EX-10.22 8 sonm-ex1022_530.htm EX-10.22

Exhibit 10.22

EXECUT ION COPY

TH IS AMENDED AND RESTATED S U BORD I NATED SECURED CONVERT IBLE PROM I SSORY NOTE IS SUB JECT TO THE TERMS OF THE SUBORD I NAT I ON AGREEMENT, DATED AS OF OCTO BER 23, 2017, IN FAVOR OF EA ST WEST BANK (OR ITS SUCCESSOR THEREUNDER), W HICH SUBORD INA T ION AGREEMENT (AS AMENDED IN ACC ORDANCE W ITH ITS TERMS) IS INCORPORATED HERE IN BY REFERENCE.

AMENDED A ND RESTATED SUBORD INATED SECURED CONVERT IBLE PROM I SSORY NOTE

$12,000,000Ap ril 9, 2018

FOR VA LUE RECE I VED, the undersigned, S ONIM TECHNOLO G I ES, IN C., a Delaware corporation (“Borrower”), hereby promises to pay to the order of B. RIL E Y P RI N C I P AL IN V E S T M ENT S, LL C, a Delaware limited liability company ("Lender"), at such place as Lender may designate in writin g, in lawful money of the United States of America, the principal sum of the lesser of (i) Twelve Milli on Dollars ($12,000,000) and (ii) the aggregate unpaid principal amount of the Term L oan Advances made pursuant to this Amended and Restated Subordinated Secured Promissory Note (this “Note”), and accrued interest thereon, as provided in the Subordinated Term Loan and Security A greement, dated as of October 23, 2017, by and between B orrow er and Lender (as amended from time to time, the "Loan A greement").

Capit aliz ed terms used and not otherwise defined herein shall have the m eanin gs giv en to them in the Loan A greement.

1. I nt e r e s t. Inter est shall a c crue on the terms and c onditions set forth in S ection 2.2 of the Loan Agre ement.

2. Pa y ment. The outst anding prin cipal amount of the Term L o an Adva n ces shall be repaid in full on the Ma turity Da t e. B orrow er may pr epay all or a ny portion of the Term L o an at a ny time and from time to time, in whole or in part, subject to the terms and conditions set forth in S ection 2.2(d) of the Loan A greement. Principal and int erest and all other amounts due hereunder a re to be paid in lawful money of the United States of America in fede r al or other immediately a v ail able f unds.

3. S ec uri t y I nte r e s t. Pa y m ent of the amounts due her eunder is se cured by B o rrowe r’s g r ant to L ender of a s ecurity int e r est in the Coll ateral pursuant to the terms of the Loan Agreement and, subject to the terms of the Subordination Agreement, L e nder shall have all the rights with respe ct to the Coll ateral set forth in the Loan A g r eement, as w ell as all the ri ghts of a secured p arty under the UCC.

4.Optional Conv e rsio n.

(a) Upon the written e l ecti on of L ender delivered to Borr ower at a ny time on or prior to the Maturity Da te (an “Election Notice”), the Convertible Amount shall be converted in full into shares of the S eries A-3 Preferred Stock of Borrower (the “S eri es A-3 Prefe rred”), with such

c onv e rsion d ee med to be e f fec t i ve upon B o r ro w e r’s r e c e ipt of the El ec t i o n Notic e. The number of sh a r e s of S e ri e s A-3 P r e fer re d to be is s u e d up o n su c h c onv e rsion sh a ll be the number obtain e d b y div i ding (A) the Conv e rtible Amount on the d a te of c onv e rsion b y (B) 0.59136 (su c h pri c e to be a djus t e d for st o c k spli t s, s t o c k div i d e nds a nd the like w i t h r e sp e c t t o the S e ri e s A-3 P ref e r r e d), roun de d to the n e a r e st whole sh a r e. “Conv e rti b le Amount” on a n y d a te is the sum of (A) the less e r of (i) the prin c i p a l outs t a nding on s u c h d a te a nd (ii) the p roduct of (x) the a ggre g a te prin c ipal a mount of t h e T e rm L o a n Adv a n ce s made b y L e nd e r to B or r o w e r a nd (y) the D e si g n a ted P e r ce nt a g e, a nd (B) the a c c ru e d in t e re st on su c h d a te, including, if it h a s not y e t b ee n c ompounded a nd a d d e d to t h is Not e’s prin c ipal in acc or d a n c e with the L o a n A g re e ment, the in t e r e st a c c rued prior to the fi r st a nni v e rs a r y of t h e E f f ec t i ve D a te. The “D e si g n a t e d P e r ce nt a g e” is (i) one hund re d p e rc e nt (100%) if the c onv e r s ion d a te is prior to the f irst a nnive r s a r y of the E f f e c t i ve D a te, (ii) s e v e n t y-fi v e p e rc e nt (75%) if t h e c onv e rsion d a te is on or a ft e r the fi r st a nnive r s a r y o f the E f f e c t ive D a te a nd p rior to the s ec ond a nniv e rs a r y of t h e c onv e rsion d a t e, (iii) fi f t y p e r c e nt (5 0%) if the c onv e rsion d a te is on or a ft e r the s e c ond a nnive r s a r y of the E f f e c t i v e D a te a nd prior to the th i rd a nnive r s a r y o f the c o n v e rsion d a te, (iv) tw e n t y-five p e rc e nt (25%) if the c onv e rsion d a te is o n or a ft e r t h e th i rd a nn i v e rs a r y o f the E f f ec t i ve D a te a nd pri o r to the fou r th a nniv e rs a r y o f t h e c onv e rsion d a te, a nd (v) tw e lve a nd a h a lf o f p e r c e nt (12.5%) if the c onv e rsion d a te is on o r a ft e r t h e fo u rth a nniv e r s a r y of the E f f e c t i ve D a te a nd on o r prior to the M a turi t y D a te.

(b) If the conversion of this Note would r esult in the issuance of a fr actional share, Borr ower sh a l l, in l ieu o f is s u a n c e of s u c h f r a c t i o n a l sha r e, p a y L e n d e r a s u m i n ca sh e qu a l t o the prod uc t r e sul t i n g f rom m ul t ip l y i n g the then c ur r e n t f a ir m a rk e t val u e, a s d e t e rmin e d in g ood f a i t h b y B or r o w e r's B o a rd of Dir e c tors, of o n e sh a r e of S e ri e s A-3 P ref e r r e d S tock b y s u c h f r ac t i on.

(c) As a condition pre c edent to L end e r's receipt of S eries A-3 Prefe rred shares upon c onv e rsion o f the Conv e rtible Amount, the L e nd e r sh a ll e x ec ute a n d d e l i v e r c ounte r p a rt si g n a tu r e p a g e s to t h e a g r ee ments b e t w ee n B or r ow e r a nd the holde r s of t h e outs t a nding S e ri e s A-

3 Prefe rred (the "Stockholder Documents"). Upon such e x ecution and d elive r y, L end er shall be entitl ed to the rights and benefits grant ed to the other holders of S eries A-3 Prefe rred pursuant to the Stockholder Docum ents, including, but not limited to, a ny re gistration ri ghts, information rights, preemptive ri ghts, rights of first refusal, c o-sale ri ghts and voti ng ri ghts. As soon as pra cti cable aft er conv ersion of this Note, the Compan y, at its e xpense, will cause to be issued in the name of and delivered to L ender, a certific ate or certific ates repr esenti ng the number of fully paid and nonassess able shares of the S eries A-3 Preferred to which L end er shall be entitl ed upon such conversion.

(d) Borrower shall at all ti mes maintain and reserve a sufficient number of shares of Series A-3 P ref e r r e d S t o c k for is s u a n c e upon the c onv e rsion o f th i s Note i n a c c ord a n c e with th i s S ec t i on 4. I f, notwi t hstanding the fo r e g oi n g c ov e n a nt, a t the t i me of c onv e rsion the r e a r e insuf f ici e nt a uthori z e d sh a r e s o f S e ri e s A-3 P r e f e r r e d to p e rmit fu l l c onv e rsion of the Conv e rtible Amount, t h e n B or r o w e r sh a ll take a ll c orpo ra te a c t i on n e c e ssa r y to a uthori z e a suf f ici e nt number of sh a r e s of S e ri e s A-3 P r e fer r e d to p e rmit su c h c onv e rsion in full. B or r ow e r st i pulat e s that L e nd e r's r e medi e s a t law in the e v e nt of a n y d e f a ult or thr ea ten e d d e f a ult b y B or r o w e r of th i s Se c t i on 4(d) a r e not a nd will n o t be a d e qu a te to the full e st e x tent p e rmit t e d b y

law, and that this S ection 4(d) may be specifi cally enfor ced by a de cree for the spe cific performa n ce of this S ection 4(d) or by an injunction against a viol ation of this S ection 4(d).

5. W a ive r. Borrow er waiv es presentm ent, dilig e n c e, demand of pa yment, noti ce, protest and all other demands and noti ces in connection with the delive r y, a c c eptance,

p e r f orm a n ce, d e f a ult or e nfo rce m e nt of th i s Note a nd the L o a n A g re e men t. I n a n y ac t i on on th i s Not e, L e nd e r n ee d not p r odu c e or file t h e or i g inal of th i s Not e, but n ee d o n l y file a phot o c o p y of th i s Note ce rtifi e d b y L e nd e r to be a t r u e a nd c or r ec t co p y of this Note in a ll mat e ri a l r e sp e c ts.

6. Gov e rni n g L a w; I nt e rp r e tatio n. This Note shall be gov erned b y, and construed in accord ance with, the int ernal laws of the State of California, without regard to principl es of conflicts of law. Whe n ever possible, each provision of this Note shall be int erpreted in such manner as to be eff e ctive and valid under appli ca ble law, but if a ny provision is prohibited by or invalid under appli cable law, it shall be ineffe ctive to the e xtent of such prohibition or invalidit y, without invalidating the r emainder of the provision or the remaining provisions of this Note.

7.Time of Ess e n c e. Time is of the essence of each and eve ry provision of this Note.

8. Am e ndment a nd R e stat e men t. This Note a m ends and restat es the Subordinated S ecured Promissory Note dated October 23, 2017 (the “Or i ginal Note”), which was e x ecuted and delivered in conne ction with the e x ecution and delive ry of the Loan Agreement. All outst anding Term L o ans and Term Loan Advanc es under the Or i ginal Note shall be d eemed to (i) be made under this Note, (ii) continue in full for ce and effe ct und er this Note and the Loan A g r eement and (iii) be secured by the unint errupted and continued security interest in the Coll ateral g r anted pursuant to the L oan A g r eement.

SONIM TECHNOLOGIES, INC.