1009-00001 · Skybridge Fintech Ltd · Correspondence

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CALDERWOOD & HARKNESS LLP Attorneys at Law

600 Lexington Avenue New York, New York 10022 Telephone: (212) 554-7000 Facsimile: (212) 554-7001 www.calderwoodharkness.com

December 11, 2023

Graham Whitfield, Esq. Whitfield, Pratt & Soo LLP One Federal Street, 26th Floor Boston, Massachusetts 02110

Re: Skybridge Fintech Ltd. — $60,000,000 Convertible Note Bridge Financing Calderwood & Harkness Matter No. 1009-00001

Dear Graham:

As you know, this firm represents Skybridge Fintech Ltd., a Delaware corporation ("Skybridge" or the "Company"), as issuer's counsel in connection with the proposed $60,000,000 convertible promissory note bridge financing (the "Bridge Financing"). We are writing to transmit enclosed initial drafts of the principal transaction documents for your review on behalf of your clients, Ridgeline Ventures Fund IV, L.P. ("Ridgeline"), as lead investor, and the other investors participating in the syndicate (collectively, the "Purchasers").

The enclosed documents have been prepared to reflect the economic and structural terms set forth in the executed Term Sheet dated December 4, 2023 (the "Term Sheet"), entered into between Skybridge (signed by Arjun Mehta, Chief Executive Officer) and Ridgeline (signed by Samuel Okonkwo, Partner), acting as lead investor on behalf of the investor syndicate. We have endeavored to incorporate all material terms from the Term Sheet while supplementing them with customary provisions appropriate for a transaction of this nature and size. We look forward to receiving your comments and to working with you and your colleagues to bring this transaction to a prompt and efficient closing.

Set forth below is a description of each enclosed document, a summary of certain key drafting points and areas that we anticipate will be the subject of further discussion, and an identification of additional ancillary documents that we intend to circulate in the near term.

I. Description of Enclosed Documents

Enclosure 1 — Note Purchase Agreement (Initial Draft)

Enclosed please find an initial draft of the Note Purchase Agreement (the "NPA"), dated as of December 11, 2023, by and among Skybridge Fintech Ltd., as the Company, and the following Purchasers:

(a) Ridgeline Ventures Fund IV, L.P.;

(b) Beacon Hill Capital Partners, LLC;

(d) Halcyon Growth Equity, L.P.

The NPA provides for the issuance and sale by the Company of convertible promissory notes (the "Notes") in the aggregate principal amount of $60,000,000. The key economic and structural terms reflected in the draft, consistent with the executed Term Sheet, are as follows:

Interest Rate. The Notes bear interest at a rate of 6.00% per annum (600 basis points), calculated as simple interest on a 365-day year basis. Interest accrues from the date of issuance of each Note and is payable at maturity or upon earlier conversion, as applicable.

Maturity Date. The Notes mature on the date that is twenty-four (24) months from the Closing Date (as defined in the NPA). Unless earlier converted or repaid in accordance with the terms of the Notes, all outstanding principal and accrued and unpaid interest will become due and payable on the Maturity Date.

Conversion discount. Upon a Qualified Financing, each Note will convert into shares of the equity securities issued in such Qualified Financing at a price per share equal to eighty percent (80%) of the price per share paid by the new investors in the Qualified Financing (i.e., reflecting a 20% discount to such price per share).

Valuation Cap. The conversion price is further subject to a valuation cap of $750,000,000 on a pre-money basis. The conversion price upon a Qualified Financing will be the lower of (x) the discounted price described above, or (y) the price per share implied by the $750,000,000 pre-money valuation cap on a fully diluted basis.

Qualified Financing Threshold. A "Qualified Financing" is defined in the NPA as the closing of an equity financing transaction by the Company in which the Company receives aggregate gross proceeds of at least $80,000,000 in new equity capital (exclusive of any principal and accrued interest converted under the Notes), which the parties anticipate would constitute a Series D preferred stock financing.

Conversion Mechanics. The Notes provide for automatic conversion upon the closing of a Qualified Financing, without the need for any action by the holders. In the event the Notes remain outstanding at the Maturity Date without a Qualified Financing having occurred, each holder may elect, at its sole option, either (i) to convert its Note into shares of the Company's equity securities at the price per share implied by the $750,000,000 pre-money valuation cap, or (ii) to demand repayment of its outstanding principal and all accrued and unpaid interest.

Change of Control. Upon the occurrence of a Change of Control (as defined in the NPA) prior to conversion or repayment of the Notes, each holder will be entitled to receive, at such holder's election, the greater of (A) two times (2.0x) the outstanding principal amount of such holder's Note plus all accrued and unpaid interest thereon, or (B) the amount such holder would receive if the Note were converted immediately prior to the Change of Control at the price per share implied by the $750,000,000 pre-money valuation cap.

Most Favored Nation (MFN) Provision. The NPA includes a Most Favored Nation provision pursuant to which, in the event the Company issues any subsequent convertible notes or simple agreements for future equity ("SAFEs") on terms that are, in the aggregate, more favorable to the holders thereof than the terms of the Notes, each Purchaser will have the right to amend its Note to incorporate such more favorable terms. This provision is intended to ensure that the Purchasers are not economically disadvantaged by any subsequent bridge or pre-Series D issuances.

Subordination. The Notes are subordinate in right of payment to the Company's existing venture debt facility with Kelvantis Lending Corp. (the "Senior Debt"), as further described in the Subordination Agreement to be entered into among the Company, the Purchasers, and Kelvantis Lending Corp. The subordination provisions in the NPA are structured to comply with the requirements of the Company's existing credit agreement with Kelvantis.

In addition to the foregoing economic terms, the NPA includes customary representations and warranties of both the Company and the Purchasers (including, without limitation, representations regarding organization, authority, capitalization, financial statements, material contracts, compliance with laws, intellectual property, tax matters, and litigation), as well as affirmative and negative covenants of the Company, conditions precedent to the obligation of the parties to consummate the closing, and indemnification provisions for the benefit of the Purchasers. The NPA is governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict of laws principles. The parties have agreed to exclusive jurisdiction in the Court of Chancery of the State of Delaware (or, if the Court of Chancery declines to accept jurisdiction over a particular matter, the Superior Court of the State of Delaware), or, in the case of claims arising under federal law, the United States District Court for the District of Delaware.

Enclosure 2 — Form of Convertible Promissory Note (Initial Draft)

Enclosed as a separate document, and also attached as Exhibit A to the NPA, is the initial draft of the Form of Convertible Promissory Note (the "Note"). The Note sets forth the form of each individual convertible promissory note to be issued to each Purchaser in its respective principal amount at the closing of the Bridge Financing. The Note reflects and incorporates the interest, maturity, conversion, subordination, and other economic terms described above and as set forth in the NPA. Each Purchaser will receive a Note in the principal amount corresponding to its commitment as set forth in the Schedule of Purchasers (described below).

Enclosure 3 — Draft Schedule of Purchasers

Enclosed as a separate document, and also attached as Schedule 1 to the NPA, is the draft Schedule of Purchasers, setting forth the name, commitment amount, and pro rata percentage of the Bridge Financing for each Purchaser, as follows:

Please confirm that the foregoing commitment amounts and percentages are consistent with your clients' understanding of the allocation among the Purchasers.

II. Summary of Key Drafting Points and Areas for Discussion

We wish to draw your attention to the following drafting points and areas that we anticipate will require further discussion between the parties:

1. Initial Closing and Final Closing Mechanics. The draft NPA contemplates the potential for an Initial Closing and a subsequent Final Closing, in order to accommodate differences in the timing of funding from all Purchasers. The NPA provides that one or more Purchasers may fund their respective commitment amounts at the Initial Closing, with the remaining Purchasers joining the transaction and funding at the Final Closing through execution of a Joinder Agreement (the form of which is attached to the NPA). The Final Closing must occur no later than thirty (30) days following the Initial Closing. We believe this structure provides appropriate flexibility while ensuring that the transaction reaches full commitment within a reasonable period. We welcome your thoughts on the mechanics and timing.

2. Conversion Price Calculation. As noted above, the conversion price applicable to the Notes upon a Qualified Financing is the lower of (a) 80% of the Series D price per share (reflecting the 20% discount), or (b) the price per share implied by the $750,000,000 pre-money valuation cap on a fully diluted basis. Based on the Company's current capitalization, which reflects approximately 48,500,000 shares outstanding on a fully diluted basis (inclusive of all outstanding options, warrants, and other convertible securities, but excluding the Notes), the implied valuation cap price is approximately $15.46 per share. The Company's capitalization table will be delivered as part of the Company Disclosure Schedule, and we expect the parties will wish to confirm the fully diluted share count as of the closing.

3. Subordination Agreement. The subordination provisions in the NPA are designed to dovetail with a separate Subordination Agreement to be entered into by and among the Company, the holders of the Notes, and Kelvantis Lending Corp., as the holder of the senior venture debt. Calderwood & Harkness is currently preparing a draft of the Subordination Agreement and intends to circulate it separately within the coming days. We note that the consent of Kelvantis Lending Corp. will be required in connection with the issuance of the Notes, and the Company is in the process of engaging with Kelvantis to obtain such consent. A formal request for consent is being prepared by this firm and will be transmitted to Kelvantis's counsel separately.

4. Information Rights and Pro Rata Participation Rights. The information rights and pro rata participation rights for the Purchasers will not be addressed within the four corners of the NPA itself but will instead be implemented through an amendment to the Company's existing Amended and Restated Investors' Rights Agreement (the "IRA"). Drafts of Amendment No. 1 to the IRA, as well as Amendment No. 1 to the Right of First Refusal and Co-Sale Agreement, will follow under separate cover. We anticipate that the Purchasers' information rights will be substantially equivalent to those currently held by the Company's Series C preferred stockholders, including quarterly unaudited financial statements, annual audited financial statements, and annual budget and operating plan.

5. Company Disclosure Schedule. The NPA contemplates that the Company will deliver a Disclosure Schedule (the "Disclosure Schedule") setting forth certain exceptions to the Company's representations and warranties, together with supplementary information, prior to the closing. Calderwood & Harkness is currently conducting due diligence in coordination with the Company's internal legal and finance teams, and we will coordinate the preparation and delivery of the Disclosure Schedule in advance of the targeted closing date.

6. Securities Law Exemptions. The offering and sale of the Notes will be conducted in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and Rule 506(b) of Regulation D promulgated thereunder. Consistent with these exemptions, the draft NPA includes customary representations from each Purchaser regarding its status as an "accredited investor" as defined in Rule 501(a) of Regulation D, as well as representations regarding investment intent, sophistication, access to information, and the restricted nature of the securities being acquired. No general solicitation or advertising has been or will be used in connection with the offering.

7. Escrow Mechanics. The draft NPA contemplates that closing funds will be deposited with Granite Trust Company, N.A. ("Granite Trust"), acting as escrow agent, to be held and disbursed in accordance with the terms of a separate Escrow Agreement. Calderwood & Harkness is currently preparing a draft Escrow Agreement with Granite Trust, which will be circulated to your firm for review in due course. We would be pleased to discuss any preferences your clients may have regarding the escrow mechanics, including conditions to disbursement and timing.

III. Additional Documents to Follow

In addition to the enclosed documents, the following ancillary transaction documents and closing deliverables will be prepared and circulated in the near term:

1. Subordination Agreement (by and among the Company, the Noteholders, and Kelvantis Lending Corp.)

2. Amendment No. 1 to Amended and Restated Investors' Rights Agreement

3. Amendment No. 1 to Right of First Refusal and Co-Sale Agreement

4. Escrow Agreement (with Granite Trust Company, N.A., as escrow agent)

5. Forms of Secretary's Certificate, Officer's Certificates, and other customary closing deliverables

6. Company Disclosure Schedule

We will endeavor to circulate drafts of each of the foregoing as promptly as practicable, and in any event in sufficient time to permit your review and comment in advance of the targeted closing date.

IV. Request for Comments and Proposed Timeline

We respectfully request that Whitfield, Pratt & Soo LLP circulate its comments on the enclosed draft NPA and Form of Note at your earliest convenience. As you are aware, the parties share a mutual objective of targeting the signing and Initial Closing of the Bridge Financing in January 2024, and a prompt exchange of drafts will be essential to maintaining that timeline.

We note that the Company's Board of Directors has been briefed on the proposed Bridge Financing and is prepared to act on the necessary board approvals. In addition, to the extent that stockholder consent is required in connection with the issuance of the Notes or the amendment of existing agreements, the Company intends to seek such consent on a timely basis. We will coordinate with your firm on the sequencing of corporate approvals and closing deliverables.

As noted above, the request for Kelvantis Lending Corp.'s consent to the issuance of the Notes and the entry into the Subordination Agreement is being prepared by Calderwood & Harkness and will be transmitted directly to Kelvantis's counsel. We will keep your firm apprised of the status of those discussions.

For purposes of day-to-day drafting, negotiation, and coordination on this matter, please direct communications to the undersigned and to Nina Reyes, Senior Associate in our Emerging Companies & Venture Capital practice group. Our respective contact information is set forth below:

Leonard Ashford, Of Counsel Telephone: (212) 554-7244

Email: lashford@calderwoodharkness.com

Nina Reyes, Senior Associate Telephone: (212) 554-7318

Email: nreyes@calderwoodharkness.com

We look forward to hearing from you and to working collaboratively with your team toward a successful closing.

Please note that the enclosed drafts are transmitted solely for purposes of negotiation and discussion and are subject to further revision by all parties. The enclosed documents do not constitute, and shall not be construed as, a binding agreement, commitment, or obligation on the part of Skybridge Fintech Ltd. or any other party. All terms and provisions remain subject to the negotiation and mutual agreement of the parties and to the execution and delivery of definitive transaction documents.

This letter and the enclosed documents are confidential, may be protected by the attorney-client privilege and/or the work product doctrine, and are intended solely for the use of the addressee and those individuals identified on the copy list below. If you have received this communication in error, please notify the sender immediately and destroy all copies of this letter and the enclosed documents. Any unauthorized review, use, disclosure, or distribution of this communication or its enclosures is strictly prohibited.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Leonard Ashford Of Counsel, Emerging Companies & Venture Capital 600 Lexington Avenue New York, New York 10022

cc: (via email)

Victoria Chambers, Esq. — Calderwood & Harkness LLP (Responsible Partner)

Nina Reyes, Esq. — Calderwood & Harkness LLP (Senior Associate, ECVC)

Priya Ramanathan, Esq. — Skybridge Fintech Ltd. (General Counsel)

David Lindstrom — Skybridge Fintech Ltd. (Chief Financial Officer)

Danielle Kwon, Esq. — Whitfield, Pratt & Soo LLP

Enclosures:

1. Note Purchase Agreement — Initial Draft (dated December 11, 2023)

2. Form of Convertible Promissory Note — Initial Draft (Exhibit A to NPA)

3. Draft Schedule of Purchasers (Schedule 1 to NPA)

Purchaser	Commitment Amount	Percentage of Round
Ridgeline Ventures Fund IV, L.P.	$30,000,000	50.00%
Beacon Hill Capital Partners, LLC	$15,000,000	25.00%
Northstar Innovation Fund II, L.P.	$10,000,000	16.67%
Halcyon Growth Equity, L.P.	$5,000,000	8.33%
Total	$60,000,000	100.00%

CALDERWOOD & HARKNESS LLP Attorneys at Law
600 Lexington Avenue New York, New York 10022 Telephone: (212) 554-7000 Facsimile: (212) 554-7001 www.calderwoodharkness.com
December 11, 2023
Graham Whitfield, Esq. Whitfield, Pratt & Soo LLP One Federal Street, 26th Floor Boston, Massachusetts 02110
Re: Skybridge Fintech Ltd. — $60,000,000 Convertible Note Bridge Financing Calderwood & Harkness Matter No. 1009-00001
Dear Graham:
As you know, this firm represents Skybridge Fintech Ltd., a Delaware corporation ("Skybridge" or the "Company"), as issuer's counsel in connection with the proposed $60,000,000 convertible promissory note bridge financing (the "Bridge Financing"). We are writing to transmit enclosed initial drafts of the principal transaction documents for your review on behalf of your clients, Ridgeline Ventures Fund IV, L.P. ("Ridgeline"), as lead investor, and the other investors participating in the syndicate (collectively, the "Purchasers").
The enclosed documents have been prepared to reflect the economic and structural terms set forth in the executed Term Sheet dated December 4, 2023 (the "Term Sheet"), entered into between Skybridge (signed by Arjun Mehta, Chief Executive Officer) and Ridgeline (signed by Samuel Okonkwo, Partner), acting as lead investor on behalf of the investor syndicate. We have endeavored to incorporate all material terms from the Term Sheet while supplementing them with customary provisions appropriate for a transaction of this nature and size. We look forward to receiving your comments and to working with you and your colleagues to bring this transaction to a prompt and efficient closing.
Set forth below is a description of each enclosed document, a summary of certain key drafting points and areas that we anticipate will be the subject of further discussion, and an identification of additional ancillary documents that we intend to circulate in the near term.
I. Description of Enclosed Documents
Enclosure 1 — Note Purchase Agreement (Initial Draft)
Enclosed please find an initial draft of the Note Purchase Agreement (the "NPA"), dated as of December 11, 2023, by and among Skybridge Fintech Ltd., as the Company, and the following Purchasers:
(a) Ridgeline Ventures Fund IV, L.P.;
(b) Beacon Hill Capital Partners, LLC;
(c) Northstar Innovation Fund II, L.P.; and
(d) Halcyon Growth Equity, L.P.
The NPA provides for the issuance and sale by the Company of convertible promissory notes (the "Notes") in the aggregate principal amount of $60,000,000. The key economic and structural terms reflected in the draft, consistent with the executed Term Sheet, are as follows:
Interest Rate. The Notes bear interest at a rate of 6.00% per annum (600 basis points), calculated as simple interest on a 365-day year basis. Interest accrues from the date of issuance of each Note and is payable at maturity or upon earlier conversion, as applicable.
Maturity Date. The Notes mature on the date that is twenty-four (24) months from the Closing Date (as defined in the NPA). Unless earlier converted or repaid in accordance with the terms of the Notes, all outstanding principal and accrued and unpaid interest will become due and payable on the Maturity Date.
Conversion discount. Upon a Qualified Financing, each Note will convert into shares of the equity securities issued in such Qualified Financing at a price per share equal to eighty percent (80%) of the price per share paid by the new investors in the Qualified Financing (i.e., reflecting a 20% discount to such price per share).
Valuation Cap. The conversion price is further subject to a valuation cap of $750,000,000 on a pre-money basis. The conversion price upon a Qualified Financing will be the lower of (x) the discounted price described above, or (y) the price per share implied by the $750,000,000 pre-money valuation cap on a fully diluted basis.
Qualified Financing Threshold. A "Qualified Financing" is defined in the NPA as the closing of an equity financing transaction by the Company in which the Company receives aggregate gross proceeds of at least $80,000,000 in new equity capital (exclusive of any principal and accrued interest converted under the Notes), which the parties anticipate would constitute a Series D preferred stock financing.
Conversion Mechanics. The Notes provide for automatic conversion upon the closing of a Qualified Financing, without the need for any action by the holders. In the event the Notes remain outstanding at the Maturity Date without a Qualified Financing having occurred, each holder may elect, at its sole option, either (i) to convert its Note into shares of the Company's equity securities at the price per share implied by the $750,000,000 pre-money valuation cap, or (ii) to demand repayment of its outstanding principal and all accrued and unpaid interest.
Change of Control. Upon the occurrence of a Change of Control (as defined in the NPA) prior to conversion or repayment of the Notes, each holder will be entitled to receive, at such holder's election, the greater of (A) two times (2.0x) the outstanding principal amount of such holder's Note plus all accrued and unpaid interest thereon, or (B) the amount such holder would receive if the Note were converted immediately prior to the Change of Control at the price per share implied by the $750,000,000 pre-money valuation cap.
Most Favored Nation (MFN) Provision. The NPA includes a Most Favored Nation provision pursuant to which, in the event the Company issues any subsequent convertible notes or simple agreements for future equity ("SAFEs") on terms that are, in the aggregate, more favorable to the holders thereof than the terms of the Notes, each Purchaser will have the right to amend its Note to incorporate such more favorable terms. This provision is intended to ensure that the Purchasers are not economically disadvantaged by any subsequent bridge or pre-Series D issuances.
Subordination. The Notes are subordinate in right of payment to the Company's existing venture debt facility with Kelvantis Lending Corp. (the "Senior Debt"), as further described in the Subordination Agreement to be entered into among the Company, the Purchasers, and Kelvantis Lending Corp. The subordination provisions in the NPA are structured to comply with the requirements of the Company's existing credit agreement with Kelvantis.
In addition to the foregoing economic terms, the NPA includes customary representations and warranties of both the Company and the Purchasers (including, without limitation, representations regarding organization, authority, capitalization, financial statements, material contracts, compliance with laws, intellectual property, tax matters, and litigation), as well as affirmative and negative covenants of the Company, conditions precedent to the obligation of the parties to consummate the closing, and indemnification provisions for the benefit of the Purchasers. The NPA is governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict of laws principles. The parties have agreed to exclusive jurisdiction in the Court of Chancery of the State of Delaware (or, if the Court of Chancery declines to accept jurisdiction over a particular matter, the Superior Court of the State of Delaware), or, in the case of claims arising under federal law, the United States District Court for the District of Delaware.
Enclosure 2 — Form of Convertible Promissory Note (Initial Draft)
Enclosed as a separate document, and also attached as Exhibit A to the NPA, is the initial draft of the Form of Convertible Promissory Note (the "Note"). The Note sets forth the form of each individual convertible promissory note to be issued to each Purchaser in its respective principal amount at the closing of the Bridge Financing. The Note reflects and incorporates the interest, maturity, conversion, subordination, and other economic terms described above and as set forth in the NPA. Each Purchaser will receive a Note in the principal amount corresponding to its commitment as set forth in the Schedule of Purchasers (described below).
Enclosure 3 — Draft Schedule of Purchasers
Enclosed as a separate document, and also attached as Schedule 1 to the NPA, is the draft Schedule of Purchasers, setting forth the name, commitment amount, and pro rata percentage of the Bridge Financing for each Purchaser, as follows:
Please confirm that the foregoing commitment amounts and percentages are consistent with your clients' understanding of the allocation among the Purchasers.
II. Summary of Key Drafting Points and Areas for Discussion
We wish to draw your attention to the following drafting points and areas that we anticipate will require further discussion between the parties:
1. Initial Closing and Final Closing Mechanics. The draft NPA contemplates the potential for an Initial Closing and a subsequent Final Closing, in order to accommodate differences in the timing of funding from all Purchasers. The NPA provides that one or more Purchasers may fund their respective commitment amounts at the Initial Closing, with the remaining Purchasers joining the transaction and funding at the Final Closing through execution of a Joinder Agreement (the form of which is attached to the NPA). The Final Closing must occur no later than thirty (30) days following the Initial Closing. We believe this structure provides appropriate flexibility while ensuring that the transaction reaches full commitment within a reasonable period. We welcome your thoughts on the mechanics and timing.
2. Conversion Price Calculation. As noted above, the conversion price applicable to the Notes upon a Qualified Financing is the lower of (a) 80% of the Series D price per share (reflecting the 20% discount), or (b) the price per share implied by the $750,000,000 pre-money valuation cap on a fully diluted basis. Based on the Company's current capitalization, which reflects approximately 48,500,000 shares outstanding on a fully diluted basis (inclusive of all outstanding options, warrants, and other convertible securities, but excluding the Notes), the implied valuation cap price is approximately $15.46 per share. The Company's capitalization table will be delivered as part of the Company Disclosure Schedule, and we expect the parties will wish to confirm the fully diluted share count as of the closing.
3. Subordination Agreement. The subordination provisions in the NPA are designed to dovetail with a separate Subordination Agreement to be entered into by and among the Company, the holders of the Notes, and Kelvantis Lending Corp., as the holder of the senior venture debt. Calderwood & Harkness is currently preparing a draft of the Subordination Agreement and intends to circulate it separately within the coming days. We note that the consent of Kelvantis Lending Corp. will be required in connection with the issuance of the Notes, and the Company is in the process of engaging with Kelvantis to obtain such consent. A formal request for consent is being prepared by this firm and will be transmitted to Kelvantis's counsel separately.
4. Information Rights and Pro Rata Participation Rights. The information rights and pro rata participation rights for the Purchasers will not be addressed within the four corners of the NPA itself but will instead be implemented through an amendment to the Company's existing Amended and Restated Investors' Rights Agreement (the "IRA"). Drafts of Amendment No. 1 to the IRA, as well as Amendment No. 1 to the Right of First Refusal and Co-Sale Agreement, will follow under separate cover. We anticipate that the Purchasers' information rights will be substantially equivalent to those currently held by the Company's Series C preferred stockholders, including quarterly unaudited financial statements, annual audited financial statements, and annual budget and operating plan.
5. Company Disclosure Schedule. The NPA contemplates that the Company will deliver a Disclosure Schedule (the "Disclosure Schedule") setting forth certain exceptions to the Company's representations and warranties, together with supplementary information, prior to the closing. Calderwood & Harkness is currently conducting due diligence in coordination with the Company's internal legal and finance teams, and we will coordinate the preparation and delivery of the Disclosure Schedule in advance of the targeted closing date.
6. Securities Law Exemptions. The offering and sale of the Notes will be conducted in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and Rule 506(b) of Regulation D promulgated thereunder. Consistent with these exemptions, the draft NPA includes customary representations from each Purchaser regarding its status as an "accredited investor" as defined in Rule 501(a) of Regulation D, as well as representations regarding investment intent, sophistication, access to information, and the restricted nature of the securities being acquired. No general solicitation or advertising has been or will be used in connection with the offering.
7. Escrow Mechanics. The draft NPA contemplates that closing funds will be deposited with Granite Trust Company, N.A. ("Granite Trust"), acting as escrow agent, to be held and disbursed in accordance with the terms of a separate Escrow Agreement. Calderwood & Harkness is currently preparing a draft Escrow Agreement with Granite Trust, which will be circulated to your firm for review in due course. We would be pleased to discuss any preferences your clients may have regarding the escrow mechanics, including conditions to disbursement and timing.
III. Additional Documents to Follow
In addition to the enclosed documents, the following ancillary transaction documents and closing deliverables will be prepared and circulated in the near term:
1. Subordination Agreement (by and among the Company, the Noteholders, and Kelvantis Lending Corp.)
2. Amendment No. 1 to Amended and Restated Investors' Rights Agreement
3. Amendment No. 1 to Right of First Refusal and Co-Sale Agreement
4. Escrow Agreement (with Granite Trust Company, N.A., as escrow agent)
5. Forms of Secretary's Certificate, Officer's Certificates, and other customary closing deliverables
6. Company Disclosure Schedule
We will endeavor to circulate drafts of each of the foregoing as promptly as practicable, and in any event in sufficient time to permit your review and comment in advance of the targeted closing date.
IV. Request for Comments and Proposed Timeline
We respectfully request that Whitfield, Pratt & Soo LLP circulate its comments on the enclosed draft NPA and Form of Note at your earliest convenience. As you are aware, the parties share a mutual objective of targeting the signing and Initial Closing of the Bridge Financing in January 2024, and a prompt exchange of drafts will be essential to maintaining that timeline.
We note that the Company's Board of Directors has been briefed on the proposed Bridge Financing and is prepared to act on the necessary board approvals. In addition, to the extent that stockholder consent is required in connection with the issuance of the Notes or the amendment of existing agreements, the Company intends to seek such consent on a timely basis. We will coordinate with your firm on the sequencing of corporate approvals and closing deliverables.
As noted above, the request for Kelvantis Lending Corp.'s consent to the issuance of the Notes and the entry into the Subordination Agreement is being prepared by Calderwood & Harkness and will be transmitted directly to Kelvantis's counsel. We will keep your firm apprised of the status of those discussions.
For purposes of day-to-day drafting, negotiation, and coordination on this matter, please direct communications to the undersigned and to Nina Reyes, Senior Associate in our Emerging Companies & Venture Capital practice group. Our respective contact information is set forth below:
Leonard Ashford, Of Counsel Telephone: (212) 554-7244
Email: lashford@calderwoodharkness.com
Nina Reyes, Senior Associate Telephone: (212) 554-7318
Email: nreyes@calderwoodharkness.com
We look forward to hearing from you and to working collaboratively with your team toward a successful closing.
Please note that the enclosed drafts are transmitted solely for purposes of negotiation and discussion and are subject to further revision by all parties. The enclosed documents do not constitute, and shall not be construed as, a binding agreement, commitment, or obligation on the part of Skybridge Fintech Ltd. or any other party. All terms and provisions remain subject to the negotiation and mutual agreement of the parties and to the execution and delivery of definitive transaction documents.
This letter and the enclosed documents are confidential, may be protected by the attorney-client privilege and/or the work product doctrine, and are intended solely for the use of the addressee and those individuals identified on the copy list below. If you have received this communication in error, please notify the sender immediately and destroy all copies of this letter and the enclosed documents. Any unauthorized review, use, disclosure, or distribution of this communication or its enclosures is strictly prohibited.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Leonard Ashford Of Counsel, Emerging Companies & Venture Capital 600 Lexington Avenue New York, New York 10022
cc: (via email)
Victoria Chambers, Esq. — Calderwood & Harkness LLP (Responsible Partner)
Nina Reyes, Esq. — Calderwood & Harkness LLP (Senior Associate, ECVC)
Priya Ramanathan, Esq. — Skybridge Fintech Ltd. (General Counsel)
David Lindstrom — Skybridge Fintech Ltd. (Chief Financial Officer)
Danielle Kwon, Esq. — Whitfield, Pratt & Soo LLP
Enclosures:
1. Note Purchase Agreement — Initial Draft (dated December 11, 2023)
2. Form of Convertible Promissory Note — Initial Draft (Exhibit A to NPA)
3. Draft Schedule of Purchasers (Schedule 1 to NPA)
Purchaser | Commitment Amount | Percentage of Round
Ridgeline Ventures Fund IV, L.P. | $30,000,000 | 50.00%
Beacon Hill Capital Partners, LLC | $15,000,000 | 25.00%
Northstar Innovation Fund II, L.P. | $10,000,000 | 16.67%
Halcyon Growth Equity, L.P. | $5,000,000 | 8.33%
Total | $60,000,000 | 100.00%

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

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