AMENDED AND RESTATED MASTER NETTING AGREEMENT

 

AMENDED AND RESTATED MASTER NETTING AGREEMENT (the “Agreement”), dated as of
August 20, 2018, by and among Longfin Corp, a Delaware corporation with offices
located at 16-017, 85 Broad Street, New York, New York 10004 (the “Company”) and
the investor signatory hereto (the “Investor”, and together with the Company,
the “Parties” and each a “Party”).

 

WHEREAS, (i) prior to the date hereof, the Parties and certain other investors
entered into that certain Securities Purchase Agreement, dated January 22, 2018,
pursuant to which, among other things, the Investor, among other things,
acquired a senior secured convertible note (the “Original Series B Note”) issued
by the Company (as amended, modified or waived from time to time, the
“Securities Purchase Agreement”), which is secured by a first priority perfected
lien in the Investor Note (as defined below), (ii) prior to the date hereof, the
Parties entered into that certain Note Purchase Agreement, dated January 22,
2018, pursuant to which, among other things, the Company acquired that certain
secured promissory note (the “Original Investor Note”) issued by the Investor
(as amended, modified or waived from time to time, the “Note Purchase
Agreement”), which is secured by certain Eligible Assets (as defined in the
Investor Note), as payment of the purchase price of the Series B Note pursuant
to the Securities Purchase Agreement, (iii) prior to the date hereof, the
Parties entered into that certain Master Netting Agreement, dated February 13,
2018 (the “Original Master Netting Agreement”) and (iv) concurrently herewith,
the Parties have entered into that certain Amendment and Exchange Agreement,
dated August 20, 2018 (as amended, modified or waived from time to time, the
“Amendment and Exchange Agreement”), pursuant to which the Parties agreed to (x)
exchange the Original Series B Note for the New Series B Note (as defined in the
Amendment and Exchange Agreement), (y) exchange the Original Investor Note for
the New Investor Note (as defined in the Amendment and Exchange Agreement) and
(z) amend and restate the Original Master Netting Agreement in the form of this
Agreement. The Amendment and Exchange Agreement, the Note Purchase Agreement,
the New Investor Note, the New Series B Notes and the Securities Purchase
Agreement, as amended by the Amendment and Exchange Agreement, are collectively
referred to herein as the “Underlying Agreements”;

 

WHEREAS, each Party desires to provide in this Master Netting Agreement for,
among other things, further clarification of its right (but not, in the case of
Investor only, its obligation) to Net (as defined below) all Obligations (as
defined below) arising under the Underlying Agreements upon the occurrence of
(i) with respect to Investor, at the Investor’s option from and after the
occurrence of either (A) an Event of Default (as defined in the New Series B
Note) or a Change of Control (as defined in the New Series B Note) (in each
case, whether or not the Investor has effected an Acceleration (as defined
below)) or, (B) August 13, 2018 or (ii) automatically upon the occurrence of
Maturity Netting (as defined in the New Investor Note), Redemption Netting (as
defined in the New Investor Note), Bankruptcy Event of Default Netting (as
defined in the New Investor Note) or any Prohibited Transfer (as defined in the
New Investor Note), in each case, and recover against the other Party under and
across the Underlying Agreements as herein specified and to treat this Agreement
and the Underlying Agreements as a single agreement for the purposes set forth
herein and the Note Purchase Agreement and the Securities Purchase Agreement
each as a “securities contract” (11 U.S.C. § 741), or other similar agreements;
and

 

 

 

 

WHEREAS, the Parties desire that the provisions of each Underlying Agreement
remain in force under each applicable Underlying Agreement to the extent such
provisions are not expressly superseded or amended hereby or by the Amendment
and Exchange Agreement.

 

NOW THEREFORE, in consideration of the mutual agreements herein made and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Party agrees as follows:

 

1. Single Agreement. This Agreement is entered into in reliance on the Parties’
agreement that for the purposes set forth herein this Agreement and the
Underlying Agreements form a single integrated agreement between the Parties,
and the Parties would not otherwise enter into this Agreement and the Underlying
Agreements. The Company and the Investor hereby acknowledge and agree (a) that
the Note Purchase Agreement, the Amendment and Exchange Agreement and the
Securities Purchase Agreement each are a “securities contract” as defined in 11
U.S.C. § 741 and that Investor shall have all rights in respect of the
Underlying Agreements as are set forth in 11 U.S.C. § 555 and 11 U.S.C. §
362(b)(6), and (b) that this Agreement is a “master netting agreement” as that
term is used in 11 U.S.C. § 362(b)(27) and 11 U.S.C. § 561 and is a “master
agreement” as that term is used in 11 U.S.C. § 362(b)(6) and that Investor shall
have all rights in respect of this Agreement (and in respect of the Underlying
Agreements as incorporated herein) as are set forth in 11 U.S.C. § 362(b)(27),
11 U.S.C. § 561, and 11 U.S.C. § 362(b)(6), including in respect of both the
foregoing clause (a) and the foregoing clause (b), without limitation, all
rights of credit, deduction, setoff, offset, recoupment, and netting
(collectively, “Netting” or “Net”) as set forth in this Agreement, the New
Investor Note and the New Series B Note.

 

2. Definitions. Terms capitalized herein but not defined herein shall have the
meanings given to such terms in the Securities Purchase Agreement (as amended by
the Amendment and Exchange Agreement). In the event of any conflict or
inconsistency between a term defined herein and in any of the Underlying
Agreements, such term as used in this Agreement shall govern and have the
meaning ascribed to it in this Agreement for the purposes of this Agreement. All
references to “$” shall be to lawful currency of the United States of America,
unless otherwise specified. All references to Sections, Exhibits, and other
provisions are to Sections, Exhibits and other provisions of this Agreement
unless otherwise expressly stated. The following terms used in this Agreement
are defined as follows:

 

“Acceleration” means the acceleration, exercise of redemption rights, required
redemption, exercise of prepayment rights or the occurrence of the Maturity Date
(as defined in the New Series B Note or New Investor Note, as applicable), in
whole or in part, of the New Series B Note or the New Investor Note, as
applicable, in accordance with this Agreement or the applicable Underlying
Agreement.

 

“Bankruptcy Code” means Title 11 of the U.S. Bankruptcy Code.

 

“Default” means, as applicable, a Default (as defined in the New Investor Note)
or an Event of Default (as defined in the New Series B Note).

 

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“Netting Party” means the Party exercising the right to effect any Netting
hereunder or under the applicable Underlying Agreement.

 

“Other Party” means the Party other than the Netting Party.

 

“Obligation” or “Obligations” means, with respect to a Party, each and every
present or future payment or performance obligation or liability of such Party
under this Agreement or an Underlying Agreement, whether fixed, matured,
unmatured, liquidated, or unliquidated.

 

“Unpaid Amounts” means, as of any date of determination, the Obligations owed by
one Party to the other under such Underlying Agreements that have not been paid
as of the date of determination, whether or not such amounts are then due and
payable and without regard to the fair market value of the New Series B Note or
the New Investor Note at such time, as applicable.

 

3. Netting.

 

(a) Optional Netting. Upon the occurrence of (i) either an Event of Default or a
Change of Control (in each case, whether or not the Investor has effected an
Acceleration) or (ii) August 13, 2018 (each, a “Default Netting Event”, and all
the principal of the New Investor Note then outstanding, the “Permitted
Amount”), the Investor may, without further notice to the Company, Net (each, an
“Optional Netting”) any Permitted Amount of any Unpaid Amount owed by the
Investor to the Company under the New Investor Note or any other Underlying
Agreement against (across or within each or all of the Underlying Agreements)
(x) any Unpaid Amounts owed by the Company to the Investor under the New Series
B Notes or (y) any Unpaid Amounts owed by the Company to the Investor under any
other Underlying Agreement.

 

(b) Automatic Netting. Upon the occurrence of an Acceleration either occurring
in connection with (w) a Redemption Netting, (x) a Bankruptcy Event of Default
Netting, (y) Maturity Netting or (z) any Prohibited Transfer, in each case, with
respect to any Unpaid Amounts then owed by the Investor to the Company under the
New Investor Note and subject to such applicable Netting pursuant to the terms
of the New Investor Note (such related aggregate amount of Restricted Principal
(as defined in the New Series B Note) of the New Series B Note subject to such
applicable Netting, each an “Acceleration Amount”), the Company shall, without
further notice to the Investor, Net an Acceleration Amount of Restricted
Principal owed by the Company to the Investor under the New Series B Note
against an amount of Principal (as defined in the New Investor Note) then
outstanding under the New Investor Note equal to such Acceleration Amount.

 

(c) Miscellaneous.

 

(i) If an Unpaid Amount is unascertainable, the Investor may, acting in a
commercially reasonable manner, estimate the Unpaid Amount thereof and Net in
respect of the estimate, subject to accounting to the Company when the Unpaid
Amount is ascertained. For the avoidance of doubt, except with the written
consent of the Investor to a different application of Netting against any Unpaid
Amounts, in the event of Optional Netting pursuant to paragraph (a) above, if
Unpaid Amounts exist with respect to both the New Series B Notes and other
Underlying Agreements, the Netting shall be applied first to obligations under
such other Underlying Agreements (until such obligations are satisfied in full)
and thereafter to obligations under the New Series B Notes.

 

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(ii) All Netting provisions of the New Investor Note, including without
limitation the provisions set forth in Section 7 of the New Investor Note, are
hereby incorporated in this Agreement and made a part hereof as if such
provisions were set forth herein.

 

(iii) The right of Netting provided for in this Section 3 is in addition to but
without duplication of, and not in limitation of, any other right or remedy
available to the Parties, whether arising under this Agreement or any Underlying
Agreement or any other agreement, under applicable law, in equity, or otherwise.
The Netting provided in this Section 3 shall be permitted without regard to fair
market value of the New Series B Note or the New Investor Note at any given time
of determination and without giving effect to equitable subordination or any
other condition effecting the rank or priority of any Obligations under any
Underlying Agreement.

 

(iv) The Netting Party shall give the Other Party notice of any Netting pursuant
to this Section 3, as soon as practicable thereafter, provided that failure to
give such notice shall not affect the validity of the Netting.

 

4. Representations and Warranties. As of the date hereof (the “Effective Date”),
each Party represents and warrants to the other Party that (i) it is duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation, formation, or organization and any other
jurisdictions where its activities so require, has all necessary power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and has taken all necessary actions to authorize such execution,
delivery, and performance; (ii) the person signing this Agreement on its behalf
was duly authorized to do so on its behalf on the Effective Date; (iii) this
Agreement and the Underlying Agreements to which it is a party constitute its
legal, valid, and binding obligations, enforceable against it in accordance with
their terms, subject to applicable bankruptcy, reorganization, insolvency,
conservatorship, receivership, moratorium, or other similar laws affecting
creditors’ rights generally and subject, as to enforceability, to equitable
principles of general application (regardless of whether enforcement is sought
in a proceeding in equity or at law); (iv) its execution and delivery of this
Agreement does not contravene, or constitute a default under, any provision of
applicable law or regulation (including, without limitation, any order, decree,
judgment, injunction, or other judicial or governmental restriction applicable
to such Party or any portion of its assets) or of the organizational documents
of such Party, or of any material agreement, judgment, injunction, order, decree
or other instrument binding upon such Party or result in the creation or
imposition of any lien on any asset of such Party other than as provided herein;
and (v) the jurisdiction of the Company’s incorporation, formation, or
organization and the location of its chief executive office are correctly set
forth in the Underlying Agreements.

 

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5. Interpretation. The Parties intend that (a) this Agreement constitute and be
deemed to be a “master netting agreement” (or any substantially similar term)
and that the Parties be deemed to be “master netting agreement participants” (or
any substantially similar term) within the meaning of, and as such terms are
used in, any law, rule, regulation, statute, or order applicable to the Parties’
rights herein, whether now or hereafter enacted or made applicable, including,
but not limited to, the Bankruptcy Code at 11 U.S.C. §§ 101(25), 101(47),
101(53B), 741(7) and 761(4); and (b) all Netting effectuated pursuant to this
Agreement or any Underlying Agreement, be governed by the following Bankruptcy
Code sections in the event of the bankruptcy of either Party: (i) Sections 555,
556, 559 and 560; (ii) Section 362(b)(6), (7) and/or (17); (iii) Sections
546(e)-(g); and (iv) Section 548(d)(2). The Parties also agree that such Netting
contemplated hereunder or under any Underlying Agreement arise under “securities
contracts” and constitute “settlement payments” as set forth in Sections 101 and
741 of the Bankruptcy Code. The Parties further intend that the Underlying
Agreements constitute “securities contracts” as such term is defined in the
Bankruptcy Code. Moreover, with respect to any Underlying Agreement, each Party
thereto constitutes a “stockbroker”, “financial institution” or “securities
clearing agency” within the meaning of, and as such terms are used in the
Bankruptcy Code and/or any law, rule, regulation, statute, or order applicable
to the Parties’ rights herein, whether now or hereafter enacted or made
applicable.

 

6. Conflicts and Inconsistencies. In the event of any conflict or inconsistency
between any provision of this Agreement and any provision of any Underlying
Agreement concerning the matters set forth in this Agreement, the provisions of
this Agreement shall govern.

 

7. Miscellaneous.

 

(a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

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(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. In the event that any signature is delivered by
facsimile transmission or by an e-mail which contains a portable document format
(.pdf) file of an executed signature page, such signature page shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such signature page
were an original thereof.

 

(c) Headings; Gender. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement. Unless the context clearly indicates otherwise, each pronoun herein
shall be deemed to include the masculine, feminine, neuter, singular and plural
forms thereof. The terms “including,” “includes,” “include” and words of like
import shall be construed broadly as if followed by the words “without
limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import
refer to this entire Agreement instead of just the provision in which they are
found.

 

(d) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. The Parties intend that this Agreement be
construed to give full effect to the intent of the Parties with respect to the
Netting provisions contained herein. If any portion of the Netting contemplated
herein shall be in any respect deemed or held to be invalid, illegal, or
unenforceable, all other provisions of this Agreement shall survive.

 

(e) Amendments. No provision of this Agreement may be amended or waived other
than by an instrument in writing signed by the Company and the Investor.

 

(f) Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement shall be governed by the
provisions of Section 9(f) of the Securities Purchase Agreement.

 

(g) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns. No party
may assign this Agreement or any rights or obligations hereunder without the
prior written consent of the other party.

 

(h) No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

 

(i) Survival. The representations, warranties, agreements and covenants shall
survive the Effective Date. The Investor shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.

 

(j) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

(k) Construction. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party.

 

(l) No Waiver. A failure or delay in exercising any right, power, or privilege
in respect of any Underlying Agreement or this Agreement will not be presumed to
operate as a waiver of that right, power, or privilege, and a single or partial
exercise of any right, power, or privilege will not be presumed to preclude any
subsequent or further exercise of that right, power, or privilege, or the
exercise of any other right, power, or privilege.

 

(m) Term. This Agreement shall continue in effect from the Effective Date until
terminated by agreement of the Parties or, if earlier, such time as no New
Investor Note remains outstanding.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Investor and the Company have caused their respective
signature page to this Master Netting Agreement to be duly executed as of the
date first written above.

 

  COMPANY:       LONGFIN CORP       By:                   Name:     Title:  

 

 

 

 

IN WITNESS WHEREOF, the Investor and the Company have caused their respective
signature page to this Master Netting Agreement to be duly executed as of the
date first written above.

 

  INVESTORS:       HUDSON BAY MASTER FUND LTD       By:                    
Name:     Title: