Exhibit 10.3

 

Execution Version

 

THE USE OF THE FOLLOWING NOTATION IN THIS EXHIBIT INDICATES THAT CERTAIN
INFORMATION HAS BEEN OMITTED PURSUANT TO ITEM 601(a)(6) OF REGULATION S-K: [***]

 

LIMITED WAIVER AND CONSENT, THIRD AMENDMENT TO SENIOR SECURED
CONVERTIBLE NOTE PURCHASE AND GUARANTEE AGREEMENT AND
REAFFIRMATION OF NOTE DOCUMENTS

 

This LIMITED WAIVER AND CONSENT, THIRD AMENDMENT TO SENIOR SECURED CONVERTIBLE NOTE PURCHASE AND GUARANTEE AGREEMENT AND REAFFIRMATION OF NOTE DOCUMENTS is dated as of May 18, 2023 (this “Agreement”), and entered into by and among Airspan Networks Holdings Inc. (f/k/a New Beginnings Acquisition Corp.), a Delaware corporation (“ANH”), as Issuer (in such capacity, the “Issuer”), each undersigned Subsidiary of the Issuer party to the Note Purchase Agreement (as defined below) as a Guarantor (each such Subsidiary acting in such capacity, collectively, the “Guarantors” and each, a “Guarantor”; and, together with the Issuer, collectively, the “Note Parties” and, each, a “Note Party”), the Holders and DBFIP ANI LLC (“Fortress”), as agent, collateral agent and trustee for the Secured Parties (Fortress in such capacities together with its successors and assigns in such capacities, the “Collateral Agent”), and acknowledged, agreed, and consented to by the Term Loan Agent on the signature pages hereto.

 

WHEREAS, the Note Parties are parties to (x) the Senior Secured Convertible Note Purchase and Guarantee Agreement, dated as of July 30, 2021 (as modified by (i) the Limited Waiver and Consent under Senior Secured Convertible Note Purchase and Guarantee Agreement, dated as of November 2, 2021, (ii) the First Amendment and Waiver to Senior Secured Convertible Note Purchase and Guarantee Agreement and Other Note Documents, dated as of March 29, 2022, (iii) the Limited Consent letter agreement, dated as of March 31, 2022, (iv) the Limited Consent letter agreement, dated as of September 14, 2022 and (v) the Second Amendment, Limited Waiver and Consent Under Senior Secured Convertible Note Purchase and Guarantee Agreement and Other Note Documents, dated as of November 14, 2022, and as the same has been further amended, amended and restated, restated, supplemented or otherwise modified from time to time prior to the Effective Date (as defined below), the “Existing Note Purchase Agreement” and, as amended by this Agreement and conformed on Exhibit A hereto, the “Amended Note Purchase Agreement”), among other things, together with the Holders and the Collateral Agent and (y) certain other Note Documents, pursuant to which the Note Parties have provided guarantees and collateral security in respect of the Obligations;

 

WHEREAS, ANH entered into that certain Credit Agreement dated as of December 30, 2020 (as modified by (i) the Limited Consent, dated as of March 8, 2021, (ii) the First Amendment to Credit Agreement, dated as of June 14, 2021, (iii) the Waiver and Consent, Second Amendment, Restatement, Joinder and Omnibus Amendment to Credit Agreement and other Loan Documents, dated as of August 13, 2021, (iv) the Limited Waiver and Consent under Amended and Restated Credit Agreement, dated as of November 2, 2021, (v) the Third Amendment and Waiver to Credit Agreement and Other Loan Documents, dated as of March 29, 2022, (vi) the Limited Consent letter agreement, dated as of March 31, 2022, (vii) the Limited Consent letter agreement, dated as of September 14, 2022 and (viii) the Fourth Amendment, Limited Waiver and Consent Under Credit Agreement and Other Loan Documents, dated as of November 14, 2022, and as the same has been or may be further amended, amended and restated, restated, supplemented or otherwise modified from time to time prior to the Effective Date, the “ Existing Credit Agreement” and, as the same may be further amended, amended and restated, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) by, among others, ANH, as holdings, the lenders party thereto as of the date hereof (collectively, the “Lenders”) and Fortress, as administrative agent and collateral agent on behalf of the secured parties thereunder (together with its successors and assigns in such capacity, the “Term Loan Agent”);

 

 

 

 

WHEREAS, the Issuer, the other Guarantors party thereto and Fortress, in its capacities as Term Loan Agent, Collateral Agent and Notes Collateral Agent (each as defined in the Forbearance Agreement (as defined below)) have entered into that certain letter agreement Re: Forbearance Agreement, Fifth Amendment to Credit Agreement and Other Loan Documents, and Third Amendment to Senior Secured Convertible Note Purchase Guarantee Agreement and other Note Documents, dated as of April 21, 2023 (the “Forbearance Agreement”) on their own behalf and on behalf of the Purchasers and the Lenders, pursuant to which the parties have agreed to forebear with respect to the Specified Defaults (as defined in the Forbearance Agreement) and to negotiate in good faith to enter into this Agreement;

 

WHEREAS, in order to raise additional liquidity, the Note Parties have engaged PJT Partners LP. (the “Company Financial Advisor”) and are planning to engage in cost cutting and enter into one or more strategic transactions to restructure their business operations and raise additional capital;

 

WHEREAS, in furtherance of the foregoing, on March 8, 2023, the Issuer entered into a Stock Purchase Agreement (as in effect on the date hereof and as amended with the consent of the Collateral Agent in its sole discretion, the “Mimosa Purchase Agreement”) with Airspan Networks Inc., a Delaware corporation (“Airspan”), Mimosa Networks, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Airspan (“Mimosa”), and Radisys Corporation, an Oregon corporation (“Buyer”), pursuant to which Airspan will sell all of the issued and outstanding shares of common stock of Mimosa to Buyer for an aggregate purchase price of approximately $60,000,000 in cash (subject to customary adjustments as set forth in the Mimosa Purchase Agreement) on the terms and subject to the conditions set forth in the Mimosa Purchase Agreement (the “Divestiture Transaction”) and the Note Parties now are seeking the consent of the Collateral Agent and the Holders to consummate the Divestiture Transaction;

 

WHEREAS, in connection with the foregoing, the Note Parties have requested that the Lenders amend and restate the Existing Credit Agreement, to make certain changes to, among other things, permit the Divestiture Transaction, charge certain fees and increase the interest rate and to increase the aggregate amount of Delayed Draw Term Loans (as defined in the Existing Credit Agreement) available to Airspan to up to $25,000,000 (the “A&R Credit Agreement”);

 

WHEREAS, in order to finance the ongoing operations of the Note Parties and the costs associated with the consummation of the Divestiture Transaction, the Note Parties have requested and the Collateral Agent and the Holders have agreed, subject to the terms and conditions stated herein, to enter into this Agreement and to amend the terms of the Note Purchase Agreement to, among other things, (i) consent to the Divestiture Transaction described in the Mimosa Purchase Agreement, (ii) waive the following existing Events of Default: (A) (v) the Event of Default which occurred pursuant to Section 6.1(a) of the Note Purchase Agreement as a result of the Note Parties’ failure to make the regularly scheduled payments required pursuant to the provisions of the Convertible Notes on the Interest Payment Date occurring on March 31, 2023 (such amount, the “Overdue Interest”), (w) the Event of Default which occurred pursuant to Section 6.1(c) of the Note Purchase Agreement on December 31, 2022 as a result of the Note Parties’ failure to comply with Section 4.2(p)(2) of the Note Purchase Agreement, (x) the Event of Default which occurred pursuant to Section 6.1(c) of the Note Purchase Agreement on December 31, 2022 as a result of the Note Parties’ failure to comply with Section 4.2(p)(3) of the Note Purchase Agreement (y) the Event of Default which occurred pursuant to Section 6.1(c) of the Note Purchase Agreement on, and which Event of Default has been continuing since, November 29, 2022 as a result of the Loan Parties’ failure to comply with Section 4.2(p)(1) of the Note Purchase Agreement and (z) the Event of Default which occurred pursuant to Section 6.1(c) of the Note Purchase Agreement as a result of the Loan Parties’ failure to comply with Section 4.1(n)(2)(E) of the Note Purchase Agreement, and (B) the Events of Default which occurred pursuant to Section 6.1(e)(1) and Section 6.1(e)(2) of the Note Purchase Agreement as a result of the events of default which occurred under the Term Loan Documents corresponding to the defaults and Events of Default described in clause (A) above in the manner described in the Limited Waiver and Consent, Second Amendment and Restatement of Credit Agreement and Reaffirmation of Loan Documents entered into in connection herewith (collectively, the “Specified Events of Default”), (iii) consent to the A&R Credit Agreement for all purposes under the Intercreditor Agreement and the other Note Documents and (iv) make such other amendments to the Note Purchase Agreement and other Note Documents described in the Amended Note Purchase Agreement attached hereto as Exhibit A, the Amended and Restated Form of Convertible Note attached hereto as Exhibit B and in the other amendments to the Note Documents entered into in connection herewith; and

 

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WHEREAS, it is the intent of the parties hereto that this Agreement and the amendment of the Note Purchase Agreement, Convertible Notes and other Note Documents does not constitute a novation of the rights, obligations and liabilities of the respective parties (including the Obligations) existing under the Note Documents or evidence payment of all or any of such obligations and liabilities under any of the Note Documents and except as expressly modified hereby, all such rights, obligations and liabilities shall continue and remain outstanding and in full force and effect;

 

NOW, THEREFORE, in consideration of the premises set forth above and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned parties agree as follows:

 

1. Defined Terms. Capitalized terms used in this Agreement and not otherwise defined in this Agreement shall have the meanings ascribed to such respective terms in the Note Purchase Agreement or, if not defined therein, shall have the meanings ascribed to such respective terms in the applicable Convertible Note(s).

 

2. Limited Waiver and Consent.

 

2.1 Subject to the terms and conditions set forth in Section 2.2 and Section 4 below, the Collateral Agent and each Holder hereby: (i) consents to (x) the consummation of the Divestiture Transaction by the applicable Note Parties (in accordance with the terms of the Mimosa Purchase Agreement) and (y) permitting the Note Parties to retain the Net Cash Proceeds of the Divestiture Transactions in excess of the Minimum Prepayment Amount (as defined below); provided in the case of clauses (x) and (y) that (A) both before and after giving effect to the Closing Date (as defined in the Mimosa Purchase Agreement, the “Mimosa Closing Date”), no Default or Event of Default then exists and is continuing and (B) the Collateral Agent determines (in its sole discretion) that each of the Consent Conditions set forth in Section 2.2 below have been satisfied prior to or substantially concurrently with the Mimosa Closing Date, (ii) waives the Specified Events of Default occurring prior to the date hereof which the Holders and the Collateral Agent have actual knowledge of (the “Known Defaults”), (iii) waives the imposition of any applicable Default Rate (as defined in the Convertible Notes) interest amounts on the Obligations and all amounts of interest, at the Default Rate or otherwise, on the Overdue Interest, in each case for the period between the applicable Interest Payment Date and the Effective Date (or solely with respect to the Overdue Interest, until the date on which the next Delayed Draw Term Loan (as defined in the A&R Credit Agreement) (the “Second DDTL Funding Date”) is funded provided that for the period from the Effective Date to the Second DDTL Funding Date no other Default or Event of Default exists), (iv) consents under the terms of the Intercreditor Agreement and the Collateral Documents to the sale of the Equity Interests in Mimosa, the release of liens and guarantees with respect to Mimosa and to the extent approved by the Collateral Agent in its sole discretion, the transfer of Company Intellectual Property and Transferred Intellectual Property (each as defined in the Mimosa Purchase Agreement) in connection therewith pursuant to the terms of the Mimosa Purchase Agreement; provided that the conditions described in clause (i) above are satisfied on the Mimosa Closing Date, and (v) consents under the terms of the Intercreditor Agreement and the other Note Documents to the amendments (including the increase in commitments) described in the A&R Credit Agreement. The foregoing waiver and consent (collectively, the “Specified Waivers and Consents”) shall be limited precisely as written and relates solely to the limited consents specified above and the Known Defaults in the manner they exist on the date hereof and not to any other change in facts or circumstances occurring after the date hereof, or to any other Defaults or Events of Default now existing or occurring after the date hereof, and shall not in any way or manner restrict the Collateral Agent or any Holder from exercising any rights or remedies they may have with respect to any other Default or Event of Default (including, for the avoidance of doubt, any Default or Event of Default existing as of the date hereof which is not a Known Default) at any time in respect of this Agreement or any other Note Document. Nothing in this Agreement shall be deemed to: (i) constitute a waiver of compliance by the Issuer or any other Note Party with respect to any other term, provision or condition of the Note Purchase Agreement or any other Note Document, or any other instrument or agreement referred to therein or prejudice any right or remedy that the Collateral Agent or any Holder may have or may in the future have; or (b) create any course of dealing or otherwise impair or prejudice any right or remedy that the Collateral Agent or any other Secured Party may now have or may have in the future under or in connection with the Note Purchase Agreement or any other Note Document, or any other instrument or agreement referred to therein, with respect to any matter other than those specifically and expressly waived and consented to in this Section 2.

 

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2.2 On or prior to the Mimosa Closing Date, the Collateral Agent (or its counsel) shall have received all of the following (each in form and substance satisfactory to the Collateral Agent in its sole discretion) (the “Consent Conditions”):

 

(i) At least five (5) Business Days prior to the Mimosa Closing Date (or such later date agreed with the Collateral Agent in its sole discretion (which consent may be via e-mail)), the Issuer shall have delivered a certificate duly executed by a Responsible Officer of the Issuer, attaching (A) current drafts of all of the transaction documents relating to the Divestiture Transaction and detailing the status of all of the conditions precedent to the Divestiture Transaction and (B) a draft flow of funds and summary of anticipated transaction expenses;

 

(ii) On the Mimosa Closing Date, immediately prior to giving effect to the Mimosa Closing Date, the Issuer shall have delivered a duly executed certificate of a Responsible Officer of the Issuer (A) certifying and attaching supporting evidence demonstrating that all conditions precedent to the Mimosa Closing Date have been satisfied in accordance with the terms set forth in the Mimosa Purchase Agreement and without waiver unless otherwise consented to in writing by the Collateral Agent in its sole discretion (which consent may be by email), (B) certifying and attaching a final flow of funds evidencing that (x) at least $45,000,000 of the proceeds of the Divestiture Transaction (the “Minimum Prepayment Amount”) will be paid substantially concurrently with the Closing Date directly from the Issuer to the Secured Parties or their respective designees (in accordance with their proportionate share of the Obligations and Term Loan Obligations then outstanding), to prepay the outstanding Obligations and Term Loan Obligations and (y) that all remaining proceeds of the Divestiture Transaction not paid to the Secured Parties pursuant to the preceding clause (x) (the “Company Retained Net Cash Proceeds”) or payable to third-parties pursuant to such funds flow are to be deposited in a Controlled Account, and (C) attaching the final documentation evidencing the Divestiture Transaction (if not previously provided), along with such other certificates, agreements, documents and instruments, in each case as reasonably requested by the Collateral Agent or the Issuer and necessary to evidence or effectuate the Divestiture Transaction, each in form and substance satisfactory to the Collateral Agent in its sole discretion.

 

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2.3 Prior to the Mimosa Closing Date, the Collateral Agent will deliver at the sole cost and expense of the Note Parties a letter (in form and substance satisfactory to the Collateral Agent in its sole discretion and which terms may be agreed by the parties in advance of such delivery date) evidencing the release of the Collateral Agent’s Liens on the assets sold pursuant to the Mimosa Purchase Agreement to be effective upon, (i) the Collateral Agent’s receipt of Minimum Payment Amount in immediately available funds in accordance with the payment details described in such letter and (ii) the receipt of countersignatures from each of the Note Parties pursuant to which the Note Parties (x) confirm that all Consent Conditions have been satisfied, (y) reaffirm all other Obligations and (z) provide customary certifications and releases for the benefit of the Secured Parties (with each of (x), (y) and (z) to be effective and to be deemed made on the Mimosa Closing Date both before and after giving effect to the release of Liens described therein).

 

3. Amendments to Note Purchase Agreement and to Convertible Notes; Exchange of Convertible Notes; No Novation. Upon the satisfaction of the terms and conditions set forth in Section 4 below on the Effective Date:

 

3.1 Amendments to Note Purchase Agreement. (a) Upon satisfaction of the conditions precedent set forth in Section 2 hereof, the Existing Note Purchase Agreement shall be and hereby is amended as set forth in the conformed copy of the Amended Note Purchase Agreement attached as Exhibit A to this Agreement, (b) Annex A to the Existing Note Purchase Agreement shall be restated as set forth in the conformed copy of Form of Convertible Note attached as Exhibit B to this Agreement, (c) the Performance Milestones to Note Purchase Agreement attached hereto as Exhibit C shall be appended to the Amended Note Purchase Agreement as Appendix C thereto, (d) Exhibit D to the Existing Note Purchase Agreement shall be amended as set forth in the Form of Compliance Certificate attached hereto as Exhibit D and (e) all of the Schedules to the Existing Note Purchase Agreement shall be amended as set forth on the corresponding schedules attached hereto as Exhibit E, in each case of the preceding clauses (a) and (b), with text marked in bold double underline indicating additions to the Amended Note Purchase Agreement and with text marked in bold strikethrough indicating deletions to the Amended Note Purchase Agreement.

 

3.2 Amendment of Convertible Notes. Each outstanding Convertible Note is hereby is amended by amending the definition of “Applicable Rate” therein to read in its entirety as follows:

 

““Applicable Rate” means ten percent (10.0%) per annum; it being understood that the then Applicable Rate shall be increased by three and three-quarters of one percent (3.75%) per annum (i) immediately and automatically upon the occurrence of an Event of Default described in Section 6.1(h) or 6.1(i) of the Purchase Agreement or (ii) at the option of the Collateral Agent or the Holders of at least a majority of the Convertible Notes then outstanding, upon the occurrence and during the continuation of any other Default or Event of Default other than those specified in clause (i) above (such rate, the (“Default Rate”)).”

 

3.3 Exchange of Convertible Notes. Promptly, and in any event within five (5) Business Days following receipt by the Issuer or its designee from the holders of the original Convertible Notes issued by the Issuer pursuant to the Existing Note Purchase Agreement, the Issuer and the Holders shall arrange for each of the Convertible Notes issued by the Issuer pursuant to the Existing Note Purchase Agreement to be replaced and exchanged (the “Exchange”) for Convertible Notes with the amendments described in Section 3.1 and Section 3.2 above (the “A&R Convertible Notes”).

 

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3.4 No Novation. It is the intent of the parties hereto that neither the amendment of each outstanding Convertible Note nor the issuance of each A&R Convertible Note constitutes a novation of the rights, obligations and liabilities of the respective parties (including the Obligations) existing under the Note Documents or evidence payment of all or any of such obligations and liabilities under any of the Note Documents and except as expressly modified hereby, all such rights, obligations and liabilities shall continue and remain outstanding and in full force and effect.

 

4. Effectiveness. This Agreement and the limited waivers and consents set forth in Section 2 above and the other amendments and other modifications to the Existing Note Purchase Agreement and Convertible Notes as set forth in Section 3 above shall become effective immediately upon the Holder’s and the Collateral Agent’s satisfaction with each of the following conditions precedent (the date of such satisfaction, the “Effective Date”):

 

4.1 The Collateral Agent (or its counsel) shall have each received the following, each in form and substance satisfactory to the Collateral Agent and the Holders:

 

(i) Duly executed counterparts to this Agreement, which shall be duly executed by the Issuer, each Guarantor, each Holder and the Collateral Agent;

 

(ii) Copies of each of the A&R Convertible Notes, each duly executed by the Issuer;

 

(iii) A duly executed copy of the Limited Waiver and Consent, Second Amendment and Restatement of Credit Agreement and Reaffirmation of Loan Documents pursuant to which the Lenders and the Term Loan Agent, agree among other things, to consent to this Agreement, the Divestiture Transaction and to waive the Specified Defaults, and all other Term Loan Documents delivered in connection therewith including the Warrants (as defined in the Term Loan Credit Agreement);

 

(iv) A copy of the engagement letter between the Company Financial Advisor and the Issuer, dated as of June 16, 2022 (the “Financial Advisor Engagement Letter”);

 

(v) A certificate of a Responsible Officer of the Issuer addressed to the Collateral Agent, in form and substance satisfactory to the Collateral Agent and certifying (a) as to the matters set forth in Section 6 below and (b) that all conditions precedent to the Effective Date have been satisfied;

 

(vi) Duly-adopted resolutions from the Board of Directors of each Note Party in form and substance satisfactory to the Collateral Agent specifically affirming that (a) prior to executing this Agreement, such Note Party has had the opportunity to review, evaluate, and negotiate this Agreement, the Note Purchase Agreement and the other Note Documents, the Specified Fees and any Applicable Redemption Amount and the calculations thereof with its advisors, (b) the Specified Fees and any Applicable Redemption Amount are a good faith, reasonable approximation of Holders’ liquidated damages upon the applicable triggering events, taking into account all of the circumstances, including the costs of funds, the opportunity cost of capital, the relative risk of the investment, and the operational benefits for the Note Parties from continued use of funds as a result of the Holders’ agreement to accept the Specified Fees and any Applicable Redemption Amount in lieu of additional up-front fees, (c) the Specified Fees and any Applicable Redemption Amount are not intended to be nor viewed by the parties as the economic equivalent of unmatured interest and (d) each of the Note Parties has duly authorized its entry into this Agreement, the Amended Note Purchase Agreement and the other Note Documents, and the Exchange in connection therewith;

 

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(vii) (a) at least two (2) Business Days before the Effective Date, a duly executed Notice of Borrowing (as defined in the A&R Credit Agreement) and (b) a flow of funds acceptable to the Collateral Agent, in each case, in connection with the A&R Credit Agreement; and

 

(viii) Each of the other conditions precedent set forth on Exhibit F.

 

4.2 No Default. Immediately after giving effect to this Agreement and the limited waivers and consents described in Section 2 above, no Default or Event of Default shall have occurred and be continuing or would result from the execution, delivery or performance of this Agreement.

 

4.3 Management. The Collateral Agent shall have received evidence satisfactory to it that, as of the Effective Date, Glenn Laxdal has been appointed as the chief executive officer of ANH and that Eric Stonestrom is the executive chairman of ANH’s board of directors.

 

5. Fees.

 

5.1 As consideration for this Agreement and the Specified Waivers and Consents and other modifications contained herein and in the other Note Documents, the Issuer has agreed to pay to the Collateral Agent, for the benefit of each of the Holders, a fee (the “Amendment Fee”) in an amount equal to 5.00% of the aggregate principal amounts of any and all outstanding Convertible Notes and other Obligations advanced or otherwise owed under the Note Documents, including, without limitation, any fees, the capitalized interest and any premiums (including, without limitation, any Make-Whole Amount or any other amounts or premiums comprising the Applicable Redemption Amount (if any)) (collectively, the “Outstanding Amounts”).

 

5.2 The Amendment Fee shall be for the ratable benefit of each Holder on a pro rata basis. The Amendment Fee shall be fully earned, and capitalized and added to the principal balance of the Loans, as of the Effective Date.

 

5.3 Each Holder party hereto, by delivering its signature page to this Agreement on the Effective Date, shall be deemed to have consented to, approved or accepted or to be satisfied with, this Agreement and each other document required hereunder or thereunder to be consented to, approved by or acceptable or satisfactory to such Holder (if any), unless the Collateral Agent shall have received notice from any such Holder prior to the Effective Date specifying its objection thereto

 

5.4 All parties to this Agreement agree and acknowledge that the Holders will have suffered damages on account of the Specified Events of Default and that, in view of the difficulty in ascertaining the amount of such damages, the Amendment Fee constitutes a reasonable compensation and liquidated damages to compensate the Holders on account thereof, the Amendment Fee shall be earned in full on the Effective Date, and shall be due and payable in full in cash, in all respects in accordance with the terms of the Amended Note Purchase Agreement.

 

5.5 All accrued fees and expenses of the Collateral Agent and Holders including the fees described in the Amended Note Purchase Agreement and included in the flow of funds delivered pursuant to Section 4.1(vii) above and the fees and expenses of external counsel (including Sidley Austin LLP and any local counsel to the Collateral Agent and Holders invoiced at least one (1) Business Day prior to the Effective Date), in each case, shall have been paid as consideration for this Agreement and the limited waivers and consents contained in Section 2 and the other amendments and modifications to the Note Documents entered into in connection with this Agreement.

 

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6. Representations and Warranties; Ratification of Obligations; Reaffirmation of Guaranty and Note Documents. Each Note Party hereby expressly represents and warrants that, immediately after giving effect to the Specified Waivers and Consents contained herein: (a) (i) each of the representations and warranties set forth in Section 3.1 of the Note Purchase Agreement and the other Note Documents are true and correct in all material respects on and as of the Effective Date, except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties remain true and correct in all material respects as of such earlier date and, in the case of any of the foregoing, other than representations that are qualified by materiality, which are true and correct in all respects; (ii) no Default or Event of Default has occurred and is continuing; and (iii) no event, change or condition has occurred since the Closing Date that has had or could reasonably be expected to have, a Material Adverse Effect; and (b) each Note Party hereby expressly: (i) confirms its Obligations (including any guarantee obligation) under each Note Document, in each case as amended, restated, supplemented or modified immediately after giving effect to this Agreement and the Specified Waivers and Consents contained herein; (ii) confirms that its Obligations as amended, restated, supplemented or modified hereby under the Note Purchase Agreement and the other Note Documents are entitled to the benefits of the pledges and guarantees, as applicable, set forth in the Note Documents, in each case, as amended, restated, supplemented or modified immediately after giving effect to this Agreement (including as such grants have been amended, restated, supplemented or modified by this Agreement and the Specified Waivers and Consents contained herein); and (iii) confirms that its Obligations under the Note Purchase Agreement and the other Note Documents immediately after giving effect to this Agreement constitute Obligations. Each party, by its execution of this Agreement, hereby confirms that the Obligations shall remain in full force and effect (except as such Obligations have been expressly supplemented, amended, restated or modified hereby), and such Obligations shall continue to be entitled to the benefits of the grant of collateral security set forth in the Collateral Documents, as amended, restated, supplemented or modified hereby.

 

7. Release. In consideration of the foregoing amendments, the Note Parties signatory hereto, and, to the extent the same is claimed by right of, through or under the Issuer or any Guarantor, for its past, present and future successors in title, representatives, assignees, agents, officers, directors and shareholders, does hereby and shall be deemed to have forever remised, released and discharged each of the Secured Parties, and their respective Affiliates, and any of the respective successors-in-title, legal representatives and assignees, past, present and future officers, directors, shareholders, trustees, agents, employees, consultants, experts, advisors, attorneys and other professionals and all other persons and entities to whom any Secured Party or any of its Affiliates would be liable if such persons or entities were found to be liable to the Issuer or any other Note Party, or any of them (collectively hereinafter the “Indemnified Parties”), from any and all manner of action and actions, cause and causes of action, claims, charges, demands, counterclaims, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, damages, judgments, expenses, executions, liens, claims of liens, claims of costs, penalties, attorneys’ fees, or any other compensation, recovery or relief on account of any liability, obligation, demand or cause of action of whatever nature, whether in law, equity or otherwise (including without limitation those arising under 11 U.S.C. §§ 541-550 and interest or other carrying costs, penalties, legal, accounting and other professional fees and expenses, and incidental, consequential and punitive damages payable to third parties), whether known or unknown, fixed or contingent, joint and/or several, secured or unsecured, due or not due, primary or secondary, liquidated or unliquidated, contractual or tortious, direct, indirect, or derivative, asserted or unasserted, foreseen or unforeseen, suspected or unsuspected, now existing, heretofore existing or which may heretofore accrue against any of the Indemnified Parties, whether held in a personal or representative capacity, and which are based on any act, fact, event or omission or other matter, cause or thing occurring at or from any time prior to and including the date hereof in any way, directly or indirectly arising out of, connected with or relating to this Agreement or the Note Documents, and the transactions contemplated hereby and thereby, and all other agreements, certificates, instruments and other documents and statements (whether written or oral) related to any of the foregoing.

 

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8. No Actions, Claims, Etc. Each Note Party acknowledges and confirms that it has no knowledge of any actions, causes of action, claims, demands, damages or liabilities of whatever kind or nature, in law or in equity, against any Secured Party, in any case, arising from any action or failure of any Secured Party to act under this Agreement or any other Note Document on or prior to the date hereof, or of any offset right, counterclaim or defense of any kind against any of its respective obligations, indebtedness or liabilities to any Secured Party or any of their Affiliates under this Agreement or any other Note Document. Each Note Party unconditionally releases, waives and forever discharges on its own behalf and on behalf of each of its subsidiaries and Affiliates (i) any and all liabilities, obligations, duties, promises or indebtedness of any kind of any Secured Party to such Note Party, except the obligations required to be performed by any Secured Party or its Affiliates or agents under the Note Documents on or after the date hereof and (ii) all claims, offsets, causes of action, suits or defenses of any kind whatsoever (if any), whether arising at law or in equity, whether known or unknown, which such Note Party might otherwise have against any Secured Party in connection with this Agreement or the other Note Documents or the transactions contemplated thereby, in the case of each of clauses (i) and (ii), on account of any past or presently existing condition, act, omission, event, contract, liability, obligation, indebtedness, claim, cause of action, defense, circumstance or matter of any kind.

 

9. Reference to and Effect on the Note Purchase Agreement and the Other Note Documents. On and after the Effective Date, each reference in the Note Purchase Agreement or the other Note Documents to “this Agreement”, “the Note Purchase Agreement”, “the Note Purchase Agreement”, “the Security Agreement” “the Senior Secured Convertible Note Purchase and Guarantee Agreement”, “the Convertible Notes”, “the Note Documents”, “hereunder”, “hereof”, “thereunder”, “thereof” or words of like import referring to the Note Purchase Agreement, the Security Agreement and the Convertible Notes, shall mean and be a reference to the Note Purchase Agreement, the Security Agreement, the Convertible Notes and/or, as the context may require, the Note Documents, as amended or amended and restated by this Agreement. The execution, delivery and effectiveness of this Agreement shall not, except as expressly provided herein, operate as a waiver or novation of any Note Document or of any right, power or remedy of any Secured Party under any Note Document, nor, except as expressly provided herein, constitute a waiver or novation of any provision of any of the Note Documents. The parties hereto hereby expressly acknowledge and agree that this Agreement is, and shall be deemed to constitute, both a “Note Document” and a “Fee Letter” for all purposes of the Note Purchase Agreement and the other Note Documents.

 

10. Confirmation of Outstanding Obligations. The parties hereto hereby acknowledge and agree that, as of the date hereof after giving effect to the Effective Date (and the capitalization of the Amendment Fee), (a) the outstanding principal amount of the Convertible Notes as of such date (including fees and interests capitalized on or prior to the Effective Date) is $52,500,000.00 in the aggregate and (b) the amount of accrued but unpaid and uncapitalized interest on the Convertible Notes from the last Payment Date to the Effective Date is $466,666.67 in the aggregate and when taken together with the Overdue Interest, the aggregate outstanding amount of accrued but unpaid and uncapitalized interest on the Convertible Notes as of the Effective Date is $1,344,612.80. The Loan Parties confirm that all of the outstanding fees described in the Note Documents, including (i) the Administration Fee, (ii) the Waiver Fee, (iii) the Backstop Fee and (iv) any other fees or Make-Whole Amounts however described remain part of the Obligations and shall be due and owing in accordance with their terms

 

11. Incorporation of Terms. The provisions of Section 9 (Indemnity), Section 12.1 (Notices), Section 12.2 (Governing Law), Section 12.3 (Jury Trial Waiver), Section 12.5 (Appointment of Process Agent; Service of Process); Section 12.6 (Issuer as Agent for Notice for the Guarantors); Section 14.5 (Survival), Section 14.11 (Successors and Assigns), Section 14.9 (Amendments), Section 14.16 (Counterparts), Section 14.28 (Interpretative Provisions) and Section 14.29 (Electronic Execution of Documents) of the Note Purchase Agreement shall be incorporated into this Agreement as if set out in full in this Agreement and as if references in those sections to “this Agreement” are references to this Agreement.

 

[Signature pages to follow.]

 

9

 

 

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed and made effective as of the date first written above:

 

  DBFIP ANI LLC,
  as Collateral Agent and Term Loan Agent
     
  By: /s/ Timothy Bailey
  Name: Timothy Bailey
  Title: Treasurer

 

[Limited Waiver and Consent, Amendment to Senior Secured Convertible Note Purchase and Guarantee Agreement and Reaffirmation of Note Documents]

 

10

 

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed and made effective as of the date first written above:

 

  HOLDERS:
   
  FIP UST LP, as a Holder
  By: FIP FUND I GP LLC, its general partner
     
  By: /s/ Timothy Bailey
  Name: Timothy Bailey
  Title: Treasurer

 

FLF II Holdings Finance L.P., as a Holder
  By: FLF II Holdings Finance CM LLC, as Servicer
  By: Fortress Lending II Holdings L.P., its Sole Member
  By: Fortress Lending Advisors II LLC, its investment manager
     
  By: /s/ Timothy Bailey
  Name: Timothy Bailey
  Title: Authorized Signatory

 

  FORTRESS LENDING II HOLDINGS L.P., as a Holder
  By: Fortress Lending Advisors II LLC, its investment manager
 
  By: /s/ Timothy Bailey
  Name: Timothy Bailey
  Title: Authorized Signatory

 

  FLF I Holdings Finance L.P., as a Holder
  By: FLF I Holdings Finance CM LLC, as Servicer
  By: Fortress Lending I Holdings L.P., its Sole Member
  By: Fortress Lending Advisors LLC, its investment manager
     
  By: /s/ Timothy Bailey
  Name: Timothy Bailey
  Title: Authorized Signatory

 

[Limited Waiver and Consent, Amendment to Senior Secured Convertible Note Purchase and Guarantee Agreement and Reaffirmation of Note Documents]

 

11

 

 

  DBDB FUNDING LLC, as a Holder
     
  By: /s/ Timothy Bailey
  Name: Timothy Bailey
  Title: Treasurer

 

  Fortress Lending Fund II MA-CRPTF LP, as a Holder
  By: FLF II MA-CRPTF Advisors LLC, its investment manager
   
  By: /s/ Timothy Bailey
  Name: Timothy Bailey
  Title: Authorized Signatory

 

[Limited Waiver and Consent, Amendment to Senior Secured Convertible Note Purchase and Guarantee Agreement and Reaffirmation of Note Documents]

 

12

 

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed and made effective as of the date first written above:

 

  NOTE PARTIES:
   
  AIRSPAN NETWORKS HOLDINGS INC. (f/k/a New Beginnings Acquisition Corp.), a Delaware corporation, as Issuer
     
  By: /s/ David Brant
  Name: David Brant
  Title: Senior Vice President and Chief Financial Officer

 

[Limited Waiver and Consent, Amendment to Senior Secured Convertible Note Purchase and Guarantee Agreement and Reaffirmation of Note Documents]

 

13

 

 

  AIRSPAN NETWORKS INC.,
a Delaware corporation, as a Guarantor and Grantor
   
  By: /s/ David Brant
  Name: David Brant
  Title: Senior Vice President and Chief Financial Officer

 

  AIRSPAN IP HOLDCO LLC,
a Delaware limited liability company, as a Guarantor and Grantor
   
  By: /s/ David Brant
  Name: David Brant
  Title: Senior Vice President and Chief Financial Officer

 

  AIRSPAN NETWORKS (SG) INC.,
a Delaware corporation, as a Guarantor and Grantor
   
  By: /s/ David Brant
  Name: David Brant
  Title: Senior Vice President and Chief Financial Officer

 

  MIMOSA NETWORKS, INC.,
a Delaware corporation, as a Guarantor and Grantor
   
  By: /s/ David Brant
  Name: David Brant
  Title: Senior Vice President and Secretary

 

[Limited Waiver and Consent, Amendment to Senior Secured Convertible Note Purchase and Guarantee Agreement and Reaffirmation of Note Documents]

 

14

 

 

  MIMOSA NETWORKS INTERNATIONAL, LLC,
a Delaware limited liability company, as a Guarantor and Grantor
   
  By: /s/ David Brant
  Name: David Brant
  Title: Senior Vice President and Chief Financial Officer

 

[Limited Waiver and Consent, Amendment to Senior Secured Convertible Note Purchase and Guarantee Agreement and Reaffirmation of Note Documents]

 

15

 

 

  AIRSPAN COMMUNICATIONS LIMITED,
a company incorporated and registered in England and Wales, as a Guarantor
   
  By: /s/ David Brant
  Name: David Brant
  Title: Director

 

  AIRSPAN NETWORKS LTD.
an Israel corporation, as a Guarantor
   
  By: /s/ David Brant
  Name: David Brant
  Title: Director

 

  Airspan Japan KK,
a Japanese corporation, as a Guarantor
   
  By: /s/ Steven P. Shipley
  Name: Steven P. Shipley
  Title: Representative Director

 

[Limited Waiver and Consent, Amendment to Senior Secured Convertible Note Purchase and Guarantee Agreement and Reaffirmation of Note Documents]

 

16

 

 

EXHIBIT A

 

CONFORMED NOTE PURCHASE AGREEMENT

 

(See Attached)

 

 

 

 

 

Exhibit A to Limited Waiver and Consent, Amendment to Senior Secured Convertible Note Purchase and Guarantee Agreement and Reaffirmation of Note Documents

 

 

 

 

Execution Version

Conformed Note Purchase Agreement

As Through SecondThird Amendment,

dated as of November 14May 18, 20222023

 

 

 

 

 

 

NEW BEGINNINGS ACQUISITION CORP.,
the Issuer

CERTAIN SUBSIDIARIES OF ISSUER,
as Guarantors

 

DBFIP ANI LLC,

as Agent and Collateral Agent

 

710% SENIOR SECURED CONVERTIBLE NOTES

due December 30, 2024

 

SENIOR SECURED CONVERTIBLE NOTE PURCHASE
AND GUARANTEE AGREEMENT

 

DATED AS OF July 30, 2021

 

 

(as amended by the First Amendment and Waiver to Senior Secured Convertible Note Purchase and Guarantee Agreement and Other Note Documents dated as of March 29, 2022 and, the Second Amendment, Limited Waiver and Consent Under Senior Secured Convertible Note Purchase and Guarantee Agreement and Other Note Documents dated as of November 14, 2022 and the Limited Waiver and Consent, Third Amendment to Senior Secured Convertible Note Purchase and Guarantee Agreement and Reaffirmation of Note Documents)

 

 

 

 

TABLE OF CONTENTS

 

        Page
Section 1.   Purchase and Sale of Convertible Notes; Backstop Fee   2
1.1   Purchase and Sale   2
1.2   Backstop Fee and Administration Fee.Specified Fees   2
(a)   Backstop Fee   2
(b)   Administration Fee   2
Section 2.   Closing   24
2.1   Closing Date   34
2.2   Closing Notices   34
2.3   Conditions Precedent   35
2.4   Account for Proceeds   46
2.5   Additional Conditions to Closing   46
2.6   Requested Information   68
Section 3.   Representations and Warranties   68
3.1   Issuer Representations and Warranties   68
(a)   Existence, Good Standing, and Power   6
(b)   Due Authorization and Valid Issuance of Common Stock   7
(c)   Due Execution and Binding Obligation   7
(d)   No Required Consents   7
(e)   No Securities Law Violations   8
(f)   No Solicitation   8
(g)   No Broker Fees   8
(h)   Disclosures.   8
(i)   Common Stock of the Issuer   10
(j)   [Reserved].   10
(k)   Compliance with Applicable Laws   10
(l)   Equity Interests of the Issuer and its Subsidiaries.   10
(m)   Margin Regulations; Investment Company Act   11
(n)   [Reserved].   11
(o)   [Reserved].   11
(p)   Solvency   11

 

i

 

 

(q)   Financial Statements; No Material Adverse Effect   12
(r)   Litigation   12
(s)   No Default   12
(t)   Ownership of Property; Liens; Permits; Environmental Compliance.   12
(u)   Insurance   13
(v)   Taxes   14
(w)   ERISA and Foreign Plans Compliance; Pensions.   14
(x)   Intellectual Property; Licensing.   15
(y)   Rights in Collateral; Priority of Liens   20
(z)   [Reserved].   21
(aa)   PATRIOT Act; Sanctions; Export Controls; FCPA.   21
(bb)   Material Contracts   23
(cc)   Employee Matters   23
(dd)   No Regulatory Restrictions on Issuance, Guarantees or Upstreaming Cashflows   24
(ee)   Rank of Debt   24
(ff)   No Set-off   24
(gg)   No Immunity; Proper Legal Form; No Need To Qualify Under each Relevant Jurisdiction or other Applicable Law.   24
(hh)   Centre of Main Interests and Establishments   25
(ii)   Exchange Controls   25
(jj)   Customers and Suppliers   25
(kk)   Critical Technologies   26
(ll)   Products   26
3.2   Purchaser Representations and Warranties   2629
(a)   Existence, Good Standing, and Power   27
(b)   Due Execution and Binding Obligation   27
(c)   Non Contravention   27
(d)   Accredited Investor; Acquisition for Own Account; No Violations   27
(e)   Acknowledgement of Private Offering   27
(f)   Direct Purchase from Issuer   28
(g)   Investors Representations   28
(h)   Acknowledgement of Private Placement Exemption   28

 

ii

 

 

(i)   Opportunity to Review   28
(j)   Direct Solicitation   29
(k)   Risk Analysis   29
(l)   No Governmental Endorsement   29
(m)   Not Sanctioned   29
(n)   ERISA   30
(o)   Sufficient Funds   30
(p)   No Broker Fee   30
Section 4.   Covenants   3033
4.1   Affirmative Covenants   3033
(a)   Compliance with Laws   30
(b)   Financial Statements   31
(c)   Certificates; Other Information   33
(d)   Notices   36
(e)   Payment of Convertible Notes   38
(f)   Books and Records   40
(g)   Inspection Rights   40
(h)   Litigation Cooperation   41
(i)   [Reserved].   41
(j)   Preservation of Existence, Etc.   41
(k)   Maintenance of Properties   41
(l)   Collateral and Guarantee Requirement; Formation or Acquisition of Subsidiaries   41
(m)   Insurance   46
(n)   Conduct of Business and SPV Compliance   46
(o)   Controlled Accounts; Cash Management Systems   47
(p)   Required Holder Meetings   48
(q)   [Reserved].   48
(r)   Assigned Patents and Assigned Patent Rights.   48
(s)   Consent of Licensors   50
(t)   Maintenance of Regulatory Permits, Contracts, Intellectual Property, Etc.   50
(u)   Pari Passu Ranking   51
(v)   Subsidiary Distributions; Upstreaming Cashflows; Investment Documents.   51

 

iii

 

 

(w)   Critical Technologies   52
(x)   Further Assurances   52
(y)   Covenants Regarding Products and Compliance with Material Regulatory Permits   53
(z)   The Issuer shall deliver the following updated Schedules or supplements to Schedules (to the extent there are any updates) to the Agent within thirty (30) days after the date hereof (or such later date as may be agreed to by the Agent in writing (including by email) in its sole discretion): Schedules 3.1(d), 3.1(l), 3.1(q), 3.1(t)(3), 3.1(x)(1), 3.1(x)(2), 3.1(x)(3), 3.1(x)(5), 3.1(x)(6), 3.1(x)(10), 3.1(x)(11), 3.1(x)(14), 3.1(bb), 3.1(cc), 3.1(dd) and 3.1(ll) to the NPA and Schedules 1, 3(a), 3(b), 4, 5, 6, 7 and 8 to the Security Agreement.   53
(aa)   Post-Closing Obligations   53
4.2   Negative Covenants   5457
(a)   Dispositions   54
(b)   Changes in Business, Management, Ownership, or Business Locations   55
(c)   Mergers or Acquisitions   56
(d)   Liens   56
(e)   Distributions; Investments   56
(f)   Transactions with Affiliates   56
(g)   Limitation on Negative Pledges   57
(h)   Compliance   57
(i)   Indebtedness   57
(j)   Amendments to Organization Documents, Patent Assignment Agreement or Patent License Agreement, Accounting Methods and Fiscal Year   58
(k)   [Reserved].   58
(l)   Patent Development and Enhancement   58
(m)   Sales and Lease Backs   58
(n)   Deposit Accounts   59
(o)   Prepayments of Certain Indebtedness   59
(p)   Financial Covenants   59
(1)   Minimum Liquidity. At all times maintain a minimum of Unrestricted Cash of the Issuer and its Subsidiaries of $20,000,000; provided, however, if no Default or Event of Default exists, then after the delivery of the Compliance Certificate of the Issuer until the delivery of the next Compliance Certificate of Holdings (or, if earlier, the date such Compliance Certificate is required to be delivered, the minimum shall be adjusted based upon the EBITDA of the Issuer and its Subsidiaries for the relevant four-fiscal-quarter Test Period reported in such Compliance Certificate to the lesser of:  

59

 

iv

 

 

(2)   Minimum LTM Revenue. Not permit the revenue of the Issuer and its Subsidiaries (as recognized in accordance with GAAP) as of the last day of any Test Period set forth in the table below, to be less than the amount set forth opposite such Test Period for such Test Period then ended:  

60

(3)   Minimum LTM EBITDA. Not permit the EBITDA of the Issuer and its Subsidiaries, as of the last day of any Test Period set forth in the table below, to be less than the amount set forth opposite such Test Period for such Test Period then ended:  

60

(q)   Pensions   61
(r)   Centre of Main Interests and Establishment   61
Section 5.   Registration of Underlying Shares   6165
5.1   Registration Statement   6166
5.2   Suspension Events   6367
5.3   Other Required Notices   6467
5.4   Effectiveness of Registration Statement   6467
5.5   Amendment to Registration Statement; Supplement of Prospectus   6468
5.6   Listing of Underlying Shares   6568
5.7   Registration of Underlying Shares   6568
5.8   Piggyback Registration Rights for Underwritten Offerings.   6568
Section 6.   Events of Default   6669
6.1   Events of Default   6669
(a)   Payment Default   66
(b)   Representations and Warranties   66
(c)   Specific Covenants   66
(d)   Other Defaults   66
(e)   Cross-Default.   67
(f)   Restraint on Business   67
(g)   Asset Seizure   67
(h)   Insolvency Proceedings   67
(i)   Inability to Pay Debts   68
(j)   Judgments   68
(k)   [Reserved].   68

 

v

 

 

(l)   ERISA and Foreign Plans   68
(m)   Invalidity of Note Documents   69
(n)   Intellectual Property   69
(o)   Moratorium; Availability of Foreign Exchange   69
(p)   Invalidity of Upstreaming   70
6.2   Rights and Remedies.   7073
(a)   Acceleration   70
(b)   Other Remedies   71
(c)   Waiver of Past Defaults   72
(d)   Control by Majority   72
(e)   Limitation on Suits   72
(f)   Rights of Holders to Receive Payment   73
(g)   Collection Suit by Collateral Agent   73
(h)   Collateral Agent May File Proof of Claims   73
(i)   Application of Monies Collected by the Collateral Agent   73
6.3   No Waiver; Remedies Cumulative   7477
Section 7.   Guaranty   7577
7.1   Unconditional Guaranty.   7577
7.2   Contribution by Guarantors   7678
7.3   Obligations Absolute   7779
7.4   Waiver.   7780
(a)   Generally   77
(b)   Real Property   78
7.5   Obligations Unimpaired.   7881
(a)   Generally   79
(b)   Acceleration   79
(c)   Israeli Guarantee Law   79
7.6   Subrogation and Subordination.   7982
7.7   Reinstatement of Guaranty   8083
7.8   Term of Guaranty   8083
7.9   Financial Condition of Issuer   8183
7.10   Bankruptcy, etc.   8184

 

vi

 

 

Section 8.   Trust Account Waiver   8285
Section 9.   Indemnity   8285
9.1   Expenses   8285
9.2   Accuracy of Statements   8386
9.3   General Indemnification   8486
9.4   Right to Notice and Defense   8486
9.5   Survival of Indemnification   8487
9.6   Contribution In Lieu of Indemnification   8487
Section 10.   Termination   8587
Section 11.   Appointment of Collateral Agent; Collateral Documents; Intercreditor and Subordination Agreements   8588
11.1   Appointment of Collateral Agent   8588
11.2   Authorization of Collateral Agent   9295
11.3   Limitations on Liability of Collateral Agent   9395
11.4   Collateral Documents   9396
11.5   Delegation of Duties   9497
11.6   Collateral Agent’s Receipt of Funds   9497
11.7   No Impairment   9498
11.8   Unauthorized Payments to Holders   9598
11.9   Obligation to Pledge   9598
Section 12.   Notices, Governing Law, Submission to Jurisdiction, Jury Trial Waiver, and Judicial Reference   9699
12.1   Notices   9699
12.2   Governing Law   9699
12.3   Jury Trial Waiver   96100
12.4   Additional Waivers in the Event of Enforcement   97100
12.5   APPOINTMENT OF PROCESS AGENT; SERVICE OF PROCESSAppointment of Process Agent; Service of Process   97100
12.6   Issuer as Agent for Notice for the Guarantors   98101
12.7   Obligor Agent.   98101
Section 13.   Taxes   99102
13.1   Payments Free of Taxes   99102
13.2   Payment of Other Taxes by Issuer and the Guarantors   99103
13.3   Additional Amounts   99103

 

vii

 

 

13.4   Status of Holder.   99103
13.5   Tax Indemnification   101105
13.6   VAT   102106
13.7   Survival   103107
Section 14.   Miscellaneous   103107
14.1   Acknowledgement of Reliance   103107
14.2   Disclosure of Agreement   104107
14.3   Registration; Exchange; Substitution of Convertible Notes.   104107
(a)   Registration of Convertible Notes   104
(b)   Transfer and Exchange of Convertible Notes   104
(c)   Pledges Not Deemed Transfers   105
14.4   Assignments   105108
14.5   Survival   105109
14.6   Affiliate Activities   106109
14.7   No Fiduciary Duty   106110
14.8   Additional Information   107111
14.9   Amendments   107111
14.10   [Reserved].   110114
14.11   Successors and Assigns   110114
14.12   [Reserved].   110114
14.13   Third Party Beneficiaries   110114
14.14   Severability of Provisions   111114
14.15   No Waivers or Election of Remedies   111114
14.16   Counterparts   111115
14.17   [Reserved].   111115
14.18   Disclosure Document   111115
14.19   Currencies   112115
14.20   MassachussetsMassachusetts Business Trusts   112115
14.21   [Reserved].   112116
14.22   Rounding   112116
14.23   Corporate Seal   112116
14.24   Location of Closing   112116

 

viii

 

 

14.25   Waiver of Immunity   112116
14.26   English Language   113116
14.27   No Strict Construction   113116
14.28   Interpretation Provisions   113116
(a)   Generally   113
(b)   Accounting Terms.   113
(c)   Rounding   114
(d)   Divisions   114
(e)   Debtor Relief Laws   115
14.29   Electronic Execution of Documents   115119
14.30   Time of Essence   115119
14.31   Relationship   115119
14.32   Entire Agreement   115119
14.33   No Novation   119
Section 15.   Defined Terms   115120

 

ix

 

 

APPENDICESANNEXES    
     
Annex A:   Form of Convertible Note
Annex B:   Principal Office; Notice Information
Annex C:   Performance Milestones
     
APPENDICES    
     
Appendix A:   Purchaser Allocations
     
SCHEDULES    
     
Schedule 1.1(b):   Guarantors
Schedule 3.1(d):   Required Consents
Schedule 3.1(l):   Subsidiaries; Equity Interests
Schedule 3.1(q):   Financial Statements; No Material Adverse Effect
Schedule 3.1(t)(3):   Environmental Compliance
Schedule 3.1(x):   Intellectual Property
Schedule 3.1(bb):   Material Contracts
Schedule 3.1(cc):   Employee Matters
Schedule 3.1(dd):   Regulatory Restrictions
Schedule 3.1(ll):   Products
Schedule 4.1(c):   Website Address
Schedule 4.2(d):   Liens
Schedule 4.2(e):   Investments
Schedule 4.2(i):   Indebtedness
     
EXHIBITS    
     
Exhibit A:   Closing Agenda
Exhibit B:   Joinder Agreement
Exhibit C:   Forms of Tax Certificates
Exhibit D:   Compliance Certificate

 

x

 

 

SENIOR SECURED CONVERTIBLE NOTE PURCHASE AND GUARANTEE
AGREEMENT

 

This SENIOR SECURED CONVERTIBLE NOTE PURCHASE AND GUARANTEE AGREEMENT (as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “Agreement”) is entered into on July 30, 2021 (the “Signing Date”), by and among New Beginnings Acquisition Corp., a Delaware corporation (the “Issuer”), each of the Purchasers listed on the signature pages hereto (collectively, the “Purchasers” and each, a “Purchaser”), the guarantors appearing on the signature pages hereto (together with each of their respective successors and assigns and each other subsidiary of the Issuer required pursuant to the terms of this Agreement and the Convertible Notes to become a guarantor hereunder, the “Guarantors”) and DBFIP ANI LLC (“Fortress”), as agent, collateral agent and trustee for the Secured Parties (Fortress in such capacities together with its successors and assigns in such capacities, the “Agent” and/or the “Collateral Agent”).

 

WHEREAS, on March 8, 2021, the Issuer, Artemis Merger Sub Corp., a Delaware corporation and direct, wholly-owned subsidiary of the Issuer (“Merger Sub”), and Airspan Networks Inc., a Delaware corporation (“Airspan”), entered into a Business Combination Agreement (as amended, modified, supplemented or waived from time to time in accordance with the terms of this Agreement, the “Transaction Agreement” and the transactions contemplated by the Transaction Agreement to be completed on and prior to the closing date thereof, collectively, the “Transaction, and the time and date of the closing of the Transaction, the “Merger Effective Time”), pursuant to which, among other things, in the manner, and on the terms and subject to the conditions and exclusions set forth therein, effective as of the closing of the Transaction, Merger Sub will merge with and into Airspan (the “Merger”), with Airspan being the surviving entity in the merger and continuing (immediately following the Merger) as a wholly- owned subsidiary of the Issuer;

 

WHEREAS, on March 8, 2021, the Issuer entered into subscription agreements with various “institutional accredited investors” (the “PIPE Investors”), pursuant to which such PIPE Investors agreed to purchase an aggregate of 7,500,000 shares of Common Stock (as defined below) for an aggregate purchase price of $75,000,000 on the Closing Date (the “PIPE”).

 

WHEREAS, in connection with the Transaction, subject to the terms and conditions set forth in this Agreement and pursuant to an exemption from the registration requirements of Section 5 of the Securities Act contained in Section 4.2(a)(2) thereof, the Issuer desires to issue and sell and the Purchasers desire to subscribe for and purchase the Issuer’s 7% Senior Secured Convertible Notes (each, as amended, restated, amended and restated, replaced, reissued, modified or supplemented in accordance with the terms of this Agreement and the Intercreditor Agreement, a “Convertible Note” and collectively, the “Convertible Notes”) of and from the Issuer having the terms set forth on Annex A attached hereto, which is incorporated in and made a part of this Agreement, in an aggregate initial principal amount up to $66,000,000, at the initial purchase price (the “Purchase Price”) (provided that in no case shall a Purchaser be required to purchase more than the aggregate amount of the Convertible Notes set forth beside such Purchaser’s name on Appendix A and if the aggregate initial principal amount of Convertible Notes issued on the Closing Date is less than $66,000,000 in the aggregate, the share of the Convertible Note offered and sold to each Purchaser shall be allocated in accordance with the formula set forth in Appendix A (such amount, the “Purchaser’s Allocated Share”));

 

 

 

 

WHEREAS, as a condition of the purchase of the Convertible Notes, it is a requirement of the Purchasers that that the Convertible Notes are guaranteed by certain subsidiaries of the Issuer including, upon the consummation of the Merger, Airspan and the Subsidiaries thereof that are “Loan Parties” as such term is defined in the Term Loan Credit Agreement and that the Obligations under the Note Documents are secured by the same Collateral and on a pari passu basis with the Term Loan Obligations and any other Priority Lien Obligations (each as defined below); and

 

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

 

Section 1. Purchase and Sale of Convertible Notes; Backstop Fee.

 

1.1 Purchase and Sale. Subject to the terms and conditions hereof including the satisfaction (or if applicable, waiver) of all of the closing conditions set forth in Section 2 below, at the Closing, each Purchaser hereby agrees to purchase, and the Issuer hereby agrees to issue and sell to each Purchaser, upon the payment of the Purchase Price, such Purchaser’s Allocated Share of the Convertible Notes (such issuance, the “Issuance”) in an aggregate principal amount for all Convertible Notes so issued to be equal to the amount in the Closing Notice delivered by the Issuer, which aggregate principal amount shall not be more than $66,000,000 in the aggregate or less than $20,000,000 in the aggregate. The total purchase price of the Convertible Notes to be funded by the Purchasers as of Closing in cash may be reduced by the amount of the Backstop Fee and the Administration Fee (all of which may be treated as original issue discount and be added to the face amount of the Convertible Notes so received by the Purchasers). All of the expenses of the Secured Parties relating to the issuance of the Convertible Notes (the “Purchaser Expenses”) shall be paid in cash by the Issuer on the Closing Date. The obligations of each Purchaser hereunder are several and not joint obligations and each Purchaser shall have no obligation and no liability to any Person for the performance or nonperformance by any other Purchaser hereunder.

 

1.2 Specified Fees.

 

(a) Backstop Fee. At the Closing, the Issuer hereby agrees to pay to the Purchasers an amount equal to $1,000,000 (the “Backstop Fee”), which Backstop Fee shall be deducted from the Purchase Price delivered to the Issuer at Closing and may be treated as original issue discount at the Purchaser’s election.

 

(b) Administration Fee. The Issuer hereby agrees to pay to the Collateral Agent, or its designee, an administration fee in an amount equal to Fifty Thousand Dollars ($50,000.00) per annum (the “Administration Fee”), which fee shall be due and payable annually in advance on the Closing Date and thereafter on each anniversary of the Closing Date. The Administration Fee paid on the Closing Date shall be deducted from the Purchase Price delivered to the Issuer at Closing and may be treated as original issue discount at the Purchaser’s election.

 

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(c) Waiver FeeOther Fees. In addition to the foregoing, the Issuer agrees to pay to the Agents and the Holders the Waiver Fee, the other Specified Fees and any other fees and expense reimbursements set forth in any other Note Document or as otherwise separately agreed by the parties, in such amounts and at such times so specified.

 

(d) Fees.

 

(1) Without limiting the generality of the foregoing, and notwithstanding anything to the contrary in this Agreement, the Convertible Notes or any Note Documents, it is understood and agreed that if the Obligations are accelerated or otherwise become due prior to the Stated Maturity Date for any reason, including because of an Event of Default or the commencement of any insolvency proceeding or by operation of law or otherwiseunder Debtor Relief Laws, the Specified Fees, if any, (in the case of the Administration Fee, to the extent then-earned and unpaid), in each case determined as of the date ofsuch acceleration or other due date, will be due and payable as though the aggregate principal amount of all Convertible Notes outstanding as of such date were voluntarily prepaid as of suchof such acceleration or, as applicable, other due date and shall constitute part of the Obligations, in view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of each Holder’s lost profits as a result thereof. Each Note Party agrees that payment of any Specified Fee due hereunder is reasonable under the circumstances currently existing. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH NOTE PARTY EXPRESSLY WAIVES THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING SPECIFIED FEES IN CONNECTION WITH ANY SUCH ACCELERATION INCLUDING IN CONNECTION WITH ANY VOLUNTARY OR INVOLUNTARY ACCELERATION OF THE NOTES AND THE RELATED OBLIGATIONS PURSUANT TO ANY PROCEEDING UNDER ANY DEBTOR RELIEF LAW OR PURSUANT TO A PLAN OF REORGANIZATION. The Specified Fees shall also be payable in the event the Obligations (and/or this Agreement) are satisfied or released by foreclosure (whether by power of judicial proceeding or otherwise), deed in lieu of foreclosure or by any other similar means, or reinstated pursuant to section 1124 of the Bankruptcy Code. THE NOTE PARTIES EXPRESSLY AGREE THAT (I) EACH SPECIFIED FEE IS REASONABLE AND IS THE PRODUCT OF AN ARM’S LENGTH TRANSACTION BETWEEN SOPHISTICATED BUSINESS PEOPLE, ABLY REPRESENTED BY COUNSEL, (II) THE SPECIFIED FEES SHALL BE PAYABLE NOTWITHSTANDING THE THEN PREVAILING MARKET RATES AT THE TIME PAYMENT IS MADE, (III) THERE HAS BEEN A COURSE OF CONDUCT BETWEEN THE HOLDERS AND THE NOTE PARTIES GIVING SPECIFIC CONSIDERATION IN THIS TRANSACTION FOR SUCH AGREEMENT TO PAY THE SPECIFIED FEES, (IV) THE SPECIFIED FEES ARE NOT INTENDED TO ACT AS OR CONSTITUTE A PENALTY OR PUNISH ANY NOTE PARTY FOR ANY PREPAYMENT OR REPAYMENT, (V) THE NOTE PARTIES’ AGREEMENT TO PAY THE SPECIFIED FEES IS A MATERIAL INDUCEMENT TO THE HOLDERS TO HOLD THE CONVERTIBLE NOTES AND PROVIDE CERTAIN CONSENTS AND WAIVERS IN CONNECTION WITH THE THIRD AMENDMENT, (VI) NO PORTION OF ANY SPECIFIED FEE REPRESENTS “UNMATURED INTEREST” WITHIN THE MEANING OF 11 U.S.C. § 502(b), AND (VIII) THE NOTE PARTIES SHALL BE ESTOPPED FROM HEREAFTER CLAIMING DIFFERENTLY THAN AS AGREED TO IN THIS SECTION 1.2(d). Each Note Party expressly acknowledges that its agreement to pay the Specified Fees to the Holders as herein described is a material inducement to the Holders to enter into this Agreement and the Third Amendment and the other amendments to the Note Documents, to continue to hold the Convertible Notes and provide any applicable waivers, consents and/or other consideration agreed to in connection therewith. Each Note Party further expressly acknowledges and agrees that, prior to executing the Third Amendment, it has had the opportunity to review, evaluate, and negotiate the Specified Fees and the calculations thereof with its advisors, and that the Specified Fees are a good faith reasonable approximation of the Holders’ liquidated damages upon the applicable triggering events, taking into account all of the circumstances, including the costs of funds, the opportunity cost of capital, the relative risk of the investment, and the operational benefits for the Note Parties from continued use of funds to pursue the Divestiture Transaction and in their continued business as a result of the Holders’ agreement to accept the Specified Fees in lieu of additional up-front fees in cash.

 

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(2) Issuer on its own behalf and on behalf of each other Note Party expressly agrees that: (A) the Specified Fees are reasonable and the product of an arm’s-length transaction between sophisticated business people, ably represented by counsel; (B) the fees described hereunder shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there has been a course of conduct between Holders and Issuer giving specific consideration in this transaction for such agreement to pay the Specified Fees; (D) no portion of any Specified Fee represents “unmatured interest” within the meaning of 11 U.S.C. § 502(b)(2); (E) the Specified Fees are not intended to act as or constitute a penalty or punish Issuer or any other Note Party for any payment or prepayment; and (F) the Note Parties shall be estopped hereafter from claiming differently than as agreed to in this paragraph. Each Note Party expressly acknowledges that its agreement to pay the Specified Fees to the Holders as herein described is a material inducement to the Holders to enter into this Agreement and the other Note Documents and purchase the Convertible Notes and provide any applicable waiver or other consideration agreed to in connection therewith.

 

(2)(3) The Note Parties agree that, once paid, theearned, all of the Specified Fees and other fees described herein or in any other Note Document or any part thereof payable hereunder will not be refundable under any circumstances and are in addition to any other fees, costs and expenses payable pursuant to this Agreement or the other Note Documents. The Issuer shall reimburse Agent or suchand each Holder for such costs and expenses as provided in this Agreement. Except as expressly provided herein, all such fees will be paid in US dollars and in immediately available funds and shall not be subject to reduction by way of setoff or counterclaim. All such payments shall be made without setoff, counterclaim or deduction for any taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any national, state or local taxing authority. All or any portion of the fees received by Fortress hereunder may be allocated to any affiliate of Fortress, the Agent or any other Holder or be shared among Fortress, the Agent and their respective affiliates.

 

Section 2. Closing.

 

2.1 Closing Date. The consummation of the Issuance contemplated hereby (the “Closing”) shall occur on the date of the closing of the Transaction (the “Closing Date”), immediately prior to or substantially concurrently with the consummation of the Transaction at the Merger Effective Time. Notwithstanding anything to the contrary contained in this Agreement, no Purchaser shall have any further obligation to purchase the Convertible Notes or deliver the Purchase Price therefor if the Transaction has not been consummated by August 15, 2021 (the “Merger Outside Date”; provided that the Merger Outside Date and the related Purchaser obligations shall refer to the next Business Day after such date, if the Issuer determines that the Outside Date (as defined in the Transaction Agreement) means such later Business Day).

 

2.2 Closing Notices. At least three (3) Business Days before the anticipated Closing Date, the Issuer shall deliver written notice to the Collateral Agent and the Purchasers (the “Closing Notice”) specifying (i) the anticipated Closing Date, (ii) the aggregate principal amount of Convertible Notes to be issued to Purchaser, and (iii) the wire instructions for delivery of the Purchase Price to the Issuer. Immediately prior to the consummation of the Transaction, each Purchaser shall deliver the Purchase Price for the Convertible Notes (net of the Backstop Fee and Purchaser Expenses, as applicable) with respect to such Purchaser’s Allocated Share by wire transfer of United States dollars in immediately available funds to the account specified by the Issuer in the Closing Notice, such funds to be held by the Issuer in escrow until the Closing separate from the Trust Account, and deliver to the Issuer such information as is reasonably requested in the Closing Notice in order for the Issuer to issue the Convertible Notes to such Purchaser or its nominee, including, without limitation, a duly completed and executed Internal Revenue Service Form W-9 or appropriate Form W-8. Upon satisfaction (or, if applicable, waiver) of the conditions set forth in this Section 2, at the Closing (or such later date agreed by such Purchaser it its sole discretion), the Issuer shall promptly deliver, to such Purchaser or its nominee the Convertible Notes. In the event that the consummation of the Transaction does not occur within three (3) Business Days after the anticipated Closing Date specified in the Closing Notice (the “Closing Outside Date”), unless otherwise agreed to in writing by the Issuer and Purchaser, the Issuer will promptly return (but in no event later than one (1) Business Day after the Closing Outside Date) the funds so delivered by the Purchasers to the Issuer pursuant to this Section 2.2 by wire transfer in immediately available funds to the account(s) specified by the Purchasers. Notwithstanding such return (x) a failure to consummate the Transaction on the anticipated Closing Date shall not, by itself, be deemed to be a failure of any of the conditions to Closing set forth in this Section 2 to be satisfied or waived on or prior to the Closing Date, and (y) unless and until this Agreement is terminated in accordance with Section 10 herein, each Purchaser shall remain obligated until the Merger Outside Date (A) to redeliver funds to the Issuer following the Issuer’s delivery to such Purchaser of a new Closing Notice and (B) to consummate the Closing upon satisfaction of the conditions set forth in this Section 2.

 

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2.3 Conditions Precedent. The Closing shall be subject to the satisfaction or valid waiver by each of the parties hereto of the conditions that, on the Closing Date:

 

(a) no Governmental Authority shall have enacted, issued, promulgated, enforced or entered any judgment, order, law, rule or regulation (whether temporary, preliminary or permanent) which is then in effect and has the effect of making consummation of the transactions contemplated hereby illegal or otherwise restraining or prohibiting consummation of the transactions contemplated hereby, and no Governmental Authority shall have instituted or threatened in writing a proceeding seeking to impose any such restraint or prohibition;

 

(b) the Issuer shall have obtained and furnished to each Purchaser and the Collateral Agent a copy of all consents and waivers required in connection with the consummation of the transactions related to the purchase of the Convertible Notes (excluding any consent or waiver in connection with the Golden Wayford Note), including evidence in form and substance satisfactory to the Purchaser of consents to the issuance of the Convertible Notes and the other Note Documents from Softbank Group International Limited in connection with the Softbank Loan Agreement;

 

(c) all conditions precedent to the closing of the Transaction set forth in the Transaction Agreement, including the approval of the Issuer’s stockholders and regulatory approvals, if any, shall have been satisfied or waived (other than those conditions which, by their nature, are to be satisfied by a party to the Transaction Agreement at the closing of the Transaction, but subject to satisfaction or waiver by such party of such conditions as of the closing of the Transaction);

 

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(d) the Underlying Shares shall have been approved for listing on NYSE American stock exchange (the “NYSE American”), subject to notice of official issuance, and no suspension of the qualification of the Underlying Shares for offering or trading in any jurisdiction, or initiation or threatening of any proceedings for any of such purposes, shall have occurred and be continuing; and

 

(e) the initial Purchasers and the Collateral Agent shall have received evidence in form and substance satisfactory to them that all of the Purchaser Expenses invoiced at least two (2) days prior to the Closing shall be paid concurrently with the consummation of the Closing on the Closing Date.

 

2.4 Account for Proceeds. Prior to the Closing, the Issuer shall have established a segregated account in the name of the Issuer for the purpose of holding the purchase price of the Convertible Notes delivered pursuant to Section 2.2 and upon the Closing such account shall be subject to a Control Agreement in form and substance satisfactory to the Purchasers and the Collateral Agent and pledged as Collateral to the Collateral Agent for the benefit of the Secured Parties.

 

2.5 Additional Conditions to Closing. In addition to the conditions set forth in Section 2.3, the obligation of each Purchaser to consummate the Closing shall be subject to the satisfaction or valid waiver by such Purchaser of the additional conditions that, on the Closing Date:

 

(a) all representations and warranties of the Issuer contained in this Agreement and all representations and warrantees of the Guarantors contained herein and in the Term Loan Credit Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Material Adverse Effect, which representations and warranties shall be true and correct in all respects) at and as of the Closing as though made on the Closing (except for those representations and warranties that speak as of a specific date, which shall be so true and correct in all material respects as of such specified date), and consummation of the Closing shall constitute a reaffirmation by the Issuer of each of the representations, warranties and agreements of the Issuer and the Guarantors contained in this Agreement and in the Term Loan Credit Agreement as of the date of this Agreement and as of the Closing both before and after giving effect to consummation of the Transaction;

 

(b) the sum of (i) the gross proceeds from the PIPE received by the Issuer upon its consummation and (ii) the cash in the Trust Account of the Issuer shall have equaled no less than $70,000,000;

 

(c) the aggregate principal amount of Convertible Notes issued to the Purchasers at Closing shall equal no less than $20,000,000;

 

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(d) the Issuer shall have performed, satisfied or complied with all agreements and covenants required by this Agreement to be performed, satisfied or complied with by it at or prior to the Closing;

 

(e) all authorizations, approvals or permits, if any, of any Governmental Authority or regulatory body of the United States or of any other country or state that are required in connection with the consummation of the Transactions and the lawful issuance and sale of the Convertible Notes and pursuant to this Agreement shall be obtained and effective as of the Closing; and

 

(f) no Material Adverse Effect shall have occurred nor shall Airspan shall have experienced a material adverse effect on its business, assets (including intangible assets), liabilities, condition (financial or otherwise) or the results of operations of such Person and its Subsidiaries;

 

(g) the Issuer shall have paid (or caused to be paid) on or before the Closing all fees and expenses then due and payable in connection with the Closing (including all reasonable and documented out-of- pocket expenses required to be reimbursed by the Issuer to the Purchasers and the Collateral Agent in connection with the Note Documents) shall have been paid, in each case to the extent due (which amount may be offset against the proceeds from the issuance of the Convertible Notes made on the date of the Closing under this Agreement);

 

(h) the Purchasers and the Collateral Agent shall have received a solvency certificate from the chief financial officer or treasurer (or officer with equivalent duties) of the Issuer in form and substance satisfactory to the Purchasers and the Collateral Agent;

 

(i) the Issuer shall have provided or caused to be provided the documentation and other information to the Purchasers and the Collateral Agent that they reasonably determine is required by United States regulatory authorities under applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the Patriot Act, in each case, at least three (3) Business Days prior to the Closing, to the extent that the Collateral Agent or the Purchaser shall have reasonably requested in writing at least ten (10) days prior to the Closing;

 

(j) on or prior to the Closing, the Purchaser and the Collateral Agent shall have received each of the conditions precedent to the Closing set forth on the closing agenda attached as Exhibit A to this Agreement;

 

(k) the initial Purchasers and the Collateral Agent shall have received evidence that the Transaction shall be consummated immediately following or substantially concurrently with the Closing on the Closing Date and in accordance with the terms of the Transaction Agreement without any amendment, modification or waiver of the Transaction Agreement that materially and adversely affects the Issuer or the Purchasers’ investment in the Issuer unless such Purchaser shall have consented thereto in writing. For the avoidance of doubt the Issuer shall not amend the definition of “Material Adverse Effect” (as defined herein) or waive non-compliance with any condition to the consummation of the Merger without the prior written consent of the Purchasers; and

 

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(l) on or prior to the Closing, each Purchaser and the Collateral Agent shall have received a disclosure letter from the Issuer and Airspan addressed to the Collateral Agent and the Purchasers in form and substance satisfactory to the Collateral Agent and the Purchasers and, if applicable, attaching and certifying such additional supplements to the Disclosure Schedules to this Agreement and as to the matters and disclosures specified therein (the “Disclosure Letter”).

 

2.6 Requested Information. Prior to or at the Closing, each of the parties to this Agreement shall deliver all such other information and shall take all such actions as is reasonably requested by the other parties in order for the Issuer to deliver the Convertible Notes to Purchaser or its nominee and all such other documents or evidence necessary in connection with this Agreement and the other transactions contemplated hereby.

 

Section 3. Representations and Warranties.

 

3.1 Issuer Representations and Warranties. Each of the Note Parties represent and warrant to the Collateral Agent and the Holders, on its own behalf and on behalf of each of its Subsidiaries, that the following representations are true, complete and correct:

 

(a) Existence, Good Standing, and Power. The Issuer, each of the Guarantors, and each of their Subsidiaries (i) is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization as identified in Schedule 3.1(l); (ii) has the requisite corporate power and authority to own, lease and operate its properties, to carry on its business as it is now being conducted and to enter into, deliver and perform its obligations under this Agreement; (iii) is duly licensed or qualified to conduct its business and, if applicable, is in good standing under the laws of each jurisdiction (other than its jurisdiction of incorporation) in which the conduct of its business or the ownership of its properties or assets requires such license or qualification, except, with respect to this clause (iii), where the failure to be in good standing would not reasonably be expected to have a Material Adverse Effect; and (iv) the Israeli Guarantor is not a “company in breach” (“hevrah meferah”), as such term is defined in the Israeli Companies Law, and neither has received a notice that it is expected to be registered as such. Schedule 3.1(l) also correctly sets forth a fully diluted capitalization table of Airspan and its respective Subsidiaries upon giving effect to the consummation of the Transactions at the Merger Effective Time showing all Equity Interests held in Airspan and each of its Subsidiaries, as well as, the legal name and jurisdiction of formation or organization for each such Person.

 

(b) Due Authorization and Valid Issuance of Common Stock. The shares of the Issuer’s common stock, par value $0.0001 per share (the “Common Stock”) issuable upon conversion of the Convertible Notes (the “Underlying Shares”) are duly authorized and, when issued upon conversion of the Convertible Notes, will be validly issued, fully paid and non-assessable, free and clear of all Liens or other restrictions, and will not have been issued in violation of or subject to any preemptive or similar rights created under the Issuer’s organizational documents (as adopted on or prior to the Closing Date), by any contract to which the Issuer is a party or by which it is bound, or under the laws of its jurisdiction of incorporation.

 

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(c) Due Execution and Binding Obligation. This Agreement has been duly authorized, executed and delivered by the Issuer and each of the Guarantors, and assuming the due authorization, execution and delivery of the same by the Purchasers, this Agreement constitutes the valid and legally binding obligation of the Issuer, enforceable against the Issuer and each of the Guarantors in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and by the availability of equitable remedies. The Convertible Notes have been duly authorized by all necessary corporate action of the Issuer. When issued and sold against receipt of the consideration therefor, the Convertible Notes will be valid and legally binding obligations of the Issuer, enforceable in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting enforcement of creditors’ generally, as limited by laws relating to the availability of equitable remedies. The execution and delivery of this Agreement and the other Note Documents, the issuance and sale of the Convertible Notes and the compliance by the Issuer and each of the Guarantors with all of the provisions of this Agreement and the other Note Documents and the consummation of the Transactions and the transactions contemplated herein and therein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any Lien, charge or encumbrance upon any of the property or assets of the Issuer pursuant to the terms of: (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other instrument or Contractual Obligation to which the Issuer or each of the Guarantors is a party or by which the Issuer or each of the Guarantors is bound or to which any of the property or assets of the Issuer, Airspan or any of their Subsidiaries is subject; (ii) the Organization Documents of the Issuer, and each of the Guarantors, Airspan or any of their Subsidiaries; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Issuer or each of the Guarantors or any of its respective properties, in each case that would reasonably be expected to have a Material Adverse Effect or materially affect the validity of the Convertible Notes or the legal authority of the Issuer or each of the Guarantors to comply in all material respects with the terms of this Agreement or any other Note Document (including the issuance and sale of the Convertible Notes).

 

(d) No Required Consents. Assuming the accuracy of the representations and warranties of the Purchasers set forth in Section 3.2 of this Agreement, except as set forth on Schedule 3.1(d), neither the Note Parties nor any of their Subsidiaries are required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other Governmental Authority, self- regulatory organization or other person in connection with the execution, delivery, performance, or enforcement (against the Issuer and/or the Guarantors) of the Transaction Agreement, this Agreement and the Note Documents (including, without limitation, the issuance of the Convertible Notes and the Underlying Shares (if any)), other than (i) filings required by applicable state securities laws, (ii) the filing of the Registration Statement (as defined below) pursuant to Section 5 below, (iii) those required by the U.S. Securities and Exchange Commission (the “SEC” or the “Commission”) or the NYSE American, including with respect to obtaining stockholder approval, (iv) those required to consummate the Transaction as provided under the Transaction Agreement, (v) the filing of notification under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, if applicable, (vi) those obtained and delivered on or prior to the Closing Date, and (vii) the failure of which to obtain would not be reasonably likely to have a Material Adverse Effect or have a material adverse effect on the Issuer’s legal authority to consummate the transactions contemplated hereby, including the issuance and sale of the Convertible Notes. No grants, funds or benefits (including, but not limited to, tax benefits actually applied) from the Israel Innovation Authority (formerly known as, the National Authority for Technological Innovation) or any other Governmental Authority were received by the Issuer or any Guarantor and none of the Issuer nor any of the Guarantors is obligated to pay any royalties or any other payments to the Israel Innovation Authority or any other Governmental Authority. The transactions contemplated by the Note Documents are not subject to any right and do not require the approval of the Israel Innovation Authority.

 

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(e) No Securities Law Violations. Assuming the accuracy of each Purchaser’s representations and warranties set forth in 3.2 of this Agreement, no registration under the Securities Act of 1933, as amended (the “Securities Act”), is required for the offer and sale of the Convertible Notes by the Issuer to the Purchasers and issuance of the Underlying Shares (if any) to any Holder, and the Convertible Notes and the Underlying Shares (if any) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act or any state securities laws.

 

(f) No Solicitation. Neither the Issuer nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Convertible Notes or any other action that would reasonably be expected to subject the offering, issuance or sale of any of the Convertible Notes to the Holders pursuant to this Agreement to the registration requirements of the Securities Act.

 

(g) No Broker Fees. No agent, broker, investment banker, financial advisor or other person is entitled to any broker’s or finder’s fee or any other commission or similar fee in connection with the transactions contemplated by this Agreement for which a Holder could become liable.

 

(h) Disclosures.

 

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(1) Disclosures to the SEC. As of their respective dates, all reports statements, schedules, prospectuses or registration statements, including all projections contained therein (collectively, the “SEC Reports”) required to be filed by the Issuer with the SEC complied in all material respects with the requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Issuer included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing and fairly present in all material respects the financial position of the Issuer and its Subsidiaries and Airspan and its Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments. Except as disclosed in the SEC Reports, (a) neither the Issuer or Airspan or any of their Subsidiaries has any material liability of any nature (matured or unmatured, fixed or contingent), (b) all liability reserves, if any, established by the Issuer were adequate in all material respects and were established by the Issuer and its Subsidiaries and Airspan and its Subsidiaries in accordance with GAAP in the United States consistently applied. Notwithstanding the foregoing, the representations in the preceding two sentences shall not apply to the Issuer’s Annual Report on Form 10-K as filed with the SEC on March 31, 2021, which report was superseded by the filing of the Issuer’s Annual Report on Form 10-K/A on May 14, 2021. A copy of each SEC Report is available to Purchaser via the SEC’s EDGAR system. The Issuer has timely filed, after giving effect to any extension period, each report, statement, schedule, prospectus, and registration statement that the Issuer was required to file with the SEC since its initial registration of the Common Stock with the SEC. There are no outstanding or unresolved comments in comment letters received by the Issuer from the staff of the Division of Corporation Finance of the SEC with respect to any of the SEC Reports. Delivery of such reports, information and documents to the Collateral Agent is for informational purposes only and the Collateral Agent’s receipt of such shall not constitute actual or constructive knowledge or notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Collateral Agent and the Holders are entitled to rely exclusively on any Compliance Certificates delivered hereunder).

 

(2) Disclosures to the Secured Parties. Each of the Issuer and the Guarantors has disclosed to the Collateral Agent all agreements, instruments and corporate or other restrictions to which it is, or to its Knowledge, Airspan and its Subsidiaries are, subject, and all other matters known to it, including with respect to Airspan and its Subsidiaries, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports, financial statements, certificates or other information furnished by or on behalf of any of the Issuer and the Guarantors to the Collateral Agent (other than forward-looking information and projections and information of a general economic nature and general information about the such Person’s industry) in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which it was made, not materially misleading. All projections delivered to the Collateral Agent or any Secured Party have been prepared in good faith on a basis that is believed by the Issuer and each of the Guarantors to be, and based on assumptions, estimates, methods and tests that are believed by the Issuer and each of the Guarantors to be reasonable at the time such projections were prepared and information believed by the Issuer and each of the Guarantors to have been accurate based upon the information available to the Issuer and each of the Guarantors at the time such projections were furnished to the Secured Parties, and none of the Issuer nor any of the Guarantors is aware of any facts or information that would lead it to believe that such projections are incorrect or misleading in any material respect; it being understood that projections are by their nature subject to significant uncertainties and contingencies, many of which are beyond the Issuer and the Guarantors’ control and actual results may differ materially from the projections and such variations may be material.

 

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(i) Common Stock of the Issuer. The issued and outstanding shares of Common Stock of the Issuer are registered pursuant to Section 12(b) of the Exchange Act, and are listed for trading on the NYSE American under the symbol “NBA” (it being understood that the trading symbol will be changed in connection with the Transaction). Except as disclosed in the SEC Reports, there is no suit, action, proceeding or investigation pending or, to the knowledge of the Issuer, threatened against the Issuer by the NYSE American or the SEC, respectively, to prohibit or terminate the listing of the shares of Common Stock on the NYSE American or to deregister the shares of Common Stock under the Exchange Act. The Issuer has taken no action that is designed to terminate the registration of the shares under the Exchange Act.

 

(j) [Reserved].

 

(k) Compliance with Applicable Laws. The Issuer each Guarantor and each Subsidiary thereof is and has been in compliance in all respects with the requirements of all applicable Laws and all orders, writs, injunctions and decrees applicable to it or to its business or properties, except to the extent any noncompliance would not be reasonably expected to adversely affect the Issuer and its Subsidiaries taken as a whole or the Obligations in any material respect.

 

(l) Equity Interests of the Issuer and its Subsidiaries.

 

(1) Equity Interests of the Issuer. As of the date hereof, the authorized capital stock of the Issuer consists of (i) 1,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”) and (ii) 100,000,000 shares of Common Stock. As of the date hereof and as of immediately prior to the Closing and the Closing: (A) no shares of Preferred Stock are issued and outstanding and (B) 14,920,000 shares of Common Stock are issued and outstanding, (C) 545,000 private placement warrants to purchase Common Stock (the “Private Placement Warrants”) are issued and outstanding and 545,000 shares of Common Stock are issuable in respect of such Private Placement Warrants, and (D) 11,500,000 public warrants to purchase Common Stock (the “Public Warrants”) are issued and outstanding and 11,500,000 shares of Common Stock are issuable in respect of such Public Warrants. Each Private Placement Warrant and Public Warrant is exercisable for one share of Common Stock at an exercise price of $11.50 per share. Except as set forth above and pursuant to the Transaction Agreement, there are no outstanding options, warrants or other rights to subscribe for, purchase or acquire from the Issuer any Common Stock, or any other Equity Interests in the Issuer, or securities convertible into or exchangeable or exercisable for such Equity Interests. There are no securities or instruments issued by or to which the Issuer is a party containing anti- dilution or similar provisions that will be triggered by the issuance of (i) the Convertible Notes or (ii) any Underlying Shares. There are no stockholder agreements, voting trusts or other agreements or understandings to which the Issuer is a party or by which it is bound relating to the voting of any securities of the Issuer, other than (A) as set forth in the SEC Reports and (B) as contemplated by the Transaction Agreement.

 

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(2) Equity Interests of the Subsidiaries. The Issuer has no Subsidiaries other than those specifically disclosed in Schedule 3.1(l)(1) or as disclosed to the Collateral Agent in writing pursuant to Section 4.1(l), and all of the outstanding Equity Interests in such Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Issuer or the Guarantors, as applicable, free and clear of all Liens other than Permitted Liens. IP Hold-Co has no equity investments in any other corporation or entity. All of the outstanding Equity Interests in the Issuer and its Subsidiaries have been validly issued and, where applicable, are fully paid and nonassessable. As of the Closing Date and after giving effect to the Transaction, Schedule 3.1(l) sets forth (a) the name and jurisdiction of organization of each Subsidiary, (b) sets forth the ownership interests of each of the Subsidiaries of the Issuer, including the percentage and classes of such Equity Interests on a fully diluted basis and (c) identifies each Person the Equity Interests of which are required to be pledged on the Closing Date pursuant to the Collateral and Guarantee Requirements.

 

(m) Margin Regulations;Investment Company Act. None of the Issuer or the Guarantors is engaged nor will it engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Federal Reserve Board), or extending credit for the purpose of purchasing or carrying margin stock. Both before and after giving effect to the transactions contemplated hereby (including the consummation of the Transaction and the receipt of payment for the Convertible Notes), none of the Issuer, the Guarantors nor any of their Subsidiaries is, is required to be, or will be required to be registered as an “investment company” under the Investment Company Act of 1940, as amended, as such terms are defined in the Investment Company Act of 1940.

 

(n) [Reserved].

 

(o) [Reserved].

 

(p) Solvency. The Issuer and each of the Note Parties which are Domestic Subsidiaries are Solvent and will be Solvent both before and after giving effect to the transactions occurring in connection with the Note Documents (including the purchase and sale of the Convertible Notes and the consummation of the Transaction on the Closing Date). The Issuer and its Subsidiaries, on a consolidated basis, are and will be Solvent both before and after giving effect to the transactions occurring on the Closing Date (including the purchase and sale of the Convertible Notes and the consummation of the Transaction on the Closing Date). No transfer of property is being made by any Note Party and no obligation is being incurred by any Note Party in connection with the Transactions and the other transactions contemplated by this Agreement or the other Note Documents or IP Hold-Co Documents with the intent to hinder, delay, or defraud either present or future creditors of the Issuer, Airspan or any of their Subsidiaries.

 

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(q) Financial Statements; No Material Adverse Effect. The Audited Financial Statements (a) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (b) fairly present the financial condition of (x) prior to the Closing Date, Airspan and its Subsidiaries, or as the context may require, of the Issuer and its Subsidiaries, and (y) with respect to any Audited Financial Statements for any period after the Closing Date, the Issuer and its Subsidiaries, as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (c) show all material Indebtedness and other liabilities (including, without limitation, Indebtedness, liabilities for taxes, long-term leases, Indebtedness and other unusual forward or long-term commitments), direct or contingent, of such Person and its Subsidiaries as of the date thereof. Since the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect, except as disclosed in any SEC Reports or on Schedule 3.1(q).

 

(r) Litigation. There are no actions, suits, proceedings, claims, investigations or disputes pending or, to the Knowledge of the Issuer or any Guarantor or any of their Subsidiaries, threatened in writing, at Law, in equity, in arbitration or before any Governmental Authority, by or against Issuer, any Guarantor, Airspan, or any of their Subsidiaries or against any of their properties or revenues that purport to affect or pertain to this Agreement or any other Note Document, or any of the transactions contemplated hereby which would be adverse to the Issuer, the Guarantors or the Secured Parties in any material respect. No Note Party nor any of their Subsidiaries, nor any director or officer thereof is or since December 31, 2020 has been the subject of any action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Issuer or any Subsidiary under the Securities Act and Exchange Act, as applicable.

 

(s) No Default. Neither the Issuer, nor any Guarantor, nor any of their Subsidiaries, to the Knowledge of the Issuer or any Guarantor or any of their Subsidiaries, is in default or event of default under or with respect to any Contractual Obligation that could either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as set forth in the Disclosure Letter, no Default or Event of Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Note Document (including the purchase and sale of the Convertible Notes and the consummation of the Transactions).

 

(t) Ownership of Property; Liens; Permits; Environmental Compliance..

 

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(1) Issuer and each of its Subsidiaries has, in all material respects, good, indefeasible and merchantable title to and ownership of its property, and is the beneficial owner of all Equity Interests in its Subsidiaries and other Persons purported to be owned by such Person, free and clear of all Liens, except Permitted Liens.

 

(2) Issuer and each Guarantor has, and is in compliance with, all permits, licenses, authorizations, approvals, entitlements and accreditations required for such Person lawfully to own, lease, manage or operate, or to acquire, each property or asset or business currently owned, leased, managed or operated, or to be acquired, by such Person, except to the extent the failure to have or be in compliance therewith could not reasonably be expected to have a Material Adverse Effect. No condition exists or event has occurred which, in itself or with the giving of notice or lapse of time or both, would result in the suspension, revocation, impairment, forfeiture or non-renewal of any material permit, license, authorization, approval, entitlement or accreditation necessary to the operation of the business of the Issuer, or as the context may require, the Guarantors, as currently operated, and, to the Knowledge of the Issuer and the Guarantors, the business of Airspan and its Subsidiaries as currently operated, and to the Knowledge of the Issuer and the Guarantors, there is no claim that any thereof is not in full force and effect or would cease to be in full force and effect after giving effect to the consummation of the transactions contemplated by the Note Documents (including the purchase and sale of the Convertible Notes and the consummation of the Transactions).

 

(3) Except as set forth on Schedule 3.1(t)(3), (i) none of the Issuer, the Guarantors, or any of their Subsidiaries is in material violation of any applicable Environmental Law, (ii) the Issuer, each Guarantor and each of their Subsidiaries has, and is in compliance with, all Environmental Permits for its respective operations and businesses, except to the extent any failure to have or be in compliance therewith could not reasonably be expected to result in any material Environmental Claim or Environmental Liability; (iii) to the knowledge of the Issuer, the Guarantors, and each of their Subsidiaries, there has been no Release of Hazardous Materials at any properties currently or formerly owned, leased or operated by any of the Issuer, the Guarantors and each of their Subsidiaries or a respective predecessor in interest or at any disposal or treatment facility which received Hazardous Materials generated by any of the Issuer, the Guarantors, or their Subsidiaries or any respective predecessor in interest, which in any case of the foregoing could reasonably be expected to result in any material Environmental Claim or Environmental Liability; (iv) neither any of the Issuer, the Guarantors, nor their Subsidiaries has received written notice of any pending or threatened Environmental Claims against, or Environmental Liability of, any of the Issuer, the Guarantors, or their Subsidiaries or any respective predecessor in interest that could reasonably be expected to result in any material Environmental Claim or Environmental Liability; (v) neither any of the Issuer, the Guarantors, or their Subsidiaries is performing or responsible for any Remedial Action that could reasonably be expected to result in any material Environmental Claim or Environmental Liability; and (vi) the Issuer, the Guarantors, and their Subsidiaries have made available to the Collateral Agent and Purchaser true and complete copies of all material environmental reports, audits, and investigations in the possession or control of any of the Issuer, the Guarantors, or their Subsidiaries with respect to the operations and business of the Issuer, the Guarantors, and their Subsidiaries.

 

(u) Insurance. The properties of the Issuer, the Guarantors and their Subsidiaries are insured with insurance companies that are not Affiliates of the Issuer or the Guarantors and that, to their Knowledge, are financially sound and reputable, in such amounts (after giving effect to any self-insurance reasonable and customary for similarly situated Persons engaged in the same or similar business as the Issuer or applicable Subsidiary), with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Issuer or the applicable Guarantor or Subsidiary operates.

 

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(v) Taxes. Issuer and each Guarantor and each of their Subsidiaries (a) have properly prepared and timely filed all material Tax returns and reports required to have been filed by them with all appropriate Governmental Authorities and (b) have fully and timely paid all Taxes required to be paid by them, other than Taxes that are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided and reflected in the Issuer’s and its Subsidiaries’ financial statements in accordance with the applicable GAAP. The charges, accruals and reserves on the books of the Issuer and its Subsidiaries in respect of Taxes for all fiscal periods are adequate in all material respects, and there are no material unpaid assessments against Issuer or any Subsidiary nor, to the Issuer’s or any Guarantor’s or Subsidiary’s Knowledge, any basis for the assessment of any additional Taxes, penalties or interest for any fiscal period or audits by any federal, state or local taxing authority. All Taxes and other assessments and levies that the Issuer or any Subsidiary is required to withhold or to collect for payment have been duly withheld and collected and paid to the proper Governmental Authority or third party when due. There are no Tax Liens or claims pending or threatened against the Issuer or any Guarantor or any Subsidiary or any of their respective assets or property other than Permitted Liens. Neither the Issuer nor any Guarantor or any of their Subsidiaries is a party to any Tax sharing agreement or other similar arrangement.

 

(w) ERISA and Foreign Plans Compliance; Pensions.

 

(1) (i) Each Plan of the Issuer and each Guarantor, and to the Knowledge of the Issuer and the Guarantors, Airspan and the other Guarantors, is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state Laws and (ii) each Foreign Plan of the Issuer and its Subsidiaries, and, to the Knowledge of the Issuer and the Guarantors, Airspan and its Subsidiaries, is in material compliance with applicable Law and regulations, special arrangements, collective bargaining agreements and extension orders in any applicable jurisdiction. Each Plan of the Issuer and each Guarantor, and, to the Knowledge of the Issuer and the Guarantors, Airspan and each Guarantor, that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or, with respect to a prototype or volume submitter plan, can rely on an opinion letter from the IRS to the document sponsor, to the effect that such Plan is so qualified and, to the Knowledge of the Issuer and its Subsidiaries, nothing has occurred which would prevent, or cause the loss of, such qualification. Issuer and each ERISA Affiliate have made all required contributions to each such Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan of the Issuer and each Guarantor, and to the Knowledge of the Issuer and the Guarantors, Airspan and each Guarantor.

 

(2) There are no pending or, to the Knowledge of the Issuer, the Guarantors or any of their Subsidiaries, threatened claims, actions or lawsuits, or action by any Governmental Authority. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan of the Issuer and its Subsidiaries, and to the Knowledge of the Issuer and the Guarantors, Airspan and the Guarantors.

 

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(3) (i) No ERISA Event has occurred or is reasonably expected to occur; (2ii) no Pension Plan has any Unfunded Pension Liability; (3iii) none of the Issuer, the Guarantors, nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA) (or equivalent Law in a non-US jurisdiction with respect to a Foreign Plan); (4iv) none of the Issuer, the Guarantors, nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan (or equivalent Law in a non-US jurisdiction); and (5v) none of the Issuer, the Guarantors, nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA (or equivalent Law in a non-US jurisdiction).

 

(4) To the best of its Knowledge, none of the Issuer, any Guarantor, Airspan, nor any of their Affiliates is or has at any time been (i) an employer (for the purposes of sections 38 to 51 of the Pensions Act 2004) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pensions Schemes Act 1993); or (ii) ‘connected’ with or an ‘associate’ of (as those terms are used in sections 38 and 43 of the Pensions Act 2004) such an employer.

 

(x) Intellectual Property; Licensing.

 

(1) Schedule 3.1(x)(1) sets forth a complete and accurate list as of the Closing Date after giving effect to the Merger Effective Time of all: (i) issuances, registrations and applications for Intellectual Property owned or exclusively licensed by Issuer or a Subsidiary, indicating for each, as applicable, the title, jurisdiction, record owner, and application or registration number; and (ii) Licenses to which the Issuer or any of its Subsidiaries is a party or otherwise bound that are material to the conduct of the business of the Issuer or any Subsidiary or that involve any Assigned Patent, excluding for the avoidance of doubt, any commercially available ‘off-the-shelf’ software or open source software licenses used in the business of the Issuer or any Subsidiary, or any licenses granted to customers, distributors or agents of the Issuer or any Subsidiary for the purpose of testing, demonstrating, using, installing, maintaining, updating, repairing, decommissioning and otherwise exploiting the Products (each, a “Material License”).

 

(2) Except as set forth on the Disclosure Schedule, Issuer and each Subsidiary exclusively own (or will own upon giving effect to the Transactions at the Merger Effective Time) all right, title and interest in and to, or have a valid and enforceable right to use, free and clear of any Lien other than any Permitted Liens, all Intellectual Property necessary for the conduct of its business as presently conducted and as it will be conducted upon giving effect to the consummation of the Transactions at the Merger Effective Time. Except as set forth in Schedule 3.1(x)(2), within the (3) three years preceding the Closing Date, no claim has been brought, is pending, or, to the knowledge of the Issuer or the Guarantors, has been threatened, by any Person (i) alleging that the conduct of the business of the Issuer or a Subsidiary, or to the Knowledge of the Issuer and the Guarantors, Airspan and its Subsidiaries, infringes, misappropriates, dilutes or otherwise violates the Intellectual Property of any Person or (ii) challenging or questioning the validity, enforceability, ownership, use, registrability or patentability of any Material Intellectual Property. To the knowledge of the Issuer and the Guarantors, no Person is infringing, misappropriating, diluting or otherwise violating any Intellectual Property of the Issuer or any Subsidiary, or to the Knowledge of the Issuer and the Guarantors, Airspan and its Subsidiaries.

 

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(3) Other than as set forth on Schedule 3.1(x)(3), no Foreign Subsidiary of the Issuer, any Guarantor or to the Knowledge of the Issuer and the Guarantors, Airspan and its Subsidiaries, owns any registrations or applications to register any Material Intellectual Property. To the knowledge of the Issuer and the Guarantors, all registrations and pending applications for Material Intellectual Property, listed in accordance with Section 3.1(x)(1) are (i) subsisting and have not been adjudged invalid or unenforceable, in whole or part, and (ii) valid and in full force and effect. Issuer and each Subsidiary, and to the Knowledge of the Issuer and the Guarantors, Airspan and each of its Subsidiaries, has taken commercially reasonable steps to maintain, enforce and protect its Intellectual Property, including by requiring each employee, consultant and independent contractor involved in the creation, development or authorship of any Intellectual Property to execute an agreement pursuant to which such Person (x) agrees to protect the confidential information of the Issuer and each Subsidiary and (y) assigns to Issuer or a Subsidiary, as applicable, all rights in any Intellectual Property created in the course of his, her or its employment or other engagement with the Issuer or a Subsidiary.

 

(4) Except as may be disclosed to the Collateral Agent in writing prior to the Closing Date, the Issuer and each Guarantor, and to the Knowledge of the Issuer and the Guarantors, Airspan and IP Hold-Co, have obtained and properly recorded previously executed assignments from inventors and all other Persons for the Assigned Patents as necessary to fully perfect their rights and title therein in accordance with applicable Law in each respective jurisdiction. All inventors named on the Assigned Patents are true and correct.

 

(5) Except as may be set forth on Schedule 3.1(x)(5), there is no obligation imposed by a standards-setting organization with respect to any of the Assigned Patents. No funding, facilities or personnel of any Governmental Authority were used, directly or indirectly, to develop or create, in whole or in part, any Intellectual Property assets, or any other products or services of the Issuer or its Subsidiaries, and to the Knowledge of the Issuer and the Guarantors, Airspan and each of its Subsidiaries.

 

(6) Except as set forth in Schedule 3.1(x)(6), none of the Assigned Patents has ever been found invalid, unpatentable, or unenforceable for any reason in any proceeding and Issuer and its Subsidiaries have no Knowledge of and has not received any notice or information of any kind suggesting that the Assigned Patents may be invalid, unpatentable, or unenforceable. If any of the Assigned Patents are terminally disclaimed to another patent or patent application, all patents and patent applications subject to such terminal disclaimer are included in the Assigned Patents. To the extent “small entity” fees were paid to the United States Patent and Trademark Office for any Assigned Patent, such reduced fees were then appropriate because the payor qualified to pay “small entity” fees at the time of such payment and specifically had not licensed rights in any Assigned Patent to an entity that was not a “small entity.

 

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(7) Issuer and each Subsidiary, and to the Knowledge of the Issuer and Guarantors, Airspan and each of its Subsidiaries, have taken all reasonable and necessary steps to maintain and enforce the Material Intellectual Property and Material Licenses and to preserve the confidentiality of all trade secrets and proprietary information included in the set of Material Intellectual Property, including by requiring Persons having access thereto to execute binding, written non-disclosure agreements or otherwise effectively obligate themselves with respect to non-disclosure and non-use. Neither the Issuer or any of its Subsidiaries, including their employees, and to the knowledge of the Issuer, the Guarantors, and Airspan, each of the Issuer’s, Airspan’s, the IP Hold-Co and the Guarantor’s agents and contractors, has disclosed any trade secrets or other proprietary, confidential or personal information in which the Issuer or any of its Subsidiaries or any other Person has (or purports to have) any right, title, or interest (or any tangible embodiment thereof) to any Person without having the recipient thereof execute a written agreement regarding the non-disclosure and non-use thereof or otherwise effectively obligate themselves with respect to non-disclosure and non-use. All use, disclosure, or appropriation of any trade secret or other proprietary, confidential or personal information not owned by the Issuer or any of its Subsidiaries, and to the Knowledge of the Issuer and Guarantors, Airspan and each of its Subsidiaries, has been pursuant to the terms of a written agreement between the Issuer or one or its Subsidiaries (or as the context may require, Airspan and one of its Subsidiaries) and the owner of such trade secret or proprietary, confidential or personal information, or otherwise with such owner’s express written consent. Neither the Issuer nor any of its Subsidiaries, nor to the Knowledge of the Issuer and Guarantors, Airspan and each of its Subsidiaries, has received any notice in the past two (2) years from any Person that there has been an unauthorized use or disclosure of any trade secrets or other proprietary, confidential or personal information by the Issuer or any of its Subsidiaries, or any of their employees, agents, or contractors. No escrow agents or other Persons other than the Issuer or any of its Subsidiaries (or as the context may require, Airspan and one of its Subsidiaries), and their employees and independent contractors who are subject to written obligations of confidentiality, have access to or otherwise possess any source code, or any current or contingent rights of any kind to any source code, included in the set of Material Intellectual Property, nor has the Issuer or any of its Subsidiaries granted access or any current or contingent rights of any kind to any source code that is part of the Intellectual Property owned or controlled by the Issuer or any of its Subsidiaries (or as the context may require, Airspan and one of its Subsidiaries). To the knowledge of the Issuer and the Guarantors, no product, system, program or software module designed, developed, distributed or otherwise made available by the Issuer or any of its Subsidiaries to any Person, including products and services, contains any “back door,” “time bomb,” “Trojan horse,” “worm,” “drop dead device,” “virus” or other software routines or hardware components designed to permit unauthorized access or to disable or erase software, hardware or data without the consent of the user (“Harmful Code”).

 

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(8) Schedule 3.1(x)(8) delivered to the Collateral Agent on or before the Closing Date is a complete and correct list of the following: (i) each open source software module by name and version number that is associated with a Reciprocal License that is incorporated in, linked to, or used in relation to, any product or service sold or distributed by the business of the Issuer, any Guarantor, Airspan, or any of their Subsidiaries; (ii) the Reciprocal License applicable to each such open source software module and a reference to where the terms of such Reciprocal License may be found (e.g., a link to a site that has the applicable Reciprocal License); (iii) whether the Issuer, any Guarantor, Airspan, or any of their Subsidiaries has modified any such open source software module, and (iv) whether such open source software module has been, or is expected to be, distributed by the Issuer, any Guarantor, Airspan, or any of their Subsidiaries or only used internally by the Issuer, any Guarantor, Airspan, or any of their Subsidiaries. Issuer’s, the Guarantor’s, Airspan’s, and each of their Subsidiaries’ use or distribution of each component of software subject to a Reciprocal License complies with the applicable Reciprocal License governing such software, including all notice and attribution requirements. Neither Issuer, any Guarantor, Airspan, or any of their Subsidiaries has used any materials subject to a Reciprocal License in any manner that would (A) require the disclosure or distribution in source code form, (B) require the license thereof for the purpose of making derivative works, (C) impose any restriction on the consideration to be charged for distribution of any Material Intellectual Property, or (D) impose any restriction on the Issuer or any of its Subsidiaries, from asserting its rights in relation to any Material Intellectual Property or the Collateral Agent or any Secured Party in exercising its rights hereunder.

 

(9) Neither the Issuer nor any Guarantor or any of their Subsidiaries, or to Issuer’s, any Guarantor’s or any of their Subsidiaries’ Knowledge, any counterparty, is in material breach of or default under the provisions of any of the Material Licenses, or has received written notice of any such breach or default or the intention of the other party to terminate such License, nor is there any event, fact, condition or circumstance which, with notice or passage of time or both, would constitute or result in a material conflict, breach, default or event of default under, any of the foregoing.

 

(10) Except as set forth in Schedule 3.1(x)(10), none of the Intellectual Property of the Issuer, Airspan, IP Hold-Co or any Guarantor has been or is currently involved in any reexamination, supplemental examination, reissue, interference proceeding, or any similar proceeding, and no such proceedings are pending or threatened.

 

(11) Except as set forth in Schedule 3.1(x)(11), none of the Issuer, the Guarantors nor any of their respective Subsidiaries, nor to the Knowledge of the Issuer and Guarantors, Airspan and its Subsidiaries, has received any notices alleging that the conduct of its business (including the development, manufacture, use, sale or other commercialization of any Product) infringes any Intellectual Property of any third party, and to the Knowledge of the Issuer and the Guarantors, the conduct of the business of the Issuer, the Guarantors, Airspan, and their respective Subsidiaries (including the development, manufacture, use, sale or other commercialization of any Product) does not infringe any Intellectual Property of any third party.

 

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(12) None of the Issuer, the Guarantors, Airspan, nor any of their Subsidiaries is a party to any agreement that conflicts with the security interest in the Intellectual Property of the Issuer or any Asset Security Provider granted under the Collateral Documents, and no license agreement with respect to any such Intellectual Property diminishes in any material respect the value of any Intellectual Property, the Issuer, any Guarantor, Airspan, or any of their Subsidiaries or interferes with the security interest granted to the Collateral Agent pursuant to the terms of the Note Documents. After giving effect to the consummation of the Transactions at the Merger Effective Time on the Closing Date, no material Intellectual Property of the Issuer, any Guarantor, Airspan, or any of their Subsidiaries is included in the set of Excluded Assets of the Issuer or the Guarantors. The consummation of the transactions contemplated hereby (including the purchase and sale of convertible Notes, the consummation of the Transactions and the grant of Liens on the Collateral) will not constitute a breach or violation of, or otherwise affect the enforceability of, any licenses of any Intellectual Property owned or licensed by the Issuer, any Guarantor, Airspan or any of their respective Subsidiaries.

 

(13) Each of the Issuer, each Guarantor and each of their Subsidiaries, and to the Knowledge of the Issuer and the Guarantors, each of Airspan and each of its Subsidiaries, have or had, as appropriate, complete, valid and enforceable rights to use a complete and correct copy of all data, data sets and databases used in, held for use in, or necessary for the conduct of the business of the Issuer and its’ Subsidiaries and the business of Airspan and its Subsidiaries (including their products), as currently conducted and as had been conducted in the past (collectively, “Company Data and Data Sets”), and all such material Company Data and Data Sets are or were, as appropriate, either (i) owned by Issuer or one of its Subsidiaries (or as the context may require, Airspan or one of its Subsidiaries), (ii) used under valid, enforceable licenses to Issuer or one of its Subsidiaries (or as the context may require, Airspan or one of its Subsidiaries), or (iii) otherwise used without encroaching on the rights of any third party.

 

(14) All IT Systems of the business of the Issuer and its Subsidiaries, and to the Knowledge of the Issuer and the Guarantors, each of Airspan and each of its Subsidiaries, are in good working condition and are sufficient for the operation of such business as currently conducted. In the past twelve (12) months, other than as disclosed in Schedule 3.1(x)(14), there has been no malfunction, failure, continued substandard performance, denial-of-service, or other cyber incident, including any cyberattack or other impairment of the IT Systems that has resulted or is reasonably likely to result in the introduction of any Harmful Code into its products or any other material disruption or damage to Issuer or any of its Subsidiaries (or as the context may require, Airspan or one of its Subsidiaries). Issuer and its Subsidiaries, and to the Knowledge of the Issuer and the Guarantors, each of Airspan and each of its Subsidiaries, have been, and is, in compliance in all material respects with all contractual obligations concerning the security and privacy of the IT Systems and information contained therein (including Intellectual Property and personal data, and other information subject to confidentiality obligations). Issuer and its Subsidiaries, and to the Knowledge of the Issuer and the Guarantors, each of Airspan and each of its Subsidiaries, have taken all commercially reasonable steps to safeguard the confidentiality, availability, security, and integrity of the IT Systems of the Issuer and its Subsidiaries, and as the context may require, Airspan and its Subsidiaries, including implementing and maintaining appropriate backup, disaster recovery, and software and hardware support arrangements. Other than as set forth on Schedule 3.1(x)(14), none of the businesses of the Issuer, any Guarantor, Airspan, or any of their Subsidiaries has suffered any security breaches in the past twelve (12) months that have resulted in a third party obtaining access to any proprietary or confidential information of the Issuer, any Guarantor, Airspan, or any of their Subsidiaries or any third parties. Issuer and its Subsidiaries, and to the Knowledge of the Issuer and the Guarantors, each of Airspan and each of its Subsidiaries, have implemented and maintained, consistent with commercially reasonable practices and its obligations to third persons, security, disaster recovery, business continuity plans, procedures, and facilities, and other measures adequate to protect computers, networks, software, and systems used by Issuer or any of its Subsidiaries, and as the context may require, Airspan and its Subsidiaries, to store, process, or transmit information or content from unauthorized access, use or modification.

 

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(15) Issuer and its Subsidiaries, and to the Knowledge of the Issuer and the Guarantors, each of Airspan and each of its Subsidiaries, have complied with, and are in compliance with, in each case in all material respects, all applicable Laws (including privacy Laws), rules, and regulations governing the collection and use of personal information and such collection and use is in accordance in all material respects with such member of the Issuer’s, each Guarantor, Airspan, and each of their Subsidiaries’ privacy policy. There are not, and have not been in the past two (2) years, any investigations, allegations, claims or occurrences pertaining to an actual or potential security or privacy breach relating to the Issuer, Airspan, any Guarantor, or any of their Subsidiaries. Issuer and its Subsidiaries, and to the Knowledge of the Issuer and the Guarantors, each of Airspan and each of its Subsidiaries, have implemented industry standard or better information and data security policies and procedures that safeguard the confidential information of the Issuer, each Guarantor, Airspan, and their Subsidiaries (including the confidential information of the Issuer’s, each Guarantor, Airspan, or any of their Subsidiaries’ customers), as well as all Personal Information collected by Issuer, each Guarantor, Airspan, or any of their Subsidiaries both on its own behalf and on behalf of third parties. In the past two (2) years, neither Issuer, the Guarantors, Airspan, nor any of their Subsidiaries has (i) experienced any actual, alleged, or suspected unauthorized access, use, or disclosure of, or data breach or other security incident involving Personal Information in its possession or control, or (ii) been subject to or received any notice of any proceeding by any Governmental Authority or other Person concerning Issuer’s, the Guarantor’s, Airspan’s, or any of their Subsidiaries’ collection, use, processing, storage, transfer, or protection of Personal Information or any actual, alleged, or suspected violation of any applicable Law concerning privacy, data security, or data breach notification, and there are no facts or circumstances that could reasonably be expected to give rise to any such proceedings.

 

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(y) Rights in Collateral; Priority of Liens. Each of the Issuer and the Guarantors owns the property granted by it as Collateral under the Note Documents, free and clear of any and all Liens in favor of third parties other than Permitted Liens. Upon the consummation of the Transactions and the effectiveness of the amendments to the Term Loan Documents, and where applicable, the proper filing and registration (as applicable) of the UCC financing statements or the equivalent thereof in any other country, the Liens in the Collateral granted to the Collateral Agent on behalf of the and for the benefit of the Secured Parties pursuant to the Collateral Documents and the other Note Documents will constitute valid and enforceable first, prior and perfected Liens on the Collateral, subject only to Permitted Liens and the Priority Lien Obligations permitted by the Intercreditor Agreement.

 

(z) [Reserved].

 

(aa) PATRIOT Act; Sanctions; Export Controls; FCPA..

 

(1) To the extent applicable, the Issuer and each of its Subsidiaries and to the Note Parties’ knowledge, Airspan and each of its Subsidiaries is in compliance in all material respects with the PATRIOT Act.

 

(2) Each Note Party represents that neither the Issuer nor any of its Subsidiaries nor any director, officer or employee thereof, nor, to its knowledge, any agent, affiliate or representative of the Issuer, Airspan, or any Subsidiary thereof, is an individual or entity that is a Person that is:

 

(i) listed in the annex to, or otherwise subject to the provisions of, Executive Order No. 13224 on Terrorist Financing effective September 24, 2001 (the “Executive Order”);

 

(ii) prohibited from dealing or otherwise engaging in any transaction by any domestic or applicable foreign laws with respect to terrorism or money laundering;

 

(iii) engaged in “terrorism” as defined in the Executive Order or in any applicable foreign laws;

 

(iv) the subject or target of any sanctions administered or enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the U.S. Department of State, the United Nations Security Council, the European Union, the State of Israel or Her Majesty’s Treasury (collectively, “Sanctions”); or

 

(v) located, organized or resident in a country or territory that is the subject of comprehensive Sanctions (including, without limitation, as of the Closing Date, Cuba, Iran, Venezuela, North Korea, Syria and the Crimea region of the Ukraine) (each a “Designated Jurisdiction”).

 

(3) Each Note Party represents and covenants that neither it nor its Subsidiaries, Airspan or any of its Subsidiaries, directly or, to its knowledge, indirectly, use the proceeds of the Convertible Notes, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person:

 

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(i) to fund or facilitate any activities or business (x) of or with any Person that, at the time of such funding or facilitation, is the subject or target of Sanctions or (y) in any country or territory that, at the time of such funding or facilitation, is the subject of comprehensive Sanctions; or

 

(ii) in any other manner that will result in a violation of Sanctions by any Person (including the Holders or other party hereto).

 

(4) To the extent applicable, each of the Issuer and its Subsidiaries is in compliance with the Export Control Regulations. Each Note Party represents that neither it nor any of its Subsidiaries nor, to any Note Party’s knowledge, Airspan or any of its Subsidiaries have engaged in transactions with, or exported any products, services or associated technical data:

 

(i) into (or to a national or resident of) Cuba, Iran, North Korea, Syria, the Crimea region of the Ukraine or any other country or territory to which the United States had embargoed exports or with which the United States had proscribed economic transactions as of the date of such export or transaction; or

 

(ii) to any person or entity included on the list of Specially Designated Nationals and Blocked Persons maintained by OFAC or the Denied Persons List maintained by the U.S. Department of Commerce as of the date of such transaction or export; or

 

(iii) that would otherwise constitute or give rise to a violation of the Export Control Regulations. Each Note Party further represents that it and its Subsidiaries and to the knowledge of the Note Parties, Airspan and its Subsidiaries have instituted policies and procedures designed to ensure, and which are reasonably expected to ensure, compliance with the Export Control Regulations and with the representation and warranty contained herein.

 

(5) Each Note Party represents that neither it, nor Airspan, nor any of their Subsidiaries nor any director, officer or employee thereof, has taken any action, directly or indirectly, that would result in a violation by any of the foregoing of the FCPA and the rules and regulations thereunder or any other applicable domestic or foreign anti-corruption law in any material respect. Each Note Party represents that to its knowledge, no agent, affiliate, representative or any other Person acting on behalf of the Issuer or any of its Subsidiaries, and to the knowledge of the Note Parties, Airspan and its Subsidiaries has taken any action, directly or indirectly, that would result in a violation by any of the foregoing of the FCPA and the rules and regulations thereunder or any other applicable domestic or foreign anti-corruption law. Each Note Party further represents that it and its Subsidiaries, and to the knowledge of the Note Parties, Airspan and its Subsidiaries have instituted policies and procedures designed to ensure, and which are reasonably expected to ensure, compliance with the FCPA and any other applicable domestic or foreign anti-corruption law and with the representation and warranty contained herein.

 

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(6) The Issuer represents that (a) the proceeds of the Convertible Notes will not be used by it or any of its Subsidiaries for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage in violation of the FCPA or any other applicable anti-corruption law, and (b) it shall not use the proceeds of the Convertible Notes, or lend, contribute or otherwise make available proceeds of the Convertible Notes to any Subsidiary of Holdingsthe Issuer, joint venture partner or other individual or entity, directly, or knowingly indirectly, (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation in any material respect of the FCPA, the UK Bribery Act 2010, and other similar anti-corruption legislation in other jurisdictions to the extent applicable to the Note Parties or (ii) to fund any activities of or business with any individual or entity, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of Sanctions in material violation thereof, or in any other manner that will result in a material violation by an individual or entity (including any Purchaser or Holder) of Sanctions.

 

(bb) Material Contracts. Schedule 3.1(bb) (as supplemented from time to time including by the Disclosure Letter) contains a true, correct and complete list of all the Material Contracts of the Issuer, each Guarantor, Airspan, and each of their Subsidiaries and all such Material Contracts are in full force and effect and no defaults currently exist thereunder which would be adverse to Issuer and its Subsidiaries or the Secured Parties in any material respect except as disclosed in the Disclosure Letter.

 

(cc) Employee Matters. Except as set forth on Schedule 3.1(cc), (i) each of the Issuer, the Guarantors and their Subsidiaries and to the Knowledge of the Issuer and the Guarantors, Airspan and its Subsidiaries, is in compliance with all requirements of applicable Law in all material respects pertaining to employment and employment practices, terms and conditions of employment, wages and hours, and occupational safety and health, (ii) none of the Issuer, the Guarantors nor any Subsidiary, nor to the Knowledge of the Issuer or any Guarantor, Airspan or any of its Subsidiaries, is party to any collective bargaining agreement, nor has any labor union been recognized as the representative of the employees of any of the Issuer, the Guarantors, Airspan, or any of their Subsidiaries, (iii) there is no material unfair labor practice complaint pending or, to the best knowledge of any of the Issuer, the Guarantors, threatened against any of the Issuer, the Guarantors, Airspan, or any of their Subsidiaries before any Governmental Authority and no grievance or arbitration proceeding pending or threatened against any of the Issuer, the Guarantors, Airspan or any of their Subsidiaries which arises out of or under any collective bargaining agreement, (iv) there has been no strike, work stoppage, slowdown, lockout, or other material labor dispute pending or, to the knowledge of any of the Issuer, the Guarantors or any Subsidiary, threatened against the Issuer, the Guarantors, Airspan, or any of their Subsidiaries, (v) to the best knowledge of each of the Issuer, the Guarantors or any Subsidiary, no labor organization or group of employees has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or threatened to be brought or filed, with the National Labor Relations Board, or any other labor relations tribunal or authority, and (vi) there are no outstanding claims, complaints, assessments or investigations against the Issuer, the Guarantors or their Subsidiaries under the Employment Standards Act, Labour Relations Code, Human Rights Code or other comparable legislation in any applicable jurisdiction, nor are there any claims, complaints, assessments, or investigations filed against Issuer, the Guarantors, Airspan or their Subsidiaries with the courts, boards and tribunals which govern the aforementioned legislation and regulations in each case which would be adverse to Issuer and its Subsidiaries in any material respect. None of the Issuer, the Guarantors, Airspan or their Subsidiaries has incurred any material liability or obligation under the Worker Adjustment and Retraining Notification Act (“WARN”) or any similar requirement of applicable Law which remains unpaid or unsatisfied. All material payments due from any of the Issuer, the Guarantors, Airspan or their Subsidiaries on account of wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the books of such Issuer, Guarantor, Airspan, or as the context may require, their Subsidiaries.

 

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(dd) No Regulatory Restrictions on Issuance, Guarantees or Upstreaming Cashflows. Except as disclosed on Schedule 3.1(dd), to the Knowledge of the Issuer, the Guarantors, Airspan and their Subsidiaries, none of the Issuer, the Guarantors or their Subsidiaries is subject to regulation under any other Law, treaty, rule or regulation or determination of an arbitrator or court or other Governmental Authority or any other contractual restriction that limits its ability to incur or guarantee any Indebtedness under this Agreement or any Note Document or to permit its Subsidiaries to upstream dividends and other distributions in the manner contemplated by Section 4.1(v) of this Agreement except as would not be adverse to the ability of the Issuer and its Subsidiaries to perform under the Note Documents in any material respect.

 

(ee) Rank of Debt. The obligations of each of the Issuer and the Guarantors under the Note Documents to pay the principal of and interest on the Convertible Notes and any and all other amounts due thereunder constitute direct and unconditional senior obligations of each such Person and will at all times rank at least equal in right of payment with all other present and future indebtedness and other obligations of such Person, except for any obligations in respect of employee compensation and benefits and taxes and other Permitted Liens in respect of obligations that are immaterial in the aggregate to the Issuer, the Guarantors and their Subsidiaries, taken as a whole, which have priority under the laws of each Relevant Jurisdiction.

 

(ff) No Set-off. The obligations of the Issuer and the Guarantors under the Note Documents are not subject to any defense, set-off or counterclaim by any of the Issuer or the Guarantors or any circumstance whatsoever which might constitute a legal or equitable discharge from its obligations thereunder other than the defense of payment in full.

 

(gg) No Immunity; Proper Legal Form; No Need To Qualify Under each Relevant Jurisdiction or other Applicable Law..

 

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(1) None of the Issuer or the Guarantors nor any of their properties have any immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the laws of the United States, and each other Relevant Jurisdiction in respect of its obligations under the Note Documents. To ensure the legality, validity, enforceability or admissibility into evidence in each Relevant Jurisdiction of the Note Documents, it is not necessary that the Note Documents or any other document be filed or recorded with any Governmental Authority in each Relevant Jurisdiction except for the translation into Hebrew of the Note Documents by an approved translator and the filings relating to the grant and perfection of security interest in the Collateral described herein and in the other Note Documents.

 

(2) Each of the Note Documents is in proper legal form under the Laws of each Relevant Jurisdiction for the enforcement thereof against any of the Issuer, and, as the context may require, the Guarantors under such Laws; provided that, in the event of enforcement of this Agreement in the courts of each Relevant Jurisdiction, the signatures of the parties signing outside of such country must be notarized and apostilled and a translation of this Agreement into the applicable language, prepared by a court-approved translator or other official translator shall be required. The submission to jurisdiction, appointment of the Process Agent, consents and waivers by the Issuer and the Guarantors in Section 12 of this Agreement are valid and irrevocable.

 

(3) It is not necessary in order for the Collateral Agent or any Secured Party to enforce any rights or remedies under the Note Documents or solely by reason of the execution, delivery and performance by any of the Issuer or the Guarantors of the Note Documents that the Collateral Agent or any Secured Party be licensed or qualified with any Governmental Authority in any Relevant Jurisdiction, or be entitled to carry on business in any of the foregoing.

 

(hh) Centre of Main Interests and Establishments. For the purposes of Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (recast) (the “Regulation”), its centre of main interest (as that term is used in Article 3(1) of the Regulation) is situated in its jurisdiction of incorporation and it has no “establishment” (as that term is used in Article 2(10) of the Regulation) in any other jurisdiction.

 

(ii) Exchange Controls. Under current laws and regulations of each Relevant Jurisdiction and each political subdivision thereof, all interest, principal, premium, if any, and other payments due or to be made on the Convertible Note or otherwise pursuant to the Note Documents may be freely transferred out of such countries and may be paid in, or freely converted into, United States Dollars.

 

(jj) Customers and Suppliers. There exists no actual or threatened in writing termination, cancellation or limitation of, or modification to or change in, the business relationship between (a) any of the Issuer, the Guarantors, Airspan or any of their Subsidiaries, on the one hand, and any customer or any group thereof, on the other hand, whose agreements with any of the Issuer, the Guarantors, Airspan or any of their Subsidiaries are individually or in the aggregate material to the business or operations of the Issuer, the Guarantors, Airspan, and their Subsidiaries, or (b) any of the Issuer, the Guarantors, Airspan or any of their Subsidiaries, on the one hand, and any supplier or any group thereof, on the other hand, whose agreements with any of the Issuer, the Guarantors, Airspan or any of their Subsidiaries are individually or in the aggregate material to the business or operations of the Issuer, the Guarantors, Airspan, and their Subsidiaries; and there exists no present state of facts or circumstances that could give rise to or result in any such termination, cancellation, limitation, modification or change, in each case which could reasonably be expected to result in a Material Adverse Effect.

 

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(kk) Critical Technologies. Except for any items eligible for license exception ENC of the Export Administration Regulations (15 CFR Part 740.17), Issuer and its Subsidiaries do not produce, design, test, manufacture, fabricate or develop any ‘critical technologies’ as that term is defined at 31 C.F.R. Part 800.215 (each a “Critical Technology”). For any product that is eligible for license exception ENC of the Export Administration Regulations (15 CFR Part 740.17), Issuer, the Guarantors, Airspan, and their Subsidiaries have complied with all Bureau of Industry Security submission requirements to perfect such exception.

 

(ll) Products. (i) Except as set forth on Schedule 3.1(ll), each Product of the Issuer, Airspan, or any of their Subsidiaries has been and/or shall be manufactured, imported, possessed, owned, warehoused, marketed, promoted, sold, labeled, furnished, distributed and marketed in accordance with all applicable Regulatory Permits and applicable Laws, other than samples and Products shipped to the United States not for sale in the ordinary course of business without FCC approval and labeled as such; (ii) with respect to any Product being tested or manufactured by any of the Issuer, the Guarantors, Airspan or any of their Subsidiaries, such Person has received, and such Product shall be the subject of, all Material Regulatory Permits needed in connection with the testing or manufacture of such Product as such testing is currently being conducted by or on behalf of such Person, and such Person has not received any notice from any applicable Governmental Authority that such Governmental Authority is conducting an investigation or review of (A) such Person’s manufacturing facilities and processes for such Product which have disclosed any material deficiencies or violations of applicable Law (and/or the Material Regulatory Permits related to the manufacture of such Product), or (B) any such Material Regulatory Permit or that any such Material Regulatory Permit has been revoked or withdrawn, nor has any such Governmental Authority issued any order or recommendation stating that the development, testing and/or manufacturing of such Product by such Person should cease; and (iii) with respect to any Product marketed, leased, rented, or sold by any of the Issuer, the Guarantors, Airspan or any of their Subsidiaries, such Person shall have received, and such Product shall be the subject of, all Material Regulatory Permits needed in connection with the marketing and sales of such Product as currently being marketed, leased, rented, or sold by such Person, and such Person has not received any notice from any applicable Governmental Authority that such Governmental Authority is conducting an investigation or review of any such Material Regulatory Permit or approval or that any such Material Regulatory Permit has been revoked or withdrawn, nor has any such Governmental Authority issued any order or recommendation stating that such marketing or sales of such Product cease or that such Product be withdrawn from the marketplace.

 

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Each of the Secured Parties shall be entitled to rely on each such representation, warranty, certification or other statement made herein or in any Note Document, including, for the avoidance of doubt, all representations and warranties in this Section 3.1, notwithstanding whether any employee, representative or agent of a Secured Party seeking to enforce a remedy hereunder or under any other Note Document knew or had reason to know of any breach or potential breach of any such representation, warranty, certification or other statement and regardless of any investigation by any Secured Party.

 

3.2 Purchaser Representations and Warranties. Each Purchaser, severally and not jointly, represents and warrants to the Issuer that:

 

(a) Existence, Good Standing, and Power. Such Purchaser (i) is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, incorporation or formation, and (ii) has the requisite power and authority to enter into and perform its obligations under this Agreement.

 

(b) Due Execution and Binding Obligation. This Agreement has been duly executed and delivered by such Purchaser, and assuming the due authorization, execution and delivery of the same by the Issuer, this Agreement constitutes the valid and legally binding obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and by the availability of equitable remedies.

 

(c) Non Contravention. The execution and delivery of this Agreement, the purchase of the Convertible Notes and the compliance by such Purchaser with all of the provisions of this Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under: (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which such Purchaser is a party or by which such Purchaser is bound or to which any of the property or assets of such Purchaser is subject; (ii) the organizational documents of such Purchaser; or (iii) any statute or any judgment, order, rule or regulation of any court or Governmental Authority, domestic or foreign, having jurisdiction over such Purchaser or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a Purchaser Material Adverse Effect. For purposes of this Agreement, a “Purchaser Material Adverse Effect” means an event, change, development, occurrence, condition or effect with respect to the applicable Purchaser that would reasonably be expected to have a material adverse effect on such Purchaser’s ability to consummate the transactions contemplated hereby, including the purchase of the Convertible Notes.

 

(d) Accredited Investor;Acquisition for Own Account;No Violations. Such Purchaser (i) is an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3), (7), (8) or (9) under the Securities Act), (ii) is acquiring the Convertible Notes and the Underlying Shares (if any) only for its own account and not for the account of others, or if such Purchaser is subscribing for the Convertible Notes as a fiduciary or agent for one or more investor accounts, such Purchaser has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgments, representations and agreements herein on behalf of each owner of each such account, and (iii) is not acquiring the Convertible Notes and the Underlying Shares (if any) with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act.

 

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(e) Acknowledgement of Private Offering. Such Purchaser understands that the Convertible Notes and the Underlying Shares (if any) are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Convertible Notes and the Underlying Shares (if any) have not been registered under the Securities Act. Such Purchaser understands that the Convertible Notes and the Underlying Shares (if any) may not be offered, resold, transferred, pledged or otherwise disposed of by such Purchaser absent an effective registration statement under the Securities Act, except in accordance with the legend applicable to the Convertible Notes and the Underlying Shares (if any), and as a result of these transfer restrictions, such Purchaser may not be able to readily resell the Convertible Notes and the Underlying Shares (if any) and may be required to bear the financial risk of an investment in the Convertible Notes and the Underlying Shares (if any) for an indefinite period of time. Such Purchaser acknowledges and agrees that the Convertible Notes and the Underlying Shares (if any) will not be eligible for offer, resale, transfer, pledge or disposition pursuant to Rule 144 promulgated under the Securities Act (“Rule 144”) until at least one year from the filing of “Form 10 information” with the Commission after the Closing Date. Such Purchaser understands that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Convertible Notes and the Underlying Shares (if any).

 

(f) Direct Purchase from Issuer. Such Purchaser understands and agrees that such Purchaser is purchasing the Convertible Notes and the Underlying Shares (if any) directly from the Issuer. Such Purchaser further acknowledges that there have not been, and such Purchaser hereby agrees that it is not relying on, any representations, warranties, covenants or agreements made to such Purchaser by the Issuer, any of its Affiliates or any control persons, officers, directors, employees, partners, agents or representatives, any other party to the Transaction or any other person or entity, expressly or by implication, other than those representations, warranties, covenants and agreements of the Issuer and the Guarantors expressly set forth in this Agreement and in the other Note Documents, and such Purchaser hereby represents and warrants that it is relying exclusively on such Purchaser’s own sources of information, investment analysis and due diligence (including professional advice such Purchaser deems appropriate) with respect to this offering of the Convertible Notes and the Underlying Shares (if any), and the business, condition (financial and otherwise), management, operations, properties and prospects of the Issuer, the Guarantors, and Airspan, including but not limited to all business, legal, regulatory, accounting, credit and tax matters. Such Purchaser acknowledges that certain information provided to such Purchaser was based on projections, and such projections were prepared based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections.

 

(g) Investors Representations. Such Purchaser (i) is an institutional account as defined in FINRA Rule 4512(c), (ii) is a sophisticated investor, experienced in investing in equity transactions that are not registered under the Securities Act, and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities and (iii) has exercised independent judgment in evaluating its participation in the purchase of the Convertible Notes and the Underlying Shares (if any).

 

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(h) Acknowledgement of Private Placement Exemption. Such Purchaser is aware that the sale to it is being made in reliance on a private placement exemption from registration under the Securities Act.

 

(i) Opportunity to Review. In making its decision to purchase the Convertible Notes and the Underlying Shares (if any), such Purchaser has relied solely upon independent investigation made by such Purchaser and the Issuer’s and Guarantors’ representations and warranties in Section 3.1 and covenants contained in Section 4 and in the other Note Documents. Such Purchaser acknowledges and agrees that such Purchaser has received, and has had an adequate opportunity to review, such information as such Purchaser deems necessary in order to make an investment decision with respect to the Convertible Notes and the Underlying Shares (if any), including with respect to the Issuer and its Subsidiaries and the Transaction. Such Purchaser represents and agrees that Such Purchaser and such Purchaser’s professional advisor(s), if any, have had the full opportunity to ask such questions, receive such answers and obtain such information as such Purchaser and such undersigned’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Convertible Notes and the Underlying Shares (if any). Without limiting the generality of the foregoing, such Purchaser acknowledges that it has reviewed the Issuer’s filings with the Commission and any disclosure documents provided by or on behalf of the Issuer and the Guarantors in connection with the Issuance, the Note Documents and the Transaction.

 

(j) Direct Solicitation. Such Purchaser became aware of this offering of the Convertible Notes and the Underlying Shares (if any) solely by means of direct contact between such Purchaser and the Issuer or their respective representatives or Affiliates, and the Convertible Notes and the Underlying Shares (if any) were offered to such Purchaser solely by direct contact between such Purchaser and the Issuer or their respective representatives or Affiliates. Such Purchaser did not become aware of this offering of the Convertible Notes and the Underlying Shares (if any), nor were the Convertible Notes and the Underlying Shares (if any) offered to such Purchaser, by any other means. Such Purchaser acknowledges that the Issuer represents and warrants that the Convertible Notes and the Underlying Shares (if any) (i) were not offered by any form of general solicitation or general advertising and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.

 

(k) Risk Analysis. Such Purchaser has analyzed and considered the risks of an investment in the Convertible Notes and the Underlying Shares (if any) and determined that the Convertible Notes and the Underlying Shares (if any) are a suitable investment for such Purchaser and that such Purchaser is able at this time and in the foreseeable future to bear the economic risk of a total loss of such Purchaser’s investment in the Issuer. Such Purchaser acknowledges specifically that a possibility of total loss exists.

 

(l) No Governmental Endorsement. Such Purchaser understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Convertible Notes and the Underlying Shares (if any) or made any findings or determination as to the fairness of this investment.

 

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(m) Not Sanctioned. Such Purchaser is not, and is not owned or controlled by or acting on behalf of (in connection with the Transaction), a Sanctioned Person. Such Purchaser is not a non-U.S. shell bank or providing banking services to a non-U.S. shell bank. Such Purchaser represents that if it is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act of 2001 and its implementing regulations (collectively, the “BSA/PATRIOT Act”), that such Purchaser maintains policies and procedures reasonably designed to comply with its obligations under the BSA/PATRIOT Act. Such Purchaser also represents that it maintains, to the extent required, either directly or through the use of a third-party administrator, policies and procedures reasonably designed for the screening of any investors against Sanctions-related lists of blocked or restricted persons and to ensure that the funds held by such Purchaser and used to purchase the Convertible Notes are derived from lawful activities. For purposes of this Agreement, “Sanctioned Person” means at any time any person or entity: (a) listed on any Sanctions-related list of designated or blocked or restricted persons; (b) that is a national of, the government of, or any agency or instrumentality of the government of, or resident in, or organized under the laws of, a country or territory that is the target of comprehensive Sanctions from time to time (as of the date of this Agreement, Cuba, Iran, North Korea, Venezuela, Syria, and the Crimea region); or (c) owned or controlled by or acting on behalf of any of the foregoing.

 

(n) ERISA. If such Purchaser is an employee benefit plan that is subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), a plan, an individual retirement account or other arrangement that is subject to section 4975 of the Code or an employee benefit plan that is a governmental plan (as defined in section 3(32) of ERISA), a church plan (as defined in section 3(33) of ERISA), a non-U.S. plan (as described in section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code, or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) such Purchaser represents and warrants that (i) it has not relied on the Issuer or any of its Affiliates (the “Transaction Parties”) as the Plan’s fiduciary or for advice, with respect to its decision to acquire and hold the Convertible Notes and the Underlying Shares (if any), and none of the Transaction Parties shall at any time be relied upon as a Plan fiduciary with respect to any decision to acquire, continue to hold or transfer the Convertible Notes and the Underlying Shares (if any) and (ii) none of the acquisition, holding and/or transfer or disposition of the Convertible Notes and the Underlying Shares (if any) will result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code or any similar law or regulation.

 

(o) Sufficient Funds. Such Purchaser will have sufficient funds to pay such Purchaser’s Allocated Share of the Purchase Price pursuant to Section 2 at the time of payment of the Purchase Price in accordance with Section 2.

 

(p) No Broker Fee. No broker or finder is entitled to any brokerage or finder’s fee or commission payable by such Purchaser solely in connection with the sale of the Convertible Notes to such Purchaser based on any arrangement entered into by or on behalf of such Purchaser.

 

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Section 4. Covenants.

 

4.1 Affirmative Covenants. From and after the date of this Agreement until the date on which all of the Convertible Notes are no longer outstanding and all of the Obligations (other than yet unasserted contingent obligations) have been fully satisfied, the Note Parties shall, and shall cause each of their respective Subsidiaries to:

 

(a) Compliance with Laws. Comply in all respects with all applicable Laws, rules, regulations, orders, judgments and decrees of all Governmental Authorities except to the extent noncompliance therewith individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect.

 

(b) Financial Statements. Deliver to the Collateral Agent and the Holders (all in form and detail satisfactory to the Collateral Agent and the Required Holders):

 

(1) as soon as available, but in any event within ninety (90) days after the end of each fiscal year of the Issuer ended after the Closing Date, (A) a consolidated balance sheet of the Issuer and its consolidated Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year and to the Financial Plan (as defined below), all in reasonable detail and prepared in accordance with GAAP, such consolidated statements to be audited and accompanied by a report and opinion of Grant Thornton LLP or any other independent certified public accounting firm of nationally recognized standing selected by the Issuer and reasonably acceptable to the Collateral Agent, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit (other than a “going concern” or like qualification or exception in either case resulting solely from an upcoming maturity date of any Permitted Indebtedness occurring within one year from the time such opinion is delivered or as permitted in writing by the Collateral Agent); and (B) for each other Subsidiary of the Issuer for which separate audited annual reports are available, a copy of such annual report containing unconsolidated and consolidated balance sheets of such reporting Person and its Subsidiaries as of the end of such fiscal year, in each case accompanied by a certification of such accountants as to the amount of Distributable Income with respect to such Person and each such Subsidiary during the preceding fiscal year (except to the extent already explicitly included in the foregoing financial statements);

 

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(2) as soon as available, but in any event within forty-five (45) days after the end of each fiscal quarter (or such longer period as may be agreed by the Collateral Agent in its sole discretion), an unaudited consolidated balance sheet of the Issuer and its Subsidiaries at the end of such fiscal quarter, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal quarter and for the portion of the Issuer’s fiscal year then ended, where available, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and corresponding portion of the previous fiscal year and to the Financial Plan, all in reasonable detail and prepared in accordance with GAAP;

 

(3) as soon as available, but in any event within thirty (30) days after the end of each month (or forty-five (45) days after the end of each month that is also the last month of a fiscal quarter) (or such longer period as may be agreed by the Collateral Agent in its sole discretion), (i) an unaudited consolidated balance sheet of the Issuer and its Subsidiaries as at the end of such month, (ii) the related consolidated statements of income or operations, shareholders’ equity and cash flows for such month and for the portion of the Issuer’s fiscal year then ended, (iii) Unrestricted Cash, expense summaries and gross and net revenue with respect to each Product of the Issuer, the Guarantors and each of their Subsidiaries as at the end of such month (and if such month is also a fiscal quarter end, for such fiscal quarter) and (iv) if such month is also a fiscal quarter end, a summary detailing the Products sold to each Key Customer for such fiscal quarter and for the portion of the Issuer’s fiscal year then ended, where available, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and corresponding portion of the previous fiscal year and to the Financial Plan (if available), all in reasonable detail (and where applicable prepared in accordance with GAAP). Notwithstanding anything to the contrary herein, to the extent the deliveries under Sections 4.1(b)(2) and 4.1(b)(3) are duplicative, the Issuer shall only be required to provide such information once;

 

(4) as soon as available and not later than the date quarterly financial statements are required to be delivered pursuant to Section 4.1(b)(2) above, a report specifying the cash and Cash Equivalents of the Issuer and its Subsidiaries by entity and by account jurisdictions, Operating Expenses, account aging and other key operating metrics, and detailing the products sold by the Issuer, the Guarantors and their Subsidiaries, the number of revenue producing customers, backlog and headcount of the Issuer, the Guarantors and their Subsidiaries, in each case certified by the chief financial officer (or equivalent) of the Issuer;

 

(5) as soon as available, but in any event within forty-five (45) days after the end of each fiscal year of the Issuer and its Subsidiaries an annual operating budget and plan prepared on a quarterly basis together with financial projections for such year each in the form approved by the Issuer’s Board of Directors and otherwise in form and substance satisfactory to the Collateral Agent and the Required Holders (any such approved budget, plan and projection, a “Financial Plan”), including (i) a forecasted consolidated balance sheet and forecasted consolidated statements of income and cash flows of the Issuer and its Subsidiaries for each such fiscal year, together with pro forma Compliance Certificates for each such fiscal year and an explanation of the assumptions on which such forecasts are based, (ii) forecasted consolidated statements of income and cash flows of the Issuer and its Subsidiaries for each quarter of each such fiscal year, (iii) forecasts demonstrating adequate liquidity and projected compliance with the requirements of Section 4.2(p) through the Maturity Date of the Convertible Notes, together, in each case, with an explanation of the assumptions on which such forecasts are based and for each fiscal year (or portion thereof) through the Maturity Date, accompanied by a certificate of a Responsible Officer of the Issuer certifying that such Financial Plan is a reasonable estimate for the periods covered thereby;

 

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(6) if, as a result of any change in accounting principles and policies from those used in the preparation of the HistoricalAudited Financial Statements and pro forma combined financial statements as provided in the SEC Reports, the consolidated financial statements of the Issuer and its Subsidiaries delivered pursuant to, delivered pursuant to Sections 4.1(b)(1) and 4.1(b)(2) will differ in any material respect from the consolidated financial statements that would have been delivered pursuant to such subdivisions had no such change in accounting principles and policies been made, then, together with the first delivery of such financial statements after such change, one (1) or more statements of reconciliation for all such prior financial statements in form and substance reasonably satisfactory to Collateral Agent and Required Holders.

 

(c) Certificates;Other Information. Deliver to the Collateral Agent and the Holders (all in form and detail reasonably satisfactory to the Collateral Agent and the Required Holders):

 

(1) concurrently with the delivery of the financial statements referred to in Section 4.1(b)(1), a certificate of independent certified public accountants certifying such financial statements;

 

(2) (i) concurrently with the delivery of the financial statements referred to in Sections 4.1(b)(1), 4.1(b)(2), and 4.1(b)(3) (provided that solely with respect to financial statements referred to in Section 4.1(b)(3) with respect to a month that is also the last month in a fiscal quarter, such Compliance Certificate shall be combined with the Compliance Certificate delivered and such combined Compliance Certificate shall be required to be for the quarterly financial statement (without a requirement for a separate monthly Compliance Certificate for the month ended contemporaneously therewith)), a duly completed Compliance Certificate signed by the chief executive officer, chief financial officer, treasurer or other Responsible Officer of the Issuer and certifying to and, as applicable, attaching (i) the calculations necessary for determining compliance of the Issuer, the Guarantors and their Subsidiaries with Section 4.2(p) of this Agreement as of the last date of such the relevant fiscal period referred to therein, (ii) a copy in form satisfactory to the Collateral Agent and the Required Holders of management’s discussion and analysis for the financial conditions and results of operations of the Issuer, the Guarantors and their Subsidiaries for such period, as compared to prior periods and the Financial Plan, along with details of any material developments or proposals affecting the Issuer, the Guarantors or their business and the reason for any significant variations from the Financial Plan and prior periods, provided that delivery to the Collateral Agent of the board kit and related materials (“Board Reporting Materials”) with respect to such fiscal quarter shall be deemed to satisfy such requirement if the Board Reporting Materials are of a level of detail substantially similar to that provided to the Collateral Agent with respect to the Board Reporting Materials of Airspan provided to the Collateral Agent prior to the Closing Date in respect of the fiscal quarter of Airspan ended March 31, 2021, (iii) that all UCC financing statements and other appropriate filings, recordings or registrations, including all re-filings, re-recordings and re-registrations, have been filed of record in each governmental, municipal or other appropriate office in each jurisdiction necessary to protect and perfect the Liens of the Collateral Agent for the benefit of the Secured Parties under the Collateral Documents for a period of not less than twelve (12) months after the date of such certificate, or indicating otherwise; (iv) that such consolidated statements fairly present the financial condition, results of operations, shareholders’ equity and cash flows, expenses and sales, as applicable, the Issuer and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes, and (v) a report supplementing Schedules 1, 3(a), 4, 5, 6, 7 and 8 to the Security Agreement and Sections 5(a) and 18 of the Perfection Certificate;

 

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(3) promptly and in no case later than the tenth (10th) day after the same are received by a Responsible Officer of the Issuer or a Guarantor, copies of any final audit reports, management letters or recommendations submitted to Issuer’s or such Guarantor’s Board of Directors (or the audit committee of the Board of Directors) by independent accountants in connection with the accounts or books of the Issuer or any Subsidiary, or any audit of any of them;

 

(4) promptly after the same are released, copies of all press releases;

 

(5) promptly and in no case later than the third (3rd) Business Day after the furnishing thereof, copies of any material statement or report furnished to any holder of debt or equity securities of the Issuer, the Guarantors or any Subsidiary thereof pursuant to the terms of any Priority Lien Document, or any other indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Secured Parties pursuant hereto;

 

(6) promptly, and in any event within five (5) Business Days after receipt thereof by the Issuer, the Guarantors or any Subsidiary thereof, copies of (i) each notice or other correspondence received from any Governmental Authority (including the FCC, The Office of Communications, the SEC or comparable agencies in any applicable jurisdictions) concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of any of the Issuer, the Guarantors or any Subsidiary thereof; and (ii) subpoenas, requests for information and other notices regarding any licenses or permits necessary to operate the business, any active or potential investigation of, or claim or litigation against, any of the Issuer, the Guarantors or any Subsidiary thereof by any Governmental Authority, and the results of any Governmental Authorities or any inspections of any manufacturing facilities of any of the Issuer, the Guarantors or any Subsidiary thereof or to the extent provided to any of the Issuer, the Guarantors or a Subsidiary thereof, any third party suppliers of any of the Issuer, the Guarantors or any Subsidiary thereof by any Governmental Authority;

 

(7) promptly and in no case later than the third (3rd) Business Day following a Secured Party’s request, proof of the Issuer’s and Guarantor’s compliance with Section 4.2(p)(1);

 

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(8) within forty five (45) days (or such longer period as the Collateral Agent may agree in its sole discretion) after the Collateral Agent’s request (which shall not be made more than once per fiscal quarter), a report (x) supplementing the Perfection Certificate delivered to the Collateral Agent on or prior to the Closing Date (or as the context may require, the most recent supplement thereof) (as to other matters other than those described in Section 4.1(c)(2)(v) and disclosure schedules to this Agreement and the Collateral Documents and the other Note Documents), including (A) a list and description (including the street address, county or other relevant jurisdiction, state, record owner, book value thereof and, in the case of leases of property, lessor, lessee, expiration date and annual rental cost thereof) of all material real property acquired or leased during such fiscal year and a description of such other changes in the information included in such certificate or as may be necessary for the Schedules to the Collateral Documents and the other Note Documents to be accurate and complete; (B) a list of registration numbers for all patents, trademarks, service marks, trade names and copyrights awarded to any of the Issuer, the Guarantors or any Subsidiary thereof during such fiscal period, (C) a list of all patent applications, trademark applications, service mark applications, trade name applications and copyright applications submitted by any of the Issuer, the Guarantors or any Subsidiary thereof during such period and the status of each such application;

 

(9) within five (5) days of delivery, copies of all statements, reports and notices (including board kits and other materials) made available to the Board of Directors of the Issuer, any Guarantor, or any of their Subsidiaries or the holders of their Equity Interests generally;

 

(10) [Reserved];

 

(11) promptly, and in any event within ten (10) days after the Issuer, any Guarantor, or any of their Subsidiaries thereof obtains knowledge of any return, recovery, dispute or claim related to Products or inventory or other property or assets of the Issuer, the Guarantors or any of their Subsidiaries that involves more than One Million Dollars ($1,000,000) in each instance or in the aggregate;

 

(12) prior written notice of any change (i) in the Issuer or any Guarantor’s corporate name, (ii) in the Issuer or any Guarantor’s identity or corporate structure, or (iii) in the Issuer or any Guarantor’s Federal Taxpayer Identification Number. The Note Parties agree (and agree to cause their Subsidiaries) not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the UCC (or the local law equivalent in each applicable jurisdiction) or equivalent foreign filings or otherwise that are required in order for Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all of the Collateral and for the Collateral at all times following such change to have a valid, legal and perfected security interest as contemplated in the Note Documents. The Note Parties also agree promptly to notify Collateral Agent and the Holders if any material portion of the Collateral is damaged or destroyed which would be adverse to Issuer and its Subsidiaries or the Secured Parties in any material respect;

 

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(13) promptly, and in any event within five (5) Business Days after receipt thereof by the Issuer, the Guarantors or any Subsidiary, (i) copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of Issuer, the Guarantors or any Subsidiary and (ii) copies of any material written correspondence or any other material written communication from the FCC or any other Governmental Authority or other regulatory body;

 

(14) promptly upon their being filed, copies of (i) all copies of each annual report, financial statements, proxy statements, or other reports, notices or communications sent to its security holders acting in such capacity and (ii) all regular, special and periodic reports and all registration statements and prospectuses, if any, filed by the Issuer or any of its Subsidiaries with any securities exchange or with the SEC (including in connection with the Transactions);

 

(15) [Reserved];

 

(16) promptly, such additional information regarding the business, financial or corporate affairs of the Issuer or any Subsidiary, or compliance with the terms of the Note Documents, as the Collateral Agent or any of the Holders may from time to time reasonably request; or

 

(17) promptly upon request by the Collateral Agent or any Holder, information and documentation for purposes of compliance with beneficial ownership regulations or any applicable “know your customer” requirements under the PATRIOT Act or other applicable, domestic or foreign, anti-money laundering laws.

 

Documents required to be delivered pursuant to this Agreement shall be deemed to have been delivered on the date on which such documents are made available on the SEC’s Electronic Data Gathering, Analysis, and Retrieval system (or any successor system thereto). Documents required to be delivered pursuant to Section 4.1(b) or Section 4.1(c)(4) may additionally be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Issuer (or any Guarantor) posts such documents, or provides a link thereto on Airspan’s or Issuer’s website on the Internet at the website address listed in Schedule 4.1(c); or (ii) on which such documents are posted on Airspan’s or Issuer’s or their Subsidiaries’ behalf on an Internet or intranet website, if any, to which the Secured Parties have access (whether a commercial, third-party website or whether sponsored by the Collateral Agent); provided that upon the request of the Collateral Agent or any Holder, the Issuer shall (A) deliver paper copies of such documents to the Collateral Agent and or such Holder or (B) provide the Collateral Agent and the Holders (by fax or electronic mail) with notice of the posting of any such documents contemporaneously with each such posting. Notwithstanding anything to the contrary contained in Section 4.1(b), Section 4.1(c) or Section 4.1(d), effective immediately upon delivery of a written notice (an “Information Declination Notice”) by a Holder to the Issuer and the Collateral Agent that such Holder no longer wishes to receive the items described in such sections (or any subclauses thereof), neither the Issuer nor any Guarantor shall be required to deliver any such items to such Holder, pursuant to the terms of this Agreement or any other Note Document. Each such Holder may, in its sole discretion, rescind any Information Declination Notice by the delivery of written notice of such rescission to the Issuer, at which time any obligations to comply with Section 4.1(b), Section 4.1(c) and/or Section 4.1(d) (or any subclauses thereof) shall be reinstated as of the date of delivery of such notice.

 

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(d) Notices. The Note Parties shall furnish to the Collateral Agent and the Holders written notice of any of the following:

 

(1) promptly, but in any event not later than the third (3rd) Business Day after a Responsible Officer of the Issuer or any Subsidiary obtaining Knowledge of the occurrence of any Default or Event of Default, specifying the nature and extent thereof and the corrective action (if any) proposed to be taken with respect thereto;

 

(A) promptly, but in any event not later than five (5) Business Days after a Responsible Officer of the Issuer or any Subsidiary thereof obtaining Knowledge of any of the following: (A) (i) of the occurrence of any ERISA Event specifying in such notice a description ERISA Event and the actions, if any, proposed to be taken with respect to such ERISA Event together with a copy of any notice filed with the PBGC or the IRS pertaining to such ERISA Event, (ii) the receipt of any other notices received by Issuer, such Subsidiary or such ERISA Affiliate from the PBGC or any other governmental agency with respect thereto (attaching copies thereof), and/or (iii) (1) becoming aware that there has been an increase in Unfunded Pension Liabilities (not taking into account Pension Plans with negative Unfunded Pension Liabilities) of more than One Million Dollars ($1,000,000) since the date the representations hereunder are given or deemed given, or from any prior notice, as applicable, (2) of the existence of any Withdrawal Liability, (3) of the adoption of, or the commencement of contributions to, any Pension Plan subject to Section 412 of the Code by Issuer, any of its Subsidiaries or any ERISA Affiliate, or (4) of the adoption of any amendment to a Pension Plan subject to Section 412 of the Code which results in a material increase in contribution obligations of the Issuer, any of its Subsidiaries or any ERISA Affiliate, a detailed written description thereof, as well as, (B) together copies of such other documents or governmental reports or filings relating to any Pension Plan as Collateral Agent or a Holder may reasonably request;

 

(2) promptly, but in any event not later than the third (3rd) Business Day after a Responsible Officer of the Issuer, or any Subsidiary obtaining Knowledge of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including (i) breach or non-performance of, or any default under, any Material Indebtedness of the Issuer, or any subsidiary; (ii) any dispute, litigation, investigation, proceeding or suspension between Issuer, or any Subsidiary and any Governmental Authority; or (iii) the commencement of, or any material development in, any litigation or proceeding affecting Issuer, or any Subsidiary, including pursuant to any applicable Environmental Laws in each case to the extent it would reasonably be expected to result in a liability in excess of One Million Dollars ($1,000,000) or a Material Adverse Effect;

 

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(3) promptly, but in any event not later than five (5) Business Days after a Responsible Officer of the Issuer, or any Subsidiary obtaining Knowledge of any of the following (i) the termination of any Material Contract other than in accordance with its terms; or (ii) any material amendment to a Material Contract or other notice or event relating to a Material Contract or Material Indebtedness, in each case that could materially impair the value of the interests or rights of the Issuer or its Subsidiaries, and in each case, together with copies of all notices, requests and other documents (including amendments, waivers and other modifications) entered into or received in connection therewith;

 

(4) promptly, but in any event not later than five (5) Business Days after a Responsible Officer of the Issuer or any Subsidiary obtaining Knowledge of any of the following: (i) any litigation, arbitration, governmental investigation or Adverse Proceeding not previously disclosed to Issuer which has been instituted or is threatened against the Issuer, the Guarantors or their Subsidiaries or their properties which could be reasonably be expected to result in losses and/or expenses in excess of One Million Dollars ($1,000,000), or (ii) any material development in any Adverse Proceeding that could be reasonably expected to have a Material Adverse Effect, or that seeks to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the transactions contemplated hereby, written notice thereof together with such other information regarding the details thereof and anticipated costs and liabilities associated therewith as may be reasonably available to the Issuer and the Guarantors and/or necessary or desirable to enable the Secured Parties and their counsel to evaluate such matters;

 

(5) promptly, but in any event not later than five (5) Business Days after a Responsible Officer of the Issuer or any Subsidiary obtaining Knowledge of any of the following, written notice of any change in the board of directors (or similar governing body) of the Issuer or any of its subsidiaries (other than changes occurring on the Closing Date in connection with the Transaction);

 

(6) promptly, but in any event not later than ten (10) Business Days after a Responsible Officer of the Issuer or any Subsidiary obtaining Knowledge of any of the following, written notice of any material change in accounting policies or financial reporting practices by Issuer, the Guarantors or any Subsidiaries thereof;

 

(7) promptly, but in any event not later than five (5) Business Days after a Responsible Officer of the Issuer or any Subsidiary obtaining Knowledge of any material deviations or updates to the Patent Prosecution Workplan then in effect;

 

(8) [reserved];

 

(9) promptly, and in any event within five (5) Business Days after receipt thereof by Issuer, the Guarantors or any Subsidiary, copies of the findings of any inspections of any manufacturing facilities of the Issuer, the Guarantors, any Subsidiary or any third party suppliers of any such Person by any Governmental Authority in each case if the result of such inspection would reasonably be expected to result in a material fine, or have an adverse impact on Issuer and its Subsidiaries or their business in any material respect;

 

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(10) to the extent (i) any pre-existing products or services provided by Issuer or any of its Subsidiaries are re-categorized by the U.S. government as a Critical Technology, or would reasonably be considered to constitute the design, fabrication, development, testing, production or manufacture of a Critical Technology after a re-categorization of selected technologies by the U.S. government, or (ii) after the Closing Date the Issuer or any Guarantor engages in any activity that could reasonably be considered to constitute the design, fabrication, development, testing, production or manufacture of a Critical Technology, in each case, that is not eligible for license exception ENC, the Issuer shall promptly, and in any event within ten (10) Business Days after a Responsible Officer of the Issuer or its Subsidiaries obtains Knowledge thereof notify the Collateral Agent of such change in the categorization of its products or services; and

 

(11) shall timely deliver to the Collateral Agent and the applicable Holders all notices required by Sections 6,3, 6.4, and 6.5 of the Convertible Notes.

 

(e) Payment of Convertible Notes. The Issuer shall promptly make all payments in respect of the Convertible Notes on the dates and in the manner provided for in the Convertible Notes and this Agreement. A payment of principal or interest, if any, shall be considered paid on the date it is due if the applicable Holder or the Collateral Agent holds such payment by 3:00 p.m., New York City time, on that date, money, deposited by or on behalf of the Issuer sufficient to make the payment. Accrued and unpaid interest on any Convertible Note that is payable, and is punctually paid or duly provided for, on any Interest Payment Date (as defined in the Convertible Note) shall be paid to the Person in whose name that Convertible Note is registered at 5:00 p.m., New York City time, on the record date for such interest (or by such other method, payment details and address as previously specified in writing for such purpose by the Holder of record to the Issuer) without the need for the applicable Secured Party to present or surrender their Convertible Note or make any notation thereon, except that upon written request of the Issuer made concurrently with or reasonably promptly after payment or prepayment in full of any Convertible Note, such Holder shall surrender such Convertible Note for cancellation, reasonably promptly after any such request, to the Issuer at its principal executive office or at the place of payment most recently designated by the Issuer to the Holder in writing in accordance with Section 14.3. Prior to any sale or other disposition of any Convertible Note held by any Holder or such Person’s nominee, such Person will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Convertible Note to the Issuer in exchange for a new Convertible Note or Convertible Notes pursuant to Section 14.3 of this Agreement. The Issuer will afford the benefits of this Section to any institutional investor that is the direct or indirect transferee of any Convertible Note. Principal, interest and other Obligations (including the Make-Whole Amount or any other amounts or premiums comprising the Applicable Redemption Amount) (if any) and the Specified Fees (in the case of any Administration Fees, to the extent then-earned)) in each case if payable, shall be considered paid on the applicable date due if on such date the Collateral Agent or, as the context may require, the applicable Holder (or its designee) holds, in accordance with the terms of this Agreement and its Convertible Note, money sufficient to pay all such amounts and Obligations then due.

 

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On each Interest Payment Date prior to (i) the occurrence and continuance of an Event of Default pursuant to Section 6.1(h) or Section 6.1(i) or (ii) the occurrence and continuance of any other Event of Default with respect to which the Collateral Agent (at the direction of the Required Holders) has provided the Issuers with at least two (2) Business Days’ prior written notice that this Section 4.1(e) shall, subject to the terms of the Intercreditor Agreement, no longer apply, all amounts received from the Issuer on such Interest Payment Date shall be distributed by the Collateral Agent in the following order of priority (the “Payment Waterfall”):

 

(i) first, ratably to the Collateral Agent, fees, costs, expenses, reimbursements and indemnification amounts due and payable to the Collateral Agent pursuant to the terms of this Agreement and the other Note Documents (including, without limitation, fees, charges and disbursements of counsel to the Collateral Agent and amounts payable under Section 9 and Section 13) payable to the Collateral Agent;

 

(ii) second, to the payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including, without limitation, fees, charges and disbursements of counsel to the Holders and amounts payable under Section 1.2, Section 9 and Section 13 (other than any Make-Whole Amount or Applicable Redemption Amount)) payable to the Agent and/or Holders;

 

(iii) third, to payment of indemnities and other amounts (other than principal, interest and fees) payable to the Secured Parties, ratably among them in proportion to the amounts described in this clause third payable to them;

 

(iv) fourth, to payment of that portion of the Obligations (other than any Make-Whole Amount) constituting accrued and unpaid interest on the Convertible Notes, and premiums (including, without limitation, any Make- Whole Amount or any other amounts or premiums comprising the Applicable Redemption Amount (if any)) and fees other than those previously paid pursuant to clause “second” above, ratably among the Holders in proportion to the respective amounts described in this clause fourth payable to them;

 

(v) fifth, to payment of that portion of the Obligations constituting unpaid principal of the Convertible Notes, ratably among the Holders in proportion to the respective amounts described in this clause fifth held by them;

 

(vi) sixth, except in connection with any Excess Cash Flow Offer, Excess Proceeds Offer or Term Loan Repayment Offer which is declined by a Holder, to prepay the Convertible Notes on a pro rata basis (in accordance with the respective outstanding principal amounts thereof);

 

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(vii) seventh, to the payment of that portion of the Obligations constituting any Make-Whole Amount payable to the Holders;

 

(viii) (vii) seventheighth, to the payment in full of all other Obligations then owing, ratably among the Secured Parties in proportion to the respective amounts described in this clause seventh held by them; and

 

(ix) (viii) eighthninth, the balance, if any, after all of the Obligations have been indefeasibly paid in full in cash, to the Issuer or as otherwise required by applicable Law.

 

Subject to items “first” through “seventheighth” preceding, the Collateral Agent shall, subject to the terms of the Intercreditor Agreement, have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Obligations.

 

(f) Books and Records. (a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made in all material respects of all financial transactions and matters involving the assets and business of the Issuer or such Subsidiary, as the case may be and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over Issuer or such Subsidiary, as the case may be.

 

(g) Inspection Rights. Permit representatives and independent contractors of the Secured Parties to visit and inspect any of its properties, to examine its corporate, financial and operating books and records and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the expense of the Issuer and the Guarantors and at such reasonable times during normal business hours, upon reasonable advance notice to the Issuer not more than two (2) times each calendar year (in the absence of an Event of Default); provided, however, that (a) when an Event of Default exists the Secured Parties (or any of their respective representatives or independent contractors) may do any of the foregoing as often as may be reasonably desired, at the expense of the Issuer at any time during normal business hours and without advance notice; and (b) the Issuer shall pay the reasonable expenses of two visits and inspections during any calendar year unless an Event of Default has occurred and is continuing.

 

(h) Litigation Cooperation. Make available to the Secured Parties, without expense to the Secured Parties, Issuer, its Subsidiaries and their directors, officers, employees and agents and its corporate, financial and operating books and records to the extent that the Secured Parties may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or against the Secured Parties with respect to any Collateral (including the Assigned Patent Rights) or the Obligations.

 

(i) [Reserved].

 

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(j) Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization, except changes otherwise permitted under this Agreement or a loss of status that is not material or adverse in any respect to the Secured Parties or Obligations and that is reinstated promptly after any Note Party has Knowledge of such loss of status, the winding up or dissolution of Mimosa Networks International, LLC, a Delaware limited liability company, in order to effectuate the Divestiture Transaction pursuant to the terms of the Mimosa Purchase Agreement as in effect on March 8, 2023 and as may be amended with the prior written consent of the Collateral Agent in its sole discretion (which may be by email); (b) take all action to maintain all rights, privileges, permits, licenses and franchises reasonably necessary in the normal conduct of its business.

 

(k) Maintenance of Properties. (a) Maintain or cause to be maintained in good repair, working order and condition (ordinary wear and tear excepted) all material properties used or useful in the business of the Issuer and its Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof and (b) improve, maintain, enforce and protect all of the Material Intellectual Property, maintain and keep in full force and effect all issued or registered Material Intellectual Property and continue to prosecute all applications for any Material Intellectual Property.

 

(l) Collateral and Guarantee Requirement; Formation or Acquisition of Subsidiaries. At the Issuer’s expense, take all action necessary or reasonably requested by the Collateral Agent to ensure that the Collateral and Guarantee Requirement (subject to the limitations set forth therein, in this Agreement, in the Intercreditor Agreement, and in the other Note Documents) continues to be satisfied, including:

 

(1) Generally. With respect to each new Subsidiary of a Note Party acquired or formed from time to time, on or prior to the date such Person becomes a Subsidiary of the Issuer or a Guarantor (or such later date agreed by the Collateral Agent (in its sole discretion)), the Issuer shall send a notice to the Collateral Agent and the Holders (i) setting forth the date on which such Person became (or will become) a Subsidiary of a Note Party, (ii) setting forth all of the data required to be set forth in Schedule 3.1(l) with respect to all Subsidiaries of a Note Parties (and any such written notice shall be deemed to supplement Schedule 3.1(l) for all purposes hereof) and (iii) confirming that such Person will be a Guarantor and that the Equity Interests in and assets of such Person will become Collateral (or detailing why such Persons or assets are Excluded Assets or that such Person is an Immaterial Foreign Subsidiary).

 

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(2) Domestic Subsidiaries and Issuer.

 

(A) In the event that (x) any Person becomes a Domestic Subsidiary of a Note Party, or (y) the Issuer, any Guarantor, or any of their Subsidiaries divides or splits itself or another existing Subsidiary otherwise creates a new Domestic Subsidiary, then within twenty (20) days after such event (or such later date agreed by the Collateral Agent (in its sole discretion)) the Issuer and the Guarantors shall (a) cause such Subsidiary to become a Guarantor hereunder and a Grantor under the applicable Collateral Documents by executing and delivering to the Collateral Agent a Joinder Agreement to this Agreement, to the Intercreditor and Subordination Agreement and to the other applicable Collateral Documents, and (b) take all such actions and execute and deliver, or cause to be executed and delivered, and all such formalities, opinions, documents, instruments, agreements, and certificates and comply with such other requirements as are necessary or desirable to comply with the Subsidiary Accession Requirements similar to those described in (in each case, as applicable), the Closing Agenda, Section 3.01 of the Term Loan Credit Agreement, and/or Section 4.1(aa) of this Agreement with respect to Domestic Subsidiaries (or required to be delivered as part of the post-closing obligations described in Section 4.1(aa)), or that are otherwise requested by the Collateral Agent and necessary or desirable to protect, evidence or perfect the security interest of the Collateral Agent in a manner similar to the Liens and assets granted by the Issuer and the existing Guarantors under the existing Collateral Documents and/or to comply with the Collateral and Guarantee Requirement (including the delivery of a counterpart and/or supplement to the existing Security Documents or such new documents as are necessary or desirable to evidence, grant or such Lien in favor of Collateral Agent) (including, without limitation, any pledges of Equity Interests (other than with respect to Excluded Assets), together with any powers, certificates, registrations, filings, control agreements, intellectual property security agreements, local law Mortgages, security documents, Collateral Documents and/or equivalents required in connection therewith).

 

(B) Within the time periods set forth on Exhibit A (or such later date agreed by the Collateral Agent (in its sole discretion)), the Note Parties shall take the post-closing actions on Exhibit A and take such actions and execute and deliver, or cause to be executed and delivered, all formalities, opinions, documents, instruments, agreements, and certificates and other requirements as are described on Exhibit A, or that are requested by the Collateral Agent and necessary or desirable to protect, evidence or perfect the security interest of the Collateral Agent in a manner similar to the Liens and assets granted by the Issuer and the Guarantors under the other Priority Lien Documents and/or to comply with the Collateral and Guarantee Requirement or such new documents as are necessary or desirable to evidence, grant or perfect a First Priority Lien in such assets in favor of Collateral Agent, for the benefit of the Secured Parties.

 

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(3) Foreign Subsidiaries.

 

(A) Existing Asset Security Jurisdictions. In the event that (x) any Person becomes a Foreign Subsidiary of the Issuer or any Guarantor (other than any member of the Dense Air Group and the Specified Immaterial Foreign Subsidiary) that is organized or formed in an Asset Security Jurisdiction which is an Initial Asset Security Jurisdiction under the Note Documents or another Priority Lien Obligation as of the Closing Date or a jurisdiction in which an existing Foreign Subsidiary which is already a Guarantor is organized or formed (the “Existing Asset Security Jurisdictions” and each, an “Existing Asset Security Jurisdictions”), (y) the Issuer, the Guarantors or any of their Subsidiaries divides or splits itself or an existing Subsidiary otherwise creates a new Subsidiary that is organized or formed in an Existing Asset Security Jurisdiction (other than any member of the Dense Air Group), then, within (A) in the case of a Person organized or formedincorporated and registered in England and Wales, twenty (20) days after such event (or such later date agreed by the Collateral Agent (in its sole discretion)) or (B) in the case of a Person organized, incorporated or formed in a jurisdiction other than the United States of America or in England and Wales, sixty (60) days after such event (or such later date agreed by the Collateral Agent (in its sole discretion)), the Issuer and the Guarantors shall (a) cause such Subsidiary to become a Guarantor hereunder and a Grantor under the applicable Collateral Documents by executing and delivering to the Collateral Agent a Joinder Agreement to this Agreement, to the Intercreditor and Subordination Agreements and to the other applicable Collateral Documents, or as the context may require, such new or additional Note Documents to provide a guarantee by such new Subsidiary, and (b) take all such actions and execute and deliver, or cause to be executed and delivered, all such formalities, opinions, documents, instruments, agreements, and certificates, filings, registrations and other requirements as are necessary or desirable to provide Collateral Liens and perfection and Liens similar to those delivered with respect to a Guarantor organized in such Existing Asset Security Jurisdiction on the Closing Date (or required to be delivered as part of the post-closing obligations described on Exhibit A), or that are requested by the Collateral Agent and necessary or desirable to protect, evidence or perfect the security interest of the Collateral Agent in a manner similar to the Liens and assets granted by the Issuer or the existing Guarantors to the Collateral Agent for the benefit of the holders of any other Priority Lien Obligations or the Secured Parties under the existing Collateral Documents and/or to comply with the Collateral and Guarantee Requirement either by executing and delivering to the Collateral Agent a counterpart or supplement to the existing Collateral Documents or such new documents as are necessary or desirable to evidence, grant or perfect a First Priority Lien to the Collateral Agent for the benefit of the Secured Parties in the assets of such new Subsidiary and, if such new Subsidiary is a first tier Subsidiary of the Issuer or a Guarantor, the Equity Interests in such Subsidiary as has been previously provided to any holder of Priority Lien Obligations in the Existing Asset Security Jurisdictions (including, if necessary, any new Collateral Documents or additional documents, evidences, certificates, instruments, agreements and filings as may be reasonably requested by the Collateral Agent in order to provide a Guarantee or evidence, grant, perfect or protect a First Priority Lien in such assets in favor of Collateral Agent, for the benefit of the Secured Parties (including, without limitation, any parallel debt arrangements, local law debentures or share charges, any counterparts or joinders to the Intercompany Subordination Agreement, together with any notices, acknowledgements, powers, certificates, registrations, filings, or local law Mortgages or equivalent Collateral Documents or deliveries necessary or desirable in connection therewith to cover assets classes that had previously been granted or perfected in favor of any holder of Priority Lien Obligations by Collateral Documents in such jurisdiction or in order to cover additional asset classes which had not previously been granted and perfected in such jurisdiction, but that had been previously granted or had previously been required to be granted as Collateral to any holder of Priority Lien Obligations in the Existing Asset Security Jurisdictions generally, including, without limitation, any pledges of Equity Interests in subsidiaries of such Person in Existing Asset Security Jurisdictions)) (each in form and substance reasonably acceptable to the Collateral Agent, (a) and (b) collectively, the “Foreign Subsidiary Accession Requirements”).

 

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(B) Additional Asset Security Jurisdictions. In the event that (x) any Foreign Subsidiary (other than any member of the Dense Air Group) organized in a jurisdiction other than the Existing Asset Security Jurisdictions or the Other Material Jurisdictions ceases to be an Immaterial Foreign Subsidiary or (y) the Subsidiaries of the Issuer which are not Asset Security Providers (as defined below) taken as a whole exceed the Immaterial Foreign Subsidiary Threshold, then the Issuer shall notify the Collateral Agent of such event and, if requested by the Collateral Agent, within sixty (60) days after such event (or such later date agreed by the Collateral Agent (in its sole discretion) (the “Joinder Date”), the Note Parties shall cause a Subsidiary or Subsidiaries as they elect to become Guarantors and Asset Security Providers (or if such Subsidiary is organized in India for so long as a guarantee, pledge of its Equity Interests, or other grant of security interest would require consent of the Reserve Bank of India, the Issuer may designate other Subsidiaries of the Issuer which are not Guarantors and Asset Security Providers in jurisdictions other than India or the Existing Asset Security Jurisdictions) (such additional designated jurisdictions, the “Additional Asset Security Jurisdictions” and each, an “Additional Asset Security Jurisdiction” and together with any Existing Asset Security Jurisdictions, the “Asset Security Jurisdictions” and each, an “Asset Security Jurisdiction” and each such additional Subsidiary, an “Additional Asset Security Provider”) as it elects in order comply with the Collateral and Guarantee Requirement and Subsidiary Accession Requirements such that after giving pro forma effect to the Guarantees and additional Collateral Documents in the Additional Asset Security Jurisdiction the Subsidiaries that are not Guarantors and not Asset Security Providers shall not exceed the Immaterial Foreign Subsidiary Threshold. It being understood that the Issuer and each such Guarantor and Additional Asset Security Provider shall deliver and cause such Subsidiaries to take all actions and execute and deliver, or cause to be executed and delivered by not later than the applicable Joinder Date a joinder to this Agreement as a Guarantor, the Intercreditor and Subordination Agreements, and supplements and/or joinders to any applicable Collateral Documents and/or other Note Documents and/or applicable foreign equivalents of the Collateral Documents together with appropriate corporate formalities, opinions, documents, instruments, agreements and certificates and other requirements for such Guarantees and/or Collateral that would have be the local law equivalent of those conditions precedent required to be delivered pursuant to (in each case, as applicable) this Agreement, the Intercreditor and Subordination Agreements, the Collateral and Guarantee Requirement and the Foreign Subsidiary Accession Requirements, together with such additional documents, evidence, certificates, instruments, agreements and filings as may be reasonably requested by the Collateral Agent in order to evidence, grant, perfect or protect a First Priority Lien in the same types and classes of as had been previously required of the Issuer and the existing Guarantors in the Existing Asset Security Jurisdictions described above but, in each case, taking into account local law formalities, market practices and requirements in order to effectuate such guarantee and collateral arrangements).

 

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If the Note Parties (or any of their Subsidiaries) provides any additional Collateral or guarantees or takes any additional perfection steps with respect to any of its assets or properties for the benefit of another Holder of Priority Lien Obligations, it shall provide the Secured Parties with benefit of the same credit enhancements on a pari passu basis. Notwithstanding the foregoing, if the Issuer or a Guarantor does not own assets of a particular category at the time it enters into Collateral Document(s) in respect of assets of one or more other categories specified in the existing Collateral Documents or the Collateral and Guarantee Requirement, such Person will not be required to enter into a Collateral Document solely to create a security interest over future assets of that particular category unless the same is granted to another holder of Priority Lien Obligations or if the same can be effected under a composite Collateral Document that also secures assets it owns at the time it enters into the Collateral Document or pursuant to entering into a joinder to the same form of Collateral Document as entered into by another Guarantor in the same jurisdiction covering the same class of assets. However, if such Issuer or Guarantor subsequently acquires assets of that particular category and the Issuer or other existing Guarantors in that jurisdiction were required to create a security interest over such class of assets or would have been so required if such assets had been owned at the time the relevant Collateral Document(s) was entered into, the Issuer or such Guarantor shall notify the Collateral Agent by not later than the date that the next Compliance Certificate is delivered pursuant to Section 4.1(b)(5), and if requested by the Collateral Agent, as soon as reasonably practicable thereafter, such Person shall create and perfect its security interest over that asset or those assets to the extent required by the Collateral and Guarantee Requirement and take such actions required under the applicable Law in order to ensure the grant, perfection, protection and enforceability of a First Priority Lien in such assets.

 

Notwithstanding any other Collateral and Guarantee Requirement contained in this Agreement, it is understood and agreed with respect to the Japanese Guarantor that, other than the Assignment of Receivables from Japanese Guarantor to the Purchasers and the lenders under the Term Loan Credit Agreement there will be no requirement for the Issuer to enter into any additional Japanese law governed Collateral Documents to pledge its Equity Interests in the Japanese Guarantor or for the Japanese Guarantor to enter into any additional Collateral Documents to grant, evidence or perfect the Collateral Agent’s security interest in any of the Japanese Guarantor’s assets prior to November 30, 2021. If the Issuer has not delivered evidence in form and substance satisfactory to the Collateral Agent prior to November 30, 2021, that the Issuer (or one of the Guarantors which is a Domestic Subsidiary or a Subsidiary organized or formed in England and Wales) has become the Rakuten receivables billing entity, then within eight (8) months after such anniversary (or such later date agreed by the Collateral Agent (in its sole discretion)), Issuer and its Subsidiaries shall enter into such Collateral Documents necessary or desirable to evidence a pledge of the Issuer’s Equity Interests in the Japanese Guarantor and to grant, perfect, protect and evidence a First Priority Lien in the assets of the Japanese Guarantor (including, taking all such additional steps and providing all such additional Collateral Documents, corporate formalities,opinions,documents, instruments, agreements and certificates and other requirements that are the local law equivalents of those conditions precedent required to be delivered by the existing Guarantors pursuant to this Agreement by the other Asset Security Providers on the Closing Date (or required to be delivered as part of the post-closing obligations described in Exhibit A) taking into account Japanese local law formalities, market practices and requirements in order to effectuate the Collateral and Guarantee Requirement (or equivalent))..

 

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(m) Insurance. Keep the business of the Issuer and its Subsidiaries insured for risks and in amounts standard for companies in Issuer’s and its Subsidiaries’ industry and location. Insurance policies shall be in a form, with companies, and in amounts that are reasonably satisfactory to the Collateral Agent. (i) All property policies of the Issuer and its Subsidiaries shall have an endorsement evidencing, to the reasonable satisfaction of the Collateral Agent, the Collateral Agent as a lender loss payee; (ii) all liability policies of the Issuer and its Subsidiaries shall show, or have endorsements showing, the Collateral Agent as an additional insured; and (iii) all policies of the Issuer and its Subsidiaries (or their respective endorsements) shall provide that the insurer shall give the Collateral Agent at least thirty (30) days’ before canceling, amending or declining to renew its policy. At the Collateral Agent’s request, Issuer and its Subsidiaries shall deliver copies of policies, certificates of insurance, endorsements and evidence of all premium payments. If the Issuer or the Guarantors fail to obtain insurance as required under this Section 4.1(m) or to pay any amount or furnish any required proof of payment to third persons and the Collateral Agent, the Collateral Agent may upon concurrent notice to Issuer make all or part of such payment or obtain such insurance policies required in this Section 4.1(m), and take any action under the policies the Collateral Agent reasonably deems prudent.

 

(n) Conduct of Business and SPV Compliance. Issuer shall, and shall use all commercially reasonable efforts to the full extent of its power to cause each of its Subsidiaries to, comply with the following conduct of business provision (the “Conduct of Business Provisions”):

 

(1) Except with the advance written consent of the Collateral Agent acting at the direction of the Required Holders, the IP Hold-Co will not own any asset or property other than (i) the Company Patent Portfolio (as defined in the IP Hold-Co Operating Agreement) and the proceeds and revenues thereof; and (ii) incidental tangible property necessary for the ownership or maintenance of the Company Patent Portfolio;

 

(2) Issuer and its Subsidiaries (other than the IP Hold-Co) will (A) not own any Patents; (B) ensure that the IP Hold-Co maintains, and takes all commercially reasonable actions to assist the IP Hold-Co in maintaining, all issued patents in the Company Patent Portfolio in full force and effect (except for patents that naturally expire or as a result of pruning activities that rely on the advice of the Fortress Member) including paying all fees in a timely manner and taking all reasonable legal actions to protect and maintain such issued patents for which the Collateral Agent and Fortress has consented; (C) ensure that the IP Hold-Co takes all commercially reasonable actions to prosecute all patent applications in the Company Patent Portfolio in an attempt to obtain all patent rights possible using the same care and skill as used by patent practitioners in the industry and according the requirements of applicable Law (including the Patent Act); (D) not permit the IP Hold-Co to engage, directly or indirectly, in any business other than the Business (as defined in the IP Hold-Co Operating Agreement) and it will conduct its Business (as defined in the IP Hold-Co Operating Agreement) as presently conducted, except upon the occurrence of and for the duration of a Liquidation Event or in connection with any Monetization (as defined in the IP Hold-Co Operating Agreement), in which case it will be operated in the manner directed by the Fortress Manager (as defined in the IP Hold-Co Operating Agreement) pursuant to the terms of the IP Hold-Co Operating Agreement; (E) will not, and will ensure that the IP Hold-Co does not enter into any contract, agreement or transaction with any third party or any Affiliate except as otherwise expressly permitted in the Note Documents or as expressly consented to by the Collateral Agent, provided that, in the event the Fortress Member (as defined in the IP Hold-Co Operating Agreement) consent to such contract, agreement or transaction, the terms and conditions of such contract, agreement or transaction (other than any contract, agreement or transaction with the Borrower Member (as defined in the IP Hold-Co Operating Agreement) that is expressly permitted under the Term Loan Credit Agreement) must be on the terms described in Section 4.2(f) of this Agreement; or (F) will not, and will ensure that the IP Hold-Co does not, violate the terms of its Organization Documents or any other Note Document;

 

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(3) The Issuer and each Guarantor has done or caused to be done and will do all things necessary to observe organizational formalities and preserve the existence of the IP Hold-Co, and neither the Issuer nor or any of its Subsidiaries will: (A) amend, modify or otherwise change the IP Hold-Co’s Organization Documents without the prior written consent of the Collateral Agent acting at the direction of the Required Holders; (B) commingle the funds and other assets of the IP Hold-Co with those of the Issuer or any other Guarantor or any of their Subsidiaries, Affiliates or members, or any Affiliate of any constituent party of the thereof, or any other Person and (C) permit the IP Hold-Co to (x) guarantee or become obligated for the debts of any other Person, other than the Priority Lien Obligations, in accordance with the terms of the Intercreditor Agreement, or (y) pledge its assets for the debts or obligations of any other Person, other than the Priority Lien Obligations, in accordance with the terms of the Intercreditor Agreement, except upon the occurrence of and for the duration of a Liquidation Event or in connection with any Monetization (as defined in the IP Hold-Co Operating Agreement), in which case it will operated in the manner directed by the Fortress Manager (as defined in the IP Hold-Co Operating Agreement) pursuant to the terms of the IP Hold-Co Operating Agreement; and

 

(4) Except upon the occurrence of and for the duration of a Liquidation Event or in connection with any Monetization (as defined in the IP Hold-Co Operating Agreement), in which case it will be operated in the manner directed by the Fortress Manager (as defined in the IP Hold-Co Operating Agreement) pursuant to the terms of the IP Hold-Co Operating Agreement, the IP Hold-Co will comply with the requirements described in Section 17 of the IP Hold-Co Operating Agreement.

 

(o) Controlled Accounts; Cash Management Systems. The Note Parties shall, and shall cause each of their Subsidiaries to, establish and maintain cash management systems reasonably acceptable to the Collateral Agent. (x) The Issuer and (y) its Subsidiaries which are Note Parties and Domestic Subsidiaries shall deliver to the Collateral Agent a fully executed Control Agreement with respect to each of their Deposit Accounts or Securities Accounts other than Excluded Accounts and De Minimis Accounts, and the Note Parties and their Subsidiaries which are not Domestic Subsidiaries shall (i) take such steps as required by the Collateral Documents or which are otherwise necessary or desirable to make such accounts Controlled Accounts and provide for the equivalent perfection and priority arrangements with respect to accounts (and the funds deposited therein) under the laws of the applicable non- US jurisdiction or (ii) ensure that not more than Two Million Dollars ($2,000,000) in the aggregate in excess of the amount necessary for payroll and to operate its business as currently operated are held at any time in the deposit accounts, security accounts, custodial accounts or equivalent of the Issuer, the Guarantors and their Subsidiaries in jurisdictions other than a State of the United States, England and Wales or other jurisdictions in which such accounts can be subject to a Control Agreement.

 

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Other than Excluded Accounts, De Minimis Accounts, or as expressly agreed with the Collateral Agent, the Issuer and the Guarantors shall not maintain any Deposit Account or Securities Accounts not subject to a Control Agreement (or otherwise Controlled Accounts); provided that the Issuer and the Guarantors may open new accounts, so long as prior to opening any such account (i) the Issuer has notified the Collateral Agent of the account and (ii) the financial institution with which such account is opened, together with the Issuer or such Guarantor has executed and delivered to the Collateral Agent, a fully executed Control Agreement with respect to such account (or equivalent arrangement to ensure that such account is a Controlled Account), each in form and substance satisfactory to the Collateral Agent. The Issuer and the Guarantors shall ensure that their Subsidiaries which are (x) not Guarantors or (y) are organized or formed in jurisdictions where Control Agreements or equivalent cash control arrangements are not possible sweep cash and Cash Equivalents in their accounts into Controlled Accounts of the Issuer or a Guarantor on a periodic basis (prior to an Event of Default, at least once per week and after the occurrence of an Event of Default, as frequently as requested by the Collateral Agent but not more frequently than once daily); provided that prior to receipt of a written notice of an Event of Default from Agent, the Subsidiaries shall only be required to sweep into the Controlled Accounts, cash and Cash Equivalents held in such accounts in excess of the amounts necessary for required debt service and to operate its business as currently operated (in each case, based on the amounts needed for such debt service and operations as reflected in the historical financial statements and the projections delivered to the Secured Parties from time to time in accordance with the terms of this Agreement). To the fullest extent permitted by applicable Law and in order to ensure that such periodic distributions described above are timely made, the Note Parties shall cause each of their Subsidiaries to declare and pay dividends and/or such other payments or distributions of the types and in the manner and frequency required by Section 4.2(l).

 

(p) Required Holder Meetings. The Issuer and its Subsidiaries will, upon the request of Collateral Agent or the Required Holders, participate in a meeting of the Collateral Agent and the Required Holders once during each fiscal quarter to be held at Airspan’s corporate offices (or at such other location as may be agreed to by the Issuer, Collateral Agent and the Required Holders) at such time as may be agreed to by the Issuer and Collateral Agent.

 

(q) [Reserved].

 

(r) Assigned Patents and Assigned Patent Rights.

 

(1) The Issuer shall not, and shall not permit any Note Party to, waive or modify, and the Issuer shall, and shall cause each Note Party to, use its best efforts not to suffer the waiver or modification of, any legal rights of a material nature arising out of or relating to the Assigned Patent Rights without the express prior written consent of the Collateral Agent (acting at the direction of the Required Holders). Issuer shall, and shall cause each Guarantor to, use its best efforts in obtaining patent protection for applications for Intellectual Property including but not limited to applications for patents, including submitting claim amendments that may change the material scope of coverage of the claims. For the avoidance of doubt, patent prosecution of such pending patent applications will proceed without involvement of the Collateral Agent (except during the pendency of an Event of Default).

 

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(2) The Note Parties will be liable to the Collateral Agent (or as applicable such other Secured Parties) (and the Issuer shall, and shall cause each Note Party to, pay the applicable Secured Parties within fifteen (15) days of delivery by the Collateral Agent of any demand or invoice) for any expenditures by a Secured Party in connection with (i) the maintenance and preservation of the Collateral, including, but not limited to, taxes, recording fees, appraisal fees, certificate of title charges, recording and filing fees (including UCC financing statement fees and other equivalent filing fees and expenses in other jurisdictions, taxes (including documentary stamps) and search fees), fees arising out of or relating to the Assigned Patent Rights, the fees and disbursements for the Secured Parties’ counsel, levies, insurance and repairs; and (ii) in addition to damages for breach of warranty, misrepresentation, or breach of covenant by the Issuer or any Guarantor, the enforcement of this Agreement, the Convertible Notes, the Intercreditor and Subordination Agreements, and the Note Documents as a result of such breach or misrepresentation, including, but not limited to, the repossession, holding, preparation for sale, and the sale of the Collateral (including attorneys’ and accountants’ fees and expenses), and all such liabilities shall be included in the definition of Obligations, shall be secured by the security interest granted herein, and shall be payable upon demand.

 

(3) The Issuer shall, and shall cause each Note Party to, use its best efforts to ensure that no standards-setting organization shall impose an obligation to license any of the Assigned Patents on particular terms or conditions. No Note Party shall agree to be subject to any covenant not to sue or other restrictions on its enforcement or enjoyment of the Assigned Patent Rights without the consent of the Fortress Member.

 

(4) None of the Issuer nor any Guarantor knows of or has received any notice or information of any kind suggesting that the Assigned Patents may be invalid, unpatentable, or unenforceable other than (i) official notices from patent offices in the course of patent prosecution and (ii) allegations from third parties in litigation involving, or invited to take a license under, certain Assigned Patents.

 

(5) All applications to Patent any Intellectual Property that is owned by the Note Parties (or any of their Subsidiaries) shall be filed in the name of the IP Hold-Co, and (i) the Issuer shall (and shall, or shall cause each of its Subsidiaries to), file all documents and take such other actions as shall be necessary, desirable or reasonably requested by the Collateral Agent to assign all right, title and interest in and to such patent application, to Issuer or any of its Subsidiaries, including the execution of, and recording with the relevant filing office of, a Patent Assignment Agreement with respect to such patent application, and (ii) each Patent application shall automatically be deemed an Assigned Patent hereunder, and Issuer and each of its Subsidiaries, as applicable, assign to IP Hold-Co all right, title, and interest in and to such Patent applications.

 

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(6) All Patents acquired by Issuer or any of its Subsidiaries from any other Person, or which any right, title or interest arises in Issuer or any of its Subsidiaries, shall be assigned to and held in the name of IP Hold-Co and (i) the Issuer shall, or shall cause any of its Subsidiaries to, file all documents and take such other actions as shall be necessary or reasonably requested by the Secured Parties to cause all right, title and interest in and to such Patents, and all related Trade Secrets, to vest in IP Hold-Co including the execution of, and recording with the relevant filing office of, a Patent Assignment Agreement with respect to such Patents, and (ii) such Patents shall automatically be deemed Assigned Patents hereunder and shall be owned by IP Hold-Co together with all Assigned Patent Rights associated therewith, and Issuer and each of its Subsidiaries, as applicable, hereby assign to IP Hold-Co all right, title, and interest in and to such Patents.

 

(7) The Issuer shall, and shall cause each Note Party to, with respect to all Assigned Patents, obtain, maintain and preserve, comply with in all material respects (except where the failure to so comply could not reasonably be expected to result in the loss thereof), and take all necessary action to timely renew, all Regulatory Permits.

 

(8) The Note Parties shall, and shall cause each of their Subsidiaries to (i) maintain or cause to be maintained each Regulatory Permit, from, or file any notice or registration in, each jurisdiction in which the Issuer or any Guarantor or licensee is required to obtain any Regulatory Permit or file any notice or registration, in each case, that is necessary and material for the maintenance of the Assigned Patents, and (ii) upon request, promptly provide evidence of same to Collateral Agent.

 

(s) Consent of Licensors. The Issuer shall, at the end of each fiscal quarter after the Issuer or any of its Subsidiaries enter into or become bound by any Material Contract or any inbound license or agreement (other than (i) over-the-counter software that is commercially available to the public and (ii) any license of or agreement relating to Intellectual Property that is not Material Intellectual Property) after the Closing Date: (a) provide written notice or a brief summary to the Collateral Agent with a description of the material terms of such Material Contract, license or agreement if the actions described in clause (b) below would need to be taken with respect to such Material Contract license or agreement if required by the Collateral Agent; and (b) take such commercially reasonable actions as the Collateral Agent may reasonably request to obtain the consent of, or waiver by, any Person whose consent or waiver is necessary for the Collateral Agent to be granted and perfect a valid security interest in such Material Contract, license or agreement and to fully exercise its rights under any of the Note Documents in the event of a disposition or liquidation of the rights, assets or property that is the subject of such Material Contract, license or agreement.

 

(t) Maintenance of Regulatory Permits, Contracts, Intellectual Property, Etc. The Note Parties shall (and shall cause each of their Subsidiaries to), with respect to the Assigned Patents, (i) maintain in full force and effect all Material Intellectual Property, and except where the failure to do so could not reasonably be expected to have a Material Adverse Effect, all other contract rights, authorizations or other rights necessary or material for the operations of its business, and comply with the terms and conditions applicable to the foregoing; (ii) maintain in full force and effect or pursue the prosecution of, as the case may be, and pay all costs and expenses relating to, all Material Intellectual Property owned or controlled by the Issuer or such Guarantor or their respective Subsidiaries, excluding the maintenance of Intellectual Property that in the commercially reasonable business judgment of the Issuer and the Guarantors is not necessary or material for the conduct of the business of the Issuer or any Guarantor or their Subsidiaries; (iii) notify the Collateral Agent, promptly after any Responsible Officer of the Issuer or any Guarantor has knowledge thereof, of any infringement or other violation by any Person of its Material Intellectual Property; and (iv) use commercially reasonable efforts to pursue, enforce, and maintain in full force and effect legal protection (except as the Issuer or the Guarantors may otherwise determine in their reasonable business judgment) for all Material Intellectual Property developed or controlled by such Person or any of its respective Subsidiaries.

 

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(u) Pari Passu Ranking. The Note Parties shall, and shall cause each of their Subsidiaries to, take, all actions to ensure that their obligations under the Note Documents rank at all times at least pari passu in right of priority and payment with the claims of all of the Priority Lien Obligations and senior to all other obligations, except for obligations mandatorily preferred by law applying to companies generally and Permitted Indebtedness that is expressly permitted by the terms of this Agreement to be senior in priority of Liens to the Obligations.

 

(v) Subsidiary Distributions; Upstreaming Cashflows; Investment Documents.

 

(1) The Note Parties shall, and shall cause each of their Subsidiaries and Investments to, declare, pay and upstream all dividends or other payments or other distributions of all cash and Cash Equivalents (each a, “Distribution”) of such Persons to the Note Parties on account of such Note Parties’ ownership interests in the Equity Interests of such Persons to the maximum extent and with the maximum frequency permitted by applicable Law. Each of the Note Parties shall ensure that (i) excess cashflows from each Subsidiary of the Note Parties are upstreamed to the Issuer and/or Airspan in an amount at least equal to the lesser of (A) ninety percent (90%) of Free Cash Flow of such Subsidiary with respect to the period as to which Distributable Income for such Subsidiary was measured for purposes of clause (B) hereof, and (B) the maximum amount of Distributable Income with respect to such Subsidiary as of the date of such Distribution permitted to be distributed under the applicable Laws of the Relevant Jurisdiction, as determined with respect to the preceding fiscal year of such Subsidiary or, in the case of Distributions made more frequently than annually, such lesser period of time as may have elapsed since the most recent determination of Distributable Income with respect to such Subsidiary hereunder (or since the Closing Date, in the case of the initial Distribution hereunder by such Subsidiary); and, (ii) to the extent restrictions are imposed by any Governmental Authority on Distributions in Dollars by any Subsidiary, cause and permit such Subsidiary to maximize Dollars available for distribution hereunder to the maximum extent permitted by applicable Law, including through the purchase and sale of Dollar-denominated Cash Equivalent debt instruments issued by the sovereign of such jurisdiction, through any other appropriate mechanism for the acquisition of Dollars in any exchange market, or through the preferential allocation towards any such distribution of Dollar- denominated and/or off-shore revenues received by such Subsidiary. Notwithstanding the foregoing, Issuer shall not be required to, and shall not be required to cause its Subsidiaries to, make distributions from any Subsidiary to the extent that in the reasonable business discretion of the Issuer, including in respect of restrictions imposed by any Governmental Authority it would be illegal or have a material adverse tax consequence to Issuer, or otherwise have a material and detrimental impact on the value of such distributions.

 

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(2) The Note Parties shall, and shall cause each of their Subsidiaries and Investments to, diligently enforce all of their rights and remedies in a timely manner under the relevant Organization Documents, shareholders agreements and/or investment agreements with respect to such Subsidiaries and Investments. The Note Parties shall not, and shall ensure that no Subsidiary shall amend, waive, supplement or terminate any rights under any of the Organization Documents, shareholders agreements or other investment documents with respect to any of their Subsidiaries or Investments in a manner that would adversely affect the Note Parties or the rights and remedies of the Secured Parties in any material respect, provided that the Issuer shall be permitted to amend its Organization Documents to authorize the issuance of Qualified Equity Interests in connection with a conversion under the Note Documents as in effect on the Closing Date (or as the same may be amended from time to time to the extent permitted by the Intercreditor Agreement). Issuer shall not, nor shall it permit any of its Subsidiaries to enter into any agreement that limits the ability of any Subsidiary to make a dividend or distribution payment to the Issuer or the Guarantors or to otherwise transfer any property to such Persons, provided, however, that this sentence shall not prohibit any negative pledge incurred or provided in favor of any holder of (x) Priority Lien Obligations as in effect on the Closing Date (or as the same may be expressly permitted to be amended in accordance with the terms hereof and of the Intercreditor Agreement) and (y) other Indebtedness existing on the Closing Date permitted under Section 4.2(i) solely to the extent any such negative pledge relates to the property financed by or the subject of such Indebtedness.

 

(w) Critical Technologies. To the extent that the Issuer’s or any of the Guarantor’s products or services become categorized as a Critical Technology other than any items eligible for license exception ENC of the Export Administration Regulations (15 CFR Part 740.17), the Note Parties shall promptly notify the Collateral Agent of such categorization.

 

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(x) Further Assurances. Subject to the applicable limitations set forth in the Note Documents and the Intercreditor Agreement (including those set forth in the definition of Collateral and Guarantee Requirement and in the Collateral Documents), take all such actions and execute, acknowledge and deliver, and cause each of its Subsidiaries to take such all actions and execute, acknowledge and deliver, at their sole cost and expense, such agreements, instruments or other documents as the Collateral Agent or Required Holders may reasonably require from time to time in order (i) to carry out more effectively the purposes of this Agreement, the Intercreditor Agreement, and the other Note Documents, (ii) to ensure that the Obligations are guaranteed in the manner contemplated herein and that the current and future assets and property of the Note Parties and their Subsidiaries are subject to valid and perfected first priorityFirst Priority Liens of the type contemplated by this Agreement and the other Note Documents in accordance with the Collateral and Guarantee Requirement and the Intercreditor Agreement, (iii) to establish and maintain the validity and effectiveness of any of the Note Documents and, subject to the terms of the Intercreditor Agreement, the validity, perfection and priority of the Liens intended to be created thereby and by the Intercreditor Agreement, and (iv) to better assure, convey, grant, assign, transfer and confirm unto each Secured Party the rights now or hereafter intended to be granted to it under this Agreement or any other Note Document (including to ensure that the Secured Parties have the benefit of any Collateral, Guarantees, or other credit enhancement provided to the other Holders of the Priority Lien Obligations). In furtherance of the foregoing, to the maximum extent permitted by applicable Law, the Issuer, on behalf of itself and each Guarantor, (i) authorizes the Collateral Agent to execute any such agreements, notices, acknowledgements, instruments or other documents in the Issuer’s or applicable Guarantor’s name to the extent such authorization is granted under the Collateral Documents and to file such agreements, notices, acknowledgments, instruments or other documents in any appropriate filing office, (ii) authorizes the Collateral Agent to file any financing statement, registrations or similar required hereunder or under any other Note Document, and any continuation statement or amendment with respect thereto, in any appropriate filing office without the signature of the Issuer or applicable Guarantor, (iii) ratifies the filing of any financing statement, and any continuation statement or amendment or equivalent with respect thereto, filed without the signature of the Issuer or applicable Guarantor prior to the Closing Date and (iv) agrees to execute any further documents, financing statements, agreements, intercreditor or subordination agreements, instruments, certificates, notices and acknowledgments (or their equivalents in an applicable Relevant Jurisdiction) and take all such further actions (including the filing and recordation of financing statements, fixture filings, Mortgages and/or amendments thereto and other documents, or any equivalent action in an applicable Relevant Jurisdiction) as the Collateral Agent reasonably requests to evidence, perfect, protect or continue the Collateral Agent’s Lien in the Collateral or to effect the purposes of this Agreement, the Intercreditor Agreement, and the other Note Documents and correct any material defect or error that may be discovered in the execution, acknowledgment, filing or recordation (or equivalent defect or error in a given Relevant Jurisdiction) of any Collateral Document or other document or instrument relating to this Agreement, the Intercreditor Agreement, the Note Documents, the Priority Lien Documents, or any of the Collateral.

 

(y) Covenants Regarding Products and Compliance with Material Regulatory Permits. The Note Parties shall, and shall cause each of their Subsidiaries to comply in all material respects with all Material Regulatory Permits at all times issued by any Governmental Authority with respect to such development, testing, manufacture, marketing, sales, or leasing of such Product by such Person as such activities are at any such time being conducted by such Person, including the timely filing (after giving effect to any extension duly obtained) of all notifications, reports, submissions, Material Regulatory Permit renewals, cost reports and other reports of every kind whatsoever required by applicable Laws (which reports shall be materially accurate and complete in all material respects and not misleading in any material respect and shall not remain open or unsettled) and shall operate in a manner such that the Material Regulatory Permits remain in full force and effect.

 

(z) The Issuer shall deliver the following updated Schedules or supplements to Schedules (to the extent there are any updates) to the Agent within thirty (30) days after the date hereof (or such later date as may be agreed to by the Agent in writing (including by email) in its sole discretion): Schedules 3.1(d), 3.1(l), 3.1(q), 3.1(t)(3), 3.1(x)(1), 3.1(x)(2), 3.1(x)(3), 3.1(x)(5), 3.1(x)(6), 3.1(x)(10), 3.1(x)(11), 3.1(x)(14), 3.1(bb), 3.1(cc), 3.1(dd) and 3.1(ll) Schedule 3.1(x)(1) to the NPA and Schedules 1, 3(a), Schedule 3(b), 4, 5, 6, 7 and 8 to the Security Agreement.

 

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(aa) Post-Closing Obligations. The Note Parties shall, and shall cause each of their Subsidiaries to, deliver, or cause to be delivered, to Collateral Agent, or otherwise complete to Collateral Agent’s reasonable satisfaction, the items set forth in (x) the list of post-closing deliverables set forth in the Closing Agenda and (y) in the list of post-merger deliverables set forth in Paragraph 4 of Exhibit B to the Merger Consent (clauses (x) and (y) together, the “Post Closing Obligations”) on or before the date specified for such item in the applicable Exhibit or in clauses (x) and (y) above (or such later date determined by Collateral Agent in its sole discretion).

 

(bb) Third Amendment Effective Date Covenants. Beginning on the Third Amendment Effective Date:

 

(1) Company Financial Advisor. The Note Parties shall continue to retain the Company Financial Advisor (or a prompt replacement Company Financial Advisor acceptable to the Agent) until the Obligations have been fully satisfied (or such earlier time as the Required Holders may agree in writing in their sole discretion), on substantially the same terms to those the Company Financial Advisor is engaged upon as of the Third Amendment Effective Date, and in any event such engagement shall specifically provide, among other things, that the Agent and Holders shall be permitted to meet and speak directly with the Company Financial Advisor from time to time promptly following request and without the Issuer or any Note Party present at such meetings or a party to any such calls.

 

(2) Performance Milestones. The Note Parties shall comply with the Performance Milestones described on Annex C within the time periods specified therefor on Annex C hereto (each such date as may be extended by the Agent in writing in its sole discretion, a “Performance Due Date”). The Note Parties shall promptly notify the Agent (for further distribution to the Holders) if they do not expect to comply with all of the Performance Milestones and other requirements of Annex C by their respective Performance Due Dates and shall notify the Agent not later than three (3) Business Days after the Loan Parties fail to fully comply with the Performance Milestones and reporting described in Annex C by the applicable Performance Due Date.

 

(cc) Post-Third Amendment Effective Date Obligations. The Note Parties shall deliver, or cause to be delivered, to the Agent, or otherwise complete to the Agent’s satisfaction, each of the items set forth in the “Post-Closing Obligations” section of the list of closing and post-closing deliverables attached as Exhibit E to the Third Amendment on or before the date specified therein (or, in each case, such later date agreed by Agent in writing (which may be via email) in its sole discretion).

 

4.2 Negative Covenants. From the date of this Agreement until all of the Convertible Notes are no longer outstanding and all of the Convertible Notes are no longer outstanding and all of the other Obligations (other than yet unasserted contingent obligations) have been fully satisfied, in cash, no Note Party shall nor shall any Note Party permit any Guarantor or any of their Subsidiaries to, directly or indirectly:

 

(a) Dispositions. Transfer, or permit any of its Subsidiaries to Transfer, in one (1) transaction or a series of transactions, any Equity Interests issued by its Subsidiaries or all or any part of its or its Subsidiary’s business, property or assets except for:

 

(1) Transfers of surplus, worn-out or obsolete equipment no longer used or useful in the business of the Issuer and its Subsidiaries;

 

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(2) Transfers in connection with Permitted Liens, Permitted Indebtedness, Investments, and any dividends or distributions not prohibited by this Agreement;

 

(3) Transfers of nonexclusive licenses for the use of the property (including intellectual property except for the Assigned Patents) of the Issuer or its Subsidiaries in the ordinary course of business and consistent with past practice;

 

(4) Transfers of cash and Cash Equivalents in the ordinary course of business and in a manner that is not prohibited by the terms of this Agreement;

 

(5) Permitted Intercompany Investments, provided, that such Transfers comply with the definition of Permitted Intercompany Investments and in no case may any such Transfers consist of assets of the IP Hold-Co unless such Transfer is independently permitted under another clause of this Section 4.2(a);

 

(6) Transfers by the IP Hold-Co of nonexclusive licenses to the Assigned Patents in the normal course of their business;

 

(7) To the extent constituting Transfers, the Transaction occurring in connection with the Closing Date;

 

(8) Sales of inventory made in the ordinary course of business;

 

(9) Transfers of the Equity Interests issued by any member of the Dense Air Group;

 

(10) Transfers of exclusive licenses for the use of the property (including intellectual property except for the Assigned Patents) of the Issuer or its Subsidiaries in the ordinary course of business and consistent with past practice; provided that consent of the Collateral Agent to exceptions to this clause (j10) shall not be unreasonably withheld or delayed;

 

(11) Cashless repurchases of Equity Interests of the Issuer deemed to occur upon the exercise of stock options, warrants or other securities convertible into or exchangeable for Qualified Equity Interests of the Issuer if such Qualified Equity Interests represent a portion of the exercise, conversion or exchange price hereof;

 

(12) Subject to the terms of the Intercreditor Agreement, the Issuer may make cash payments in lieu of issuing fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Qualified Equity Interests of the Issuer; provided that, unless expressly permitted by the Intercreditor Agreement or consented to by the Collateral Agent, no such cash payments shall be made pursuant to this clause (l12) in excess of $1,000,000 in the aggregate for the term of this Agreement.; and

 

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(13) Subject to clauses (x) and (y) below, Transfers required to effectuate the Divestiture Transaction in accordance with the terms of the Mimosa Purchase Agreement as in effect on March 8, 2023 and as may be amended with the prior written consent of the Collateral Agent in its sole discretion (which may be by email).

 

Notwithstanding the foregoing or anything else herein to the contrary, no Note Party shall nor shall any Note Party permit any of their Subsidiaries to, Transfer:

 

(x) the Assigned Patent Rights to any other Person (other than the contemplated transfer to IP Hold- CoHold-Co and other than approved by the Agents in writing and required to effectuate the Divestiture Transaction in accordance with the terms of the Mimosa Purchase Agreement as in effect on March 8, 2023 and as may be amended with the prior written consent of the Collateral Agent in its sole discretion (which may be by email)) and neither Issuer nor any of its Subsidiaries shall Transfer its rights under the Patent License Agreement without the Required Holders’ prior written consent (in itstheir respective sole and absolute discretion) (which may be by email), except that any such Transfer without the RequiredRequisite Holders’ prior written consent shall be null and void); or

 

(y) (i) all or a material portion of the Note Parties’ assets except to another Note Party (other than Equity Interests issued by any member of the Dense Air Group), or (ii) any Equity Interests (other than Equity Interests issued by any member of the Dense Air Group) owned by Issuer, any Subsidiary that is a Guarantor or any Subsidiary directly owned by the Issuer or a Guarantor unless such Person to whom the assets or Equity Interests were transferred is or becomes a Guarantor and Asset Security Provider under the Note Documents and the transferred Equity Interests remain Collateral pledged for the benefit of the Secured Parties.; provided, that notwithstanding the foregoing the Equity Interests in Mimosa may be Transferred in order to consummate the Divestiture Transaction in accordance with the terms of the Mimosa Purchase Agreement as in effect on March 8, 2023 and as may be amended with the prior written consent of the Collateral Agent in its sole and absolute discretion (which may be by email), except that any such Transfer without the Collateral Agent’s prior written consent shall be null and void.

 

(b) Changes in Business, Management, Ownership, or Business Locations. (a) Engage in or permit any of its Subsidiaries to engage in any business other than (i) the businesses currently engaged in by the Issuer, the Guarantors, Airspan, and their Subsidiaries, as applicable, on the Closing Date or (ii) any additional lines of business engaged in by the Issuer, the Guarantors, or such Subsidiary reasonably related thereto; or (b) liquidate or dissolve (other than in the case of any Subsidiary of the Issuer (other than IP Hold-Co), and solely to the extent that, if such Subsidiary is a Guarantor, the assets of such Subsidiary are transferred to another Guarantor or the Issuer); provided however that the Issuer and the Guarantors are expressly permitted to consummate (x) the Transaction on the Closing Date, including the Merger and (y) the Divestiture Transaction on the terms set forth in the Third Amendment with such changes as may be approved by the Agent in its sole discretion in writing (which may be by email). The Note Parties shall not, and shall not permit any of their Subsidiaries which are Note Parties to, without at least ten (10) days prior written notice to the Collateral Agent and the Secured Parties (or such shorter period as it may agree) (i) change its jurisdiction of organization; (ii) change its organizational structure or type; (iii) change its legal name; (iv) change any organizational number (if any) assigned by its jurisdiction of organization, in each case, without the prior written consent of the Required Holders; or (v) form, create or incorporate any new Foreign Subsidiary.

 

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(c) Mergers or Acquisitions. Consummate a Business Combination (except for (i) the Divestiture Transaction, provided that the conditions set forth for the Divestiture Transaction in the Third Amendment have been satisfied, (ii) the Merger Transaction occurring on the Closing Date or (iii) a Permitted Investment) without obtaining the prior written consent of the Collateral Agent and the Required Holders (in their sole and absolute discretion).

 

(d) Liens. Create, incur, assume or suffer to exist any Lien, except Permitted Liens, upon any of its property, assets or revenues, whether now owned or hereafter acquired.

 

(e) Distributions; Investments. (a) Pay any dividends or make any distribution or payment or redeem, retire or purchase any of its Equity Interests; provided, that (i) the Issuer may convert through a cashless exercise the Convertible Notes and any of its other convertible securities into other securities that do not constitute Disqualified Equity Interests pursuant to the terms of such convertible securities or otherwise in exchange thereof, provided that such conversion is not restricted by the terms of this Agreement and the Intercreditor Agreement then in effect, (ii) the Issuer may pay dividends solely in the form of common Equity Interests that are not Disqualified Equity Interests, (iii) the Issuer may repurchase the stock of current or former employees or consultants of the Issuer or its Subsidiaries pursuant to stock repurchase agreements so long as no Default or Event of Default exists at the time of such repurchase and would not exist after giving effect to such repurchase, provided, that such repurchases do not exceed in the aggregate Two Hundred and Fifty Thousand Dollars ($250,000) per fiscal year, (iv) subsidiaries of the Issuer may make distributions to the Issuer or any Guarantor, (v) any Note Party may make a distribution to any Note Party (provided however that distributions from IP Hold-Co shall be limited to distributions in the form of cash, Cash Equivalents, or Equity Interests in the ordinary course of business unless agreed otherwise with the Collateral Agent), (vi) the Issuer and the Guarantors may make any distribution in accordance with Section 4.1(v), (vii) the consummation of the Transactions on the terms set forth in the Transaction Agreement, and (viii) Issuer may withhold or repurchase shares of common stock issued by the Issuer in connection with withholding taxes related thereto; or (b) directly or indirectly make (or permit any of its Subsidiaries to make) any Investment other than Permitted Investments. Notwithstanding the foregoing, other than Investments in the Dense Air Group existing on the Closing Date, in no event shall any Note Party or Subsidiarysubsidiary directly or indirectly make any other Investment after the Closing Date in any member of the Dense Air Group other than as it may relate (on a non-cash basis) to a conversion of the current five percent (5%) equity holding of Airspan Communications Limited in Dense Air Limited into an equivalent equity holding, to be held by Airspan Communications Limited or another group company, in Dense Air Holdco or one of its subsidiaries on the Dense Air Conversion Date, provided such transaction substantially complies with the proposal provided to the Secured Parties prior to the Closing Date in all material respects.

 

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(f) Transactions with Affiliates. Enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of the Issuer or any Guarantor on terms that are less favorable to Issuer or that Subsidiary, as the case may be, than those that might be obtained at the time from Persons who are not such an Affiliate other than (x) any transactions between the Issuer and IP Hold-Co expressly contemplated hereunder and (y) transactions among the Issuer and Guarantors otherwise independently permitted under another clause of this Agreement (it being understood that any transactions with IP Hold-Co shall only be permitted to the extent that such transactions are in full compliance with the restrictions and limitations set forth in this Agreement, including the Conduct of Business Provisions set forth in Section 4.1(n) and limitation on Transfers set forth in Section 4.2(a)).

 

(g) Limitation on Negative Pledges. Enter into, incur or permit to exist, or permit any Subsidiary to enter into, incur or permit to exist, directly or indirectly, any agreement, instrument, deed, lease or other arrangement that prohibits, restricts or imposes any condition upon the ability of the Note Parties or any Subsidiary of the Note Parties to create, incur or permit to exist any Lien upon any of its property or revenues, whether now owned or hereafter acquired, or that requires the grant of any security for an obligation if security is granted for another obligation, except the following: (i) (A) this Agreement and the other Note Documents and (B) subject to the terms of the Intercreditor Agreement, the Liens granted pursuant to the terms of the applicable Priority Lien Documents, as in effect on the Closing Date and as the same may be amended from time to time in accordance with the Intercreditor Agreement, (ii) any customary restrictions and conditions contained in agreements relating to Indebtedness permitted under clause (iii) of the definition of Permitted Indebtedness or in the agreements relating to the sale or other disposition of assets or of a Subsidiary pending such sale or other disposition; provided that such restrictions and conditions apply only to the assets or Subsidiary to be sold or disposed of and such sale or disposition is permitted hereunder, (iii) subject to the terms of the Intercreditor Agreement and without duplication of (i)(A) above, Liens granted pursuant to the terms of the Loan Documents as in effect on the Closing Date and as the same may be amended from time to time in accordance with the terms of this Agreement, the other Note Documents and the Intercreditor Agreement (iv) customary provisions in leases restricting the assignment or sublet thereof.

 

(h) Compliance. (a) Become an “investment company” or a company controlled by an “investment company” under the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Federal Reserve Board), or use the proceeds of any Convertible Note for that purpose; (b) fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; (c) fail to comply with the Federal Fair Labor Standards Act or violate any other applicable Law or regulation, or permit any of its Subsidiaries to do so, except when taken together with all other such events and failures, could not reasonably be expected to result in liability of the Issuer and its Subsidiaries in an aggregate total amount exceeding One Million Dollars ($1,000,000); (d) withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of the Issuer or its Subsidiaries, including any liability to the PBGC or its successors or any other governmental agency.

 

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(i) Indebtedness. Create or suffer to exist any Indebtedness, other than Permitted Indebtedness (it being expressly understood that the Note Parties may not, and shall not permit any Subsidiary to, guarantee or provide any other security in respect of any Indebtedness of non-Note Parties that is intended to be non-recourse to the Note Parties and their Subsidiaries and the IP Hold-Co shall not incur, guarantee or provide security in respect of any Indebtedness (other than the Obligations and the Priority Lien Obligations described in clause (xvi) of the definition of Permitted Indebtedness that are expressly permitted by the terms of the Intercreditor Agreement to rank pari passu with the Obligations)).

 

(j) Amendments to Organization Documents, Patent Assignment Agreement or Patent License Agreement, Accounting Methods and Fiscal Year. Amend, or permit their Subsidiaries to permit (i) the amendment of the Issuer, the Guarantors, or any of their Subsidiaries’ Organization Documents in a manner adverse to the Secured Parties in any respect; provided that the consent letter with respect to the IP Hold-Co Operating Agreement entered into by the Collateral Agent in its capacity as a member of IP Hold-Co on the Third Amendment Effective Date shall not be deemed to constitute an amendment of an Organization Document that is adverse to the Secured Parties in any respect, (ii) any amendment to, or the termination (other than termination at its natural term) or waiver of any Material Contract of the Issuer or its Subsidiaries or any provision thereof, including the Patent Assignment Agreement or Patent License Agreement, in a manner adverse to Collateral Agent, ; provided that the Patent Assignment Agreement and the Patent License Agreement may be amended with the consent of the Collateral Agent to the extent necessary to consummate the Divestiture Transaction in accordance with the terms of the Mimosa Purchase Agreement as in effect on March 8, 2023 and as the same may be amended with the prior written consent of the Collateral Agent in its sole discretion (which may be by email), (iii) the modification or any other change to, Issuer’s or any Subsidiary’s method of accounting or accounting principles from those utilized in the preparation of the Audited Financial Statements (other than as may be required to conform to the applicable GAAP), or (iv) the change of the fiscal year of the Issuer and its Subsidiaries (other than any Subsidiary organized in India, which shall be March 31) to a date other than December 31 of each calendar year without the consent of the Collateral Agent (and appropriate related changes to this Agreement). It being understood that notwithstanding the foregoing the consummation of the Transaction in the manner described in the Transaction Agreement is expressly permitted and the changes to the preparation of the Audited Financial Statements necessary to effectuate the consummation of the Merger and the Issuer as the reporting entity are expressly permitted provided that upon giving effect to such changes the Issuer and the Guarantors provide the Secured Parties with a statement reconciling any such changes against the historical financial statements for the Issuer and its Subsidiaries and Airspan and its Subsidiaries.

 

(k) [Reserved].

 

(l) Patent Development and Enhancement. Expend any amounts on the prosecution of any Patent of the Issuer or any of its Subsidiaries without the consent of the Collateral Agent (acting at the direction of the Required Holders) (which consent may be provided in the form of an email and shall be deemed given in connection with any Patent prosecution made in compliance with Section 4.1(r)), including expenditures on legal counsel to the Issuer or the Guarantors, which counsel shall be selected and engaged by the IP Hold-Co and acceptable to the Collateral Agent (acting at the direction of the Required Holders).

 

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(m) Sales and Lease Backs. The Note Parties shall not, and shall not permit any of their Subsidiaries to, directly or indirectly, become or remain liable as lessee or as a guarantor or other surety with respect to any lease of any property (whether real, personal or mixed), whether now owned or hereafter acquired, which such Person (a) has sold or transferred or is to sell or to transfer to any other Person (other than the Issuer or any of the Guarantors), or (b) intends to use for substantially the same purpose as any other property which has been or is to be sold or transferred by the Note Parties or any Subsidiary to any Person (other than a Note Party) in connection with such lease. For the avoidance of doubt, the Transfer pursuant to the Patent Assignment Agreement and the licensure pursuant to the terms of the Patent Assignment Agreement shall not be prohibited by this Section 4.2(m).

 

(n) Deposit Accounts. Except as expressly permitted by Section 4.1(o), no Note Party that is a U.S. Person shall establish or maintain a Deposit Account that is not a Controlled Account, and (i) neither the Issuer nor any Guarantor that is a U.S. Person will deposit and maintain proceeds in any Deposit Account (which is not a Controlled Account or an Excluded Account) in excess of the amounts permitted by Section 4.1(o) and (ii) in the case of a jurisdiction where Controlled Accounts are not possible, neither the Issuer nor any Guarantor shall maintain accounts which are not subject to the cash management systems and periodic sweeps described in Section 4.1(o) and Section 4.1(v).

 

(o) Prepayments of Certain Indebtedness. The Note Parties shall not, and shall not permit any of their Subsidiaries or their Affiliates to, directly or indirectly, purchase, redeem, defease or prepay any principal of, premium, if any, interest or other amount payable in respect of any Indebtedness prior to its scheduled maturity, other than (i) the Obligations in accordance with the terms of the Note Documents, (ii) the payment of interest accrued on Airspan’s obligations under the Softbank Loan Agreement to the extent permitted the Subordination Agreement provided at the time of such payment both before and after giving effect to such payment no Default or Event of Default shall exist or be caused by such payment, (iii) Permitted Intercompany Investments to the extent permitted by the Intercompany Subordination Agreement; (iv) Indebtedness secured by a Permitted Lien that is senior to the Obligations if the asset securing such Indebtedness has been sold or otherwise disposed of in accordance with Section 4.2(a), Section 4.2(c) or Section 4.2(e); and (v) Indebtedness secured by a Priority Lien pursuant to a Priority Lien Document that is permitted by this Agreement and that is pari passu to the Obligations if such payment is permitted by the terms of the Intercreditor Agreement and both before and after giving effect to such payment no Default or Event of Default shall exist or be caused by such payment; and (vi) prepayment of Indebtedness owed to a Note Party by another Note Party in connection with the Divestiture Transaction.

 

(p) Financial Covenants. The Note Parties shall, and shall cause their Subsidiaries to:

 

(1) Minimum Liquidity. At all times (i) following the Third Amendment Effective Date and prior to the Mimosa Closing Date, maintain a minimum amount of Unrestricted Cash of the Issuer and its Subsidiaries of $20,000,000; provided, however, if no Default or Event of Default exists, then after the delivery of the Compliance Certificate of the Issuer until the delivery of the next Compliance Certificate of Holdings (or, if earlier, the date such Compliance Certificate is required to be delivered,the minimum shall be adjusted based upon the EBITDA Two Million Dollars ($2,000,000) and (ii) on and after the Mimosa Closing Date, maintain a minimum amount of Unrestricted Cash of the Issuer and its Subsidiaries for the relevant four-fiscal-quarter Test Period reported in such Compliance Certificate to the lesser of:of Four Million Dollars ($4,000,000). 

 

(i) $20,000,000; and

 

(ii) (A) $20,000,000 minus (B) the difference between (x) the actual EBITDA of the Issuer and its Subsidiaries for the four fiscal quarters ended as of the last day of the relevant Test Period (the “Actual LTM EBITDA”) and (y) the number described as “Base LTM EBITDA” set forth in the table provided by the Issuer to Fortress on March [__], 2022 (hereby agreed by Fortress) in the row corresponding to the end date of the same four-fiscal-quarter Test Period (the “Base LTM EBITDA”);

 

provided, that, (A) if the Actual LTM EBITDA exceeds the Base LTM EBITDA by more than $5,000,000, the minimum Unrestricted Cash then required shall be Fifteen Million Dollars ($15,000,000) and (B) if a Default or Event of Default exists at any time, the minimum Unrestricted Cash requirement shall be automatically increased on and after the date of delivery of the next Compliance Certificate of Holdings (or, if earlier, the date such Compliance Certificate is required to be delivered) to $20,000,000 and until such Default or Event of Default is waivered or cured, the covenant shall be calculated without giving effect to any reduction. 

 

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(2) Minimum LTM Revenue. Not permit the revenue of the Issuer and its Subsidiaries (as recognized in accordance with GAAP) as of the last day of any Test Period set forth in the table below, to be less than the amount set forth opposite such Test Period for such Test Period then ended:

 

Test Period Ended Minimum Revenue
March 31, 2022 $169,000,000
June 30, 2022 $165,000,000
September 30, 2022 $173,000,000
December 31, 2022 $172,000,000
March 31, 2023 $180,000,000
June 30, 2023 $189,000,00030,321,000
September 30, 2023 $203,000,00026,659,000
December 31, 2023 $215,000,00046,183,000
March 31, 2024 $227,000,00034,302,000
June 30, 2024 $235,000,00035,794,000
September 30, 2024 $241,000,00038,777,000

 

It being understood that for the purposes of determining the revenue of the Issuer and its Subsidiaries for any Test Period which includes a fiscal quarter ended prior to the consummation of the Merger, but relating to periods before giving effect to the Transaction Agreement, the revenue of the Issuer and its Subsidiaries (x) for the fiscal quarter ended June 30, 2021 shall be deemed to be the revenue of Airspan and its Subsidiaries on a consolidated basis for the fiscal quarter ended June 30, 2021, and (y) for the fiscal quarter ended March 31, 2021 shall be deemed $45,935,000.

 

It being understood that for the purposes of determining the revenue of the Issuer and its Subsidiaries for any Test Period which includes a fiscal quarter ended prior to the consummation of the Merger, but relating to periods before giving effect to the Transaction Agreement, the revenue of the Issuer and its Subsidiaries (x) for the fiscal quarter ended June 30, 2021 shall be deemed to be the revenue of Airspan and its Subsidiaries on a consolidated basis for the fiscal quarter ended June 30, 2021, and (y) for the fiscal quarter ended March 31, 2021 shall be deemed $45,935,000.

 

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(3) Minimum LTM EBITDA. Not permit the EBITDA of the Issuer and its Subsidiaries, as of the last day of any Test Period set forth in the table below, to be less than the amount set forth opposite such Test Period for such Test Period then ended:

 

Test Period Ended Minimum  LTM EBITDA
March 31, 2022 $(36,000,000)
June 30, 2022 $(44,000,000)
September 30, 2022 $(40,000,000)
December 31, 2022 $(37,000,000)
March 31, 2023 $(23,000,000)
June 30, 2023 $(23,000,0008,264,000)
September 30, 2023 $(21,000,0005,015,000)
December 31, 2023 $(16,000,000)5,030,000
March 31, 2024 $(16,000,000562,000)
June 30, 2024 $(10,000,000896,000)
September 30, 2024 $(5,000,000)495,000

 

(q) Pensions. No Note Party shall, nor shall they permit any Note Party organizedincorporated under the laws of England and Wales, at any time be (a) an employer (for the purposes of sections 38 to 51 of the Pensions Act 2004) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pensions Schemes Act 1993); or (b) ‘connected’ with or an ‘associate’ of (as those terms are used in sections 38 and 43 of the Pensions Act 2004) such an employer.

 

(r) Centre of Main Interests and Establishment. No Note Party (i) incorporated in a member state of the European Union shall, without the prior written consent of the Collateral Agent, take any action that shall cause its centre of main interests (as that term is used in Article 3(1) of the Regulation) to be situated outside of its jurisdiction of incorporation or (ii) incorporated under the laws of England and Wales shall change its center of main interests or acquire an “establishment” in any other jurisdiction.

 

Section 5. Registration of Underlying Shares.

 

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5.1 Registration Statement. The Issuer agrees that the Issuer will file with the Commission (at the Issuer’s sole cost and expense) a registration statement (the “Registration Statement”) registering the resale of all of the Underlying Shares (if any) no later than fifteen (15) Business Days after the Closing Date, and the Issuer shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) sixty (60) calendar days after the filing thereof (or, in the event the Commission reviews and has written comments to the Registration Statement, the ninetieth (90th) calendar day following the filing thereof) and (ii) the tenth (10th) Business Day after the date the Issuer is notified (orally or in writing, whichever is earlier) by the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review ((i) and (ii) collectively, the “Effectiveness Deadline”); provided, that if such day falls on a Saturday, Sunday or other day that the Commission is closed for business, the Effectiveness Deadline shall be extended to the next Business Day on which the Commission is open for business. The Issuer will provide a draft of the Registration Statement to the applicable Holder for review at least three (3) Business Days in advance of filing the Registration Statement. Unless otherwise agreed to in writing by the applicable Holder, such Holder shall not be identified as a statutory underwriter in the Registration Statement unless requested by the Commission or another regulatory agency; provided, that if the Commission or another regulatory agency requests that a Holder be identified as a statutory underwriter in the Registration Statement, such Holder will have the opportunity to withdraw from the Registration Statement upon its prompt written request to the Issuer. Notwithstanding the foregoing, if the Commission prevents the Issuer from including any or all of the shares proposed to be registered under the Registration Statement due to limitations on the use of Rule 415 under the Securities Act for the resale of the Underlying Shares by the applicable stockholders or otherwise, such Registration Statement shall register for resale such number of Underlying Shares which is equal to the maximum number of Underlying Shares as is permitted by the Commission. In such event, the number of Underlying Shares to be registered for each selling stockholder named in the Registration Statement shall be reduced pro rata among all such selling stockholders and as promptly as practicable after being permitted to register additional Underlying Shares under Rule 415 under the Securities Act, the Issuer shall amend the Registration Statement or file a new Registration Statement to register such Underlying Shares not included in the Registration Statement and cause such amendment or Registration Statement to become effective as promptly as practicable. The Issuer agrees that, except for such times as the Issuer is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, the Issuer will use its commercially reasonable efforts to cause such Registration Statement to remain effective with respect to Such Holder until the earlier of (i) three (3) years from the issuance of the Convertible Notes, or (ii) the date on which all of the Underlying Shares (if any) shall have been sold. If requested by any Holder, the Issuer shall use its best efforts to (i) cause the removal of the restrictive legends from any Underlying Shares being sold under the Registration Statement or from any Convertible Notes and Underlying Shares to be sold pursuant to Rule 144 (including any successor rule thereto) and (ii) cause its legal counsel to deliver an opinion, if necessary, to the transfer agent in connection with the instruction under subclause (i) to the effect that the removal of such restrictive legends in such circumstances may be effected under the Securities Act, in each case upon the receipt of customary representations and other documentation, if any, from the Holder (as defined below) as reasonably requested by the Issuer, its counsel or the transfer agent, establishing that conditions precedent to the removal of any restrictive legends have been satisfied on the part of the Holder. From and after such time as the benefits of Rule 144 or any other similar rule or regulation of the Commission that may allow such Holder to sell securities of the Issuer to the public without registration are available to Holders of the Issuer’s Common Stock for so long as such Holder holds Underlying Shares, the Issuer shall, at its expense, make and keep public information available, as those terms are understood and defined in Rule 144; use commercially reasonable efforts to file with the Commission in a timely manner all reports and other documents required of the Issuer under the Securities Act and the Exchange Act so long as the Issuer remains subject to such requirements and such reports and other documents are required for the applicable provisions of Rule 144 to enable such Holder to sell the Underlying Shares (if any) under Rule 144 for so long as such Holder holds any Convertible Note; and furnish to such Holder, promptly upon such Holder’s reasonable request, (i) a written statement by the Issuer, if true, that it has complied with the reporting requirements of Rule 144, the Securities Act, and the Exchange Act, (ii) a copy of the most recent annual or quarterly report of the Issuer and such other reports and documents so filed by the Issuer, and (iii) such other information as may be reasonably requested to permit such Holder to sell such securities pursuant to Rule 144 without registration. “Underlying Shares” shall be deemed to include, as of any date of determination, any equity security issued or issuable with respect to the Underlying Shares (if any) by way of share split, dividend, distribution, recapitalization, merger, exchange, replacement or similar event. The Issuer’s obligations to include the Underlying Shares in the Registration Statement are contingent upon such Holder furnishing in writing to the Issuer such information regarding a Holder, the securities of the Issuer held by such Holder and the intended method of disposition of the Underlying Shares as shall be reasonably requested by the Issuer to effect the registration of the Underlying Shares, and such Holder and the Collateral Agent (as applicable) shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling stockholder in similar situations, including providing that the Issuer shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement during any customary blackout or similar period or as permitted hereunder; provided, however, that such Holder shall not in connection with the foregoing be required to execute any lock-up or similar agreement or otherwise be subject to any contractual restriction on the ability to transfer the Underlying Shares. In the case of the registration effected by the Issuer pursuant to this Agreement, the Issuer shall, upon reasonable request, inform such Holder as to the status of such registration. No Holder shall be entitled to use the Registration Statement for an underwritten offering of any Underlying Shares. Notwithstanding anything to the contrary contained herein, the Issuer may delay or postpone filing of such Registration Statement, and from time to time require a Holder not to sell under the Registration Statement or suspend the use or effectiveness of any such Registration Statement if it determines that in order for the Registration Statement to not contain a material misstatement or omission, an amendment thereto would be needed, or if such filing or use could materially affect a bona fide business or financing transaction of the Issuer or would require premature disclosure of information that could materially adversely affect the Issuer, or if the Commission issues any stop order suspending the effectiveness of any Registration Statement or indicates the intention to initiate any proceedings for such purpose (each such circumstance, a “Suspension Event”); provided, that, (w) the Issuer shall not so delay filing or so suspend the use of the Registration Statement for a period of more than sixty (60) consecutive days or more than two (2) times in any three hundred sixty (360) day period and (x) the Issuer shall use commercially reasonable efforts to make such registration statement available for the sale by such Holder of such securities as soon as practicable thereafter.

 

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5.2 Suspension Events. Upon receipt of any written notice from the Issuer (which notice shall not contain any material nonpublic information regarding the Issuer) of the occurrence of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, each Holder agrees that (i) it will immediately discontinue offers and sales of any Underlying Shares under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until such Holder receives copies of a supplemental or amended prospectus (which the Issuer agrees to promptly prepare at its expense) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Issuer that it may resume such offers and sales, and (ii) it will maintain the confidentiality of any information included in such written notice delivered by the Issuer unless otherwise required by law, subpoena or regulatory request or requirement. If so directed by the Issuer, such Holder will deliver to the Issuer, or in such Holder’s sole discretion destroy, all copies of the prospectus covering the Underlying Shares in such Holder’s possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Underlying Shares shall not apply (w) to the extent a Holder is required to retain a copy of such prospectus (A) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (B) in accordance with a bona fide pre-existing document retention policy or (x) to copies stored electronically on archival servers as a result of automatic data back-up.

 

5.3 Other Required Notices. The Issuer shall advise each of the Holders within five (5) Business Days:

 

(a) when a Registration Statement or any amendment thereto has been filed with the Commission and when such Registration Statement or any post-effective amendment thereto has become effective;

 

(b) of any request by the Commission for amendments or supplements to any Registration Statement or the prospectus included therein or for additional information;

 

(c) of the issuance by the Commission of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for such purpose;

 

(d) of the receipt by the Issuer of any notification with respect to a Suspension Event; and

 

(e) subject to the provisions in this Agreement, of the occurrence of any event that requires the making of any changes in any Registration Statement or prospectus so that, as of such date, the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading.

 

Notwithstanding anything to the contrary set forth herein, the Issuer shall not, when so advising the Holders of such events, the Holders with any material, nonpublic information regarding the Issuer other than to the extent that providing notice to the Holders of the occurrence of the events listed in (a) through (e) above constitutes material, nonpublic information regarding the Issuer, and each such Holder is notified that such events are material, nonpublic information at the time of notification.

 

5.4 Effectiveness of Registration Statement. The Issuer shall use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement as soon as reasonably practicable.

 

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5.5 Amendment to Registration Statement; Supplement of Prospectus. Except for such times as the Issuer is permitted hereunder to suspend, and has suspended, the use of a prospectus forming part of a Registration Statement as contemplated by this Agreement, the Issuer shall as soon as reasonably practicable prepare a post- effective amendment to such Registration Statement or a supplement to the related prospectus, or file any other required document so that, as thereafter delivered to Holders of the Underlying Shares included therein, such prospectus will not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

5.6 Listing of Underlying Shares. The Issuer shall use its reasonable best efforts to cause all of the Underlying Shares (when issued) to be listed on each securities exchange or market, if any, on which the Issuer’s Common Stock have been listed.

 

5.7 Registration of Underlying Shares. The Issuer shall use its reasonable best efforts to take all other steps necessary to effect the registration of the Underlying Shares (if any) issuable upon conversion of the Convertible Notes required hereby. The Issuer shall be responsible for all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.), national securities exchange fees, blue sky fees and expenses, printing and delivery expenses and fees and disbursement of the Issuer’s counsel and accountants incurred in connection with the registration of the Underlying Shares.

 

5.8 Piggyback Registration Rights for Underwritten Offerings.

 

(a) If (but without any obligation to do so) the Issuer proposes to register any of its Common Stock under the Securities Act in connection with an underwritten offering of such securities solely for cash, then the Issuer shall give written notice of such proposed offering to the Holders as soon as practicable but not less than ten (10) days before the anticipated filing date of the “red herring” prospectus or prospectus supplement used for marketing such offering, which notice shall (A) describe the amount and type of securities to be included in such offering and the name of the proposed managing underwriter or underwriters in such offering, and (B) offer to such Holders the opportunity to include in such underwritten offering such number of Underlying Shares as the Holders may request in writing within five (5) days after receipt of such written notice (such registered offering, a “Piggyback Registration”). Subject to Section 5.8(b), the Issuer shall, in good faith, cause such Underlying Shares to be included in such Piggyback Registration and shall use its commercially reasonable efforts to cause the managing underwriter or underwriters of such Piggyback Registration to permit the Underlying Shares requested by the applicable Holders pursuant to this Section 5.8(a) to be included therein on the same terms and conditions as any similar securities of the Issuer included in such registered offering and to permit the sale of such Underlying Shares in accordance with the intended method of distribution thereof. The inclusion of any of a Holder’s Underlying Shares in a Piggyback Registration shall be subject to such Holder agreeing to enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwritten offering.

 

(b) If the total amount of securities, including Underlying Shares of the applicable Holder(s), requested to be included in such offering exceeds the amount of securities sold other than by the Issuer that the underwriters determine in their reasonable discretion is compatible with the success of the offering, then the Issuer shall be required to include in the offering only that number of such securities, including Underlying Shares, which the underwriters determine in their reasonable discretion will not jeopardize the success of the offering (the securities so included to be apportioned pro rata among the selling security holders according to the total amount of securities entitled to be included therein owned by each selling security holder or in such other proportions as shall mutually be agreed to by such selling security holders).

 

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(c) Each Holder shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to the Issuer and the underwriter or underwriters (if any) of its intention to withdraw from such Piggyback Registration prior to the filing of the applicable “red herring” prospectus or prospectus supplement with respect to such Piggyback Registration used for marketing such transaction. The Issuer (whether on its own good faith determination or as the result of a request for withdrawal by persons or entities pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement or otherwise abandon such offering. The expenses of such withdrawal registration shall be borne by the Issuer. Notwithstanding anything to the contrary in this Agreement, the Issuer shall be responsible for all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.), national securities exchange fees, blue sky fees and expenses, printing and delivery expenses and fees and disbursement of the Issuer’s counsel and accountants incurred in connection with the Piggyback Registration prior to its withdrawal under this Section 5.8(c).

 

(d) Each Holder shall have the right to irrevocably waive its rights under this Section 5.8 (without prejudicing or altering its other rights under this Section 5) by providing written notice to the Issuer in accordance with this Agreement, in which case the Issuer will not provide any notice contemplated by this Section 5.8.

 

Section 6. Events of Default.

 

6.1 Events of Default. Whenever used herein with respect to the Convertible Notes or any other Note Document, any one (1) of the following events or circumstances shall constitute an event of default (each, an “Event of Default”):

 

(a) Payment Default. The Issuer or any Guarantor defaults in the payment of: (ai) any principal amount, interest or premium (including, without limitation, the payment of any Make-Whole Amount, or any other amounts or premiums comprising the Applicable Redemption Amount (if any)) on any of the Convertible Notes when such amount becomesis due and payable or when declared due and payable in accordance with this Agreement or (bii) any other Obligation under the Note Documents and, in each case under clause (i) and clause (ii), such default shall continue unremedied for a period of five (5) Business Days after the date when due and payable or when declared due and payable in accordance with the terms of this Agreement.

 

(b) Representations and Warranties. Any representation, warranty, certification or other statement (i) made by a Note Party or by any of its Subsidiaries in any Note Document or in any statement or certificate at any time given by Issuer, the Guarantors or any of their Subsidiaries pursuant hereto or thereto or in connection herewith or therewith shall have been false in any material respect on the date as of which made so as to make such representation, warranty, certification or other statement misleading.

 

(c) Specific Covenants. Any Note Party, or any Subsidiary thereof fails to deliver any item required in Sections 4.1(b) or 4.1(c) or fails to perform or observe any term, covenant or agreement contained in Sections 4.1(d), 4.1(e), 4.1(g), 4.1(j), 4.1(l), 4.1(m), 4.1(n), 4.1(o), 4.1(t), 4.1(u), 4.1(v), 4.1(x), 4.1(y) or , 4.1(aa), 4.1(bb), 4.1(cc) or Section 4.2.

 

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(d) Other Defaults. Any Note Party, or any Subsidiary thereof fails to perform, or observe any other covenant or agreement (not specified in Sections 6.1(a), (b), or (c)) contained in any Note Document on its part to be performed or observed and such failure continues for thirty (30) days after the earlier of (i) a Responsible Officer of a Note Party obtaining actual or constructive knowledge of such default or (ii) the Issuer receiving written notice of such default from the Collateral Agent or any Holder of a Convertible Note.

 

(e) Cross-Default.

 

(1) A Note Party, or any Subsidiary thereof shall fail to pay when due any principal of or interest on or any other amount payable in respect of any Priority Lien Obligation or one (1) or more other items of Material Indebtedness in an individual principal amount of One Million Dollars ($1,000,000.00) or more or with an aggregate principal amount of Two Million Dollars ($2,000,000.00) or more; or

 

(2) The breach or default by Issuer, any Guarantor or any Subsidiary thereof with respect to any other term of (a) one (1) or more items of Indebtedness in the individual or aggregate principal amounts referred to in clause (i1) above or (b) any loan agreement, mortgage, indenture or other agreement relating to such item(s) of Indebtedness, if the effect of such breach or default is to cause, or to permit the holder or holders of that Indebtedness (or a trustee on behalf of such holder or holders) to cause, that Indebtedness to become or be declared due and payable prior to its stated maturity or the stated maturity of any underlying obligation, as the case may be (upon the giving or receiving of notice, lapse of time, both, or otherwise).

 

(f) Restraint on Business. Any injunction, whether temporary or permanent, shall be rendered against the Issuer, any Guarantor, or any of their material Subsidiaries that prevents Issuer or any of its material Subsidiaries from operating or otherwise conducting a material portion of the business of the Issuer and its Subsidiaries in the aggregate in the ordinary course for more than thirty (30) consecutive calendar days after the earlier of (i) a Responsible Officer of the Issuer or any Guarantor obtaining actual or constructive knowledge of such default or (ii) the Issuer receiving written notice of such default from the Collateral Agent or any Holder of a Convertible Note.

 

(g) Asset Seizure. (a) Any material portion of the Issuer’s, any Guarantor’s, or any of their respective material Subsidiaries’ assets is attached, seized or appropriated, levied on or condemned, or otherwise comes into possession or control of a trustee or receiver or any other Governmental Authority or any Person acting or purporting to act under such authority; or (b) any court order (other than court ordered operational interruptions solely attributable to the COVID-19 pandemic) enjoins, restrains, or prevents Issuer and its Subsidiaries from conducting any material part of its business, in each case, as to each of clauses (a) and (b), which event continues in existence and is not remedied, dismissed or stayed for thirty (30) days the earlier of (i) a Responsible Officer of the Issuer or any Guarantor obtaining actual or constructive knowledge of such default or (ii) the Issuer receiving written notice of such default from the Collateral Agent or any Holder of a Convertible Note.

 

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(h) Insolvency Proceedings. (a) The Issuer or any Guarantor or any of their material Subsidiaries institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors, or enters into a composition, compromise or arrangement with any creditor (other than in the ordinary course of business and on a solvent basis), or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator, administrator, compulsory manager or similar officer for it or for all or any material part of its property; (b) any receiver, administrative receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person; or (c) any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person or an order for relief (including, without limitation, the issue of an order by an Israeli court for the commencement of insolvency proceedings (“tsav le-ptichat halichim”) (as defined in the Israeli Insolvency and Economic Rehabilitation Law, 2018)) is entered in any such proceeding, in each case with respect to clauses (b) and (c) above which event continues in existence and is not dismissed or stayed within sixty (60) days.

 

(i) Inability to Pay Debts. The Issuer, any Guarantor, or any of their material Subsidiaries becomes unable or admits in writing its inability to pay its debts when due, whether or not the maturity date therefor has arrived or the value of its assets exceeds its obligations (including future and contingent obligations), or fails generally to pay its debts as they become due and such circumstance, event or failure continues in existence and is not remedied for sixty (60) days after a Loan Party’s receipt of actual or constructive notice of such circumstance, event or failure.

 

(j) Judgments. Any money judgment, writ or warrant of attachment or similar process involving (i) in any individual case an amount in excess of One Million Dollars ($1,000,000.00) over the amount covered by independent third-party insurance as to which liability has been accepted by the applicable insurance carrier or (ii) in the aggregate at any time an amount in excess of Two Million Dollars ($2,000,000.00) over the amount covered by independent third-party insurance as to which liability has been accepted by the applicable insurance carrier, shall be entered or filed against Issuer or any of its Subsidiaries or any of their respective assets and shall remain undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days (or in any event later than five (5) days prior to the date of any proposed sale thereunder).

 

(k) [Reserved].

 

(l) ERISA and Foreign Plans. (a) An ERISA Event occurs with respect to a Pension Plan, Multiemployer Plan or a Foreign Plan which has resulted or could reasonably be expected to result in liability of a the Issuer, any Guarantor or their Subsidiaries under Title IV of ERISA to the Pension Plan, Multiemployer Plan or Foreign Plan or the PBGC (or equivalent Governmental Authority in a non-US jurisdiction) in an aggregate amount in excess of One Million Dollars ($1,000,000.00) and such ERISA Event continues in existence and is not remedied for thirty (30) days after actual or constructive notice of the occurrence thereof, or (b) Issuer, the Guarantors or their Subsidiaries or ERISA Affiliates fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan or equivalent under a Foreign Plan in an aggregate amount in excess of One Million Dollars ($1,000,000.00) and such failure to pay continues in existence and is not remedied for thirty (30) days after the date when such payment was due.

 

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(m) Invalidity of Note Documents. At any time after the execution and delivery thereof, (i) the Guaranty for any reason, other than the satisfaction in full of all Obligations, shall cease to be in full force and effect (other than in accordance with its terms) or shall be declared to be null and void or any Guarantor shall repudiate its obligations thereunder, (ii) (a) this Agreement or any Note Document ceases to be in full force and effect (other than by reason of a release of Collateral in accordance with the terms hereof or thereof or the satisfaction in full of the Obligations in accordance with the terms hereof) or shall be declared null and void, or (b) Collateral Agent shall not have or shall cease to have a valid and perfected Lien in any Collateral with a fair market value in excess of One Million Dollars ($1,000,000.00) after delivery thereof pursuant to the terms of the Collateral Documents with the priority required by the relevant Collateral Document, in each case for any reason other than (x) to the extent permitted by the terms hereof or thereof or (y) of such loss of perfection or priority result from the failure of Collateral Agent or a Secured Party to take such actions in the control of such Secured Party (including the failure to maintain possession of any certificated Equity Interests actually delivered to it representing Equity Interests pledged as Collateral pursuant to the Collateral Documents), (iii) Issuer or any of its Subsidiaries shall contest the validity or enforceability of any Note Document in writing or deny in writing that it has any further liability, including with respect to future advances by Required Holders, under any Note Document to which it is a party, or (iv) the Intercreditor Agreement, or any of the provisions thereof, ceases to be valid and enforceable against any holder of Priority Lien Obligations or any holder thereof shall so assert in writing, (v) any Subordination Agreement (or subordination provisions incorporated in any Subordinated Indebtedness), or any provisions thereof, ceases to be valid and enforceable against any holder of Indebtedness secured by a Lien intended to be subordinated to the Obligations or any holder of such Indebtedness shall so assert in writing, (vi) the Intercreditor Agreement, or any provisions thereof, ceases to be valid and enforceable against any holder of a Priority Lien Obligation or any holder of a Priority Lien Obligation shall so asset in writing; or (vii) the failure of any party thereto to comply with the terms of the Intercreditor Agreement or, as the context may require, the applicable Subordination Agreement.

 

(n) Intellectual Property. (a) The Issuer or any of its Subsidiaries fails to comply with the Conduct of Business Provisions or fails to meet its obligations under the Note Documents and/or Section 17 of the IP Hold-Co Operating Agreement for the timely payment of maintenance fees, annuities or the like for any Patent or fails to meet its obligations relating to the timely prosecution of each patent application in the set of Assigned Patents (including future filed patent applications), provided such failure or delay can no longer be substantially remedied by making a late payment, obtaining an extension or taking further or remedial action in the prosecution of such patent, or (b) any Assigned Patent that constitutes Material Intellectual Property is found unpatentable or unenforceable due to the inequitable conduct or gross negligence or willful misconduct of the Issuer or any Guarantor.

 

(o) Moratorium; Availability of Foreign Exchange. A moratorium shall be agreed or declared in respect of any Indebtedness of the Note Parties or any of their Subsidiaries or any restriction or requirement not in effect on the Closing Date shall be imposed, whether by legislative enactment, decree, regulation, order or otherwise, which limits the availability or the transfer of foreign exchange by Issuer and/or its Subsidiaries for the purpose of performing any payment obligation under the Convertible Notes or any other Note Document to which it is a party and such moratorium, restriction, or requirement, has a material adverse effect on the ability of the Issuer and the Guarantors to perform their payment obligations under the Convertible Notes or any other Note Document.

 

(p) Invalidity of Upstreaming. Any governmental or other consent, license, approval, permit or authorization which is now or may in the future be necessary or appropriate under any applicable law for the upstreaming or other transfer of dividends, Free Cash Flow or Distributable Income from any of the Subsidiaries to the Issuer or any Guarantor or to make such upstreaming, transfer or loan legal, valid, enforceable and admissible in evidence shall not be obtained or shall be withdrawn, revoked or modified or shall cease to be in full force and effect or shall be modified in any manner that would have a Material Adverse Effect.

 

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6.2 Rights and Remedies.

 

(a) Acceleration. If any Event of Default (other than an Event of Default specified in Section 6.1(h) or Section 6.1(i) hereof) occurs and is continuing, the Collateral Agent or the Holders of at least a majority in aggregate principal amount of the Convertible Notes then outstanding, by written notice to the Issuer (and to the Collateral Agent if the notice is given by the Holders), may declare the principal, interest, fees and other amounts and premiums in respect of the Convertible Notes and other Obligations (including, without limitation the Make-Whole Amounts (if any)) to and the Specified Fees (in the case of any Administration Fees, to the extent then-earned)) to become and shall automatically be immediately due and payable. Upon a declaration of acceleration, the principal, interest, fees and other amounts and premiums in respect of the Convertible Notes and other Obligations (including, without limitation the Make-Whole Amounts (if any) and the Specified Fees (in the case of any Administration Fees, to the extent then-earned)) will become immediately due and payable. If an Event of Default specified in Section 6.1(h) or Section 6.1(i) hereof occurs, the principal, interest, fees and other amounts and premiums in respect of the Convertible Notes and other Obligations (including, without limitation the Make-Whole Amounts (if any) and the Specified Fees (in the case of any Administration Fees, to the extent then-earned)) will become immediately due and payable without any declaration or other act on the part of the Collateral Agent or any Holder. Without limiting the generality of the foregoing, it is understood and agreed that if the Obligations are accelerated or otherwise become due prior to their Stated Maturity Date (as defined in the Convertible Notes), in each case, as a result of an Event of Default (including, without limitation, an Event of Default under Section 6.1(h) or Section 6.1(i) hereof (including the acceleration of any portion of the Convertible Notes by operation of law)), the Applicable Redemption Amount shall be due and payable (including any Make-Whole Amounts and Specified Fees (in the case of any Administration Fees, to the extent then-earned)) as though the Convertible Notes had been optionally redeemed on the date of such acceleration and any such Make-Whole Amounts and any other premiums comprising the Applicable Redemption Amount shall constitute part of the Obligations with respect to the Convertible Notes in view of the impracticability and difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of each Holder’s lost profits as a result thereof. If the Applicable Redemption Amount becomes due and payable, it shall be deemed to be principal of the Convertible Notes, and interest shall accrue on the full principal amount of the Convertible Notes (including any such Make-Whole Amounts and Specified Fees (in the case of any Administration Fees, to the extent then-earned) and any other premiums comprising the Applicable Redemption Amount) from and after the applicable triggering event, including in connection with an Event of Default specified under Section 6.1(h) or Section 6.1(i) hereof. Any such Make-Whole Amounts, Specified Fees and any other premiums comprising the Applicable Redemption Amount payable above shall be presumed to be liquidated damages sustained by each holderHolder as the result of the acceleration of the Convertible Notes and the Issuer and the Guarantors to the extent they provide guarantees for the Obligations agree that it is reasonable under the circumstances currently existing. The premium shall also be payable in the event the Convertible Notes or the Obligations are satisfied, released or discharged through foreclosure, whether by judicial proceeding, deed in lieu of foreclosure, sale or collection of the Collateral or by any other means, or in connection with the restructuring, reorganization or compromise of the obligations by a plan of reorganization or otherwise. THE ISSUER AND THE GUARANTORS EXPRESSLY WAIVE (TO THE FULLEST EXTENT THEY MAY LAWFULLY DO SO) THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING AMOUNTS IN CONNECTION WITH ANY SUCH ACCELERATION. The Issuer and Guarantors will expressly agree (to the fullest extent they may lawfully do so) that: (A) any such Make-Whole Amounts and any other premiums comprising the Applicable Redemption Amount is reasonable and is the product of an arm’s length transaction between sophisticated business entities ably represented by counsel; (B) the Applicable Redemption Amount shall be payable notwithstanding the then prevailing market rates at the time acceleration occurs; (C) there has been a course of conduct between Holders and the Issuer giving specific consideration in this transaction for such agreement to pay the Applicable Redemption Amount; and (D) the Issuer and any Guarantor shall be estopped from claiming differently than as agreed to in this paragraph. Each of the Issuer and the Guarantors expressly acknowledge that their agreement to pay the Applicable Redemption Amount to Holders as herein described was a material inducement to investors to acquire the Convertible Notes. The Holders of a majority in principal amount of the outstanding Convertible Notes by written notice to the Issuer and to the Collateral Agent may waive all past Defaults and rescind and annul a declaration of acceleration and its consequences if: (x) all existing Events of Default, other than the nonpayment of the principal of, and interest and premium, if any, on, the Convertible Notes that have become due solely by the declaration of acceleration, have been cured or waived; and (y) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction.

 

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(b) Other Remedies. If an Event of Default occurs and is continuing, the Collateral Agent may pursue any available remedy to collect the payment of principal of, premium on, if any, or interest on, or Make-Whole Amounts on the Convertible Notes and other Obligations or to enforce the performance of any provision of the Convertible Notes, this Agreement and/or the other Note Documents, including without limitation, (i) subject to the Intercreditor Agreement, apply any funds in its possession to the Obligations, (ii) if a Triggering Event (as defined in the IP Hold-Co Operating Agreement) has occurred and is continuing, distributions made pursuant to the IP Hold-Co Operating Agreement shall be made in accordance with the IP Hold-Co Operating Agreement and applied to the Obligations in the order provided by the IP Hold-Co Operating Agreement and then in the manner provided in Section 6.2(i); (iii) provide notice to the Issuer and the Guarantors that any funds, payments, recoveries, distributions or other amounts received shall be applied as set forth in Section 6.2(i) rather than as set forth in Section 4.1(e) and (iv) subject to the terms of the Intercreditor Agreement and any limitations therein, exercise any and all other remedies under the Collateral Documents, Note Documents and under the UCC or other applicable Law available to the Collateral Agent and the Holders or any rights in equity. The Collateral Agent may maintain a proceeding even if it does not possess any of the Convertible Notes or does not produce any of them in the proceeding. A delay or omission by the Collateral Agent or any Holder of a Convertible Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by Law. It being understood that in all cases the Issuer and the Guarantors shall remain liable to the Secured Parties for any deficiency. If the Collateral Agent, in its good faith business judgment, directly or indirectly enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral, the Secured Parties shall have the option, exercisable at any time, of either reducing the Obligations by the principal amount of the purchase price or deferring the reduction of the Obligations until the actual receipt by the Secured Parties of cash therefor.

 

(c) Waiver of Past Defaults. The Holders of a majority in aggregate principal amount of the then outstanding Convertible Notes by notice to the Collateral Agent may on behalf of the Holders of all of the Convertible Notes waive an existing Default or Event of Default and its consequences hereunder, except as otherwise provided in Section 6.2(a) hereof and Section 14.3 hereof. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Agreement; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

 

(d) Control by Majority. The Holders of a majority in aggregate principal amount of the then outstanding Convertible Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Collateral Agent or exercising any power conferred on the Collateral Agent. However, the Collateral Agent may refuse to follow any direction that conflicts with Law, this Agreement or the other Note Documents, that may involve the Collateral Agent in personal liability, or that the Collateral Agent determines in good faith may be unduly prejudicial to the rights of Holders not joining in the giving of such direction (it being understood that the Collateral Agent shall have no duty to determine whether any direction is prejudicial to any Holder). In addition, the Collateral Agent may take any other action it deems necessary or proper that is not inconsistent with any such direction received from the Holders. The Collateral Agent shall not be obligated to take any action at the direction of Holders of Convertible Notes unless such Holders have offered, and if requested, provided to the Collateral Agent indemnity or security satisfactory to the Trusteetrustee and the Collateral Agent.

 

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(e) Limitation on Suits. A Holder of a Convertible Note may not institute any proceeding, judicial or otherwise, with respect to this Agreement, the Convertible Notes or the other Note Documents, or for the appointment of a receiver or trustee, or for any other remedy under this Agreement, the Convertible Notes or the other Note Documents, unless: (A) the Holder of a Convertible Note has previously given to the Collateral Agent written notice of a continuing Event of Default; (B) the Holders of at least a majority in aggregate principal amount of outstanding Convertible Notes have made a written request to the Collateral Agent to institute proceedings in respect of the Event of Default in its own name as Collateral Agent under this Agreement; (C) the Holders of the Convertible Notes have offered and, if requested, provided to the Collateral Agent an indemnity reasonably satisfactory to the Collateral Agent against any costs, liabilities or expenses to be incurred in compliance with such request; (D) the Collateral Agent for sixty (60) days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (E) during such sixty (60) day period, the Holders of a majority in aggregate principal amount of the then outstanding Convertible Notes have not given the Collateral Agent a direction that is inconsistent with such written request. A Holder of a Convertible Note may not use this Agreement to prejudice the rights of another Holder of a Convertible Note or to obtain a preference or priority over another Holder of a Convertible Note.

 

(f) Rights of Holders to Receive Payment. Notwithstanding anything in this Agreement to the contrary, the right of any Holder of a Convertible Note to receive payment of principal of, or interest on its Convertible Note on or after the Stated Maturity Date thereof (as defined in the Convertible Note), or to bring suit for the enforcement of any such payment on or after such dates, shall not be impaired or affected without the consent of that Holder.

 

(g) Collection Suit by Collateral Agent. If an Event of Default specified in Section 6.1(i) hereof occurs and is continuing, the Collateral Agent is authorized to recover a judgment in its own name and as collateral agent against the Issuer and the Guarantors for the whole amount of principal of, premium on, if any, interest and Make-Whole Amounts, if any, remaining unpaid on the Convertible Notes and interest on overdue principal and, to the extent lawful, interest and such further amounts and Obligations as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Collateral Agent, its agents and counsel.

 

(h) Collateral Agent May File Proof of Claims. The Collateral Agent is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Collateral Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Collateral Agent, its agents and counsel) and the Holders of the Convertible Notes allowed in any judicial proceedings relative to the Issuer or the Guarantors (or any other obligor upon the Convertible Notes or Note Documents), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Collateral Agent, and in the event that the Collateral Agent shall consent to the making of such payments directly to the Holders, to pay to the Collateral Agent any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Collateral Agent, its agents and counsel, and any other amounts due the Collateral Agent under Section 9 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Collateral Agent, its agents and counsel, and any other amounts due the Collateral Agent under Section 9 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Collateral Agent to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Convertible Notes or the rights of any Holder, or to authorize the Collateral Agent to vote in respect of the claim of any Holder in any such proceeding.

 

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(i) Application of Monies Collected by the Collateral Agent. Subject to the Intercreditor Agreement, if the Collateral Agent collects any money or property pursuant to this Article VISection 6 with respect to the Convertible Notes, it shall apply the money or property in the following order (or in such other order as the Collateral Agent determines) at the dates fixed by the Collateral Agent for distribution of such monies, upon presentation of the several Convertible Notes, and stamping thereon the payment, if only partially paid, and upon surrender thereof, if fully paid:

 

First: to the Collateral Agent, their respective agents and attorneys for amounts due under SectionSections 9 and 13 hereof and under the other Note Documents, including payment of all compensation, expenses, fees, indemnification and liabilities incurred, and all advances made, by the Collateral Agent and the costs and expenses of collection;

 

Second: in case the principal of the outstanding Convertible Notes shall not have become due and be unpaid, to the payment of any interest on, and any cash due upon conversion of, the Convertible Notes in default in the order of the date due of the payments of such interest and cash due upon conversion, as the case may be, with interest (to the extent that such interest has been collected by the Collateral Agent) payable upon such overdue payments at the rate borne by the Convertible Notes at such time, such payments to be made ratably to the Holders based on the aggregate principal amount of Convertible Notes held thereby;

 

Third: in case the principal of the outstanding Convertible Notes shall have become due, by declaration or otherwise, and be unpaid to the payment of the whole amount (including, if applicable, the payment of the Applicable Redemption Amount (including any Make- Whole Amounts) and any cash due upon conversion) then owing and unpaid upon the Convertible Notes for principal and interest, if any, with interest on the overdue principal and, to the extent that such interest has been collected by the Collateral Agent, upon overdue installments of interest at the rate borne by the Convertible Notes at such time, and in case such monies shall be insufficient to pay in full the whole amounts so due and unpaid upon the Convertible Notes, then to the payment of such Applicable Redemption Amount (including any Make-Whole Amounts) (including, if applicable, any Make-Whole Amount and any cash due upon conversion), ratably to the aggregate of such principal (including, if applicable, any Make-Whole Amount and any cash due upon conversion) and accrued and unpaid interest; and

 

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Fourth: to the Collateral Agent, on behalf of Holders of Convertible Notes and other Secured Parties, in an amount necessary to pay any additional Obligation (or Guaranteed Obligation) then due and payable; and

 

Fifth: the balance, if any, after all of the Obligations have been indefeasibly paid in full in cash, to the Issuer or to such other party as a court of competent jurisdiction shall direct.

 

6.3 No Waiver; Remedies Cumulative. The Collateral Agent and Secured Parties’ failure, at any time or times, to require strict performance by the Issuer or the Guarantors of any provision of this Agreement or any other Note Document shall not waive, affect, or diminish any right of the Secured Parties thereafter to demand strict performance and compliance herewith or therewith. No waiver hereunder shall be effective unless signed by the party granting the waiver and then is only effective for the specific instance and purpose for which it is given. The Collateral Agent and Secured Parties’ rights and remedies under this Agreement and the other Note Documents are cumulative. The Collateral Agent and Secured Parties have all rights and remedies provided under the UCC, by Law, or in equity. The Collateral Agent and Secured Parties’ exercise of one (1) right or remedy is not an election and shall not preclude the Collateral Agent or Secured Parties from exercising any other remedy under this Agreement or other remedy available at Law or in equity, and the Collateral Agent or Secured Parties’ waiver of any Event of Default is not a continuing waiver. The Collateral Agent or Secured Parties’ delay in exercising any remedy is not a waiver, election, or acquiescence.

 

Section 7. Guaranty.

 

7.1 Unconditional Guaranty..

 

(a) In consideration of the execution and delivery of this Agreement and the purchase of the Convertible Notes by the Purchasers, the Merger Sub and, effective as of the consummation of the Merger, each other Guarantor hereby irrevocably, absolutely, unconditionally and jointly and severally with the other Guarantors guarantees to the Purchasers and each other Secured Party, as a primary obligor and not merely as a surety, the due and punctual payment in full of (i) the principal of and interest on (including, without limitation, interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), and any other amounts due under, the Convertible Notes and the other Note Documents when and as the same shall become due and payable (whether at stated maturity or by required or optional prepayment or by acceleration or otherwise including any Make-Whole Amounts and other fees, amounts, and premiums) and (ii) any other sums which may become due under the terms and provisions of this Agreement, the Convertible Notes, or any other Note Document or other instrument referred to herein or therein (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)) (all such obligations described in clauses (i) and (ii) above are herein called the “Guaranteed Obligations”). The guaranty in the preceding sentence is an absolute, present and continuing guaranty of payment and not of collectability and is in no way conditional or contingent upon any attempt to collect from the Issuer or any other guarantor of the Note Documents (including, without limitation, any other Guarantor) or upon any other action, occurrence or circumstance whatsoever. In the event that the Issuer shall fail so to pay any of such Guaranteed Obligations, each Guarantor agrees to pay the same when due to the Holders entitled thereto, without demand, presentment, protest or notice of any kind, in lawful money of the United States of America, pursuant to the requirements for payment specified in the Convertible Notes and this Agreement. Each default in payment of any of the Guaranteed Obligations shall give rise to a separate cause of action hereunder and separate suits may be brought hereunder as each cause of action arises. Each Guarantor agrees that the Convertible Notes issued in connection with this Agreement may (but need not) make reference to the guaranty provided in this Section 7.

 

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(b) Each Guarantor agrees to pay and to indemnify and save each Holder harmless from and against any damage, loss, cost or expense (including reasonable documented attorneys’ fees) which such Holder may incur or be subject to as a consequence, direct or indirect, of (i) any breach by such Guarantor, by any other Guarantor or by the Issuer of any warranty, covenant, term or condition in, or the occurrence of any default under, the Convertible Notes, this Agreement, or any other Note Document or instrument referred to herein or therein, together with all expenses resulting from the compromise or defense of any claims or liabilities arising as a result of any such breach or defau