section 3(a) unless and until the registration statement relating to such registration has been declared effective by the SEC; provided , however , that the Stockholder may request, in writing, that the Company withdraw a registration statement which has been filed under this Section 3(a) but has not yet been declared effective, and may thereafter request the Company to reinstate such registration statement, if permitted under the Securities Act, or request that the Company file another registration statement, in accordance with the procedures set forth herein and without reduction in the number of demand registrations permitted under this Section 3(a) .

(b) If a requested Demand Registration involves an underwritten public offering, (i) the managing underwriter shall be chosen by the Stockholder with the approval of the Company (which approval will not be unreasonably withheld or delayed) and (ii) no securities to be sold for the account of any Person (including the Company) other than the Stockholder shall be included in the Demand Registration unless the managing underwriter advises the Stockholder in writing that the inclusion of such securities is not anticipated to have an adverse effect on the price or success of such offering.

4. Piggyback Registration .

(a) If the Company at any time after the Lock-Up Period proposes to register any of its securities under the Securities Act for sale to the public (except with respect to registration statements on Forms S-4, S-8 or another form not available for registering the Registrable Securities for sale to the public), each such time it will give written notice at the applicable address of record to the Stockholder of its intention to do so. Upon the written request of the Stockholder, given within 20 days after receipt by the Stockholder of such notice, the Company shall, subject to the limits contained in this Section 4 , use commercially reasonable efforts to cause all such Registrable Securities of the Stockholder (as requested by the Stockholder) to be registered under the Securities Act and qualified for sale under any state blue sky law, all to the extent required to permit such sale or other disposition of said Registrable Securities; provided , however, that, notwithstanding the foregoing, the Company may at any time, in its sole discretion, without the consent of the Stockholder, delay or abandon the proposed offering in which the Stockholder had requested to participate pursuant to this Section 4(a) or cease the filing (or obtaining or maintaining the effectiveness) of or withdraw the related registration statement or prospectus supplement or other governmental approvals, registrations or qualifications. In such event, the Company shall so notify the Stockholder and the Company shall incur no liability for its failure to complete any such offering.

(b) In connection with the exercise of any registration rights granted to the Stockholder pursuant to this Section 4 , if the offering is to be effected by means of an underwritten offering, the Company may condition participation in such offering on the Stockholder entering into an underwriting agreement in customary form and acting in accordance with the terms and conditions thereof.

(c) If the Company is advised in writing in good faith by any managing underwriter of the Company’s securities being offered in a public offering pursuant to such registration statement that the amount to be sold by Persons other than the Company (collectively, “ Selling Stockholders ”) is greater than the amount which can be offered without adversely affecting the offering, the Company may reduce the amount offered for the accounts of Selling Stockholders (including the Stockholder) to a number deemed satisfactory by such managing underwriter; and provided further , that any shares of Selling Stockholders to be excluded shall be determined in the following order of priority: (i) securities held by any Persons not having any contractual, incidental registration rights and (ii) securities held by any Persons having contractual, incidental registration rights pursuant to an agreement which is not this Agreement and the Registrable Securities sought to be included by the Stockholder, on a pro rata basis (or such basis as such stockholders may agree among themselves and the Company).

5. Registration Procedures . If and whenever the Company is required by the provisions of this Agreement to use its commercially reasonable efforts to promptly effect the registration of any of its securities under the Securities Act, the Company shall:

(a) use its commercially reasonable efforts diligently to prepare and file with the SEC a registration statement on the appropriate form under the Securities Act with respect to such securities, which form shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith, and use its commercially reasonable efforts to cause such registration statement to become and remain effective until completion of the proposed offering;

(b) use its commercially reasonable efforts to diligently prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective until the distribution described in such registration statement has been completed and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all securities covered by such registration statement whenever the seller or sellers of such securities shall desire to sell or otherwise dispose of the same, but only to the extent provided in this Agreement;

(c) furnish to the Stockholder and the underwriters, if any, such number of copies of such registration statement, any amendments thereto, any documents incorporated by reference therein, the prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as the Stockholder may reasonably request in order to facilitate the public sale or other disposition of the securities owned by the Stockholder;

(d) use its commercially reasonable efforts to register or qualify the securities covered by such registration statement under such other securities or state blue sky laws of such jurisdictions as the Stockholder shall request, and do any and all other acts and things which may be necessary under such securities or blue sky laws to enable the Stockholder to consummate the public sale or other disposition in such jurisdictions of the securities owned by the Stockholder, except that the Company shall not for any such purpose be required to qualify to do business as a foreign corporation in any jurisdiction wherein it is not so qualified;

(e) within a reasonable time before each filing of the registration statement or prospectus or amendments or supplements thereto with the SEC, furnish to counsel selected by the holders of Registrable Securities copies of such documents proposed to be filed, which documents shall be subject to the approval of such counsel;

(f) immediately notify the Stockholder, the Stockholder’s counsel and any underwriter and (if requested by any such Person) confirm such notice in writing, of the happening of any event which makes any statement made in the registration statement or related prospectus untrue or which requires the making of any changes in such registration statement or prospectus so that they will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein in the light of the circumstances under which they were made not misleading; and, as promptly as practicable thereafter, prepare and file with the SEC and furnish a supplement or amendment to such prospectus so that, as thereafter deliverable to the purchasers of such Registrable Securities, such prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(g) use its commercially reasonable efforts to prevent the issuance of any order suspending the effectiveness of a registration statement, and if one is issued use its commercially reasonable efforts to

obtain the withdrawal of any order suspending the effectiveness of a registration statement at the earliest possible moment;

(h) if requested by the managing underwriter or underwriters (if any), the Stockholder, or the Stockholder’s counsel, promptly incorporate in a prospectus supplement or post-effective amendment such information as such Person requests to be included therein, including, without limitation, with respect to the securities being sold by the Stockholder to such underwriter or underwriters, the purchase price being paid therefor by such underwriter or underwriters and with respect to any other terms of an underwritten offering of the securities to be sold in such offering, and promptly make all required filings of such prospectus supplement or post-effective amendment;

(i) make available to the Stockholder, any underwriter participating in any disposition pursuant to a registration statement, and any attorney, accountant or other agent or representative retained by the Stockholder or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company’s connection with such registration statement;

(j) enter into any reasonable underwriting agreement required by the proposed underwriter(s) for the Stockholder, if any, and use its commercially reasonable efforts to facilitate the public offering of the securities;

(k) furnish to the Stockholder a signed counterpart, addressed to the Stockholder, of (A) an opinion of counsel for the Company, dated the effective date of the registration statement, and (B) a “comfort” letter signed by the independent public accountants who have certified the Company’s financial statements included in the registration statement, covering substantially the same matters with respect to the registration statement (and the prospectus included therein) and (in the case of the accountants’ letter) with respect to events subsequent to the date of the financial statements, as are customarily covered (at the time of such registration) in opinions of the Company’s counsel and in accountants’ letters delivered to the underwriters in underwritten public offerings of securities;

(l) cause the securities covered by such registration statement to be listed on the securities exchange or quoted on the quotation system on which the common stock of the Company is then listed or quoted;

(m) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the SEC and make generally available to its security holders, in each case as soon as practicable, but not later than 30 days after the close of the period covered thereby, an earnings statement of the Company which will satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any comparable successor provisions);

(n) otherwise cooperate with the underwriter(s), the SEC and other regulatory agencies and take all actions and execute and deliver or cause to be executed and delivered all documents necessary to effect the registration of any securities under this Agreement; and

(o) during the period when the prospectus is required to be delivered under the Securities Act, promptly file all documents required to be filed with the SEC pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act.

6. Expenses . All expenses incurred in effecting the registrations provided for in Sections 2 , 3 and 4 , including, without limitation, all registration and filing fees, NASDAQ listing fees, printing expenses,

fees and disbursements of counsel for the Company, underwriting expenses (other than fees, commissions or discounts), expenses of any audits incident to or required by any such registration and expenses of complying with the securities or blue sky laws of any jurisdictions (all of such expenses referred to as “ Registration Expenses ”), shall be paid by the Company. Notwithstanding the foregoing, Registration Expenses shall not include underwriting discounts, selling commissions, stock transfer taxes, fees, fees and disbursements of counsel to the Stockholder, and other selling expenses associated with effecting any sales of Registrable Securities, which shall be borne by the Stockholder.

7. Indemnification .

(a) The Company shall indemnify and hold harmless the Stockholder, each underwriter (as defined in the Securities Act), and directors, officers, employees and agents of any of them, and each other Person who participates in the offering of Registrable Securities and each other Person, if any, who controls (within the meaning of the Securities Act) such seller, underwriter or participating Person (individually and collectively, the “ Indemnified Person ”) against any losses, claims, damages or liabilities (collectively, the “ liability ”), joint or several, to which such Indemnified Person may become subject under the Securities Act or any other statute or at common law, insofar as such liability (or action in respect thereof) arises out of or is based upon (i) any untrue statement or alleged untrue statement of any material fact contained, on the effective date thereof, in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, or any free writing prospectus used in connection with any offering, including but not limited to, any free writing prospectus used by the Company, the underwriters or the Stockholder, or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) any violation by the Company of the Securities Act, any state securities or “blue sky” laws or any sale or regulation thereunder in connection with such registration, or (iv) any information provided by the Company or at the instruction of the Company to any Person participating in the offer at the point of sale containing any untrue statement or alleged untrue statement of any material fact or omitting or allegedly omitting any material fact required to be included in such information or necessary to make the statements therein not misleading. Except as otherwise provided in Section 7(d) , the Company shall reimburse each such Indemnified Person in connection with investigating or defending any such liability; provided, however, that the Company shall not be liable to any Indemnified Person in any such case to the extent that any such liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, preliminary or final prospectus, or amendment or supplement thereto, free writing prospectus, or other information, in reliance upon and in conformity with information furnished in writing to the Company by such Person specifically for use therein; and provided further, that the Company shall not be required to indemnify any Person against any liability arising from any untrue or misleading statement or omission contained in any preliminary prospectus if such deficiency is corrected in the final prospectus or for any liability which arises out of the failure of any Person to deliver a prospectus as required by the Securities Act regardless of any investigation made by or on behalf of such Indemnified Person and shall survive transfer of such securities by such seller; and provided, further that, the indemnity agreement contained in this Section 7(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld).

(b) The Stockholder shall indemnify and hold harmless each other selling holder of any securities, the Company, its directors and officers, employees and agents, each underwriter and each other Person, if any, who controls (within the meaning of the Securities Act) the Company or such underwriter (individually and collectively also the “ Indemnified Person ”), against any liability, joint or several, to which any such Indemnified Person may become subject under the Securities Act or any other statute or at common

law, insofar as such liability (or actions in respect thereof) arises out of or is based upon (i) any untrue statement or alleged untrue statement of any material fact contained, on the effective date thereof, in any registration statement under which securities were registered under the Securities Act at the request of the Stockholder, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, or any free writing prospectus used in connection with such offering, including but not limited to, any free writing prospectus used by the Company, the underwriters or the Stockholder, or (ii) any omission or alleged omission by the Stockholder to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) any information provided at the instruction of the Company to any Person participating in the offer at the point of sale containing any untrue statement or alleged untrue statement of any material fact or omitting or allegedly omitting any material fact required to be included in such information or necessary to make the statements therein not misleading, in the case of (i), (ii) and (iii) to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in such registration statement, preliminary or final prospectus, amendment or supplement thereto, free writing prospectus, or other information, in reliance upon and in conformity with information furnished in writing to the Company by the Stockholder specifically for use therein. The Stockholder shall reimburse any Indemnified Person for any legal fees incurred in investigating or defending any such liability; provided, however, that in no event shall the liability of the Stockholder for indemnification under this Section 7 in its capacity as a seller of Registrable Securities exceed the lesser of (i) that proportion of the total of such losses, claims, damages, expenses or liabilities indemnified against equal to the proportion of the total securities sold under such registration statement which is being held by the Stockholder, or (ii) the amount equal to the proceeds to the Stockholder of the securities sold in any such registration; and provided further, however, that the Stockholder shall not be required to indemnify any Person against any liability arising from any untrue or misleading statement or omission contained in any preliminary prospectus if such deficiency is corrected in the final prospectus or for any liability which arises out of the failure of any Person to deliver a prospectus as required by the Securities Act regardless of any investigation made by or on behalf of such Indemnified Person; and provided, further that, the indemnity agreement contained in this Section 7(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Stockholder (which consent shall not be unreasonably withheld).

(c) Indemnification similar to that specified in Sections 7(a) and (b) shall be given by the Company and the Stockholder (with such modifications as may be appropriate) with respect to any required registration or other qualification of their securities under any federal or state law or regulation of governmental authority other than the Securities Act.

(d) In the event the Company, the Stockholder or other Person receives a complaint, claim or other notice of any liability or action, giving rise to a claim for indemnification under Sections 7(a) , (b) or (c) above, the Person claiming indemnification under such paragraphs shall promptly notify the Person against whom indemnification is sought of such complaint, notice, claim or action, and such indemnifying Person shall have the right to investigate and defend any such loss, claim, damage, liability or action.

(e) If the indemnification provided for in this Section 7 for any reason is held by a court of competent jurisdiction to be unavailable to an Indemnified Person in respect of any losses, claims, damages expenses or liabilities referred to therein, then each indemnifying party under this Section 7 , in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, expenses or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, the Stockholder and the underwriters from the offering of Registrable Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in

clause (i) above but also the relative fault of the Company, the Stockholder and the underwriters in connection with the statements or omissions which resulted in such losses, claims, damages expenses or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company, the Stockholder and the underwriters shall be deemed to be in the same respective proportions that the net proceeds from the offering (before deducting expenses) received by the Company, the Stockholder, and the underwriting discount received by the underwriters, in each case as set forth in the table on the cover page of the applicable prospectus, bear to the aggregate public offering price of the Registrable Securities. The relative fault of the Company, the Stockholder and the underwriters shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, the Stockholder, or the underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The Company and the Stockholder agree that it would not be just and equitable if contribution to this Section 7 were determined by pro rata or per capita allocation or by any other method of allocation which does not take account the equitable considerations referred to in the immediately preceding paragraph. In no event, however, shall the Stockholder be required to contribute under this Section 7(e) in excess of the lesser of (i) that proportion of the total of such losses, claims, damages expenses or liabilities indemnified against equal to the proportion of the total Registrable Securities sold under such registration statement which are being sold by the Stockholder or (ii) the net proceeds received by the Stockholder from its sale of Registrable Securities under such registration statement. No Person found guilty of fraudulent representation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation.

(f) The amount paid by an indemnifying party or payable to an Indemnified Person as a result of the losses, claims, damages, expenses and liabilities referred to in this Section 7 shall be deemed to include, subject to limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim, payable as the same are incurred. The indemnification and contribution provided for in this Section 7 will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified parties or any other officer, director, employee, agent or controlling person of the indemnified parties. No indemnifying party, in the defense of any such claim or litigation, shall enter into a consent or entry of any judgment or enter into a settlement without the consent of the Indemnified Person, which consent will not be unreasonably withheld or delayed.

8. Amendment and Waiver . The provisions of this Agreement may be amended or waived at any time only by written agreement signed by the Company and the Stockholder.

9. Postponement and Suspension . Notwithstanding anything to the contrary herein, the Company may, by notice in writing to the Stockholder, postpone the filing or effectiveness of any registration statement required hereunder or otherwise suspend the registration rights of the Stockholder hereunder and/or require the Stockholder to suspend use of any resale prospectus included in any Shelf Registration Statement for a reasonable period of time if there shall occur a Material Disclosure Event (such period, a “ Black-Out Period ”), which Black-Out Periods shall not exceed 90 days in the aggregate during any 12-month period; provided , however, that if the Company deems in good faith that it is necessary to file a post-effective amendment to a Shelf Registration Statement in order to comply with Section 2 hereof, then such period of time from the date of filing of such post-effective amendment until the date on which such Shelf Registration Statement is declared effective by the SEC or otherwise becomes effective shall not be treated as a Black-Out Period and the Company shall use its commercially reasonable efforts to cause such post-effective

amendment to be declared effective or otherwise become effective as promptly as possible. Upon notice of the existence of a Black Out Period from the Company to the Stockholder with respect to any registration statement already effective, the Stockholder shall refrain from selling its Registrable Securities under such registration statement until such Black Out Period has ended.

10. Market Stand-Off . The Stockholder agrees, that if requested by the Company and an underwriter of Registrable Securities of the Company in connection with any public offering of the Company, not to directly or indirectly offer, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of or otherwise dispose of or transfer any shares held by it for such period, not to exceed 90 days following the effective date of the relevant registration statement in connection with any such public offering of Registrable Securities, as such underwriter shall specify reasonably and in good faith, provided, however, that all executive officers and directors of the Company enter into similar agreements.

11. Damages . The Company recognizes and agrees that the Stockholder will not have an adequate remedy if the Company fails to comply with the terms and provisions of this Agreement and that damages will not be readily ascertainable, and the Company expressly agrees that, in the event of such failure, it shall not oppose an application by the Stockholder requiring specific performance of any and all provisions hereof or enjoining the Company from continuing to commit any such breach of this Agreement.

12. Miscellaneous .

(a) Notices . All notices, requests, demands and other communications provided for hereunder shall be in writing and mailed (by first class registered or certified mail, postage prepaid), sent by nationally recognized, documented delivery service or electronic facsimile transmission (with a copy by mail or delivery service), or delivered to the applicable party at the addresses indicated below:

If to the Company:

DASAN Zhone Solutions, Inc.

7195 Oakport Street

Oakland, California 94621

Attention: Kirk Misaka

Fax: +1 (510) 777-7593

With a copy to:

Latham & Watkins LLP

12670 High Bluff Drive

San Diego, California 92130

Attention: Craig M. Garner, Esq.

Fax: +1 (858) 523-5450

If to the Stockholder:

DASAN Networks, Inc.

Dasan Tower, 49 Daewangpangyo-ro 644beon-gil, Bundang-gu, Seongnam-si

Gyeonggi-do, Korea

Attention: JaeHoon Joo

Facsimile No.: +82 (31) 622-6501

or, as to each of the foregoing, at such other address as shall be designated by such Person in a written notice to other parties complying as to delivery with the terms of this subsection (a) . All such notices, requests, demands and other communications shall, when mailed or sent, respectively, be effective (i) upon receipt if deposited in the mails, (ii) on the third business day after dispatch, if sent by nationally recognized, documented delivery service or (iii) when sent by electronic facsimile transmission (upon confirmation of receipt), respectively, addressed as aforesaid.

(b) Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, excluding any rule of law that would cause the application of the laws of any jurisdiction other than the laws of the State of Delaware. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY STATE COURT OF COMPETENT JURISDICTION THE STATE OF DELAWARE (OR, IF SUCH COURTS DO NOT HAVE JURISDICTION OR DO NOT ACCEPT JURISDICTION, IN THE UNITED STATES DISTRICT COURT LOCATED IN THE STATE OF DELAWARE).

(c) Waiver of Jury Trial . EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

(d) Counterparts This Agreement may be executed in one or more counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which together shall be deemed to constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including .pdf) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and to be valid and effective for all purposes.

(e) Severability . If any provision of this Agreement shall be held to be illegal, invalid or unenforceable, such illegality, invalidity or unenforceability shall attach only to such provision and shall not in any manner affect or render illegal, invalid or unenforceable any other provision of this Agreement, and this Agreement shall be carried out as if any such illegal, invalid or unenforceable provision were not contained herein.

(f) Integration . This Agreement, including the exhibits, documents and instruments referred to herein or therein, constitutes the entire agreement among the parties with respect to the subject matter.

[ Signature Pages Follow ]

 

IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed as of the date first set forth above.

THE COMPANY:

DASAN ZHONE SOLUTIONS, INC.

By: /s/ KIRK MISAKA ___________

Name:    Kirk Misaka

Title:    Chief Financial Officer

 

THE STOCKHOLDER:

DASAN NETWORKS, INC.

By: /s/ MIN WOO NAM _____________

Name:    Min Woo Nam

Title:    Chief Executive Officer

LOAN AGREEMENT

THIS LOAN AGREEMENT, dated as of September 9, 2016 (this “ Agreement ”), is by and between DASAN Networks, Inc., a company incorporated under the laws of Korea (“ Lender ”) and DASAN Zhone Solutions, Inc., a Delaware corporation (“ Borrower ”).

WHEREAS, Lender desires to provide a delayed draw term loan facility to Borrower on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual conditions and agreement set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1.     Commitment . The commitment amount for the term loans (each, a “ Loan ”) to be made by Lender to Borrower hereunder is US$5,000,000 (the “ Commitment Amount ”).

2.     Loans . Borrower may, at any time from and after the date hereof through September 9, 2021, request one or more drawdowns of Loans by delivering a written Loan request to Lender, which Loan request shall specify the principal amount of the requested Loan and the requested funding date therefor (which shall not be earlier than ten days after the date of the Loan request unless otherwise agreed by Lender) (the “ Funding Date ”); provided , that the maximum aggregate amount of Loans requested hereunder shall not exceed the Commitment Amount. Lender shall lend Borrower the amount specified on the Loan request on the applicable Funding Date by wire transfer of immediately available funds to such account or accounts as may be designated by Borrower.

3.     Maturity Date . The maturity date for all Loans made hereunder shall be the fifth anniversary of the initial Funding Date hereunder (the “ Maturity Date ”); provided , that, if such date is not a business day in New York New York, the Maturity Date shall be the next succeeding business day.

4.     Interest . Interest shall accrue daily on the outstanding unpaid principal balance of each Loan from the Funding Date thereof until repaid in full at a rate per annum equal initially to 4.6%, provided , that, in the event that, any time during the term of this Agreement, the interest rate applicable to related party loan transactions as set forth in the Enforcement Decree of Corporation Tax Act of Korea (as may be amended, the “ Tax Enforcement Decree ”) or the Enforcement Rules on Corporate Tax Act of Korea (together with the Tax Enforcement Decree and, as may be amended, the “ Korean Corporate Tax Law ”) is different from the then-applicable interest rate hereunder, the interest rate applicable hereunder shall be automatically changed to reflect such interest rate applicable to related party loan transactions as set forth in the Korean Corporate Tax Law. Lender shall promptly advise Borrower in writing of any such change in the interest rate hereunder. Interest shall be calculated on the basis of a 365 (or 366)-day year, payable quarterly in arrears on the first business day in New York, New York following March 31, June 30, September 30 and December 31 of each year.

5.     Payment of Principal and Interest . The entire principal balance outstanding hereunder, together with all accrued and unpaid interest thereon, shall be due and payable in full on the Maturity Date. All payments made hereunder shall be made when due in United States Dollars in immediately available funds. All payments made hereunder shall be applied first to accrued interest, and second to the payment of the principal amount outstanding hereunder. Any principal amounts paid under this Agreement may not be re-borrowed.

6.     Prepayment . Borrower may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding amounts hereunder.

7.     Subordination . Borrower and Lender acknowledge that the Loans and all other amounts due hereunder constitute “Subordinated Indebtedness” for purposes and subject to the terms of that certain Subordination Agreement, dated on or about the date hereof, between Lender and Borrower in favor of Wells Fargo Bank, National Association (the “ Subordination Agreement ”). Without limiting the foregoing, Lender hereby acknowledges and agrees that Lender’s right to payment from Borrower hereunder shall at all times be subordinate and subject in right of payment to the rights of the holders of any and all senior unsecured or secured loans, notes, guarantees or other obligations (including hedging obligations) made or issued under any loan agreement, credit agreement, indenture or other debt facility with any bank, financial institution, indenture trustee or other institutional lender (or agent on their behalf) for which Borrower is an issuer, borrower or guarantor, whether entered into prior to, on or after the date hereof, in each case to payment in full, in cash, of all obligations (other than obligations permitted to remain outstanding under the applicable documents after such payment), including any principal, interest, premium, penalties, fees, indemnifications, reimbursements, damages and other liabilities in accordance with the documents applicable thereto; provided , that, subject to the terms of the Subordination Agreement, Borrower may make payments to Lender until an event of default (as defined in the applicable indenture, credit agreement or other instrument governing such indebtedness) shall have occurred and be continuing and the appropriate lender, trustee or agent with respect to the applicable indebtedness shall have directed Borrower to cease making such payments.

8.     Covenants . Except as consented to by Lender, from and after the initial Funding Date hereunder until payment in full of all outstanding Loans and all accrued and unpaid interest thereon, Borrower shall not:

(a)    incur any indebtedness for borrowed money other than (i) indebtedness under that certain Credit and Security Agreement, dated as of March 13, 2012, by and among Borrower, ZTI Merger Subsidiary III, Inc., Premisys Communications, Inc., Zhone Technologies International, Inc., Paradyne Networks, Inc., Paradyne Corporation and Wells Fargo Bank, National Association (as amended, amended and restated, renewed, extended, refinanced or replaced from time to time, the “ Senior Credit Facility ”) and (ii) indebtedness permitted to be incurred by the Senior Credit Facility;

(b)    incur any liens securing indebtedness on any of its assets or property (other than (i) liens for Taxes, (ii) liens made to secure statutory obligations, surety or appeal bonds, or bonds for the release of attachments or for stay of execution, (iii) liens arising under applicable law (including landlords’, carriers’, warehousemen’s, mechanics’, workers’, suppliers’, materialmen’s, or repairmen’s liens), (iv) purchase money liens with respect to tangible personal property, (v) liens for indebtedness permitted to be incurred under Section 8(a), and (vi) other liens securing obligations of Borrower or its subsidiaries other than for indebtedness, collectively “ Permitted Liens ”), in each case unless, contemporaneously with the incurrence of such liens (other than Permitted Liens), Borrower grants a security interest to Lender to secure the obligations under this Agreement on a substantially equal and ratable basis;

(c)    merge, consolidate or amalgamate with, or convey, sell, lease, transfer or otherwise dispose of all or substantially all of its assets and property (in one transaction or a series of related transactions) to any person or entity (other than an affiliate), excluding sales of inventory and other assets in the ordinary course of business; or

(d)    upon the occurrence and during the continuation of an Event of Default, pay any dividend or make any other distribution on its membership interests.

9.     Events of Default . The occurrence of any one or more of the following events shall constitute an event of default hereunder (each, an “ Event of Default ”):

(a)    Borrower fails to pay when due (whether on the Maturity Date, upon acceleration or otherwise) any payment hereunder, and such failure continues unremedied for ten days after written notice thereof from Lender to Borrower;

(b)    Borrower (i) commences a voluntary case or proceeding with respect to itself, (ii) consents to the entry of an order for relief against it in an involuntary case or proceeding, (iii) consents to the appointment of any receiver, trustee, assignee, liquidator, custodian or similar official (a “ Bankruptcy Custodian ”) under Title 11, U.S. Code or any similar federal or state law for the relief of debtors (a “ Bankruptcy Law ”) of it or for substantially all of its property of (iv) makes a general assignment for the benefit of its creditors; or takes any comparable action under any foreign laws relating to insolvency, in each case pursuant to or within the meaning of any Bankruptcy Law;

(c)     a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against Borrower in an involuntary case, (ii) appoints a Bankruptcy Custodian of Borrower for substantially all of its property or (iii) orders the winding up or liquidation of Borrower, or any relief similar to the foregoing which is granted under any foreign laws, where in each case such order, decree or relief remains unstayed and in effect for 60 consecutive days;

(d)     Borrower fails to perform or observe any material covenant, condition or provision contained in this Agreement required to be performed or observed by it (other than the covenant to pay the principal, interest (including default interest)) and such failure continues for a period of 30 days after notice requiring such failure to be remedied has been given to Borrower by Lender;

(e)    a distress, execution or seizure before judgment is levied or enforced upon all or substantially all the property of Borrower which has a material adverse effect on Borrower and is not discharged within thirty days thereof;

(f)    Borrower is unable to pay its debts as and when they become due; or

(g)    Borrower has materially defaulted under any material mortgage, indenture or instrument under which there may be issued or guaranteed or by which there may be secured or evidenced any indebtedness for borrowed money, which default results in the acceleration of such indebtedness prior to its maturity.

10.     Default Rate . During the continuation of an Event of Default, interest on the outstanding unpaid principal balance of the Loans (if any) shall accrue at the interest rate specified in Section 4 plus two percentage points.

11.     Rights of Lender Upon Event of Default . Upon the occurrence or existence of any Event of Default and at any time thereafter and during the continuation of such Event of Default, Lender may declare the entire outstanding principal balance of the Loans, together with all unpaid accrued interest thereon, to be immediately due and payable. In addition to the foregoing remedy, upon the occurrence or existence of any Event of Default and at any time thereafter and during the continuation of such Event of Default, Lender may exercise any other right, power or remedy permitted to it by applicable law, either by suit in equity or by action at law, or both.

12.     Waivers . Borrower hereby waives demand, presentment for payment, protest, notice of nonpayment, notice of protest, notice of dishonor, and any other notices of any kind (except those notices required hereunder), and any and all exemption rights that it holds at law or in equity with respect to the Loans.

13.     Rights Cumulative . All rights and remedies of Lender under this Agreement and under applicable law are cumulative and not alternative. Failure of Lender at any time to exercise any such rights or remedies shall neither constitute a waiver of such rights or remedies nor bar the future exercise of any such rights or remedies.

14.     No Usury . Payments of interest shall not be required, for any period for which interest is computed hereunder, to the extent that contracting for or receipt thereof would be contrary to provisions of any applicable law to Lender limiting the highest rate of interest that may be lawfully contracted for, charged or received by Lender, as determined by a final judgment of a court of competent jurisdiction. Any interest paid in excess of such highest rate shall be applied to the unpaid principal balance of the Loans. In the event that any such excess exceeds the principal amount, the amount of such excess over the principal amount shall be refunded to Borrower.

15.     Assignment . Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned (other than by operation of law), in whole or in part, by a party without the prior written consent of the other party.

16.     Successors and Assigns . The rights and obligations of Borrower and Lender under this Agreement shall be binding upon and benefit the successors, permitted assigns, heirs, administrators and permitted transferees of the parties hereto.

17.     Entire Agreement; Amendments; Waiver . This Agreement contains the entire agreement between Borrower and Lender relating to the subject matter hereof, and supersedes all prior agreements and undertakings, both written and oral, between the parties with respect to the subject matter hereof. No amendment, modification, termination, release, surrender or discharge of this Agreement shall be of any force or effect except by an agreement in writing signed by Borrower and Lender. No purported waiver of any of the provisions of this Agreement shall be valid or effective unless the same is in writing and signed by the party against whom it is sought to be enforced.

18.     Severability . In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal and unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof.

19.     Notices . Any notices or other communications required or permitted under, or otherwise in connection with this Agreement, shall be in writing and shall be deemed to have been duly given when delivered in person or upon confirmation of receipt when transmitted by facsimile transmission, on receipt after dispatch if sent by registered or certified mail, postage prepaid, addressed, or on the third business day after dispatch if sent by nationally recognized, documented delivery service, in each case as follows:

If to Lender, addressed to it at:

DASAN Networks, Inc.

Dasan Tower, 49 Daewangpangyo-ro 644beon-gil, Bundang-gu, Seongnam-si

Gyeonggi-do, Korea

Attention: JaeHoon Joo

Facsimile No.: +82 (31) 622-6501

If to Borrower, addressed to it at:

DASAN Zhone Solutions, Inc.

7195 Oakport Street

Oakland, California 94621

Attention: Kirk Misaka

Fax: +1 (510) 777-7593

20.     Governing Law . This Agreement and all actions arising out of or in connection with this Note shall be governed by and construed in accordance with the laws of New York, without regard to the conflicts of law provisions of that or of any other state.

[ Signature Page Follows ]

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

SIXTH AMENDMENT TO CREDIT AND SECURITY AGREEMENTS AND CONSENT

THIS SIXTH AMENDMENT TO CREDIT AND SECURITY AGREEMENTS AND CONSENT (the “ Amendment ”), dated as of September 9, 2016, is entered into by and among ZHONE TECHNOLOGIES, INC., a Delaware corporation (“ Zhone Technologies ”), ZTI MERGER SUBSIDIARY III, INC., a Delaware corporation (“ ZTI ”; Zhone Technologies and ZTI are sometimes referred to herein individually as a “ Borrower ” and collectively as the “ Borrowers ”), PREMISYS COMMUNICATIONS, INC., a Delaware corporation (“ Premisys ”), ZHONE TECHNOLOGIES INTERNATIONAL, INC., a Delaware corporation, (“ Zhone International ”), PARADYNE NETWORKS, INC., a Delaware corporation (“ Paradyne Networks ”), PARADYNE CORPORATION, a Delaware corporation (“ Paradyne Corporation ”; Premisys, Zhone International, Paradyne Networks, and Paradyne Corporation are sometimes referred to herein individually as a “ Guarantor ” and collectively as the “ Guarantors ”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“ Lender ”).

RECITALS

A.    Borrowers, Guarantors, and Lender are parties to (i) a Credit and Security Agreement, dated March 13, 2012 (as amended by that certain First Amendment to Credit and Security Agreements, dated as of March 13, 2013 (the “ First Amendment ”), that certain Second Amendment to Credit and Security Agreements, dated September 30, 2013 (the “ Second Amendment ”), that certain Third Amendment to Credit and Security Agreements, dated March 5, 2014 (the “ Third Amendment ”), that certain Fourth Amendment to Credit and Security Agreements, dated March 6, 2015 (the “ Fourth Amendment ”), and that certain Fifth Amendment to Credit and Security Agreement, dated March 23, 2016 (the “ Fifth Amendment ”), and as further amended from time to time, the “ Domestic Credit Agreement ”), and (ii) a Credit and Security Agreement (Ex-Im Subfacility), dated March 13, 2012 (as amended by the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, and the Fifth Amendment, and as further amended from time to time, the “ Ex-Im Credit Agreement ”; and together with the Domestic Credit Agreement, collectively, the “ Credit Agreements ”). Capitalized terms used in this Amendment have the meanings given to them in the Credit Agreements unless otherwise specified in this Amendment.

B.    Zhone Technologies, Dragon Acquisition Corporation, a California corporation and wholly-owned subsidiary of Zhone Technologies formed to effectuate the Merger (as defined below) (“ Merger Sub ”), DASAN Networks, Inc., a company incorporated under the laws of Korea (“ DASAN ”), and Dasan Network Solutions, Inc., a California corporation (“ DNS ”), intend to effect a merger of Merger Sub with and into DNS, pursuant to which Merger Sub will cease to exist, and DNS will become a wholly-owned subsidiary of Zhone Technologies (the “ Merger ”), pursuant to that certain Agreement and Plan of Merger, dated as of April 11, 2016, by and among Zhone Technologies, Merger Sub, DASAN and DNS (the “ Merger Agreement ”), and all other documents related thereto and executed in connection therewith (collectively, the “ Merger Documents ”).

C.    Lender and Borrowers now wish for Lender to (i) consent to (a) the Merger, (b) the Change of Control resulting from DASAN becoming the beneficial owner of 58% of the Stock of Zhone Technologies as a result of the Merger and the related changes to the Board of Directors of Zhone Technologies (collectively, the “ DASAN Change of Control ”), and (c) the proposed name change of Zhone Technologies to “DASAN Zhone Solutions, Inc.” (the “ Zhone Name Change ”), and (ii) amend the Credit Agreements on the terms and conditions set forth herein.

D.    Borrowers are entering into this Amendment with the understanding and agreement that, except as specifically provided herein, none of the Lender’s rights and remedies as set forth in the Credit Agreements or any other Loan Document is being waived or modified by the terms of this Amendment.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, it is agreed as follows:

1. Amendments to Credit Agreements . The Credit Agreements are amended as follows:

1.1     General .

(a)    Prior to DNS becoming a party to the Credit Agreement (as contemplated by Section 6.1 hereof), each reference to “Subsidiary” and “Subsidiaries” in Sections 2.4(f) , 4.2(a) , 6 , and 7 (other than Section 7.12 ) of the Credit Agreements, and in Exhibit D to the Credit Agreements, including any such reference in a defined term that is used in any such Section or Exhibit, shall exclude DNS and its Subsidiaries, but shall include DNS and its Subsidiaries from and after such date to the extent set forth in the amendment contemplated by Section 6.1 hereof;

(b)    Whenever the term “Borrowers”, “Borrower and its Subsidiaries” or “Borrowers and their Subsidiaries” is used in respect of a financial covenant or a related definition set forth in the Credit Agreements (including, without limitation, the definitions of Excess Availability, EBITDA, and Fixed Charge Coverage Ratio), prior to and after DNS becoming a party to the Credit Agreement (as contemplated by Section 6.1 hereof), it shall be understood to mean Borrowers and their respective Subsidiaries (other than DNS and its Subsidiaries) on a consolidated basis, unless the context clearly requires otherwise; and

(c)    Each reference to “Zhone Technologies, Inc.” in the Credit Agreements and any other Loan Document shall be replaced with a reference to “DASAN Zhone Solutions, Inc.”

1.2     Section 6.15 of the Credit Agreements . Section 6.15 of the Credit Agreements is hereby amended by replacing the phrase “first tier Subsidiary of a Borrower” with the phrase “first tier Subsidiary of a Loan Party”.

1.3     Section 7.12 of the Credit Agreements . Section 7.12 of the Credit Agreements is hereby amended as follows:

(a)    The following is hereby added immediately after the phrase “series of related transactions” in clause (b) thereof:

“; provided that, to the extent requested by Lender, the Loan Parties shall provide Lender with information relating to any such transactions regardless of the size of such transaction;

(b)    The “and” at the end of clause (d) thereof is hereby deleted, the “.” at the end of clause (e) thereof is hereby replaced with “; and”, and new clauses (f) , (g) and (h) are hereby added at the end thereof to read in their entirety as follows:

“(f)    transactions pursuant to the DASAN Loan Agreement to the extent not otherwise prohibited by this Agreement, the DASAN Subordination Agreement, or the other Loan Documents and not constituting an Event of Default;

(g)    transactions between DASAN Zhone Solutions, Inc. and DASAN expressly contemplated by, and entered into pursuant to the terms of, the Merger Agreement; and

(h)    transactions between or among DNS or any of its Subsidiaries, on the one hand, and DASAN or any of its Affiliates (prior to giving effect to the Merger), on the other hand, that were in existence prior to the consummation of the Merger.”

1.4     Section 9.9 of the Credit Agreements . Section 9.9 of the Credit Agreements is hereby amended to read in its entirety as follows:

“9.9    If the obligation of any Guarantor or DNS under a Guaranty is limited or terminated by operation of law or by such Guarantor or DNS (other than in accordance with the terms of this Agreement or the Guaranty), or if any Guarantor or DNS fails to perform any obligation under a Guaranty, or repudiates or revokes or purports to repudiate or revoke any obligation under a Guaranty, or any individual Guarantor dies or becomes incapacitated, or any other Guarantor or DNS ceases to exist for any reason;”

1.5     Schedule 1.1 to the Credit Agreements .

(a)     Clause (a) of the definition of “ Change of Control ” that appears in Schedule 1.1 to the Credit Agreements is hereby amended to read in its entirety as follows:

“(a)    (i) any “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the Exchange Act) other than any Permitted Holder becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 20%, or more, of the Stock of DASAN Zhone Solutions, Inc. having the right to vote for the election of members of the Board of Directors, or (ii) a Permitted Holder becomes the beneficial owner, directly or indirectly, of 65%, or more, of the Stock of DASAN Zhone Solutions, Inc. having the right to vote for the election of members of the Board of Directors; or”

(b)    The following definition of “ DASAN ” is hereby added in alphabetical order to Schedule 1.1 to the Credit Agreements:

““ DASAN ” means DASAN Networks, Inc., a company incorporated under the laws of Korea.”

(c)    The following definition of “ DASAN Loan Agreement ” is hereby added in alphabetical order to Schedule 1.1 to the Credit Agreements:

““ DASAN Loan Agreement ” means that certain Loan Agreement, dated as of September 9, 2016, between DASAN and DASAN Zhone Solutions, Inc., as the same may be amended, restated, replaced, modified or supplemented from time to time in accordance with the terms thereof and the terms of this Agreement and the DASAN Subordination Agreement.”

(d)    The following definition of “ DASAN Subordination Agreement ” is hereby added in alphabetical order to Schedule 1.1 to the Credit Agreements:

““ DASAN Subordination Agreement ” means that certain Subordination Agreement, dated as of September 9, 2016, made by DASAN for the benefit of Lender and acknowledged by DASAN Zhone Solutions, Inc., as the same may be amended, modified, or supplemented from time to time.”

(e)    The following definition of “ DNS ” is hereby added in alphabetical order to Schedule 1.1 to the Credit Agreements:

““ DNS ” means Dasan Network Solutions, Inc., a California corporation.”

(f)    The definition of “ Guarantor ” that appears in Schedule 1.1 to the Credit Agreements is hereby amended to read in its entirety as follows:

““ Guaranty ” means any guaranty that may be executed and delivered from time to time by a Guarantor or DNS in favor of Lender in form and substance reasonably satisfactory to Lender.”

(g)    The definition of “ Loan Document ” that appears in Schedule 1.1 to the Credit Agreements is hereby amended to read in its entirety as follows:

““ Loan Documents ” means this Agreement, any Borrowing Base Certificate, the Control Agreements, the Cash Management Documents, the Copyright Security Agreement, each Guaranty, the Intercompany Subordination Agreement, the DASAN Subordination Agreement, the Letters of Credit, the Mortgages, the Patent and Trademark Security Agreement, any note or notes executed by any Borrower in connection with this Agreement and payable to Lender, any Letter of Credit Applications and other Letter of Credit Agreements entered into by any Borrower in connection with this Agreement, and any other instrument or agreement entered into, now or in the future, by any Loan Party

or any of its Subsidiaries and Lender in connection with this Agreement, but specifically excluding all Hedge Agreements.”

(h)    The following definition of “ Merger ” is hereby added in alphabetical order to Schedule 1.1 to the Credit Agreements:

““ Merger ” means the merger of Dragon Acquisition Corporation, a California corporation, with and into DNS, with DNS surviving as a wholly-owned subsidiary of DASAN Zhone Solutions, Inc., as contemplated by the Merger Agreement.”

(i)    The following definition of “ Merger Agreement ” is hereby added in alphabetical order to Schedule 1.1 to the Credit Agreements:

““ Merger Agreement ” means that certain Agreement and Plan of Merger, dated as of April 11, 2016, by and among Zhone Technologies, Inc. (now known as DASAN Zhone Solutions, Inc.), Dragon Acquisition Corporation, a California corporation, DASAN and DNS.”

(j)    The definition of “ Permitted Acquisition ” that appears in Schedule 1.1 to the Credit Agreements is hereby amended by inserting “(i)” immediately prior to the phrase “any Acquisition” in the first line thereof, inserting the phrase “pursuant to this clause (i)” immediately after the phrase “the purchase price consideration payable in respect of all Permitted Acquisitions” in clause (j) thereof, replacing the “.” at the end of clause (j) thereof with “; and”, and inserting a new clause (ii) at the end thereof to read in its entirety as follows:

“(ii)    the Acquisition of DNS and its Subsidiaries pursuant to the Merger Agreement.”

(k)    The following definition of “ Permitted Holder ” is hereby added in alphabetical order to Schedule 1.1 to the Credit Agreements:

““ Permitted Holder ” means DASAN or any Person that is an beneficial owner of Stock of DASAN Zhone Solutions, Inc. solely through such Person’s ownership of Stock of DASAN; provided that in no event shall any Loan Party or any Subsidiary of a Loan Party constitute a Permitted Holder.”

(l)    The definition of “ Permitted Indebtedness ” that appears in Schedule 1.1 to the Credit Agreements is hereby amended by deleting the “and” and the end of clause (h) thereof, replacing the “.” at the end of clause (i) thereof with “; and”, and adding a new clause (j) at the end thereof to read in its entirety as follows:

“(j)    unsecured Indebtedness incurred pursuant to the DASAN Loan Agreement in an aggregate principal amount not to exceed $5,000,000 (together with accrued and unpaid interest thereon), so long as such Indebtedness remains subject to the DASAN Subordination Agreement.”

(m)    The definition of “ Permitted Investments ” that appears in Schedule 1.1 to the Credit Agreements is hereby amended by deleting the “and” and the end of clause (f) thereof, replacing the “.” at the end of clause (g) thereof with “; and”, and adding a new clause (h) at the end thereof to read in its entirety as follows:

“(h)    Permitted Acquisitions.”

2.     No Other Changes . Except as explicitly amended by this Amendment or the other Loan Documents delivered in connection with this Amendment, all of the terms and conditions of the Credit Agreements and the other Loan Documents shall remain in full force and effect and shall apply to any advance or letter of credit thereunder. This Amendment shall be deemed to be a “Loan Document” (as defined in the Credit Agreements).

3.     Amendment Fee . [Intentionally Omitted].

4.     Consents . Upon satisfaction of the conditions precedent set forth in Sections 5.1 , 5.6 , 5.8 and 5.10 of this Amendment, and notwithstanding any restrictions in the Credit Agreements, Lender hereby consents to (i) the Merger, so long as that the Merger is consummated in accordance with the terms of the Merger Agreement, (ii) the DASAN Change of Control, and (iii) the Zhone Name Change, so long as each of the foregoing occurs, and all of the conditions precedent set forth in Section 5 have been satisfied, on or prior to September 12, 2016.

5.     Conditions Precedent . Except as provided in Section 4 , this Amendment shall be effective when Lender shall have received each of the following, each in substance and form acceptable to Lender in its reasonable discretion and duly executed by all relevant parties:

5.1    A duly executed original of this Amendment;

5.2    A Continuing Guaranty duly executed by DNS;

5.3    A Subordination Agreement duly executed by DASAN and acknowledged by Zhone Technologies;

5.4    An Agreement of Merger duly executed by DNS and Merger Sub and filed with the Secretary of State of the State of California;

5.5    Certificates of Authority from the corporate secretaries of the Borrowers and Guarantors and the corporate secretary of DNS;

5.6    A certificate of an Authorized Person of Zhone Technologies certifying as to true, correct and complete copy of the Merger Agreement;

5.7    A certificate of an Authorized Person of Zhone Technologies certifying as to true, correct and complete copy of that certain Loan Agreement, dated as of the date of consummation of the Merger, between DASAN and Zhone Technologies;

5.8    Consent and approval of this Amendment by the Export Import Bank of the United States;

5.9    Evidence reasonably satisfactory to Lender that the Zhone Name Change has occurred; and

5.10    The representations and warranties set forth in this Amendment must be true and correct.

6.     Post-Amendment Covenants . The obligations of Lender to continue to make Advances (or otherwise extend credit under the Credit Agreements) is subject to the satisfaction of the following covenants, and the failure by Borrowers to so perform or cause to be performed the following as and when required, unless extended or otherwise waived in writing by Lender (in Lender’s sole discretion), shall constitute an Event of Default:

6.1    Within 30 days after the date of this Agreement, the Credit Agreements shall be amended, in form and substance reasonably satisfactory to Lender, to join DNS as a “Guarantor” and a “Loan Party” under, and as a party to, the Credit Agreements and the other Loan Documents, as applicable, and the Loan Parties and DNS shall take such action as may be required pursuant to Section 6.15 of the Credit Agreements with respect to DNS and its Subsidiaries; provided that such amendment shall not permit any Loan Party to make any Investments in DNS or its Subsidiaries following the consummation of the Merger without Lender’s consent; and

6.2    Within 30 days after the date of this Agreement, the Information Certificate shall be amended and restated, in form and substance satisfactory to Lender, by the Loan Parties and DNS to include information about DNS.

7.     Representations and Warranties . Borrowers and Guarantors hereby represent and warrant to Lender as follows:

7.1    Borrowers and Guarantors have all requisite power and authority to execute this Amendment and any other agreements or instruments required hereunder and to perform all of their obligations hereunder, and this Amendment and all such other agreements and instruments have been duly executed and delivered by Borrowers and Guarantors and constitute the legal, valid and binding obligation of Borrowers and Guarantors, enforceable against Borrowers and Guarantors in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally.

7.2    The execution, delivery and performance by Borrowers and Guarantors of this Amendment and any other agreements or instruments required hereunder have been duly authorized by all necessary corporate action on the part of Borrowers and Guarantors and do not (i) require any authorization, consent or approval by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, other than authorizations, consents or approvals that have been obtained and are in full force and effect or as contemplated by

Section 4.2 , (ii) violate any material provision of any law, rule or regulation or of any order, writ, injunction or decree presently in effect, having applicability to Borrowers or Guarantors, or the certificates of incorporation or by-laws of Borrowers or Guarantors, or (iii) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other Material Contract to which Borrowers or Guarantors are a party or by which Borrowers and Guarantors or their respective properties may be bound or affected, except to the extent that any such breach or default could not individually or in the aggregate reasonably be expected to cause a Material Adverse Change.

7.3    All of the representations and warranties contained in Section 5 and Exhibit D of the Credit Agreements are true and correct in all material respects on and as of the date hereof as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date (in which case such representations and warranties continue to be true and correct in all material respects as of such earlier date).

8.     References . All references in the Credit Agreements to “this Agreement” shall be deemed to refer to the Credit Agreements as amended hereby; and any and all references in the other Loan Documents to the Credit Agreements shall be deemed to refer to the Credit Agreements as amended hereby.

9.     No Waiver . The execution of this Amendment and the acceptance of all other agreements and instruments related hereto shall not be deemed to be a waiver of any Default or Event of Default under the Credit Agreements or a waiver of any breach, default or event of default under any Loan Document or other document held by Lender, whether or not known to Lender and whether or not existing on the date of this Amendment.

10.      Release . Borrowers and Guarantors hereby absolutely and unconditionally release and forever discharge Lender, and any and all participants, parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents, attorneys, and employees of any of the foregoing, from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which Borrowers or Guarantors have had, now have or have made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Amendment, whether such claims, demands and causes of action are matured or unmatured or known or unknown. It is the intention of the Borrowers and Guarantors in executing this release that the same shall be effective as a bar to each and every claim, demand and cause of action specified and in furtherance of this intention each of the Borrowers and Guarantors waives and relinquishes all rights and benefits under Section 1542 of the Civil Code of the State of California, which provides:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM

OR HER MIGHT HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

The parties acknowledge that each may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such claims, demands, or causes of action and agree that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.

11.      Costs and Expenses . Borrowers agree to pay all reasonable out-of-pocket fees and disbursements of counsel to Lender for the services performed by such counsel in connection with the preparation of this Amendment and the documents and instruments incidental hereto. Borrowers hereby agree that Lender may, at any time or from time to time in its sole discretion and without further authorization by Borrowers, make a loan to Borrowers under the Credit Agreements, or apply the proceeds of any loan, for the purpose of paying any such reasonable out-of-pocket fees, disbursements, costs and expenses.

12.      Miscellaneous . This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original and all of which counterparts, taken together, shall constitute one and the same instrument. Transmission by facsimile or “pdf” file of an executed counterpart of this Amendment shall be deemed to constitute due and sufficient delivery of such counterpart. Any party hereto may request an original counterpart of any party delivering such electronic counterpart. This Amendment and the rights and obligations of the parties hereto shall be construed in accordance with, and governed by, the laws of the State of California. In the event of any conflict between this Amendment and the Credit Agreements, the terms of this Amendment shall govern.

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

BORROWERS :

ZHONE TECHNOLOGIES, INC.

By: /s/ KIRK MISAKA
Name: Kirk Misaka
Title: Chief Financial Officer

ZTI MERGER SUBSIDIARY III, INC.

By: /s/ KIRK MISAKA
Name: Kirk Misaka
Title: Chief Financial Officer

[SIGNATURES CONTINUED ON NEXT PAGE]

GUARANTORS :

 

PREMISYS COMMUNICATIONS, INC.

By: /s/ KIRK MISAKA
Name: Kirk Misaka
Title: Chief Financial Officer

ZHONE TECHNOLOGIES INTERNATIONAL, INC.

By: /s/ KIRK MISAKA
Name: Kirk Misaka
Title: Chief Financial Officer

PARADYNE NETWORKS, INC.

By: /s/ KIRK MISAKA
Name: Kirk Misaka
Title: Chief Financial Officer

PARADYNE CORPORATION

By: /s/ KIRK MISAKA
Name: Kirk Misaka
Title: Chief Financial Officer

LENDER :

WELLS FARGO BANK, NATIONAL ASSOCIATION

By: /s/ HARRY L. JOE
Name: Harry L. Joe
Title: Authorized Signatory