SEQUANS COMMUNICATIONS S.A.

AMENDMENT NO. 3 TO CONVERTIBLE PROMISSORY NOTE

This Amendment No. 3 to Convertible Promissory Note (the “ Amendment ”) is made as of September 27, 2018 by and between Sequans Communications S.A., a société anonyme incorporated in the French Republic (the “ Company ”) and Nokomis Capital Master Fund, LP, a Cayman Islands exempted limited partnership (the “ Purchaser ” and together with the Company, the “ Parties ”) and is made with reference to the Convertible Promissory Note issued as of April 14, 2015 (the “ Note ”), as amended on June 30, 2017 and October 30, 2017, under and pursuant to that certain Convertible Note Agreement, dated as of April 14, 2015 (the “ Purchase Agreement ”), between the Parties. Unless otherwise indicated herein, capitalized terms used herein have the same meanings set forth in the Purchase Agreement.

WHEREAS, the Parties wish to amend the Note to extend the maturity of the Note to April 14, 2021 and to lower the conversion rate of the Note;

WHEREAS, the Parties wish to amend the Note to allow the Company to grant Harbert European Specialty Lending Company II S.A.R.L. (“ Harbert ”) a security interest on all of the Company’s intellectual property; and

WHEREAS, the Parties wish to amend the Note to provide that the Note will be subordinated to up to €12 million of secured indebtedness owed to Harbert under the loan agreement between the Company and Harbert.

NOW, THEREFORE, the Parties hereby agree to amend the Note as follows:

“Section 3.1 Scheduled Payment . Unless converted as set forth below, the Accreted Principal Amount (including any accrued and unpaid interest) of this Note shall be due and payable on April 14, 2021.”

“Section 5.2 Conversion Rate . The initial Conversion Rate shall be 588.2353 Ordinary Shares (subject to adjustment as provided in this Article V, the “ Conversion Rate ”) per US$1,000 Accreted Principal Amount (including any accrued and unpaid interest) of the Note. To address dilution of the conversion rights granted under the Notes, the Conversion Rate shall be subject to adjustment from time to time pursuant to Sections 5.3 and 5.4.”

“For so long as the Note is outstanding, the Company will not grant a consensual security interest or pledge its personal property assets to another third-party lender in connection with debt for borrowed money (other than (i) purchase money security interests or capital leases incurred in the ordinary course of business, (ii) up to $25 million of secured indebtedness relating to a receivables facility or debt or letters of credit facilities, and (iii) up to €12 million of secured indebtedness owed to Harbert under the loan agreement

between the Company and Harbert, which is or will be secured by all of the Company’s intellectual property) without the consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed, in particular in the case of a security interest or pledge granted or made to a strategic corporate partner or joint venture partner as a component of a financing transaction or other business relationship with a strategic corporate partner or joint venture partner (whether directly or involving an investment fund controlled by the relevant strategic corporate partner or joint venture partner)).”

“ ARTICLE XII

SUBORDINATION

With the exception of (i) up to $25 million of secured indebtedness owed to Natixis under the factoring agreement between the Company and Natixis and (ii) up to €12 million of secured indebtedness owed to Harbert under the loan agreement between the Company and Harbert, which is or will be secured by all of the Company’s intellectual property, the Note and the interest accrued under the Note are the senior obligations of the Company and will rank pari passu in right of payment with all other senior and unsubordinated obligations of the Company.”

IN WITNESS WHEREOF, the Company has executed and delivered this Amendment on September 27, 2018.

COMPANY: SEQUANS COMMUNICATIONS S.A.

By: /s/ Georges Karam                         

Georges KARAM

CEO

PURCHASER: NOKOMIS CAPITAL MASTER FUND, LP

By: /s/ Brett Hendrickson                         

Brett HENDRICKSON

Portfolio manager

SEQUANS COMMUNICATIONS S.A.

AMENDMENT NO. 3 TO CONVERTIBLE PROMISSORY NOTE

This Amendment No. 3 to Convertible Promissory Note (the “ Amendment ”) is made as of September 27, 2018 by and between Sequans Communications S.A., a société anonyme incorporated in the French Republic (the “ Company ”) and Nokomis Capital Master Fund, LP, a Cayman Islands exempted limited partnership (the “ Purchaser ” and together with the Company, the “ Parties ”) and is made with reference to the Convertible Promissory Note issued as of April 27, 2016 (the “ Note ”), as amended on June 30, 2017 and October 30, 2017, under and pursuant to that certain Convertible Note Agreement, dated as of April 27, 2016 (the “ Purchase Agreement ”), between the Company and the several purchasers party thereto, including the Purchaser. Unless otherwise indicated herein, capitalized terms used herein have the same meanings set forth in the Purchase Agreement.

WHEREAS, the Parties wish to amend the Note to allow the Company to grant Harbert European Specialty Lending Company II S.A.R.L. (“ Harbert ”) a security interest on all of the Company’s intellectual property; and

WHEREAS, the Parties wish to amend the Note to provide that the Note will be subordinated to up to €12 million of secured indebtedness owed to Harbert under the loan agreement between the Company and Harbert.

NOW, THEREFORE, the Parties hereby agree to amend the Note as follows:

“For so long as the Note is outstanding, the Company will not grant a consensual security interest or pledge its personal property assets to another third-party lender in connection with debt for borrowed money (other than (i) purchase money security interests or capital leases incurred in the ordinary course of business, (ii) up to $25 million of secured indebtedness relating to a receivables facility or debt or letters of credit facilities, and (iii) up to €12 million of secured indebtedness owed to Harbert under the loan agreement between the Company and Harbert, which is or will be secured by all of the Company’s intellectual property) without the consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed, in particular in the case of a security interest or pledge granted or made to a strategic corporate partner or joint venture partner as a component of a financing transaction or other business relationship with a strategic corporate partner or joint venture partner (whether directly or involving an investment fund controlled by the relevant strategic corporate partner or joint venture partner)).”

“ARTICLE XII

SUBORDINATION

With the exception of (i) up to $25 million of secured indebtedness owed to Natixis under the factoring agreement between the Company and Natixis and (ii) up to €12 million of secured indebtedness owed to Harbert under the loan agreement between the Company and Harbert, which is or will be secured by all of the Company’s intellectual property, the Note and the interest accrued under the Note are the senior obligations of the Company and will rank pari passu in right of payment with all other senior and unsubordinated obligations of the Company.”

IN WITNESS WHEREOF, the Company has executed and delivered this Amendment on September 27, 2018.

COMPANY: SEQUANS COMMUNICATIONS S.A.

By: /s/ Georges Karam                         

Georges KARAM

CEO

                        

PURCHASER: NOKOMIS CAPITAL MASTER FUND, LP

By: /s/ Brett Hendrickson     

Brett HENDRICKSON

Portfolio manager

    

THE SECURITY REPRESENTED BY THIS INSTRUMENT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”). ACCORDINGLY, THIS SECURITY MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THE TRANSFER OF THIS SECURITY IS ALSO SUBJECT TO THE CONDITIONS SPECIFIED IN THE CONVERTIBLE NOTE AGREEMENT, DATED AS OF APRIL 14, 2015, AS AMENDED AND MODIFIED FROM TIME TO TIME, BETWEEN SEQUANS COMMUNICATIONS S.A. (THE “ COMPANY ”) AND THE PURCHASER PARTY THERETO. THE COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH SECURITY UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. UPON WRITTEN REQUEST, A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF WITHOUT CHARGE .

SEQUANS COMMUNICATIONS S.A.

CONVERTIBLE PROMISSORY NOTE

September 27, 2018                                          $4,500,000.00

SEQUANS COMMUNICATIONS S.A., a société anonyme incorporated in the French Republic (the “ Company ”), hereby promises to pay to the order of Nokomis Capital Master Fund, LP, a Cayman Islands exempted limited partnership (the “ Purchaser ”), the principal amount of Four Million, Five Hundred Thousand and 00/100 Dollars ($4,500,000.00) plus the portion of the Accreted Principal Amount (as defined below) in excess thereof. This Note is being issued pursuant to a Convertible Note Agreement, dated as of April 14, 2015 (the “ Purchase Agreement ”), between the Company and the Purchaser. The Purchase Agreement contains terms governing the rights of the holder of this Note, and all provisions of the Purchase Agreement are hereby incorporated herein in full by reference. Unless otherwise indicated herein, capitalized terms used in this Note have the same meanings set forth in the Purchase Agreement.

The terms defined in this Article I (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Note shall have the respective meanings specified in this Article I. The words “herein,” “hereof,” “hereunder” and words

of similar import refer to this Note as a whole and not to any particular Article, Section or other subdivision. The terms defined in this Article I include the plural as well as the singular.

“ Accreted Principal Amount ” shall have the meaning specified in Article II. For the avoidance of doubt, “Accreted Principal Amount” shall include any accrued and unpaid interest at the time of any determination of such “Accreted Principal Amount.”

“ ADSs ” shall have the meaning specified in Section 3.2.

“ Board of Directors ” shall have the meaning specified in Section 5.3(a).

“ Closing Sale Price ” shall have the meaning specified in Section 5.1(e).

“ Company ” shall have the meaning specified in the preamble.

“ Conversion Date ” shall have the meaning specified in Section 5.1(b).

“ Conversion Rate ” shall have the meaning specified in Section 5.2.

“ Deposit Agreement ” shall have the meaning specified in Section 5.1(d)(iii).

“ Depositary ” shall have the meaning specified in Section 5.1(d)(ii).

“ Distributed Assets ” shall have the meaning specified in Section 5.3(d).

“ Event of Default ” shall have the meaning specified in Section 4.1.

“ Expiration Date ” shall have the meaning specified in Section 5.3(f).

“ Expiration Time ” shall have the meaning specified in Section 5.3(f).

“ Interest Payment Date ” shall have the meaning specified in Article II.

“ Issuable Maximum ” shall have the meaning specified in Section 5.1(c).

“ Ordinary Shares ” shall have the meaning specified in Section 3.2.

“ Organic Change ” shall have the meaning specified in Section 5.4.

“ PIK Amount ” shall have the meaning specified in Article II.

“ Purchase Agreement ” shall have the meaning specified in the preamble.

“ Purchaser ” shall have the meaning specified in the preamble.

“ Securities Act ” shall have the meaning specified in the legend above.

“ Spin-Off ” shall have the meaning specified in Section 5.3(d).

“ Spin-Off Valuation Period ” shall have the meaning specified in Section 5.3(d).

“ Trigger Event ” shall have the meaning specified in Section 5.3(d).

“ Underlying Shares ” shall have the meaning specified in Section 5.1(d)(i).

Interest shall accrue on the Accreted Principal Amount (in each case computed on the basis of a 365/366-day year and the actual number of days elapsed in any year) at an annual rate equal to 7.0% per annum or (if less) at the highest rate then permitted under applicable law, which shall be payable by adding such interest to the Accreted Principal Amount on each Interest Payment Date (as defined below) and on the final maturity hereof (the “ PIK Amount ”). At any time, the outstanding principal amount of this Note, including all PIK Amounts added thereto through such time, is referred to in this Note as the “ Accreted Principal Amount .” The Company shall pay to the holder of this Note all accrued interest (including interest on the Accreted Principal Amount) on each anniversary date of this Note (each, an “ Interest Payment Date ”), including the final maturity date of this Note. Interest shall accrue on any principal payment due under this Note (including as to accrued interest added to the principal) until such time as payment therefor is actually delivered to the holder of this Note.

Section 3.1      Scheduled Payment . Unless converted as set forth below, the Accreted Principal Amount (including any accrued and unpaid interest) of this Note shall be due and payable on April 14, 2021.

Section 3.2      Conversion . Notwithstanding any provision contained in this Article III, the holder of this Note may convert, indirectly through the procedure set forth in Section 5.1(d), all or any portion of the Accreted Principal Amount (including any accrued and unpaid interest) of this Note into the Company’s American Depositary Shares (“ ADSs ”), each representing one (1) ordinary share of the Company, nominal value €0.02 per share (“ Ordinary Shares ”), in accordance with Article V, until such time as such Accreted Principal Amount (including any accrued and unpaid interest) has been paid. For the avoidance of doubt, any reference in this Note to the conversion of the Note into ADSs shall mean the issuance of ADSs following conversion of the Note in accordance with the procedure set forth in Section 5.1(d).

ARTICLE IV     EVENTS OF DEFAULT; REMEDIES ON DEFAULT

Section 4.1      Event of Default . An “ Event of Default ” shall exist if any of the following conditions or events shall occur and be continuing:

(a) the Company defaults in the payment of principal or interest on the Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise and such failure to pay is not cured within three (3) business days after the occurrence thereof; or

(b) the Company defaults in the performance of, or compliance with, any material term contained in the Purchase Agreement or the Note and the default is not remedied within thirty (30) days after the Company receives written notice of the default from the holder

of the Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 4.1(b)); or

(c) the Company (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property or (v) is adjudicated as insolvent or to be liquidated; or

(d) any representation, warranty or certification made herein or pursuant to the Purchase Agreement by the Company was not true or correct in any material respect as of the time made; or

(e) the Company, any subsidiary of the Company or any of their respective affiliates fails to pay principal when due (whether at stated maturity or otherwise) or an uncured default exists that results in the acceleration of maturity of any indebtedness for borrowed money of the Company, any subsidiary of the Company or any of their respective affiliates in an aggregate amount in excess of $10,000,000 (or its foreign currency equivalent), unless such indebtedness is discharged, or such acceleration is rescinded, stayed or annulled, within any applicable cure period set forth in the relevant agreement or instrument; or

(f) one or more final non-appealable judgments for the payment of money in any aggregate amount in excess of $10,000,000 shall be rendered against the Company, any subsidiary of the Company or any of their respective affiliates and the same shall remain undischarged for a period of sixty (60) days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to levy upon assets or properties of the Company, any subsidiary of the Company or any of their respective affiliates to enforce any such judgment; or

(g) an Event of Default under any other Note issued pursuant to the Purchase Agreement; or

(h) a court or governmental authority of competent jurisdiction enters an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company, or any such petition shall be filed against the Company and such petition shall not be dismissed within sixty (60) days.

Section 4.2      Acceleration

 

(a)     If an Event of Default with respect to the Company described in subsection (c) of Section 4.1 has occurred, the Note shall automatically become immediately due and payable.

(b)     If any other Event of Default has occurred and is continuing, the holder of the Note may at any time at his, her or its option, by notice to the Company, declare the Note to be immediately due and payable.

(c)     Upon the Note becoming due and payable under this Section 4.2, whether automatically or by declaration, the Note will forthwith mature and the entire unpaid Accreted Principal Amount (including any accrued and unpaid interest) shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.

Section 4.3      Other Remedies . If any Event of Default has occurred and is continuing, and irrespective of whether the Note has become or has been declared immediately due and payable under Section 4.2, the holder of the Note may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein, for an injunction against a violation of any of the terms hereof or thereof or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

Section 4.4      No Waivers or Election of Remedies; Expenses . No course of dealing and no delay on the part of the holder of the Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. The Company shall pay the Accreted Principal Amount (including any accrued and unpaid interest) of the Note without any deduction for any setoff or counterclaim. No right, power or remedy conferred by the Purchase Agreement or by the Note upon the holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. The Company will pay to the holder of the Note on demand such further amount as shall be sufficient to cover all reasonable costs and expenses of such holder incurred in any enforcement or collection under this Article IV, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.

Section 4.5      Waiver of Demand . The Company hereby waives diligence, presentment, protest and demand and notice of protest and demand, dishonor and nonpayment of this Note, and expressly agrees that this Note, or any payment hereunder, may be extended from time to time and that the holder hereof may accept security for this Note or release security for this Note, all without in any way affecting the liability of the Company hereunder

ARTICLE V CONVERSION

Section 5.1      Conversion Procedure .

(a) At any time prior to the payment of this Note in full, the holder of this Note may convert all or any portion of the outstanding Accreted Principal Amount (including any accrued and unpaid interest) of this Note into a number of ADSs (excluding any fractional ADS) equal to the product obtained by dividing (i) the portion of the Accreted Principal Amount designated by such holder to be converted, by (ii) the Conversion Rate then in effect

(b) Except as otherwise expressly provided herein, each conversion of this Note shall be deemed to have been effected as of the close of business on the date on which this Note has been surrendered for conversion at the principal office of the Company (the “ Conversion Date ”). At such time as such conversion has been effected, the rights of the holder of this Note as such holder to the extent of the conversion shall cease, and the Person

or Persons in whose name or names the ADSs are to be issued upon such conversion shall be deemed to have become the holder or holders of record of the ADSs represented thereby.

(c) Notwithstanding anything herein to the contrary, including any adjustments to the Conversion Rate pursuant to Section 5.3, the Company may not issue, upon conversion of this Note, a number of ADSs that would exceed in the aggregate 40,000,000 (subject to adjustment as provided in Section 5.3 below) Ordinary Shares and ADSs as of the date of issuance of such ADSs (such number of shares, the “ Issuable Maximum ”). If, pursuant to any adjustment to the Conversion Rate contemplated in this Article V, the conversion of the Note would result in the issuance of ADSs that would exceed the Issuable Maximum, then the Conversion Rate shall be further adjusted such that that maximum number of ADSs issuable upon conversion of the Note shall not exceed the Issuable Maximum.

(d) As soon as possible after a conversion has been effected (but in any event within five (5) business days in the case of clause (i) below), the holder of this Note shall subscribe for the number of Ordinary Shares issuable upon conversion (in whole or in part) of this Note, and the Company shall do the following:

(i) register the issuance to the converting holder of the number of Ordinary Shares issuable upon conversion (in whole or in part) of this Note (the “ Underlying Shares ”) in the Company’s share transfer registry;

(ii) issue the Underlying Shares and deposit such Underlying Shares with The Bank of New York Mellon, as depositary (the “ Depositary ”), in the name and on behalf of the holder of the Note

(iii) cause the Depositary to issue and deliver to the converting holder certificates or a book-entry transfer for the number of ADSs to which Purchaser shall be entitled against deposit of the Underlying Shares, pursuant to the Deposit Agreement dated as of April 14, 2011, as amended (the “ Deposit Agreement ”) among the Company, the Depositary and the owners and holders from time to time of the ADSs issued thereunder; and

(iv) deliver to the converting holder a new Note representing any portion of the Accreted Principal Amount (including any accrued and unpaid interest) that was represented by the Note surrendered to the Company in connection with such conversion, but which was not converted or which could not be converted because it would have required the issuance of a fractional Ordinary Share.

The converting holder shall cooperate with the Company and the Depositary to facilitate the process outlined above, including through the execution of a subscription form for the Ordinary Shares satisfactory to the converting holder and the execution of a power of attorney authorizing the Company to deliver the Underlying Shares to the Depositary on such holder’s behalf.

(e) If a fractional ADS would, except for the provisions hereof, be deliverable upon conversion of this Note, the Company, in lieu of delivering such fractional share, shall in the event the conversion is being consummated in connection with repayment in full of the Note, pay in cash an amount equal to the market price of such fractional share based on the closing price of the ADSs on the New York Stock Exchange (the “ Closing Sale Price ”) on the Conversion Date.

(f) The issuance of the Underlying Shares and ADSs upon conversion of this Note shall be made without charge to the holder hereof for any issuance tax in respect thereof or other cost incurred by the Company in connection with such conversion and the related issuance of Underlying Shares and ADSs, unless the tax is due because the holder requests such Underlying Shares and ADSs to be issued in a name other than the holder’s name, in which case the holder shall pay the tax. Upon conversion of this Note, the Company

shall take all such actions as are necessary in order to ensure that the Ordinary Shares and ADSs issuable with respect to such conversion shall be validly issued, fully paid and nonassessable.

(g) The Company shall not close its books against the transfer of Ordinary Shares or ADSs issued or issuable upon conversion of this Note in any manner which interferes with the timely conversion of this Note.

(h) The conversion of this Note shall be subject to the Beneficial Ownership Limitations set forth in Section 5.2 of the Purchase Agreement, which are incorporated herein by reference.

Section 5.2      Conversion Rate . The initial Conversion Rate shall be 588.2353 Ordinary Shares (subject to adjustment as provided in this Article V, the “Conversion Rate”) per US$1,000 Accreted Principal Amount (including any accrued and unpaid interest) of the Note. To address dilution of the conversion rights granted under the Notes, the Conversion Rate shall be subject to adjustment from time to time pursuant to Section 5.3.

Section 5.3      Adjustments to Conversion Rate . If the number of Ordinary Shares represented by each ADS is changed, after the date of this Note, for any reason other than one or more of the events described in this Section 5.3, the Company shall make an appropriate adjustment to the Conversion Rate such that the number of Ordinary Shares represented by the ADSs upon which conversion of the Notes is based remains the same. In addition, the Conversion Rate shall be adjusted from time to time by the Company as follows:

(a)     In case the Company shall, at any time or from time to time while any of the Notes are outstanding, pay a dividend in Ordinary Shares (directly or in the form of ADSs) or make a distribution in Ordinary Shares to all or substantially all holders of Ordinary Shares (other than a dividend or distribution in connection with a transaction to which Section 5.4 applies), then the Conversion Rate shall be adjusted based on the following formula:

Any adjustment made pursuant to this Section 5.3(a) shall become effective immediately prior to 9:00 a.m., New York City time, on the ex-dividend date for such dividend or distribution. If any dividend or distribution that is the subject of this Section 5.3(a) is declared but not so paid or made, the Conversion Rate shall be immediately readjusted, effective as of the date the Board of Directors of the Company (the “ Board of Directors ”) publicly announces its decision not to pay or make such dividend or distribution, to the

Conversion Rate that would then be in effect if such dividend or distribution had not been declared. For purposes of this Section 5.3(a), the number of Ordinary Shares outstanding at 5:00 p.m., New York City time, on the trading day immediately preceding the ex-dividend date for such dividend or distribution shall not include Ordinary Shares held in treasury, if any. The Company will not pay any dividend or make any distribution on Ordinary Shares held in treasury, if any.

(b)     In case outstanding Ordinary Shares (directly or in the form of ADSs) shall be subdivided or split into a greater number of Ordinary Shares or combined or reverse split into a smaller number of Ordinary Shares (in each case, other than in connection with a transaction to which Section 5.4 applies), the Conversion Rate shall be adjusted based on the following formula:

where

Any adjustment made pursuant to this Section 5.3(b) shall become effective immediately prior to 9:00 a.m., New York City time, on the effective date of such subdivision or combination.

(c)     In case the Company shall issue rights (other than rights issued pursuant to a shareholders’ rights plan or a dividend or distribution on Ordinary Shares in Ordinary Shares as set forth in (a) above) or warrants to all or substantially all holders of its Ordinary Shares (whether direct or in the form of ADSs), other than an issuance in connection with a transaction to which Section 5.4 applies, entitling them to purchase, for a period expiring within forty-five (45) calendar days of the date of issuance, Ordinary Shares (directly or in the form of ADSs) at a price per Ordinary Share less than the average of the Closing Sale Prices of the ADSs divided by the number of Ordinary Shares then represented by each ADS during the ten (10) consecutive trading day period ending on the trading day immediately preceding the ex-dividend date for the distribution, the Conversion Rate shall be adjusted based on the following formula:

Any adjustment made pursuant to this Section 5.3(c) shall become effective immediately prior to 9:00 a.m., New York City time, on the ex-dividend date for such issuance. If any rights or warrants described in this Section 5.3(c) are not so issued, the Conversion Rate shall be immediately readjusted, effective as of the date the Board of Directors publicly announces its decision not to issue such rights or warrants, to the Conversion Rate that would then be in effect if such issuance had not been declared. To the extent that such rights or warrants are not exercised prior to their expiration or Ordinary Shares are otherwise not delivered pursuant to such rights or warrants upon the exercise of such rights or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of Ordinary Shares actually delivered. In determining the aggregate price payable to exercise such rights and warrants, there shall be taken into account any consideration received by the Company for such rights or warrants and the value of such consideration (if other than cash, to be determined in good faith by the Board of Directors). For purposes of this Section 5.3(c), the number of Ordinary Shares outstanding at 5:00 p.m., New York City time, on the trading day immediately preceding the ex-dividend date for such issuance shall not include Ordinary Shares held in treasury, if any. The Company will not issue any such rights or warrants in respect of Ordinary Shares held in treasury, if any.

(d)     In case the Company shall, by dividend or otherwise, distribute to all or substantially all holders of its outstanding Ordinary Shares (whether direct or in the form of ADSs) of any class of capital stock of the Company or evidences of its indebtedness or assets (including securities, but excluding (i) any dividends or distributions referred to in Section 5.3(a), (ii) any rights or warrants referred to in Section 5.3(c), (iii) any dividends or distributions referred to in Section 5.3(e), (iv) any dividends or distributions in connection with a transaction to which Section 5.4 applies, or (v) any Spin-Offs to which the provisions set forth below in this Section 5.3(d)

applies) (any of the foregoing hereinafter in this Section 5.3(d) called the “ Distributed Assets ”), then, in each such case, the Conversion Rate shall be adjusted based on the following formula:

NEITHER THE WARRANTS NOR THE SHARES DELIVERABLE UPON EXERCISE OF THE WARRANTS (THE “ WARRANT SHARES ”) HAVE BEEN OR WILL BE REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL SELECTED BY THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO SEQUANS COMMUNICATIONS.

SEQUANS COMMUNICATIONS

WARRANT AGREEMENT

Nokomis Capital Master Fund, L.P.

P.O. Box 309

Ugland House

Grand Cayman,

KY1-1104,

Cayman Islands

hereinafter referred to as the “ Beneficiary ”

On September 24, 2018, the board of directors, using the delegation of competence granted to it by the extraordinary shareholders meeting of SEQUANS COMMUNICATIONS (the “ Company ”) held on June 29, 2018 issued and granted to the Beneficiary 1,800,000 warrants (the “ Warrants ”) under the terms and conditions set forth in this agreement.

For the avoidance of doubt, the present document shall in no event be deemed as the certificate referred to in article R. 211-7 of the French Code monétaire et financier and shall only be deemed, for purposes of French law, to set forth the terms and conditions of the Warrants.

Date of Grant:                          September 27, 2018

Subscription Price of the Warrants:                  USD 1.00

(i.e., USD 0.00000056 per Warrant)

Maximum number of ordinary shares

(the “ Warrant Shares ”) to be subscribed upon exercise of the Warrants:      1,800,000 (i.e., 1 Warrant Share per Warrant)

Exercise price per Warrant Share:                      USD 1.70

Term/Expiration date of the Warrants:                  April 14, 2021

Article 1 - Validity of the Warrants

The Warrants will be validly issued as from the date of their subscription by the Beneficiary subject to the conditions precedent that the Beneficiary:

Article 2 - Exercise of the Warrants

2.1      Vesting period

The Warrants may be exercised at any time from their issue date until April 14, 2021.

Any Warrant not exercised on or before April 14, 2021 shall be automatically void.

2.2      Method of Exercise

The Warrants are exercisable by delivery of an exercise notice, in the form attached hereto under exhibit 2 (the “ Exercise Notice ”), comprising a Warrant Share subscription form ( bulletin de souscription ) which shall state the Beneficiary’s election to exercise all or parts of the Warrants and the number of Warrant Shares in respect of which the Warrants are being exercised. The Exercise Notice shall be signed by the Beneficiary and shall be delivered in person or by certified mail to the Company or its designated representative or by facsimile message to be immediately confirmed by certified mail to the Company. The Exercise Notice shall be accompanied by the payment of the aggregate exercise price (the “ Exercise Price ”) of all Warrant Shares being exercised. If the Exercise Price is paid

by wire transfer, the Exercise Price will have to be paid on the Company’s bank account at the latest within 10 calendar days following the receipt by the Company of the Exercise Notice. The Warrants being exercised shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by the proof of payment of such Exercise Price.

Upon exercise of the Warrants, the Warrant Shares issued to the Beneficiary shall be assimilated with all other ordinary shares of the Company (other than with respect to the obligation to transfer the Warrant Shares only in an “offshore transaction” as that term is defined in Regulation S under the Securities Act or otherwise in a transaction not requiring registration under the Securities Act) and shall be entitled to dividend for the fiscal year during which the Warrant Shares are subscribed and issued.

2.3      Payment of the Warrant Shares

Payment of the aggregate Exercise Price of the Warrant Shares being exercised shall be made, at the election of the Beneficiary, by:

(1) bank wire transfer ; or

(2) set off against receivables in accordance with applicable French law ; or

(3) any combination of the foregoing methods of payment.

Article 3 - Transfer of the warrants

The Warrants shall not be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities.

Article 4 - Other terms of the Warrants

In the event of a reduction in the Company’s share capital resulting from losses and implemented through share cancellation, the Beneficiary’s rights regarding the number of shares to be issued upon exercise of its Warrants shall be reduced accordingly, as if the Beneficiary were a shareholder at the time of such reduction in share capital.

In the event of a reduction in the Company’s share capital resulting from losses and implemented through reduction of the Company’s shares par value, the subscription price for the shares issued upon exercise of the Warrants shall not change, and the issuance premium shall be increased in an amount corresponding to the aggregate amount of the reduction of the Company’s shares par value.

In the event of a reduction in the Company’s share capital not resulting from losses and implemented through reduction of the Company’s shares par value, the subscription price of the shares issued upon exercise of the Warrants shall be reduced accordingly.

In the event of a reduction in the Company’s share capital not resulting from losses and implemented through share cancellation, should the Beneficiary choose to exercise its Warrants, it shall be entitled to request the purchase by the Company of a quantum of shares (granted upon exercise of the Warrants) under the same conditions as those set in favor of then existing shareholders when such reduction in the Company’s share capital occurred.

In case of a rights issue, the Company will take one or several of the following decisions to preserve the rights of Warrants holders, in accordance with the provisions of article L. 228-99 of the French commercial code and applicable French and U.S. securities laws:

The Company is authorized, without requesting the specific consent of the holder of the Warrants, to modify its corporate form and its corporate purpose.

The Company may amend the rules regarding profit allocation, amortize the share capital and create and issue preferred shares entailing any such modification or amortization without requesting the specific consent of the holder of the Warrants subject to complying with the provisions of Article L. 228-98 of the French Commercial Code.

Article 5 - Governing Law

This agreement is governed by the laws of the Republic of France.

Any claim or dispute arising under this agreement shall be subject to the exclusive jurisdiction of the court competent for the place of the registered office of the Company.

EXHIBIT 1

SUBSCRIPTION FORM OF THE WARRANTS

SEQUANS COMMUNICATIONS

French société anonyme with a share capital of EUR. [1,887,994.14]

Registered office: 15-55 Boulevard Charles de Gaulle Les Portes de la Défense, 92700 Colombes

SUBSCRIPTION FORM

Amount and terms of the issuance of the warrant

Issuance at a total price of USD 1.00 of 1,800,000 warrants (hereafter the “ Warrants ”), giving the right to subscribe a maximum number of 1,800,000 ordinary shares (hereafter the “ Warrant Shares ”), each of a nominal value of EUR. 0.01, at a fixed price of USD 1.70 each (issue premium included), to be fully paid up in cash or by way of set off against receivables and the subscription of which has been reserved to the subscriber.

The issuance has been decided by the board of directors of Sequans Communications on September 24, 2018 pursuant to the authorization granted to it by the extraordinary shareholders’ meeting of June 29, 2018.

The terms and conditions of the Warrants are described in the warrant agreement executed by the subscriber and Sequans Communications on September 27, 2018.

The subscription period is opened from September 27, 2018 to October 8, 2018 included.

The amount of the subscription shall be paid in cash or by way of set off against receivables in accordance with applicable French law.

-ooOoo-

The undersigned

Nokomis Capital Master Fund, L.P., a Cayman Island partnership, having its registered office at P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands,

acknowledging the terms and conditions of the Warrants, including:

and representing and warranting to Sequans Communications as follows:

hereby subscribes the Warrants and pays the amount of its subscription, i.e. USD 1.00, by way of set off against receivables in accordance with applicable French law.

Made in Dallas, TX, USA

On September 27, 2018

In two (2) copies

/s/ Brett Hendrickson

For Nokomis Capital Master Fund, L.P.*

By: Brett HENDRICKSON

Title: Portfolio Manager

* the signature shall be preceded by the following handwritten sentence: “Approval for formal and irrevocable subscription of 1,800,000 (one million eight hundred thousand) Warrants”

EXHIBIT 2

EXERCISE NOTICE OF THE WARRANTS

(Share subscription form)

SEQUANS COMMUNICATIONS

15-55 Boulevard Charles de Gaulle Les Portes de la Défense,

92700 Colombes

France

[_-_],[_-_]

Attention: Deborah Choate

Nokomis Capital Master Fund, L.P., a Cayman Island partnership, having its registered office at P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands,

holder of 1,800,000 Warrants, each giving right to subscribe for one ordinary share (each a “ Warrant Share ”) of Sequans Communications (the “ Company ”) issued pursuant to the resolution of the board of directors of Sequans Communications held on September 24, 2018,

having examined the terms and conditions of the Warrants, including:

hereby

exercises [_-_] Warrants

and

subscribes consequently for [_-_] Warrant Shares of Sequans Communications, each of a nominal value of EUR. 0.01, for a subscription price per share of USD 1.70 share premium included,

pays , for this subscription, the total amount of USD [_-_], corresponding to the aggregate of the nominal value and the share premium of the above Warrant Shares,

by wire transfer to Sequans Communications’ bank account opened at [_-_], Bank Code: [_-_], Desk Code: [_-_], Account: [_-_], Cle RIB: [_-_], IBAN International Bank Account Number [_-_].

Made in [_-_]

On [_-_]

In two copies

For Nokomis Capital Master Fund, L.P.*

By:

Title:

* Signature preceded by: “Approval for formal and irrevocable subscription of [_-_] ordinary shares” (number of shares to be mentioned in both figures and letters.)

SEQUANS COMMUNICATIONS S.A. AMENDMENT NO. 4 TO CONVERTIBLE PROMISSORY NOTE

This Amendment No. 4 to Convertible Promissory Note (the “ Amendment ”) is made as of October 26, 2018 by and between Sequans Communications S.A., a société anonyme incorporated in the French Republic (the “Company”) and Nokomis Capital Master Fund, LP, a Cayman Islands exempted limited partnership (the “ Purchaser ” and together with the Company, the “ Parties ”) and is made with reference to the Convertible Promissory Note issued as of April 14, 2015 (the “ Note ”), as amended on June 30, 2017, October 30, 2017 and September 27, 2018, under and pursuant to that certain Convertible Note Agreement, dated as of April 14, 2015 (the “ Purchase Agreement ”), between the Parties. Unless otherwise indicated herein, capitalized terms used herein have the same meanings set forth in the Purchase Agreement.

WHEREAS, the Parties have amended the Note pursuant to the provisions of Amendment No. 3 in order to allow the Company to grant Harbert European Specialty Lending Company II S.A.R.L. (“ Harbert ”) a security interest on all of the Company’s intellectual property, and the Parties now wish to amend the Note further to allow the Company to grant Harbert a security interest on all of the Company’s assets, including intellectual property, bank accounts opened in France, receivables and business as a going concern ( fonds de commerce ); and

WHEREAS, the Parties wish to amend the Note to provide further details on the conditions pursuant to which the Note will be subordinated to up to €12 million of secured indebtedness owed to Harbert under a bond issue agreement to be entered into between the Company as issuer and Harbert as subscriber (the “ Bond Issue Agreement ”).

NOW, THEREFORE, the Parties hereby agree to amend the Note as follows:

1.      Amendments to Note .

a. Any reference in Amendment No.3 to the loan agreement to be entered into between the Company and Harbert shall be construed as a reference to the Bond Issue Agreement.

b. Article VI of the Note is hereby amended and restated in its entirety as follows:

“For so long as the Note is outstanding, the Company will not grant a consensual security interest or pledge its personal property assets to another third-party lender in connection with debt for borrowed money (other than (i) purchase money security interests or capital leases incurred in the ordinary course of business, (ii) up to $25 million of secured indebtedness relating to a receivables facility or debt or letters of credit facilities, and (iii) up to €12 million of secured indebtedness owed to Harbert under the bond issue agreement to be entered into between the Company as issuer and Harbert as subscriber (the “ Bond Issue Agreement ”), which is or will be secured by all of the Company’s assets, including intellectual property, bank accounts opened in France, receivables and business as a going concern ( fonds de commerce )) without the consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed, in particular in the case of a security interest or pledge granted or made to a strategic corporate partner or joint venture partner as a component of a financing transaction or other business relationship with a strategic corporate partner or joint venture partner (whether directly or involving an investment fund controlled by the relevant strategic corporate partner or joint venture partner)).”

c. Article XII of the Note is hereby amended and restated in its entirety as follows:

“ARTICLE XII SUBORDINATION

With the exception of (i) up to $25 million of secured indebtedness owed to Natixis under the factoring agreement between the Company and Natixis and (ii) up to €12 million of secured indebtedness owed to Harbert under the Bond Issue Agreement between the Company and Harbert, which is or will be secured by all of the Company’s assets including intellectual property, bank accounts opened in France, receivables and business as a going concern ( fonds de commerce ), which are senior secured indebtedness to the Note, the Note and the interest accrued under the Note are the senior unsecured obligations of the Company and will rank pari passu in right of payment with all other senior unsecured and unsubordinated obligations of the Company:

In particular, the Company and the Purchaser agree that until the complete payment and repayment of any amounts due under the Bond Issue Agreement (the “ Harbert Indebtedness ”):

For the purpose of this Article, the Company shall notify the Purchaser in case of the occurrence of an Event of Default (as such term is defined in the Bond Issue Agreement) or in case of an acceleration under the Bond Issue Agreement.”

2. Miscellaneous .

IN WITNESS WHEREOF, the Company has executed and delivered this Amendment on October 26, 2018.

COMPANY: SEQUANS COMMUNICATIONS S.A.

By: /s/ Georges Karam                         

Georges KARAM

CEO

PURCHASER: NOKOMIS CAPITAL MASTER FUND, LP

By: /s/ Brett Hendrickson                         

Brett HENDRICKSON

Portfolio manager

SEQUANS COMMUNICATIONS S.A. AMENDMENT NO. 4 TO CONVERTIBLE PROMISSORY NOTE

This Amendment No. 4 to Convertible Promissory Note (the “ Amendment ”) is made as of October 26, 2018 by and between Sequans Communications S.A., a société anonyme incorporated in the French Republic (the “Company”) and Nokomis Capital Master Fund, LP, a Cayman Islands exempted limited partnership (the “ Purchaser ” and together with the Company, the “ Parties ”) and is made with reference to the Convertible Promissory Note issued as of April 27, 2016 (the “ Note ”), as amended on June 30, 2017, October 30, 2017 and September 27, 2018, under and pursuant to that certain Convertible Note Agreement, dated as of April 27, 2016 (the “ Purchase Agreement ”), between the Parties. Unless otherwise indicated herein, capitalized terms used herein have the same meanings set forth in the Purchase Agreement.

WHEREAS, the Parties have amended the Note pursuant to the provisions of Amendment No. 3 in order to allow the Company to grant Harbert European Specialty Lending Company II S.A.R.L. (“ Harbert ”) a security interest on all of the Company’s intellectual property, and the Parties now wish to amend the Note further to allow the Company to grant Harbert a security interest on all of the Company’s assets, including intellectual property, bank accounts opened in France, receivables and business as a going concern ( fonds de commerce ); and

WHEREAS, the Parties wish to amend the Note to provide further details on the conditions pursuant to which the Note will be subordinated to up to €12 million of secured indebtedness owed to Harbert under a bond issue agreement to be entered into between the Company as issuer and Harbert as subscriber (the “ Bond Issue Agreement ”).

NOW, THEREFORE, the Parties hereby agree to amend the Note as follows:

1.      Amendments to Note .

a. Any reference in Amendment No.3 to the loan agreement to be entered into between the Company and Harbert shall be construed as a reference to the Bond Issue Agreement.

b. Article VI of the Note is hereby amended and restated in its entirety as follows:

“For so long as the Note is outstanding, the Company will not grant a consensual security interest or pledge its personal property assets to another third-party lender in connection with debt for borrowed money (other than (i) purchase money security interests or capital leases incurred in the ordinary course of business, (ii) up to $25 million of secured indebtedness relating to a receivables facility or debt or letters of credit facilities, and (iii) up to €12 million of secured indebtedness owed to Harbert under the bond issue agreement to be entered into between the Company as issuer and Harbert as subscriber (the “ Bond Issue Agreement ”), which is or will be secured by all of the Company’s assets, including intellectual property, bank accounts opened in France, receivables and business as a going concern ( fonds de commerce )) without the consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed, in particular in the case of a security interest or pledge granted or made to a strategic corporate partner or joint venture partner as a component of a financing transaction or other business relationship with a strategic corporate partner or joint venture partner (whether directly or involving an investment fund controlled by the relevant strategic corporate partner or joint venture partner)).”

c. Article XII of the Note is hereby amended and restated in its entirety as follows:

“ARTICLE XII SUBORDINATION

With the exception of (i) up to $25 million of secured indebtedness owed to Natixis under the factoring agreement between the Company and Natixis and (ii) up to €12 million of secured indebtedness owed to Harbert under the Bond Issue Agreement between the Company and Harbert, which is or will be secured by all of the Company’s assets including intellectual property, bank accounts opened in France, receivables and business as a going concern ( fonds de commerce ), which are senior secured indebtedness to the Note, the Note and the interest accrued under the Note are the senior unsecured obligations of the Company and will rank pari passu in right of payment with all other senior unsecured and unsubordinated obligations of the Company:

In particular, the Company and the Purchaser agree that until the complete payment and repayment of any amounts due under the Bond Issue Agreement (the “ Harbert Indebtedness ”):

For the purpose of this Article, the Company shall notify the Purchaser in case of the occurrence of an Event of Default (as such term is defined in the Bond Issue Agreement) or in case of an acceleration under the Bond Issue Agreement.”

2. Miscellaneous .

of the Note will continue in full force and effect. This Amendment shall not be construed as a novation of any of the Note or the Purchase Agreement.

IN WITNESS WHEREOF, the Company has executed and delivered this Amendment on October 26, 2018.

COMPANY: SEQUANS COMMUNICATIONS S.A.

By: /s/ Georges Karam                         

Georges KARAM

CEO

PURCHASER: NOKOMIS CAPITAL MASTER FUND, LP

By: /s/ Brett Hendrickson                         

Brett HENDRICKSON

Portfolio manager

SEQUANS COMMUNICATIONS S.A.

AMENDMENT NO. 1 TO CONVERTIBLE PROMISSORY NOTE

This Amendment No. 1 to Convertible Promissory Note (the “ Amendment ”) is made as of October 26, 2018 by and between Sequans Communications S.A., a société anonyme incorporated in the French Republic (the “Company”) and Nokomis Capital Master Fund, LP, a Cayman Islands exempted limited partnership (the “ Purchaser ” and together with the Company, the “ Parties ”) and is made with reference to the Convertible Promissory Note issued as of September 27, 2018 (the “ Note ”), under and pursuant to that certain Convertible Note Agreement, dated as of April 14, 2015 (the “ Purchase Agreement ”), between the Parties. Unless otherwise indicated herein, capitalized terms used herein have the same meanings set forth in the Purchase Agreement.

WHEREAS, the Parties wish to amend the Note to allow the Company to grant Harbert European Specialty Lending Company II S.A.R.L. (“ Harbert ”) a security interest on all of the Company’s assets, including intellectual property, bank accounts opened in France, receivables and business as a going concern ( fonds de commerce ) (and not just the Company’s intellectual property); and

WHEREAS, the Parties also wish to amend the Note to provide further details on the conditions pursuant to which the Note will be subordinated to up to €12 million of secured indebtedness owed to Harbert under a bond issue agreement to be entered into between the Company as issuer and Harbert as subscriber (the “ Bond Issue Agreement ”).

NOW, THEREFORE, the Parties hereby agree to amend the Note as follows:

1.      Amendments to Note .

a. Any reference in the Note to the loan agreement to be entered into between the Company and Harbert shall be construed as a reference to the Bond Issue Agreement.

b. Article VI of the Note is hereby amended and restated in its entirety as follows:

“For so long as the Note is outstanding, the Company will not grant a consensual security interest or pledge its personal property assets to another third-party lender in connection with debt for borrowed money (other than (i) purchase money security interests or capital leases incurred in the ordinary course of business, (ii) up to $25 million of secured indebtedness relating to a receivables facility or debt or letters of credit facilities, and (iii) up to €12 million of secured indebtedness owed to Harbert under the bond issue agreement to be entered into between the Company as issuer and Harbert as subscriber (the “ Bond Issue Agreement ”), which is or will be secured by all of the Company’s assets, including intellectual property, bank accounts opened in France, receivables and business as a going concern ( fonds de commerce )) without the consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed, in particular in the case of a security interest or pledge granted or made to a strategic corporate partner or joint venture partner as a component of a financing transaction or other business relationship with a strategic corporate partner or joint venture partner (whether directly or involving an investment fund controlled by the relevant strategic corporate partner or joint venture partner)).”

c. Article XII of the Note is hereby amended and restated in its entirety as follows:

“ARTICLE XII SUBORDINATION

With the exception of (i) up to $25 million of secured indebtedness owed to Natixis under the factoring agreement between the Company and Natixis and (ii) up to €12 million of secured indebtedness owed to Harbert under the Bond Issue Agreement between the Company and Harbert, which is or will be secured by all of the Company’s assets including intellectual property, bank accounts opened in France, receivables and business as a going concern ( fonds de commerce ), which are senior secured indebtedness to the Note, the Note and the interest accrued under the Note are the senior unsecured obligations of the Company and will rank pari passu in right of payment with all other senior unsecured and unsubordinated obligations of the Company:

In particular, the Company and the Purchaser agree that until the complete payment and repayment of any amounts due under the Bond Issue Agreement (the “ Harbert Indebtedness ”):

For the purpose of this Article, the Company shall notify the Purchaser in case of the occurrence of an Event of Default (as such term is defined in the Bond Issue Agreement) or in case of an acceleration under the Bond Issue Agreement.”

2. Miscellaneous .

IN WITNESS WHEREOF, the Company has executed and delivered this Amendment on October 26, 2018.

COMPANY: SEQUANS COMMUNICATIONS S.A.

By: /s/ Georges Karam                         

Georges KARAM

CEO

PURCHASER: NOKOMIS CAPITAL MASTER FUND, LP

By: /s/ Brett Hendrickson                         

Brett HENDRICKSON

Portfolio manager

Execution version

DATED 26 OCTOBER 2018

    

BETWEEN

SEQUANS COMMUNICATIONS

As Issuer

AND

HARBERT EUROPEAN SPECIALTY LENDING COMPANY II S.à r.l.

As Subscriber

______________________________________

BOND ISSUe AGREEMENT

________________________________________

LPA - CGR

THIS BOND ISSUE AGREEMENT HAS BEEN ENTERED INTO ON 26 OCTOBER 2018 BETWEEN:

(together, the “ Parties ”)

WHEREAS:

The Subscriber is a fund, the business of which consists in making investments in providing specialty debt financing to European growth business, predominantly in the sectors of innovation, internet, technologies and life sciences.

The Issuer is a 4G chipmaker and leading provider of single-mode LTE chipset solutions to wireless device manufacturers worldwide.

In order to provide the Issuer with sufficient funding to scale up its operation and prepare subsequent larger financing round, the Subscriber has agreed to subscribe to an issue of bonds (the “ Notes ”) by the Issuer for a nominal amount of twelve million Euros (€ 12,000,000), subject to and upon the terms and conditions contained herein.

IT IS AGREED AS FOLLOWS:

but excluding (i) trade indebtedness of such person incurred in the ordinary course of business, (ii) normal working capital item like trade creditors, and (iii) debts included under the provision 8.1.15 (“ Subordination” ) and it being understood that normal working capital, " avances conditionées ” from Bpifrance Financement or other government equivalent for research programs or subordinated debts as referred to in Article 9.1.7 below shall not be deemed

as “Indebtedness”.

in any rate, price or currency which constitutes Permitted Indebtedness;

After the end of the Availability Period, in the event that any of the Condition Precedent Documents has not been received by the Subscriber in a form deemed satisfactory for it and that any the satisfaction of the corresponding condition precedent has not been waived by the Subscriber in accordance with the Clause 2.3 below, the issue of the Notes shall be deemed irrevocably cancelled.

Each of the Notes shall rank equally and rateably inter se ( pari passu ) without any discrimination or preference and as direct unconditional, unsubordinated obligations, secured as set out in the Security Documents.

Each of the Notes shall rank senior to the claims of the Issuer’s other unsecured creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.

To the extent interest is not paid for at least one year on any Interest Payment Date, further interest shall accrue on any such interest not so paid in accordance with Article 1343-2 of the French Civil Code at the rate specified in Article 5.5 here under. Interest shall be calculated on the basis of a 365 days year and shall be deemed to accrue on the Notes from day to day.

For ease of interpretation, a worked example based on certain assumed funding and prepayment dates is set out in the column entitled “Prepayment Amount Assuming Full prepayment at month end” of Annex 2 ( Payment and Amortization Schedule) .

If French law should require that payments of principal or interest in respect of the Notes be subject to withholding or deduction in respect of any taxes or duties whatsoever, the Issuer will, to the fullest extent then permitted by law, pay such additional amounts as may be necessary in order that the Noteholder, after such withholding or deduction, receive the full amount provided in such Notes to be then due and payable.

Any references in this Agreement to principal and interest shall be deemed also to refer to any additional amounts which may be payable under the provisions of this Article 7.

8.1.1 Status

It is a company, duly incorporated and validly existing under the law of France. It has the power to own its assets and carry on its business as it is being conducted.

8.1.2 Power and binding obligations

It has full power and authority to execute, deliver and perform its obligations under the Issue Documents and to use the amounts made available under these documents.

All necessary action has been taken (and not revoked) and all necessary consents and authorisations obtained to authorise the execution, delivery and performance of the Issue Documents, and the Issue Documents constitute the valid and legally binding obligations of the Issuer enforceable in accordance with the terms of the Issue Documents, subject to the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors.

8.1.3 Security Documents validity and effectiveness

Each Security Document creates the Security Interests which that Security Document purports to create and those Security Interests are (subject to the Subscriber carrying out all necessary filings and registrations with any necessary court or other authority) valid and effective.

8.1.4 Non-conflict with other obligations and provisions

The execution, delivery and performance of the Issue Documents and the use of the proceeds of the Issue do not and will not:

(1)    (save to the extent it would not give rise to a Material Adverse Effect) contravene any law, regulation, directive, or judicial or official order to which the Issuer is subject;

(2)    (save to the extent it would not give rise to a Material Adverse Effect) result in any breach of or default under any obligation, agreement, restriction, undertaking or instrument to which any member of the Group is a party or is subject or which it requires to carry on its business,

(3)    contravene any provision of the Issuer’s constitutional documents.

8.1.5 No litigation, arbitration or administrative proceeding

No litigation, arbitration or administrative proceeding and, without limitation, no dispute with any statutory or governmental authority is taking place, pending or, to its knowledge, threatened against any of member of Issuer’s Group which, if adversely determined, would have a Material Adverse Effect.

8.1.6 No Event of Default

No Event of Default on the date of this Agreement only has occurred and is continuing;

8.1.7 Compliance with tax requirements

Each member of Issuer’s Group has punctually paid and discharged all taxes imposed upon it or its assets within the time period allowed without incurring penalties.

No member of Issuer’s Group is materially overdue in the filing of any tax returns and the Issuer is not aware of any claims that are being or are reasonably likely to be asserted against any member of the Issuer’s Group with respect to taxes in each case save as notified to the Subscriber.

8.1.8 No winding up, dissolution or re-organisation proceedings

It has not taken any corporate action nor, to its knowledge, have any other steps been taken or legal proceedings been started or threatened against it for its winding up, dissolution or re organisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of it or of any or all of its revenues or assets.

8.1.9 Permitted Security Interest

No member of Issuer’s Group has created any Security Interest over the whole or any part of its present or future assets, undertaking, rights or revenues other than a Permitted Security Interest or is under any obligation to create any Security Interest other than a Permitted Security Interest.

8.1.10 Consolidated financial statements

The latest consolidated financial statements delivered to the Subscriber have been prepared in accordance with generally accepted accounting principles and practices under International Financial Reporting Standards (or IFRS) as applied in France and give a true and fair view of the financial condition and results of operations of the Issuer at the date to which such financial statements have been prepared; and since that date there has been no material adverse change in the business, assets or operations of the Issuer or Issuer’s Group taken as a whole.

8.1.11 Issuer’s Group accounts

The most recent management accounts of Issuer’s Group have been prepared with due care and attention and in accordance with good accounting practice on a basis consistent with that of the management accounts, accurately reflect the financial position of Issuer’s Group in all material respects as at their date and fully disclose all liabilities, actual or contingent, all encumbrances and financial commitments in existence at the date of the most recent management accounts.

8.1.12 No misleading information

All written information supplied to the Subscriber in contemplation of, in connection with, or pursuant to the Issue Documents was true and accurate in all material respects as at the date of the relevant report or document containing the information or, as the case may be, as at the date the information is expressed to be given and does not contain any materially misleading statement or omit to state a material fact.

All forecasts, projections and written statements of intention and opinions provided to the Subscriber by any company of the Issuer’s Group were made honestly and in good faith on the date on which they were expressed to be made.

The Issuer is not aware of any fact or circumstance, the omission of which would have made any such written information, forecasts, projections, written statements of intention or opinion misleading in any material respect on the date on which they were expressed to be made (subject to uncertainties and contingencies that are inherent to forecasts and projections).

8.1.13 Intellectual property rights

Save as otherwise disclosed by the Issuer to the Subscriber on or prior to the date of this Agreement, the Issuer's Group is the legal or beneficial owner of, or has valid leases or licences of, and all necessary authorisations and consents to use, its assets (including all Intellectual Property rights material to the business of the Issuer and to the knowledge of each member of the Issuer’s Group, there is no material violation by any person of any right of such member of Issuer’s Group with respect to such Intellectual Property rights material to the business of the Issuer) which are necessary to carry on its business as presently conducted and the use of the assets does not infringe, according to the Issuer’s best knowledge, any third party rights, unless such violation or infringement does not have a Material Adverse Effect.

8.1.14 Subordination

Any existing loans to the Issuer (including convertible notes and shareholder loans but excluding (i) the Natixis Factoring Programme, (ii) any Indebtedness arising under any loan agreement entered into or to be entered into with Bpifrance Financement and (iii) any " avances conditionées ” from Bpifrance Financement or other government equivalent for research programs) shall be fully subordinated with respect to payment and security to the Notes in the same manner as provided under the amendment n°4 to Nokomis convertible promissory note dated 14 April 2015, the amendment n°4 to Nokomis convertible promissory note dated 27 April 2016 and the amendment n°1 to Nokomis convertible promissory note dated 27 September 2018.

8.2      The Subscriber makes the following representations and warranties on the date of this Agreement.

The Issuer shall, with the exception of Intellectual Property obtain, maintain in full force and effect and comply with the terms of all authorisations, approvals, licences, exemptions, notarisations and consents required in or by the laws and regulations in France to enable it to lawfully enter into and perform its obligations under any Issue Document to which it is a party or to ensure the legality, validity, enforceability or admissibility in evidence of any Issue Document to which it is a party in France, subject to the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;

The Issuer shall promptly upon becoming aware of them, deliver to the Noteholder details of any material litigation, arbitration or administrative proceedings which are current, threatened or pending and might, if adversely determined, have a Material Adverse Effect;

The Issuer shall promptly inform the Noteholder of the occurrence of any Event of Default and, upon receipt of a written request to that effect from the Noteholder, confirm to the Noteholder that, save as previously notified to the Noteholder or as notified in that confirmation, no such event has occurred;

The Issuer shall not:

The Issuer shall obtain and maintain at its own expense insurance cover in relation to its business and assets of a type and in an amount as is usual for prudent companies carrying on a business such as that carried on by it;

The Issuer shall not enter into any Indebtedness other than Permitted Indebtedness.

The Issuer shall not enter into any convertible loan notes other than the Notes and the convertible promissory notes issued to the benefit of Nokomis Capital Master Fund, LP and Manatuck Hill Scout Fund, LP for an aggregate principal amount of twenty three million five hundred thousand dollars ($23,500,000), nor into any shareholder loans, without the prior written consent of the Noteholder, and shall subordinate any existing (except for Manatuck Hill Scout Fund, LP existing convertible loan notes) or duly authorized future convertible loan notes or shareholder loans, to the Notes in the same manner as provided under amendment n°4 to Nokomis convertible promissory note dated 14 April 2015, amendment n°4 to Nokomis convertible promissory note dated 27 April 2016 and amendment n°1 to Nokomis convertible promissory note dated 27 September 2018.

9.1.8 Warrant

The Issuer shall issue to the Noteholder a Warrant in accordance with the terms and conditions of the Warrant Issue Agreement entered into between the Parties this day.

9.1.9 Change in business

The Issuer shall not make or permit any substantial change in the nature or scope of its business or that of the Issuer’s Group, or suspend any substantial part of its operations as a whole which it conducts directly or indirectly.

The Issuer shall as soon as the same become available (and in any event within 9 months after the end of each of its financial years), deliver a copy of its Accounts for that financial year to the Noteholder;

The Issuer shall as soon as the same become available (and in any event within 30 days after the end of each quarter of each of its financial years), deliver to the Noteholder its unaudited management accounts for that quarter (including a balance sheet and profit and loss account forecasts for that month and a cash flow forecast at least and at the latest for the following quarter), prepared in accordance with basic accounting principles generally accepted in France for management accounts and consistently applied, signed by either the CEO or the CFO of the Issuer);

The Issuer shall at the same time as sent to its shareholders, deliver to the Noteholder a copy of any circular, document or other written information sent to its shareholders in their capacity as shareholders;

The Issuer shall grant access to the Noteholder to board packs (i.e. the pack of information sent by a company to the board of directors prior to each meeting), to calls, monthly management accounts including Profit & Loss statement and liquidity analysis which shall include operational and financials cash flows with details of ending bank and loan balances, together with any other information provided to the Issuer’s board of directors, including any available CEO report and/or board pack information. Balance Sheet where prepared monthly shall also be made available to the Noteholder, otherwise on a quarterly basis.

The Noteholder will be entitled to nominate a candidate for appointment as censeur of the board of directors ( conseil d'administration ) of the Issuer (hereafter, the " Observer "). Upon request of the Noteholder, and following appointment of this candidate as Observer by the board of directors ( conseil d'administration ), such Observer will be entitled to attend meetings of the board of directors ( conseil d'administration ) as an observer onlyparticipate in the discussion, give its views but it shall not have any voting rights and, for the avoidance of doubt, will not be, or be entitled to be, counted in the quorum for any board of directors' meeting.

The Issuer shall procure that the Observer receives access to (i) quarterly financial information (income statement, balance sheet and cash flow statement) and monthly operating data as available to the Noteholder in accordance with the provisions of Clause 9.2.4; (ii) semi-annual/quarterly non audited and annual audited financial statements; (iii) board packs; and (iv) any other information provided to the Issuer’s board of directors, including the reports and other board pack information as well as copies of the minutes of all board of directors meetings, of the Issuer’s Shareholders’ meetings, together with copies of documents presented to such meetings.

The Observer will have to abide by the Issuer’s insider trading policy. Mr. Jérôme Fonteneau has been appointed by the board of directors of the Issuer during the board meeting dated October 23 2018.

The Issuer shall inform immediately the Noteholder if the Issuer has taken any steps to negotiate any agreement relating to a delay of the payment schedule, with any tax authorities (including any social security tax (URSSAF) or any other related employment taxes) to the extent that such delay would have a Material Adverse Effect.

The Issuer shall from time to time at the request of the Noteholder, furnish the Noteholder with such information about the business and financial condition of the Issuer as the Noteholder may reasonably require, provided said information is readily available.

The Parties hereby agree that (x) should the information provided pursuant to Clause 9.1.2 or Clause 9.2 constitute material nonpublic information, the Issuer shall not provide such information to the Noteholder before it is made public through a press release or filing with the United States Securities and Exchange Commission unless if the Noteholder, after having been informed that the information to be provided constitutes material nonpublic information, have specifically agreed to receive it and (y) there shall be no obligation to provide any information (i) in violation of any applicable law or regulation or any binding agreement, (ii) which provision would result in the loss or waiver of the attorney-client or similar privilege or (iii) that constitutes non-registered Intellectual Property or trade secrets.

9.4 Compliance with the Security Documents

The Issuer hereby further undertakes to comply with the provisions of the Security Documents in relation to all filings and registrations with any necessary court or other authority as may be necessary for the purpose of the creation, perfection, protection or maintenance of the Security Interests granted pursuant to the Security Documents.

9.5 Manatuck Hill Scout Fund LP convertible promissory note

The Subscriber and the Issuer agree that:

(a)    any indebtedness arising under any convertible promissory note issued to the benefit of Manatuck Hill Scout Fund LP shall be fully repaid by the Issuer within a period of two (2) Business Days following the actual receipt by the Issuer of the funds corresponding to the subscription of the Notes; and

(b)    until the end of the period of two (2) Business Days referred to in paragraph (a) above, the Subscriber hereby expressly waives any Event of Default or other action against the Issuer which could arise under the Issue Documents as a result of the convertible promissory note issued to the benefit of Manatuck Hill Scout Fund LP not repaid in full or otherwise amended.

Subject to the paragraph below, at any time after the occurrence of an Event of Default (and for so long as that Event of Default is continuing), the Noteholder may, by notice to the Issuer, declare all or part of the amounts due in connection with the Notes and under the Issue Documents to be immediately due and payable, whereupon those amounts shall immediately become due and payable. In such case, the Issuer shall redeem the Notes by paying the Noteholder the amounts detailed in Article 6.

The Issuer fails to pay in full on the due date any sum due under this Agreement in the currency and in the manner specified in this Agreement save where such failure is solely due to an administrative or systems error in the transmission of funds;

The Issuer fails to perform or comply with any of the obligations expressed to be assumed by it in Article 9 ( Undertakings ) and where such non-performance or non-compliance is capable of remedy, has not been remedied within fifteen (15) Business Days of the earlier of notice to the Issuer of that breach by the Noteholder and the date on which the Issuer becomes aware of such breach.

The Issuer fails to perform or comply with any other obligation expressed to be assumed by it in any of the Issue Documents to which it is a party and where such non-performance or non-compliance is capable of remedy, has not been remedied within fifteen (15) Business Days of the earlier of notice to the Issuer of that breach by the Noteholder and the date on which the Issuer becomes aware of such breach;

in each case, except where the aggregate amount of Indebtedness falling within the above cases is less than three hundred fifty thousand euros (EUR 350,000) or where such event of default results from a dispute (i) related to trade creditors or landlords or (ii) arising strictly within the course of ordinary business between the Issuer and a business counterparty, such as, without limitation, suppliers or clients;

The Issuer is unable to pay its debts as they fall due, admits its inability to pay its debts as they fall due, commences negotiations with any one or more of its creditors with a view to the general readjustment or rescheduling of its Indebtedness or makes a general assignment of all of its assets for the benefit of, or a composition with, its creditors;

The Issuer takes any corporate action or other steps are taken or legal proceedings are started for (i) its winding‑up, dissolution or re‑organisation affecting a substantial part of its business,(with the exception of any winding-up petition which is frivolous or vexatious and/or contested in good faith and is discharged, stayed or dismissed within 7 Business Days of commencement) (ii) the appointment of a receiver, administrator, administrative receiver, trustee or similar officer;

10.7 Litigation

 

Any litigation, arbitration or administrative proceedings are commenced against the Issuer which has a Material Adverse Effect;

10.8 Validity of agreement

at any time any act, condition or thing required to be done, fulfilled or performed by it in order: