1009-00001 · Skybridge Fintech Ltd · Engagement & Administration

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MEMORANDUM

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT

TO: Victoria Chambers, Responsible Partner Howard Quinn, Billing Partner

FROM: Leonard Ashford, Of Counsel, Emerging Companies & Venture Capital Nina Reyes, Senior Associate, Emerging Companies & Venture Capital

DATE: November 6, 2023

RE: Fee Estimate & Budget — Skybridge Fintech Ltd. $60,000,000 Convertible Note Bridge Financing

Matter No.: 1009-00001

I. Executive Summary

The purpose of this memorandum is to set forth the estimated fees, budget allocation by work stream, and anticipated disbursements for Calderwood & Harkness LLP's ("C&H" or the "Firm") representation of Skybridge Fintech Ltd. ("Skybridge" or "SBF"), a Delaware C-corporation headquartered at 1400 Market Street, Suite 2200, Wilmington, DE 19801, as issuer in a proposed $60,000,000 convertible promissory note bridge financing (the "Bridge Financing" or the "Transaction"). This memorandum is intended solely for internal use by the matter leadership team and should be treated as privileged and confidential attorney work product.

The Bridge Financing will be led by Ridgeline Ventures Fund IV, L.P. ("Ridgeline" or the "Lead Investor"), which is anticipated to commit the largest tranche of the $60,000,000 aggregate principal amount. The investor syndicate participating alongside Ridgeline includes Beacon Hill Capital Partners, LLC, Northstar Innovation Fund II, L.P., and Halcyon Growth Equity, L.P. (collectively with Ridgeline, the "Investors" or the "Purchasers"). Ridgeline and the investor syndicate are represented by Whitfield, Pratt & Soo LLP ("WPS"), One Federal Street, 26th Floor, Boston, Massachusetts 02110, with Graham Whitfield serving as lead partner and Danielle Kwon as the primary associate on the matter.

The C&H engagement was opened effective November 6, 2023, and the Firm's standard engagement letter has been executed by Skybridge on the same date. The Transaction contemplates the issuance by Skybridge of convertible promissory notes (each, a "Note" and collectively, the "Notes") bearing interest at a rate of 6.00% per annum (600 basis points), with a pre-money valuation cap of $750,000,000, a 20% discount to the conversion price applicable upon a qualifying equity financing, and a maturity date of 24 months from the date of closing. The planned closing target is mid-January 2024, with the possibility of a second and final closing shortly thereafter to accommodate the anticipated participation of Northstar Innovation Fund II, L.P.

The agreed fee cap for this engagement is $275,000 for all legal fees, exclusive of disbursements and third-party costs. This cap encompasses all work streams described in this memorandum and in the scope of the engagement letter. Skybridge has agreed to provide an advance retainer in the amount of $75,000, to be received by the Firm no later than November 15, 2023. The retainer will be held in the Firm's client trust account and applied against the final invoice or invoices rendered in connection with the engagement. Monthly invoices will be rendered in the ordinary course and will draw against the retainer balance until exhausted, with any remaining invoices payable by Skybridge within thirty (30) days of receipt.

In addition to the C&H fee cap, this memorandum addresses the anticipated obligation of Skybridge to reimburse the legal fees and expenses of WPS, counsel to the Lead Investor and the investor syndicate, which reimbursement is expected to be capped at $125,000 pursuant to the terms of the Note Purchase Agreement. This memorandum also addresses estimated disbursements and third-party costs that fall outside the C&H fee cap, including escrow agent fees, filing fees, and other customary transaction-related expenses.

The total estimated fee range for C&H's work, based on the staffing plan and anticipated scope of the engagement, is $255,000 to $275,000, which tracks to the agreed fee cap. The deal team will actively manage hours and staffing to ensure that the engagement is completed within the cap absent material changes in scope.

II. Scope of Engagement

The scope of C&H's engagement encompasses the following principal work streams, each of which is described in further detail in the budget allocation section below (Section V):

Preliminary Analysis and Deal Structuring Advice. C&H will prepare a comprehensive deal structure memorandum for Skybridge management and the Board of Directors, addressing the key economic and governance terms of the Bridge Financing, including conversion mechanics, valuation cap analysis, discount pricing, interest accrual and payment-in-kind provisions, maturity and acceleration triggers, and the interplay between the Notes and the Company's existing capitalization and investor rights agreements. This phase will also include the preparation of a Delaware corporate law memorandum, a securities law (Regulation D) memorandum, a tax considerations memorandum (addressing both federal income tax and Delaware franchise tax implications), and a preliminary review of the Company's existing charter, bylaws, Amended and Restated Investors' Rights Agreement ("IRA"), and Right of First Refusal and Co-Sale Agreement ("ROFR/Co-Sale Agreement") for any provisions that may affect the structuring or execution of the Transaction, including most-favored-nation ("MFN") provisions and anti-dilution protections.

Term Sheet Negotiation and Drafting. C&H will prepare the initial draft of the non-binding term sheet setting forth the principal economic and legal terms of the Bridge Financing, coordinate with Skybridge management on business terms, and lead the negotiation with WPS through execution. The target date for an executed term sheet is December 4, 2023.

Due Diligence. C&H will prepare and deliver comprehensive due diligence request lists and manage the due diligence process across the following areas:

(a) Corporate diligence, including review of entity formation documents, good standing, charter amendments, board and stockholder resolutions, capitalization (approximately 48,500,000 fully diluted shares prior to the Bridge Financing), stock ledger and transfer records, equity incentive plans, and outstanding convertible instruments;

(b) intellectual property diligence, including review of patent portfolios, trademark registrations and applications, copyright registrations, trade secret protections, domain name registrations, and employee/contractor invention assignment agreements (led by Peter Vassiliev and Wendy Schultz of the Firm's intellectual Property practice group);

(c) Material contracts review, including review of all contracts required to be disclosed on the Company Disclosure Schedule, with particular attention to the Kelvantis Lending Corp. Loan and Security Agreement dated August 15, 2022 (the "Kelvantis LSA") governing the existing $15,000,000 venture debt facility;

(d) Regulatory and compliance diligence, including analysis of money transmission licensing requirements, state-by-state licensing for Skybridge's payments orchestration platform, and any applicable federal regulatory requirements;

(e) Litigation and threatened claims review, including a survey of pending, threatened, or reasonably anticipated litigation, arbitration, or administrative proceedings;

(f) Employee and benefits review, including review of employment agreements, offer letters, independent contractor arrangements, employee benefit plans, and the most recent Section 409A fair market valuation of the Company's common stock (reported at $8.42 per share as of September 15, 2023, prepared by Atlas Valuation Services, Inc.), with an analysis of option pricing and the Company's approximately 310 full-time equivalent employees; and

(g) Insurance coverage review, including review of directors' and officers' liability insurance, errors and omissions coverage, cyber liability coverage, and general commercial liability policies.

Upon completion of the due diligence process, C&H will prepare a comprehensive due diligence summary and risk assessment memorandum for internal review and, as appropriate, for delivery to Skybridge management and the Board.

Drafting and Negotiation of Transaction Documents. C&H will prepare, negotiate, and finalize the following Transaction documents:

(a) Note Purchase Agreement (the "NPA"), through multiple drafts (initial draft, revised draft reflecting WPS comments, second revised draft, and execution version);

(b) Form of Convertible Promissory Note (initial draft and execution version);

(d) Company Disclosure Schedule to the NPA;

(e) Subordination Agreement among Skybridge, the Investors, and Kelvantis Lending Corp. as senior lender (the "Subordination Agreement");

(f) Amendment No. 1 to the Amended and Restated Investors' Rights Agreement;

(g) Amendment No. 1 to the Right of First Refusal and Co-Sale Agreement;

(h) Escrow Agreement among Skybridge, the Investors, and Granite Trust Company, N.A. as escrow agent (the "Escrow Agreement"); and

(i) Joinder Agreement for any Purchasers joining at the Final Closing (anticipated: Northstar Innovation Fund II, L.P.).

Negotiation of the Transaction documents will be conducted principally with WPS (Graham Whitfield and Danielle Kwon) on behalf of Ridgeline Ventures and the investor syndicate.

Board and Stockholder Approval Documentation. C&H will prepare the unanimous written consent of the Board of Directors authorizing the Bridge Financing, a board presentation and summary of transaction terms, a written consent of stockholders in lieu of a special meeting pursuant to Section 228 of the Delaware General Corporation Law ("DGCL"), and the required Section 228 notice to non-consenting stockholders.

Closing Deliverables. C&H will prepare the closing checklist, secretary's certificate, officer's certificates (including representations bring-down and use of proceeds certifications), coordinate with the Delaware Secretary of State for good standing certificates, prepare a legal opinion (including internal assumptions and qualifications memorandum), draft wire transfer instructions and escrow release instructions for both the Initial Closing and the Final Closing, and prepare the funds flow memorandum.

Securities Law Compliance. C&H will conduct a Regulation D / Rule 506(b) private placement analysis, prepare and file the initial Form D with the U.S. Securities and Exchange Commission (target filing date: January 16, 2024) and a Form D amendment following the Final Closing, and prepare a blue sky / state notice filings memorandum for the applicable jurisdictions.

Delaware Corporate Law Analysis. C&H will prepare a memorandum analyzing the authorization of the Notes under DGCL Sections 152, 153, and 157, including an analysis of the Company's authorized and available shares of common and preferred stock sufficient to satisfy conversion of the Notes.

Tax Considerations Memorandum. C&H will prepare a memorandum addressing the federal income tax and Delaware franchise tax implications of the Bridge Financing for the Company and, to the extent requested, a summary of the tax treatment for Investors.

Lender Consent Process. C&H will coordinate with Kelvantis Lending Corp. (contact: Ted Marsh) to obtain the required lender consent and waiver under the Kelvantis LSA in connection with the issuance of the Notes and the execution of the Subordination Agreement.

Post-Closing Matters. C&H will compile and deliver closing binders, prepare a post-closing obligations reminder letter to the client, and handle any other matters arising within a reasonable period following the closing that are directly related to the Transaction.

Out-of-Scope Matters. This engagement does not include representation of Skybridge in any Series D equity financing round, which, if commenced, would be the subject of a separate engagement letter and a separate fee estimate. The anticipated timing for a Series D round is Q3–Q4 2024. This engagement also does not include ongoing corporate advisory services beyond post-closing obligations directly related to the Bridge Financing.

III. Staffing Plan Summary

A separate Staffing Plan Memorandum dated November 8, 2023 will follow this memorandum with full detail on timekeeper assignments, individual billing rates, anticipated availability windows, and work stream allocations. For purposes of this fee estimate and budget, the following key team members and their anticipated roles and estimated hours are set forth below:

Victoria Chambers — Responsible Partner, overall matter supervision and client relationship management. Victoria will serve as the primary point of contact for senior Skybridge management (Priya Ramanathan, General Counsel, and David Lindstrom, Chief Financial Officer) on engagement-level matters and will provide strategic oversight on all significant negotiation and drafting issues. Estimated hours: approximately 15–20 hours.

Howard Quinn — Billing Partner, billing oversight and fee administration. Howard will review all invoices prior to distribution to Skybridge, monitor hours against the fee cap, and serve as the internal point of contact on budgeting and billing inquiries. Estimated hours: approximately 5–10 hours.

Leonard Ashford — Of Counsel, Emerging Companies & Venture Capital, substantive corporate lead. Leonard will serve as the senior deal lawyer on the engagement, responsible for deal structuring advice, lead drafter of the NPA and other principal Transaction documents, lead negotiator with WPS, preparation of the legal opinion, and oversight of the Delaware corporate law, securities law, and tax memoranda. Estimated hours: approximately 80–100 hours.

Nina Reyes — Senior Associate, Emerging Companies & Venture Capital, primary drafter and coordinator. Nina will serve as the day-to-day project manager on the engagement, responsible for coordinating the due diligence process, preparing initial drafts of the form of Note, amendments to the IRA and ROFR/Co-Sale Agreement, Escrow Agreement, board and stockholder consent documents, closing deliverables (secretary's certificate, officer's certificates, closing checklist, funds flow memorandum), and securities law filings. Nina will also manage the closing process and closing binder compilation. Estimated hours: approximately 120–150 hours.

Peter Vassiliev — Lead Associate, intellectual Property, IP due diligence lead. Peter will lead the review of Skybridge's patent portfolio, trademark registrations, and other intellectual property assets and will prepare the IP section of the due diligence summary memorandum. Estimated hours: approximately 30–40 hours.

Wendy Schultz — Working Associate, intellectual Property, IP due diligence support. Wendy will support Peter Vassiliev on the IP due diligence review, including analysis of invention assignment agreements, trade secret protections, and domain name registrations. Estimated hours: approximately 20–30 hours.

The combined estimated hours across all timekeepers range from approximately 270 to 350 hours. The staffing plan is designed to ensure that the engagement can be completed within the $275,000 fee cap, taking into account the blended effective rate implied by the cap and the range of estimated hours.

Note regarding IP diligence scope: The scope of intellectual property due diligence for this engagement is provisional. An engagement letter amendment is anticipated to be executed on or about December 1, 2023, which will confirm the scope of IP diligence and any adjustments to the hours budgeted for Peter Vassiliev and Wendy Schultz. Until such time, the hours set forth above are budgeted provisionally within this estimate and are subject to revision.

IV. Fee Cap and Retainer

Fee Cap. The agreed fee cap for all legal fees in connection with the convertible note Bridge Financing is $275,000. This cap encompasses all work streams described in Section II of this memorandum, including but not limited to preliminary analysis and deal structuring, term sheet negotiation, due diligence, transaction document drafting and negotiation, board and stockholder approvals, closing and post-closing deliverables, securities law compliance, the lender consent process, and general matter administration and correspondence. The fee cap is exclusive of disbursements and third-party costs, which are addressed separately in Section VII below.

The fee cap was negotiated with Skybridge's General Counsel, Priya Ramanathan, and Chief Financial Officer, David Lindstrom, and is reflected in the C&H engagement letter executed on November 6, 2023. The fee cap represents a ceiling on C&H's legal fees for the Transaction; the Firm's actual fees may be less than the cap depending on the complexity of the negotiation, the volume of due diligence findings, and other factors discussed in Section VIII below.

Retainer. Skybridge has agreed to provide an advance retainer in the amount of $75,000, to be received by the Firm no later than November 15, 2023. The retainer will be deposited in the Firm's client trust account (IOLTA account) in accordance with applicable New York Rules of Professional Conduct. The retainer will be applied against the final invoice or invoices rendered in connection with the engagement. Monthly invoices will be rendered in the ordinary course and will draw against the retainer balance until the retainer is exhausted. Any remaining invoices will be payable by Skybridge within thirty (30) days of receipt.

Billing Rates. Standard C&H billing rates apply to all timekeepers on this matter, including partner, of counsel, senior associate, and associate rates. The specific billing rate for each timekeeper will be set forth in the Staffing Plan Memorandum dated November 8, 2023. The fee cap provides an effective ceiling on fees regardless of the aggregate hours expended, such that even if the product of hours worked and applicable billing rates were to exceed $275,000, the Firm's fees will not exceed $275,000 absent a change in scope as described below.

Scope Changes. If the matter scope changes materially during the course of the engagement, the fee cap may be revisited with the prior written consent of Skybridge. Examples of material scope changes that could warrant an adjustment to the fee cap include, without limitation:

(a) the emergence of significant litigation or threatened claims during the due diligence process requiring extensive remediation, additional legal memoranda, or restructuring of the Transaction;

(b) the addition of closings beyond the two-closing structure currently contemplated (i.e., the Initial Closing and the Final Closing);

(c) the emergence of regulatory complications — for example, a determination that additional money transmission licenses are required in states not currently contemplated, necessitating an extended regulatory engagement;

(d) the retention of separate counsel by one or more Investors, resulting in additional negotiation tracks; or

(e) a material acceleration of the Series D equity financing timeline such that the Series D preparatory work overlaps with, and becomes inseparable from, the Bridge Financing engagement.

In any such event, Leonard Ashford will promptly notify Victoria Chambers and Howard Quinn, and the team will prepare a revised budget estimate for client discussion and approval before any work in excess of the fee cap is commenced.

V. Budget Allocation by Work Stream

The following subsections set forth the estimated fee allocation for each of the principal work streams comprising the engagement. The estimates are based on the staffing plan described in Section III, the anticipated complexity of each work stream, and the Firm's experience with comparable convertible note bridge financings in the venture capital market. The total estimated fee range of $255,000 to $275,000 tracks to the agreed fee cap.

A. Preliminary Analysis & Strategy

This work stream encompasses the preparation of the initial deal structure memorandum for Skybridge management and the Board, the Delaware corporate law memorandum (analyzing authorization of the Notes under DGCL Sections 152, 153, and 157, including an analysis of available authorized shares), the securities law memorandum (addressing Regulation D / Rule 506(b) requirements, accredited investor verification procedures, and the prohibition on general solicitation), the tax considerations memorandum (federal income tax treatment of convertible debt instruments, original issue discount analysis, and Delaware franchise tax implications), the Kelvantis covenant analysis (identifying covenants in the Kelvantis LSA that may be implicated by the Bridge Financing, including negative covenants on additional indebtedness, liens, and subordination requirements), and a preliminary review of the Company's certificate of incorporation (as amended), bylaws, Amended and Restated Investors' Rights Agreement, and Right of First Refusal and Co-Sale Agreement to identify MFN, anti-dilution, preemptive right, and information right provisions that interact with or may be affected by the Bridge Financing. This phase will also include an analysis of the interaction between the Notes' conversion mechanics and the existing anti-dilution protections applicable to the Company's outstanding Series B and Series C preferred stock.

Estimated Allocation: $35,000 – $40,000

Primary Timekeepers: Leonard Ashford, Nina Reyes

B. Term Sheet Phase

This work stream encompasses the drafting of the initial non-binding term sheet, internal review and revision in consultation with Skybridge management, delivery of the initial draft to WPS, review and analysis of WPS markup, preparation of a redline summary memorandum for the client, and negotiation support through execution of the final term sheet. The target date for execution of the term sheet is December 4, 2023. This phase is expected to involve two to three rounds of comments and at least one conference call with WPS and the respective client teams.

Estimated Allocation: $15,000 – $20,000

Primary Timekeepers: Leonard Ashford, Nina Reyes

C. Due Diligence

This work stream encompasses the full scope of the due diligence investigation and is expected to be the most labor-intensive phase of the engagement on a timekeeper-hours basis. The principal components of the due diligence process are as follows:

Preparation and Delivery of Due Diligence Request Lists. C&H will prepare and deliver an initial due diligence request list to Skybridge management (anticipated delivery: within five business days of term sheet execution) and one or more supplemental request lists based on the results of the initial document review.

Corporate Diligence. This component includes a review of the Company's certificate of incorporation (as amended through the Third Amended and Restated Certificate of Incorporation filed in connection with the Series C Preferred Stock financing), bylaws, all board and stockholder resolutions, capitalization records (including a fully diluted capitalization table reflecting approximately 48,500,000 fully diluted shares on a pre-Bridge Financing basis, inclusive of outstanding common stock, Series A through Series C preferred stock on an as-converted basis, outstanding stock options, restricted stock units, and warrants), the Company's stock transfer ledger, equity incentive plan documents (including the 2019 Equity Incentive Plan, as amended), and all outstanding convertible instruments (including any prior SAFE agreements or convertible notes).

intellectual Property Diligence. This component, led by Peter Vassiliev and Wendy Schultz, includes a review of the Company's patent portfolio (including any pending patent applications), registered and common-law trademarks, trademark applications, copyright registrations, trade secret protection policies and procedures, domain name registrations, open-source software usage and compliance, and employee and contractor invention assignment and confidentiality agreements. Peter Vassiliev will prepare the IP section of the due diligence summary memorandum, including a risk assessment of any identified IP deficiencies.

Material Contracts Review. This component includes a review of all contracts required to be disclosed on the Company Disclosure Schedule, including the Kelvantis Lending Corp. Loan and Security Agreement dated August 15, 2022, customer agreements, vendor agreements, partnership and channel agreements, and any agreements containing change-of-control, anti-assignment, or consent-required provisions that may be triggered by the Bridge Financing or a subsequent equity financing.

Regulatory and Compliance Diligence. This component includes an analysis of federal and state regulatory requirements applicable to Skybridge's payments orchestration platform, including money transmission licensing (with a focus on the states in which Skybridge currently operates or is required to hold licenses), state-by-state payment processor registration requirements, and any applicable federal regulatory requirements under the Bank Secrecy Act, the Electronic Fund Transfer Act, or other applicable statutes.

Litigation and Threatened Claims Review. This component includes a review of all pending, threatened, or reasonably anticipated litigation, arbitration, or administrative proceedings involving the Company, as well as any pre-litigation demand letters, regulatory inquiries, or investigations.

Employee and Benefits Review. This component includes a review of key employment agreements, offer letter templates, independent contractor agreements, employee benefit plans (including the Company's 401(k) plan), equity compensation arrangements, and the most recent Section 409A fair market valuation of the Company's common stock (reported at $8.42 per share as of September 15, 2023, prepared by Atlas Valuation Services, Inc., contact: Martin Khoury). This review will encompass the Company's approximately 310 full-time equivalent employees and will include an analysis of any outstanding equity compensation grants that may give rise to Section 409A compliance issues.

Insurance Coverage Review. This component includes a review of the Company's directors' and officers' liability insurance, errors and omissions coverage, cyber liability coverage, and general commercial liability policies, with a focus on coverage adequacy and any exclusions that may be relevant to the Transaction or the Company's ongoing operations.

Due Diligence Summary and Risk Assessment Memorandum. Upon completion of the due diligence process, C&H will prepare a comprehensive due diligence summary and risk assessment memorandum consolidating the findings from each diligence area. This memorandum will be prepared for internal review and, as appropriate, for delivery to Skybridge management and the Board.

Estimated Allocation: $60,000 – $75,000

Primary Timekeepers: Nina Reyes (coordination, corporate, contracts, regulatory, litigation, employee/benefits, and insurance diligence); Peter Vassiliev and Wendy Schultz (Intellectual property diligence)

D. Transaction Document Drafting & Negotiation

This work stream encompasses the preparation, negotiation, and finalization of all principal Transaction documents. This is expected to be the most significant single work stream by dollar value, reflecting the extensive drafting, negotiation, and revision cycles typical of a convertible note bridge financing of this size and complexity.

The specific documents to be prepared under this work stream include:

(a) Note Purchase Agreement. C&H will prepare the initial draft of the NPA and anticipates at least four versions through the negotiation process: (i) the initial draft, (ii) a revised draft reflecting WPS's initial comments and markup, (iii) a second revised draft incorporating responses to WPS's follow-up comments and any client-directed revisions, and (iv) the execution version. The NPA will include customary representations and warranties of the Company, representations and warranties of the Purchasers, conditions to closing, covenants, and the Company Disclosure Schedule.

(b) Form of Convertible Promissory Note. C&H will prepare the initial draft of the form of Note (as an exhibit to the NPA) and the execution version. The Note will set forth the economic terms of the Bridge Financing, including the 6.00% per annum interest rate, the $750,000,000 pre-money valuation cap, the 20% conversion discount, the 24-month maturity, and the conversion mechanics upon a qualifying equity financing, change of control, or maturity.

(c) Schedule of Purchasers. C&H will prepare the initial Schedule of Purchasers setting forth each Purchaser's name, address, commitment amount, and wire transfer instructions, to be attached to the NPA. An amended Schedule of Purchasers will be prepared for the Final Closing to reflect the addition of any Purchasers not participating at the Initial Closing (anticipated: Northstar Innovation Fund II, L.P.).

(d) Company Disclosure Schedule. C&H will coordinate with Skybridge management and in-house counsel (Priya Ramanathan) to prepare the Company Disclosure Schedule to the NPA, organizing disclosed items by reference to the applicable representations and warranties.

(e) Subordination Agreement. C&H will prepare the Subordination Agreement among Skybridge, the Purchasers (as subordinated creditors), and Kelvantis Lending Corp. (as senior lender), establishing the subordination of the Notes to the Company's obligations under the Kelvantis LSA.

(f) Amendment No. 1 to Amended and Restated Investors' Rights Agreement. C&H will prepare an amendment to the IRA to add the Purchasers as parties and to make any conforming changes necessitated by the Bridge Financing, including information rights and registration rights provisions.

(g) Amendment No. 1 to Right of First Refusal and Co-Sale Agreement. C&H will prepare an amendment to the ROFR/Co-Sale Agreement to add the Purchasers as parties and to make any conforming changes necessitated by the Bridge Financing.

(h) Escrow Agreement. C&H will prepare the Escrow Agreement among Skybridge, the Purchasers, and Granite Trust Company, N.A. (contact: Angela Petrov) as escrow agent, governing the deposit, release, and distribution of escrowed funds in connection with the Initial Closing and the Final Closing.

(i) Joinder Agreement. C&H will prepare a form of Joinder Agreement for any Purchasers joining at the Final Closing (anticipated: Northstar Innovation Fund II, L.P.), providing for such Purchaser's joinder to the NPA and ancillary agreements.

Negotiation of the Transaction documents will be conducted primarily with WPS (Graham Whitfield and Danielle Kwon) on behalf of Ridgeline Ventures and the investor syndicate. The budget for this work stream assumes a customary negotiation cadence for a venture-stage convertible note financing, including two to three rounds of substantive markups on the NPA, one to two rounds on the form of Note and the Subordination Agreement, and one round on each of the ancillary documents.

Estimated Allocation: $80,000 – $95,000

Primary Timekeepers: Leonard Ashford, Nina Reyes

E. Board & Stockholder Approvals

This work stream encompasses the preparation of all corporate authorization documents required to approve the Bridge Financing under Delaware law and the Company's governing documents.

C&H will prepare and finalize a unanimous written consent of the Board of Directors of Skybridge authorizing the Bridge Financing, including the issuance of the Notes, the execution and delivery of the NPA and ancillary Transaction documents, and the appointment of officers authorized to execute and deliver such documents on behalf of the Company. C&H will also prepare a board presentation and summary of transaction terms for use by the Board in connection with its consideration of the Transaction.

In addition, C&H will prepare and finalize a written consent of stockholders in lieu of a special meeting, pursuant to Section 228 of the DGCL, to the extent that stockholder approval is required under the Company's certificate of incorporation, the IRA, the ROFR/Co-Sale Agreement, or other applicable agreements. Following execution of the stockholder consent, C&H will prepare and deliver the Section 228 notice to non-consenting stockholders as required by DGCL Section 228(e), informing such stockholders of the action taken by written consent without a meeting.

Estimated Allocation: $15,000 – $20,000

Primary Timekeepers: Nina Reyes, Leonard Ashford

F. Closing & Post-Closing

This work stream encompasses all activities related to the preparation for and execution of the closing of the Bridge Financing (including both the Initial Closing and the Final Closing) and post-closing deliverables and obligations.

Closing Preparation:

• Closing checklist preparation and maintenance. C&H will prepare a comprehensive closing checklist identifying all conditions to closing, deliverables required from each party, and responsible parties, and will maintain the checklist through closing.

• Secretary's certificate. C&H will prepare the secretary's certificate attaching certified copies of the Company's certificate of incorporation (as amended), bylaws, board resolutions, and stockholder consent, together with an incumbency certificate for the officers of the Company.

• Officer's certificates. C&H will prepare officer's certificates, including a certificate of representations bring-down (confirming the accuracy of the Company's representations and warranties as of the closing date) and a use of proceeds certificate.

• Good standing certificate coordination. C&H will coordinate with the Delaware Secretary of State to obtain a certificate of good standing for Skybridge as of a recent date prior to closing.

• Legal opinion. C&H will prepare a legal opinion of company counsel addressed to the Purchasers, covering due organization, good standing, authorization, execution and delivery, enforceability, and non-contravention, together with any qualifications and assumptions customary in a transaction of this type. C&H will prepare an internal assumptions and qualifications memorandum in connection with the legal opinion.

• Wire transfer instructions and escrow release instructions. C&H will prepare wire transfer instructions for the Purchasers and escrow release instructions for Granite Trust Company, N.A. in connection with both the Initial Closing and the Final Closing.

• Funds flow memorandum. C&H will prepare a funds flow memorandum setting forth the sources and uses of funds at each closing, including the aggregate principal amount of Notes to be issued, investor counsel fee reimbursement, escrow agent fees, and net proceeds to Skybridge.

Lender Consent Coordination:

• C&H will prepare and deliver a letter to Kelvantis Lending Corp. (Ted Marsh) requesting consent to the Bridge Financing and execution of the Subordination Agreement, and will review and negotiate the executed consent and waiver from Kelvantis.

Securities Law Filings:

• Form D filing. C&H will prepare and file the initial Form D with the SEC (target filing date: January 16, 2024, within 15 days of the Initial Closing).

• Form D amendment. C&H will prepare and file a Form D amendment following the Final Closing to update the aggregate offering amount and the number of purchasers.

• Blue sky / state notice filings memorandum. C&H will prepare a memorandum identifying the applicable state blue sky or notice filing requirements in each relevant jurisdiction and will coordinate or prepare the required filings.

Post-Closing:

• Closing binder compilation. C&H will compile closing binders (physical and electronic) containing executed copies of all Transaction documents, certificates, opinions, and ancillary deliverables, together with a table of contents and index.

• Post-closing obligations reminder letter. C&H will prepare and deliver a letter to Skybridge management identifying any post-closing covenants, reporting obligations, or notice requirements arising under the NPA or ancillary agreements, and recommending calendar reminders for key dates and deadlines.

Estimated Allocation: $40,000 – $50,000

Primary Timekeepers: Nina Reyes, Leonard Ashford

G. Correspondence & General Matter Administration

This work stream encompasses all general correspondence, communications, and administrative activities related to the engagement that are not specifically allocated to one of the foregoing work streams, including:

• Transmittal letters to WPS, to Kelvantis Lending Corp., to Granite Trust Company, N.A., and to the client;

• Emails and telephone calls with Skybridge management and in-house counsel, including Priya Ramanathan (General Counsel), David Lindstrom (Chief Financial Officer), Arjun Mehta (Vice President, Corporate Development), and Marcus Tillman (Vice President, Finance);

• Communications with opposing counsel at WPS (Graham Whitfield and Danielle Kwon);

• Communications with Kelvantis Lending Corp. (Ted Marsh);

• Communications with Granite Trust Company, N.A. (Angela Petrov);

• Internal team coordination, including weekly deal team calls, status updates, and work allocation; and

• General matter administration, including conflict checks, file maintenance, and time entry review.

Estimated Allocation: $10,000 – $15,000

Primary Timekeepers: All team members

Summary Table — Budget Allocation

The following table summarizes the estimated fee allocation by work stream:

The total estimated fee range of $255,000 to $275,000 tracks to the agreed fee cap of $275,000. The deal team will actively manage hours and staffing throughout the engagement to ensure that the Firm's actual fees remain within the cap. In the event that the team identifies early in the process that a particular work stream is trending above its estimated allocation, Leonard Ashford and Nina Reyes will confer with Victoria Chambers to determine whether reallocation from another work stream is appropriate or whether a scope change discussion with the client is warranted.

VI. Anticipated Investor Counsel Fee Reimbursement

Pursuant to the anticipated terms of the Note Purchase Agreement, Skybridge will be obligated to reimburse the reasonable legal fees and expenses of Whitfield, Pratt & Soo LLP ("WPS"), One Federal Street, 26th Floor, Boston, Massachusetts 02110, as counsel to the Lead Investor, Ridgeline Ventures Fund IV, L.P., and the investor syndicate, in connection with the Bridge Financing. The anticipated reimbursement cap is up to $125,000.

The WPS team working on this matter consists of Graham Whitfield (Lead Partner) and Danielle Kwon (Associate). It is expected that WPS will submit its invoice for reimbursement directly to Skybridge at or promptly following the closing, and that the reimbursement obligation will be netted against the closing proceeds (i.e., deducted from the aggregate subscription amounts prior to disbursement to Skybridge, as set forth in the funds flow memorandum).

This investor counsel fee reimbursement obligation is standard in venture capital and growth equity financings and is consistent with market practice for convertible note bridge rounds of this size. The final reimbursement cap amount will be confirmed in the execution version of the NPA. The team expects that this term will be largely non-controversial, as the $125,000 cap is within the range customary for a financing of this aggregate principal amount.

It is important to note that the WPS fee reimbursement is a direct obligation of Skybridge and is not included within the C&H fee cap of $275,000. The total legal cost to Skybridge for the Bridge Financing, inclusive of C&H fees, WPS reimbursement, and disbursements, is estimated at approximately $400,600 to $414,700 (calculated as $275,000 C&H fee cap + $125,000 WPS reimbursement cap + $10,600 to $14,700 estimated disbursements).

VII. Estimated Disbursements and Third-Party Costs

All disbursements and third-party costs incurred by C&H in connection with the Bridge Financing are in addition to the $275,000 fee cap and will be billed to Skybridge at cost. The following table sets forth the anticipated disbursements:

The escrow agent fee for Granite Trust Company, N.A. is a flat fee of $7,500 and is the largest single anticipated disbursement. This fee covers Granite Trust's services as escrow agent for both the Initial Closing and the Final Closing and includes standard document review and wire transfer processing fees. The escrow agent fee will be borne directly by Skybridge and may be netted from closing proceeds as set forth in the Escrow Agreement and funds flow memorandum.

State blue sky and notice filing fees are estimated at $1,000 to $3,000 in the aggregate, reflecting filings in Delaware, Massachusetts, Illinois, California, and Washington. The specific fees and filing requirements vary by state and will be confirmed in the blue sky / state notice filings memorandum prepared by C&H in connection with the closing.

Note regarding third-party vendor costs that are not C&H disbursements: The fees of Pinnacle Audit Group LLP (the Company's independent auditors; contact: Lisa Johannsen) and Atlas Valuation Services, Inc. (the Company's Section 409A valuation provider; contact: Martin Khoury) are not C&H disbursements. Those fees are direct Skybridge vendor relationships and will be invoiced directly by the respective service providers to Skybridge. C&H's budget does not include any allocation for the fees of Pinnacle Audit Group LLP or Atlas Valuation Services, Inc.

VIII. Key Assumptions and Risk Factors

The budget set forth in this memorandum is based on the following key assumptions. To the extent that any of these assumptions proves to be incorrect or any of the identified risk factors materializes, the estimated fee range and the adequacy of the fee cap may need to be reassessed:

1. Two-Closing Structure. The budget assumes a two-closing structure consisting of an Initial Closing (targeted for mid-January 2024) and a Final Closing (targeted for approximately 30 to 45 days following the Initial Closing) to accommodate the anticipated participation of Northstar Innovation Fund II, L.P. and any other Purchasers that do not participate at the Initial Closing. Each closing will require standard closing deliverables, including officer's certificates, escrow release instructions, updated funds flow memorandum, and (for the Final Closing) an amended Schedule of Purchasers and a Form D amendment. If additional closings beyond the two currently contemplated are required, additional time and fees will be incurred.

2. Single Investor-Side Counsel. The budget assumes that WPS will serve as the sole counsel for the entire investor syndicate, including Ridgeline Ventures Fund IV, L.P., Beacon Hill Capital Partners, LLC, Northstar Innovation Fund II, L.P., and Halcyon Growth Equity, L.P. If any individual Investor retains separate counsel, the resulting additional negotiation track(s) will increase the time required for document negotiation and may require additional drafts and revisions. This would have a direct impact on the Work Stream D allocation and could jeopardize the Firm's ability to stay within the fee cap.

3. No Material Adverse Diligence Findings. The budget assumes that the due diligence process will not uncover material adverse findings that require extensive remediation, the preparation of additional legal memoranda not currently contemplated, or a restructuring of the Transaction. Examples of findings that could trigger additional work include undisclosed litigation, unresolved regulatory compliance deficiencies, material IP ownership gaps, or previously unknown tax liabilities. If such findings arise, the team will promptly inform Victoria Chambers and evaluate whether a revised budget and scope discussion with Skybridge is warranted.

4. Timely Lender Consent. The budget assumes that Kelvantis Lending Corp. will provide the required lender consent and waiver under the Kelvantis LSA in a timely manner and without protracted negotiation. The Kelvantis consent process is budgeted to include the preparation and delivery of a consent request letter, one round of comments from Kelvantis (Ted Marsh), and the execution of the consent and waiver. If Kelvantis requires material modifications to the Subordination Agreement or imposes additional conditions on its consent, the resulting negotiation will increase the time and fees allocated to this work stream.

5. Delaware Governing Law; No Multi-Jurisdictional Opinions. The budget assumes that Delaware law will govern the Transaction documents and that disputes will be subject to the exclusive jurisdiction of the Delaware Court of Chancery (or, if the Court of Chancery declines jurisdiction, the Superior Court of the State of Delaware, or the United States District Court for the District of Delaware). On this basis, the legal opinion will be limited to Delaware law, and no multi-jurisdictional legal opinions will be required. If the Transaction documents require the application of the laws of additional jurisdictions — for example, if the Escrow Agreement is governed by New York law and the Purchasers require a separate New York law opinion — additional opinion work will be required, potentially involving local counsel.

6. Standard Reg D / Rule 506(b) Compliance. The budget assumes a standard Regulation D / Rule 506(b) private placement without general solicitation issues, "bad actor" disqualification issues, or integration concerns with prior or subsequent offerings. If any such issues arise, additional analysis and remediation will be required.

7. Series D Timing. The budget assumes that the planned Series D equity financing round will not accelerate to overlap with the Bridge Financing engagement. If the Series D timeline accelerates and preparatory work for the Series D becomes necessary during the Bridge Financing engagement, separate staffing and budgeting will be required under a separate engagement letter.

8. IP Diligence Scope. The IP diligence budget is provisional, as noted in Section III, pending confirmation of the scope of IP diligence under the anticipated engagement letter amendment. If the scope of IP diligence expands materially beyond the provisional allocation — for example, to include freedom-to-operate analyses, patent claim chart reviews, or extended open-source software compliance audits — the hours and fees allocated to Peter Vassiliev and Wendy Schultz will need to be adjusted.

IX. Billing and Invoice Schedule

C&H will render monthly invoices for legal fees and disbursements incurred in connection with the Bridge Financing. The first invoice is anticipated to cover the period from November 6, 2023, through November 30, 2023, and will be rendered on or about December 10, 2023. Subsequent invoices will be rendered on a calendar-month basis.

All invoices will be rendered to:

Skybridge Fintech Ltd. 1400 Market Street, Suite 2200 Wilmington, DE 19801

Attention: David Lindstrom, Chief Financial Officer, and Priya Ramanathan, General Counsel

The advance retainer of $75,000 will be applied against the final invoice or invoices rendered in connection with the engagement. Monthly invoices will draw against the retainer balance until the retainer is exhausted. Any remaining invoices will be payable by Skybridge within thirty (30) days of receipt.

Fee statements will include timekeeper-level detail, including each timekeeper's name, role, hours worked, applicable billing rate, and task descriptions coded to the work streams set forth in Section V of this memorandum (Work Streams A through G). This work stream coding will enable Skybridge and the C&H billing team to monitor the Firm's progress against the budget allocation for each work stream and to identify early any work streams that are trending above their estimated allocations.

Howard Quinn, as Billing Partner, will review all invoices prior to distribution to Skybridge to ensure accuracy, consistency with the engagement letter, and compliance with the fee cap.

Any amounts that would cause the aggregate fees billed to Skybridge in connection with the Bridge Financing to exceed the $275,000 fee cap require prior written approval from Skybridge before such amounts are invoiced. The deal team will proactively flag for Victoria Chambers and Howard Quinn any circumstances that suggest the fee cap may be approached or exceeded, and will not commence work in excess of the cap without client authorization.

X. Approval and Next Steps

We respectfully request that Victoria Chambers and Howard Quinn review and confirm the budget and allocation set forth in this memorandum at your earliest convenience. Upon approval, the budget will serve as the operative internal framework for managing fees and staffing on the engagement.

The following next steps are anticipated:

1. Retainer Receipt (Target: November 15, 2023). Upon receipt of the $75,000 advance retainer from Skybridge, the Firm will proceed with substantive work on the preliminary analysis and deal structuring phase.

2. Staffing Plan Memorandum (November 8, 2023). A separate Staffing Plan Memorandum will follow this memorandum within two business days, providing detailed information on timekeeper billing rates, anticipated availability and scheduling, and work stream assignments.

3. First Substantive Deliverable — Preliminary Deal Structure Memorandum (Target: November 10, 2023). The first substantive deliverable to the client is anticipated to be the Preliminary Deal Structure Memorandum, which will outline the key economic and structural terms of the Bridge Financing, identify open business and legal points for client consideration, and set forth a proposed timeline and critical path for the Transaction.

4. Engagement Letter Amendment — IP Diligence Scope (Target: December 1, 2023). An amendment to the engagement letter confirming the scope of IP due diligence and any associated adjustments to budgeted hours is anticipated to be executed on or about December 1, 2023.

5. Term Sheet Execution (Target: December 4, 2023). The deal team will prepare the initial draft of the term sheet promptly following the preliminary analysis phase, with a target of term sheet execution by December 4, 2023.

We are available to discuss any aspect of this memorandum at your convenience and look forward to your confirmation so that we may proceed.

ACKNOWLEDGMENT AND APPROVAL

Prepared by:

LEONARD ASHFORD Of Counsel, Emerging Companies & Venture Capital Calderwood & Harkness LLP

Date: November 6, 2023

NINA REYES Senior Associate, Emerging Companies & Venture Capital Calderwood & Harkness LLP

Date: November 6, 2023

Approved by:

VICTORIA CHAMBERS Responsible Partner Calderwood & Harkness LLP

By: ________

Date: ________

HOWARD QUINN Billing Partner Calderwood & Harkness LLP

By: ________

Date: ________

Distribution: Internal only — Victoria Chambers, Howard Quinn, Leonard Ashford, Nina Reyes. This memorandum is privileged and confidential attorney work product and is not intended for distribution to the client or any third party.

Work Stream	Estimated Fee Range
A. Preliminary Analysis & Strategy	$35,000 – $40,000
B. Term Sheet Phase	$15,000 – $20,000
C. Due Diligence	$60,000 – $75,000
D. Transaction Document Drafting & Negotiation	$80,000 – $95,000
E. Board & Stockholder Approvals	$15,000 – $20,000
F. Closing & Post-Closing	$40,000 – $50,000
G. Correspondence & General Administration	$10,000 – $15,000
Total Estimated Range	$255,000 – $275,000
Item	Estimated Cost
Granite Trust Company, N.A. — escrow agent fee	$7,500 (flat fee, borne by Skybridge)
Delaware Secretary of State — good standing certificate(s)	$100 – $200
SEC Form D filing fee	No filing fee (electronic filing)
State blue sky / notice filing fees (DE, MA, IL, CA, WA)	$1,000 – $3,000 (varies by state)
Document reproduction, courier, and Severin Partners LLC	$500 – $1,000
Online research and database charges (Westmark Data Systems, Bramwell Health IT, state licensing databases)	$1,000 – $2,000
Closing binder production (physical and electronic)	$500 – $1,000
Total Estimated Disbursements	$10,600 – $14,700

MEMORANDUM
PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT
TO: Victoria Chambers, Responsible Partner Howard Quinn, Billing Partner
FROM: Leonard Ashford, Of Counsel, Emerging Companies & Venture Capital Nina Reyes, Senior Associate, Emerging Companies & Venture Capital
DATE: November 6, 2023
RE: Fee Estimate & Budget — Skybridge Fintech Ltd. $60,000,000 Convertible Note Bridge Financing
Matter No.: 1009-00001
I. Executive Summary
The purpose of this memorandum is to set forth the estimated fees, budget allocation by work stream, and anticipated disbursements for Calderwood & Harkness LLP's ("C&H" or the "Firm") representation of Skybridge Fintech Ltd. ("Skybridge" or "SBF"), a Delaware C-corporation headquartered at 1400 Market Street, Suite 2200, Wilmington, DE 19801, as issuer in a proposed $60,000,000 convertible promissory note bridge financing (the "Bridge Financing" or the "Transaction"). This memorandum is intended solely for internal use by the matter leadership team and should be treated as privileged and confidential attorney work product.
The Bridge Financing will be led by Ridgeline Ventures Fund IV, L.P. ("Ridgeline" or the "Lead Investor"), which is anticipated to commit the largest tranche of the $60,000,000 aggregate principal amount. The investor syndicate participating alongside Ridgeline includes Beacon Hill Capital Partners, LLC, Northstar Innovation Fund II, L.P., and Halcyon Growth Equity, L.P. (collectively with Ridgeline, the "Investors" or the "Purchasers"). Ridgeline and the investor syndicate are represented by Whitfield, Pratt & Soo LLP ("WPS"), One Federal Street, 26th Floor, Boston, Massachusetts 02110, with Graham Whitfield serving as lead partner and Danielle Kwon as the primary associate on the matter.
The C&H engagement was opened effective November 6, 2023, and the Firm's standard engagement letter has been executed by Skybridge on the same date. The Transaction contemplates the issuance by Skybridge of convertible promissory notes (each, a "Note" and collectively, the "Notes") bearing interest at a rate of 6.00% per annum (600 basis points), with a pre-money valuation cap of $750,000,000, a 20% discount to the conversion price applicable upon a qualifying equity financing, and a maturity date of 24 months from the date of closing. The planned closing target is mid-January 2024, with the possibility of a second and final closing shortly thereafter to accommodate the anticipated participation of Northstar Innovation Fund II, L.P.
The agreed fee cap for this engagement is $275,000 for all legal fees, exclusive of disbursements and third-party costs. This cap encompasses all work streams described in this memorandum and in the scope of the engagement letter. Skybridge has agreed to provide an advance retainer in the amount of $75,000, to be received by the Firm no later than November 15, 2023. The retainer will be held in the Firm's client trust account and applied against the final invoice or invoices rendered in connection with the engagement. Monthly invoices will be rendered in the ordinary course and will draw against the retainer balance until exhausted, with any remaining invoices payable by Skybridge within thirty (30) days of receipt.
In addition to the C&H fee cap, this memorandum addresses the anticipated obligation of Skybridge to reimburse the legal fees and expenses of WPS, counsel to the Lead Investor and the investor syndicate, which reimbursement is expected to be capped at $125,000 pursuant to the terms of the Note Purchase Agreement. This memorandum also addresses estimated disbursements and third-party costs that fall outside the C&H fee cap, including escrow agent fees, filing fees, and other customary transaction-related expenses.
The total estimated fee range for C&H's work, based on the staffing plan and anticipated scope of the engagement, is $255,000 to $275,000, which tracks to the agreed fee cap. The deal team will actively manage hours and staffing to ensure that the engagement is completed within the cap absent material changes in scope.
II. Scope of Engagement
The scope of C&H's engagement encompasses the following principal work streams, each of which is described in further detail in the budget allocation section below (Section V):
Preliminary Analysis and Deal Structuring Advice. C&H will prepare a comprehensive deal structure memorandum for Skybridge management and the Board of Directors, addressing the key economic and governance terms of the Bridge Financing, including conversion mechanics, valuation cap analysis, discount pricing, interest accrual and payment-in-kind provisions, maturity and acceleration triggers, and the interplay between the Notes and the Company's existing capitalization and investor rights agreements. This phase will also include the preparation of a Delaware corporate law memorandum, a securities law (Regulation D) memorandum, a tax considerations memorandum (addressing both federal income tax and Delaware franchise tax implications), and a preliminary review of the Company's existing charter, bylaws, Amended and Restated Investors' Rights Agreement ("IRA"), and Right of First Refusal and Co-Sale Agreement ("ROFR/Co-Sale Agreement") for any provisions that may affect the structuring or execution of the Transaction, including most-favored-nation ("MFN") provisions and anti-dilution protections.
Term Sheet Negotiation and Drafting. C&H will prepare the initial draft of the non-binding term sheet setting forth the principal economic and legal terms of the Bridge Financing, coordinate with Skybridge management on business terms, and lead the negotiation with WPS through execution. The target date for an executed term sheet is December 4, 2023.
Due Diligence. C&H will prepare and deliver comprehensive due diligence request lists and manage the due diligence process across the following areas:
(a) Corporate diligence, including review of entity formation documents, good standing, charter amendments, board and stockholder resolutions, capitalization (approximately 48,500,000 fully diluted shares prior to the Bridge Financing), stock ledger and transfer records, equity incentive plans, and outstanding convertible instruments;
(b) intellectual property diligence, including review of patent portfolios, trademark registrations and applications, copyright registrations, trade secret protections, domain name registrations, and employee/contractor invention assignment agreements (led by Peter Vassiliev and Wendy Schultz of the Firm's intellectual Property practice group);
(c) Material contracts review, including review of all contracts required to be disclosed on the Company Disclosure Schedule, with particular attention to the Kelvantis Lending Corp. Loan and Security Agreement dated August 15, 2022 (the "Kelvantis LSA") governing the existing $15,000,000 venture debt facility;
(d) Regulatory and compliance diligence, including analysis of money transmission licensing requirements, state-by-state licensing for Skybridge's payments orchestration platform, and any applicable federal regulatory requirements;
(e) Litigation and threatened claims review, including a survey of pending, threatened, or reasonably anticipated litigation, arbitration, or administrative proceedings;
(f) Employee and benefits review, including review of employment agreements, offer letters, independent contractor arrangements, employee benefit plans, and the most recent Section 409A fair market valuation of the Company's common stock (reported at $8.42 per share as of September 15, 2023, prepared by Atlas Valuation Services, Inc.), with an analysis of option pricing and the Company's approximately 310 full-time equivalent employees; and
(g) Insurance coverage review, including review of directors' and officers' liability insurance, errors and omissions coverage, cyber liability coverage, and general commercial liability policies.
Upon completion of the due diligence process, C&H will prepare a comprehensive due diligence summary and risk assessment memorandum for internal review and, as appropriate, for delivery to Skybridge management and the Board.
Drafting and Negotiation of Transaction Documents. C&H will prepare, negotiate, and finalize the following Transaction documents:
(a) Note Purchase Agreement (the "NPA"), through multiple drafts (initial draft, revised draft reflecting WPS comments, second revised draft, and execution version);
(b) Form of Convertible Promissory Note (initial draft and execution version);
(c) Schedule of Purchasers (initial and amended to reflect the Final Closing);
(d) Company Disclosure Schedule to the NPA;
(e) Subordination Agreement among Skybridge, the Investors, and Kelvantis Lending Corp. as senior lender (the "Subordination Agreement");
(f) Amendment No. 1 to the Amended and Restated Investors' Rights Agreement;
(g) Amendment No. 1 to the Right of First Refusal and Co-Sale Agreement;
(h) Escrow Agreement among Skybridge, the Investors, and Granite Trust Company, N.A. as escrow agent (the "Escrow Agreement"); and
(i) Joinder Agreement for any Purchasers joining at the Final Closing (anticipated: Northstar Innovation Fund II, L.P.).
Negotiation of the Transaction documents will be conducted principally with WPS (Graham Whitfield and Danielle Kwon) on behalf of Ridgeline Ventures and the investor syndicate.
Board and Stockholder Approval Documentation. C&H will prepare the unanimous written consent of the Board of Directors authorizing the Bridge Financing, a board presentation and summary of transaction terms, a written consent of stockholders in lieu of a special meeting pursuant to Section 228 of the Delaware General Corporation Law ("DGCL"), and the required Section 228 notice to non-consenting stockholders.
Closing Deliverables. C&H will prepare the closing checklist, secretary's certificate, officer's certificates (including representations bring-down and use of proceeds certifications), coordinate with the Delaware Secretary of State for good standing certificates, prepare a legal opinion (including internal assumptions and qualifications memorandum), draft wire transfer instructions and escrow release instructions for both the Initial Closing and the Final Closing, and prepare the funds flow memorandum.
Securities Law Compliance. C&H will conduct a Regulation D / Rule 506(b) private placement analysis, prepare and file the initial Form D with the U.S. Securities and Exchange Commission (target filing date: January 16, 2024) and a Form D amendment following the Final Closing, and prepare a blue sky / state notice filings memorandum for the applicable jurisdictions.
Delaware Corporate Law Analysis. C&H will prepare a memorandum analyzing the authorization of the Notes under DGCL Sections 152, 153, and 157, including an analysis of the Company's authorized and available shares of common and preferred stock sufficient to satisfy conversion of the Notes.
Tax Considerations Memorandum. C&H will prepare a memorandum addressing the federal income tax and Delaware franchise tax implications of the Bridge Financing for the Company and, to the extent requested, a summary of the tax treatment for Investors.
Lender Consent Process. C&H will coordinate with Kelvantis Lending Corp. (contact: Ted Marsh) to obtain the required lender consent and waiver under the Kelvantis LSA in connection with the issuance of the Notes and the execution of the Subordination Agreement.
Post-Closing Matters. C&H will compile and deliver closing binders, prepare a post-closing obligations reminder letter to the client, and handle any other matters arising within a reasonable period following the closing that are directly related to the Transaction.
Out-of-Scope Matters. This engagement does not include representation of Skybridge in any Series D equity financing round, which, if commenced, would be the subject of a separate engagement letter and a separate fee estimate. The anticipated timing for a Series D round is Q3–Q4 2024. This engagement also does not include ongoing corporate advisory services beyond post-closing obligations directly related to the Bridge Financing.
III. Staffing Plan Summary
A separate Staffing Plan Memorandum dated November 8, 2023 will follow this memorandum with full detail on timekeeper assignments, individual billing rates, anticipated availability windows, and work stream allocations. For purposes of this fee estimate and budget, the following key team members and their anticipated roles and estimated hours are set forth below:
Victoria Chambers — Responsible Partner, overall matter supervision and client relationship management. Victoria will serve as the primary point of contact for senior Skybridge management (Priya Ramanathan, General Counsel, and David Lindstrom, Chief Financial Officer) on engagement-level matters and will provide strategic oversight on all significant negotiation and drafting issues. Estimated hours: approximately 15–20 hours.
Howard Quinn — Billing Partner, billing oversight and fee administration. Howard will review all invoices prior to distribution to Skybridge, monitor hours against the fee cap, and serve as the internal point of contact on budgeting and billing inquiries. Estimated hours: approximately 5–10 hours.
Leonard Ashford — Of Counsel, Emerging Companies & Venture Capital, substantive corporate lead. Leonard will serve as the senior deal lawyer on the engagement, responsible for deal structuring advice, lead drafter of the NPA and other principal Transaction documents, lead negotiator with WPS, preparation of the legal opinion, and oversight of the Delaware corporate law, securities law, and tax memoranda. Estimated hours: approximately 80–100 hours.
Nina Reyes — Senior Associate, Emerging Companies & Venture Capital, primary drafter and coordinator. Nina will serve as the day-to-day project manager on the engagement, responsible for coordinating the due diligence process, preparing initial drafts of the form of Note, amendments to the IRA and ROFR/Co-Sale Agreement, Escrow Agreement, board and stockholder consent documents, closing deliverables (secretary's certificate, officer's certificates, closing checklist, funds flow memorandum), and securities law filings. Nina will also manage the closing process and closing binder compilation. Estimated hours: approximately 120–150 hours.
Peter Vassiliev — Lead Associate, intellectual Property, IP due diligence lead. Peter will lead the review of Skybridge's patent portfolio, trademark registrations, and other intellectual property assets and will prepare the IP section of the due diligence summary memorandum. Estimated hours: approximately 30–40 hours.
Wendy Schultz — Working Associate, intellectual Property, IP due diligence support. Wendy will support Peter Vassiliev on the IP due diligence review, including analysis of invention assignment agreements, trade secret protections, and domain name registrations. Estimated hours: approximately 20–30 hours.
The combined estimated hours across all timekeepers range from approximately 270 to 350 hours. The staffing plan is designed to ensure that the engagement can be completed within the $275,000 fee cap, taking into account the blended effective rate implied by the cap and the range of estimated hours.
Note regarding IP diligence scope: The scope of intellectual property due diligence for this engagement is provisional. An engagement letter amendment is anticipated to be executed on or about December 1, 2023, which will confirm the scope of IP diligence and any adjustments to the hours budgeted for Peter Vassiliev and Wendy Schultz. Until such time, the hours set forth above are budgeted provisionally within this estimate and are subject to revision.
IV. Fee Cap and Retainer
Fee Cap. The agreed fee cap for all legal fees in connection with the convertible note Bridge Financing is $275,000. This cap encompasses all work streams described in Section II of this memorandum, including but not limited to preliminary analysis and deal structuring, term sheet negotiation, due diligence, transaction document drafting and negotiation, board and stockholder approvals, closing and post-closing deliverables, securities law compliance, the lender consent process, and general matter administration and correspondence. The fee cap is exclusive of disbursements and third-party costs, which are addressed separately in Section VII below.
The fee cap was negotiated with Skybridge's General Counsel, Priya Ramanathan, and Chief Financial Officer, David Lindstrom, and is reflected in the C&H engagement letter executed on November 6, 2023. The fee cap represents a ceiling on C&H's legal fees for the Transaction; the Firm's actual fees may be less than the cap depending on the complexity of the negotiation, the volume of due diligence findings, and other factors discussed in Section VIII below.
Retainer. Skybridge has agreed to provide an advance retainer in the amount of $75,000, to be received by the Firm no later than November 15, 2023. The retainer will be deposited in the Firm's client trust account (IOLTA account) in accordance with applicable New York Rules of Professional Conduct. The retainer will be applied against the final invoice or invoices rendered in connection with the engagement. Monthly invoices will be rendered in the ordinary course and will draw against the retainer balance until the retainer is exhausted. Any remaining invoices will be payable by Skybridge within thirty (30) days of receipt.
Billing Rates. Standard C&H billing rates apply to all timekeepers on this matter, including partner, of counsel, senior associate, and associate rates. The specific billing rate for each timekeeper will be set forth in the Staffing Plan Memorandum dated November 8, 2023. The fee cap provides an effective ceiling on fees regardless of the aggregate hours expended, such that even if the product of hours worked and applicable billing rates were to exceed $275,000, the Firm's fees will not exceed $275,000 absent a change in scope as described below.
Scope Changes. If the matter scope changes materially during the course of the engagement, the fee cap may be revisited with the prior written consent of Skybridge. Examples of material scope changes that could warrant an adjustment to the fee cap include, without limitation:
(a) the emergence of significant litigation or threatened claims during the due diligence process requiring extensive remediation, additional legal memoranda, or restructuring of the Transaction;
(b) the addition of closings beyond the two-closing structure currently contemplated (i.e., the Initial Closing and the Final Closing);
(c) the emergence of regulatory complications — for example, a determination that additional money transmission licenses are required in states not currently contemplated, necessitating an extended regulatory engagement;
(d) the retention of separate counsel by one or more Investors, resulting in additional negotiation tracks; or
(e) a material acceleration of the Series D equity financing timeline such that the Series D preparatory work overlaps with, and becomes inseparable from, the Bridge Financing engagement.
In any such event, Leonard Ashford will promptly notify Victoria Chambers and Howard Quinn, and the team will prepare a revised budget estimate for client discussion and approval before any work in excess of the fee cap is commenced.
V. Budget Allocation by Work Stream
The following subsections set forth the estimated fee allocation for each of the principal work streams comprising the engagement. The estimates are based on the staffing plan described in Section III, the anticipated complexity of each work stream, and the Firm's experience with comparable convertible note bridge financings in the venture capital market. The total estimated fee range of $255,000 to $275,000 tracks to the agreed fee cap.
A. Preliminary Analysis & Strategy
This work stream encompasses the preparation of the initial deal structure memorandum for Skybridge management and the Board, the Delaware corporate law memorandum (analyzing authorization of the Notes under DGCL Sections 152, 153, and 157, including an analysis of available authorized shares), the securities law memorandum (addressing Regulation D / Rule 506(b) requirements, accredited investor verification procedures, and the prohibition on general solicitation), the tax considerations memorandum (federal income tax treatment of convertible debt instruments, original issue discount analysis, and Delaware franchise tax implications), the Kelvantis covenant analysis (identifying covenants in the Kelvantis LSA that may be implicated by the Bridge Financing, including negative covenants on additional indebtedness, liens, and subordination requirements), and a preliminary review of the Company's certificate of incorporation (as amended), bylaws, Amended and Restated Investors' Rights Agreement, and Right of First Refusal and Co-Sale Agreement to identify MFN, anti-dilution, preemptive right, and information right provisions that interact with or may be affected by the Bridge Financing. This phase will also include an analysis of the interaction between the Notes' conversion mechanics and the existing anti-dilution protections applicable to the Company's outstanding Series B and Series C preferred stock.
Estimated Allocation: $35,000 – $40,000
Primary Timekeepers: Leonard Ashford, Nina Reyes
B. Term Sheet Phase
This work stream encompasses the drafting of the initial non-binding term sheet, internal review and revision in consultation with Skybridge management, delivery of the initial draft to WPS, review and analysis of WPS markup, preparation of a redline summary memorandum for the client, and negotiation support through execution of the final term sheet. The target date for execution of the term sheet is December 4, 2023. This phase is expected to involve two to three rounds of comments and at least one conference call with WPS and the respective client teams.
Estimated Allocation: $15,000 – $20,000
Primary Timekeepers: Leonard Ashford, Nina Reyes
C. Due Diligence
This work stream encompasses the full scope of the due diligence investigation and is expected to be the most labor-intensive phase of the engagement on a timekeeper-hours basis. The principal components of the due diligence process are as follows:
Preparation and Delivery of Due Diligence Request Lists. C&H will prepare and deliver an initial due diligence request list to Skybridge management (anticipated delivery: within five business days of term sheet execution) and one or more supplemental request lists based on the results of the initial document review.
Corporate Diligence. This component includes a review of the Company's certificate of incorporation (as amended through the Third Amended and Restated Certificate of Incorporation filed in connection with the Series C Preferred Stock financing), bylaws, all board and stockholder resolutions, capitalization records (including a fully diluted capitalization table reflecting approximately 48,500,000 fully diluted shares on a pre-Bridge Financing basis, inclusive of outstanding common stock, Series A through Series C preferred stock on an as-converted basis, outstanding stock options, restricted stock units, and warrants), the Company's stock transfer ledger, equity incentive plan documents (including the 2019 Equity Incentive Plan, as amended), and all outstanding convertible instruments (including any prior SAFE agreements or convertible notes).
intellectual Property Diligence. This component, led by Peter Vassiliev and Wendy Schultz, includes a review of the Company's patent portfolio (including any pending patent applications), registered and common-law trademarks, trademark applications, copyright registrations, trade secret protection policies and procedures, domain name registrations, open-source software usage and compliance, and employee and contractor invention assignment and confidentiality agreements. Peter Vassiliev will prepare the IP section of the due diligence summary memorandum, including a risk assessment of any identified IP deficiencies.
Material Contracts Review. This component includes a review of all contracts required to be disclosed on the Company Disclosure Schedule, including the Kelvantis Lending Corp. Loan and Security Agreement dated August 15, 2022, customer agreements, vendor agreements, partnership and channel agreements, and any agreements containing change-of-control, anti-assignment, or consent-required provisions that may be triggered by the Bridge Financing or a subsequent equity financing.
Regulatory and Compliance Diligence. This component includes an analysis of federal and state regulatory requirements applicable to Skybridge's payments orchestration platform, including money transmission licensing (with a focus on the states in which Skybridge currently operates or is required to hold licenses), state-by-state payment processor registration requirements, and any applicable federal regulatory requirements under the Bank Secrecy Act, the Electronic Fund Transfer Act, or other applicable statutes.
Litigation and Threatened Claims Review. This component includes a review of all pending, threatened, or reasonably anticipated litigation, arbitration, or administrative proceedings involving the Company, as well as any pre-litigation demand letters, regulatory inquiries, or investigations.
Employee and Benefits Review. This component includes a review of key employment agreements, offer letter templates, independent contractor agreements, employee benefit plans (including the Company's 401(k) plan), equity compensation arrangements, and the most recent Section 409A fair market valuation of the Company's common stock (reported at $8.42 per share as of September 15, 2023, prepared by Atlas Valuation Services, Inc., contact: Martin Khoury). This review will encompass the Company's approximately 310 full-time equivalent employees and will include an analysis of any outstanding equity compensation grants that may give rise to Section 409A compliance issues.
Insurance Coverage Review. This component includes a review of the Company's directors' and officers' liability insurance, errors and omissions coverage, cyber liability coverage, and general commercial liability policies, with a focus on coverage adequacy and any exclusions that may be relevant to the Transaction or the Company's ongoing operations.
Due Diligence Summary and Risk Assessment Memorandum. Upon completion of the due diligence process, C&H will prepare a comprehensive due diligence summary and risk assessment memorandum consolidating the findings from each diligence area. This memorandum will be prepared for internal review and, as appropriate, for delivery to Skybridge management and the Board.
Estimated Allocation: $60,000 – $75,000
Primary Timekeepers: Nina Reyes (coordination, corporate, contracts, regulatory, litigation, employee/benefits, and insurance diligence); Peter Vassiliev and Wendy Schultz (Intellectual property diligence)
D. Transaction Document Drafting & Negotiation
This work stream encompasses the preparation, negotiation, and finalization of all principal Transaction documents. This is expected to be the most significant single work stream by dollar value, reflecting the extensive drafting, negotiation, and revision cycles typical of a convertible note bridge financing of this size and complexity.
The specific documents to be prepared under this work stream include:
(a) Note Purchase Agreement. C&H will prepare the initial draft of the NPA and anticipates at least four versions through the negotiation process: (i) the initial draft, (ii) a revised draft reflecting WPS's initial comments and markup, (iii) a second revised draft incorporating responses to WPS's follow-up comments and any client-directed revisions, and (iv) the execution version. The NPA will include customary representations and warranties of the Company, representations and warranties of the Purchasers, conditions to closing, covenants, and the Company Disclosure Schedule.
(b) Form of Convertible Promissory Note. C&H will prepare the initial draft of the form of Note (as an exhibit to the NPA) and the execution version. The Note will set forth the economic terms of the Bridge Financing, including the 6.00% per annum interest rate, the $750,000,000 pre-money valuation cap, the 20% conversion discount, the 24-month maturity, and the conversion mechanics upon a qualifying equity financing, change of control, or maturity.
(c) Schedule of Purchasers. C&H will prepare the initial Schedule of Purchasers setting forth each Purchaser's name, address, commitment amount, and wire transfer instructions, to be attached to the NPA. An amended Schedule of Purchasers will be prepared for the Final Closing to reflect the addition of any Purchasers not participating at the Initial Closing (anticipated: Northstar Innovation Fund II, L.P.).
(d) Company Disclosure Schedule. C&H will coordinate with Skybridge management and in-house counsel (Priya Ramanathan) to prepare the Company Disclosure Schedule to the NPA, organizing disclosed items by reference to the applicable representations and warranties.
(e) Subordination Agreement. C&H will prepare the Subordination Agreement among Skybridge, the Purchasers (as subordinated creditors), and Kelvantis Lending Corp. (as senior lender), establishing the subordination of the Notes to the Company's obligations under the Kelvantis LSA.
(f) Amendment No. 1 to Amended and Restated Investors' Rights Agreement. C&H will prepare an amendment to the IRA to add the Purchasers as parties and to make any conforming changes necessitated by the Bridge Financing, including information rights and registration rights provisions.
(g) Amendment No. 1 to Right of First Refusal and Co-Sale Agreement. C&H will prepare an amendment to the ROFR/Co-Sale Agreement to add the Purchasers as parties and to make any conforming changes necessitated by the Bridge Financing.
(h) Escrow Agreement. C&H will prepare the Escrow Agreement among Skybridge, the Purchasers, and Granite Trust Company, N.A. (contact: Angela Petrov) as escrow agent, governing the deposit, release, and distribution of escrowed funds in connection with the Initial Closing and the Final Closing.
(i) Joinder Agreement. C&H will prepare a form of Joinder Agreement for any Purchasers joining at the Final Closing (anticipated: Northstar Innovation Fund II, L.P.), providing for such Purchaser's joinder to the NPA and ancillary agreements.
Negotiation of the Transaction documents will be conducted primarily with WPS (Graham Whitfield and Danielle Kwon) on behalf of Ridgeline Ventures and the investor syndicate. The budget for this work stream assumes a customary negotiation cadence for a venture-stage convertible note financing, including two to three rounds of substantive markups on the NPA, one to two rounds on the form of Note and the Subordination Agreement, and one round on each of the ancillary documents.
Estimated Allocation: $80,000 – $95,000
Primary Timekeepers: Leonard Ashford, Nina Reyes
E. Board & Stockholder Approvals
This work stream encompasses the preparation of all corporate authorization documents required to approve the Bridge Financing under Delaware law and the Company's governing documents.
C&H will prepare and finalize a unanimous written consent of the Board of Directors of Skybridge authorizing the Bridge Financing, including the issuance of the Notes, the execution and delivery of the NPA and ancillary Transaction documents, and the appointment of officers authorized to execute and deliver such documents on behalf of the Company. C&H will also prepare a board presentation and summary of transaction terms for use by the Board in connection with its consideration of the Transaction.
In addition, C&H will prepare and finalize a written consent of stockholders in lieu of a special meeting, pursuant to Section 228 of the DGCL, to the extent that stockholder approval is required under the Company's certificate of incorporation, the IRA, the ROFR/Co-Sale Agreement, or other applicable agreements. Following execution of the stockholder consent, C&H will prepare and deliver the Section 228 notice to non-consenting stockholders as required by DGCL Section 228(e), informing such stockholders of the action taken by written consent without a meeting.
Estimated Allocation: $15,000 – $20,000
Primary Timekeepers: Nina Reyes, Leonard Ashford
F. Closing & Post-Closing
This work stream encompasses all activities related to the preparation for and execution of the closing of the Bridge Financing (including both the Initial Closing and the Final Closing) and post-closing deliverables and obligations.
Closing Preparation:
•  Closing checklist preparation and maintenance. C&H will prepare a comprehensive closing checklist identifying all conditions to closing, deliverables required from each party, and responsible parties, and will maintain the checklist through closing.
•  Secretary's certificate. C&H will prepare the secretary's certificate attaching certified copies of the Company's certificate of incorporation (as amended), bylaws, board resolutions, and stockholder consent, together with an incumbency certificate for the officers of the Company.
•  Officer's certificates. C&H will prepare officer's certificates, including a certificate of representations bring-down (confirming the accuracy of the Company's representations and warranties as of the closing date) and a use of proceeds certificate.
•  Good standing certificate coordination. C&H will coordinate with the Delaware Secretary of State to obtain a certificate of good standing for Skybridge as of a recent date prior to closing.
•  Legal opinion. C&H will prepare a legal opinion of company counsel addressed to the Purchasers, covering due organization, good standing, authorization, execution and delivery, enforceability, and non-contravention, together with any qualifications and assumptions customary in a transaction of this type. C&H will prepare an internal assumptions and qualifications memorandum in connection with the legal opinion.
•  Wire transfer instructions and escrow release instructions. C&H will prepare wire transfer instructions for the Purchasers and escrow release instructions for Granite Trust Company, N.A. in connection with both the Initial Closing and the Final Closing.
•  Funds flow memorandum. C&H will prepare a funds flow memorandum setting forth the sources and uses of funds at each closing, including the aggregate principal amount of Notes to be issued, investor counsel fee reimbursement, escrow agent fees, and net proceeds to Skybridge.
Lender Consent Coordination:
•  C&H will prepare and deliver a letter to Kelvantis Lending Corp. (Ted Marsh) requesting consent to the Bridge Financing and execution of the Subordination Agreement, and will review and negotiate the executed consent and waiver from Kelvantis.
Securities Law Filings:
•  Form D filing. C&H will prepare and file the initial Form D with the SEC (target filing date: January 16, 2024, within 15 days of the Initial Closing).
•  Form D amendment. C&H will prepare and file a Form D amendment following the Final Closing to update the aggregate offering amount and the number of purchasers.
•  Blue sky / state notice filings memorandum. C&H will prepare a memorandum identifying the applicable state blue sky or notice filing requirements in each relevant jurisdiction and will coordinate or prepare the required filings.
Post-Closing:
•  Closing binder compilation. C&H will compile closing binders (physical and electronic) containing executed copies of all Transaction documents, certificates, opinions, and ancillary deliverables, together with a table of contents and index.
•  Post-closing obligations reminder letter. C&H will prepare and deliver a letter to Skybridge management identifying any post-closing covenants, reporting obligations, or notice requirements arising under the NPA or ancillary agreements, and recommending calendar reminders for key dates and deadlines.
Estimated Allocation: $40,000 – $50,000
Primary Timekeepers: Nina Reyes, Leonard Ashford
G. Correspondence & General Matter Administration
This work stream encompasses all general correspondence, communications, and administrative activities related to the engagement that are not specifically allocated to one of the foregoing work streams, including:
•  Transmittal letters to WPS, to Kelvantis Lending Corp., to Granite Trust Company, N.A., and to the client;
•  Emails and telephone calls with Skybridge management and in-house counsel, including Priya Ramanathan (General Counsel), David Lindstrom (Chief Financial Officer), Arjun Mehta (Vice President, Corporate Development), and Marcus Tillman (Vice President, Finance);
•  Communications with opposing counsel at WPS (Graham Whitfield and Danielle Kwon);
•  Communications with Kelvantis Lending Corp. (Ted Marsh);
•  Communications with Granite Trust Company, N.A. (Angela Petrov);
•  Internal team coordination, including weekly deal team calls, status updates, and work allocation; and
•  General matter administration, including conflict checks, file maintenance, and time entry review.
Estimated Allocation: $10,000 – $15,000
Primary Timekeepers: All team members
Summary Table — Budget Allocation
The following table summarizes the estimated fee allocation by work stream:
The total estimated fee range of $255,000 to $275,000 tracks to the agreed fee cap of $275,000. The deal team will actively manage hours and staffing throughout the engagement to ensure that the Firm's actual fees remain within the cap. In the event that the team identifies early in the process that a particular work stream is trending above its estimated allocation, Leonard Ashford and Nina Reyes will confer with Victoria Chambers to determine whether reallocation from another work stream is appropriate or whether a scope change discussion with the client is warranted.
VI. Anticipated Investor Counsel Fee Reimbursement
Pursuant to the anticipated terms of the Note Purchase Agreement, Skybridge will be obligated to reimburse the reasonable legal fees and expenses of Whitfield, Pratt & Soo LLP ("WPS"), One Federal Street, 26th Floor, Boston, Massachusetts 02110, as counsel to the Lead Investor, Ridgeline Ventures Fund IV, L.P., and the investor syndicate, in connection with the Bridge Financing. The anticipated reimbursement cap is up to $125,000.
The WPS team working on this matter consists of Graham Whitfield (Lead Partner) and Danielle Kwon (Associate). It is expected that WPS will submit its invoice for reimbursement directly to Skybridge at or promptly following the closing, and that the reimbursement obligation will be netted against the closing proceeds (i.e., deducted from the aggregate subscription amounts prior to disbursement to Skybridge, as set forth in the funds flow memorandum).
This investor counsel fee reimbursement obligation is standard in venture capital and growth equity financings and is consistent with market practice for convertible note bridge rounds of this size. The final reimbursement cap amount will be confirmed in the execution version of the NPA. The team expects that this term will be largely non-controversial, as the $125,000 cap is within the range customary for a financing of this aggregate principal amount.
It is important to note that the WPS fee reimbursement is a direct obligation of Skybridge and is not included within the C&H fee cap of $275,000. The total legal cost to Skybridge for the Bridge Financing, inclusive of C&H fees, WPS reimbursement, and disbursements, is estimated at approximately $400,600 to $414,700 (calculated as $275,000 C&H fee cap + $125,000 WPS reimbursement cap + $10,600 to $14,700 estimated disbursements).
VII. Estimated Disbursements and Third-Party Costs
All disbursements and third-party costs incurred by C&H in connection with the Bridge Financing are in addition to the $275,000 fee cap and will be billed to Skybridge at cost. The following table sets forth the anticipated disbursements:
The escrow agent fee for Granite Trust Company, N.A. is a flat fee of $7,500 and is the largest single anticipated disbursement. This fee covers Granite Trust's services as escrow agent for both the Initial Closing and the Final Closing and includes standard document review and wire transfer processing fees. The escrow agent fee will be borne directly by Skybridge and may be netted from closing proceeds as set forth in the Escrow Agreement and funds flow memorandum.
State blue sky and notice filing fees are estimated at $1,000 to $3,000 in the aggregate, reflecting filings in Delaware, Massachusetts, Illinois, California, and Washington. The specific fees and filing requirements vary by state and will be confirmed in the blue sky / state notice filings memorandum prepared by C&H in connection with the closing.
Note regarding third-party vendor costs that are not C&H disbursements: The fees of Pinnacle Audit Group LLP (the Company's independent auditors; contact: Lisa Johannsen) and Atlas Valuation Services, Inc. (the Company's Section 409A valuation provider; contact: Martin Khoury) are not C&H disbursements. Those fees are direct Skybridge vendor relationships and will be invoiced directly by the respective service providers to Skybridge. C&H's budget does not include any allocation for the fees of Pinnacle Audit Group LLP or Atlas Valuation Services, Inc.
VIII. Key Assumptions and Risk Factors
The budget set forth in this memorandum is based on the following key assumptions. To the extent that any of these assumptions proves to be incorrect or any of the identified risk factors materializes, the estimated fee range and the adequacy of the fee cap may need to be reassessed:
1.  Two-Closing Structure. The budget assumes a two-closing structure consisting of an Initial Closing (targeted for mid-January 2024) and a Final Closing (targeted for approximately 30 to 45 days following the Initial Closing) to accommodate the anticipated participation of Northstar Innovation Fund II, L.P. and any other Purchasers that do not participate at the Initial Closing. Each closing will require standard closing deliverables, including officer's certificates, escrow release instructions, updated funds flow memorandum, and (for the Final Closing) an amended Schedule of Purchasers and a Form D amendment. If additional closings beyond the two currently contemplated are required, additional time and fees will be incurred.
2.  Single Investor-Side Counsel. The budget assumes that WPS will serve as the sole counsel for the entire investor syndicate, including Ridgeline Ventures Fund IV, L.P., Beacon Hill Capital Partners, LLC, Northstar Innovation Fund II, L.P., and Halcyon Growth Equity, L.P. If any individual Investor retains separate counsel, the resulting additional negotiation track(s) will increase the time required for document negotiation and may require additional drafts and revisions. This would have a direct impact on the Work Stream D allocation and could jeopardize the Firm's ability to stay within the fee cap.
3.  No Material Adverse Diligence Findings. The budget assumes that the due diligence process will not uncover material adverse findings that require extensive remediation, the preparation of additional legal memoranda not currently contemplated, or a restructuring of the Transaction. Examples of findings that could trigger additional work include undisclosed litigation, unresolved regulatory compliance deficiencies, material IP ownership gaps, or previously unknown tax liabilities. If such findings arise, the team will promptly inform Victoria Chambers and evaluate whether a revised budget and scope discussion with Skybridge is warranted.
4.  Timely Lender Consent. The budget assumes that Kelvantis Lending Corp. will provide the required lender consent and waiver under the Kelvantis LSA in a timely manner and without protracted negotiation. The Kelvantis consent process is budgeted to include the preparation and delivery of a consent request letter, one round of comments from Kelvantis (Ted Marsh), and the execution of the consent and waiver. If Kelvantis requires material modifications to the Subordination Agreement or imposes additional conditions on its consent, the resulting negotiation will increase the time and fees allocated to this work stream.
5.  Delaware Governing Law; No Multi-Jurisdictional Opinions. The budget assumes that Delaware law will govern the Transaction documents and that disputes will be subject to the exclusive jurisdiction of the Delaware Court of Chancery (or, if the Court of Chancery declines jurisdiction, the Superior Court of the State of Delaware, or the United States District Court for the District of Delaware). On this basis, the legal opinion will be limited to Delaware law, and no multi-jurisdictional legal opinions will be required. If the Transaction documents require the application of the laws of additional jurisdictions — for example, if the Escrow Agreement is governed by New York law and the Purchasers require a separate New York law opinion — additional opinion work will be required, potentially involving local counsel.
6.  Standard Reg D / Rule 506(b) Compliance. The budget assumes a standard Regulation D / Rule 506(b) private placement without general solicitation issues, "bad actor" disqualification issues, or integration concerns with prior or subsequent offerings. If any such issues arise, additional analysis and remediation will be required.
7.  Series D Timing. The budget assumes that the planned Series D equity financing round will not accelerate to overlap with the Bridge Financing engagement. If the Series D timeline accelerates and preparatory work for the Series D becomes necessary during the Bridge Financing engagement, separate staffing and budgeting will be required under a separate engagement letter.
8.  IP Diligence Scope. The IP diligence budget is provisional, as noted in Section III, pending confirmation of the scope of IP diligence under the anticipated engagement letter amendment. If the scope of IP diligence expands materially beyond the provisional allocation — for example, to include freedom-to-operate analyses, patent claim chart reviews, or extended open-source software compliance audits — the hours and fees allocated to Peter Vassiliev and Wendy Schultz will need to be adjusted.
IX. Billing and Invoice Schedule
C&H will render monthly invoices for legal fees and disbursements incurred in connection with the Bridge Financing. The first invoice is anticipated to cover the period from November 6, 2023, through November 30, 2023, and will be rendered on or about December 10, 2023. Subsequent invoices will be rendered on a calendar-month basis.
All invoices will be rendered to:
Skybridge Fintech Ltd. 1400 Market Street, Suite 2200 Wilmington, DE 19801
Attention: David Lindstrom, Chief Financial Officer, and Priya Ramanathan, General Counsel
The advance retainer of $75,000 will be applied against the final invoice or invoices rendered in connection with the engagement. Monthly invoices will draw against the retainer balance until the retainer is exhausted. Any remaining invoices will be payable by Skybridge within thirty (30) days of receipt.
Fee statements will include timekeeper-level detail, including each timekeeper's name, role, hours worked, applicable billing rate, and task descriptions coded to the work streams set forth in Section V of this memorandum (Work Streams A through G). This work stream coding will enable Skybridge and the C&H billing team to monitor the Firm's progress against the budget allocation for each work stream and to identify early any work streams that are trending above their estimated allocations.
Howard Quinn, as Billing Partner, will review all invoices prior to distribution to Skybridge to ensure accuracy, consistency with the engagement letter, and compliance with the fee cap.
Any amounts that would cause the aggregate fees billed to Skybridge in connection with the Bridge Financing to exceed the $275,000 fee cap require prior written approval from Skybridge before such amounts are invoiced. The deal team will proactively flag for Victoria Chambers and Howard Quinn any circumstances that suggest the fee cap may be approached or exceeded, and will not commence work in excess of the cap without client authorization.
X. Approval and Next Steps
We respectfully request that Victoria Chambers and Howard Quinn review and confirm the budget and allocation set forth in this memorandum at your earliest convenience. Upon approval, the budget will serve as the operative internal framework for managing fees and staffing on the engagement.
The following next steps are anticipated:
1.  Retainer Receipt (Target: November 15, 2023). Upon receipt of the $75,000 advance retainer from Skybridge, the Firm will proceed with substantive work on the preliminary analysis and deal structuring phase.
2.  Staffing Plan Memorandum (November 8, 2023). A separate Staffing Plan Memorandum will follow this memorandum within two business days, providing detailed information on timekeeper billing rates, anticipated availability and scheduling, and work stream assignments.
3.  First Substantive Deliverable — Preliminary Deal Structure Memorandum (Target: November 10, 2023). The first substantive deliverable to the client is anticipated to be the Preliminary Deal Structure Memorandum, which will outline the key economic and structural terms of the Bridge Financing, identify open business and legal points for client consideration, and set forth a proposed timeline and critical path for the Transaction.
4.  Engagement Letter Amendment — IP Diligence Scope (Target: December 1, 2023). An amendment to the engagement letter confirming the scope of IP due diligence and any associated adjustments to budgeted hours is anticipated to be executed on or about December 1, 2023.
5.  Term Sheet Execution (Target: December 4, 2023). The deal team will prepare the initial draft of the term sheet promptly following the preliminary analysis phase, with a target of term sheet execution by December 4, 2023.
We are available to discuss any aspect of this memorandum at your convenience and look forward to your confirmation so that we may proceed.
ACKNOWLEDGMENT AND APPROVAL
Prepared by:
LEONARD ASHFORD Of Counsel, Emerging Companies & Venture Capital Calderwood & Harkness LLP
Date: November 6, 2023
NINA REYES Senior Associate, Emerging Companies & Venture Capital Calderwood & Harkness LLP
Date: November 6, 2023
Approved by:
VICTORIA CHAMBERS Responsible Partner Calderwood & Harkness LLP
By: ________
Date: ________
HOWARD QUINN Billing Partner Calderwood & Harkness LLP
By: ________
Date: ________
Distribution: Internal only — Victoria Chambers, Howard Quinn, Leonard Ashford, Nina Reyes. This memorandum is privileged and confidential attorney work product and is not intended for distribution to the client or any third party.
Work Stream | Estimated Fee Range
A. Preliminary Analysis & Strategy | $35,000 – $40,000
B. Term Sheet Phase | $15,000 – $20,000
C. Due Diligence | $60,000 – $75,000
D. Transaction Document Drafting & Negotiation | $80,000 – $95,000
E. Board & Stockholder Approvals | $15,000 – $20,000
F. Closing & Post-Closing | $40,000 – $50,000
G. Correspondence & General Administration | $10,000 – $15,000
Total Estimated Range | $255,000 – $275,000
Item | Estimated Cost
Granite Trust Company, N.A. — escrow agent fee | $7,500 (flat fee, borne by Skybridge)
Delaware Secretary of State — good standing certificate(s) | $100 – $200
SEC Form D filing fee | No filing fee (electronic filing)
State blue sky / notice filing fees (DE, MA, IL, CA, WA) | $1,000 – $3,000 (varies by state)
Document reproduction, courier, and Severin Partners LLC | $500 – $1,000
Online research and database charges (Westmark Data Systems, Bramwell Health IT, state licensing databases) | $1,000 – $2,000
Closing binder production (physical and electronic) | $500 – $1,000
Total Estimated Disbursements | $10,600 – $14,700

MEMORANDUM

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT

ACKNOWLEDGMENT AND APPROVAL

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