| | Amendment No. 3 to the Subordinated Credit Agreement
In connection with the entry by the Issuer, on June 14, 2026, into a Securities Purchase Agreement (the "Purchase Agreement" and the transactions contemplated by the Purchase Agreement the "Transactions"), by and among the Issuer, certain direct or indirect subsidiaries of the Issuer named therein and Wavestream Corporation, a Delaware corporation and an affiliate of Gilat Satellite Networks Ltd, a company incorporated under the laws of the State of Israel, on June 14, 2026, the Issuer entered into an Amendment No. 3 to Subordinated Credit Agreement ("Amendment No. 3 to Subordinated Credit Agreement") with the guarantors party thereto, the lenders party thereto and the Subordinated Agent, which amends that certain Subordinated Credit Agreement, dated as of October 17, 2024, among the Issuer, the guarantors party thereto, the lenders party thereto and the Subordinated Agent (as amended by that certain Waiver and Amendment No. 1, dated as of March 3, 2025, and that certain Amendment No. 2 to Subordinated Credit Agreement, dated as of July 21, 2025, the "Existing Subordinated Credit Agreement" and, as amended by the Subordinated Amendment No. 3, the "Amended Subordinated Credit Agreement").
Pursuant to Amendment No. 3 to Subordinated Credit Agreement, the Subordinated Agent (a) acknowledges that the form of, and the terms and conditions set forth in, the Purchase Agreement and certain ancillary agreements related to the Transactions are acceptable to it, (b) consents to the consummation of the Transactions, and (c) acknowledges and agrees that the Transactions shall not result in a Change of Control (as defined in the Existing Subordinated Credit Agreement). The Amendment No. 3 to Subordinated Credit Agreement further amends the Existing Subordinated Credit Agreement to, among other things, (i) suspend, until the four-quarter period ending July 31, 2027, testing of the fixed charge coverage ratio, the net leverage ratio and the minimum EBITDA covenants in the Amended Subordinated Credit Agreement, (ii) modify the calculation of the make-whole premium applicable to certain tranches of the subordinated term loans (as described in further detail below), and (iii) clarify that the advance payment made to the Issuer pursuant to the Purchase Agreement will not be required to be applied to prepay the applicable obligations in accordance with the terms of the Amended Subordinated Credit Agreement until the consummation of the Transactions.
The Amended Subordinated Credit Agreement provides that, with respect to the subordinated term loans that are subject to a make-whole amount (which have an aggregate outstanding principal amount of $65,000,000), the make-whole amount will be equal to (i) before and on April 1, 2027, the principal repayment amount multiplied by 50.0%, plus, starting on March 3, 2027, interest accrued on the principal amount outstanding at the Make-Whole Interest Rate (as defined below) and calculated as of any such date of determination; and (ii) after April 1, 2027, the principal repayment amount multiplied by 75.0% plus, starting on April 1, 2027, interest accrued on the principal amount outstanding at the Make-Whole Interest Rate (as defined below) and calculated as of any such date of determination. The Make-Whole Interest Rate is a rate equal to 16.0% per annum, which is increased by 2.0% per annum upon the occurrence and during the continuation of an event of default under the Amended Subordinated Credit Agreement.
Capitalized terms used, but not defined, in this section under the heading "Amendment No. 3 to Subordinated Credit Agreement" have the meanings set forth in the Existing Credit Agreement, the Amended Subordinated Credit Agreement or Amendment No. 3 to Subordinated Credit Agreement, as applicable.
In connection with the Amendment No. 3 to Subordinated Credit Agreement, the Issuer issued warrants (the "Lender Warrants" and together with the Preferred Warrants (as defined below), the "Warrants") to WHSP II, which entitles WHSP II to purchase from the Issuer up to 125,000 shares (the "Warrant Shares") of the Issuer's common stock, par value $0.10 per share (the "Common Stock"), at any time and from time to time from the Vesting Date (as defined below) and on or prior to the close of business on 5:00 p.m., New York, NY time, on April 17, 2032, at an exercise price of $0.10 per share, subject to certain adjustments. The Lender Warrants and the Warrant Shares will vest and become exercisable on October 17, 2026 (the "Vesting Date"); provided, however, that the Lender Warrants will not vest, and will be automatically and irrevocably forfeited and cancelled for no consideration, if, prior to the Vesting Date, the Closing Date Term Loans (as defined in the Amended Subordinated Credit Agreement) have been repaid in full, including (x) all accrued and unpaid interest on the Closing Date Term Loans and (y) the applicable make-whole amount payable in connection with such payment. In connection with the Lender Warrants, the Issuer entered into an amendment (the "Registration Rights Agreement Amendment") to that certain Registration Rights Agreement, dated as of March 3, 2025 (the "Existing Registration Rights Agreement"), by and among the Issuer and the investors parties named therein, to grant Warrant Holders certain customary registration rights with respect to the shares of Common Stock issuable upon exercise of the Lender Warrants.
The foregoing descriptions of Amendment No. 3 to Subordinated Credit Agreement, the Registration Rights Agreement Amendment and the Lender Warrants are not complete and are qualified in their entirety by the full texts of Amendment No. 3 to Subordinated Credit Agreement, the Registration Rights Agreement Amendment and the form of Lender Warrant. For further information regarding Amendment No. 3 to Subordinated Credit Agreement, the Registration Rights Agreement Amendment and the Lender Warrants, reference is made to the full texts of Amendment No. 3 to Subordinated Credit Agreement, the Registration Rights Agreement Amendment and the Lender Warrants which have been filed as Exhibit 99.19, Exhibit 99.20, and Exhibit 99.21 hereto, respectively and incorporated by reference herein.
Exchange Agreement
On June 14, 2026, the White Hat Funds entered into an Exchange Agreement (the "Exchange Agreement") with the Issuer and the other investors listed on the signature pages attached thereto (each of the White Hat Funds and such other parties, an "Investor" and collectively, the "Investors") pursuant to which the parties agreed to change certain terms of the Series B-3 Convertible Preferred Stock. The Investors agreed to, among other things, (i) consent to the Purchase Agreement, certain ancillary agreements related to the Transactions, and the consummation of the Transactions, (ii) waive any rights to repayment or repurchase of shares of Series B-3 Convertible Preferred Stock (as defined below) owned or controlled by such Investor or its related parties in connection with the Transactions, and (iii) change certain terms of the Issuer's Series B-3 Convertible Preferred Stock, par value $0.10 per share (the "Series B-3 Convertible Preferred Stock"). The changes provide that (i) the Investors may not exercise their optional repurchase right until October 31, 2029, except upon consummation of certain qualified asset sales by the Issuer or its subsidiaries or a Change of Control (as defined in the Series B-4 Certificate of Designations), and (ii) the Investors may not elect to receive dividends in cash earlier than October 31, 2028. Pursuant to the Exchange Agreement, assuming the satisfaction of the conditions to such exchange (i) WHSP will exchange, 24,576.16 shares of Series B-3 Convertible Preferred Stock outstanding for 24,576.16 shares of the Company's newly issued Series B-4 Convertible Preferred Stock, par value $0.10 per share, with an initial liquidation preference equal to the per share liquidation preference of the Series B-3 Convertible Preferred Stock as of the date of issuance (collectively, the "Series B-4 Convertible Preferred Stock") and (ii) WHSP II will exchange 6,365.08 shares of Series B-4 Convertible Preferred Stock for 6,365.08 shares of Series B-4 Convertible Preferred Stock (exchanges described in clauses (i) and (ii) above, the "Exchange"). Consummation of the Exchange and issuance of shares of Series B-4 Convertible Preferred Stock are conditioned upon the consummation of the Transactions and are expected to occur on the date of the Closing.
In connection with the Exchange Agreement, the White Hat Funds entered into a Voting Agreement, substantially consistent with existing agreements relating to the Series B-3 Convertible Preferred Stock (the "Voting Agreement"), pursuant to which the White Hat Funds agreed, among other things, subject to the qualifications and exceptions set forth in the Voting Agreements, to vote their shares of Series B-4 Convertible Preferred Stock or shares issued upon conversion of the Series B-4 Convertible Preferred Stock that exceed 3.4999% of the Company's outstanding voting power as of January 22, 2024, in the same proportion as the vote of all holders (excluding the Investors) of the Series B-4 Convertible Preferred Stock or the Common Stock, as applicable. The Voting Agreement will automatically take effect as of the Closing, and the existing voting agreement relating to the Series B-3 Convertible Preferred Stock will be automatically terminated.
Also in connection with the closing of the Exchange Agreement, the White Hat Funds entered into a Registration Rights Agreement, substantially consistent with the existing agreement relating to the Series B-3 Convertible Preferred Stock, with the Issuer and the other Investors (the "Registration Rights Agreement"), pursuant to which the Issuer granted the Investors certain customary registration rights with respect to the shares of Common Stock issued and issuable upon conversion of Series B-4 Convertible Preferred Stock and upon exercise of Warrants, including the warrants issued in substitution for the Series B-4 Convertible Preferred Stock in certain circumstances (described below). The Registration Rights Agreement will become effective automatically as of the Closing and the Existing Registration Rights Agreement will be automatically terminated.
The foregoing description of the Exchange Agreement, Voting Agreement and Registration Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the full texts of the Exchange Agreement, Form of Voting Agreement and Registration Rights Agreement. For further information regarding the Exchange Agreement, Form of Voting Agreement and Registration Rights Agreement, reference is made to the full texts of the Exchange Agreement, Form of Voting Agreement and Registration Rights Agreement which have been filed as Exhibit 99.22, Exhibit 99.23, and Exhibit 99.24 hereto, respectively and incorporated by reference herein.
Except for the changes described above, the powers, preferences and rights of the Series B-4 Convertible Preferred Stock are substantially similar as those of the Series B-3 Convertible Preferred Stock, including, without limitation, that the shares of Series B-4 Convertible Preferred Stock are convertible into shares of Common Stock at a conversion price of $7.99 per share of Common Stock (the same as the conversion price of the Series B-3 Convertible Preferred Stock, and subject to the same adjustments).
The foregoing descriptions of the Exchange Agreement, Series B-4 Certificate of Designations, Warrant, Voting Agreement and Registration Rights Agreement do not purport to be complete and are qualified in their entireties by reference to the full texts of the Subscription and Exchange Agreement, Series B-3 Certificate of Designations, Form of Warrant, Voting Agreement and Registration Rights Agreement. For further information regarding the Subscription and Exchange Agreement, Series B-3 Certificate of Designations, Warrant, Voting Agreement and Registration Rights Agreement reference is made to the texts of the Subscription and Exchange Agreement, Series B-3 Certificate of Designations, Form of Warrant, Form of Voting Agreement and Registration Rights Agreement, which have been filed as Exhibit 99.13 hereto, Exhibit 3.1 of the Issuer's Current Report on Form 8-K filed with the Securities and Exchange Commission (the "SEC") on March 4, 2025, Exhibit 99.14, Exhibit 99.15 and Exhibit 99.16 hereto, respectively, and incorporated by reference herein.The foregoing description of the Series B-4 Convertible Preferred Stock does not purport to be complete and is qualified in its entirety by reference to the form of Certificate of Designations of the Series B-4 Convertible Preferred Stock, which is included in the Exchange Agreement that is filed as Exhibit 10.5 to the Issuer's Current Report on Form 8-K filed with the SEC on June 15, 2026, and incorporated herein by reference, and to the final Certificate of Designations of the Series B-4 Convertible Preferred Stock, which will be filed with a subsequent Current Report on Form 8-K.
Like the Series B-3 Convertible Preferred Stock, the Series B-4 Convertible Preferred Stock will provide for repurchase of the Series B-4 Convertible Preferred Stock at the Company's option or the holders' options upon the occurrence of specified asset sales. Upon the occurrence of such repurchases by an Investor or the Company, the Company will issue to each Investor whose shares of Series B-4 Convertible Preferred Stock were repurchased a warrant to purchase Common Stock (each, a "Preferred Warrant", collectively, the "Preferred Warrants"). A Preferred Warrant will represent the right to acquire Common Stock, as further described in the Exchange Agreement, for a term of five years and six months from the issuance of such Warrant, in the amount of (x) the aggregate Liquidation Preference of shares of Series B-4 Convertible Preferred Stock purchased by the Company divided by (y) the Conversion Price as of such Optional Repurchase Date or the Optional Call Date, subject to adjustments set forth in the Warrant, and with an initial exercise price equal to the Conversion Price as of such Optional Repurchase Date or the Optional Call Date, as applicable, in each case, subject to adjustments substantially similar to the Series B-4 Convertible Preferred Stock. Capitalized terms used but not defined in this paragraph shall have the meanings ascribed to them in the Exchange Agreement.
The foregoing description of the Preferred Warrants is not complete and is qualified in its entirety by reference to the full text of the form of the Preferred Warrant. For further information regarding the Preferred Warrants, reference is made to the full text of the form of Preferred Warrants which has been filed as Exhibit 99.25 hereto and incorporated by reference herein. |
