Baylin Technologies Inc. — Capital/Financing Update 2025

Mar 20, 2025

EXECUTION VERSION

WAIVER AND FOURTEENTH AMENDMENT TO CREDIT AGREEMENT

THIS WAIVER AND FOURTEENTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is made as of December 20, 2024, among:

BAYLIN TECHNOLOGIES INC. (the "Borrower")

-and-

ROYAL BANK OF CANADA, in its capacity as the administrative agent (the "Agent")

-and-

ROYAL BANK OF CANADA, as lender (the "Lender")

RECITALS

A. The Agent, the Borrower, the Lender and HSBC Bank Canada have entered into a credit agreement, dated March 29, 2019, as amended by a first amendment to credit agreement dated June 8, 2020, a second amendment to credit agreement dated December 2, 2020, a third amendment to credit agreement dated May 10, 2021, a waiver and fourth amendment to credit agreement dated August 11, 2021, a waiver and fifth amendment to credit agreement dated October 12, 2021, a waiver and consent dated November 22, 2021, a consent, waiver and sixth amendment to credit agreement dated March 7, 2022, a seventh amendment to credit agreement dated July 11, 2022, an eighth amendment to credit agreement dated September 14, 2022, a ninth amendment to credit agreement dated May 2, 2023, a tenth amendment to credit agreement dated September 28, 2023, a waiver and eleventh amendment to credit agreement dated February 12, 2024, a twelfth amendment to credit agreement dated March 8, 2024 and a thirteenth amendment to credit agreement dated June 5, 2024 (as further amended, restated, supplemented or replaced from time to time, collectively, the "Credit Agreement").

B. Effective March 29, 2024, Royal Bank of Canada, HSBC Bank Canada, HSBC Trust Company (Canada), HSBC Mortgage Corporation (Canada) and HSBC Finance Mortgages Inc. amalgamated and continued as one bank under the name in English, "Royal Bank of Canada".

C. Pursuant to the Credit Agreement, the aggregate principal amount outstanding under the Revolving Facility shall not exceed the Revolving Facility Limit, being the lesser of the Aggregate Revolving Commitment and the Borrowing Base, as set out in the latest Borrowing Base Certificate delivered by the Borrower. Pursuant to the Borrowing Base Certificate for the Fiscal Quarter ended September 30, 2024, the Borrower reported that the aggregate principal amount outstanding under the Revolving Facility exceeded the Revolving Facility Limit by $435,000 for such Fiscal Quarter (the "Revolving Facility Limit Breach"). The Borrower has requested and the Lender has agreed to waive the Revolving Facility Limit Breach in respect of the Fiscal Quarter ended September 30, 2024; and

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D. The Borrower requested, and the Agent and the Lender have agreed to make, certain amendments to the terms and conditions of the Credit Agreement.

NOW THEREFORE, in consideration of the covenants and agreements contained in this Amendment, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Definitions. All capitalized terms used in this Amendment, unless otherwise defined herein, shall have the meaning ascribed to such terms in the Credit Agreement.

2. Waiver of Revolving Facility Limit Breach. Subject to the terms and conditions contained herein, the Lender hereby waives any Default or Event of Default resulting from the Revolving Facility Limit Breach in respect of the Fiscal Quarter ended September 30, 2024 only.

3. Amendments to Credit Agreement. The Credit Agreement is hereby amended as follows:

3.1. Section 1.01 (Definitions) of the Credit Agreement is amended by:

(a) Adding the following definition to Section 1.01 in alphabetical order:

“Fourteenth Amendment Date” means December 20, 2024.

(b) Deleting the definition of “Aggregate Revolving Commitment” and replacing it with the following:

“Aggregate Revolving Commitment” means the aggregate Commitments of the Lenders under the Revolving Facility as may be reduced in accordance with Section 2.12 and/or increased in accordance with Section 2.15 from time to time. As of the Fourteenth Amendment Date, the Aggregate Revolving Commitment is Cdn.$15,000,000.”

(c) Deleting the definition of “Borrowing Base” and replacing it with the following:

“Borrowing Base” means an amount determined at such time as follows (without duplication):

(i) 90% of Eligible Insured Accounts Receivables; plus
(ii) 75% of Eligible Canadian/US Accounts Receivable; plus
(iii) 50% of Eligible Inventory valued at the lower of cost and fair market value up to a maximum of 50% of the total Borrowing Base; less
(iv) reasonable reserves established by the Lenders acting reasonably in respect to Potential Prior Ranking Claims,

as determined in accordance with the Borrowing Base Certificate.”

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(d) Deleting the definition of “Eligible Accounts Receivable” and replacing it with the following:

“Eligible Accounts Receivable” means accounts receivable owing to the Borrower, Canadian Guarantors or US Guarantors excluding (i) the entire amount of accounts, any portion of which is outstanding more than ninety (90) days after billing date, provided that (a) for accounts owing by account debtors other than Askey Computer Corp. and Pegatron Corporation, the under 90 day portion may be included where the over ninety (90) day portion is less than 10% of the amount of accounts, or where the Majority Lenders have designated such portion as nevertheless good, and (b) for accounts owing by Askey Computer Corp. and Pegatron Corporation, the under 90 day portion of such accounts may be included, (ii) all amounts due from any affiliate, (iii) bad or doubtful accounts, (iv) accounts subject to any security interest or other encumbrance ranking or capable of ranking in priority to the Lenders’ Security, (v) the amount of all holdbacks, contra accounts or rights of setoff on the part of any account debtor, (vi) those trade accounts receivable included elsewhere in the Borrowing Base calculation, (vii) any accounts which the Majority Lenders have previously advised to be ineligible and (viii) accounts that are not subject to the Security or are subject to other Encumbrances other than Permitted Encumbrances.”

(e) Deleting the definition of “Maturity Date” and replacing it with the following:

“Maturity Date” means the earlier of (i) February 28, 2025, and (ii) the date on which the Credit Facilities are terminated pursuant to Section 12.02.”

(f) Deleting the definition of “Swingline Facility 2 Commitment” and replacing it with the following:

“Swingline Facility 2 Commitment” means an amount equal to Cdn.$0.00.”

3.2. Article 2 (The Credit Facilities) of the Credit Agreement is hereby amended by:

(a) Deleting the words “which, as of the date hereof, is Cdn.$4,166,666.67” from Section 2.03(1).

(b) Inserting the following as a new Subsection (5) of Section 2.03:

“(5) Notwithstanding any other provision of this Agreement, with effect from the Fourteenth Amendment Date, Swingline Facility 2 is automatically terminated and the Swingline Facility 2 Lenders are relieved of all obligations to provide any further Advances under Swingline Facility 2.”

3.3. Schedule A (Lenders and Commitments) of the Credit Agreement is deleted in its entirety and replaced with Schedule A attached hereto as Exhibit I.

1. Conditions Precedent. The effectiveness of this Amendment shall be conditional upon each of the following, each of which must be fulfilled by the Borrower in form and

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substance satisfactory to the Agent or waived by the Agent in writing prior to the effectiveness hereof:

(a) receipt, by the Agent, of a fully executed copy of this Amendment;

(b) confirmation (as contained herein) that no Default or Event of Default has occurred; and

(c) confirmation (as contained herein) that all representations and warranties contained in the Credit Agreement are true and correct as if made on the date hereof except to the extent that such representations and warranties relate solely to an earlier date.

1. Representations and Warranties. The Borrower hereby represents and warrants to the Agent and the Lenders as follows:

(a) it has all requisite power and authority to execute this Amendment and any other agreements or instruments required hereunder and to perform all obligations hereunder, and this Amendment constitutes legal, valid and binding obligations, enforceable in accordance with its terms;

(b) the execution, delivery and performance by it of this Amendment and any other agreements or instruments required hereunder have been duly authorized by all necessary corporate or other action and do not require any authorization, consent or approval by any Governmental Authority or other Person, or violate any Applicable Law;

(c) all of the representations and warranties contained in Credit Agreement are correct on and as of the date hereof as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date;

(d) no Default or Event of Default has occurred and is continuing; and

(e) the Borrower shall have reimbursed the Agent and the Lenders for their costs and expenses in accordance with Section 10.

1. References. All references in the Credit Agreement to “this Agreement” shall be deemed to refer to the Credit Agreement as amended hereby; and any and all references in the other Loan Documents to the Credit Agreement shall be deemed to refer to the Credit Agreement as amended hereby. This Amendment is a Loan Document.

2. No Other Changes. Except as explicitly amended by this Amendment, all of the terms and conditions of the Credit Agreement shall remain in full force and effect and un-amended hereby.

3. Costs and Expenses. The Borrower reaffirms its agreement under the Credit Agreement to pay or reimburse the Agent and the Lenders on demand for all costs and expenses incurred by the Agent and the Lenders in connection with the Loan Documents, including

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without limitation all reasonable fees and disbursements of advisors to the Agent and Lenders, including without limitation legal counsel.

1. Miscellaneous. This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.

2. Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the laws of Canada applicable therein.

3. Counterparts; Electronic Execution. This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. The words “execution”, “signed”, “signature”, and words of like import in this Amendment shall be deemed to include electronic signature or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper based recordkeeping system, as the case may be.

[SIGNATURE PAGE FOLLOWS]

149587947:v6

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IN WITNESS WHEREOF the Parties hereto have executed this Amendment as of the date first written above.

BORROWER:

BAYLIN TECHNOLOGIES INC.

By:

Name: Leighton Carroll
Title: Chief Executive Officer

Signature Page to Waiver and Fourteenth Amendment to Credit Agreement

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AGENT:

ROYAL BANK OF CANADA, as Agent

By: Ushantha
Name: Sean Ekanayaka
Title: Deal Manager

By:
Name:
Title:

LENDER:

ROYAL BANK OF CANADA, as Lender

By: Nada Hamadi
Name: Nada Hamadi
Title: Senior Director, RBC

By:
Name:
Title:

Signature Page to Waiver and Fourteenth Amendment to Credit Agreement

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S3

AGREED AND ACKNOWLEDGED BY EACH OF THE FOLLOWING GUARANTORS:

GALTRONICS USA, INC., as Guarantor

By:

Name: Leighton Carroll
Title: Chief Executive Officer

GALTRONICS ELECTRONICS (WUXI) CO., LTD., as Guarantor

By:

Name: Leighton Carroll
Title: Director

GALTRONICS CANADA INC., as Guarantor

By:

Name: Philip Mohtadi
Title: Corporate Secretary

ADVANTECH WIRELESS TECHNOLOGIES INC., as Guarantor

By:

Name: Leighton Carroll
Title: Chief Executive Officer

Signature Page to Waiver and Fourteenth Amendment to Credit Agreement

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S4

ADVANTECH WIRELESS TECHNOLOGIES (USA) INC., as Guarantor

By:

Name: Leighton Carroll
Title: Chief Executive Officer

GALTRONICS CORPORATION LTD. (DELAWARE), as Guarantor

By:

Name: Philip Mohtadi
Title: Corporate Secretary

Signature Page to Waiver and Fourteenth Amendment to Credit Agreement

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EXHIBIT I

SCHEDULE A

LENDERS AND COMMITMENTS

Lender	Revolving Facility	Term Facility
Royal Bank of Canada	Cdn.$8,425,926	--
Royal Bank of Canada
(previously HSBC Bank Canada)	Cdn.$6,574,074	--
	Cdn.$15,000,000	--