On December 30, 2020, Legacy Airspan, together with Holdco, Airspan Networks (SG) Inc., Mimosa, Mimosa Networks International, LLC, Airspan Communications Limited, Airspan Networks LTD, and Airspan Japan K.K., as guarantors, together with the other parties thereto, entered into an assignment agreement, whereby Pacific Western Bank (“PWB”) and Ally Bank assigned their interests in a loan facility under the Second Amended and Restated Loan and Security Agreement with Legacy Airspan (the “PWB Facility”) to certain new lenders (the “Assignment Agreement”), and PWB entered into a resignation and assignment agreement (the “Agent Resignation Agreement”) pursuant to which PWB resigned in its capacity as agent under all of the transaction documents and DBFIP ANI LLC (“Fortress”) became the successor agent (as defined in the Agent Resignation Agreement), replacing PWB in such capacity under the PWB Facility. The Assignment Agreement and the Agent Resignation Agreement, along with a Reaffirmation and Omnibus Amendment, resulted in the amendment and restatement of the terms of the PWB Facility and a credit agreement with Fortress (the “Fortress Credit Agreement”) with the new lenders as the lenders thereunder. Fortress became the administrative agent, collateral agent and trustee for the lenders and other secured parties. At Closing, on August 13, 2021, the Company, Legacy Airspan and certain of the Company’s subsidiaries who are party to the Fortress Credit Agreement entered into a Waiver and Consent, Second Amendment, Restatement, Joinder and Omnibus Amendment to Credit Agreement and Other Loan Documents relating to the Fortress Credit Agreement with Fortress to, among other things, add the Company as a guarantor, recognize and account for the Business Combination, recognize and account for the Convertible Notes (see Note 15) and provide updated procedures for replacement of LIBOR. On March 29, 2022, the Company, Legacy Airspan and certain of the Company’s subsidiaries who are party to the Fortress Credit Agreement entered into the March 2022 Fortress Credit Amendment to, among other things, amend the financial covenants included in the Fortress Credit Agreement. On November 14, 2022, the Company, Legacy Airspan and certain of the Company’s subsidiaries who are party to the Fortress Credit Agreement entered into the November 2023 Fortress Credit Amendment to, among other things, effect a limited waiver of certain events of default under the Fortress Credit Agreement. On May 18, 2023, the Company, Legacy Airspan and certain of our subsidiaries who are party to the Fortress Credit Agreement entered into the May 2023 Fortress Credit Amendment to, among other things, amend and restate the Fortress Credit Agreement, effect a limited waiver of certain events of default under the Fortress Credit Agreement, terminate the existing delayed draw term loan commitments under the Fortress Credit Agreement, and establish new delayed draw term loan commitments in the aggregate amount of $25.0 million, modify the interest rates applicable to certain loans under the Fortress Credit Agreement, obtain certain consents related to the Transaction, and provide for the issuance of 5,912,040 warrants to purchase shares of the Company’s common stock. On August 11, 2023, the Company, Legacy Airspan and certain of our subsidiaries who are party to the Fortress Credit Agreement entered into the August 2023 Fortress Credit Amendment to, among other things, implement certain modifications to the Fortress Credit Agreement relating to the Purchase Agreement and the Transaction. On November 14, 2023, the Company, Legacy Airspan and certain of our subsidiaries who are party to the Fortress Credit Agreement entered into the November Fortress Credit Amendment to, among other things, amend and restate the Fortress Credit Agreement, effect a limited waiver of certain events of default under the Fortress Credit Agreement, establish new delayed draw term loan commitments in the amount of $5.0 million, and establish certain new covenants. On December 22, 2023, the Company, Legacy Airspan and certain of our subsidiaries who are party to the Fortress Credit Agreement entered into the December 2023 Fortress Credit Agreement to, among other things, amend and restate the Fortress Credit Agreement, effect a limited waiver of certain existing and potential prospective events of default under the Fortress Credit Agreement, establish new delayed draw term loan commitments in the amount of $10.0 million, defer the due date of certain cash payments of principal and interest under the Fortress Credit Agreement, and establish certain new covenants.

With the May 2023 Credit Agreement Amendment, the interest rates were increased to 5.5% plus SOFR to up to 8.5% for the paid in-kind interest. The maturity of the loan did not change. The Company accounted for the May 2023 Credit Agreement Amendment as a loss on debt extinguishment of which $5.1 million is related to the senior term loan.

The Fortress Credit Agreement initial term loan total commitment of $34.0 million and a term loan commitment of $10.0 million were both funded to Legacy Airspan on December 30, 2020. After giving effect to the May 2023 Fortress Credit Amendment, the November 2023 Fortress Credit Amendment, the December 2023 Fortress Credit Amendment, we expanded the term loan commitment, subject to the terms of the Fortress Credit Agreement. The maturity date of the total loan commitment is December 30, 2024. Subsequent to December 29, 2021, the Company may prepay this loan but will incur a related fee in the amount of a make-whole amount of interest that would have been payable had such prepayment not been made.

To secure its obligations under the Fortress Credit Agreement, Fortress was assigned PWB’s security interest under the PWB Facility and the Company granted Fortress as security for the obligations a security interest in (a) all of the real, personal and mixed property in which liens are granted or purported to be granted pursuant to any of the collateral documents as security for the obligations, (b) all products, proceeds, rents and profits of such property, (c) all of each loan party’s book and records (d) all of the foregoing whether now owned or existing, in each case excluding certain excluded assets.

The Fortress Credit Agreement contains representations and warranties, events of default and affirmative and negative covenants, which include, among other things, certain restrictions on the ability to pay dividends, create liens, incur additional indebtedness, make investments, dispose of assets, consummate business combinations (except for permitted investments, as defined in the Fortress Credit Agreement), and make distributions. In addition, financial covenants apply. Prior to the March 2022 Fortress Credit Amendment, these financial covenants included (a) minimum liquidity of $4.0 million as of December 31, 2020 and $5.0 million thereafter, (b) minimum last twelve-month revenue and (c) minimum last twelve-month Earnings before Interest, Taxes, Depreciation, and Amortization (“EBITDA”). Pursuant to the March 2022 Fortress Credit Amendment, the financial covenants included in the Fortress Credit Agreement were amended to increase the minimum liquidity requirement to an amount between $15.0 million and $20.0 million, depending on EBITDA performance levels and whether a default or event of default exists under the Fortress Credit Agreement, and decrease the minimum last twelve-month revenue and EBITDA requirements. Revenue and EBITDA financial covenants are tested quarterly. Pursuant to the May 2023 Fortress Credit Amendment, the financial covenants included in the Fortress Credit Agreement were amended to reduce the minimum liquidity requirement to a minimum of, prior to the closing of the Transaction, $2.0 million, and after the closing of the Transaction, $4.0 million.

The Company was not in compliance with the minimum liquidity covenant under the Fortress Credit Agreement and the Fortress Convertible Note Agreement at all times from October 26, 2023, which was an event of default under those agreements for which the Company obtained a waiver. The Company also did not satisfy the revenue covenant and the EBITDA covenant on September 30, 2023, which were also events of default for which the Company obtained a waiver. The Company also did not make cash payments of principal and interest under the Fortress Credit Agreement and the Fortress Convertible Note on September 30, October 31, November 30, and December 31 within any grace period applicable thereto, for which we obtained a deferral of such payments. The Company also obtained a prospective waiver of compliance with the minimum liquidity covenant, the minimum last twelve-month EBITDA covenant and the minimum last twelve-month revenue covenant under the Fortress Credit Agreement and the Fortress Convertible Note Agreement as of the December 31, 2023 quarterly measurement date.

There can be no assurance that the lenders under the Fortress Credit Agreement and the agreement governing the Company’s senior secured convertible notes will agree to waive future covenant breaches. Based on management’s current forecast, absent of additional financing or capital raising, the Company has concluded it is probable that the Company will not be in compliance with certain of the prospective financial covenants under the Fortress Credit Agreement and the agreement governing the Company’s senior secured convertible notes during certain periods over the next twelve months. Accordingly, while the Company may seek future waivers from compliance with the applicable covenants in connection with such anticipated breaches, or amendments of existing financial covenants included in the Fortress Credit Agreement and the agreement governing the Company’s senior secured convertible notes, the Company is also pursuing alternative sources of capital so that it would be able to satisfy its prospective minimum liquidity obligations under the Fortress Credit Agreement and the agreement governing the Company’s senior secured convertible notes. There can be no assurance that the lenders under the Fortress Credit Agreement and the agreement governing the Company’s senior secured convertible notes will agree to waive any breaches thereunder that may arise in the future or that we will otherwise be able to remedy such breaches.

In the absence of waivers or remedies of existing covenant breaches or any additional breaches that may arise in the future, the lenders under the Fortress Credit Agreement and the agreement governing the Company’s senior secured convertible notes could (i) elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest and other premiums, and institute foreclosure proceedings against the Company’s assets, (ii) elect to apply the default interest rate under the Fortress Credit Agreement and the Fortress Convertible Note Agreement and related agreements, and (iii) with respect to the Fortress Credit Agreement, elect to terminate their delayed draw commitments thereunder and cease making further loans. As a result of any of these actions, the Company could be forced into bankruptcy or liquidation. In addition, the Company’s subordinated term loan – related party (see Note 13) and subordinated debt (see Note 12) could be accelerated or required to be paid due to provisions contained within those instruments. As a result, the Company has classified its senior term loan, convertible debt, subordinated term loan and subordinated debt as current at December 31, 2023.

In connection with the Fortress Credit Agreement, the Company granted Fortress entities party to the Fortress Credit Agreement a warrant to purchase 55,284 shares of Legacy Airspan’s Series H Senior Convertible Preferred Stock at a purchase price of $61.50. See Note 19 for additional information about the Series H Senior Convertible Preferred Stock. These warrants were recorded at fair value and recorded as a discount to the debt and will be amortized over the term of the debt instrument. In connection with the May 2023 Fortress Credit Amendment, the Company granted certain Fortress entities party to the May 2023 Fortress Credit Amendment a warrant to purchase 5,912,040 shares of common stock of the Company at a purchase price of $0.01 per share subject to the terms and conditions of the related warrant agreement (the “May 2023 Warrants”). See Note 19 for additional information about the May 2023 Warrants.

The interest rate for Tranche 1 is based on the level of the Company’s Net EBITDA Leverage Ratio, as defined in the Fortress Credit Agreement. The initial applicable rate for Tranche 1 is set at Level V (see table below). After the initial applicable rate period, the relevant rate (prior to the effective date of the May 2023 Fortress Credit Amendment) is as follows for Tranche 1:

From and after the effective date of the May 2023 Fortress Credit Amendment, the relevant rate is as follows for Tranche 1:

The interest rate for delayed draw term loans is based on the level of the Company’s Net EBITDA Leverage Ratio, as defined in the Fortress Credit Agreement. The initial applicable rate for delayed draw term loans is set at Level V (see table below). After the initial applicable rate period, the relevant rate is as follows for the delayed draw term loans:

Interest with respect to the delayed draw term loans and delayed draw term loans is payable monthly in accordance with the Cash Component/PIK Component split described in the foregoing table.

With respect to Tranche 2, the relevant applicable rate was 5.00% prior to the effective date of the May 2023 Fortress Credit Amendment, and 8.00% from and after the effective date of the May 2023 Fortress Credit Amendment and as of December 31, 2023 and is payable monthly as interest paid in kind.

The Company’s senior term loan balance was $61.3 million and $44.1 million, inclusive of accrued interest of $8.9 million and $5.0 million, as of December 31, 2023 and 2022, respectively. Deferred financing fees of $1.8 million and $3.6 million are reflected as reductions of the outstanding senior term loan balance as of December 31, 2023 and 2022, respectively.