UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): ~~December~~April 144, ~~2007~~2008

DIGITAL LIGHTWAVE, INC.

(Exact name of registrant as specified in its charter)

Delaware		~~000~~001-~~21669~~31770		95-4313013
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

5775 Rio Vista Drive

Clearwater, Florida 33760

(Address of Principal Executive Offices and Zip Code)

Registrant’s telephone number, including area code: (727) 442-6677

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01.

ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

~~Borrowing From~~The ~~Optel~~disclosure ~~Capital,~~set ~~LLC~~forth below under Item 2.03 (Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant) is hereby incorporated by reference into this Item 1.01.

To fund its working capital requirements, on December 14, 2007, Digital Lightwave, Inc. (the “Company”) borrowed $600,000 from Optel Capital, LLC (“Optel”), an entity controlled by the Company’s largest stockholder and current chairman of the board of directors, Dr. Bryan J. Zwan. The disclosure set forth below under Item 2.03 (Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant) is hereby incorporated by reference into this Item 1.01.

ITEM 2.03.

CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT

On ~~December~~April 144, ~~2007~~2008, ~~the~~Digital ~~Company borrowed $600~~Lightwave,~~000~~ ~~from Optel to fund its working capital requirements~~Inc. ~~The loan is evidenced by a secured promissory note that bears interest at 10.0% per annum and is secured by a security interest in substantially all of~~ (the “Company’s”) ~~assets. Principal~~ and ~~any accrued but unpaid interest under the secured promissory note is due and payable upon demand by~~ Optel ~~at any time after June 30~~Capital, ~~2008;~~LLC ~~provided,~~(“Optel”) ~~however,~~entered ~~that~~into ~~the~~a ~~entire~~Credit ~~unpaid principal amount of the loan, together with accrued but unpaid interest, shall become immediately due~~ and ~~payable upon demand by Optel at any~~ ~~time~~Restructuring onAgreement ~~or following~~ (the ~~occurrence~~“Credit ofAgreement”) ~~any~~pursuant ofto ~~the~~which ~~following events:~~ (a) the ~~sale of all or substantially all of the~~ Company’s ~~assets~~existing ~~or,~~indebtedness ~~subject~~owed to ~~certain exceptions~~Optel, ~~any~~consisting ~~merger or consolidation~~ of ~~the~~approximately ~~Company~~$28.0 ~~with~~million ~~or into another corporation; (b) the inability~~ of ~~the~~principal, ~~Company~~that tobore ~~pay~~interest ~~its~~at ~~debts as they become due; (c)~~10% ~~the~~per ~~dissolution~~annum, ~~termination~~and accrued ofinterest ~~existence,~~thereon ~~or appointment~~ of aapproximately ~~receiver,~~$7.7 ~~trustee or custodian~~million, ~~for~~ all ~~or any material part~~ of ~~the~~which ~~property~~was ~~of, assignment~~due ~~for~~and ~~the~~payable ~~benefit~~upon ofdemand ~~creditors~~ by, ~~or the commencement of any proceeding by the Company under any reorganization~~Optel, ~~bankruptcy,~~was ~~arrangement,~~restructured ~~dissolution~~and ~~or liquidation law or statute of any jurisdiction, now or in the future in effect;~~ (db) ~~the~~Optel ~~execution~~agreed byto ~~the~~make ~~Company of~~ a ~~general~~$2.5 ~~assignment~~million ~~for~~revolving ~~the~~credit ~~benefit~~facility ofavailable ~~creditors;~~to ~~(e)~~ the ~~commencement of any proceeding against the~~ Company. ~~under~~Optel ~~any~~is ~~reorganization,~~controlled by ~~bankruptcy,~~Dr. Bryan J. ~~arrangement~~Zwan, ~~dissolution~~the orCompany’s ~~liquidation~~largest ~~law~~stockholder orand ~~statute~~ chairman of ~~any jurisdiction, now or in~~ the ~~future~~board inof ~~effect,~~directors. ~~which~~The isCredit ~~not~~Agreement ~~cured~~was approved by the ~~dismissal~~Company’s ~~thereof~~board ~~within~~of ~~ninety~~directors ~~(90) days~~upon ~~after~~ the ~~date~~unanimous ~~commenced;~~recommendation ~~or (f) the appointment~~ of a ~~receiver~~special orcommittee ~~trustee to take possession~~ of the board ~~property~~comprised orsolely ~~assets~~ of ~~the~~independent ~~Company~~directors.

InPursuant ~~part~~to the Credit Agreement, ~~funds~~the ~~will~~restructured beindebtedness ~~used~~is evidenced by a new secured convertible promissory note in the principal amount of approximately $35.7 million (the “Restated Note”), and the revolving credit facility is evidenced by an additional secured convertible promissory note in the principal amount of $2.5 million (the “New Commitment Note” and, together with the Restated Note, the “Notes”). The Notes bear interest at a rate equal to ~~cover~~London ~~development~~Interbank Offered Rate plus 1.0% per annum and ~~prototyping~~are ~~costs~~secured ~~for~~by substantially all the ~~40Gbps~~Company’s ~~technology~~assets pursuant to an amended and ~~product~~restated ~~development~~security agreement (the “Security Agreement”). Each of the Notes requires quarterly payments of interest commencing on June 30, 2008, and matures on March 31, 2010.

AsAll ofthe ~~December 14,~~indebtedness ~~2007,~~evidenced by the Notes is convertible into common stock of the Company ~~owed~~at the option of Optel anat ~~aggregate~~any time following approval of ~~approximately~~the ~~$28.5~~conversion ~~million~~feature inby ~~principal~~the ~~plus~~disinterested ~~approximately~~stockholders $6(as described below) at a conversion price based on the average trading price of the stock during the five-day period preceding the date of any conversion.7 The Company and Optel ~~million~~have ofmade ~~accrued~~it ~~interest~~a ~~thereon~~condition to the indebtedness evidenced by the Notes becoming convertible, ~~which~~that ~~debt~~the isconversion ~~secured~~feature be approved by the holders of a ~~first~~majority ~~priority~~of ~~security~~the ~~interest~~outstanding inshares ~~substantially~~of ~~all~~common stock of the Company who are not affiliated with Optel or any of its affiliates at the Company’s ~~assets~~2009 ~~and~~annual meeting of stockholders. If such holders do not approve the conversion feature, the outstanding debt ~~accrues~~and accrued interest atwould aimmediately ~~rate~~become ofdue ~~10.0% per~~and ~~annum.~~payable ~~The~~in ~~maturity~~full ~~dates~~upon ~~and~~demand ~~corresponding~~by ~~payment~~Optel ~~schedules~~at ~~related~~any totime ~~these~~after ~~obligations~~the ~~are~~stockholders’ asmeeting. ~~follows:~~

•Pursuant ~~approximately~~to ~~$27.9~~a ~~million~~Registration inRights ~~principal,~~Agreement ~~plus~~(the ~~accrued~~“Registration ~~interest~~Rights Agreement”) ~~which~~entered asinto ofin ~~December~~connection 14with the Credit Agreement, ~~2007~~the Company has agreed to file, ~~was~~upon ~~approximately~~written ~~$6.7~~demand ~~million~~by Optel, isa ~~currently~~registration ~~due~~statement ~~and~~covering ~~payable~~the onresale ~~demand~~by atOptel ~~any~~of ~~time;~~the ~~and~~shares of common stock issuable upon conversion of the Notes.

•The ~~$600~~Credit Agreement,~~000~~ inthe ~~principal~~Notes, ~~plus~~the ~~interest~~Security ~~that~~Agreement, ~~accrues~~and ~~thereon~~the ~~after~~Registration ~~December~~Rights ~~14,~~Agreement ~~2007,~~are isattached ~~due~~as ~~and~~exhibits ~~payable~~to this Current Report on ~~demand~~Form at8-K ~~any~~and ~~time~~are ~~after~~incorporated ~~June~~herein ~~30,~~by ~~2008~~reference. The foregoing summaries do not purport to be complete and are qualified in their entirety by reference to such documents.

All of the foregoing transactions with Optel were approved by the Company’s board of directors, upon the recommendation of a special committee of the board. The special committee is composed solely of independent directors.

The Company’s ability to meet cash requirements and maintain sufficient liquidity over the next 12 months is dependent on its ability to obtain additional financing from funding sources which may include, but may not be limited to, Optel. If the Company is not able to obtain additional financing, it expects that it will not have sufficient cash to fund its working capital and capital expenditure requirements for the near term and will not have the resources required for the payment of its current liabilities when they become due. Optel currently continues to be the principal source of financing for the Company. The Company has not identified any funding source other than Optel that would be prepared to provide current or future financing to the Company.

The Company cannot assure that it will be able to obtain adequate financing, that it will achieve profitability or, if it achieves profitability that the profitability will be sustainable or that it will continue as a going concern. As a result, the Company’s independent registered public accounting firm has included an explanatory paragraph for a going concern in its report for the year ended December 31, 2006, that was included in the Company’s Annual Report on Form 10-K filed on April 6, 2007.

ITEM 8.01. OTHER EVENTS

On December 13, 2007, the Company received a purchase order from a major US telecommunications carrier for the NIC platform with NextGeneration technology. The deal is valued in excess of $1M, including hardware and software licensing.

ITEM 9.01.

FINANCIAL STATEMENTS AND EXHIBITS.

(a)

Financial Statements of Businesses Acquired.

Not applicable.

(b)

Pro Forma Financial Information.

Not applicable.

(c)

Exhibits.

10.1 Secured Promissory Note issued by Digital Lightwave, Inc. to Optel Capital, LLC on December 14, 2007.


10.1		Credit and Restructuring Agreement dated April 4, 2008, between Digital Lightwave, Inc. and Optel Capital, LLC.

10.2		Secured Convertible Promissory Note (Restated Note) dated April 4, 2008, issued by Digital Lightwave, Inc. to Optel Capital, LLC.

10.3		Secured Convertible Promissory Note (New Commitment Loans) dated April 4, 2008, issued by Digital Lightwave, Inc. to Optel Capital, LLC.

10.4		Amended and Restated Security Agreement dated April 4, 2008, between Digital Lightwave, Inc. and Optel Capital, LLC.

10.5		Registration Rights Agreement dated April 4, 2008, between Digital Lightwave, Inc. and Optel Capital, LLC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DIGITAL LIGHTWAVE, INC.
Date: December 20, 2007	By:	/s/ Kenneth T. Myers
Date: April 10, 2008	By:	/s/ Kenneth T. Myers
		Kenneth T. Myers
		President and Chief Executive Officer

Exhibit Index

Exhibit No.		Description
10.1		~~Secured~~Credit ~~Promissory~~and ~~Note~~Restructuring ~~issued~~Agreement bydated April 4, 2008, between the Digital Lightwave, Inc. toand Optel Capital, LLC ~~on December 14, 2007~~.
10.2		Secured Convertible Promissory Noted (Restated Note) dated April 4, 2008, issued by the Digital Lightwave, Inc. to Optel Capital, LLC.
10.3		Secured Convertible Promissory Note (New Commitment Loans) dated April 4, 2008, issued by Digital Lightwave, Inc. to Optel Capital, LLC.
10.4		Amended and Restated Security Agreement dated April 4, 2008, between Digital Lightwave, Inc. and Optel Capital, LLC.
10.5		Registration Rights Agreement dated April 4, 2008, between Digital Lightwave, Inc. and Optel Capital, LLC.

Filing Compare · DIGITAL LIGHTWAVE INC