AMENDMENT NO. 3

TO CREDIT AGREEMENT

 

AMENDMENT NO. 3 TO CREDIT AGREEMENT dated as of April 20, 2017 (the “Amendment”)
among (1) JUS-COM, INC., an Indiana corporation (the “Initial Borrower”), (2)
FTE NETWORKS, INC., a Nevada corporation (“Holdings”), (3) the lenders party
hereto, and (4) LATERAL JUSCOM FEEDER LLC, a Delaware limited liability company,
as Administrative Agent (in such capacity, together with its successors in such
capacity, the “Administrative Agent”).

 

PRELIMINARY STATEMENTS

 

A. The Initial Borrower, Holdings, each lender from time to time party thereto
(the “Lenders”), and the Administrative Agent have entered into that certain
Credit Agreement dated as of October 28, 2015 (as amended, restated,
supplemented or otherwise modified prior to the date hereof, including pursuant
to the Amendment No. 1 to Credit Agreement dated as of April 5, 2016, and
Amendment No. 2 to Credit Agreement dated as of September 30, 2016, the
“Existing Credit Agreement” and as amended, restated, supplemented or otherwise
modified from time to time including pursuant hereto, the “Credit Agreement”).

 

B. The Initial Borrower has requested that the Administrative Agent and the
Lenders amend the Credit Agreement to, among other matters, provide additional
extensions of credit, and the Administrative Agent and each of the Lenders party
hereto are willing to do so on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the sufficiency and receipt of all of which is hereby
acknowledged, the parties hereto hereby agree as follows:

 

SECTION 1. Definitions. Capitalized terms not otherwise defined in this
Amendment have the same meanings as specified in the Existing Credit Agreement
or, if not defined therein, the Credit Agreement as modified by this Amendment.

 

SECTION 2. Amendments to Loan Documents; Other Agreements. (a) Subject to the
terms and conditions set forth herein, on the Third Amendment Effective Date (as
defined below):

 

(i) the Existing Credit Agreement shall be amended to incorporate the changes
reflected in, and read in its entirety as set forth in, the form attached hereto
as Annex A; and

 

(ii) Exhibits B-1, B-2, H-1 and P-1 to the Credit Agreement shall mean and refer
to Exhibits B-1, B-2, H-1 and P-1 attached to this Amendment.

 

(b) On the Third Amendment Effective Date, each Person executing this Amendment
in its capacity as a “Lender” under the Credit Agreement hereby consents to this
Amendment and the terms and provisions thereof.

 

(c) The Credit Parties hereby acknowledge and agree that:

 

(i) as of the last day of the calendar month most recently ended prior to the
date hereof, the outstanding principal amount of the Term Loans (inclusive of
all Principal Increases) was $[●], which Term Loans constitute valid and
subsisting obligations of the Credit Parties to the Lenders and are not subject
to any credit, offset, defense, claim, counterclaim or adjustment of any kind;
and

 

   

 

 

(ii) in connection with the Amendment No. 1 to Credit Agreement dated as of
April 5, 2016, the Credit Parties agreed to pay to the Lenders composing the
Lateral Entities a fee equal to $240,000, and to pay to the Lenders composing
the WP Entities a fee equal to $240,000, and that such fees remain unpaid as of
the Third Amendment Effective Date. The Lenders hereby agree that such fees
shall be paid, effective as of March 31, 2017, by being added to the principal
amount outstanding in respect of the Term Loans of the corresponding Lenders
(and applied ratably among the Term Loans of the Lenders composing the Lateral
Entities and WP Entities, as the case may be), and thereafter shall accrue
interest in accordance with the terms of the Credit Agreement.

 

(d) Holdings has advised the Administrative Agent and the Lenders that (i) FTE
Properties, LLC and UBIQ Communications, LLC (each a Subsidiary of Holdings and
herein referred to as the “Designated Subsidiaries”) hold no assets, are
otherwise not in good standing in their respective jurisdictions of
organization, and are likely to be administratively dissolved, (ii) the Credit
Parties have potentially accrued certain payroll tax liabilities for activities
arising prior to the Third Amendment Effective Date (all as disclosed to the
Administrative Agent prior to the Third Amendment Effective Date and herein
referred to the “Designated Tax Liabilities”), and (iii) Messrs. Palleschi and
Lethem (affiliates of Holdings and herein referred to herein as the “Designated
Individuals”) have collectively advanced an aggregate of $777,000 to Holdings
(the “Related Party Payables”) and that the Designated Individuals have
requested that all such Related Party Payables be repaid following the Third
Amendment Effective Date. The Administrative Agent and the Lenders hereby agree
(effective with the Third Amendment Effective Date) that (i) so long as neither
Designated Subsidiary holds any assets, neither the fact that the Designated
Subsidiaries are not in good standing in their respective jurisdictions of
organization and are likely to be administratively dissolved nor the actual
administrative dissolution of either or both of the Designated Subsidiaries
shall constitute an Event of Default, (ii) so long as the aggregate liability in
respect of the Designated Tax Liabilities does not exceed $1.8 million, the
representations and warranties in Section 3.10 of the Credit Agreement, and the
covenant in Section 4.7(a) of the Credit Agreement, shall be deemed qualified by
reference to the existence of the Designated Tax Liabilities, and (iii) so long
as (A) no Default or Event of Default has occurred and is continuing or would
result therefrom, and (B) Holdings shall have paid all amounts otherwise due and
payable in respect of the Benchmark Indebtedness for the month most recently
ended prior to the proposed payment date, Holdings may repay the Related Party
Payables not more frequently than monthly and then in an amount in any month not
greater than the lesser of (1) $100,000, and (2) 20% of the “Monthly Excess Cash
Flow” (as defined in the Benchmark Subordination Agreement), giving effect to
the $4.0 million minimum unrestricted cash and cash equivalents qualification
set forth in the definition of “Monthly Excess Cash Flow Amount” (as defined in
the Benchmark Subordination Agreement).

 

SECTION 3. Conditions to Effectiveness of Amendment. This Amendment shall become
effective (the “Third Amendment Effective Date”) upon satisfaction of the
following conditions in a manner reasonably satisfactory to the Administrative
Agent and the Lenders:

 

(a) The Administrative Agent shall have received executed counterparts of the
following documents and instruments or such other items as are described below,
as the case may be:

 

(i) this Amendment, duly executed and delivered by the Initial Borrower,
Holdings, the Administrative Agent and each of the Lenders;

 

(ii) a Consent and Reaffirmation, in the form attached hereto as Annex C, duly
executed and delivered by the Initial Borrower, Holdings and each other Credit
Party;

 

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(iii) a fee agreement, in form and substance acceptable to the Administrative
Agent, duly executed and delivered by the Initial Borrower, Holdings, each other
Credit Party and the Affiliate of the Administrative Agent party thereto (the
“Amendment Fee Letter”);

 

(iv) a Notice of Borrowing in respect of the Third Amendment Term Loans;

 

(v) if requested by the Lender with the Third Amendment TL Commitment, a Third
Amendment Term Note evidencing the Third Amendment Term Loans advanced on the
Third Amendment Effective Date;

 

(vi) the Holdings Assumption Agreement, duly executed and delivered by the
parties signatory thereto;

 

(vii) the Benchmark Subordination Agreement, duly executed and delivered by the
parties signatory thereto;

 

(viii) a solvency certificate from the chief executive officer or chief
financial officer of Holdings in substantially the form of Exhibit 2.1(c) to the
Credit Agreement; and

 

(ix) a certificate of a Responsible Officer of Crosslayer, Inc., a newly
organized subsidiary of Holdings (“Crosslayer”), and each Credit Party (other
than the Designated Subsidiaries) dated the Third Amendment Effective Date,
certifying (A) that attached thereto is (1) a true and complete copy of a
certificate as to the good standing of Crosslayer and each Credit Party (in
so-called “long-form” if available), as of a recent date, from the Secretary of
State of the state of its organization (or other applicable Governmental
Authority to the extent available), (2) a true and complete copy of each
Organization Document of Crosslayer and each Credit Party certified as of a
recent date by the Secretary of State of the state of its organization (or, if
any such Organizational Document of a Credit Party has not been amended,
restated, supplemented, or otherwise modified since the Closing Date, certifying
the absence of any amendments, restatements, supplements, or modifications to
such Organizational Documents of such Credit Party), (3) a true and complete
copy of resolutions duly adopted by the board of directors or similar governing
body of Crosslayer and each Credit Party authorizing the execution, delivery and
performance of this Amendment and each other document or instrument required to
be delivered in connection herewith, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, and (4) a true
and complete copy of the Benchmark Purchase Agreement and each other document or
instruments to be executed and delivered in connection with the consummation of
the Benchmark Acquisition, and (B) as to the incumbency and specimen signature
of each officer executing this Amendment or any other document or instrument
delivered in connection herewith on behalf of Crosslayer or any Credit Party
(together with a certificate of another officer as to the incumbency and
specimen signature of the Responsible Officer executing the certificate in this
clause (ix)).

 

(b) Evidence reasonably satisfactory to the Administrative Agent that, in
accordance with the Benchmark Purchase Agreement, the Benchmark Acquisition has
been consummated (or will be consummated concurrently) with the funding of the
Third Amendment Term Loans.

 

(c) There shall not exist any judgment, decree or order of any Governmental
Authority which would prevent the performance of this Amendment, the Credit
Agreement (as modified hereby), the Benchmark Acquisition or the transactions
contemplated hereby or declare unlawful this Amendment or the other transactions
contemplated hereby.

 

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(d) The Administrative Agent and the Lenders shall have received all
documentation and other information requested by the Administrative Agent or any
Lender and required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including, without
limitation, the PATRIOT Act.

 

(e) All other documents and legal matters in connection with the transactions
contemplated by this Amendment shall have been delivered or executed or recorded
and shall be in form and substance satisfactory to the Administrative Agent.

 

It shall be a condition subsequent to the Third Amendment Effective Date that
each of the following conditions subsequent are satisfied (and the failure to
satisfy such conditions subsequent shall constitute an immediate Event of
Default):

 

(a) the Administrative Agent shall have received (unless extended by the
Administrative Agent in the exercise of its sole discretion):

 

(i) no later than April 21, 2017:

 

(A) amended and restated Schedules 3.18, 3.19, 3.25, 5.1, 5.4, 5.5, and 5.9 to
the Existing Credit Agreement (giving pro forma effect to the Benchmark
Acquisition), each of which shall be acceptable to the Administrative Agent and
the Lenders;

 

(B) a Perfection Certificate, duly executed and delivered by (A) Benchmark, (B)
Crosslayer, and (C) each Credit Party;

 

(C) the Benchmark Assumption Agreement, duly executed and delivered by the
parties signatory thereto;

 

(D) a joinder agreement (in the form attached to the Guaranty and Security
Agreement) duly executed and delivered by Benchmark, each other Credit Party
thereto and the Administrative Agent;

 

(E) a joinder agreement (in the form attached to the Guaranty and Security
Agreement) duly executed and delivered by Crosslayer, each other Credit Party
thereto and the Administrative Agent;

 

(F) (1) a pledge amendment (in the form attached to the Guaranty and Security
Agreement) duly executed by Holdings in respect of the Stock of Benchmark
acquired with the proceeds of the Third Amendment Term Loans, (2) all
certificates evidencing the Stock of Benchmark acquired in the Benchmark
Acquisition, accompanied by instruments of transfer or stock powers undated and
endorsed in blank, and (3) UCC financing statements in appropriate form for
filing under the UCC, filings with the United States Patent and Trademark Office
and United States Copyright Office and such other documents under applicable
Requirements of Law in each United States jurisdiction as may be necessary or
appropriate, in the reasonable opinion of the Administrative Agent, to perfect
the Liens created, or purported to be created, by Benchmark pursuant to the
Collateral Documents;

 

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(G) a certificate of a Responsible Officer of Benchmark, certifying (A) that
attached thereto is (1) a true and complete copy of a certificate as to the good
standing of Benchmark (in so-called “long-form” if available), as of a recent
date, from the Secretary of State of the state of its organization (or other
applicable Governmental Authority to the extent available), (2) a true and
complete copy of each Organization Document of Benchmark certified as of a
recent date by the Secretary of State of the state of its organization, and (3)
a true and complete copy of resolutions duly adopted by the board of directors
or similar governing body of Benchmark authorizing the execution, delivery and
performance of the Benchmark Assumption Agreement, the Credit Agreement (as
supplemented thereby) and each other document or instrument required to be
delivered in connection herewith, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect and (B) as to
the incumbency and specimen signature of each officer executing the Benchmark
Assumption Agreement or any other document or instrument delivered in connection
herewith or therewith on behalf of Benchmark (together with a certificate of
another officer as to the incumbency and specimen signature of the Responsible
Officer executing the certificate in this clause (F));

 

(H) (1) a pledge amendment (in the form attached to the Guaranty and Security
Agreement) duly executed by Holdings in respect of the Stock of Crosslayer, (2)
all certificates evidencing the Stock of Crosslayer, accompanied by instruments
of transfer or stock powers undated and endorsed in blank, (3) UCC financing
statements in appropriate form for filing under the UCC, filings with the United
States Patent and Trademark Office and United States Copyright Office and such
other documents under applicable Requirements of Law in each United States
jurisdiction as may be necessary or appropriate, in the reasonable opinion of
the Administrative Agent, to perfect the Liens created, or purported to be
created, by Crosslayer pursuant to the Collateral Documents, and (4) copies of
UCC, United States Patent and Trademark Office, tax and judgment lien searches,
bankruptcy and pending lawsuit searches or equivalent reports or searches, each
of a recent date listing all effective financing statements, lien notices or
comparable documents that name Benchmark, Crosslayer or any Credit Party as
debtor and that are filed in those state and county jurisdictions in which any
property of Benchmark, Crosslayer or any Credit Party is located and the state
and county jurisdictions in which Benchmark, Crosslayer or any Credit Party is
organized or maintains its principal place of business and such other searches
that the Administrative Agent deems necessary or appropriate, none of which
encumber the Collateral covered or intended to be covered by the Collateral
Documents (other than Permitted Liens);

 

(ii) no later than April 28, 2017:

 

(A) for the benefit of the Lender with the Third Amendment TL Commitment, the
Administrative Agent shall have received a number of shares of common Stock of
Holdings representing an aggregate of 10.0% (determined on a fully diluted basis
after giving effect to the consummation of the Benchmark Acquisition and all
Stock and Stock Equivalents (or securities convertible into or exchangeable for
Stock and\or Stock Equivalents) issued in connection therewith) of the
outstanding Stock and Stock Equivalents of Holdings, accompanied by supporting
evidence (in form and substance reasonably acceptable to the Administrative
Agent) that the issuance of such shares have been duly authorized and issued in
accordance with the Organizational Documents of Holdings and all Requirements of
Law; and

 

(B) the Administrative Agent shall have received (for the benefit of the
applicable Persons described therein) all Stock contemplated to be issued
pursuant to the Conditional Termination of Redemption Rights Agreement dated on
or about the Third Amendment Effective Date among Holdings and the Lenders party
thereto;

 

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(iii) no later than April [●], 2017:

 

(A) a legal opinion from K&L Gates LLP, designated transactional counsel to
Benchmark and the Credit Parties, and from such other counsel as the
Administrative Agent may reasonably request, each in form and substance
reasonably satisfactory to the Administrative Agent;

 

(B) updated certificates evidencing the record ownership of Holdings of all of
the issued and outstanding Stock of Benchmark, accompanied by instruments of
transfer or stock powers undated and endorsed in blank;

 

(C) customary insurance certificates and endorsements thereto in form and
substance reasonably satisfactory to the Administrative Agent naming the
Administrative Agent (on behalf of the Lenders) as an additional insured or loss
payee (and mortgagee), as the case may be, under all insurance policies to be
maintained with respect to the properties of the Credit Parties (including
Benchmark and Crosslayer) forming part of the Collateral; and

 

(iv) no later than May [●], 2017:

 

(A) the Administrative Agent shall have received Control Agreements in respect
of all Deposit Accounts of Benchmark and (to the extent not otherwise in effect
on the Third Amendment Effective Date) each Credit Party; and

 

(B) the Administrative Agent shall have received such other documents and
instruments as the Administrative Agent may reasonably request to evidence (or
further evidence) that the Administrative Agent has a perfected, first priority
Lien in all Collateral, subject only to Permitted Liens.

 

SECTION 4. Representations and Warranties. The Initial Borrower represents and
warrants to the Administrative Agent and the Lenders that:

 

(a) Each Credit Party and each of their respective Subsidiary (i) is a
corporation, limited liability company or limited partnership, as applicable,
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, organization or formation, as applicable;
(ii) has the power and authority and all governmental licenses, authorizations,
Permits, consents and approvals to own its assets, carry on its business and
execute, deliver, and perform its obligations under, this Amendment (and the
Credit Agreement); (iii) is duly qualified as a foreign corporation, limited
liability company or limited partnership, as applicable, and licensed and in
good standing, under the laws of each jurisdiction where its ownership, lease or
operation of Property or the conduct of its business requires such qualification
or license; and (iv) is in compliance with all Requirements of Law; except, in
each case referred to in clause (iii) or clause (iv), to the extent that the
failure to do so would not reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect.

 

(b) The execution, delivery and performance by each of the Credit Parties of
this Amendment have been duly authorized by all necessary action, and do not and
will not (i) contravene the terms of any of that Person’s Organization
Documents, (ii) conflict with or result in any material breach or contravention
of, or result in the creation of any Lien under, any document evidencing any
material Contractual Obligation to which such Person is a party or any order,
injunction, writ or decree of any Governmental Authority to which such Person or
its Property is subject, or (iii) violate any material Requirement of Law in any
material respect.

 

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(c) No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority is necessary or required
in connection with the execution, delivery or performance by, or enforcement
against, any Credit Party or any Subsidiary of any Credit Party of this
Amendment (or the Credit Agreement) except (a) for recordings and filings in
connection with the Liens granted to the Administrative Agent under the
Collateral Documents and (b) those obtained or made on or prior to the Third
Amendment Effective Date.

 

(d) This Amendment (and the Credit Agreement) constitute the legal, valid and
binding obligations of the Initial Borrower and Holdings, enforceable against
such Person in accordance with their respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws affecting
the enforcement of creditors’ rights generally or by equitable principles
relating to enforceability.

 

SECTION 5. Reference to and Effect on the Credit Agreement and the Loan
Documents.

 

(a) On and after the Third Amendment Effective Date, each reference in the
Existing Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of
like import referring to the Existing Credit Agreement shall mean and be a
reference to the Existing Credit Agreement as amended by this Amendment on the
Third Amendment Effective Date. This Amendment shall constitute a Loan Document
for all purposes of the Credit Agreement and the other Loan Documents.

 

(b) The Existing Credit Agreement and each of the other Loan Documents, as
specifically amended by this Amendment, are and shall continue to be in full
force and effect and are hereby in all respects ratified and confirmed. Without
limiting the generality of the foregoing, the Collateral Documents and all of
the Collateral described therein do and shall continue to secure the payment of
all Obligations of the Credit Parties under the Loan Documents, in each case, as
amended by this Amendment. Furthermore, the Initial Borrower and Holdings
acknowledge that neither Person has any offsets or defenses to its obligations
under the Loan Documents to which it is a party and no claims or counterclaims
against the Administrative Agent or any Lender.

 

(c) The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of any Lender or the Administrative Agent under any of the Loan
Documents, nor constitute a modification, acceptance or waiver of any other
provision of any of the Loan Documents. No failure or delay or course of dealing
on the part of the Administrative Agent and Lenders in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights, powers and remedies provided in the Loan Documents are cumulative
and not exclusive of any rights, powers or remedies which the Administrative
Agent and the Lenders would otherwise be entitled to exercise. No notice to or
demand on any Credit Party in any case shall entitle any such Person to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Administrative Agent and the Lenders to
any other or further action in any circumstances without notice or demand

 

SECTION 6. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute but one and the same agreement. Delivery
of an executed counterpart of a signature page to this Amendment by facsimile or
.pdf shall be effective as delivery of a manually executed counterpart of this
Amendment.

 

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SECTION 7. Miscellaneous. The laws of the State of New York shall govern all
matters arising out of, in connection with or relating to this Amendment,
including its validity, interpretation, construction, performance and
enforcement (including any claims sounding in contract or tort law arising out
of the subject matter hereof and any determinations with respect to
post-judgment interest). This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York. Sections 9.18(b), 9.18(c),
9.18(d), and 9.19 of the Credit Agreement are hereby incorporated by reference
into this Amendment, mutatis mutandis, and the parties hereto hereby agree that
such provisions shall apply to this Amendment with the same force and effect as
if set forth herein in their entirety.

 

[The remainder of this page is intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

INITIAL BORROWER: JUS-COM, INC.         By:     Name: Michael Palleschi   Title:
Chief Executive Officer

 

HOLDINGS: FTE NETWORKS, INC.         By:     Name: Michael Palleschi   Title:
CEO/President

 

Signature Page to Amendment No. 3 to Credit Agreement

JUS-COM, Inc.

 

   

 

 

  LATERAL JUSCOM FEEDER LLC,
as Administrative Agent         By: Lateral Global Investors, LLC, its Manager  
      By:     Richard de Silva, Manager                LATERAL JUSCOM FEEDER
LLC,
as a Lender               By: Lateral Global Investors, LLC, its Manager        
By:     Richard de Silva, Manager         LATERAL FTE FEEDER LLC,
as a Lender               By: Lateral Global Investors, LLC, its Manager        
By:     Richard de Silva, Manager         LATERAL U.S. CREDIT OPPORTUNITIES
FUND, L.P.,
as a Lender         By: Lateral Credit Opportunities, LLC, its General Partner  
      By:     Richard de Silva, Manager

 

Signature Page to Amendment No. 3 to Credit Agreement

JUS-COM, Inc.

 

   

 

 

ANNEX A

 

REDLINE VERSION OF

CREDIT AGREEMENT AS AMENDED BY AMENDMENT NO. 3

 

[Attached]

 

   

 

 

ANNEX B

 

RESERVED

 

   

 

 

ANNEX C

 

CONSENT AND REAFFIRMATION

 

April 20, 2017

 

Reference is made to (i) that certain Credit Agreement, dated as of October 28,
2015 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among (1) JUS-COM, INC., an Indiana corporation
(the “Initial Borrower”), (2) FTE NETWORKS, INC., a Nevada corporation
(“Holdings”), (3) the lenders party hereto, and (4) LATERAL JUSCOM FEEDER LLC, a
Delaware limited liability company, as Administrative Agent (in such capacity,
together with its successors in such capacity, the “Administrative Agent”); and
(ii) Amendment No. 3 to Credit Agreement dated as of April 20, 2017 (the
“Amendment”) among the Initial Borrower, Holdings, the Lenders party thereto,
and the Administrative Agent. Capitalized terms used but not otherwise defined
in this Consent and Reaffirmation (this “Consent”) are used with the meanings
attributed thereto in the Amendment.

 

Each Credit Party hereby consents to the execution, delivery and performance of
the Amendment and the Existing Credit Agreement (as modified by the Amendment
upon the satisfaction of the conditions set forth in Section 3 of the Amendment)
and agrees that each reference to the Existing Credit Agreement in the Loan
Documents shall, on and after the Third Amendment Effective Date, be deemed to
be a reference to the Existing Credit Agreement as amended by the Amendment on
the Third Amendment Effective Date. The Existing Credit Agreement and each of
the other Loan Documents, as specifically amended by the Amendment, are and
shall continue to be in full force and effect and are hereby in all respects
ratified and confirmed. Without limiting the generality of the foregoing, the
Collateral Documents and all of the Collateral described therein do and shall
continue to secure the payment of all Obligations of the Credit Parties under
the Loan Documents, in each case, as amended by the Amendment. Furthermore, each
Credit Party acknowledges that such Credit Party has no offsets or defenses to
its obligations under the Loan Documents to which it is a party and no claims or
counterclaims against the Administrative Agent or any Lender.

 

This Consent shall be governed by, and construed and interpreted in accordance
with, the laws of the state of New York.

 

[Signature Pages Follow]

 

   

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Consent and
Reaffirmation as of the date first set forth above.

 

  JUS-COM, INC., an Indiana corporation         By:     Name:     Title:        
  FTE NETWORKS, INC., a Nevada corporation         By:     Name:     Title:    
      UBIQ COMMUNICATIONS, LLC, a Nevada limited liability company         By:  
  Name:                               Title:           FOCUS VENTURE PARTNERS,
INC., a Nevada corporation         By:     Name:     Title:           FTE
HOLDINGS, LLC, a Nevada limited liability company         By:     Name:    
Title:           FTE PROPERTIES, LLC, a Nevada limited liability company        
By:     Name:     Title:           FOCUS FIBER SOLUTIONS, LLC, a Delaware
limited liability company         By:     Name:     Title:  

 

  FOCUS WIRELESS, LLC, a Delaware limited liability company         By:    
Name:                Title:           OPTOS CAPITAL PARTNERS, LLC, a Delaware
limited liability company         By:     Name:     Title:  

 

Signature Page to Consent and Reaffirmation

 

   

 

 

EXHIBIT B-1

 

FORM OF BENCHMARK ASSUMPTION AGREEMENT

 

[Attached]

 

   

 

 

DRAFT: APRIL 14, 2017

 

BENCHMARK ASSUMPTION AGREEMENT

 

BENCHMARK ASSUMPTION AGREEMENT dated as of April [●], 2017 (the “Agreement”)
among (1) BENCHMARK BUILDERS, INC., a New York corporation (“Benchmark”), (2)
each other Person composing the Borrower under the below-referenced Credit
Agreement, (3) the other Credit Parties, (4) LATERAL JUSCOM FEEDER LLC, a
Delaware limited liability company, as Administrative Agent (in such capacity,
together with its successors in such capacity, the “Administrative Agent”), and
(5) the Lenders party to the below referenced Credit Agreement.

 

RECITALS:

 

WHEREAS, this Agreement is entered into pursuant to that certain Amendment No. 3
to Credit Agreement dated as of April [●], 2017 (the “Amendment”) among (inter
alios) FTE Networks, Inc., a Nevada corporation (“Holdings”), and the
Administrative Agent, that amends that certain Credit Agreement dated as of
October 28, 2015 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”; terms defined in the Credit Agreement
(after giving effect to the Amendment) and not otherwise defined herein are used
herein as therein defined) among (inter alios) Holdings and the Administrative
Agent;

 

WHEREAS, it is a condition subsequent to the effectiveness of the Amendment that
Benchmark assume (on a joint and several basis with each other Person composing
the Borrower) the Obligations of the Borrower under the Credit Agreement; and

 

WHEREAS, in order to induce the Administrative Agent and the Lenders to execute
and deliver the Amendment, and to make the Third Amendment Term Loans
contemplated by the Credit Agreement, Benchmark desires to enter into this
Agreement in order to satisfy the condition described in the preceding
paragraph.

 

NOW, THEREFORE, in consideration of the foregoing and the other benefits
accruing to Benchmark, the receipt and sufficiency of which are hereby
acknowledged, Benchmark covenants and agrees with the Administrative Agent and
each Lender as follows:

 

  (1) Agreement.

 

    (a) Benchmark hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, it shall become a party to the Credit Agreement and
the other Loan Documents and it shall be fully bound by, and subject to, and
assumes all of the covenants, terms, obligations (including, without limitation,
all payment obligations) and conditions of the Credit Agreement and the other
Loan Documents applicable to a Person composing the Borrower thereunder as
though originally party thereto as the Borrower, and Benchmark shall be deemed a
Person composing the Borrower (together with each other Person composing the
Borrower under the Credit Agreement) for all purposes of the Credit Agreement
from and after the date hereof.             (b) By its signature below, each
other Person composing the Borrower, the Lenders and the Administrative Agent
hereby agrees and consents to Benchmark becoming bound by, and subject to, the
terms and conditions of the Credit Agreement as provided herein, and agrees and
acknowledges that Benchmark shall be afforded the benefits of the Borrower under
the Credit Agreement, in accordance with the terms and conditions thereof as
provided herein, in each case as fully and the same as if Benchmark was
originally party thereto as a Person composing the Borrower thereunder.

 

   

 

 

  (c) Benchmark acknowledges and confirms that it has received a copy of the
Credit Agreement, the other Loan Documents and all schedules and exhibits
thereto and has reviewed and understands all of the terms and provisions
thereof.

 

  (2) Effect of this Agreement. Except as expressly provided in this Agreement,
the Credit Agreement shall remain in full force and effect, without modification
or amendment.         (3) Successors and Assigns; Entire Agreement. This
Agreement is binding upon and shall inure to the benefit of the parties to this
Agreement and their respective successors and assigns. This Agreement, the
Credit Agreement and the Loan Documents set forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges and
supersedes all prior discussions, agreements and understandings of any and every
nature among them. This Agreement is a Loan Document.         (4) Headings and
Counterparts. The descriptive headings of this Agreement are for convenience or
reference only and do not constitute a part of this Agreement. This Agreement
may be executed in any number of counterparts and by the different parties
hereto on separate counterparts, including by way of facsimile transmission or
other electronic transmission capable of authentication, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.         (5) Miscellaneous. The laws of
the State of New York shall govern all matters arising out of, in connection
with or relating to this Agreement, including its validity, interpretation,
construction, performance and enforcement (including any claims sounding in
contract or tort law arising out of the subject matter hereof and any
determinations with respect to post-judgment interest). This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York. Sections 9.18(b), 9.18(c), 9.18(d), and 9.19 of the Credit Agreement are
hereby incorporated by reference into this Amendment, mutatis mutandis, and the
parties hereto hereby agree that such provisions shall apply to this Amendment
with the same force and effect as if set forth herein in their entirety.

 

[Remainder of page intentionally left blank]

 

   

 

 

DRAFT: APRIL 14, 2017

 

IN WITNESS WHEREOF, Benchmark, the Lenders the Administrative Agent have
executed this Agreement as of the date first written above.

 

BENCHMARK: BENCHMARK BUILDERS, INC.         By:                      Name:    
Title:  

 

[Signature Page – Benchmark Assumption Agreement]

 

   

 

 

ADMINISTRATIVE AGENT: LATERAL JUSCOM FEEDER LLC,
as Administrative Agent         By: Lateral Global Investors, LLC, its Manager  
      By:     Richard de Silva, Manager       LENDER: LATERAL JUSCOM FEEDER LLC,
as a Lender         By: Lateral Global Investors, LLC, its Manager         By:  
  Richard de Silva, Manager       LENDER: LATERAL FTE FEEDER LLC,
as a Lender         By: Lateral Global Investors, LLC, its Manager         By:  
  Richard de Silva, Manager       LENDER: LATERAL U.S. CREDIT OPPORTUNITIES
FUND, L.P.,
as a Lender         By: Lateral Credit Opportunities, LLC, its General Partner  
      By:     Richard de Silva, Manager

 

[Signature Page – Benchmark Assumption Agreement]

 

   

 

 

DRAFT: APRIL 14, 2017

 

AGREED AND CONSENTED TO BY THE PERSONS COMPOSING THE BORROWER AND EACH OTHER
CREDIT PARTY:

 

INITIAL BORROWER: JUS-COM, INC.         By:     Name:
                                       Title:         HOLDINGS: FTE NETWORKS,
INC.         By:     Name:     Title:         OTHER CREDIT PARTIES: UBIQ
COMMUNICATIONS, LLC, a Nevada limited liability company         By:     Name:  
  Title:           FOCUS VENTURE PARTNERS, INC., a Nevada corporation        
By:     Name:     Title:           FTE HOLDINGS, LLC, a Nevada limited liability
company         By:     Name:     Title:           [FTE PROPERTIES, LLC, a
Nevada limited liability company]         By:     Name:     Title:  

 

[Signature Page – Benchmark Assumption Agreement]

 

   

 

 

  FOCUS FIBER SOLUTIONS, LLC, a Delaware limited liability company         By:  
  Name:                     Title:           FOCUS WIRELESS, LLC, a Delaware
limited liability company         By:     Name:     Title:           OPTOS
CAPITAL PARTNERS, LLC, a Delaware limited liability company         By:    
Name:     Title:  

 

[Signature Page – Benchmark Assumption Agreement]

 

   

 

 

EXHIBIT B-2

 

FORM OF BENCHMARK SUBORDINATION AGREEMENT

 

[Attached]

 

   

 

 

SUBORDINATION AND INTERCREDITOR AGREEMENT

 

THIS SUBORDINATION AND INTERCREDITOR AGREEMENT (this “Agreement”) is entered
into as of April 20, 2017, by and among Brian McMahon, a natural person, as a
Subordinated Creditor (“McMahon”), Fred Sacramone, a natural person, as a
Subordinated Creditor (“Sacramone” and, together with McMahon, the “Initial
Subordinated Creditors”), FTE NETWORKS, INC., a Nevada corporation (“Holdings”),
each of the subsidiaries of Holdings signatory hereto (such subsidiaries,
together with Holdings, the “Companies”), and LATERAL JUSCOM FEEDER LLC, as
Senior Agent.

 

R E C I T A L S

 

A. The Companies, Senior Agent and Senior Lenders have entered into the Credit
Agreement dated a of October 28, 2015 (as the same has been and may further be
amended, supplemented or otherwise modified from time to time, the “Senior
Credit Agreement”) pursuant to which, among other things, Senior Lenders have
agreed, subject to the terms and conditions set forth in the Senior Credit
Agreement, to make certain loans to Companies named therein. All of the
Companies’ obligations to Senior Agent and Senior Lenders under the Senior
Credit Agreement and the other Senior Debt Documents are secured by liens on and
security interests in the Collateral (as hereinafter defined).

 

B. As an inducement to and as one of the conditions precedent to the agreement
of Senior Agent and Senior Lenders to consummate the transactions contemplated
by that certain Amendment No. 3 to Credit Agreement dated as of the date hereof
(the “Senior Amendment”) and to make the Third Amendment Term Loans (as defined
therein) thereunder, the proceeds of which are being used, among other purposes,
to finance the acquisition of Benchmark Builders, Inc., a New York corporation
(“Benchmark”), Senior Agent and Senior Lenders have required the execution and
delivery of this Agreement by the Initial Subordinated Creditors and the
Companies (including, without limitation, Benchmark via execution of an
assumption agreement) in order to set forth the relative rights and priorities
of Senior Agent, Senior Lenders and Subordinated Creditors under the Senior Debt
Documents and the Subordinated Debt Documents.

 

NOW, THEREFORE, in order to induce Senior Agent and Senior Lenders to consummate
the transactions contemplated by the Senior Amendment and to make the Third
Amendment Term Loans (as defined therein) thereunder, and for other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto hereby agree as follows:

 

1. Definitions. The following terms shall have the following meanings in this
Agreement:

 

“Affiliate” of any Person shall mean (a) any Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person, or (b) any Person who is a director, manager, member, managing
member, general partner or officer (i) of such Person, (ii) of any Subsidiary of
such Person or (iii) of any Person described in clause (a) above. For purposes
of this definition, control of a Person shall mean the power, direct or
indirect, (x) to vote 5% or more of the Equity Interests having ordinary voting
power for the election of directors of such Person or other Persons performing
similar functions for any such Person, or (y) to direct or cause the direction
of the management and policies of such Person whether by ownership of Equity
Interests, contract or otherwise.

 

   

 

 

“Bankruptcy Code” shall mean Title 11 of the United States Code, as amended from
time to time and any successor statute and all rules and regulations promulgated
thereunder.

 

“Benchmark 18 Month Notes” shall mean each of the Series C Promissory Notes
dated as of the date hereof and delivered by Holdings to the Subordinated
Creditors in connection with the consummation of the transactions contemplated
by the Benchmark Purchase Agreement, together with any notes issued in
substitution or exchange thereof.

 

“Benchmark 24 Month Notes” shall mean each of the Series A Promissory Notes
dated as of the date hereof and delivered by Holdings to the Subordinated
Creditors pursuant to the Benchmark Purchase Agreement, together with any notes
issued in substitution or exchange thereof.

 

“Benchmark 36 Month Notes” shall mean each of the Series B Promissory Notes
dated as of the date hereof and delivered by Holdings to the Subordinated
Creditors pursuant to the Benchmark Purchase Agreement, together with any notes
issued in substitution or exchange thereof.

 

“Benchmark Purchase Agreement” shall mean the Stock Purchase Agreement dated as
of March 9, 2017, and amended as of April 20, 2017, among Holdings, Benchmark
Builders, Inc., a New York corporation (“BBI”), and the stockholders of BBI,
including the Subordinated Creditors, as amended, restated, supplemented, or
otherwise modified.

 

“Collateral” shall mean all of the existing or hereafter acquired property,
whether real, personal or mixed, of each Company.

 

“Disposition” shall mean, with respect to any interest in property, the sale,
lease, license or other disposition of such interest in such property.

 

“Distribution” shall mean, with respect to any indebtedness or obligation, (a)
any payment or distribution by any Person of cash, securities or other property,
by set-off or otherwise, on account of such indebtedness or obligation, or (b)
any redemption, purchase or other acquisition of such indebtedness or obligation
by any Person.

 

“Enforcement Action” shall mean (a) except to the extent constituting a
Permitted Subordinated Debt Payment, to take from or for the account of any
Company or any guarantor of the Subordinated Debt, by set-off or in any other
manner, the whole or any part of any moneys which may now or hereafter be owing
by any Company or any such guarantor with respect to the Subordinated Debt, (b)
to initiate or participate with others in any suit, action or proceeding against
any Company or any such guarantor to (i) sue for or enforce payment of the whole
or any part of the Subordinated Debt, (ii) commence or join with other Persons
to commence a Proceeding, or (iii) commence judicial enforcement of any of the
rights and remedies under the Subordinated Debt Documents or applicable law with
respect to the Subordinated Debt, (c) to accelerate the Subordinated Debt, (d)
to take any action to enforce any rights or remedies with respect to the
Subordinated Debt, (e) to exercise any put option or to cause any Company or any
such guarantor to honor any redemption or mandatory prepayment obligation under
any Subordinated Debt Document or (f) to exercise any rights or remedies of a
creditor under the Subordinated Debt Documents or applicable law or take any
action under the provisions of any state or federal law, including, without
limitation, the Uniform Commercial Code, or under any contract or agreement, to
enforce, foreclose upon, take possession of or sell any property or assets of
any Company or any such guarantor.

 

  -2- 

 

 

“Lateral Loan Documents” shall mean the Senior Credit Agreement and all other
agreements, documents and instruments executed from time to time in connection
therewith, as the same may be amended, supplemented or otherwise modified from
time to time.

 

“Monthly Excess Cash Flow” shall mean, for each fiscal month of Holdings,
without duplication, the result of (a) the net income of Holdings for such
month, plus (b) the sum of (i) depreciation for such month, and (ii)
amortization for such month, minus (c) the sum of (i) tax obligations (including
a reserve for estimated tax liabilities), capital expenditures and other
investments made during such month, (ii) payments made on account of the Senior
Debt Documents and equipment financings during such month, and (iii) the amount
(to the extent a positive number) by which accounts payable exceeds billed and
unbilled accounts receivable as of the end of such month, in each case,
determined on a consolidated basis in accordance with generally accepted
accounting principles.

 

“Monthly Excess Cash Flow Amount” shall mean, for any fiscal month of Holdings,
an amount equal to (a) 80% of Monthly Excess Cash Flow for such month, minus (b)
such amounts such that, immediately after giving effect to any applicable
payment on the Benchmark 18 Month Notes or the Benchmark 36 Month Notes, as the
case may be, Benchmark has unrestricted cash and cash equivalents of not less
than $4,000,000.

 

“Paid in Full,” “Payment in Full,” “paid in full” or “payment in full” shall
mean, as of any date of determination with respect to the Senior Debt, that: (a)
all of such Senior Debt (other than contingent indemnification obligations not
yet due and payable or with respect to which a claim has not been asserted has
been paid in full in cash), (b) no Person has any further right to obtain any
loans or other extensions of credit under the Senior Debt Documents, and (c) any
costs, expenses and contingent indemnification obligations which are not yet due
and payable but with respect to which a claim has been or may reasonably be
expected to be asserted by Senior Agent or a Senior Lender, are backed by
standby letters of credit (issued by a bank, and in form and substance,
acceptable to Senior Agent) or cash collateralized, in each case in an amount
reasonably estimated by Senior Agent to be the amount of costs, expenses and
contingent indemnification obligations that may become due and payable.

 

“Permitted Refinancing” shall mean any refinancing or replacement of the Senior
Debt under the Lateral Loan Documents (or any Permitted Refinancing Senior Debt
Documents).

 

“Permitted Refinancing Senior Debt Documents” shall mean any financing
documentation which replaces the Lateral Loan Documents (or any Permitted
Refinancing Senior Debt Documents) and pursuant to which the Senior Debt under
the Lateral Loan Documents (or any Permitted Refinancing Senior Debt Documents)
is refinanced or replaced, whether by the same or any other Senior Agent, lender
or group of lenders, as such financing documentation may be amended,
supplemented or otherwise modified from time to time in compliance with this
Agreement.

 

  -3- 

 

 

“Permitted Subordinated Debt Payments” shall mean:

 

(a) regularly scheduled payments of interest in-kind (and, for purposes of
clarification, not in cash) on the Subordinated Debt as set forth in the
Benchmark 24 Month Notes and the Benchmark 36 Month Notes, as the case may be,
to the extent due and payable on a non-accelerated basis in accordance with the
terms of the Subordinated Debt Documents as in effect on the date hereof.

 

(b) payments made on account of the Benchmark 36 Month Notes; provided, that:

 

(i) (A) no Senior Default shall have occurred and be continuing or would result
therefrom, and (B) the Benchmark 18 Month Notes have been paid in full and have
otherwise been retired;

 

(ii) no payment shall be made more frequently than once per fiscal month; and

 

(iii) the aggregate principal amount that may be repaid in any instance shall
not exceed the Monthly Excess Cash Flow Amount for the fiscal month most
recently ended prior to the repayment date for which financial statements, and
supporting calculations supporting the calculation of the Monthly Excess Cash
Flow Amount, have been delivered to and approved by the Senior Agent.

 

(c) payments made on account of the Benchmark 36 Month Notes; provided, that:

 

(i) (A) no Senior Default shall have occurred and be continuing or would result
therefrom, and (B) the Benchmark 18 Month Notes have been paid in full and have
otherwise been retired; and

 

(ii) any such payment (A) shall be made solely from the identifiable net cash
proceeds of an offering of equity securities of Holdings or any subsidiary
thereof (and (I) if such proceeds represent proceeds from an offering of
convertible debt securities, the issuance of such convertible debt securities is
permitted in accordance with the Senior Debt Documents as in effect from time to
time and (II) in the case of any offering of equity securities by a subsidiary
of Holdings, solely to the extent representing net cash proceeds received from a
Person other than Holdings or another subsidiary of Holdings), and (B) shall not
exceed an amount equal to 80% of such net cash proceeds.

 

(d) payment at the stated maturity date of the Benchmark 24 Month Notes and the
Benchmark 36 Month Notes (each as in effect on the date hereof), provided, that,
no Senior Default shall have occurred and be continuing or would result
therefrom.

 

“Person” shall mean any natural person, corporation, general or limited
partnership, limited liability company, firm, trust, association, government,
governmental agency or other entity, whether acting in an individual, fiduciary
or other capacity.

 

“Proceeding” shall mean any voluntary or involuntary insolvency, bankruptcy,
receivership, custodianship, liquidation, dissolution, reorganization,
assignment for the benefit of creditors, appointment of a custodian, receiver,
trustee or other officer with similar powers or any other proceeding for the
liquidation, dissolution or other winding up of a Person.

 

  -4- 

 

 

“Senior Agent” shall mean Lateral Juscom Feeder LLC, as agent for the Senior
Lenders, or any other Person appointed by the holders of the Senior Debt as
administrative agent for purposes of the Senior Debt Documents and this
Agreement.

 

“Senior Amendment” shall have the meaning set forth in the recitals hereto.

 

“Senior Credit Agreement” shall have the meaning set forth in the recitals
hereto.

 

“Senior Debt” shall mean all obligations, liabilities and indebtedness of every
nature of the Companies from time to time owed to Senior Agent or any Senior
Lender under the Senior Debt Documents, including, without limitation, the
principal amount of all debts, claims and indebtedness, accrued and unpaid
interest and all fees, costs and expenses, whether primary, secondary, direct,
contingent, fixed or otherwise, heretofore, now and from time to time hereafter
owing, due or payable, whether before or after the filing of a Proceeding under
the Bankruptcy Code together with any interest, fees, costs and expenses
accruing thereon after the commencement of a Proceeding, without regard to
whether or not such interest, fees, costs and expenses are allowed; provided,
however, that the aggregate principal amount of borrowed money constituting
Senior Debt shall not exceed an amount equal to (1) $30,500,000 minus (2) other
than any payments received in connection with a Permitted Refinancing, principal
payments received by the Senior Lenders in respect of the borrowed money
constituting Senior Debt (such limitation to exclude any fees or interest
paid-in-kind or otherwise accreted to the principal amount of loans outstanding
under the Senior Debt Documents). Senior Debt shall be considered to be
outstanding whenever any loan commitment under the Senior Debt Document is
outstanding.

 

“Senior Debt Documents” shall mean the Lateral Loan Documents and, after the
consummation of any Permitted Refinancing, the Permitted Refinancing Senior Debt
Documents.

 

“Senior Default” shall mean any “Default” or “Event of Default” under the Senior
Debt Documents.

 

“Senior Lenders” shall mean the holders of the Senior Debt.

 

“Senior Secured Parties” shall mean Senior Agent and Senior Lenders.

 

“Subordinated Creditor” shall mean each Initial Subordinated Creditor and each
other holder of Subordinated Debt.

 

“Subordinated Debt” shall mean all of the obligations of the Companies to
Subordinated Creditors evidenced by or incurred pursuant to the Subordinated
Debt Documents.

 

“Subordinated Debt Documents” shall mean the Benchmark 24 Month Notes, the
Benchmark 36 Month Notes, any guaranty with respect to the Subordinated Debt,
and all other documents, agreements and instruments now existing or hereinafter
entered into in connection with Benchmark 24 Month Notes and Benchmark 36 Month
Notes.

 

  -5- 

 

 

2. Subordination.

 

2.1. Subordination of Subordinated Debt to Senior Debt. Each Company covenants
and agrees, and each Subordinated Creditor likewise covenants and agrees,
notwithstanding anything to the contrary contained in any of the Subordinated
Debt Documents, that the payment of any and all of the Subordinated Debt shall
be subordinate and subject in right and time of payment, to the extent
(including giving effect to subsection 2.3 hereof) and in the manner hereinafter
set forth, to the prior payment in full of the Senior Debt. Each holder of
Senior Debt, whether now outstanding or hereafter created, incurred, assumed or
guaranteed, shall be deemed to have acquired Senior Debt in reliance upon the
provisions contained in this Agreement.

 

2.2. Liquidation, Dissolution, Bankruptcy. In the event of any Proceeding
involving any Company:

 

(a) All Senior Debt shall first be paid in full before any Distribution, whether
in cash, securities or other property, shall be made to Subordinated Creditors
on account of any Subordinated Debt.

 

(b) Any Distribution, whether in cash, securities or other property which would
otherwise, but for the terms hereof, be payable or deliverable in respect of the
Subordinated Debt shall be paid or delivered directly to Senior Agent (to be
held and/or applied by Senior Agent in accordance with the terms of the Senior
Debt Documents) until all Senior Debt is paid in full. Subordinated Creditors
irrevocably authorize, empower and direct any debtor, debtor in possession,
receiver, trustee, liquidator, custodian, conservator or other Person having
authority, to pay or otherwise deliver all such Distributions to Senior Agent.
Subordinated Creditors also irrevocably authorize and empower Senior Agent, in
the name of Subordinated Creditors, to demand, sue for, collect and receive any
and all such Distributions.

 

(c) Each Subordinated Creditor agrees to execute, verify, deliver and file any
proofs of claim in respect of the Subordinated Debt requested by Senior Agent in
connection with any such Proceeding and hereby irrevocably authorizes, empowers
and appoints Senior Agent its agent and attorney-in-fact to (i) execute, verify,
deliver and file such proofs of claim upon the failure of such Subordinated
Creditor promptly to do so prior to 30 days before the expiration of the time to
file any such proof of claim and (ii) vote such claim in any such Proceeding
upon the failure of such Subordinated Creditor to do so prior to 15 days before
the expiration of the time to vote any such claim; provided, Senior Agent shall
have no obligation to execute, verify, deliver, file and/or vote any such proof
of claim. In the event that Senior Agent votes any claim in accordance with the
authority granted hereby, Subordinated Creditors shall not be entitled to change
or withdraw such vote.

 

  -6- 

 

 

(d) Each Subordinated Creditor agrees that it will consent to, and not object to
or oppose any use of cash collateral consented to by Senior Agent or any
financing provided by any Senior Lender to any Company (or any financing
provided by any other Person consented to by Senior Agent) (collectively, “DIP
Financing”) on such terms and conditions as Senior Agent, in its sole
discretion, may decide. In connection therewith, any Company may grant to Senior
Agent and Senior Lenders or such other lender, as applicable, liens and security
interests upon all of the property of such Company, which liens and security
interests (i) shall secure payment of all Senior Debt (whether such Senior Debt
arose prior to the commencement of any Proceeding or at any time thereafter) and
all other financing provided by any Senior Lender or consented to by Senior
Agent during the Proceeding and (ii) shall be superior in priority to the liens
and security interests, if any, in favor of Subordinated Creditors on the
property of such Company. If, in connection with any cash collateral use or DIP
Financing, any liens and security interests on the Collateral held by Senior
Agent are subject to a surcharge or are subordinated to an administrative
priority claim, a professional fee “carve out,” or fees owed to the United
States Trustee, then the liens on the Collateral of Subordinated Creditors, if
any, shall also be subordinated to such interest or claim and shall remain
subordinated to the liens and security interests on the Collateral of Senior
Agent consistent with this Agreement. Each Subordinated Creditor agrees that it
will consent to, and not object to or oppose, a sale or other disposition of any
property securing all or any part of any Senior Debt free and clear of security
interests, liens or other claims of Subordinated Creditors under the Bankruptcy
Code, including Sections 363, 365 and 1129 of the Bankruptcy Code, if Senior
Agent has consented to such sale or disposition. Each Subordinated Creditor
agrees not to assert any right it may have in any Proceeding arising from any
Company’s use, sale or other disposition of Collateral and agrees that it will
not seek (or support any other Person seeking) to have any stay, whether
automatic or otherwise, lifted with respect to any Collateral without the prior
written consent of Senior Agent. Each Subordinated Creditor agrees that it will
not, and will not permit, any of its Affiliates to, directly or indirectly
provide, participate in or otherwise support, any financing in a Proceeding to
any Company without the prior written consent of Senior Agent. No Subordinated
Creditor will object to or oppose any adequate protection sought by Senior Agent
or any Senior Lender or object to or oppose any motion by Senior Agent to lift
the automatic stay or any other stay in any Proceeding. No Subordinated Creditor
will seek or assert any right it may have for adequate protection of its
interest in any Collateral, if any. Each Subordinated Creditor waives any claim
it may now or hereafter have arising out of Senior Agent’s or Senior Lenders’
election, in any Proceeding, of the application of Section 1111(b)(2) of the
Bankruptcy Code, and/or any borrowing or grant of a security interest under
Section 364 of the Bankruptcy Code by any Company, as debtor in possession. Each
Subordinated Creditor further agrees that it shall not, without Senior Agent’s
prior written consent, commence or continue any Proceeding, propose any plan of
reorganization, arrangement or proposal or file any motion, pleading or material
in support of any motion or plan of reorganization, arrangement or proposal that
would impair the rights of the Senior Lenders, is in conflict with the terms of
this Agreement, or is opposed by Senior Lenders or Senior Agent, or oppose any
plan of reorganization or liquidation supported by Senior Agent.

 

(e) The Senior Debt shall continue to be treated as Senior Debt and the
provisions of this Agreement shall continue to govern the relative rights and
priorities of Senior Lenders and Subordinated Creditors even if all or part of
the Senior Debt or the security interests securing the Senior Debt are
subordinated, set aside, avoided, invalidated or disallowed in connection with
any such Proceeding.

 

(f) Any claim that the Subordinated Creditors have by reason of Section 507(b)
of the Bankruptcy Code, if any, may be satisfied under a plan of reorganization
with cash, securities or other property, having a value, as of the effect date
of such plan, equal to the allowed amount of such claim under Section 507(b).

 

2.3. Subordinated Debt Payment Restrictions. Notwithstanding the terms of the
Subordinated Debt Documents, each Company hereby agrees that it may not make,
and each Subordinated Creditor hereby agrees that it will not accept, any
Distribution with respect to the Subordinated Debt until the Senior Debt is paid
in full other than, subject to the terms of subsection 2.2 of this Agreement,
Permitted Subordinated Debt Payments.

 

2.4. Subordinated Debt Standstill Provisions. Until the Senior Debt is paid in
full, no Subordinated Creditor shall, without the prior written consent of
Senior Agent, take any Enforcement Action with respect to the Subordinated Debt
or under the Subordinated Debt Documents; provided, however, the Subordinated
Creditors may, in accordance with the terms and conditions of the Benchmark 24
Month Notes (as in effect on the date hereof), elect to convert such note into
common equity securities of Holdings. Any Distributions or other proceeds of any
Enforcement Action obtained by any Subordinated Creditor shall in any event be
held in trust by it for the benefit of Senior Agent and Senior Lenders and
promptly paid or delivered to Senior Agent for the benefit of Senior Lenders in
the form received until the Senior Debt is paid in full.

 

  -7- 

 

 

2.5. Incorrect Payments. If any Distribution on account of the Subordinated Debt
not permitted to be made by a Company or accepted by a Subordinated Creditor
under this Agreement is knowingly received by any Subordinated Creditor, such
Distribution shall not be commingled with any of the assets of such Subordinated
Creditor, shall be held in trust by such Subordinated Creditor for the benefit
of Senior Secured Parties and shall be promptly paid over to Senior Agent for
application (in accordance with the Senior Debt Documents) to the payment of the
Senior Debt then remaining unpaid, until all of the Senior Debt is paid in full.

 

2.6. Subordination of Liens and Security Interests; Agreement Not to Contest;
Sale of Collateral; Release of Liens. Until the Senior Debt has been paid in
full, any liens and security interests of Subordinated Creditors in the
Collateral, if any, which may exist shall be and hereby are subordinated for all
purposes and in all respects to the liens and security interests of Senior Agent
and Senior Lenders in the Collateral, regardless of the time, manner or order of
perfection of any such liens and security interests and regardless of the
validity, perfection or enforceability of such liens and security interests of
Senior Agent. Each Subordinated Creditor agrees that it will not at any time
contest the validity, perfection, priority or enforceability of the Senior Debt,
the Senior Debt Documents, or the liens and security interests of Senior Agent
and Senior Lenders in the Collateral securing the Senior Debt. In the event that
a Company desires to sell, lease, license or otherwise dispose of any interest
in any of the Collateral (including the equity interests of a Company) and
Senior Agent consents to such Disposition, each Subordinated Creditor shall be
deemed to have consented to such Disposition and such Disposition shall be free
and clear of any liens and security interests of Subordinated Creditors in such
Collateral, if any (and if such Disposition involves the equity interests of a
Company, each Subordinated Creditor shall release such Company from any guaranty
or other obligation owing to Subordinated Creditors), and any purchaser of any
Collateral may rely on this Agreement as evidence of each Subordinated
Creditor’s consent to such Disposition and that such Disposition is free and
clear of any liens and security interests of such Subordinated Creditor in such
Collateral, if any (and if such Disposition involves the equity interests of a
Company, that such Company is released from any guaranty or other obligation
owing to Subordinated Creditors). Each Subordinated Creditor shall (or shall
cause its agent) to promptly execute and deliver to Senior Agent such
termination statements and releases as Senior Agent shall request to effect the
release of the liens and security interests of Subordinated Creditors in such
Collateral, if any, in accordance with this subsection 2.6. In furtherance of
the foregoing, each Subordinated Creditor hereby irrevocably appoints Senior
Agent its attorney-in-fact, with full authority in the place and stead of such
Subordinated Creditor and in the name of such Subordinated Creditor or
otherwise, to execute and deliver any document or instrument which such
Subordinated Creditor may be required to deliver pursuant to this subsection
2.6.

 

2.7. Sale, Transfer or other Disposition of Subordinated Debt.

 

(a) No Subordinated Creditor shall sell, assign, pledge, dispose of or otherwise
transfer all or any portion of the Subordinated Debt or any Subordinated Debt
Document: (i) without giving prior written notice of such action to Senior
Agent, and (ii) unless, prior to the consummation of any such action, the
transferee thereof shall execute and deliver to Senior Agent an agreement
joining such transferee as a party to this Agreement as a Subordinated Creditor
or an agreement substantially identical to this Agreement, providing for the
continued subordination of the Subordinated Debt to the Senior Debt as provided
herein and for the continued effectiveness of all of the rights of Senior Agent
and Senior Lenders arising under this Agreement.

 

  -8- 

 

 

(b) Notwithstanding the failure of any transferee to execute or deliver an
agreement substantially identical to this Agreement, the subordination effected
hereby shall survive any sale, assignment, pledge, disposition or other transfer
of all or any portion of the Subordinated Debt, and the terms of this Agreement
shall be binding upon the successors and assigns of any Subordinated Creditor,
as provided in Section 9 hereof.

 

2.8. Legends. Until the termination of this Agreement in accordance with Section
15 hereof, each Subordinated Creditor will cause to be clearly, conspicuously
and prominently inserted on the face of the Subordinated Note and any other
Subordinated Debt Document, as well as any renewals or replacements thereof, the
following legend:

 

“This instrument and the rights and obligations evidenced hereby are subordinate
in the manner and to the extent set forth in that certain Subordination and
Intercreditor Agreement (the “Subordination Agreement”) dated as of April 20,
2017 among (inter alios) Brian McMahon, a natural person, as an Initial
Subordinated Creditor, Fred Sacramone, a natural person, as an Initial
Subordinated Creditor, FTE NETWORKS, INC., a Nevada corporation (“Holdings”),
and LATERAL JUSCOM FEEDER LLC, as Senior Agent, to the indebtedness (including
interest) owed by Holdings and its subsidiaries, pursuant to that certain Credit
Agreement dated as of October 28, 2015 among the Holdings, its subsidiaries
party thereto, Senior Agent and the lenders from time to time party thereto (the
“Senior Credit Agreement”) and the other Senior Debt Documents (as defined in
the Subordination Agreement), as such Senior Credit Agreement and other Senior
Debt Documents have been and hereafter may be amended, supplemented or otherwise
modified from time to time and to indebtedness refinancing the indebtedness
under those agreements as contemplated by the Subordination Agreement; and each
holder of this instrument, by its acceptance hereof, irrevocably agrees to be
bound by the provisions of the Subordination Agreement.”

 

2.9. Obligations Hereunder Not Affected. All rights and interest of Senior
Secured Parties hereunder, and all agreements and obligations of Subordinated
Creditors and Companies hereunder, shall remain in full force and effect
irrespective of:

 

(a) any lack of validity or enforceability of any document evidencing any of the
Senior Debt;

 

(b) any change in the time, manner or place of payment of, or any other term of,
all or any of the Senior Debt, or any other permitted amendment or waiver of or
any release or consent to departure from any of the Senior Debt Documents;

 

(c) any exchange, subordination, release or non-perfection of any collateral for
all or any of the Senior Debt;

 

(d) any failure of any Senior Secured Party to assert any claim or to enforce
any right or remedy against any other party hereto under the provisions of this
Agreement or any Senior Debt Document other than this Agreement;

 

  -9- 

 

 

(e) any reduction, limitation, impairment or termination of the Senior Debt for
any reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to (and Companies and Subordinated
Creditors hereby waive any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of invalidity,
illegality, nongenuiness, irregularity, compromise, unenforceability of, or any
other event or occurrence affecting, any Senior Debt; and

 

(f) any other circumstance which might otherwise constitute a defense available
to, or a discharge of, Companies in respect of the Senior Debt or Subordinated
Creditors in respect of this Agreement.

 

Each Subordinated Creditor acknowledges and agrees that Senior Secured Parties
may in accordance with the terms of the Senior Debt Documents, without notice or
demand and without affecting or impairing such Subordinated Creditor’s
obligations hereunder, (i) modify the Senior Debt Documents; (ii) take or hold
security for the payment of the Senior Debt and exchange, enforce, foreclose
upon, waive and release any such security; (iii) apply such security and direct
the order or manner of sale thereof as Senior Agent and Senior Lenders in their
sole discretion, may determine; (iv) release and substitute one or more
endorsers, warrantors, borrowers or other obligors; and (v) exercise or refrain
from exercising any rights against any Company or any other Person. The Senior
Debt shall continue to be treated as Senior Debt and the provisions of this
Agreement shall continue to govern the relative rights and priorities of Senior
Secured Parties and Subordinated Creditors even if all or part of the Senior
Debt or the security interests securing the Senior Debt are subordinated, set
aside, avoided, invalidated or disallowed.

 

2.10. Marshaling. Each Subordinated Creditor hereby waives any rights it may
have under applicable law to assert the doctrine of marshaling or to otherwise
require any Senior Secured Party to marshal any property of any Company or of
any guarantor or other obligor of the Senior Debt for the benefit of any
Subordinated Creditor.

 

2.11. Application of Proceeds from Sale or other Disposition of the Collateral.
In the event of any Disposition (including a casualty loss or taking through
eminent domain) of the Collateral, the proceeds resulting therefrom (including
insurance proceeds) shall be applied to the Senior Debt in the order and manner
set forth in the Senior Debt Documents until such time as the Senior Debt is
Paid in Full.

 

2.12. Rights Relating to Senior Agent’s Actions with respect to the Collateral.
Each Subordinated Creditor hereby waives, to the extent permitted by applicable
law, any rights which it may have to enjoin or otherwise obtain a judicial or
administrative order preventing Senior Secured Parties from taking, or
refraining from taking, any action with respect to all or any part of the
Collateral. Without limitation of the foregoing, each Subordinated Creditor
hereby agrees (a) that it has no right to direct or object to the manner in
which a Senior Secured Party applies the proceeds of the Collateral resulting
from the exercise by Senior Secured Parties of rights and remedies under the
Senior Debt Documents to the Senior Debt, (b) that it waives any right to object
to any action or inaction by any Senior Secured Party with respect to exercising
its rights or remedies under the Senior Debt Documents or with respect to the
Collateral (including in connection with any foreclosure or enforcement of liens
in respect of Collateral), if any, and (c) no Senior Secured Party has assumed
any obligation to act as the agent for any Subordinated Creditor with respect to
the Collateral. No Subordinated Creditor shall object to any proposed retention
or acceptance of Collateral by a Senior Secured Party in full or partial
satisfaction of such Senior Secured Party’s Senior Debt and agrees that any such
retention or acceptance by a Senior Secured Party shall be free and clear of
Subordinated Creditors’ security interests and liens, if any.

 

  -10- 

 

 

2.13. Insurance Proceeds. Until the Senior Debt has been Paid in Full, Senior
Agent shall have the sole and exclusive right, as against Subordinated
Creditors, to adjust settlement of insurance claims in the event of any covered
loss, theft or destruction of such Collateral. All proceeds of such insurance
shall inure to Senior Secured Parties, to the extent of the Senior Debt, and
each Subordinated Creditor shall cooperate (if necessary) in a reasonable manner
in effecting the payment of insurance proceeds to the holders of Senior Debt (or
any representative thereof). In the event the requisite holders of Senior Debt
(or any representative thereof), in their or its sole discretion or pursuant to
agreement with any Company, permits such Company to utilize the proceeds of
insurance, the consent of the holders of Senior Debt (or any representative
thereof) shall be deemed to include the consent of each Subordinated Creditor.

 

3. Modifications.

 

3.1. Modifications to Senior Debt Documents. Senior Lenders may at any time and
from time to time without the consent of or notice to Subordinated Creditors,
without incurring liability to Subordinated Creditors and without impairing or
releasing the obligations of Subordinated Creditors under this Agreement, change
the manner or place of payment or extend the time of payment of or renew or
alter any of the terms of the Senior Debt, or amend in any manner any agreement,
note, guaranty or other instrument evidencing or securing or otherwise relating
to the Senior Debt.

 

3.2. Modifications to Subordinated Debt Documents. Until the Senior Debt has
been paid in full, and notwithstanding anything to the contrary contained in the
Subordinated Debt Documents, Subordinated Creditors shall not, without the prior
written consent of Senior Agent, (a) amend, modify or supplement the
Subordinated Debt Documents, (b) take any liens or security interests in any
assets of any Company or any of its subsidiaries or any other assets securing
the Senior Debt or (c) obtain any guaranties or credit support from any Person
in respect of the Subordinated Debt.

 

4. Representations and Warranties.

 

4.1. Representations and Warranties of Subordinated Creditors. Each Subordinated
Creditor hereby represents and warrants to Senior Agent and Senior Lenders that
as of the date hereof: (a) such Subordinated Creditor has the power and
authority to enter into, execute, deliver and carry out the terms of this
Agreement, all of which have been duly authorized by all proper and necessary
action; (b) the execution of this Agreement by such Subordinated Creditor will
not violate or conflict with any material agreement binding upon such
Subordinated Creditor or any law, regulation or order or require any consent or
approval which has not been obtained; (c) this Agreement is the legal, valid and
binding obligation of each Subordinated Creditor, enforceable against each
Subordinated Creditor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by equitable principles; and (e) Subordinated
Creditors are the sole owners, beneficially and of record, of the Subordinated
Debt Documents and the Subordinated Debt.

 

4.2. Representations and Warranties of Senior Agent. Senior Agent hereby
represents and warrants to Subordinated Creditors that as of the date hereof:
(a) Senior Agent is a limited liability company duly formed and validly existing
under the laws of the State of Delaware; (b) Senior Agent has the power and
authority to enter into, execute, deliver and carry out the terms of this
Agreement, all of which have been duly authorized by all proper and necessary
action; (c) the execution of this Agreement by Senior Agent will not violate or
conflict with the organizational documents of Senior Agent, any material
agreement binding upon Senior Agent or any law, regulation or order or require
any consent or approval which has not been obtained; and (d) this Agreement is
the legal, valid and binding obligation of Senior Agent, enforceable against
Senior Agent in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally or by
equitable principles.

 

  -11- 

 

 

5. Subrogation; Recovery. Subject to the payment in full of the Senior Debt,
Subordinated Creditors shall be subrogated to the rights of Senior Agent and
Senior Lenders to receive Distributions with respect to the Senior Debt until
the Subordinated Debt is paid in full. If Senior Agent or any Senior Lender is
required to disgorge any proceeds of Collateral, payment or other amount
received by such Person (whether because such proceeds, payment or other amount
is invalidated, declared to be fraudulent or preferential or otherwise) or turn
over or otherwise pay any amount (a “Recovery”) to the estate or to any creditor
or representative of a Company or any other Person, then the Senior Debt shall
be reinstated (to the extent of such Recovery) as if such Senior Debt had never
been paid and to the extent any Subordinated Creditor has received proceeds,
payments or other amounts to which such Subordinated Creditor would not have
been entitled under this Agreement had such reinstatement occurred prior to
receipt of such proceeds, payments or other amounts, such Subordinated Creditor
shall turn over such proceeds, payments or other amounts to Senior Agent for
reapplication to the Senior Debt. A Distribution made pursuant to this Agreement
to Senior Agent or Senior Lenders which otherwise would have been made to
Subordinated Creditors is not, as between the Companies and Subordinated
Creditors, a payment by the Companies to or on account of the Senior Debt.

 

6. Modification. Any modification or waiver of any provision of this Agreement,
or any consent to any departure by any party from the terms hereof, shall not be
effective in any event unless the same is in writing and signed by Senior Agent
and each Subordinated Creditor, and then such modification, waiver or consent
shall be effective only in the specific instance and for the specific purpose
given. Any notice to or demand on any party hereto in any event not specifically
required hereunder shall not entitle the party receiving such notice or demand
to any other or further notice or demand in the same, similar or other
circumstances unless specifically required hereunder.

 

7. Further Assurances. Each party to this Agreement promptly will execute and
deliver such further instruments and agreements and do such further acts and
things as may be reasonably requested in writing by any other party hereto that
may be necessary or desirable in order to effect fully the purposes of this
Agreement.

 

8. Notices. Unless otherwise specifically provided herein, any notice delivered
under this Agreement shall be in writing addressed to the respective party as
set forth below and may be personally served, facsimile or sent by overnight
courier service or certified or registered United States mail and shall be
deemed to have been given (a) if delivered in person, when delivered; (b) if
delivered by facsimile, on the date of transmission if transmitted on a business
day before 5:00 p.m. (New York time) or, if not, on the next succeeding business
day; (c) if delivered by overnight courier, one business day after delivery to
such courier properly addressed; or (d) if by United States mail, three business
days after deposit in the United States mail, postage prepaid and properly
addressed.

 

Notices shall be addressed as follows:

 

If to any Subordinated Creditor:

 

c/o Fred Sacramone

34 Haas Road

Basking Ridge, New Jersey 07920

 

  -12- 

 

 

With a copy to:

 

Pryor Cashman LLP

7 Times Square

New York, New York 10036

Attention: Eric M. Hellige, Esq.
Facsimile: 212.798.6380

 

If to a Company:

 

c/o FTE Networks, Inc.

999 Vanderbilt Beach Road, Suite 601

Naples, Florida 34109

Attention: Michael Palleschi, Chief Executive Officer

Facsimile: 877.781.2583

 

With a copy to:

 

K&L Gates LLP

200 S. Biscayne Blvd., Suite 3900

Miami, Florida 33131

Attention: Clayton E. Parker, Esq.
Facsimile: 305.358.7095

 

If to Senior Agent or Senior Lenders:

 

LATERAL JUSCOM FEEDER LLC

1825 South Grant Street, Suite 210

San Mateo, California 94402

Attention: Patrick Feeney

 

or in any case, to such other address as the party addressed shall have
previously designated by written notice to the serving party, given in
accordance with this Section 8.

 

9. Successors and Assigns; Permitted Refinancing. This Agreement shall inure to
the benefit of, and shall be binding upon, the respective successors and assigns
of Senior Agent, Senior Lenders, Subordinated Creditors and the Companies. To
the extent permitted under the Senior Debt Documents, Senior Lenders may, from
time to time, without notice to Subordinated Creditors, assign or transfer any
or all of the Senior Debt or any interest therein to any Person and,
notwithstanding any such assignment or transfer, or any subsequent assignment or
transfer, the Senior Debt shall, subject to the terms hereof, be and remain
Senior Debt for purposes of this Agreement, and every permitted assignee or
transferee of any of the Senior Debt or of any interest therein shall, to the
extent of the interest of such permitted assignee or transferee in the Senior
Debt, be entitled to rely upon and be the third party beneficiary of the
subordination provided under this Agreement and shall be entitled to enforce the
terms and provisions hereof to the same extent as if such assignee or transferee
were initially a party hereto. Each Subordinated Creditor agrees that any party
that consummates a Permitted Refinancing may rely on and enforce this Agreement.
Each Subordinated Creditor further agrees that it will, at the request of Senior
Agent, enter into an agreement, in the form of this Agreement, mutatis mutandis,
with the party that consummates the Permitted Refinancing; provided, that the
failure of any Subordinated Creditor to execute such an agreement shall not
affect such party’s right to rely on and enforce the terms of this Agreement.

 

  -13- 

 

 

10. Relative Rights. This Agreement shall define the relative rights of Senior
Secured Parties and Subordinated Creditors. Nothing in this Agreement shall (a)
impair, as among the Companies and Senior Secured Parties and as between the
Companies and Subordinated Creditors, the obligation of the Companies with
respect to the payment of the Senior Debt and the Subordinated Debt in
accordance with their respective terms or (b) affect the relative rights of
Senior Secured Parties or Subordinated Creditors with respect to any other
creditors of any Company.

 

11. Conflict. In the event of any conflict between any term, covenant or
condition of this Agreement and any term, covenant or condition of any of the
Subordinated Debt Documents, the provisions of this Agreement shall control and
govern.

 

12. Headings. The paragraph headings used in this Agreement are for convenience
only and shall not affect the interpretation of any of the provisions hereof.

 

13. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

14. Severability. In the event that any provision of this Agreement is deemed to
be invalid, illegal or unenforceable by reason of the operation of any law or by
reason of the interpretation placed thereon by any court or governmental
authority, the validity, legality and enforceability of the remaining provisions
of this Agreement shall not in any way be affected or impaired thereby, and the
affected provision shall be modified to the minimum extent permitted by law so
as most fully to achieve the intention of this Agreement.

 

15. Continuation of Subordination; Termination of Agreement. This Agreement
shall be applicable both before and after the commencement of any Proceeding and
all converted or succeeding cases in respect thereof. Accordingly, the
provisions of this Agreement are intended to be and shall be enforceable as a
subordination agreement within the meaning of Section 510 of the Bankruptcy
Code. This Agreement shall remain in full force and effect until the payment in
full of the Senior Debt after which this Agreement shall terminate without
further action on the part of the parties hereto; provided, that if any payment
is, subsequent to such termination, recovered from any holder of Senior Debt,
this Agreement shall be reinstated; provided, further that a Permitted
Refinancing shall not be deemed to be payment in full of the Senior Debt.

 

16. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

 

17. CONSENT TO JURISDICTION. EACH SUBORDINATED CREDITOR AND EACH COMPANY HEREBY
CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE
STATE, COUNTY AND CITY OF NEW YORK AND IRREVOCABLY AGREES THAT, SUBJECT TO
SENIOR AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING
TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EACH SUBORDINATED CREDITOR
AND EACH COMPANY EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. EACH
SUBORDINATED CREDITOR AND EACH COMPANY HEREBY WAIVES PERSONAL SERVICE OF ANY AND
ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON IT BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO SUCH
SUBORDINATED CREDITOR OR SUCH COMPANY AT ITS RESPECTIVE ADDRESS SET FORTH IN
THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE 10 DAYS AFTER THE SAME HAS
BEEN POSTED.

 

  -14- 

 

 

18. WAIVER OF JURY TRIAL. EACH SUBORDINATED CREDITOR, EACH COMPANY AND SENIOR
AGENT HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE SUBORDINATED
DEBT DOCUMENTS OR ANY OF THE SENIOR DEBT DOCUMENTS. EACH SUBORDINATED CREDITOR,
EACH COMPANY AND SENIOR AGENT ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE
WAIVER IN ENTERING INTO THIS AGREEMENT AND THE SENIOR DEBT DOCUMENTS AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH
SUBORDINATED CREDITOR, EACH COMPANY AND SENIOR AGENT WARRANTS AND REPRESENTS
THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL
COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

 

19. Additional Company. Holdings shall cause any Person that becomes a Credit
Party (as defined in the Senior Credit Agreement) to execute a joinder (in form
and substance satisfactory to Senior Agent) to this Agreement to bind such
Person to this Agreement as a Company.

 

[Remainder of page intentionally left blank]

 

  -15- 

 

 

IN WITNESS WHEREOF, the Initial Subordinated Creditors, the Companies and Senior
Agent have caused this Agreement to be executed as of the date first above
written.

 

COMPANIES: JUS-COM, INC., an Indiana corporation         By:     Name:    
Title:           FTE NETWORKS, INC., a Nevada corporation         By:     Name:
    Title:                                                UBIQ COMMUNICATIONS,
LLC, a Nevada limited liability company         By:     Name:     Title:        
  FOCUS VENTURE PARTNERS, INC., a Nevada corporation         By:     Name:    
Title:           FTE HOLDINGS, LLC, a Nevada limited liability company        
By:     Name:     Title:           FTE PROPERTIES, LLC, a Nevada limited
liability company         By:     Name:     Title:           FOCUS FIBER
SOLUTIONS, LLC, a Delaware limited liability company         By:     Name:    
Title:  

 

[Signature Page – Subordination and Intercreditor Agreement]
[FTE Networks, Inc.]

 

   

 

 

  FOCUS WIRELESS, LLC, a Delaware limited liability company         By:
                              Name:     Title:           OPTOS CAPITAL PARTNERS,
LLC, a Delaware limited liability company         By:     Name:     Title:      
    CROSSLAYER, INC.         By:     Name:     Title:  

 

[Signature Page – Subordination and Intercreditor Agreement]
[FTE Networks, Inc.]

 

   

 

 

SENIOR AGENT: LATERAL JUSCOM FEEDER LLC,
as Senior Agent         By: Lateral Global Investors, LLC, its Manager        
By:     Richard de Silva, Manager

 

[Signature Page – Subordination and Intercreditor Agreement]
[FTE Networks, Inc.]

 

   

 

 

INITIAL SUBORDINATED CREDITOR:             Brian McMahon             INITIAL
SUBORDINATED CREDITOR:             Fred Sacramone

 

[Signature Page – Subordination and Intercreditor Agreement]
[FTE Networks, Inc.]

 

   

 

 

EXHIBIT H-1

 

FORM OF HOLDINGS ASSUMPTION AGREEMENT

 

[Attached]

 

   

 

 

EXECUTION VERSION

 

HOLDINGS ASSUMPTION AGREEMENT

 

HOLDINGS ASSUMPTION AGREEMENT dated as of April 20, 2017 (the “Agreement”) among
(1) FTE NETWORKS, INC., a Nevada corporation (“Holdings”), (2) JUS-COM, INC., an
Indiana corporation (the “Initial Borrower”), (3) the other Credit Parties, (4)
LATERAL JUSCOM FEEDER LLC, a Delaware limited liability company, as
Administrative Agent (in such capacity, together with its successors in such
capacity, the “Administrative Agent”), and (5) the Lenders party to the below
referenced Credit Agreement.

 

RECITALS:

 

WHEREAS, this Agreement is entered into pursuant to that certain Amendment No. 3
to Credit Agreement dated as of April 20, 2017 (the “Amendment”) among (inter
alios) Holdings, the Initial Borrower and the Administrative Agent, that amends
that certain Credit Agreement dated as of October 28, 2015 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”; terms defined in the Credit Agreement (after giving effect to the
Amendment) and not otherwise defined herein are used herein as therein defined)
among (inter alios) Holdings, the Initial Borrower and the Administrative Agent;

 

WHEREAS, pursuant to the Guaranty and Security Agreement dated as of October 28,
2015 (as amended, restated, supplemented or otherwise modified from time to
time, the “Security Agreement”) among (inter alios) Holdings and the
Administrative Agent, Holdings (1) guaranteed the payment and performance of all
Obligations of the Initial Borrower under the Credit Agreement and the other
Loan Documents to which the Initial Borrower is a party and (2) granted Liens in
favor of the Administrative Agent in all or substantially all of its assets to
secure its Obligations under the Credit Agreement, the Security Agreement and
each other Loan Document to which it is a party;

 

WHEREAS, it is a condition precedent to the effectiveness of the Amendment that
Holdings assume (on a joint and several basis with the Initial Borrower) the
Obligations of the Initial Borrower, as “Borrower”, under the Credit Agreement;
and

 

WHEREAS, in order to induce the Administrative Agent and the Lenders to execute
and deliver the Amendment, and to make the Third Amendment Term Loans
contemplated by the Credit Agreement, Holdings desires to enter into this
Agreement in order to satisfy the condition described in the preceding
paragraph.

 

NOW, THEREFORE, in consideration of the foregoing and the other benefits
accruing to Holdings, the receipt and sufficiency of which are hereby
acknowledged, Holdings covenants and agrees with the Administrative Agent and
each Lender as follows:

 

  (1) Agreement.

 

    (a) Holdings hereby acknowledges, agrees and confirms that, by its execution
of this Agreement, it shall be fully bound by, and subject to, and assumes all
of the covenants, terms, obligations (including, without limitation, all payment
obligations) and conditions of the Credit Agreement and the other Loan Documents
applicable to a Person composing the Borrower thereunder as though originally
party thereto as the Borrower, and Holdings shall be deemed a Person composing
the Borrower (together with each other Person composing the Borrower under the
Credit Agreement) for all purposes of the Credit Agreement from and after the
date hereof.

 

   

 

 

    (b) By its signature below, each other Person composing the Borrower, the
Lenders and the Administrative Agent hereby agrees and consents to Holdings
becoming bound by, and subject to, the terms and conditions of the Credit
Agreement as provided herein, and agrees and acknowledges that Holdings shall be
afforded the benefits of the Borrower under the Credit Agreement, in accordance
with the terms and conditions thereof as provided herein, in each case as fully
and the same as if Holdings was originally party thereto as a Person composing
the Borrower thereunder.             (c) Holdings acknowledges and confirms that
it has received a copy of the Credit Agreement, the other Loan Documents and all
schedules and exhibits thereto and has reviewed and understands all of the terms
and provisions thereof.

 

  (2) Effect of this Agreement. Except as expressly provided in this Agreement,
the Credit Agreement shall remain in full force and effect, without modification
or amendment.         (3) Successors and Assigns; Entire Agreement. This
Agreement is binding upon and shall inure to the benefit of the parties to this
Agreement and their respective successors and assigns. This Agreement, the
Credit Agreement and the Loan Documents set forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges and
supersedes all prior discussions, agreements and understandings of any and every
nature among them. This Agreement is a Loan Document.         (4) Headings and
Counterparts. The descriptive headings of this Agreement are for convenience or
reference only and do not constitute a part of this Agreement. This Agreement
may be executed in any number of counterparts and by the different parties
hereto on separate counterparts, including by way of facsimile transmission or
other electronic transmission capable of authentication, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.         (5) Miscellaneous. The laws of
the State of New York shall govern all matters arising out of, in connection
with or relating to this Agreement, including its validity, interpretation,
construction, performance and enforcement (including any claims sounding in
contract or tort law arising out of the subject matter hereof and any
determinations with respect to post-judgment interest). This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York. Sections 9.18(b), 9.18(c), 9.18(d), and 9.19 of the Credit Agreement are
hereby incorporated by reference into this Amendment, mutatis mutandis, and the
parties hereto hereby agree that such provisions shall apply to this Amendment
with the same force and effect as if set forth herein in their entirety.

 

[Remainder of page intentionally left blank]

 

   

 

 

IN WITNESS WHEREOF, Holdings, the Lenders the Administrative Agent have executed
this Agreement as of the date first written above.

 

HOLDINGS: FTE NETWORKS, INC.         By:                       Name:     Title:
 

 

[Signature Page – Holdings Assumption Agreement]

 

   

 

 

ADMINISTRATIVE AGENT: LATERAL JUSCOM FEEDER LLC,
as Administrative Agent         By: Lateral Global Investors, LLC, its Manager  
      By:     Richard de Silva, Manager       LENDER: LATERAL JUSCOM FEEDER LLC,
as a Lender               By: Lateral Global Investors, LLC, its Manager        
By:     Richard de Silva, Manager       LENDER: LATERAL FTE FEEDER LLC,
as a Lender         By: Lateral Global Investors, LLC, its Manager         By:  
  Richard de Silva, Manager       LENDER: LATERAL U.S. CREDIT OPPORTUNITIES
FUND, L.P., as a Lender         By: Lateral Credit Opportunities, LLC, its
General Partner         By:     Richard de Silva, Manager

 

[Signature Page – Holdings Assumption Agreement]

 

   

 

 

AGREED AND CONSENTED TO BY THE PERSONS COMPOSING THE BORROWER:

 

INITIAL BORROWER: JUS-COM, INC.         By:
                                        Name:     Title:         OTHER CREDIT
PARTIES: UBIQ COMMUNICATIONS, LLC, a Nevada limited liability company        
By:     Name:     Title:           FOCUS VENTURE PARTNERS, INC., a Nevada
corporation         By:     Name:     Title:           FTE HOLDINGS, LLC, a
Nevada limited liability company         By:     Name:     Title:           [FTE
PROPERTIES, LLC, a Nevada limited liability company]         By:     Name:    
Title:           FOCUS FIBER SOLUTIONS, LLC, a Delaware limited liability
company         By:     Name:     Title:  

 

[Signature Page – Holdings Assumption Agreement]

 

   

 

 

  FOCUS WIRELESS, LLC, a Delaware limited liability company         By:    
Name:                        Title:           OPTOS CAPITAL PARTNERS, LLC, a
Delaware limited liability company         By:     Name:     Title:  

 

[Signature Page – Holdings Assumption Agreement]

 

   

 

 

EXHIBIT P-1

 

FORM OF PERFECTION CERTIFICATE

 

[Attached]

 

   

 

 

PERFECTION CERTIFICATE

 

April [●], 2017

 

Reference hereby is made to that certain Credit Agreement dated as of October
28, 2015 (the “Credit Agreement”) among, inter alios, the below referenced
Company, and Lateral Juscom Feeder LLC, as administrative agent (the
“Administrative Agent”). Capitalized terms used but not defined herein have the
meanings assigned in the Credit Agreement

 

The undersigned, the [●] of [●] (the “Company”), hereby represents and warrants
to the Administrative Agent and the Lenders as follows:

 

  (1) NAMES OF THE COMPANY

 

    (A) The name of the Company as it appears in its current Organizational
Documents is:___________________________________________________________.      
      (B) The federal employer identification number of the Company
is:________________________.             (C) The Company is formed under the
laws of the State of __________________________.             (D) The
organizational identification number of the Company is:
__________________________.             (E) The Company is duly qualified to
transact business as a foreign entity in the following jurisdictions (list
jurisdictions other than jurisdiction of formation):_______________________.    
        (F) The Company has not changed its jurisdiction of organization or
incorporation at any time since the Closing Date (or, in the case of Benchmark,
in the five years prior to the date hereof).             (G) Other than the
Benchmark Acquisition, the Company has not been a party to an acquisition of all
or substantially all of the assets of any Person, or otherwise consummated a
merger, amalgamation or other similar transaction at any time during the five
years prior to the date hereof.

 

  (2) SUBSIDIARIES OF THE COMPANY.

 

    (A) The legal name (and, in the case of Benchmark, each tradename used in
the last five years), federal employer identification number and organizational
identification number of each subsidiary of the Company is as follows.

 

Name   Fed. Employer ID No.   Organizational ID No.                            
 

 

    (B) The following is a list of the respective jurisdictions of formation of
each subsidiary of the Company:

 

   

 

 

Perfection Certificate

[  ]

 

Name   Jurisdiction                              

 

    (C) No subsidiary of the Company has changed its jurisdiction of
organization or incorporation at any time since the Closing Date (or, in the
case of Benchmark, in the five years prior to the date hereof).             (D)
Schedule A hereto is a true and correct organizational chart of the Company and
its subsidiaries.

 

  (3) LOCATIONS OF COMPANY AND ITS SUBSIDIARIES

 

    (A) The chief executive offices of the Company and its subsidiaries are
presently located at the following addresses:

 

 

Company/Subsidiary

 

Complete Street and Mailing Address, including

County and Zip Code

                             

 

    (B) The Company’s books and records and those of its subsidiaries are
located at the following additional addresses (if different from the above):

 

 

Company/Subsidiary

 

Complete Street and Mailing Address, including

County and Zip Code

                             

 

    (C) The following are all the locations where the Company and its
subsidiaries own, lease, or occupy any real property (and, in the case of
Benchmark, the address of any chief executive office in the last five years) (if
different from the above) :

 

 

Company/Subsidiary

 

Complete Street and Mailing Address, including

County and Zip Code

                             

 

  -2- 

 

 

Perfection Certificate

[  ]

 

  (4) SPECIAL TYPES OF COLLATERAL

 

    (A) The Company and its subsidiaries own (or have rights in) the following
kinds of assets. (If the answer is “Yes” to any of the following questions,
Schedule B hereto describes each such asset owned by the Company or its
subsidiaries and identifying which party owns the asset

 

Copyrights or copyright applications Yes [  ]   No [  ] Patents and patent
applications Yes [  ]   No [  ] Trademarks or trademark applications (including
any service marks, collective marks and certification marks Yes [  ]   No [  ]
Stocks, bonds or other securities Yes [  ]   No [  ] Promissory notes, or other
instruments or evidence of indebtedness Yes [  ]   No [  ]

 

    (B) The following are all institutions at which the Company and its
subsidiaries maintain any deposit, securities or commodities accounts:

 

 

Company/Subsidiary

 

Bank/Securities/Commodities

Intermediary Name

 

 

Account Number(s)

 

 

Branch Address

                                                                     

 

    (C) The following is a list of letters of credit naming the Company or any
subsidiary as “beneficiary” thereunder:

 

LC Number   Name of LC Issuer   LC Applicant                                    
             

 

  -3- 

 

 

Perfection Certificate

[  ]

 

[Signature Page Follows]

 

  -4- 

 

 

The Company agrees to advise you of any change or modification to any of the
foregoing information or any supplemental information provided on any
continuation pages attached hereto, and, until such notice is received by you,
you shall be entitled to rely upon such information and presume it is correct.
The Company acknowledges that your acceptance of this Perfection Certificate
does not imply any commitment on your part to enter into a loan transaction with
the Company.

 

  [●]         By:        Name:     Title:  

 

   

 

 

Schedule A

 

Organizational Chart

 

[See Attached]

 

   

 

 

Schedule B

 

Special Collateral