1009-00001 · Skybridge Fintech Ltd · Transaction Documents/Note

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EXHIBIT A

TO THE NOTE PURCHASE AGREEMENT

CONVERTIBLE PROMISSORY NOTE

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

Issuer: Skybridge Fintech Ltd., a Delaware corporation Principal Office: 1400 Market Street, Suite 2200, Wilmington, DE 19801

Skybridge Fintech Ltd., a Delaware corporation (the "Company"), for value received, hereby promises to pay to _____ or its registered assigns (the "**Holder**"), the principal sum of _____ Dollars ($______), together with accrued and unpaid interest thereon, each due and payable as set forth below in accordance with the terms of this Convertible Promissory Note (this "Note").

This Note is one of a series of Convertible Promissory Notes (collectively, the "Notes") issued pursuant to that certain Note Purchase Agreement, dated as of January 15, 2024 (as amended, restated, supplemented, or otherwise modified from time to time, the "Note Purchase Agreement"), by and among the Company and the Purchasers named therein, in the aggregate principal amount of up to Sixty Million Dollars ($60,000,000). The Notes are being issued in one or more closings as set forth in the Note Purchase Agreement, and Notes issued at the Final Closing (as defined in the Note Purchase Agreement) shall bear a Date of Issuance of January 26, 2024.

Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Note Purchase Agreement.

Section 1. Interest

1.1 Interest Rate. Interest shall accrue on the outstanding principal amount of this Note at the rate of six percent (6.00%) per annum (600 basis points), commencing on the Date of Issuance set forth above and continuing until this Note is converted, repaid, or otherwise satisfied in full in accordance with its terms.

1.2 Simple Interest. Interest on this Note shall be computed on the basis of simple interest (and shall not compound) and shall be calculated on the basis of a three hundred sixty-five (365) day year and the actual number of days elapsed during the period for which interest is being calculated. For purposes of illustration only, the annual interest accrual on the full aggregate principal amount of Sixty Million Dollars ($60,000,000) under all outstanding Notes would equal Three Million Six Hundred Thousand Dollars ($3,600,000) per year.

1.3 Payment of Interest. Interest shall not be payable in cash during the term of this Note. All accrued and unpaid interest shall be payable at the Maturity Date (as defined in Section 2 below), or upon conversion of this Note in accordance with Section 3 below, as applicable. For the avoidance of doubt, all accrued and unpaid interest shall be included in any conversion of this Note into equity securities of the Company and shall be treated in the same manner as outstanding principal for purposes of determining the number of shares issuable upon conversion.

Section 2. Maturity

2.1 Maturity Date. The outstanding principal amount of this Note, together with all accrued and unpaid interest thereon, shall be due and payable in full on January 15, 2026 (the "Maturity Date"), which date is twenty-four (24) months from the date of the Initial Closing under the Note Purchase Agreement, unless this Note is earlier converted or repaid in accordance with the terms hereof. There shall be no scheduled amortization of this Note; all principal and accrued and unpaid interest shall be due and payable in a single bullet payment on the Maturity Date (subject to the conversion and prepayment provisions set forth herein).

2.2 Business Day Convention. If the Maturity Date falls on a day that is not a Business Day (as defined below), payment shall be due on the next succeeding Business Day and no additional interest shall accrue during such extension. For purposes of this Note, "Business Day" means any day other than a Saturday, a Sunday, or a day on which banks in Wilmington, Delaware or New York, New York are authorized or required by law or executive order to close.

Section 3. Conversion

Section 3.1. Automatic Conversion upon Qualified Financing

(a) Definition of Qualified Financing. For purposes of this Note, a "Qualified Financing" means a bona fide equity financing of the Company (including, without limitation, a Series D Preferred Stock financing) in which the Company raises at least Eighty Million Dollars ($80,000,000) in aggregate gross proceeds from the sale and issuance of shares of its Preferred Stock (exclusive of any amounts raised through the conversion of the Notes or any other convertible securities of the Company then outstanding). For the avoidance of doubt, the aggregate gross proceeds threshold shall be measured by reference to cash actually received by the Company from investors other than holders of the Notes converting such Notes into equity securities of the Company in connection with such financing.

(b) Automatic Conversion. Upon the closing of a Qualified Financing, all outstanding principal and all accrued and unpaid interest under this Note shall automatically convert, without any further action on the part of the Holder, into shares of the series of Preferred Stock sold in such Qualified Financing (the "Qualified Financing Securities"). Such conversion shall be deemed to have occurred immediately prior to and contingent upon the closing of such Qualified Financing.

(c) Conversion Price. The price per share at which this Note shall convert upon a Qualified Financing (the "Conversion Price") shall be the lower of:

(i) eighty percent (80%) of the price per share paid by the other investors in the Qualified Financing for the Qualified Financing Securities (i.e., a twenty percent (20%) discount to the price per share paid by such investors in the Qualified Financing) (the "discount Price"); or

(ii) the price per share obtained by dividing the Valuation Cap of Seven Hundred Fifty Million Dollars ($750,000,000) by the Company's fully diluted capitalization immediately prior to the closing of the Qualified Financing (the "Cap Price").

For purposes of illustration only, based on a pre-bridge fully diluted share count of approximately 48,500,000 shares of the Company's capital stock, the Cap Price would equal approximately $15.46 per share ($750,000,000 ÷ 48,500,000 = ~$15.46). The actual Cap Price shall be calculated based on the Company's fully diluted capitalization as of immediately prior to the closing of the applicable Qualified Financing and may differ from this illustrative amount.

(d) Number of Shares. The number of shares of Qualified Financing Securities issuable to the Holder upon conversion of this Note pursuant to this Section 3.1 shall be equal to the quotient obtained by dividing (x) the sum of all outstanding principal and all accrued and unpaid interest under this Note as of the date of conversion, by (y) the applicable Conversion Price determined in accordance with Section 3.1(c) above.

(e) Rights of Converted Shares. The shares of Qualified Financing Securities issued to the Holder upon conversion of this Note shall carry the same rights, preferences, privileges, and restrictions as the shares of Qualified Financing Securities issued to the other investors in such Qualified Financing, except that the conversion price and original issue price for such shares (for purposes of the certificate of incorporation and any investors' rights agreement, right of first refusal and co-sale agreement, or voting agreement entered into in connection with the Qualified Financing) shall be the Conversion Price determined in accordance with Section 3.1(c) above rather than the price per share paid by the other investors.

Section 3.2. Optional Conversion at Maturity

(a) Holder Election. If no Qualified Financing has occurred on or before the Maturity Date, the Holder may elect, at the Holder's sole option, by written notice delivered to the Company no later than five (5) Business Days prior to the Maturity Date, to either:

(i) convert all outstanding principal and all accrued and unpaid interest under this Note into shares of the Company's Common Stock (or, if one or more classes of Preferred Stock are then outstanding, the most senior series of Preferred Stock then authorized and outstanding) at a price per share equal to the Cap Price (i.e., $750,000,000 divided by the Company's fully diluted capitalization immediately prior to such conversion); or

(ii) demand repayment of all outstanding principal plus all accrued and unpaid interest under this Note in cash on the Maturity Date.

(b) Failure to Elect. If the Holder fails to deliver a timely election notice in accordance with Section 3.2(a) above, this Note shall be repaid in cash on the Maturity Date in an amount equal to all outstanding principal plus all accrued and unpaid interest thereon. For the avoidance of doubt, the Holder's failure to deliver an election notice shall be deemed an election to receive repayment in cash.

(c) Form of Election Notice. The Holder's election notice shall be in writing, shall specify the election made by the Holder (conversion or cash repayment), and shall be delivered to the Company in accordance with Section 14 of this Note.

Section 3.3. Conversion upon Change of Control

(a) Definition of Change of Control. For purposes of this Note, a "Change of Control" means any of the following events:

(i) any merger, consolidation, or other business combination of the Company with or into another entity, other than a financing transaction in which the Company is the surviving entity and the holders of the Company's outstanding capital stock immediately prior to such transaction retain a majority of the voting power of the surviving entity immediately following such transaction;

(ii) the sale, lease, exclusive license, or other disposition of all or substantially all of the assets of the Company in a single transaction or a series of related transactions; or

(iii) any transaction or series of related transactions resulting in the holders of the Company's outstanding capital stock immediately prior to such transaction or series of related transactions holding less than fifty percent (50%) of the voting power of the surviving or acquiring entity immediately following such transaction or series of related transactions.

(b) Change of Control Payment. Upon a Change of Control occurring prior to the conversion of this Note, the Holder shall receive, at the closing of such Change of Control, an amount equal to the greater of:

(i) two times (2.0x) the outstanding principal amount of this Note plus all accrued and unpaid interest thereon as of the date of the closing of such Change of Control (the "Change of Control Multiple Amount"); or

(ii) the amount the Holder would receive if the outstanding principal and all accrued and unpaid interest under this Note were converted into shares of the Company's capital stock at the Cap Price immediately prior to the closing of such Change of Control and such shares participated in the Change of Control transaction on a fully as-converted basis alongside all other holders of the Company's capital stock (the "As-Converted Amount").

For purposes of illustration only, the maximum Change of Control Multiple Amount at the time of issuance, calculated on the full aggregate principal amount of all Notes ($60,000,000), assuming no accrued interest, would equal One Hundred Twenty Million Dollars ($120,000,000) (i.e., 2.0 × $60,000,000 = $120,000,000), if such amount exceeds the As-Converted Amount.

(c) Form of Payment. Payment of the applicable Change of Control amount determined in accordance with Section 3.3(b) above shall be made concurrently with the closing of the Change of Control transaction, in cash or in the same form of consideration paid or payable to the holders of the Company's capital stock in connection with such Change of Control transaction. If the consideration payable to the Company's stockholders in such Change of Control transaction consists in whole or in part of non-cash consideration, the value of such non-cash consideration shall be determined in good faith by the Company's board of directors.

(d) Priority of Payment. Payment of the Change of Control amount shall be subject in all respects to the subordination provisions set forth in Section 5 of this Note and the terms of the Subordination Agreement.

Section 3.4. Mechanics of Conversion

(a) Notice of Qualified Financing or Change of Control. The Company shall deliver to the Holder written notice of a Qualified Financing or Change of Control not fewer than ten (10) Business Days prior to the expected closing date thereof. Such notice shall include a reasonably detailed description of the material terms and conditions of the Qualified Financing or Change of Control, as applicable, including the price per share (or per-share equivalent) at which equity securities are being sold or the aggregate consideration payable in connection with the Change of Control.

(b) Cancellation of Note. Upon conversion of this Note in accordance with Section 3.1, Section 3.2(a)(i), or Section 3.3, this Note shall be deemed cancelled and shall cease to represent any obligation of the Company, and the Company shall issue to the Holder a stock certificate (or book-entry notation through the Company's transfer agent) representing the shares of capital stock into which this Note has been converted. Any fractional shares that would otherwise be issuable upon conversion shall be rounded down to the nearest whole share, and the Company shall pay to the Holder in cash the fair value of any such fractional share based on the applicable Conversion Price.

(c) Surrender of Note. The Holder shall surrender this Note to the Company promptly upon conversion, and the Company's obligation to issue the applicable shares shall not be contingent upon such surrender; provided, however, that in the event this Note is lost, stolen, or destroyed, the Holder shall deliver to the Company a lost note affidavit and indemnity agreement in form and substance reasonably satisfactory to the Company.

(d) Delivery of Shares. The Company shall deliver all requisite share certificates or book-entry statements to the Holder within ten (10) Business Days following the date of conversion. Pending delivery of such certificates or book-entry statements, the Holder shall be deemed the record holder of the shares issuable upon conversion as of the date of conversion.

Section 3.5. No Fractional Shares

No fractional shares of capital stock shall be issued upon conversion of this Note. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall pay to the Holder in cash an amount equal to the fair value of such fractional share based on the applicable Conversion Price. Such payment shall be made concurrently with the delivery of share certificates or book-entry statements in accordance with Section 3.4(d).

Section 4. Payment; Prepayment

4.1 Manner of Payment. All payments of principal and interest under this Note shall be made in lawful money of the United States of America by wire transfer of immediately available funds to such account as shall be designated in writing by the Holder. The Holder shall provide wire transfer instructions to the Company at least five (5) Business Days prior to any date on which a cash payment is due hereunder.

4.2 Restrictions on Prepayment. The Company may not prepay this Note, in whole or in part, without the prior written consent of the Majority Holders (as defined in the Note Purchase Agreement), except as expressly provided in connection with a Change of Control under Section 3.3 of this Note. Any prepayment made with the consent of the Majority Holders shall be made pro rata among all holders of the Notes based on the outstanding principal amount of each such Note.

4.3 Application of Payments. All payments made under this Note shall be applied first to accrued and unpaid interest then outstanding, and thereafter to outstanding principal, unless otherwise agreed in writing by the Company and the Holder.

Section 5. Subordination

5.1 Senior Indebtedness. This Note is subordinated in right of payment to all obligations of the Company under that certain Loan and Security Agreement, dated as of August 15, 2022, by and between Kelvantis Lending Corp. ("Kelvantis") and Skybridge Fintech Ltd. (as amended, restated, supplemented, or otherwise modified from time to time, the "Senior Loan Agreement"), pursuant to the terms and conditions of that certain Subordination Agreement, dated as of January 15, 2024, by and among Kelvantis Lending Corp., the Purchasers (as defined in the Note Purchase Agreement), and the Company (the "Subordination Agreement"). As of the date hereof, the outstanding principal amount under the Senior Loan Agreement is Fifteen Million Dollars ($15,000,000), with a scheduled maturity date of August 15, 2025.

5.2 Agreement to Subordinate. By acceptance of this Note, the Holder agrees to be bound by, and to comply with, all of the terms and conditions of the Subordination Agreement as if the Holder were an original party thereto. The Holder acknowledges that it has received a copy of the Subordination Agreement and has had an opportunity to review its terms.

5.3 Payment Restrictions. No payment of principal or interest under this Note shall be made, and no amount due under this Note shall be collected or enforced, at any time when such payment, collection, or enforcement would violate the terms of the Subordination Agreement or the Senior Loan Agreement. In the event of any conflict between the terms of this Note and the terms of the Subordination Agreement, the terms of the Subordination Agreement shall control.

5.4 Holder's Rights Subject to Subordination. The Holder's rights under this Note are subject to, and qualified in their entirety by, the provisions of the Subordination Agreement. The Holder agrees that it will not take any action to enforce its rights under this Note that is inconsistent with, or that would violate, the terms of the Subordination Agreement.

Section 6. Most Favored Nation

6.1 MFN Adjustment. If the Company issues any convertible promissory notes, simple agreements for future equity ("SAFEs"), or other convertible debt instruments to any person or entity after the date hereof and prior to the conversion or repayment of this Note, on terms that are more favorable to the holders thereof than the terms of this Note (including, without limitation, a lower valuation cap, a greater conversion discount, a higher interest rate, or more favorable change of control provisions) (any such instrument, a "Subsequent Convertible Instrument"), then, upon written request of the Holder delivered within thirty (30) days of the Holder's receipt of notice of such issuance, the terms of this Note shall be automatically amended to incorporate such more favorable terms (the "MFN Adjustment"). The MFN Adjustment shall be effective as of the date of issuance of the applicable Subsequent Convertible Instrument and shall apply to this Note on a going-forward basis from and after such date.

6.2 Notice of Subsequent Issuances. The Company shall provide written notice to the Holder of any issuance of a Subsequent Convertible Instrument within five (5) Business Days following such issuance. Such notice shall include a reasonably detailed summary of the material terms of the Subsequent Convertible Instrument, including the valuation cap, conversion discount, interest rate, maturity date, and any change of control provisions applicable thereto. The Company shall, upon request by the Holder, provide the Holder with a complete copy of such Subsequent Convertible Instrument (subject to redaction of the identity of the holder thereof, if reasonably requested by the Company).

6.3 Exceptions. The MFN Adjustment shall not apply to any of the following:

(a) stock options, restricted stock awards, or other equity awards issued under the Company's equity incentive plans as approved by the Company's board of directors;

(b) shares of capital stock issued upon conversion of the Notes or any other convertible securities of the Company outstanding as of the date hereof; or

Section 7. Events of Default

Section 7.1. Definition of Events of Default

Each of the following events shall constitute an "Event of Default" under this Note:

(a) Payment Default. The failure by the Company to pay any amount of principal or interest due under this Note within five (5) Business Days after the date on which such payment is due and payable;

(b) Breach of Representations, Warranties, or Covenants. The breach by the Company of any material representation, warranty, or covenant contained in the Note Purchase Agreement or this Note, which breach is not cured within thirty (30) days after written notice thereof is delivered to the Company by the Holder or the Majority Holders;

(c) Bankruptcy or Insolvency. (i) The Company shall commence a voluntary case or other proceeding seeking liquidation, reorganization, or other relief with respect to itself or its debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect, or seeking the appointment of a trustee, receiver, liquidator, custodian, or other similar official of the Company or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors; or (ii) an involuntary case or other proceeding shall be commenced against the Company seeking liquidation, reorganization, or other relief with respect to it or its debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect, or seeking the appointment of a trustee, receiver, liquidator, custodian, or other similar official of the Company or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of sixty (60) consecutive days;

(d) Judgments. The entry of one or more final judgments, orders, or awards against the Company in an aggregate amount in excess of One Million Dollars ($1,000,000) (exclusive of amounts covered by insurance as to which the applicable insurer has acknowledged coverage), which judgments, orders, or awards remain undischarged, unstayed, unbonded, or unsatisfied for a period of sixty (60) consecutive days after the date on which the right to appeal has expired or such judgment, order, or award has otherwise become final and non-appealable;

(e) Cross-Acceleration. The acceleration of any indebtedness of the Company in an aggregate principal amount in excess of Five Million Dollars ($5,000,000) (including, without limitation, any indebtedness outstanding under the Senior Loan Agreement), whether such acceleration results from a default thereunder, a demand for payment, or otherwise; or

(f) Senior Loan Default. The occurrence of any event of default under the Senior Loan Agreement that results in the acceleration of the obligations of the Company thereunder, regardless of whether the outstanding principal amount of the obligations so accelerated exceeds the threshold set forth in clause (e) above.

Section 7.2. Remedies upon Event of Default

(a) Acceleration by Majority Holders. Upon the occurrence and during the continuance of an Event of Default (other than an Event of Default described in Section 7.1(c)), the Majority Holders may, by written notice to the Company, declare all outstanding principal and all accrued and unpaid interest under all Notes to be immediately due and payable, without presentment, demand, protest, or other notice of any kind, all of which are hereby expressly waived by the Company; provided, however, that such acceleration shall be subject in all respects to the terms and conditions of the Subordination Agreement, and no payment shall be made in respect of such accelerated amounts in contravention of the Subordination Agreement.

(b) Automatic Acceleration upon Bankruptcy. In the case of an Event of Default described in Section 7.1(c), all outstanding principal and all accrued and unpaid interest under all Notes shall automatically become immediately due and payable without notice or demand, and without any action on the part of any Holder or the Majority Holders.

(c) Default Interest. Upon the occurrence and during the continuance of an Event of Default, interest shall accrue on all outstanding principal and any overdue interest under this Note at a rate per annum equal to the lesser of (i) ten percent (10.00%) per annum, or (ii) the maximum rate permitted by applicable law (the "Default Rate"), in each case from the date of the occurrence of such Event of Default until all obligations under this Note are repaid in full or such Event of Default is cured or waived in accordance with the terms hereof.

(d) Subordination. Notwithstanding any provision of this Section 7 to the contrary, all remedies of the Holder and the Majority Holders under this Section 7 are subject to the subordination provisions of Section 5 of this Note and the terms and conditions of the Subordination Agreement. In the event of any conflict between this Section 7 and the Subordination Agreement, the Subordination Agreement shall control.

(e) Cumulative Remedies. The rights and remedies of the Holder under this Section 7 are cumulative and are in addition to, and not in limitation of, any other rights and remedies available to the Holder at law or in equity.

Section 8. Representations and Warranties of the Holder

By acceptance of this Note, the Holder hereby represents and warrants to the Company as follows:

8.1 Investment Purpose. The Holder is acquiring this Note for its own account for investment purposes only and not with a view to, or for resale in connection with, any distribution or reselling of this Note or the securities issuable upon conversion hereof in violation of the Securities Act of 1933, as amended (the "Securities Act"), or any applicable state securities laws.

8.2 Accredited Investor. The Holder is an "accredited investor" as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act and, as such, was not formed for the specific purpose of acquiring this Note.

8.3 Sophistication and Experience. The Holder has sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of this investment and has the ability to bear the economic risks of this investment, including the complete loss of the investment.

8.4 Restricted Securities. The Holder understands that this Note and the securities issuable upon conversion hereof have not been registered under the Securities Act and may not be offered, sold, or otherwise transferred except pursuant to an effective registration statement under the Securities Act or pursuant to an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. The Holder acknowledges and agrees that this Note and any certificates representing the securities issuable upon conversion hereof shall bear the restrictive legend set forth on the first page of this Note (or a legend substantially similar thereto) and such other legends as may be required by applicable law.

8.5 Access to Information. The Holder has had the opportunity to ask questions of, and receive answers from, representatives of the Company concerning the Company, its business, and the terms and conditions of the offering of the Notes, and has had access to such financial and other information as the Holder has deemed necessary or appropriate in order to make an informed investment decision with respect to this Note.

Section 9. Covenants of the Company

9.1 Reservation of Shares. The Company shall, at all times during the term of this Note, reserve and keep available out of its authorized but unissued shares of capital stock (or shares held in treasury) a sufficient number of shares for issuance upon conversion of all outstanding Notes, including this Note, in accordance with the terms hereof. The Company shall take all such corporate action as may be necessary to increase its authorized but unissued shares of capital stock if at any time the number of shares of authorized but unissued capital stock shall not be sufficient to permit the conversion of all outstanding Notes.

9.2 Securities Law Compliance. The Company shall comply with all applicable federal and state securities laws in connection with the issuance of the Notes and the shares of capital stock issuable upon conversion of the Notes, and shall take all such action as may be necessary to ensure that the issuance of shares upon conversion of the Notes is exempt from registration under the Securities Act and applicable state securities laws or is effected pursuant to an effective registration statement.

9.3 Notices. The Company shall provide written notice to the Holder of any of the following events within the time periods specified herein or, if no time period is specified, promptly following the occurrence thereof:

(a) the anticipated closing of any Qualified Financing (such notice to be delivered not fewer than ten (10) Business Days prior to the expected closing thereof, in accordance with Section 3.4(a));

(b) any Change of Control (such notice to be delivered not fewer than ten (10) Business Days prior to the expected closing thereof, in accordance with Section 3.4(a));

(c) any issuance of Subsequent Convertible Instruments (such notice to be delivered within five (5) Business Days following such issuance, in accordance with Section 6.2); and

(d) any Event of Default or any event that, with the giving of notice or the passage of time or both, would constitute an Event of Default (such notice to be delivered promptly, and in any event within five (5) Business Days, following the Company's becoming aware of such event).

Section 10. Transfer Restrictions

10.1 Restrictions on Transfer. This Note may not be offered, sold, assigned, transferred, pledged, encumbered, hypothecated, or otherwise disposed of (each, a "Transfer") without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned, or delayed; provided, however, that no such consent shall be required in connection with a Transfer (a) to an affiliate of the Holder (as such term is defined in Rule 405 promulgated under the Securities Act) or (b) that is otherwise in compliance with all applicable federal and state securities laws and the terms of the Note Purchase Agreement and the Subordination Agreement.

10.2 Compliance with Securities Laws. Any Transfer of this Note shall be subject to compliance with the restrictive legend set forth on the first page of this Note and all applicable federal and state securities laws. The Company may require, as a condition to any Transfer, that the transferor and/or the transferee deliver to the Company an opinion of counsel, in form and substance reasonably satisfactory to the Company, to the effect that such Transfer may be effected without registration under the Securities Act.

10.3 Void Transfers. Any purported Transfer of this Note in violation of this Section 10 shall be null and void and of no force or effect, and the Company shall not recognize or give effect to any such purported Transfer on its books and records.

Section 11. Amendments and Waivers

11.1 Amendment. This Note may be amended or modified, and the observance of any term or provision hereof may be waived (either generally or in any particular instance and either retroactively or prospectively), only with the written consent of the Company and the Majority Holders (as defined in the Note Purchase Agreement).

11.2 Majority Holders. As used herein, "Majority Holders" means holders of Notes representing more than fifty percent (50%) of the aggregate outstanding principal amount of all Notes then outstanding. For the avoidance of doubt, the determination of Majority Holders shall be made with reference to the aggregate outstanding principal amount of all Notes issued under the Note Purchase Agreement, not solely the principal amount outstanding under this Note.

11.3 Binding Effect. Any amendment, modification, or waiver effected in accordance with this Section 11 shall be binding upon the Company, the Holder, and all other holders of the Notes, whether or not such holders consented to or were parties to such amendment, modification, or waiver.

Section 12. Governing Law; Jurisdiction

12.1 Governing Law. This Note shall be governed by, and construed and enforced 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 (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

12.2 Exclusive Jurisdiction. Any action, suit, or proceeding arising out of or relating to this Note or the transactions contemplated hereby shall be brought exclusively in the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over any such action, suit, or proceeding, any state court or federal court of competent jurisdiction sitting in the State of Delaware, including the Superior Court of the State of Delaware and the United States District Court for the District of Delaware). Each of the Company and the Holder irrevocably submits to the exclusive jurisdiction of such courts for the purpose of any such action, suit, or proceeding and irrevocably waives, and agrees not to assert in any such action, suit, or proceeding, any claim that it is not subject personally to the jurisdiction of such courts, that the action, suit, or proceeding is brought in an inconvenient forum, that the venue of the action, suit, or proceeding is improper, or that this Note or the subject matter hereof may not be enforced in or by such courts.

Section 13. Waiver of Jury Trial

EACH OF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS NOTE, THE NOTE PURCHASE AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH OF THE COMPANY AND THE HOLDER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO THE TRANSACTIONS CONTEMPLATED HEREBY, THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL IN CONNECTION HEREWITH, AND THAT EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

Section 14. Notices

14.1 Method of Notice. All notices, requests, demands, consents, and other communications required or permitted under this Note shall be in writing and shall be deemed to have been duly given: (a) when delivered personally to the party to be notified; (b) when sent by nationally recognized overnight courier service (with written confirmation of receipt); or (c) when sent by electronic mail (with confirmation of receipt by the recipient, which confirmation may be by reply email), in each case addressed as follows:

If to the Company:

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

Attention: Priya Ramanathan, General Counsel

Email: pramanathan@skybridgefintech.com

with a copy (which shall not constitute notice) to:

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

Attention: Leonard Ashford

Email: lashford@calderwoodharkness.com

If to the Holder:

At the address set forth on the Schedule of Purchasers attached to the Note Purchase Agreement, or at such other address as the Holder may designate by notice given in accordance with this Section 14.

14.2 Change of Address. Either party may change its address for purposes of notices under this Note by giving written notice of such change to the other party in accordance with this Section 14.

Section 15. Successors and Assigns

This Note shall be binding upon and inure to the benefit of the Company and the Holder and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns. The Company may not assign this Note or any of its rights or obligations hereunder without the prior written consent of the Holder. Subject to the transfer restrictions set forth in Section 10, the Holder may assign its rights under this Note in accordance with the terms hereof and the Note Purchase Agreement.

Section 16. Severability

If any provision of this Note is held to be invalid, illegal, or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Note, and the remaining provisions of this Note shall continue in full force and effect. In such event, the parties shall negotiate in good faith to modify the invalid, illegal, or unenforceable provision to the minimum extent necessary to make it valid, legal, and enforceable while preserving the original intent of the parties as closely as possible.

Section 17. Entire Agreement

This Note, together with the Note Purchase Agreement and the other Transaction Documents (as defined in the Note Purchase Agreement), including the Subordination Agreement, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, understandings, representations, and warranties, both written and oral, among the parties with respect to such subject matter. There are no representations, warranties, covenants, or agreements between the parties relating to the subject matter of this Note other than those expressly set forth or referred to herein or in the Note Purchase Agreement and the other Transaction Documents.

Section 18. Expenses

The Company shall reimburse the reasonable and documented out-of-pocket legal fees and expenses of counsel to the lead investor, Whitfield, Pratt & Soo LLP, incurred in connection with the negotiation, preparation, execution, and delivery of the Note Purchase Agreement, this Note, and the other Transaction Documents, in an aggregate amount not to exceed One Hundred Twenty-Five Thousand Dollars ($125,000). In addition, the Company shall bear the Seven Thousand Five Hundred Dollar ($7,500) flat escrow fee payable to Granite Trust Company, N.A. in connection with the closings under the Note Purchase Agreement. The foregoing expense reimbursement obligations are more fully set forth in the Note Purchase Agreement and are incorporated herein by reference.

Section 19. Defined Terms

Capitalized terms used in this Note and not otherwise defined herein shall have the meanings ascribed to them in the Note Purchase Agreement, including, without limitation, the following terms:

"Cap Price" has the meaning set forth in Section 3.1(c)(ii) of this Note.

"Change of Control" has the meaning set forth in Section 3.3(a) of this Note.

"Conversion Price" has the meaning set forth in Section 3.1(c) of this Note.

"Majority Holders" means holders of Notes representing more than fifty percent (50%) of the aggregate outstanding principal amount of all Notes then outstanding, as more fully defined in the Note Purchase Agreement.

"Note Purchase Agreement" means that certain Note Purchase Agreement, dated as of January 15, 2024, by and among the Company and the Purchasers, as amended, restated, supplemented, or otherwise modified from time to time.

"Purchasers" means Ridgeline Ventures Fund IV, L.P., Beacon Hill Capital Partners, LLC, Northstar Innovation Fund II, L.P., and Halcyon Growth Equity, L.P., and any additional purchasers that become parties to the Note Purchase Agreement in accordance with its terms.

"Qualified Financing" has the meaning set forth in Section 3.1(a) of this Note.

"Senior Loan Agreement" has the meaning set forth in Section 5.1 of this Note.

"Subordination Agreement" has the meaning set forth in Section 5.1 of this Note.

"Transaction Documents" has the meaning given to such term in the Note Purchase Agreement.

"Valuation Cap" means Seven Hundred Fifty Million Dollars ($750,000,000).

[Signature Page Follows]

SIGNATURE PAGE TO CONVERTIBLE PROMISSORY NOTE

IN WITNESS WHEREOF, the Company has executed and delivered this Convertible Promissory Note as of the date first written above.

SKYBRIDGE FINTECH LTD.

By: ________

Name: Arjun Mehta

Title: Chief Executive Officer

ACKNOWLEDGED AND AGREED:

HOLDER:

________________________________________

[Name of Holder]

By: ________

Name: ________

Title: ________

Address: ________

________________________________________

Principal Amount: $________

SCHEDULE A

CONVERSION CALCULATION EXAMPLE

(Illustrative Only — Not Binding)

The following illustrative examples are provided for reference purposes only and shall not be deemed to modify, limit, or otherwise affect the terms and conditions of the Note. All calculations are subject to adjustment based on the Company's actual fully diluted capitalization at the time of conversion and the actual price per share in any Qualified Financing. The examples below assume a single Note with an outstanding principal balance of $10,000,000 and twelve (12) months of accrued interest at 6.00% per annum ($600,000), for a total conversion amount of $10,600,000.

Assumptions:

• Pre-bridge fully diluted share count: approximately 48,500,000 shares

• Valuation Cap: $750,000,000

• Cap Price: $750,000,000 ÷ 48,500,000 = approximately $15.46 per share

• Conversion discount: 20% (i.e., conversion at 80% of the Qualified Financing price)

• Illustrative principal amount of single Note: $10,000,000

• Accrued interest (12 months at 6.00%): $600,000

• Total conversion amount: $10,600,000

Scenario 1: Qualified Financing Price of $18.00 per share

In this scenario, the discount Price ($14.40) is lower than the Cap Price ($15.46), so the discount Price applies.

Scenario 2: Qualified Financing Price of $22.00 per share

In this scenario, the Cap Price ($15.46) is lower than the discount Price ($17.60), so the Cap Price applies. The Valuation Cap effectively governs the conversion.

Scenario 3: Qualified Financing Price of $19.33 per share (Breakeven)

At a Qualified Financing price of approximately $19.33 per share, the 20% discount price ($15.46) equals the Cap Price ($15.46). At any Qualified Financing price above $19.33, the Cap Price will govern; at any price below $19.33, the discount Price will govern.

Note: All share amounts are rounded down to the nearest whole share in accordance with Section 3.5 of the Note. Actual results will vary based on the Company's fully diluted capitalization at the time of the applicable Qualified Financing, which may differ from the illustrative 48,500,000-share figure used above. This Schedule A is for illustrative purposes only and does not constitute a representation or warranty by the Company as to its capitalization or the terms of any future Qualified Financing.

Principal Amount: $____

Date of Issuance: January 15, 2024

Discount Price (80%)	Cap Price	Applicable Price (Lower)
Price per share	$14.40	$15.46	$14.40
Shares issued ($10,600,000 ÷ price)	736,111	685,641	736,111
Discount Price (80%)	Cap Price	Applicable Price (Lower)
Price per share	$17.60	$15.46	$15.46
Shares issued ($10,600,000 ÷ price)	602,272	685,641	685,641
Discount Price (80%)	Cap Price	Applicable Price (Lower)
Price per share	$15.46	$15.46	$15.46
Shares issued ($10,600,000 ÷ price)	685,641	685,641	685,641

EXHIBIT A
TO THE NOTE PURCHASE AGREEMENT
CONVERTIBLE PROMISSORY NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
Issuer: Skybridge Fintech Ltd., a Delaware corporation Principal Office: 1400 Market Street, Suite 2200, Wilmington, DE 19801
Skybridge Fintech Ltd., a Delaware corporation (the "Company"), for value received, hereby promises to pay to _____ or its registered assigns (the "**Holder**"), the principal sum of _____ Dollars ($______), together with accrued and unpaid interest thereon, each due and payable as set forth below in accordance with the terms of this Convertible Promissory Note (this "Note").
This Note is one of a series of Convertible Promissory Notes (collectively, the "Notes") issued pursuant to that certain Note Purchase Agreement, dated as of January 15, 2024 (as amended, restated, supplemented, or otherwise modified from time to time, the "Note Purchase Agreement"), by and among the Company and the Purchasers named therein, in the aggregate principal amount of up to Sixty Million Dollars ($60,000,000). The Notes are being issued in one or more closings as set forth in the Note Purchase Agreement, and Notes issued at the Final Closing (as defined in the Note Purchase Agreement) shall bear a Date of Issuance of January 26, 2024.
Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Note Purchase Agreement.
Section 1. Interest
1.1 Interest Rate. Interest shall accrue on the outstanding principal amount of this Note at the rate of six percent (6.00%) per annum (600 basis points), commencing on the Date of Issuance set forth above and continuing until this Note is converted, repaid, or otherwise satisfied in full in accordance with its terms.
1.2 Simple Interest. Interest on this Note shall be computed on the basis of simple interest (and shall not compound) and shall be calculated on the basis of a three hundred sixty-five (365) day year and the actual number of days elapsed during the period for which interest is being calculated. For purposes of illustration only, the annual interest accrual on the full aggregate principal amount of Sixty Million Dollars ($60,000,000) under all outstanding Notes would equal Three Million Six Hundred Thousand Dollars ($3,600,000) per year.
1.3 Payment of Interest. Interest shall not be payable in cash during the term of this Note. All accrued and unpaid interest shall be payable at the Maturity Date (as defined in Section 2 below), or upon conversion of this Note in accordance with Section 3 below, as applicable. For the avoidance of doubt, all accrued and unpaid interest shall be included in any conversion of this Note into equity securities of the Company and shall be treated in the same manner as outstanding principal for purposes of determining the number of shares issuable upon conversion.
Section 2. Maturity
2.1 Maturity Date. The outstanding principal amount of this Note, together with all accrued and unpaid interest thereon, shall be due and payable in full on January 15, 2026 (the "Maturity Date"), which date is twenty-four (24) months from the date of the Initial Closing under the Note Purchase Agreement, unless this Note is earlier converted or repaid in accordance with the terms hereof. There shall be no scheduled amortization of this Note; all principal and accrued and unpaid interest shall be due and payable in a single bullet payment on the Maturity Date (subject to the conversion and prepayment provisions set forth herein).
2.2 Business Day Convention. If the Maturity Date falls on a day that is not a Business Day (as defined below), payment shall be due on the next succeeding Business Day and no additional interest shall accrue during such extension. For purposes of this Note, "Business Day" means any day other than a Saturday, a Sunday, or a day on which banks in Wilmington, Delaware or New York, New York are authorized or required by law or executive order to close.
Section 3. Conversion
Section 3.1. Automatic Conversion upon Qualified Financing
(a) Definition of Qualified Financing. For purposes of this Note, a "Qualified Financing" means a bona fide equity financing of the Company (including, without limitation, a Series D Preferred Stock financing) in which the Company raises at least Eighty Million Dollars ($80,000,000) in aggregate gross proceeds from the sale and issuance of shares of its Preferred Stock (exclusive of any amounts raised through the conversion of the Notes or any other convertible securities of the Company then outstanding). For the avoidance of doubt, the aggregate gross proceeds threshold shall be measured by reference to cash actually received by the Company from investors other than holders of the Notes converting such Notes into equity securities of the Company in connection with such financing.
(b) Automatic Conversion. Upon the closing of a Qualified Financing, all outstanding principal and all accrued and unpaid interest under this Note shall automatically convert, without any further action on the part of the Holder, into shares of the series of Preferred Stock sold in such Qualified Financing (the "Qualified Financing Securities"). Such conversion shall be deemed to have occurred immediately prior to and contingent upon the closing of such Qualified Financing.
(c) Conversion Price. The price per share at which this Note shall convert upon a Qualified Financing (the "Conversion Price") shall be the lower of:
(i) eighty percent (80%) of the price per share paid by the other investors in the Qualified Financing for the Qualified Financing Securities (i.e., a twenty percent (20%) discount to the price per share paid by such investors in the Qualified Financing) (the "discount Price"); or
(ii) the price per share obtained by dividing the Valuation Cap of Seven Hundred Fifty Million Dollars ($750,000,000) by the Company's fully diluted capitalization immediately prior to the closing of the Qualified Financing (the "Cap Price").
For purposes of illustration only, based on a pre-bridge fully diluted share count of approximately 48,500,000 shares of the Company's capital stock, the Cap Price would equal approximately $15.46 per share ($750,000,000 ÷ 48,500,000 = ~$15.46). The actual Cap Price shall be calculated based on the Company's fully diluted capitalization as of immediately prior to the closing of the applicable Qualified Financing and may differ from this illustrative amount.
(d) Number of Shares. The number of shares of Qualified Financing Securities issuable to the Holder upon conversion of this Note pursuant to this Section 3.1 shall be equal to the quotient obtained by dividing (x) the sum of all outstanding principal and all accrued and unpaid interest under this Note as of the date of conversion, by (y) the applicable Conversion Price determined in accordance with Section 3.1(c) above.
(e) Rights of Converted Shares. The shares of Qualified Financing Securities issued to the Holder upon conversion of this Note shall carry the same rights, preferences, privileges, and restrictions as the shares of Qualified Financing Securities issued to the other investors in such Qualified Financing, except that the conversion price and original issue price for such shares (for purposes of the certificate of incorporation and any investors' rights agreement, right of first refusal and co-sale agreement, or voting agreement entered into in connection with the Qualified Financing) shall be the Conversion Price determined in accordance with Section 3.1(c) above rather than the price per share paid by the other investors.
Section 3.2. Optional Conversion at Maturity
(a) Holder Election. If no Qualified Financing has occurred on or before the Maturity Date, the Holder may elect, at the Holder's sole option, by written notice delivered to the Company no later than five (5) Business Days prior to the Maturity Date, to either:
(i) convert all outstanding principal and all accrued and unpaid interest under this Note into shares of the Company's Common Stock (or, if one or more classes of Preferred Stock are then outstanding, the most senior series of Preferred Stock then authorized and outstanding) at a price per share equal to the Cap Price (i.e., $750,000,000 divided by the Company's fully diluted capitalization immediately prior to such conversion); or
(ii) demand repayment of all outstanding principal plus all accrued and unpaid interest under this Note in cash on the Maturity Date.
(b) Failure to Elect. If the Holder fails to deliver a timely election notice in accordance with Section 3.2(a) above, this Note shall be repaid in cash on the Maturity Date in an amount equal to all outstanding principal plus all accrued and unpaid interest thereon. For the avoidance of doubt, the Holder's failure to deliver an election notice shall be deemed an election to receive repayment in cash.
(c) Form of Election Notice. The Holder's election notice shall be in writing, shall specify the election made by the Holder (conversion or cash repayment), and shall be delivered to the Company in accordance with Section 14 of this Note.
Section 3.3. Conversion upon Change of Control
(a) Definition of Change of Control. For purposes of this Note, a "Change of Control" means any of the following events:
(i) any merger, consolidation, or other business combination of the Company with or into another entity, other than a financing transaction in which the Company is the surviving entity and the holders of the Company's outstanding capital stock immediately prior to such transaction retain a majority of the voting power of the surviving entity immediately following such transaction;
(ii) the sale, lease, exclusive license, or other disposition of all or substantially all of the assets of the Company in a single transaction or a series of related transactions; or
(iii) any transaction or series of related transactions resulting in the holders of the Company's outstanding capital stock immediately prior to such transaction or series of related transactions holding less than fifty percent (50%) of the voting power of the surviving or acquiring entity immediately following such transaction or series of related transactions.
(b) Change of Control Payment. Upon a Change of Control occurring prior to the conversion of this Note, the Holder shall receive, at the closing of such Change of Control, an amount equal to the greater of:
(i) two times (2.0x) the outstanding principal amount of this Note plus all accrued and unpaid interest thereon as of the date of the closing of such Change of Control (the "Change of Control Multiple Amount"); or
(ii) the amount the Holder would receive if the outstanding principal and all accrued and unpaid interest under this Note were converted into shares of the Company's capital stock at the Cap Price immediately prior to the closing of such Change of Control and such shares participated in the Change of Control transaction on a fully as-converted basis alongside all other holders of the Company's capital stock (the "As-Converted Amount").
For purposes of illustration only, the maximum Change of Control Multiple Amount at the time of issuance, calculated on the full aggregate principal amount of all Notes ($60,000,000), assuming no accrued interest, would equal One Hundred Twenty Million Dollars ($120,000,000) (i.e., 2.0 × $60,000,000 = $120,000,000), if such amount exceeds the As-Converted Amount.
(c) Form of Payment. Payment of the applicable Change of Control amount determined in accordance with Section 3.3(b) above shall be made concurrently with the closing of the Change of Control transaction, in cash or in the same form of consideration paid or payable to the holders of the Company's capital stock in connection with such Change of Control transaction. If the consideration payable to the Company's stockholders in such Change of Control transaction consists in whole or in part of non-cash consideration, the value of such non-cash consideration shall be determined in good faith by the Company's board of directors.
(d) Priority of Payment. Payment of the Change of Control amount shall be subject in all respects to the subordination provisions set forth in Section 5 of this Note and the terms of the Subordination Agreement.
Section 3.4. Mechanics of Conversion
(a) Notice of Qualified Financing or Change of Control. The Company shall deliver to the Holder written notice of a Qualified Financing or Change of Control not fewer than ten (10) Business Days prior to the expected closing date thereof. Such notice shall include a reasonably detailed description of the material terms and conditions of the Qualified Financing or Change of Control, as applicable, including the price per share (or per-share equivalent) at which equity securities are being sold or the aggregate consideration payable in connection with the Change of Control.
(b) Cancellation of Note. Upon conversion of this Note in accordance with Section 3.1, Section 3.2(a)(i), or Section 3.3, this Note shall be deemed cancelled and shall cease to represent any obligation of the Company, and the Company shall issue to the Holder a stock certificate (or book-entry notation through the Company's transfer agent) representing the shares of capital stock into which this Note has been converted. Any fractional shares that would otherwise be issuable upon conversion shall be rounded down to the nearest whole share, and the Company shall pay to the Holder in cash the fair value of any such fractional share based on the applicable Conversion Price.
(c) Surrender of Note. The Holder shall surrender this Note to the Company promptly upon conversion, and the Company's obligation to issue the applicable shares shall not be contingent upon such surrender; provided, however, that in the event this Note is lost, stolen, or destroyed, the Holder shall deliver to the Company a lost note affidavit and indemnity agreement in form and substance reasonably satisfactory to the Company.
(d) Delivery of Shares. The Company shall deliver all requisite share certificates or book-entry statements to the Holder within ten (10) Business Days following the date of conversion. Pending delivery of such certificates or book-entry statements, the Holder shall be deemed the record holder of the shares issuable upon conversion as of the date of conversion.
Section 3.5. No Fractional Shares
No fractional shares of capital stock shall be issued upon conversion of this Note. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall pay to the Holder in cash an amount equal to the fair value of such fractional share based on the applicable Conversion Price. Such payment shall be made concurrently with the delivery of share certificates or book-entry statements in accordance with Section 3.4(d).
Section 4. Payment; Prepayment
4.1 Manner of Payment. All payments of principal and interest under this Note shall be made in lawful money of the United States of America by wire transfer of immediately available funds to such account as shall be designated in writing by the Holder. The Holder shall provide wire transfer instructions to the Company at least five (5) Business Days prior to any date on which a cash payment is due hereunder.
4.2 Restrictions on Prepayment. The Company may not prepay this Note, in whole or in part, without the prior written consent of the Majority Holders (as defined in the Note Purchase Agreement), except as expressly provided in connection with a Change of Control under Section 3.3 of this Note. Any prepayment made with the consent of the Majority Holders shall be made pro rata among all holders of the Notes based on the outstanding principal amount of each such Note.
4.3 Application of Payments. All payments made under this Note shall be applied first to accrued and unpaid interest then outstanding, and thereafter to outstanding principal, unless otherwise agreed in writing by the Company and the Holder.
Section 5. Subordination
5.1 Senior Indebtedness. This Note is subordinated in right of payment to all obligations of the Company under that certain Loan and Security Agreement, dated as of August 15, 2022, by and between Kelvantis Lending Corp. ("Kelvantis") and Skybridge Fintech Ltd. (as amended, restated, supplemented, or otherwise modified from time to time, the "Senior Loan Agreement"), pursuant to the terms and conditions of that certain Subordination Agreement, dated as of January 15, 2024, by and among Kelvantis Lending Corp., the Purchasers (as defined in the Note Purchase Agreement), and the Company (the "Subordination Agreement"). As of the date hereof, the outstanding principal amount under the Senior Loan Agreement is Fifteen Million Dollars ($15,000,000), with a scheduled maturity date of August 15, 2025.
5.2 Agreement to Subordinate. By acceptance of this Note, the Holder agrees to be bound by, and to comply with, all of the terms and conditions of the Subordination Agreement as if the Holder were an original party thereto. The Holder acknowledges that it has received a copy of the Subordination Agreement and has had an opportunity to review its terms.
5.3 Payment Restrictions. No payment of principal or interest under this Note shall be made, and no amount due under this Note shall be collected or enforced, at any time when such payment, collection, or enforcement would violate the terms of the Subordination Agreement or the Senior Loan Agreement. In the event of any conflict between the terms of this Note and the terms of the Subordination Agreement, the terms of the Subordination Agreement shall control.
5.4 Holder's Rights Subject to Subordination. The Holder's rights under this Note are subject to, and qualified in their entirety by, the provisions of the Subordination Agreement. The Holder agrees that it will not take any action to enforce its rights under this Note that is inconsistent with, or that would violate, the terms of the Subordination Agreement.
Section 6. Most Favored Nation
6.1 MFN Adjustment. If the Company issues any convertible promissory notes, simple agreements for future equity ("SAFEs"), or other convertible debt instruments to any person or entity after the date hereof and prior to the conversion or repayment of this Note, on terms that are more favorable to the holders thereof than the terms of this Note (including, without limitation, a lower valuation cap, a greater conversion discount, a higher interest rate, or more favorable change of control provisions) (any such instrument, a "Subsequent Convertible Instrument"), then, upon written request of the Holder delivered within thirty (30) days of the Holder's receipt of notice of such issuance, the terms of this Note shall be automatically amended to incorporate such more favorable terms (the "MFN Adjustment"). The MFN Adjustment shall be effective as of the date of issuance of the applicable Subsequent Convertible Instrument and shall apply to this Note on a going-forward basis from and after such date.
6.2 Notice of Subsequent Issuances. The Company shall provide written notice to the Holder of any issuance of a Subsequent Convertible Instrument within five (5) Business Days following such issuance. Such notice shall include a reasonably detailed summary of the material terms of the Subsequent Convertible Instrument, including the valuation cap, conversion discount, interest rate, maturity date, and any change of control provisions applicable thereto. The Company shall, upon request by the Holder, provide the Holder with a complete copy of such Subsequent Convertible Instrument (subject to redaction of the identity of the holder thereof, if reasonably requested by the Company).
6.3 Exceptions. The MFN Adjustment shall not apply to any of the following:
(a) stock options, restricted stock awards, or other equity awards issued under the Company's equity incentive plans as approved by the Company's board of directors;
(b) shares of capital stock issued upon conversion of the Notes or any other convertible securities of the Company outstanding as of the date hereof; or
(c) shares of capital stock issued in connection with a Qualified Financing.
Section 7. Events of Default
Section 7.1. Definition of Events of Default
Each of the following events shall constitute an "Event of Default" under this Note:
(a) Payment Default. The failure by the Company to pay any amount of principal or interest due under this Note within five (5) Business Days after the date on which such payment is due and payable;
(b) Breach of Representations, Warranties, or Covenants. The breach by the Company of any material representation, warranty, or covenant contained in the Note Purchase Agreement or this Note, which breach is not cured within thirty (30) days after written notice thereof is delivered to the Company by the Holder or the Majority Holders;
(c) Bankruptcy or Insolvency. (i) The Company shall commence a voluntary case or other proceeding seeking liquidation, reorganization, or other relief with respect to itself or its debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect, or seeking the appointment of a trustee, receiver, liquidator, custodian, or other similar official of the Company or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors; or (ii) an involuntary case or other proceeding shall be commenced against the Company seeking liquidation, reorganization, or other relief with respect to it or its debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect, or seeking the appointment of a trustee, receiver, liquidator, custodian, or other similar official of the Company or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of sixty (60) consecutive days;
(d) Judgments. The entry of one or more final judgments, orders, or awards against the Company in an aggregate amount in excess of One Million Dollars ($1,000,000) (exclusive of amounts covered by insurance as to which the applicable insurer has acknowledged coverage), which judgments, orders, or awards remain undischarged, unstayed, unbonded, or unsatisfied for a period of sixty (60) consecutive days after the date on which the right to appeal has expired or such judgment, order, or award has otherwise become final and non-appealable;
(e) Cross-Acceleration. The acceleration of any indebtedness of the Company in an aggregate principal amount in excess of Five Million Dollars ($5,000,000) (including, without limitation, any indebtedness outstanding under the Senior Loan Agreement), whether such acceleration results from a default thereunder, a demand for payment, or otherwise; or
(f) Senior Loan Default. The occurrence of any event of default under the Senior Loan Agreement that results in the acceleration of the obligations of the Company thereunder, regardless of whether the outstanding principal amount of the obligations so accelerated exceeds the threshold set forth in clause (e) above.
Section 7.2. Remedies upon Event of Default
(a) Acceleration by Majority Holders. Upon the occurrence and during the continuance of an Event of Default (other than an Event of Default described in Section 7.1(c)), the Majority Holders may, by written notice to the Company, declare all outstanding principal and all accrued and unpaid interest under all Notes to be immediately due and payable, without presentment, demand, protest, or other notice of any kind, all of which are hereby expressly waived by the Company; provided, however, that such acceleration shall be subject in all respects to the terms and conditions of the Subordination Agreement, and no payment shall be made in respect of such accelerated amounts in contravention of the Subordination Agreement.
(b) Automatic Acceleration upon Bankruptcy. In the case of an Event of Default described in Section 7.1(c), all outstanding principal and all accrued and unpaid interest under all Notes shall automatically become immediately due and payable without notice or demand, and without any action on the part of any Holder or the Majority Holders.
(c) Default Interest. Upon the occurrence and during the continuance of an Event of Default, interest shall accrue on all outstanding principal and any overdue interest under this Note at a rate per annum equal to the lesser of (i) ten percent (10.00%) per annum, or (ii) the maximum rate permitted by applicable law (the "Default Rate"), in each case from the date of the occurrence of such Event of Default until all obligations under this Note are repaid in full or such Event of Default is cured or waived in accordance with the terms hereof.
(d) Subordination. Notwithstanding any provision of this Section 7 to the contrary, all remedies of the Holder and the Majority Holders under this Section 7 are subject to the subordination provisions of Section 5 of this Note and the terms and conditions of the Subordination Agreement. In the event of any conflict between this Section 7 and the Subordination Agreement, the Subordination Agreement shall control.
(e) Cumulative Remedies. The rights and remedies of the Holder under this Section 7 are cumulative and are in addition to, and not in limitation of, any other rights and remedies available to the Holder at law or in equity.
Section 8. Representations and Warranties of the Holder
By acceptance of this Note, the Holder hereby represents and warrants to the Company as follows:
8.1 Investment Purpose. The Holder is acquiring this Note for its own account for investment purposes only and not with a view to, or for resale in connection with, any distribution or reselling of this Note or the securities issuable upon conversion hereof in violation of the Securities Act of 1933, as amended (the "Securities Act"), or any applicable state securities laws.
8.2 Accredited Investor. The Holder is an "accredited investor" as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act and, as such, was not formed for the specific purpose of acquiring this Note.
8.3 Sophistication and Experience. The Holder has sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of this investment and has the ability to bear the economic risks of this investment, including the complete loss of the investment.
8.4 Restricted Securities. The Holder understands that this Note and the securities issuable upon conversion hereof have not been registered under the Securities Act and may not be offered, sold, or otherwise transferred except pursuant to an effective registration statement under the Securities Act or pursuant to an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. The Holder acknowledges and agrees that this Note and any certificates representing the securities issuable upon conversion hereof shall bear the restrictive legend set forth on the first page of this Note (or a legend substantially similar thereto) and such other legends as may be required by applicable law.
8.5 Access to Information. The Holder has had the opportunity to ask questions of, and receive answers from, representatives of the Company concerning the Company, its business, and the terms and conditions of the offering of the Notes, and has had access to such financial and other information as the Holder has deemed necessary or appropriate in order to make an informed investment decision with respect to this Note.
Section 9. Covenants of the Company
9.1 Reservation of Shares. The Company shall, at all times during the term of this Note, reserve and keep available out of its authorized but unissued shares of capital stock (or shares held in treasury) a sufficient number of shares for issuance upon conversion of all outstanding Notes, including this Note, in accordance with the terms hereof. The Company shall take all such corporate action as may be necessary to increase its authorized but unissued shares of capital stock if at any time the number of shares of authorized but unissued capital stock shall not be sufficient to permit the conversion of all outstanding Notes.
9.2 Securities Law Compliance. The Company shall comply with all applicable federal and state securities laws in connection with the issuance of the Notes and the shares of capital stock issuable upon conversion of the Notes, and shall take all such action as may be necessary to ensure that the issuance of shares upon conversion of the Notes is exempt from registration under the Securities Act and applicable state securities laws or is effected pursuant to an effective registration statement.
9.3 Notices. The Company shall provide written notice to the Holder of any of the following events within the time periods specified herein or, if no time period is specified, promptly following the occurrence thereof:
(a) the anticipated closing of any Qualified Financing (such notice to be delivered not fewer than ten (10) Business Days prior to the expected closing thereof, in accordance with Section 3.4(a));
(b) any Change of Control (such notice to be delivered not fewer than ten (10) Business Days prior to the expected closing thereof, in accordance with Section 3.4(a));
(c) any issuance of Subsequent Convertible Instruments (such notice to be delivered within five (5) Business Days following such issuance, in accordance with Section 6.2); and
(d) any Event of Default or any event that, with the giving of notice or the passage of time or both, would constitute an Event of Default (such notice to be delivered promptly, and in any event within five (5) Business Days, following the Company's becoming aware of such event).
Section 10. Transfer Restrictions
10.1 Restrictions on Transfer. This Note may not be offered, sold, assigned, transferred, pledged, encumbered, hypothecated, or otherwise disposed of (each, a "Transfer") without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned, or delayed; provided, however, that no such consent shall be required in connection with a Transfer (a) to an affiliate of the Holder (as such term is defined in Rule 405 promulgated under the Securities Act) or (b) that is otherwise in compliance with all applicable federal and state securities laws and the terms of the Note Purchase Agreement and the Subordination Agreement.
10.2 Compliance with Securities Laws. Any Transfer of this Note shall be subject to compliance with the restrictive legend set forth on the first page of this Note and all applicable federal and state securities laws. The Company may require, as a condition to any Transfer, that the transferor and/or the transferee deliver to the Company an opinion of counsel, in form and substance reasonably satisfactory to the Company, to the effect that such Transfer may be effected without registration under the Securities Act.
10.3 Void Transfers. Any purported Transfer of this Note in violation of this Section 10 shall be null and void and of no force or effect, and the Company shall not recognize or give effect to any such purported Transfer on its books and records.
Section 11. Amendments and Waivers
11.1 Amendment. This Note may be amended or modified, and the observance of any term or provision hereof may be waived (either generally or in any particular instance and either retroactively or prospectively), only with the written consent of the Company and the Majority Holders (as defined in the Note Purchase Agreement).
11.2 Majority Holders. As used herein, "Majority Holders" means holders of Notes representing more than fifty percent (50%) of the aggregate outstanding principal amount of all Notes then outstanding. For the avoidance of doubt, the determination of Majority Holders shall be made with reference to the aggregate outstanding principal amount of all Notes issued under the Note Purchase Agreement, not solely the principal amount outstanding under this Note.
11.3 Binding Effect. Any amendment, modification, or waiver effected in accordance with this Section 11 shall be binding upon the Company, the Holder, and all other holders of the Notes, whether or not such holders consented to or were parties to such amendment, modification, or waiver.
Section 12. Governing Law; Jurisdiction
12.1 Governing Law. This Note shall be governed by, and construed and enforced 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 (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
12.2 Exclusive Jurisdiction. Any action, suit, or proceeding arising out of or relating to this Note or the transactions contemplated hereby shall be brought exclusively in the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over any such action, suit, or proceeding, any state court or federal court of competent jurisdiction sitting in the State of Delaware, including the Superior Court of the State of Delaware and the United States District Court for the District of Delaware). Each of the Company and the Holder irrevocably submits to the exclusive jurisdiction of such courts for the purpose of any such action, suit, or proceeding and irrevocably waives, and agrees not to assert in any such action, suit, or proceeding, any claim that it is not subject personally to the jurisdiction of such courts, that the action, suit, or proceeding is brought in an inconvenient forum, that the venue of the action, suit, or proceeding is improper, or that this Note or the subject matter hereof may not be enforced in or by such courts.
Section 13. Waiver of Jury Trial
EACH OF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS NOTE, THE NOTE PURCHASE AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH OF THE COMPANY AND THE HOLDER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO THE TRANSACTIONS CONTEMPLATED HEREBY, THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL IN CONNECTION HEREWITH, AND THAT EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
Section 14. Notices
14.1 Method of Notice. All notices, requests, demands, consents, and other communications required or permitted under this Note shall be in writing and shall be deemed to have been duly given: (a) when delivered personally to the party to be notified; (b) when sent by nationally recognized overnight courier service (with written confirmation of receipt); or (c) when sent by electronic mail (with confirmation of receipt by the recipient, which confirmation may be by reply email), in each case addressed as follows:
If to the Company:
Skybridge Fintech Ltd. 1400 Market Street, Suite 2200 Wilmington, DE 19801
Attention: Priya Ramanathan, General Counsel
Email: pramanathan@skybridgefintech.com
with a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 600 Lexington Avenue New York, NY 10022
Attention: Leonard Ashford
Email: lashford@calderwoodharkness.com
If to the Holder:
At the address set forth on the Schedule of Purchasers attached to the Note Purchase Agreement, or at such other address as the Holder may designate by notice given in accordance with this Section 14.
14.2 Change of Address. Either party may change its address for purposes of notices under this Note by giving written notice of such change to the other party in accordance with this Section 14.
Section 15. Successors and Assigns
This Note shall be binding upon and inure to the benefit of the Company and the Holder and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns. The Company may not assign this Note or any of its rights or obligations hereunder without the prior written consent of the Holder. Subject to the transfer restrictions set forth in Section 10, the Holder may assign its rights under this Note in accordance with the terms hereof and the Note Purchase Agreement.
Section 16. Severability
If any provision of this Note is held to be invalid, illegal, or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Note, and the remaining provisions of this Note shall continue in full force and effect. In such event, the parties shall negotiate in good faith to modify the invalid, illegal, or unenforceable provision to the minimum extent necessary to make it valid, legal, and enforceable while preserving the original intent of the parties as closely as possible.
Section 17. Entire Agreement
This Note, together with the Note Purchase Agreement and the other Transaction Documents (as defined in the Note Purchase Agreement), including the Subordination Agreement, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, understandings, representations, and warranties, both written and oral, among the parties with respect to such subject matter. There are no representations, warranties, covenants, or agreements between the parties relating to the subject matter of this Note other than those expressly set forth or referred to herein or in the Note Purchase Agreement and the other Transaction Documents.
Section 18. Expenses
The Company shall reimburse the reasonable and documented out-of-pocket legal fees and expenses of counsel to the lead investor, Whitfield, Pratt & Soo LLP, incurred in connection with the negotiation, preparation, execution, and delivery of the Note Purchase Agreement, this Note, and the other Transaction Documents, in an aggregate amount not to exceed One Hundred Twenty-Five Thousand Dollars ($125,000). In addition, the Company shall bear the Seven Thousand Five Hundred Dollar ($7,500) flat escrow fee payable to Granite Trust Company, N.A. in connection with the closings under the Note Purchase Agreement. The foregoing expense reimbursement obligations are more fully set forth in the Note Purchase Agreement and are incorporated herein by reference.
Section 19. Defined Terms
Capitalized terms used in this Note and not otherwise defined herein shall have the meanings ascribed to them in the Note Purchase Agreement, including, without limitation, the following terms:
"Cap Price" has the meaning set forth in Section 3.1(c)(ii) of this Note.
"Change of Control" has the meaning set forth in Section 3.3(a) of this Note.
"Conversion Price" has the meaning set forth in Section 3.1(c) of this Note.
"Majority Holders" means holders of Notes representing more than fifty percent (50%) of the aggregate outstanding principal amount of all Notes then outstanding, as more fully defined in the Note Purchase Agreement.
"Note Purchase Agreement" means that certain Note Purchase Agreement, dated as of January 15, 2024, by and among the Company and the Purchasers, as amended, restated, supplemented, or otherwise modified from time to time.
"Purchasers" means Ridgeline Ventures Fund IV, L.P., Beacon Hill Capital Partners, LLC, Northstar Innovation Fund II, L.P., and Halcyon Growth Equity, L.P., and any additional purchasers that become parties to the Note Purchase Agreement in accordance with its terms.
"Qualified Financing" has the meaning set forth in Section 3.1(a) of this Note.
"Senior Loan Agreement" has the meaning set forth in Section 5.1 of this Note.
"Subordination Agreement" has the meaning set forth in Section 5.1 of this Note.
"Transaction Documents" has the meaning given to such term in the Note Purchase Agreement.
"Valuation Cap" means Seven Hundred Fifty Million Dollars ($750,000,000).
[Signature Page Follows]
SIGNATURE PAGE TO CONVERTIBLE PROMISSORY NOTE
IN WITNESS WHEREOF, the Company has executed and delivered this Convertible Promissory Note as of the date first written above.
SKYBRIDGE FINTECH LTD.
By: ________
Name: Arjun Mehta
Title: Chief Executive Officer
ACKNOWLEDGED AND AGREED:
HOLDER:
________________________________________
[Name of Holder]
By: ________
Name: ________
Title: ________
Address: ________
________________________________________
________________________________________
Principal Amount: $________
SCHEDULE A
CONVERSION CALCULATION EXAMPLE
(Illustrative Only — Not Binding)
The following illustrative examples are provided for reference purposes only and shall not be deemed to modify, limit, or otherwise affect the terms and conditions of the Note. All calculations are subject to adjustment based on the Company's actual fully diluted capitalization at the time of conversion and the actual price per share in any Qualified Financing. The examples below assume a single Note with an outstanding principal balance of $10,000,000 and twelve (12) months of accrued interest at 6.00% per annum ($600,000), for a total conversion amount of $10,600,000.
Assumptions:
•  Pre-bridge fully diluted share count: approximately 48,500,000 shares
•  Valuation Cap: $750,000,000
•  Cap Price: $750,000,000 ÷ 48,500,000 = approximately $15.46 per share
•  Conversion discount: 20% (i.e., conversion at 80% of the Qualified Financing price)
•  Illustrative principal amount of single Note: $10,000,000
•  Accrued interest (12 months at 6.00%): $600,000
•  Total conversion amount: $10,600,000
Scenario 1: Qualified Financing Price of $18.00 per share
In this scenario, the discount Price ($14.40) is lower than the Cap Price ($15.46), so the discount Price applies.
Scenario 2: Qualified Financing Price of $22.00 per share
In this scenario, the Cap Price ($15.46) is lower than the discount Price ($17.60), so the Cap Price applies. The Valuation Cap effectively governs the conversion.
Scenario 3: Qualified Financing Price of $19.33 per share (Breakeven)
At a Qualified Financing price of approximately $19.33 per share, the 20% discount price ($15.46) equals the Cap Price ($15.46). At any Qualified Financing price above $19.33, the Cap Price will govern; at any price below $19.33, the discount Price will govern.
Note: All share amounts are rounded down to the nearest whole share in accordance with Section 3.5 of the Note. Actual results will vary based on the Company's fully diluted capitalization at the time of the applicable Qualified Financing, which may differ from the illustrative 48,500,000-share figure used above. This Schedule A is for illustrative purposes only and does not constitute a representation or warranty by the Company as to its capitalization or the terms of any future Qualified Financing.
Principal Amount: $____ | Note Number: CN-___
Date of Issuance: January 15, 2024
Discount Price (80%) | Cap Price | Applicable Price (Lower)
Price per share | $14.40 | $15.46 | $14.40
Shares issued ($10,600,000 ÷ price) | 736,111 | 685,641 | 736,111
Discount Price (80%) | Cap Price | Applicable Price (Lower)
Price per share | $17.60 | $15.46 | $15.46
Shares issued ($10,600,000 ÷ price) | 602,272 | 685,641 | 685,641
Discount Price (80%) | Cap Price | Applicable Price (Lower)
Price per share | $15.46 | $15.46 | $15.46
Shares issued ($10,600,000 ÷ price) | 685,641 | 685,641 | 685,641

EXHIBIT A

TO THE NOTE PURCHASE AGREEMENT

CONVERTIBLE PROMISSORY NOTE

SIGNATURE PAGE TO CONVERTIBLE PROMISSORY NOTE

SKYBRIDGE FINTECH LTD.

ACKNOWLEDGED AND AGREED:

HOLDER:

SCHEDULE A

CONVERSION CALCULATION EXAMPLE

Record

Parties

Dates

Amounts