1009-00001 · Skybridge Fintech Ltd · Term Sheet

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TERM SHEET — CONVERTIBLE NOTE BRIDGE FINANCING

EXECUTED — December 4, 2023

This Term Sheet is binding solely with respect to the provisions set forth in the section entitled "Binding Provisions" below. All other provisions are non-binding and are intended to summarize the principal terms of the proposed transaction.

This Term Sheet (this "Term Sheet") sets forth the principal terms and conditions under which the investors identified herein (collectively, the "Purchasers" and each individually, a "Purchaser") will purchase convertible promissory notes (the "Notes") from Skybridge Fintech Ltd., a Delaware corporation (the "Company"). The transaction contemplated hereby will be documented through the negotiation, execution, and delivery of a definitive Note Purchase Agreement (the "NPA") and related transaction documents, the forms and substance of which shall be mutually satisfactory to the Company and the Purchasers. Except as expressly set forth in Section 6 (Binding Provisions) below, this Term Sheet is a non-binding indication of the parties' intent and does not create any legally enforceable obligation on the part of any party to consummate the transactions described herein.

Date: December 4, 2023

Section 1: Summary of Principal Terms

1.1 Issuer / Company

Name: Skybridge Fintech Ltd., a corporation duly organized and existing under the laws of the State of Delaware.

Employer Identification Number (EIN): 83-2147605

Principal Office: 1400 Market Street, Suite 2200, Wilmington, DE 19801

Business Description: The Company operates a cloud-based payments orchestration and embedded lending platform designed to serve mid-market e-commerce companies. The Company's platform enables merchants to integrate multi-rail payment processing, real-time risk decisioning, and embedded credit products through a unified API layer, facilitating revenue growth and operational efficiency for its customer base.

1.2 Purchasers. The following investors (collectively, the "Purchasers") have indicated their commitment to purchase the Notes in the aggregate amounts and percentages set forth below:

Ridgeline Ventures Fund IV, L.P. shall serve as the "Lead Investor" for purposes of this Term Sheet and the definitive transaction documents, and shall have the rights and responsibilities customarily associated with such designation, including without limitation the right to negotiate the terms of the definitive agreements on behalf of the Purchasers (subject to the consent rights of each individual Purchaser as set forth therein).

The following Purchasers are existing stockholders of the Company: (i) Ridgeline Ventures Fund IV, L.P. is affiliated with Ridgeline Ventures Fund III, L.P., which participated as an investor in the Company's Series C Preferred Stock financing; (ii) Beacon Hill Capital Partners, LLC participated as an investor in the Company's Series C Preferred Stock financing; and (iii) Halcyon Growth Equity, L.P. served as the lead investor in the Company's Series B Preferred Stock financing.

Northstar Innovation Fund II, L.P. is a new investor in the Company and has not previously invested in any equity or debt securities of the Company.

1.3 Aggregate Principal Amount

The aggregate principal amount of the Notes to be issued and sold pursuant to this Term Sheet and the definitive NPA shall be $60,000,000 (sixty million dollars), allocated among the Purchasers as set forth in Section 1.2 above.

1.4 Type of Security

The securities to be issued in the transaction shall be convertible promissory notes of the Company, substantially in the form to be attached as an exhibit to the NPA. Each Note shall be a direct, unsecured (except as otherwise provided in the Subordination Agreement), subordinated obligation of the Company, subject to the terms and conditions described herein and in the definitive NPA.

1.5 Interest Rate

Each Note shall bear simple interest at a rate of 6.00% per annum (600 basis points), computed on the basis of a 365-day year and the actual number of days elapsed from and including the date of issuance through but excluding the date of conversion or repayment, as applicable. Interest shall accrue on the outstanding principal balance of each Note from the date of issuance and shall not be compounded at any time.

For reference, annual interest accrual on the full aggregate principal amount of $60,000,000 at the stated rate of 6.00% per annum equals $3,600,000.

No cash interest payments shall be due or payable prior to the Maturity Date or the earlier conversion or repayment of the Notes. All accrued and unpaid interest shall be payable (or convertible) at the time of conversion, maturity, or such earlier repayment event as described herein.

1.6 Maturity Date

The Notes shall mature on the date that is twenty-four (24) months from the Closing Date (as defined in Section 3.1 below) (the "Maturity Date"). Assuming an Initial Closing Date of January 15, 2024, the expected Maturity Date would be January 15, 2026.

The Notes shall not be subject to any scheduled amortization. All outstanding principal and accrued and unpaid interest shall be due and payable in full on the Maturity Date unless the Notes are earlier converted in accordance with the conversion terms set forth in Section 2 below or repaid in accordance with the terms of the definitive NPA.

1.7 Use of Proceeds

The proceeds from the sale of the Notes shall be used by the Company for general corporate purposes, including working capital needs, continued product development and platform enhancements, and such other operational expenses as determined by the Company's Board of Directors and management team, in each case consistent with the Company's approved operating plan. The Notes are intended to serve as bridge financing to the Company's planned Series D preferred stock equity financing round, which the Company currently anticipates completing in Q3–Q4 2024.

Section 2: Conversion Terms

2.1 Qualified Financing (Automatic Conversion)

A "Qualified Financing" shall mean a bona fide equity financing transaction in which the Company raises aggregate gross proceeds of at least $80,000,000 (eighty million dollars) from the sale and issuance of shares of its preferred stock to investors, in one or more closings, whether in a single round or a series of related transactions. For the avoidance of doubt, a Qualified Financing shall not include (i) the issuance of shares upon conversion of the Notes, (ii) the issuance of shares pursuant to the Company's equity incentive plan or upon exercise of warrants, or (iii) any issuance of debt securities.

Upon the closing of a Qualified Financing, all outstanding principal and accrued and unpaid interest under the Notes shall automatically convert, without any further action required on the part of any holder, into fully paid and non-assessable shares of the same class and series of preferred stock issued and sold to investors in the Qualified Financing, at the Conversion Price set forth in Section 2.2 below, and on the same terms and conditions (other than price) as those applicable to the investors in the Qualified Financing.

2.2 Conversion Price

Upon a Qualified Financing, the Notes shall convert into shares of preferred stock at a per-share price (the "Conversion Price") equal to the lower of:

(a) 80% of the per-share price paid by investors in the Qualified Financing (representing a 20% discount to the Qualified Financing price); or

(b) the per-share price implied by a pre-money valuation cap of $750,000,000 (seven hundred fifty million dollars) on a fully diluted basis (the "Cap-Implied Price").

The Cap-Implied Price per share is calculated by dividing the Valuation Cap ($750,000,000) by the total number of fully diluted shares of the Company outstanding immediately prior to the Qualified Financing. Based on the Company's current fully diluted capitalization of 48,500,000 shares, the Cap-Implied Price is approximately $15.46 per share ($750,000,000 ÷ 48,500,000 = $15.4639, rounded to two decimal places).

For purposes of this Term Sheet and the definitive NPA, "fully diluted basis" shall mean and include all outstanding shares of common stock, all outstanding shares of preferred stock (calculated on an as-converted-to-common-stock basis), all shares of common stock issuable upon exercise of outstanding options and warrants (whether or not then vested or exercisable), and all shares of common stock reserved for future issuance under the Company's 2021 Equity Incentive Plan (as amended from time to time), but excluding shares issuable upon conversion of the Notes.

2.3 Valuation Cap

The Notes shall be subject to a pre-money valuation cap of $750,000,000 (seven hundred fifty million dollars) (the "Valuation Cap"). The Valuation Cap shall be used to determine the Cap-Implied Price as described in Section 2.2(b) above and shall apply to all conversion scenarios in which the Cap-Implied Price is utilized, including automatic conversion upon a Qualified Financing and optional conversion at maturity.

2.4 Conversion discount

As described in Section 2.2(a), the Notes shall benefit from a 20% discount to the per-share price paid by investors in the Qualified Financing. The Conversion Price shall be the lower of the discounted price and the Cap-Implied Price, ensuring that holders of the Notes receive the more favorable of the two conversion mechanisms in all conversion scenarios.

2.5 Optional Conversion at Maturity

If no Qualified Financing has occurred on or prior to the Maturity Date, each holder of a Note may elect, at such holder's sole option and discretion, exercisable by written notice delivered to the Company no later than five (5) business days prior to the Maturity Date, to do either of the following:

(a) Convert all outstanding principal and accrued and unpaid interest under such holder's Note at the Cap-Implied Price (i.e., approximately $15.46 per share, based on the Company's current fully diluted capitalization) into fully paid and non-assessable shares of the most senior class of preferred stock of the Company then outstanding, with such shares carrying the same rights, preferences, privileges, and restrictions as the existing shares of such class of preferred stock, subject to any modifications mutually agreed upon between the Company and the converting holders; or

(b) Demand repayment of all outstanding principal plus all accrued and unpaid interest under such holder's Note in cash, payable by the Company to such holder within ten (10) business days following the Maturity Date by wire transfer of immediately available funds to an account designated by such holder.

If a holder fails to deliver a timely election notice, such holder shall be deemed to have elected repayment in cash pursuant to clause (b) above. In no event shall a holder be permitted to elect conversion with respect to a portion of its Note and repayment with respect to the remaining portion; each holder must elect conversion or repayment with respect to the entire outstanding principal and accrued interest of its Note.

2.6 Change of Control

In the event of a Change of Control (as such term will be defined in the definitive NPA) occurring prior to the conversion of the Notes, each holder of a Note shall be entitled to receive, at the closing of such Change of Control, a cash payment equal to the greater of:

(i) 2.0x the outstanding principal amount of such holder's Note, plus all accrued and unpaid interest thereon through and including the date of the closing of the Change of Control; or

(ii) the amount that would be payable to such holder if the outstanding principal and accrued interest under such holder's Note were converted into shares of preferred stock at the Cap-Implied Price and such shares were treated as shares of the applicable class of preferred stock for purposes of the distribution waterfall in the Change of Control transaction.

For illustrative purposes, if the 2.0x multiple in clause (i) above exceeds the value derived from the Cap-Implied Price conversion in clause (ii), the maximum aggregate Change of Control payment to all holders at the time of issuance (calculated solely on outstanding principal, excluding accrued interest) would be 2.0 × $60,000,000 = $120,000,000.

"Change of Control" shall be defined in the definitive NPA to include, without limitation: (A) any merger, consolidation, or other business combination of the Company with or into another entity in which the stockholders of the Company immediately prior to such transaction hold less than 50% of the voting power of the surviving or resulting entity immediately following such transaction; (B) the sale or transfer, in a single transaction or a series of related transactions, of all or substantially all of the assets of the Company; (C) the acquisition by any person or group (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) of beneficial ownership of more than 50% of the outstanding voting securities of the Company; and (D) the grant of an exclusive license or other arrangement with respect to all or substantially all of the Company's intellectual property or assets, in each case as further described in the definitive NPA.

Section 3: Closing Mechanics

3.1 Closings. The Company and the Purchasers anticipate that the issuance and sale of the Notes will be consummated in an Initial Closing and one or more subsequent closings (each, a "Subsequent Closing," and together with the Initial Closing, the "Closings"). The terms applicable to each closing are as follows:

Initial Closing. The initial closing (the "Initial Closing") is anticipated to occur on or about January 15, 2024 (the "Initial Closing Date"), subject to the satisfaction or waiver of the conditions to closing set forth in Section 4.8 below and in the definitive NPA. At the Initial Closing, the following Purchasers are anticipated to fund their respective commitment amounts as set forth below:

Subsequent / Final Closing. One or more Subsequent Closings (including a final closing, the "Final Closing") shall occur no later than fifteen (15) business days following the Initial Closing Date. At the Subsequent Closing(s), the following Purchasers are anticipated to fund the remaining commitment amounts as set forth below:

Notes issued at a Subsequent Closing shall be identical in form and substance to the Notes issued at the Initial Closing, except that the date of issuance (and accordingly the commencement of interest accrual) shall reflect the date of such Subsequent Closing.

3.2 Escrow. All closing funds to be paid by the Purchasers at each Closing shall be deposited by wire transfer of immediately available funds into an escrow account established and maintained by Granite Trust Company, N.A. (the "Escrow Agent") pursuant to an escrow agreement among the Company, the Purchasers, and the Escrow Agent (the "Escrow Agreement"). Funds held in escrow shall be released to the Company promptly upon the satisfaction (or waiver by the applicable parties) of all conditions to the applicable Closing as set forth in the definitive NPA and the Escrow Agreement. In the event that a Closing does not occur and the escrow is terminated, all escrowed funds shall be returned to the respective Purchasers, without interest or deduction.

The Escrow Agent's fee for its services under the Escrow Agreement shall be $7,500, which fee shall be borne solely by the Company.

3.3 Definitive Agreements

The transaction contemplated by this Term Sheet will be documented through the negotiation, execution, and delivery of the following definitive agreements and ancillary documents (collectively, the "Transaction Documents"):

(a) Note Purchase Agreement (the "NPA"), setting forth the terms and conditions of the issuance and sale of the Notes, including representations, warranties, covenants, conditions to closing, and related provisions;

(b) Form of Convertible Promissory Note, to be attached as an exhibit to the NPA, evidencing the obligations of the Company under each Note issued to a Purchaser;

(c) Schedule of Purchasers, identifying each Purchaser, its commitment amount, and its funding allocation between the Initial Closing and Subsequent Closing(s);

(d) Company Disclosure Schedule, setting forth the exceptions and qualifications to the Company's representations and warranties in the NPA;

(e) Subordination Agreement among the Company, the Purchasers (or a collateral agent or representative acting on their behalf), and Kelvantis Lending Corp., subordinating the Notes to the Company's existing venture debt facility with Kelvantis Lending Corp.;

(f) Amendment to Amended and Restated Investors' Rights Agreement, amending the Company's existing Amended and Restated Investors' Rights Agreement to, among other things, grant the holders of the Notes pro rata participation rights in the Qualified Financing and information rights as contemplated herein;

(g) Amendment to Right of First Refusal and Co-Sale Agreement, amending the Company's existing Right of First Refusal and Co-Sale Agreement to include the holders of Notes as parties thereto, to the extent applicable upon conversion;

(h) Escrow Agreement among the Company, the Purchasers, and Granite Trust Company, N.A., governing the deposit, holding, and release of the closing funds; and

(i) Such other documents, instruments, certificates, and agreements as may be reasonably required by the parties or their respective counsel to consummate the transactions contemplated hereby.

Section 4: Additional Terms

4.1 Subordination. The Notes shall be subordinated in right of payment to the Company's existing $15,000,000 venture debt facility with Kelvantis Lending Corp. pursuant to the Loan and Security Agreement between the Company and Kelvantis Lending Corp. dated August 15, 2022 (as amended, restated, or otherwise modified from time to time, the "Kelvantis Facility"). The subordination of the Notes shall be governed by a Subordination Agreement to be entered into among the Company, the Purchasers (or a collateral agent or representative acting on their behalf), and Kelvantis Lending Corp., in form and substance reasonably satisfactory to Kelvantis Lending Corp., the Company, and the Lead Investor. The Subordination Agreement shall contain customary terms providing for the subordination of the Notes to the Kelvantis Facility with respect to the payment of principal, interest, and other amounts, and shall restrict the rights of the holders of the Notes to receive payments on or enforce their rights under the Notes during the continuance of an event of default under the Kelvantis Facility, in each case as more fully set forth therein.

4.2 Lender Consent

Prior to the Initial Closing, the Company shall obtain the written consent and waiver of Kelvantis Lending Corp. with respect to (i) the issuance and sale of the Notes, (ii) the incurrence of the indebtedness evidenced by the Notes, (iii) the execution and delivery of the Subordination Agreement, and (iv) any other matters requiring the consent or waiver of Kelvantis Lending Corp. under the Kelvantis Facility in connection with the transactions contemplated hereby (collectively, the "Kelvantis Consent"). The Kelvantis Consent shall be in form and substance reasonably satisfactory to the Company and the Lead Investor.

4.3 Most Favored Nation (MFN)

If, after the date of execution and delivery of the NPA and prior to the conversion or repayment in full of all outstanding Notes, the Company issues any convertible promissory notes, simple agreements for future equity (SAFEs), or other convertible debt or equity-linked instruments to any person or entity on terms that are, taken as a whole, more favorable to the holders thereof than the terms of the Notes (including, without limitation, a lower valuation cap, a higher conversion discount, a higher interest rate, additional conversion triggers, or more favorable change of control terms), then each holder of a Note shall have the right, upon written notice to the Company, to amend the terms of its Note to incorporate such more favorable terms. The Company shall provide each holder of a Note with prompt written notice (and, in any event, not later than five (5) business days following such issuance) of the issuance of any such instrument, together with a copy of such instrument and a summary of the material terms thereof.

4.4 Information Rights

The Company shall provide the following financial information and reporting to each holder of Notes holding an outstanding principal amount in excess of $5,000,000 (each, a "Major Holder"), for so long as such holder's Notes remain outstanding:

(a) Annual Audited Financial Statements. Within one hundred twenty (120) days following the end of each fiscal year, annual audited financial statements of the Company, prepared in accordance with generally accepted accounting principles consistently applied ("GAAP") and audited by Pinnacle Audit Group LLP, the Company's independent registered public accounting firm, including a balance sheet, income statement, statement of cash flows, and statement of changes in stockholders' equity, together with the report of the independent auditors thereon.

(b) Quarterly Unaudited Financial Statements. Within forty-five (45) days following the end of each fiscal quarter (other than the final fiscal quarter of the fiscal year), unaudited financial statements of the Company, prepared in accordance with GAAP (subject to year-end adjustments and the absence of footnotes), including a balance sheet, income statement, and statement of cash flows.

(c) Annual Budget and Operating Plan. Within thirty (30) days following the approval by the Board of Directors, the Company's annual budget and operating plan for the ensuing fiscal year, including projected revenue, expenses, capital expenditures, and cash flow.

(d) Notice of Material Adverse Events. Prompt written notice (and, in any event, not later than five (5) business days following the occurrence thereof) of any event, circumstance, or development that has had, or would reasonably be expected to have, a material adverse effect on the business, operations, financial condition, or prospects of the Company.

4.5 Board Observer Rights

The Lead Investor (Ridgeline Ventures Fund IV, L.P.) shall be entitled to designate one (1) non-voting board observer (the "Observer") to attend all meetings (including telephonic and video meetings) of the Company's Board of Directors and to receive all materials and information provided to the members of the Board of Directors in connection therewith; provided, however, that the Company shall have the right to exclude the Observer from any portion of any meeting, and to withhold any materials, if the Board of Directors reasonably determines that such exclusion or withholding is necessary to preserve the attorney-client privilege or to address a conflict of interest. This right shall not apply to the extent that the Lead Investor already holds a designated board seat through an affiliated entity, including through Ridgeline Ventures Fund III, L.P., in which case the Lead Investor's existing board representation shall be deemed to satisfy this provision.

4.6 Preemptive / Pro Rata Rights

Each holder of Notes shall have the right to participate, on a pro rata basis, in the Qualified Financing (anticipated to be the Company's Series D Preferred Stock financing), based on such holder's as-converted ownership percentage immediately following the conversion of the Notes. Such pro rata participation rights shall be set forth in the Amendment to the Amended and Restated Investors' Rights Agreement and shall be subject to the terms and conditions contained therein, including customary limitations, exceptions, and oversubscription mechanics.

4.7 Representations and Warranties

The definitive NPA shall contain the following representations and warranties:

Representations and Warranties of the Company. The NPA shall contain customary representations and warranties of the Company with respect to the following matters, among others, subject to the qualifications and exceptions set forth in the Company Disclosure Schedule:

(a) due organization, valid existence, and good standing; (b) corporate power and authority to execute, deliver, and perform the NPA and the other Transaction Documents; (c) due authorization and enforceability; (d) no conflicts with organizational documents, material agreements, or applicable law; (e) capitalization, including a fully diluted capitalization table; (f) accuracy of financial statements; (g) absence of undisclosed liabilities; (h) ownership and sufficiency of intellectual property; (i) material contracts; (j) compliance with applicable laws and regulations; (k) absence of pending or threatened litigation; (l) tax matters; (m) employee and labor matters; (n) environmental matters (to the extent applicable); (o) absence of a material adverse change since September 30, 2023; (p) insurance; and (q) such other representations and warranties as are customary in transactions of this nature.

Representations and Warranties of the Purchasers. The NPA shall contain customary representations and warranties of each Purchaser with respect to the following matters, among others:

(a) status as an "accredited investor" within the meaning of Rule 501(a) of Regulation D under the Securities Act of 1933, as amended; (b) investment intent and agreement not to distribute the Notes or the shares of preferred stock issuable upon conversion thereof in violation of applicable securities laws; (c) authority and capacity to execute, deliver, and perform the NPA; (d) receipt of sufficient information to make an informed investment decision; and (e) such other representations and warranties as are customary in transactions of this nature.

4.8 Conditions to Closing

The obligation of each Purchaser to purchase its Note(s) at each Closing shall be subject to the satisfaction (or waiver by the applicable Purchaser) of the following conditions:

(a) Execution and delivery of the NPA and all ancillary Transaction Documents by all parties thereto;

(b) Approval of the transaction and the issuance of the Notes by the Company's Board of Directors;

(c) Stockholder approval of the transaction to the extent required under applicable law (including the Delaware General Corporation Law) and the Company's Certificate of Incorporation, Bylaws, and any applicable stockholders' agreements;

(d) Receipt by the Company of the Kelvantis Consent, in form and substance reasonably satisfactory to the Lead Investor;

(e) Delivery to the Purchasers of a legal opinion of Calderwood & Harkness LLP, counsel to the Company, in form and substance reasonably satisfactory to investor counsel, addressing customary matters including due organization, authorization, enforceability, no conflicts, and compliance with securities laws;

(f) Delivery to the Purchasers of a Secretary's Certificate of the Company, certifying the Company's Certificate of Incorporation, Bylaws, and resolutions of the Board of Directors and stockholders (if applicable) authorizing the transaction, and an Officer's Certificate of the Company, certifying the accuracy of the Company's representations and warranties and satisfaction of closing conditions;

(g) Delivery to the Purchasers of a Good Standing Certificate of the Company issued by the Delaware Secretary of State, dated not more than five (5) business days prior to the applicable Closing Date;

(h) Execution and delivery of the Escrow Agreement by the Company, the Purchasers, and Granite Trust Company, N.A.;

(i) Satisfactory completion of legal, financial, business, and technical due diligence by the Purchasers and their respective advisors; and

(j) Since September 30, 2023, there shall not have occurred any event, circumstance, or development that has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, operations, assets, liabilities, financial condition, or prospects of the Company (a "Material Adverse Change").

Section 5: Other Provisions

5.1 Governing Law

This Term Sheet, and any disputes arising hereunder or in connection herewith, shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice-of-law or conflict-of-law rules or provisions that would cause the application of the laws of any other jurisdiction.

5.2 Dispute Resolution

Each party irrevocably and unconditionally submits to the exclusive jurisdiction of (i) the Court of Chancery of the State of Delaware or, if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, the Superior Court of the State of Delaware, or (ii) the United States District Court for the District of Delaware, for the purpose of any action, suit, or proceeding arising out of or relating to this Term Sheet, and each party irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim, or otherwise, any objection that it is not subject to the jurisdiction of the above-named courts, that the venue of any such action, suit, or proceeding is improper, or that this Term Sheet or the subject matter hereof may not be enforced in or by such courts.

5.3 Legal Counsel

Company Counsel: Calderwood & Harkness LLP, 600 Lexington Avenue, New York, NY 10022

Investor Counsel: Whitfield, Pratt & Soo LLP, One Federal Street, 26th Floor, Boston, MA 02110

5.4 Legal Fees and Expenses

The Company shall bear its own legal fees and expenses incurred in connection with the negotiation, execution, and delivery of this Term Sheet, the definitive NPA, and all other Transaction Documents, including all fees and expenses of Calderwood & Harkness LLP, counsel to the Company.

The Company shall reimburse the Purchasers for the reasonable and documented out-of-pocket legal fees and expenses of investor counsel, Whitfield, Pratt & Soo LLP, incurred in connection with the negotiation, execution, and delivery of this Term Sheet, the definitive NPA, and all other Transaction Documents, in an aggregate amount not to exceed $125,000. Such reimbursement shall be payable at the Initial Closing by wire transfer of immediately available funds to an account designated by investor counsel, or, if the Closings do not occur, within thirty (30) days following written demand by investor counsel.

The Company shall bear the Escrow Agent's fee of $7,500 payable to Granite Trust Company, N.A. under the Escrow Agreement, as described in Section 3.2 above.

5.5 Confidentiality. This Term Sheet and all negotiations, discussions, correspondence, and other communications relating hereto and to the transactions contemplated hereby are strictly confidential and may not be disclosed by any party hereto, in whole or in part, to any person or entity, except (i) to such party's directors, officers, employees, members, partners, counsel, accountants, financial advisors, and other professional advisors who have a reasonable need to know such information in connection with the transactions contemplated hereby and who are bound by obligations of confidentiality, and (ii) as required by applicable law, regulation, or legal process, provided that the disclosing party shall use commercially reasonable efforts to provide the other parties with prompt prior written notice of any such required disclosure (to the extent legally permissible) and shall cooperate with the other parties in seeking a protective order or other appropriate remedy to limit the scope of such disclosure. This confidentiality obligation shall survive the termination or expiration of this Term Sheet.

Section 6: Binding Provisions

Notwithstanding the non-binding nature of the other provisions of this Term Sheet, the following provisions shall constitute binding and enforceable obligations of the parties upon execution of this Term Sheet by the Company and the Lead Investor (and, with respect to the co-investors, upon their respective acknowledgment and agreement hereto):

(a) Confidentiality (Section 5.5);

(b) Governing Law (Section 5.1);

(c) Legal Fees and Expenses (Section 5.4), including the Company's obligation to reimburse the reasonable legal fees and expenses of investor counsel (Whitfield, Pratt & Soo LLP) in an amount not to exceed $125,000; and

(d) Exclusivity. The Company agrees that for a period of forty-five (45) days following the date of execution of this Term Sheet (the "Exclusivity Period"), the Company shall not, and shall cause its directors, officers, employees, agents, and representatives not to, directly or indirectly, (i) solicit, initiate, or encourage the submission of any proposal or offer from any person or entity (other than the Purchasers and their affiliates) relating to any debt financing, equity financing, or other capital-raising transaction (other than the Company's planned Series D Preferred Stock financing and the transactions contemplated by the Kelvantis Facility), (ii) participate in any discussions or negotiations regarding, or furnish to any third party any information with respect to, any such alternative proposal or transaction, or (iii) enter into any agreement, arrangement, or understanding relating to any such alternative proposal or transaction. The Company shall promptly notify the Lead Investor if the Company receives any unsolicited proposal or indication of interest relating to any such alternative transaction.

All other provisions of this Term Sheet are non-binding indications of the parties' current intent and are subject in all respects to the negotiation, execution, and delivery of mutually satisfactory definitive agreements. No party shall have any obligation to consummate the transactions described herein (other than with respect to the binding provisions set forth in this Section 6) unless and until the definitive NPA and all other Transaction Documents have been fully negotiated, executed, and delivered by all parties thereto.

6.1 Expiration. This Term Sheet shall expire and be of no further force or effect (other than with respect to the binding provisions set forth in Section 6 above, which shall survive in accordance with their terms) if the definitive NPA and the other Transaction Documents are not executed and delivered by all parties thereto on or before February 15, 2024, unless such date is extended by the mutual written agreement of the Company and the Lead Investor.

[Remainder of page intentionally left blank. Signature page follows.]

SIGNATURE PAGE TO TERM SHEET — CONVERTIBLE NOTE BRIDGE FINANCING

IN WITNESS WHEREOF, the undersigned parties have executed this Term Sheet as of the date first written above, intending to be bound solely by the provisions identified in Section 6 (Binding Provisions) hereof.

COMPANY:

SKYBRIDGE FINTECH LTD.

By: ________

Name: Arjun Mehta

Title: Chief Executive Officer & Co-Founder

Date: December 4, 2023

LEAD INVESTOR (signing on behalf of the investor syndicate):

RIDGELINE VENTURES FUND IV, L.P.

By: Ridgeline Ventures Management IV, LLC, its General Partner

By: ________

Name: Samuel Okonkwo

Title: Partner

Date: December 4, 2023

ACKNOWLEDGED AND AGREED — CO-INVESTORS

Each of the undersigned co-investors hereby acknowledges and agrees to the terms and conditions of this Term Sheet, including the binding provisions set forth in Section 6 hereof.

BEACON HILL CAPITAL PARTNERS, LLC

By: ________

Name: Joanna Falkner

Title: Managing Director

Date: December 4, 2023

NORTHSTAR INNOVATION FUND II, L.P.

By: Northstar Innovation GP II, LLC, its General Partner

By: ________

Name: Wei-Lin Chang

Title: Managing Partner

Date: December 4, 2023

HALCYON GROWTH EQUITY, L.P.

By: Halcyon Growth Management, LLC, its General Partner

By: ________

Name: Robert "Rob" Castillo

Title: Partner

Date: December 4, 2023

Purchaser	Commitment Amount	Percentage of Total
Ridgeline Ventures Fund IV, L.P. (Lead Investor)	$30,000,000	50.00%
Beacon Hill Capital Partners, LLC	$15,000,000	25.00%
Northstar Innovation Fund II, L.P.	$10,000,000	16.67%
Halcyon Growth Equity, L.P.	$5,000,000	8.33%
Total	$60,000,000	100.00%
Purchaser	Initial Closing Funding
Ridgeline Ventures Fund IV, L.P.	$30,000,000
Beacon Hill Capital Partners, LLC	$10,000,000
Halcyon Growth Equity, L.P.	$5,000,000
Subtotal — Initial Closing	$45,000,000
Purchaser	Subsequent Closing Funding
Beacon Hill Capital Partners, LLC	$5,000,000
Northstar Innovation Fund II, L.P.	$10,000,000
Subtotal — Subsequent Closing(s)	$15,000,000

TERM SHEET — CONVERTIBLE NOTE BRIDGE FINANCING
EXECUTED — December 4, 2023
This Term Sheet is binding solely with respect to the provisions set forth in the section entitled "Binding Provisions" below. All other provisions are non-binding and are intended to summarize the principal terms of the proposed transaction.
This Term Sheet (this "Term Sheet") sets forth the principal terms and conditions under which the investors identified herein (collectively, the "Purchasers" and each individually, a "Purchaser") will purchase convertible promissory notes (the "Notes") from Skybridge Fintech Ltd., a Delaware corporation (the "Company"). The transaction contemplated hereby will be documented through the negotiation, execution, and delivery of a definitive Note Purchase Agreement (the "NPA") and related transaction documents, the forms and substance of which shall be mutually satisfactory to the Company and the Purchasers. Except as expressly set forth in Section 6 (Binding Provisions) below, this Term Sheet is a non-binding indication of the parties' intent and does not create any legally enforceable obligation on the part of any party to consummate the transactions described herein.
Date: December 4, 2023
Section 1: Summary of Principal Terms
1.1 Issuer / Company
Name: Skybridge Fintech Ltd., a corporation duly organized and existing under the laws of the State of Delaware.
Employer Identification Number (EIN): 83-2147605
Principal Office: 1400 Market Street, Suite 2200, Wilmington, DE 19801
Business Description: The Company operates a cloud-based payments orchestration and embedded lending platform designed to serve mid-market e-commerce companies. The Company's platform enables merchants to integrate multi-rail payment processing, real-time risk decisioning, and embedded credit products through a unified API layer, facilitating revenue growth and operational efficiency for its customer base.
1.2 Purchasers.  The following investors (collectively, the "Purchasers") have indicated their commitment to purchase the Notes in the aggregate amounts and percentages set forth below:
Ridgeline Ventures Fund IV, L.P. shall serve as the "Lead Investor" for purposes of this Term Sheet and the definitive transaction documents, and shall have the rights and responsibilities customarily associated with such designation, including without limitation the right to negotiate the terms of the definitive agreements on behalf of the Purchasers (subject to the consent rights of each individual Purchaser as set forth therein).
The following Purchasers are existing stockholders of the Company: (i) Ridgeline Ventures Fund IV, L.P. is affiliated with Ridgeline Ventures Fund III, L.P., which participated as an investor in the Company's Series C Preferred Stock financing; (ii) Beacon Hill Capital Partners, LLC participated as an investor in the Company's Series C Preferred Stock financing; and (iii) Halcyon Growth Equity, L.P. served as the lead investor in the Company's Series B Preferred Stock financing.
Northstar Innovation Fund II, L.P. is a new investor in the Company and has not previously invested in any equity or debt securities of the Company.
1.3 Aggregate Principal Amount
The aggregate principal amount of the Notes to be issued and sold pursuant to this Term Sheet and the definitive NPA shall be $60,000,000 (sixty million dollars), allocated among the Purchasers as set forth in Section 1.2 above.
1.4 Type of Security
The securities to be issued in the transaction shall be convertible promissory notes of the Company, substantially in the form to be attached as an exhibit to the NPA. Each Note shall be a direct, unsecured (except as otherwise provided in the Subordination Agreement), subordinated obligation of the Company, subject to the terms and conditions described herein and in the definitive NPA.
1.5 Interest Rate
Each Note shall bear simple interest at a rate of 6.00% per annum (600 basis points), computed on the basis of a 365-day year and the actual number of days elapsed from and including the date of issuance through but excluding the date of conversion or repayment, as applicable. Interest shall accrue on the outstanding principal balance of each Note from the date of issuance and shall not be compounded at any time.
For reference, annual interest accrual on the full aggregate principal amount of $60,000,000 at the stated rate of 6.00% per annum equals $3,600,000.
No cash interest payments shall be due or payable prior to the Maturity Date or the earlier conversion or repayment of the Notes. All accrued and unpaid interest shall be payable (or convertible) at the time of conversion, maturity, or such earlier repayment event as described herein.
1.6 Maturity Date
The Notes shall mature on the date that is twenty-four (24) months from the Closing Date (as defined in Section 3.1 below) (the "Maturity Date"). Assuming an Initial Closing Date of January 15, 2024, the expected Maturity Date would be January 15, 2026.
The Notes shall not be subject to any scheduled amortization. All outstanding principal and accrued and unpaid interest shall be due and payable in full on the Maturity Date unless the Notes are earlier converted in accordance with the conversion terms set forth in Section 2 below or repaid in accordance with the terms of the definitive NPA.
1.7 Use of Proceeds
The proceeds from the sale of the Notes shall be used by the Company for general corporate purposes, including working capital needs, continued product development and platform enhancements, and such other operational expenses as determined by the Company's Board of Directors and management team, in each case consistent with the Company's approved operating plan. The Notes are intended to serve as bridge financing to the Company's planned Series D preferred stock equity financing round, which the Company currently anticipates completing in Q3–Q4 2024.
Section 2: Conversion Terms
2.1 Qualified Financing (Automatic Conversion)
A "Qualified Financing" shall mean a bona fide equity financing transaction in which the Company raises aggregate gross proceeds of at least $80,000,000 (eighty million dollars) from the sale and issuance of shares of its preferred stock to investors, in one or more closings, whether in a single round or a series of related transactions. For the avoidance of doubt, a Qualified Financing shall not include (i) the issuance of shares upon conversion of the Notes, (ii) the issuance of shares pursuant to the Company's equity incentive plan or upon exercise of warrants, or (iii) any issuance of debt securities.
Upon the closing of a Qualified Financing, all outstanding principal and accrued and unpaid interest under the Notes shall automatically convert, without any further action required on the part of any holder, into fully paid and non-assessable shares of the same class and series of preferred stock issued and sold to investors in the Qualified Financing, at the Conversion Price set forth in Section 2.2 below, and on the same terms and conditions (other than price) as those applicable to the investors in the Qualified Financing.
2.2 Conversion Price
Upon a Qualified Financing, the Notes shall convert into shares of preferred stock at a per-share price (the "Conversion Price") equal to the lower of:
(a) 80% of the per-share price paid by investors in the Qualified Financing (representing a 20% discount to the Qualified Financing price); or
(b) the per-share price implied by a pre-money valuation cap of $750,000,000 (seven hundred fifty million dollars) on a fully diluted basis (the "Cap-Implied Price").
The Cap-Implied Price per share is calculated by dividing the Valuation Cap ($750,000,000) by the total number of fully diluted shares of the Company outstanding immediately prior to the Qualified Financing. Based on the Company's current fully diluted capitalization of 48,500,000 shares, the Cap-Implied Price is approximately $15.46 per share ($750,000,000 ÷ 48,500,000 = $15.4639, rounded to two decimal places).
For purposes of this Term Sheet and the definitive NPA, "fully diluted basis" shall mean and include all outstanding shares of common stock, all outstanding shares of preferred stock (calculated on an as-converted-to-common-stock basis), all shares of common stock issuable upon exercise of outstanding options and warrants (whether or not then vested or exercisable), and all shares of common stock reserved for future issuance under the Company's 2021 Equity Incentive Plan (as amended from time to time), but excluding shares issuable upon conversion of the Notes.
2.3 Valuation Cap
The Notes shall be subject to a pre-money valuation cap of $750,000,000 (seven hundred fifty million dollars) (the "Valuation Cap"). The Valuation Cap shall be used to determine the Cap-Implied Price as described in Section 2.2(b) above and shall apply to all conversion scenarios in which the Cap-Implied Price is utilized, including automatic conversion upon a Qualified Financing and optional conversion at maturity.
2.4 Conversion discount
As described in Section 2.2(a), the Notes shall benefit from a 20% discount to the per-share price paid by investors in the Qualified Financing. The Conversion Price shall be the lower of the discounted price and the Cap-Implied Price, ensuring that holders of the Notes receive the more favorable of the two conversion mechanisms in all conversion scenarios.
2.5 Optional Conversion at Maturity
If no Qualified Financing has occurred on or prior to the Maturity Date, each holder of a Note may elect, at such holder's sole option and discretion, exercisable by written notice delivered to the Company no later than five (5) business days prior to the Maturity Date, to do either of the following:
(a) Convert all outstanding principal and accrued and unpaid interest under such holder's Note at the Cap-Implied Price (i.e., approximately $15.46 per share, based on the Company's current fully diluted capitalization) into fully paid and non-assessable shares of the most senior class of preferred stock of the Company then outstanding, with such shares carrying the same rights, preferences, privileges, and restrictions as the existing shares of such class of preferred stock, subject to any modifications mutually agreed upon between the Company and the converting holders; or
(b) Demand repayment of all outstanding principal plus all accrued and unpaid interest under such holder's Note in cash, payable by the Company to such holder within ten (10) business days following the Maturity Date by wire transfer of immediately available funds to an account designated by such holder.
If a holder fails to deliver a timely election notice, such holder shall be deemed to have elected repayment in cash pursuant to clause (b) above. In no event shall a holder be permitted to elect conversion with respect to a portion of its Note and repayment with respect to the remaining portion; each holder must elect conversion or repayment with respect to the entire outstanding principal and accrued interest of its Note.
2.6 Change of Control
In the event of a Change of Control (as such term will be defined in the definitive NPA) occurring prior to the conversion of the Notes, each holder of a Note shall be entitled to receive, at the closing of such Change of Control, a cash payment equal to the greater of:
(i) 2.0x the outstanding principal amount of such holder's Note, plus all accrued and unpaid interest thereon through and including the date of the closing of the Change of Control; or
(ii) the amount that would be payable to such holder if the outstanding principal and accrued interest under such holder's Note were converted into shares of preferred stock at the Cap-Implied Price and such shares were treated as shares of the applicable class of preferred stock for purposes of the distribution waterfall in the Change of Control transaction.
For illustrative purposes, if the 2.0x multiple in clause (i) above exceeds the value derived from the Cap-Implied Price conversion in clause (ii), the maximum aggregate Change of Control payment to all holders at the time of issuance (calculated solely on outstanding principal, excluding accrued interest) would be 2.0 × $60,000,000 = $120,000,000.
"Change of Control" shall be defined in the definitive NPA to include, without limitation: (A) any merger, consolidation, or other business combination of the Company with or into another entity in which the stockholders of the Company immediately prior to such transaction hold less than 50% of the voting power of the surviving or resulting entity immediately following such transaction; (B) the sale or transfer, in a single transaction or a series of related transactions, of all or substantially all of the assets of the Company; (C) the acquisition by any person or group (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) of beneficial ownership of more than 50% of the outstanding voting securities of the Company; and (D) the grant of an exclusive license or other arrangement with respect to all or substantially all of the Company's intellectual property or assets, in each case as further described in the definitive NPA.
Section 3: Closing Mechanics
3.1 Closings.  The Company and the Purchasers anticipate that the issuance and sale of the Notes will be consummated in an Initial Closing and one or more subsequent closings (each, a "Subsequent Closing," and together with the Initial Closing, the "Closings"). The terms applicable to each closing are as follows:
Initial Closing. The initial closing (the "Initial Closing") is anticipated to occur on or about January 15, 2024 (the "Initial Closing Date"), subject to the satisfaction or waiver of the conditions to closing set forth in Section 4.8 below and in the definitive NPA. At the Initial Closing, the following Purchasers are anticipated to fund their respective commitment amounts as set forth below:
Subsequent / Final Closing. One or more Subsequent Closings (including a final closing, the "Final Closing") shall occur no later than fifteen (15) business days following the Initial Closing Date. At the Subsequent Closing(s), the following Purchasers are anticipated to fund the remaining commitment amounts as set forth below:
Notes issued at a Subsequent Closing shall be identical in form and substance to the Notes issued at the Initial Closing, except that the date of issuance (and accordingly the commencement of interest accrual) shall reflect the date of such Subsequent Closing.
3.2 Escrow.  All closing funds to be paid by the Purchasers at each Closing shall be deposited by wire transfer of immediately available funds into an escrow account established and maintained by Granite Trust Company, N.A. (the "Escrow Agent") pursuant to an escrow agreement among the Company, the Purchasers, and the Escrow Agent (the "Escrow Agreement"). Funds held in escrow shall be released to the Company promptly upon the satisfaction (or waiver by the applicable parties) of all conditions to the applicable Closing as set forth in the definitive NPA and the Escrow Agreement. In the event that a Closing does not occur and the escrow is terminated, all escrowed funds shall be returned to the respective Purchasers, without interest or deduction.
The Escrow Agent's fee for its services under the Escrow Agreement shall be $7,500, which fee shall be borne solely by the Company.
3.3 Definitive Agreements
The transaction contemplated by this Term Sheet will be documented through the negotiation, execution, and delivery of the following definitive agreements and ancillary documents (collectively, the "Transaction Documents"):
(a) Note Purchase Agreement (the "NPA"), setting forth the terms and conditions of the issuance and sale of the Notes, including representations, warranties, covenants, conditions to closing, and related provisions;
(b) Form of Convertible Promissory Note, to be attached as an exhibit to the NPA, evidencing the obligations of the Company under each Note issued to a Purchaser;
(c) Schedule of Purchasers, identifying each Purchaser, its commitment amount, and its funding allocation between the Initial Closing and Subsequent Closing(s);
(d) Company Disclosure Schedule, setting forth the exceptions and qualifications to the Company's representations and warranties in the NPA;
(e) Subordination Agreement among the Company, the Purchasers (or a collateral agent or representative acting on their behalf), and Kelvantis Lending Corp., subordinating the Notes to the Company's existing venture debt facility with Kelvantis Lending Corp.;
(f) Amendment to Amended and Restated Investors' Rights Agreement, amending the Company's existing Amended and Restated Investors' Rights Agreement to, among other things, grant the holders of the Notes pro rata participation rights in the Qualified Financing and information rights as contemplated herein;
(g) Amendment to Right of First Refusal and Co-Sale Agreement, amending the Company's existing Right of First Refusal and Co-Sale Agreement to include the holders of Notes as parties thereto, to the extent applicable upon conversion;
(h) Escrow Agreement among the Company, the Purchasers, and Granite Trust Company, N.A., governing the deposit, holding, and release of the closing funds; and
(i) Such other documents, instruments, certificates, and agreements as may be reasonably required by the parties or their respective counsel to consummate the transactions contemplated hereby.
Section 4: Additional Terms
4.1 Subordination.  The Notes shall be subordinated in right of payment to the Company's existing $15,000,000 venture debt facility with Kelvantis Lending Corp. pursuant to the Loan and Security Agreement between the Company and Kelvantis Lending Corp. dated August 15, 2022 (as amended, restated, or otherwise modified from time to time, the "Kelvantis Facility"). The subordination of the Notes shall be governed by a Subordination Agreement to be entered into among the Company, the Purchasers (or a collateral agent or representative acting on their behalf), and Kelvantis Lending Corp., in form and substance reasonably satisfactory to Kelvantis Lending Corp., the Company, and the Lead Investor. The Subordination Agreement shall contain customary terms providing for the subordination of the Notes to the Kelvantis Facility with respect to the payment of principal, interest, and other amounts, and shall restrict the rights of the holders of the Notes to receive payments on or enforce their rights under the Notes during the continuance of an event of default under the Kelvantis Facility, in each case as more fully set forth therein.
4.2 Lender Consent
Prior to the Initial Closing, the Company shall obtain the written consent and waiver of Kelvantis Lending Corp. with respect to (i) the issuance and sale of the Notes, (ii) the incurrence of the indebtedness evidenced by the Notes, (iii) the execution and delivery of the Subordination Agreement, and (iv) any other matters requiring the consent or waiver of Kelvantis Lending Corp. under the Kelvantis Facility in connection with the transactions contemplated hereby (collectively, the "Kelvantis Consent"). The Kelvantis Consent shall be in form and substance reasonably satisfactory to the Company and the Lead Investor.
4.3 Most Favored Nation (MFN)
If, after the date of execution and delivery of the NPA and prior to the conversion or repayment in full of all outstanding Notes, the Company issues any convertible promissory notes, simple agreements for future equity (SAFEs), or other convertible debt or equity-linked instruments to any person or entity on terms that are, taken as a whole, more favorable to the holders thereof than the terms of the Notes (including, without limitation, a lower valuation cap, a higher conversion discount, a higher interest rate, additional conversion triggers, or more favorable change of control terms), then each holder of a Note shall have the right, upon written notice to the Company, to amend the terms of its Note to incorporate such more favorable terms. The Company shall provide each holder of a Note with prompt written notice (and, in any event, not later than five (5) business days following such issuance) of the issuance of any such instrument, together with a copy of such instrument and a summary of the material terms thereof.
4.4 Information Rights
The Company shall provide the following financial information and reporting to each holder of Notes holding an outstanding principal amount in excess of $5,000,000 (each, a "Major Holder"), for so long as such holder's Notes remain outstanding:
(a) Annual Audited Financial Statements. Within one hundred twenty (120) days following the end of each fiscal year, annual audited financial statements of the Company, prepared in accordance with generally accepted accounting principles consistently applied ("GAAP") and audited by Pinnacle Audit Group LLP, the Company's independent registered public accounting firm, including a balance sheet, income statement, statement of cash flows, and statement of changes in stockholders' equity, together with the report of the independent auditors thereon.
(b) Quarterly Unaudited Financial Statements. Within forty-five (45) days following the end of each fiscal quarter (other than the final fiscal quarter of the fiscal year), unaudited financial statements of the Company, prepared in accordance with GAAP (subject to year-end adjustments and the absence of footnotes), including a balance sheet, income statement, and statement of cash flows.
(c) Annual Budget and Operating Plan. Within thirty (30) days following the approval by the Board of Directors, the Company's annual budget and operating plan for the ensuing fiscal year, including projected revenue, expenses, capital expenditures, and cash flow.
(d) Notice of Material Adverse Events. Prompt written notice (and, in any event, not later than five (5) business days following the occurrence thereof) of any event, circumstance, or development that has had, or would reasonably be expected to have, a material adverse effect on the business, operations, financial condition, or prospects of the Company.
4.5 Board Observer Rights
The Lead Investor (Ridgeline Ventures Fund IV, L.P.) shall be entitled to designate one (1) non-voting board observer (the "Observer") to attend all meetings (including telephonic and video meetings) of the Company's Board of Directors and to receive all materials and information provided to the members of the Board of Directors in connection therewith; provided, however, that the Company shall have the right to exclude the Observer from any portion of any meeting, and to withhold any materials, if the Board of Directors reasonably determines that such exclusion or withholding is necessary to preserve the attorney-client privilege or to address a conflict of interest. This right shall not apply to the extent that the Lead Investor already holds a designated board seat through an affiliated entity, including through Ridgeline Ventures Fund III, L.P., in which case the Lead Investor's existing board representation shall be deemed to satisfy this provision.
4.6 Preemptive / Pro Rata Rights
Each holder of Notes shall have the right to participate, on a pro rata basis, in the Qualified Financing (anticipated to be the Company's Series D Preferred Stock financing), based on such holder's as-converted ownership percentage immediately following the conversion of the Notes. Such pro rata participation rights shall be set forth in the Amendment to the Amended and Restated Investors' Rights Agreement and shall be subject to the terms and conditions contained therein, including customary limitations, exceptions, and oversubscription mechanics.
4.7 Representations and Warranties
The definitive NPA shall contain the following representations and warranties:
Representations and Warranties of the Company. The NPA shall contain customary representations and warranties of the Company with respect to the following matters, among others, subject to the qualifications and exceptions set forth in the Company Disclosure Schedule:
(a) due organization, valid existence, and good standing; (b) corporate power and authority to execute, deliver, and perform the NPA and the other Transaction Documents; (c) due authorization and enforceability; (d) no conflicts with organizational documents, material agreements, or applicable law; (e) capitalization, including a fully diluted capitalization table; (f) accuracy of financial statements; (g) absence of undisclosed liabilities; (h) ownership and sufficiency of intellectual property; (i) material contracts; (j) compliance with applicable laws and regulations; (k) absence of pending or threatened litigation; (l) tax matters; (m) employee and labor matters; (n) environmental matters (to the extent applicable); (o) absence of a material adverse change since September 30, 2023; (p) insurance; and (q) such other representations and warranties as are customary in transactions of this nature.
Representations and Warranties of the Purchasers. The NPA shall contain customary representations and warranties of each Purchaser with respect to the following matters, among others:
(a) status as an "accredited investor" within the meaning of Rule 501(a) of Regulation D under the Securities Act of 1933, as amended; (b) investment intent and agreement not to distribute the Notes or the shares of preferred stock issuable upon conversion thereof in violation of applicable securities laws; (c) authority and capacity to execute, deliver, and perform the NPA; (d) receipt of sufficient information to make an informed investment decision; and (e) such other representations and warranties as are customary in transactions of this nature.
4.8 Conditions to Closing
The obligation of each Purchaser to purchase its Note(s) at each Closing shall be subject to the satisfaction (or waiver by the applicable Purchaser) of the following conditions:
(a) Execution and delivery of the NPA and all ancillary Transaction Documents by all parties thereto;
(b) Approval of the transaction and the issuance of the Notes by the Company's Board of Directors;
(c) Stockholder approval of the transaction to the extent required under applicable law (including the Delaware General Corporation Law) and the Company's Certificate of Incorporation, Bylaws, and any applicable stockholders' agreements;
(d) Receipt by the Company of the Kelvantis Consent, in form and substance reasonably satisfactory to the Lead Investor;
(e) Delivery to the Purchasers of a legal opinion of Calderwood & Harkness LLP, counsel to the Company, in form and substance reasonably satisfactory to investor counsel, addressing customary matters including due organization, authorization, enforceability, no conflicts, and compliance with securities laws;
(f) Delivery to the Purchasers of a Secretary's Certificate of the Company, certifying the Company's Certificate of Incorporation, Bylaws, and resolutions of the Board of Directors and stockholders (if applicable) authorizing the transaction, and an Officer's Certificate of the Company, certifying the accuracy of the Company's representations and warranties and satisfaction of closing conditions;
(g) Delivery to the Purchasers of a Good Standing Certificate of the Company issued by the Delaware Secretary of State, dated not more than five (5) business days prior to the applicable Closing Date;
(h) Execution and delivery of the Escrow Agreement by the Company, the Purchasers, and Granite Trust Company, N.A.;
(i) Satisfactory completion of legal, financial, business, and technical due diligence by the Purchasers and their respective advisors; and
(j) Since September 30, 2023, there shall not have occurred any event, circumstance, or development that has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, operations, assets, liabilities, financial condition, or prospects of the Company (a "Material Adverse Change").
Section 5: Other Provisions
5.1 Governing Law
This Term Sheet, and any disputes arising hereunder or in connection herewith, shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice-of-law or conflict-of-law rules or provisions that would cause the application of the laws of any other jurisdiction.
5.2 Dispute Resolution
Each party irrevocably and unconditionally submits to the exclusive jurisdiction of (i) the Court of Chancery of the State of Delaware or, if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, the Superior Court of the State of Delaware, or (ii) the United States District Court for the District of Delaware, for the purpose of any action, suit, or proceeding arising out of or relating to this Term Sheet, and each party irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim, or otherwise, any objection that it is not subject to the jurisdiction of the above-named courts, that the venue of any such action, suit, or proceeding is improper, or that this Term Sheet or the subject matter hereof may not be enforced in or by such courts.
5.3 Legal Counsel
Company Counsel: Calderwood & Harkness LLP, 600 Lexington Avenue, New York, NY 10022
Investor Counsel: Whitfield, Pratt & Soo LLP, One Federal Street, 26th Floor, Boston, MA 02110
5.4 Legal Fees and Expenses
The Company shall bear its own legal fees and expenses incurred in connection with the negotiation, execution, and delivery of this Term Sheet, the definitive NPA, and all other Transaction Documents, including all fees and expenses of Calderwood & Harkness LLP, counsel to the Company.
The Company shall reimburse the Purchasers for the reasonable and documented out-of-pocket legal fees and expenses of investor counsel, Whitfield, Pratt & Soo LLP, incurred in connection with the negotiation, execution, and delivery of this Term Sheet, the definitive NPA, and all other Transaction Documents, in an aggregate amount not to exceed $125,000. Such reimbursement shall be payable at the Initial Closing by wire transfer of immediately available funds to an account designated by investor counsel, or, if the Closings do not occur, within thirty (30) days following written demand by investor counsel.
The Company shall bear the Escrow Agent's fee of $7,500 payable to Granite Trust Company, N.A. under the Escrow Agreement, as described in Section 3.2 above.
5.5 Confidentiality.  This Term Sheet and all negotiations, discussions, correspondence, and other communications relating hereto and to the transactions contemplated hereby are strictly confidential and may not be disclosed by any party hereto, in whole or in part, to any person or entity, except (i) to such party's directors, officers, employees, members, partners, counsel, accountants, financial advisors, and other professional advisors who have a reasonable need to know such information in connection with the transactions contemplated hereby and who are bound by obligations of confidentiality, and (ii) as required by applicable law, regulation, or legal process, provided that the disclosing party shall use commercially reasonable efforts to provide the other parties with prompt prior written notice of any such required disclosure (to the extent legally permissible) and shall cooperate with the other parties in seeking a protective order or other appropriate remedy to limit the scope of such disclosure. This confidentiality obligation shall survive the termination or expiration of this Term Sheet.
Section 6: Binding Provisions
Notwithstanding the non-binding nature of the other provisions of this Term Sheet, the following provisions shall constitute binding and enforceable obligations of the parties upon execution of this Term Sheet by the Company and the Lead Investor (and, with respect to the co-investors, upon their respective acknowledgment and agreement hereto):
(a) Confidentiality (Section 5.5);
(b) Governing Law (Section 5.1);
(c) Legal Fees and Expenses (Section 5.4), including the Company's obligation to reimburse the reasonable legal fees and expenses of investor counsel (Whitfield, Pratt & Soo LLP) in an amount not to exceed $125,000; and
(d) Exclusivity. The Company agrees that for a period of forty-five (45) days following the date of execution of this Term Sheet (the "Exclusivity Period"), the Company shall not, and shall cause its directors, officers, employees, agents, and representatives not to, directly or indirectly, (i) solicit, initiate, or encourage the submission of any proposal or offer from any person or entity (other than the Purchasers and their affiliates) relating to any debt financing, equity financing, or other capital-raising transaction (other than the Company's planned Series D Preferred Stock financing and the transactions contemplated by the Kelvantis Facility), (ii) participate in any discussions or negotiations regarding, or furnish to any third party any information with respect to, any such alternative proposal or transaction, or (iii) enter into any agreement, arrangement, or understanding relating to any such alternative proposal or transaction. The Company shall promptly notify the Lead Investor if the Company receives any unsolicited proposal or indication of interest relating to any such alternative transaction.
All other provisions of this Term Sheet are non-binding indications of the parties' current intent and are subject in all respects to the negotiation, execution, and delivery of mutually satisfactory definitive agreements. No party shall have any obligation to consummate the transactions described herein (other than with respect to the binding provisions set forth in this Section 6) unless and until the definitive NPA and all other Transaction Documents have been fully negotiated, executed, and delivered by all parties thereto.
6.1 Expiration.  This Term Sheet shall expire and be of no further force or effect (other than with respect to the binding provisions set forth in Section 6 above, which shall survive in accordance with their terms) if the definitive NPA and the other Transaction Documents are not executed and delivered by all parties thereto on or before February 15, 2024, unless such date is extended by the mutual written agreement of the Company and the Lead Investor.
[Remainder of page intentionally left blank. Signature page follows.]
SIGNATURE PAGE TO TERM SHEET — CONVERTIBLE NOTE BRIDGE FINANCING
IN WITNESS WHEREOF, the undersigned parties have executed this Term Sheet as of the date first written above, intending to be bound solely by the provisions identified in Section 6 (Binding Provisions) hereof.
COMPANY:
SKYBRIDGE FINTECH LTD.
By: ________
Name: Arjun Mehta
Title: Chief Executive Officer & Co-Founder
Date: December 4, 2023
LEAD INVESTOR (signing on behalf of the investor syndicate):
RIDGELINE VENTURES FUND IV, L.P.
By: Ridgeline Ventures Management IV, LLC, its General Partner
By: ________
Name: Samuel Okonkwo
Title: Partner
Date: December 4, 2023
ACKNOWLEDGED AND AGREED — CO-INVESTORS
Each of the undersigned co-investors hereby acknowledges and agrees to the terms and conditions of this Term Sheet, including the binding provisions set forth in Section 6 hereof.
BEACON HILL CAPITAL PARTNERS, LLC
By: ________
Name: Joanna Falkner
Title: Managing Director
Date: December 4, 2023
NORTHSTAR INNOVATION FUND II, L.P.
By: Northstar Innovation GP II, LLC, its General Partner
By: ________
Name: Wei-Lin Chang
Title: Managing Partner
Date: December 4, 2023
HALCYON GROWTH EQUITY, L.P.
By: Halcyon Growth Management, LLC, its General Partner
By: ________
Name: Robert "Rob" Castillo
Title: Partner
Date: December 4, 2023
Purchaser | Commitment Amount | Percentage of Total
Ridgeline Ventures Fund IV, L.P. (Lead Investor) | $30,000,000 | 50.00%
Beacon Hill Capital Partners, LLC | $15,000,000 | 25.00%
Northstar Innovation Fund II, L.P. | $10,000,000 | 16.67%
Halcyon Growth Equity, L.P. | $5,000,000 | 8.33%
Total | $60,000,000 | 100.00%
Purchaser | Initial Closing Funding
Ridgeline Ventures Fund IV, L.P. | $30,000,000
Beacon Hill Capital Partners, LLC | $10,000,000
Halcyon Growth Equity, L.P. | $5,000,000
Subtotal — Initial Closing | $45,000,000
Purchaser | Subsequent Closing Funding
Beacon Hill Capital Partners, LLC | $5,000,000
Northstar Innovation Fund II, L.P. | $10,000,000
Subtotal — Subsequent Closing(s) | $15,000,000

TERM SHEET — CONVERTIBLE NOTE BRIDGE FINANCING

COMPANY:

SKYBRIDGE FINTECH LTD.

RIDGELINE VENTURES FUND IV, L.P.

BEACON HILL CAPITAL PARTNERS, LLC

NORTHSTAR INNOVATION FUND II, L.P.

HALCYON GROWTH EQUITY, L.P.

Record

Parties

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