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

subordination-agreement-initial-draft.docx DOCUMENT Funds

74 / 74 ← ✕

PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT

SUBORDINATION AGREEMENT

DRAFT — For Discussion Purposes Only — December 18, 2023

Prepared by: Calderwood & Harkness LLP, 600 Lexington Avenue, New York, NY 10022 Matter No. 1009-00001

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

Right-click to update Table of Contents

SUBORDINATION AGREEMENT

This SUBORDINATION AGREEMENT (this "Agreement") is entered into as of [●], 2024 (the "Effective Date"), by and among:

(1) KELVANTIS LENDING CORP., a Delaware corporation, with its principal office at 350 Park Avenue, 18th Floor, New York, NY 10022 (the "Senior Lender");

(2) RIDGELINE VENTURES FUND IV, L.P., a Delaware limited partnership, with its principal office at 800 Boylston Street, 34th Floor, Boston, MA 02199;

(3) BEACON HILL CAPITAL PARTNERS, LLC, a Delaware limited liability company, with its principal office at 222 West Adams Street, Suite 3400, Chicago, IL 60606;

(4) NORTHSTAR INNOVATION FUND II, L.P., a Delaware limited partnership, with its principal office at 555 California Street, Suite 4100, San Francisco, CA 94104;

(5) HALCYON GROWTH EQUITY, L.P., a Delaware limited partnership, with its principal office at 1201 Third Avenue, Suite 5600, Seattle, WA 98101;

(the parties identified in clauses (2) through (5) above, collectively, the "Junior Creditors" or "Noteholders," and each individually, a "Junior Creditor" or "Noteholder"); and

(6) SKYBRIDGE FINTECH LTD., a Delaware corporation (EIN: 83-2147605; DE File Number: 6384291), with its principal office at 1400 Market Street, Suite 2200, Wilmington, DE 19801 (the "Company" or "Borrower").

The Senior Lender, the Junior Creditors, and the Company are each referred to herein individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS:

A. The Senior Lender and the Company are parties to that certain Loan and Security Agreement, dated as of August 15, 2022, by and between Kelvantis Lending Corp. and Skybridge Fintech Ltd. (as may be amended, restated, supplemented, or otherwise modified from time to time, the "Senior Loan Agreement"), pursuant to which the Senior Lender extended a venture debt facility to the Company in the original principal amount of Fifteen Million Dollars ($15,000,000) (the "Senior Debt"), maturing on August 15, 2025;

B. The Company proposes to issue convertible promissory notes (the "Notes" or "Junior Debt") in the aggregate principal amount of up to Sixty Million Dollars ($60,000,000), bearing interest at the rate of 6.00% per annum (600 basis points), calculated as simple interest computed on a 365-day year basis, maturing twenty-four (24) months from the date of issuance (the "Maturity Date"), pursuant to that certain Note Purchase Agreement, to be dated on or about the date hereof (the "Note Purchase Agreement"), by and among the Company and the Junior Creditors;

C. The Notes will be convertible into equity securities of the Company upon a Qualified Financing (as defined in the Note Purchase Agreement) of at least Eighty Million Dollars ($80,000,000) in new equity capital, at a conversion price equal to the lower of (a) eighty percent (80%) of the price per share in such Qualified Financing (reflecting a twenty percent (20%) discount) or (b) the price per share implied by a Seven Hundred Fifty Million Dollar ($750,000,000) pre-money valuation cap on a fully diluted basis;

D. The Senior Loan Agreement restricts the Company from incurring additional indebtedness without the prior written consent of the Senior Lender, and the Senior Lender is willing to consent to the issuance of the Notes, subject to the terms and conditions of this Agreement;

E. As a condition to the Senior Lender's consent to the issuance of the Notes, and as a condition to the closing of the transactions contemplated by the Note Purchase Agreement, the Parties desire to set forth the relative priorities and rights of the Senior Lender and the Junior Creditors with respect to the Senior Debt and the Junior Debt, and to establish the terms upon which the Junior Debt shall be subordinated to the Senior Debt; and

F. The Company acknowledges and agrees to the subordination of the Junior Debt to the Senior Debt and joins this Agreement to confirm its obligations hereunder and to bind itself to the covenants, restrictions, and undertakings set forth herein.

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I — DEFINITIONS

Section 1.1 — Defined Terms.

As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Senior Loan Agreement or the Note Purchase Agreement, as applicable, unless the context otherwise requires.

"Agreement" means this Subordination Agreement, as may be amended, modified, restated, or supplemented from time to time in accordance with Section 12.6.

"Bankruptcy Event" means, with respect to the Company, (a) the filing by the Company of a voluntary petition for relief under Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.), as amended from time to time (the "Bankruptcy Code"), or any successor statute thereto, (b) the filing of an involuntary petition against the Company under the Bankruptcy Code that is not dismissed within sixty (60) days of filing, (c) the making by the Company of a general assignment for the benefit of creditors, (d) the appointment of a receiver, trustee, custodian, conservator, or similar official for the Company or for all or substantially all of the Company's assets, (e) the entry of an order for relief against the Company in any case under the Bankruptcy Code, or (f) the commencement of any proceeding under any other federal or state insolvency, reorganization, receivership, or similar law now or hereafter in effect relating to the Company.

"blockage Notice" has the meaning set forth in Section 2.2(b).

"Change of Control" has the meaning ascribed to such term in the Note Purchase Agreement. For purposes of this Agreement, references to the payment obligations of the Company upon a Change of Control shall include, without limitation, the obligation to pay the Junior Creditors the greater of (i) two times (2.0x) the outstanding principal amount of the Notes plus all accrued and unpaid interest thereon, or (ii) the amount that would be payable upon conversion of the Notes at the price per share implied by the $750,000,000 valuation cap on a fully diluted basis, in each case as more fully described in the Note Purchase Agreement and the Notes.

"Collateral" means all assets and property of the Company, whether now owned or hereafter acquired, in which the Senior Lender holds or may hereafter hold a security interest, lien, or encumbrance under the Senior Loan Agreement, including, without limitation, all accounts receivable, inventory, equipment, intellectual property, general intangibles, instruments, chattel paper, deposit accounts, investment property, letter-of-credit rights, commercial tort claims, and all proceeds and products thereof, in each case as described in the Senior Loan Agreement.

"Company" means Skybridge Fintech Ltd., a Delaware corporation, and its successors and assigns.

"Conversion" means the conversion of the Notes, in whole or in part, into equity securities of the Company pursuant to and in accordance with the terms and conditions set forth in the Notes and the Note Purchase Agreement, whether such conversion occurs automatically upon a Qualified Financing, optionally at the election of the Noteholders, or upon the Maturity Date at the valuation cap price, as applicable.

"Distribution" means any payment, repayment, prepayment, distribution, transfer, or delivery of cash, property, securities, or other consideration, directly or indirectly, on account of or with respect to the Junior Debt, whether by way of principal, interest, fees, damages, or otherwise, and whether made voluntarily, involuntarily, or by operation of law, including, without limitation, any payment made in connection with a Bankruptcy Event or any plan of reorganization or liquidation.

"Effective Date" has the meaning set forth in the preamble.

"Enforcement Action" means any action, proceeding, or step taken to collect, enforce, accelerate, exercise, or realize upon any rights or remedies with respect to the Junior Debt or any instrument or agreement evidencing or relating to the Junior Debt, including, without limitation, (a) commencing, prosecuting, or joining in any lawsuit, action, proceeding, or arbitration against the Company or any guarantor, (b) accelerating the maturity of any or all of the Junior Debt, (c) exercising any right of setoff, recoupment, or counterclaim against the Company, (d) commencing or joining in any involuntary bankruptcy, insolvency, or similar proceeding against the Company, (e) exercising any right of foreclosure or attachment with respect to any property of the Company, (f) seeking to obtain a judgment, decree, or order against the Company, or (g) seeking to enforce any judgment, decree, or order against the Company or any of its assets.

"Junior Creditors" 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 their respective successors and assigns that become bound by this Agreement in accordance with its terms.

"Junior Debt" means all obligations, liabilities, and indebtedness of the Company to the Junior Creditors under or in connection with the Notes and the Note Purchase Agreement, whether now existing or hereafter arising, including, without limitation, (a) all outstanding principal (in an aggregate amount of up to Sixty Million Dollars ($60,000,000)), (b) all accrued and unpaid interest thereon (at the rate of 6.00% per annum), (c) all premiums, fees, expenses, costs, and charges payable thereunder, and (d) all other amounts of whatever nature that may become due and payable by the Company to the Junior Creditors under or in connection with the Notes or the Note Purchase Agreement.

"Maturity Date" means the date that is twenty-four (24) months from the date of issuance of the Notes, anticipated to be January 15, 2026, as such date may be extended in accordance with the terms of the Notes, subject to Section 9.2 of this Agreement.

"Note Purchase Agreement" means the Note Purchase Agreement, to be dated on or about the Effective Date, by and among the Company and the Junior Creditors, as may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms thereof and subject to Section 9.2 of this Agreement.

"Notes" means the convertible promissory notes issued or to be issued by the Company to the Junior Creditors pursuant to the Note Purchase Agreement, substantially in the form attached hereto as Exhibit B, and all notes issued in exchange therefor, replacement thereof, or substitution therefor.

"Payment in Full" means the indefeasible payment in full in cash of all Senior Debt (including all principal, accrued and unpaid interest, fees, expenses, and all other amounts due and payable under the Senior Loan Agreement) and the irrevocable termination of all commitments and obligations of the Senior Lender to extend credit or make advances under the Senior Loan Agreement. For purposes of this definition, payments that are subject to any right of return, clawback, avoidance, recovery, or disgorgement under any applicable law (including Sections 547 and 548 of the Bankruptcy Code) shall not constitute "indefeasible payment."

"Permitted Junior Payments" has the meaning set forth in Section 2.3.

"Qualified Financing" has the meaning ascribed to such term in the Note Purchase Agreement. For purposes of this Agreement, a "Qualified Financing" means an equity financing of the Company in which the Company raises at least Eighty Million Dollars ($80,000,000) in new equity capital (exclusive of any amounts raised through conversion of the Notes or other convertible instruments) from investors in a bona fide arm's-length transaction.

"Senior Debt" means all obligations, liabilities, and indebtedness of the Company to the Senior Lender under or in connection with the Senior Loan Agreement, whether now existing or hereafter arising, including, without limitation, (a) outstanding principal in the amount of Fifteen Million Dollars ($15,000,000), (b) all accrued and unpaid interest thereon, (c) all fees (including any final payment, prepayment premium, or success fee), expenses (including reasonable attorneys' fees and costs), and charges payable thereunder, (d) all protective advances made by the Senior Lender under the Senior Loan Agreement, and (e) all other amounts of whatever nature that may become due and payable by the Company to the Senior Lender under or in connection with the Senior Loan Agreement, in each case whether or not allowed or allowable as a claim in any Bankruptcy Event. The Senior Debt shall mature on August 15, 2025, unless earlier accelerated, extended, or otherwise modified in accordance with the terms of the Senior Loan Agreement and this Agreement.

"Senior Default" means any "Event of Default" as defined in the Senior Loan Agreement, whether arising from a payment default, a covenant default, a cross-default, a material adverse change, or otherwise.

"Senior Lender" means Kelvantis Lending Corp., a Delaware corporation, and its successors, assigns, and transferees.

"Senior Loan Agreement" has the meaning set forth in Recital A.

"Subordination Period" means the period commencing on the Effective Date and continuing until the first to occur of (a) the Payment in Full of all Senior Debt and the termination of all commitments under the Senior Loan Agreement, and (b) the Payment in Full of all Junior Debt (including by Conversion into equity securities of the Company, which shall be deemed to constitute payment in full of the converted portion of the Junior Debt for purposes of this definition).

Section 1.2 — Rules of Construction.

Unless the context otherwise requires: (a) a term defined in the singular shall have the corresponding meaning when used in the plural, and vice versa; (b) references to "herein," "hereof," "hereunder," and words of similar import shall refer to this Agreement as a whole and not to any particular Article, Section, subsection, or provision; (c) references to any Article, Section, subsection, Exhibit, or Schedule shall refer to the corresponding Article, Section, subsection, Exhibit, or Schedule of this Agreement, unless otherwise specified; (d) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation"; (e) references to any statute or regulation shall include all statutory and regulatory provisions consolidating, amending, replacing, or supplementing such statute or regulation from time to time, and shall include any rules and regulations promulgated thereunder; (f) references to "days" shall mean calendar days unless otherwise specified as "business days"; (g) references to "dollars" or "$" shall mean the lawful currency of the United States of America; (h) references to any Person shall include such Person's successors and permitted assigns; (i) references to any agreement or other document shall mean such agreement or document as from time to time amended, restated, supplemented, or otherwise modified in accordance with its terms and, where applicable, subject to the terms of this Agreement; and (j) in the event of any conflict between the provisions of this Agreement and the provisions of the Notes or the Note Purchase Agreement, the provisions of this Agreement shall control as among the Parties. This Agreement shall be construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (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. The Parties acknowledge that each Party and its counsel have reviewed and revised this Agreement and that no rule of construction to the effect that ambiguities are to be resolved against the drafting party shall apply to the interpretation of this Agreement.

ARTICLE II — SUBORDINATION

Section 2.1 — Subordination of Junior Debt.

(a) Each Junior Creditor hereby agrees, and the Company acknowledges and agrees, that all Junior Debt is, and shall at all times remain, expressly subordinated and made junior and subject in right of payment, to the extent and in the manner set forth in this Agreement, to the prior Payment in Full of all Senior Debt. The subordination effected by this Section 2.1 applies to all principal of the Junior Debt (in an aggregate amount of up to Sixty Million Dollars ($60,000,000)), all accrued and unpaid interest thereon (at the rate of 6.00% per annum, which interest, if calculated on the full aggregate principal amount, would equal approximately Three Million Six Hundred Thousand Dollars ($3,600,000) annually), and all other amounts of whatever kind or nature that may at any time become due and payable under the Notes or the Note Purchase Agreement.

(b) The rights of the Junior Creditors in and to the Junior Debt, and the rights of the Junior Creditors to receive any Distribution on account of the Junior Debt, are and shall at all times be subject to the provisions of this Agreement. During the Subordination Period, no Junior Creditor shall demand, accept, or receive any Distribution on account of the Junior Debt, directly or indirectly, except as expressly permitted under this Agreement. Each Junior Creditor acknowledges and agrees that the subordination and priority provisions set forth in this Agreement are intended for the benefit of the Senior Lender and that the Senior Lender is an intended beneficiary of such provisions.

(c) The priority of the Senior Debt over the Junior Debt established by this Agreement is absolute and unconditional, and shall not be affected by (i) the time, manner, or order of granting, creation, attachment, or perfection of any liens, security interests, or encumbrances held by the Senior Lender or the Junior Creditors, (ii) the time or order of making any loans, advances, or extensions of credit constituting the Senior Debt or the Junior Debt, (iii) any amendment, modification, renewal, extension, refinancing, or supplement of the Senior Debt or the Junior Debt, (iv) any defect in or insufficiency or invalidity of the Senior Loan Agreement, the Notes, or the Note Purchase Agreement, (v) any defense, counterclaim, offset, or claim that the Company may have against the Senior Lender, or (vi) any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Company or any Junior Creditor in respect of the subordination effected hereby.

Section 2.2 — Payment blockage.

(a) During the Subordination Period, the Company shall not make, and the Junior Creditors shall not demand, accept, or receive, directly or indirectly, any Distribution on account of the Junior Debt (other than Permitted Junior Payments as defined in Section 2.3) if, at the time of such Distribution or immediately after giving effect thereto: (i) a Senior Default has occurred and is continuing, or (ii) any payment of principal, interest, or any other amount due under the Senior Loan Agreement on account of the Senior Debt is then past due and remains unpaid.

(b) Upon receipt by the Company and the Junior Creditors (or their designated representative) of a written notice from the Senior Lender (a "blockage Notice") stating that a Senior Default has occurred and is continuing and specifying the nature of such Senior Default in reasonable detail, a payment blockage period shall commence on the date of delivery of such blockage Notice and shall continue until the earliest to occur of: (i) one hundred seventy-nine (179) days after the date of delivery of such blockage Notice, (ii) the date on which the Senior Default specified in such blockage Notice is cured to the satisfaction of the Senior Lender or waived in writing by the Senior Lender, or (iii) the date on which the Senior Lender accelerates the maturity of the Senior Debt and demands payment in full thereof. During any payment blockage period, no Distribution shall be made on account of the Junior Debt (other than Permitted Junior Payments), and neither the Company nor any Junior Creditor shall take any action inconsistent with the payment blockage.

(c) The Senior Lender shall not deliver more than two (2) blockage Notices during any consecutive twelve (12)-month period. In addition, a minimum interval of ninety (90) days must elapse between the expiration or termination of one payment blockage period and the commencement of a subsequent payment blockage period pursuant to a new blockage Notice. Nothing in this Section 2.2(c) shall prevent the Senior Lender from delivering a blockage Notice at any time that a Senior Default has occurred and is continuing, provided that the numerical and timing limitations set forth in the preceding sentences are satisfied.

(d) If the Company makes any Distribution on the Junior Debt in violation of this Section 2.2, or if any Junior Creditor receives any Distribution on the Junior Debt in violation of this Section 2.2, such Distribution shall be received and held in trust by the Company or such Junior Creditor, as applicable, for the benefit of the Senior Lender and shall be promptly turned over and delivered to the Senior Lender in the form received (with any necessary endorsements or assignments) for application against the Senior Debt in accordance with Article VIII. Neither the Company nor any Junior Creditor shall have any right, title, or interest in or to any such Distribution, except as trustee for the Senior Lender.

Section 2.3 — Permitted Junior Payments.

Notwithstanding the provisions of Section 2.2, the following shall constitute "Permitted Junior Payments" and shall not be restricted, blocked, or prohibited by this Agreement:

(a) Conversion of Notes into Equity. The automatic or optional Conversion of the Notes, in whole or in part, into equity securities of the Company upon a Qualified Financing, upon the Maturity Date at the valuation cap price, or otherwise in accordance with the terms of the Notes and the Note Purchase Agreement, as no cash payment is made by the Company to the Junior Creditors on account of such Conversion. For the avoidance of doubt, the issuance of equity securities upon Conversion shall not constitute a "Distribution" for purposes of this Agreement.

(b) Regularly Scheduled Interest Payments. [C&H Note to Client and Whitfield, Pratt & Soo LLP: The current form of Convertible Promissory Note provides for simple interest at 6.00% per annum accruing to conversion or maturity, with no periodic cash interest payments due during the term of the Notes. If the final Note form is revised to provide for periodic cash interest payments (e.g., quarterly or semi-annual), the parties should discuss whether such cash interest payments should be included as Permitted Junior Payments or whether they should be subject to the payment blockage provisions of Section 2.2. To be confirmed prior to execution.]

(c) Change of Control Payments. Subject to Section 2.5, any payment made by the Company to the Junior Creditors upon a Change of Control in accordance with the terms of the Notes and the Note Purchase Agreement, provided that all Senior Debt is indefeasibly repaid in full in cash, and all commitments under the Senior Loan Agreement are irrevocably terminated, concurrently with or prior to the making of any such payment on account of the Junior Debt.

Section 2.4 — Liquidation, Dissolution, Bankruptcy.

(a) Upon the occurrence of any Bankruptcy Event, or upon any dissolution, winding up, liquidation, reorganization, arrangement, adjustment, composition, or similar proceeding relating to the Company, its creditors, or its assets, whether voluntary or involuntary, partial or complete, and whether in bankruptcy, insolvency, receivership, or other similar proceedings, or upon an assignment for the benefit of creditors or any other marshalling of the assets and liabilities of the Company:

(i) All Senior Debt shall first be indefeasibly Paid in Full before any Distribution of any kind or character, whether in cash, property, securities, or otherwise, shall be made on account of or with respect to the Junior Debt;

(ii) Any Distribution of any kind or character, whether in cash, property, securities, or otherwise, that would otherwise be payable or deliverable to the Junior Creditors on account of the Junior Debt shall be paid, delivered, and transferred directly to the Senior Lender (or its designated agent) until the Senior Debt is Paid in Full, and the Junior Creditors hereby irrevocably authorize and direct any trustee in bankruptcy, receiver, assignee for the benefit of creditors, agent, liquidating agent, or other similar Person acting on behalf of the Company or its estate to make such payments and deliveries directly to the Senior Lender;

(iii) If any Junior Creditor fails to file a proof of claim or interest with respect to the Junior Debt in any insolvency proceeding within thirty (30) days of the applicable bar date for the filing of such claims, the Junior Creditors hereby irrevocably authorize the Senior Lender, acting as attorney-in-fact for the Junior Creditors (which appointment is coupled with an interest and is irrevocable), to file proofs of claim on behalf of the Junior Creditors with respect to the Junior Debt, and to accept or reject any plan of reorganization or liquidation on behalf of the Junior Creditors; provided, that such authority shall not limit the right of the Junior Creditors to file their own proofs of claim at any time prior to the expiration of the applicable bar date; and

(iv) The Junior Creditors agree that, to the extent permitted by applicable law, they shall vote their claims in favor of any plan of reorganization or liquidation that is acceptable to the Senior Lender, and shall not vote in favor of any plan that is opposed by the Senior Lender. [Note: This provision is subject to further negotiation. The Junior Creditors may seek to limit the scope of this voting restriction or to preserve their independent right to vote on any plan that adequately provides for the treatment of the Junior Debt. Counsel for the Junior Creditors has indicated they will propose revisions.]

(b) The provisions of this Section 2.4 shall apply regardless of whether the Senior Lender's claims against the Company are allowed, secured, or unsecured in any Bankruptcy Event, and regardless of whether the Senior Lender has filed a proof of claim or is otherwise a party to such proceeding.

Section 2.5 — Change of Control.

(a) The Parties acknowledge that, pursuant to the Notes and the Note Purchase Agreement, upon the occurrence of a Change of Control, the Junior Creditors are entitled to receive from the Company the greater of (i) two times (2.0x) the outstanding principal amount of the Notes held by such Junior Creditor, plus all accrued and unpaid interest thereon, or (ii) the amount that would be payable to such Junior Creditor upon Conversion of the Notes at the price per share implied by the Seven Hundred Fifty Million Dollar ($750,000,000) valuation cap on a fully diluted basis. Based on the aggregate principal amount of Sixty Million Dollars ($60,000,000), the maximum aggregate Change of Control payment to the Junior Creditors under clause (i) above would be One Hundred Twenty Million Dollars ($120,000,000) (exclusive of accrued interest), assuming the 2.0x multiple exceeds the value implied by conversion at the valuation cap.

(b) Notwithstanding any provision of the Notes or the Note Purchase Agreement to the contrary, any payment on account of the Junior Debt upon a Change of Control is and shall remain subject to the prior Payment in Full of all Senior Debt. No Distribution shall be made to any Junior Creditor on account of the Junior Debt in connection with a Change of Control unless and until all Senior Debt has been indefeasibly Paid in Full in cash and all commitments under the Senior Loan Agreement have been irrevocably terminated.

(c) The Company shall provide the Senior Lender with not less than fifteen (15) business days' prior written notice of any proposed Change of Control, together with a reasonably detailed description of the proposed transaction, the identity of the acquirer, the anticipated closing date, and the proposed sources and uses of funds in connection therewith. The Company shall provide such additional information regarding the proposed Change of Control as the Senior Lender may reasonably request.

ARTICLE III — STANDSTILL AND ENFORCEMENT LIMITATIONS

Section 3.1 — Standstill.

During the Subordination Period, no Junior Creditor shall, directly or indirectly, take any Enforcement Action with respect to the Junior Debt without the prior written consent of the Senior Lender, except as expressly provided in Section 3.2. Without limiting the generality of the foregoing, during the Subordination Period, no Junior Creditor shall, without the prior written consent of the Senior Lender:

(a) accelerate the maturity of any or all of the Junior Debt;

(b) commence, prosecute, or join in any lawsuit, action, proceeding, or arbitration against the Company for the collection or enforcement of the Junior Debt;

(d) commence, join in, or support any involuntary bankruptcy, insolvency, or similar proceeding against the Company;

(e) seek to attach, levy upon, garnish, or otherwise execute against any assets or property of the Company;

(f) seek to obtain any judgment, decree, or order against the Company with respect to the Junior Debt; or

(g) exercise any other creditor remedy or right against the Company with respect to the Junior Debt, whether at law, in equity, or otherwise.

Each Junior Creditor acknowledges and agrees that the standstill restrictions set forth in this Section 3.1 are a material inducement to the Senior Lender's willingness to consent to the issuance of the Notes and to enter into this Agreement.

Section 3.2 — Standstill Exceptions.

The standstill restrictions set forth in Section 3.1 shall not prevent or restrict the following actions by any Junior Creditor:

(a) Conversion. The Conversion of the Notes into equity securities of the Company in accordance with the terms of the Notes and the Note Purchase Agreement. For the avoidance of doubt, Conversion of the Notes is not an Enforcement Action and shall not be subject to any consent, approval, or standstill requirement under this Agreement.

(b) Filing Proofs of Claim. The filing of proofs of claim or interest in any insolvency, bankruptcy, receivership, or similar proceeding commenced by any party other than such Junior Creditor, to the extent necessary to preserve the Junior Creditor's rights with respect to the Junior Debt; provided, that any Distribution received by any Junior Creditor in such proceeding shall remain subject to the provisions of this Agreement, including the turnover obligations set forth in Article VIII.

(c) Enforcement After Standstill Period. After the expiration of a period of one hundred eighty (180) days following the date on which the Junior Creditors (acting by majority in aggregate principal amount of the outstanding Notes) have accelerated the Junior Debt upon the occurrence and during the continuance of an event of default under the Notes (the "Standstill Period"), the Junior Creditors may take Enforcement Action with respect to the Junior Debt; provided, however, that such right to take Enforcement Action shall be suspended and the Standstill Period shall be tolled during any period in which the Senior Lender has commenced and is diligently pursuing its own enforcement proceedings with respect to the Senior Debt or the Collateral. [Note: The length of the Standstill Period is subject to further negotiation. The Senior Lender may request a longer standstill period (e.g., 270 days or 365 days). Counsel for the Junior Creditors has indicated that any period in excess of 180 days would be commercially unreasonable given the maturity profile of the Notes. The parties should discuss and agree upon the final standstill duration.]

(d) Notices of Default. The delivery of notices of default, acceleration, or other similar notices to the Company under the Notes or the Note Purchase Agreement; provided, that the Junior Creditors shall simultaneously deliver copies of all such notices to the Senior Lender.

Section 3.3 — Notice of Default on Junior Debt.

Each Junior Creditor shall promptly (and in any event within five (5) business days) provide the Senior Lender with written notice of the occurrence of any event of default under the Notes or the Note Purchase Agreement, specifying the nature of such event of default in reasonable detail. In addition, the Junior Creditors shall provide the Senior Lender with copies of any and all notices of default, notices of acceleration, demand letters, or other formal communications delivered by any Junior Creditor to the Company in connection with the Junior Debt, promptly upon delivery thereof. The failure of any Junior Creditor to provide such notice shall not affect the validity of the subordination provisions of this Agreement but may give rise to liability for damages suffered by the Senior Lender as a result of such failure.

ARTICLE IV — LIEN SUBORDINATION

Section 4.1 — No Liens.

(a) Each Junior Creditor acknowledges and agrees that the Notes are and shall at all times be unsecured obligations of the Company. The Notes are not secured by any lien on, security interest in, mortgage, pledge, charge, encumbrance, or other interest in or against any assets, properties, or rights of the Company, whether now owned or hereafter acquired.

(b) No Junior Creditor shall, directly or indirectly, acquire, accept, hold, or obtain any lien on, security interest in, mortgage, pledge, charge, or other encumbrance in or against any assets, properties, or rights of the Company as security for any or all of the Junior Debt, without the prior written consent of the Senior Lender. This restriction applies to liens and security interests of every kind and nature, whether arising by contract, operation of law, or otherwise, and whether voluntary or involuntary.

(c) If, notwithstanding the foregoing, any Junior Creditor acquires, receives, or otherwise obtains any lien on, security interest in, or other encumbrance in or against any assets, properties, or rights of the Company in violation of this Section 4.1, such lien, security interest, or encumbrance shall be and is hereby deemed to be subordinate in all respects to the liens, security interests, and encumbrances of the Senior Lender in the Collateral under the Senior Loan Agreement, regardless of the time, manner, or order of creation, granting, attachment, or perfection thereof. Any such lien or security interest shall be held by the Junior Creditor as trustee for the benefit of the Senior Lender, and the Junior Creditor shall, at its sole cost and expense, promptly execute and deliver to the Senior Lender such releases, termination statements, and other documents as the Senior Lender may reasonably request to evidence the release or subordination of such lien or security interest.

Section 4.2 — Senior Lender's Liens.

(a) Each Junior Creditor acknowledges and agrees that the Senior Lender holds valid, perfected, and enforceable security interests and liens in the Collateral under the Senior Loan Agreement, and that such security interests and liens have priority over any and all claims, interests, or rights of the Junior Creditors with respect to the Collateral.

(b) No Junior Creditor shall, directly or indirectly, contest, challenge, object to, or raise any defense to the validity, perfection, enforceability, or priority of the Senior Lender's security interests and liens in the Collateral, whether in any judicial or administrative proceeding, in any Bankruptcy Event, or otherwise. Each Junior Creditor hereby waives any and all rights it may have to challenge, contest, or object to the Senior Lender's security interests and liens in the Collateral.

ARTICLE V — REPRESENTATIONS AND WARRANTIES

Section 5.1 — Representations and Warranties of the Junior Creditors.

Each Junior Creditor, severally and not jointly, hereby represents and warrants to the Senior Lender and the Company as of the Effective Date as follows:

(a) Organization and Existence. Such Junior Creditor is duly organized, validly existing, and in good standing under the laws of the State of Delaware. Specifically: Ridgeline Ventures Fund IV, L.P. is a Delaware limited partnership; Beacon Hill Capital Partners, LLC is a Delaware limited liability company; Northstar Innovation Fund II, L.P. is a Delaware limited partnership; and Halcyon Growth Equity, L.P. is a Delaware limited partnership. Each Junior Creditor has all requisite organizational power and authority to own, lease, and operate its properties and to conduct its business as presently conducted.

(b) Authority. Such Junior Creditor has all requisite power, authority, and legal capacity to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement by such Junior Creditor have been duly authorized by all necessary action on the part of such Junior Creditor, including, in the case of each limited partnership, authorization by its general partner, and in the case of each limited liability company, authorization by its managing member or members.

(c) Enforceability. This Agreement constitutes a legal, valid, and binding obligation of such Junior Creditor, enforceable against such Junior Creditor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith, and fair dealing), regardless of whether considered in a proceeding in equity or at law.

(d) No Consents Required. No consent, approval, authorization, order, registration, qualification, filing, or notification of or with any governmental authority or regulatory body, or any other Person, is required for the execution, delivery, and performance by such Junior Creditor of this Agreement, other than those that have been duly obtained, made, or given prior to the Effective Date and are in full force and effect.

(e) No Existing Liens. As of the Effective Date, such Junior Creditor does not hold, and has not been granted, any lien on, security interest in, mortgage, pledge, charge, or other encumbrance in or against any assets, properties, or rights of the Company as security for the Junior Debt or any other obligation.

Section 5.2 — Representations and Warranties of the Senior Lender.

Kelvantis Lending Corp. hereby represents and warrants to the Junior Creditors and the Company as of the Effective Date as follows:

(a) Organization and Existence. The Senior Lender is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. The Senior Lender has all requisite corporate power and authority to own, lease, and operate its properties and to conduct its business as presently conducted.

(b) Authority. The Senior Lender has all requisite corporate power and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement by the Senior Lender have been duly authorized by all necessary corporate action.

(c) Enforceability. This Agreement constitutes a legal, valid, and binding obligation of the Senior Lender, enforceable against the Senior Lender in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith, and fair dealing), regardless of whether considered in a proceeding in equity or at law.

(d) Status of Senior Loan Agreement. The Senior Loan Agreement is in full force and effect as of the Effective Date. As of the Effective Date, no Senior Default exists under the Senior Loan Agreement, and to the knowledge of the Senior Lender, no event or condition exists that, with the giving of notice, the passage of time, or both, would constitute a Senior Default. [Note: To be confirmed with Kelvantis Lending Corp. (Ted Marsh, Relationship Manager) prior to execution. If a Senior Default exists or is anticipated, the representation should be qualified accordingly.]

Section 5.3 — Representations and Warranties of the Company.

Skybridge Fintech Ltd. hereby represents and warrants to the Senior Lender and the Junior Creditors as of the Effective Date as follows:

(a) Organization and Existence. The Company is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Delaware. The Company has all requisite corporate power and authority to own, lease, and operate its properties and to conduct its business as presently conducted.

(b) Authority; Board Authorization. The Company has all requisite corporate power and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement by the Company have been duly authorized by all necessary corporate action, including approval by Unanimous Written Consent of the Board of Directors of the Company.

(c) No Conflicts. The execution, delivery, and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not (i) violate or conflict with the Company's Amended and Restated Certificate of Incorporation or Bylaws, (ii) violate or conflict with any law, rule, regulation, order, judgment, decree, or injunction applicable to the Company, or (iii) result in a breach of, constitute a default under, require any consent under, or give rise to any right of termination, cancellation, or acceleration under any material agreement, contract, or instrument to which the Company is a party or by which the Company or any of its assets is bound, except, in the case of clause (iii), as would not reasonably be expected to have a material adverse effect on the Company.

(d) Outstanding Senior Debt. The Senior Debt under the Senior Loan Agreement is in an outstanding principal amount of Fifteen Million Dollars ($15,000,000) as of the Effective Date, with a maturity date of August 15, 2025. The Company has disclosed to the Junior Creditors the interest rate, payment schedule, financial covenants, and other material terms of the Senior Loan Agreement.

(e) Disclosure of Senior Loan Agreement. The Company has disclosed to the Junior Creditors the existence and material terms of the Senior Loan Agreement, and has made available to counsel for the Junior Creditors a true, correct, and complete copy of the Senior Loan Agreement (including all amendments, supplements, and modifications thereto) for review.

ARTICLE VI — COVENANTS

Section 6.1 — Company Covenants.

The Company hereby covenants and agrees with the Senior Lender and the Junior Creditors as follows:

(a) Notice of Defaults. The Company shall provide the Senior Lender and the Junior Creditors with prompt written notice (and in any event within five (5) business days) of the occurrence of (i) any Senior Default under the Senior Loan Agreement, (ii) any event of default under the Notes or the Note Purchase Agreement, or (iii) any event or circumstance that, with the giving of notice, the passage of time, or both, would reasonably be expected to constitute a Senior Default or an event of default under the Notes. Such notice shall specify the nature of the default or event in reasonable detail and shall describe the actions, if any, that the Company proposes to take with respect thereto.

(b) Restrictions on Modification of Senior Loan Agreement. The Company shall not amend, modify, restate, supplement, or otherwise alter the Senior Loan Agreement or any other agreement, instrument, or document evidencing, securing, or relating to the Senior Debt in any manner that would (i) increase the aggregate principal amount of the Senior Debt above Fifteen Million Dollars ($15,000,000) (exclusive of protective advances, interest, fees, and expenses), (ii) extend the maturity date of the Senior Debt beyond August 15, 2025, (iii) increase the interest rate applicable to the Senior Debt, (iv) expand the scope or nature of the Collateral beyond the collateral described in the Senior Loan Agreement as in effect on the Effective Date, or (v) impose any new covenant, condition, or restriction that would materially and adversely affect the rights of the Junior Creditors under this Agreement, the Notes, or the Note Purchase Agreement, in each case without the prior written consent of the Junior Creditors holding a majority in aggregate principal amount of the outstanding Junior Debt. [Note: This protective covenant for the benefit of the Junior Creditors is subject to further negotiation. The Senior Lender may object to certain of these restrictions, and the parties should discuss the scope and application of this provision.]

(c) Compliance with Subordination. The Company shall not make any Distribution on or with respect to the Junior Debt in violation of this Agreement. The Company shall cooperate with the Senior Lender in the enforcement of the subordination provisions of this Agreement and shall take all actions reasonably requested by the Senior Lender to give effect to the intent and purposes hereof.

(d) Delivery of Notices from Senior Lender. The Company shall provide the Junior Creditors with copies of all material notices and communications received from the Senior Lender (including, without limitation, any blockage Notice, notice of default, notice of acceleration, demand for payment, or notice of intention to exercise remedies), promptly upon receipt thereof and in any event within three (3) business days of receipt.

Section 6.2 — Junior Creditor Covenants.

Each Junior Creditor, severally and not jointly, hereby covenants and agrees with the Senior Lender and the Company as follows:

(a) Compliance with Agreement. Such Junior Creditor shall at all times comply with, and shall not take any action inconsistent with, the subordination provisions of Article II, the standstill and enforcement limitations of Article III, and the lien restrictions of Article IV set forth in this Agreement.

(b) Restrictions on Modification of Junior Debt. No Junior Creditor shall amend, modify, restate, supplement, waive, or otherwise alter the Notes, the Note Purchase Agreement, or any other agreement, instrument, or document evidencing, securing, or relating to the Junior Debt in a manner that would (i) increase the aggregate principal amount of the Junior Debt beyond Sixty Million Dollars ($60,000,000), (ii) increase the interest rate applicable to the Junior Debt above 6.00% per annum, (iii) shorten or accelerate the Maturity Date to a date earlier than January 15, 2026 (other than an acceleration in connection with an event of default under the Notes in compliance with the standstill provisions of Article III), (iv) add, grant, or create any lien on, security interest in, or other encumbrance against any assets, properties, or rights of the Company as security for the Junior Debt, or (v) amend, modify, or waive any subordination provision contained in the Notes or the Note Purchase Agreement that is intended for the benefit of the Senior Lender, in each case without the prior written consent of the Senior Lender.

(c) Notice of Assignments and Transfers. Each Junior Creditor shall promptly (and in any event within ten (10) business days) notify the Senior Lender in writing of any proposed or completed assignment, transfer, sale, or other disposition of its Notes or any interest therein, and shall ensure that any assignee, transferee, or other recipient of such Notes executes and delivers to the Senior Lender a Joinder Agreement substantially in the form attached hereto as Exhibit C, pursuant to which such assignee or transferee agrees to be bound by all of the terms and conditions of this Agreement.

Section 6.3 — Senior Lender Covenants.

The Senior Lender hereby covenants and agrees with the Junior Creditors and the Company as follows:

(a) Notice of Defaults and Acceleration. The Senior Lender shall provide the Junior Creditors with prompt written notice (and in any event within five (5) business days) of (i) the occurrence of any Senior Default under the Senior Loan Agreement and (ii) any acceleration of the maturity of the Senior Debt or any demand by the Senior Lender for payment in full of the Senior Debt. Such notice shall specify the nature of the Senior Default or the basis for such acceleration in reasonable detail.

(b) Non-Interference with Conversion. The Senior Lender shall not unreasonably interfere with, obstruct, or impede the Conversion of the Notes into equity securities of the Company upon a Qualified Financing or otherwise in accordance with the terms of the Notes and the Note Purchase Agreement. The parties acknowledge and agree that Conversion of the Notes into equity securities does not constitute a Distribution on the Junior Debt, does not require the payment of cash by the Company to the Junior Creditors, and is permitted under this Agreement as a Permitted Junior Payment pursuant to Section 2.3(a).

ARTICLE VII — CONSENT OF THE SENIOR LENDER

Section 7.1 — Consent to Issuance of Notes.

Kelvantis Lending Corp., as the Senior Lender, hereby consents to the issuance by the Company of the Notes in an aggregate principal amount not to exceed Sixty Million Dollars ($60,000,000) pursuant to the Note Purchase Agreement, notwithstanding any restriction on the incurrence of additional indebtedness contained in Section [●] or any other provision of the Senior Loan Agreement. This consent is specifically limited to the issuance of the Notes as described in this Agreement and in the Note Purchase Agreement, and shall not be construed as a consent to any other indebtedness, obligation, or transaction, whether or not similar to the Notes. This consent does not constitute a waiver of any term, condition, covenant, or provision of the Senior Loan Agreement other than as expressly set forth in Section 7.2, and the Senior Lender reserves all of its rights and remedies under the Senior Loan Agreement except as expressly modified hereby. The consent set forth in this Section 7.1 is conditioned upon the execution and delivery of this Agreement by all Parties hereto, and shall not be effective unless and until this Agreement has been duly executed and delivered by each of the Senior Lender, the Junior Creditors, and the Company.

Section 7.2 — Waiver.

The Senior Lender hereby waives any default or event of default under the Senior Loan Agreement that would otherwise arise solely from (a) the issuance of the Notes by the Company pursuant to the Note Purchase Agreement, (b) the execution and delivery by the Company of this Agreement, the Note Purchase Agreement, and the Notes, and (c) the performance by the Company of its obligations under this Agreement, the Note Purchase Agreement, and the Notes in accordance with the terms thereof. This waiver is limited to the specific events described in the preceding sentence and does not extend to any other default or event of default, whether existing on the Effective Date or arising thereafter. This waiver is in addition to, and shall be supplemented by, the separate Kelvantis Lender Consent and Waiver Letter to be delivered by the Senior Lender to the Company prior to or concurrently with the closing of the transactions contemplated by the Note Purchase Agreement.

ARTICLE VIII — TURNOVER

Section 8.1 — Turnover of Payments.

If any Junior Creditor receives any Distribution on account of the Junior Debt in violation of this Agreement (whether received directly from the Company, from a trustee in bankruptcy, from a receiver, or from any other Person, and whether received in cash, property, securities, or otherwise), such Junior Creditor shall receive and hold such Distribution in trust for the benefit of the Senior Lender and shall promptly (and in any event within five (5) business days of receipt) deliver, transfer, and turn over such Distribution to the Senior Lender, in the form received (with any necessary endorsements, assignments, or instruments of transfer), for application against the Senior Debt in accordance with Section 8.2. Each Junior Creditor hereby appoints the Senior Lender as its attorney-in-fact (which appointment is coupled with an interest and is irrevocable) to endorse any check, draft, instrument, or other item of payment received by such Junior Creditor in violation of this Agreement and to take such other actions as may be reasonably necessary to effectuate the turnover provisions of this Section 8.1.

The turnover obligation set forth in this Section 8.1 is absolute and unconditional and shall not be affected by, and no Junior Creditor may assert as a defense, counterclaim, or setoff, (a) any claim, defense, or counterclaim that the Company or any Junior Creditor may have against the Senior Lender, (b) any invalidity, irregularity, or unenforceability of the Senior Debt or the Senior Loan Agreement, (c) any lack of due execution, validity, or enforceability of this Agreement, (d) any change in the time, manner, or place of payment of the Senior Debt, (e) any release or discharge of the Company or any guarantor from the Senior Debt, (f) any release, substitution, or exchange of any Collateral for the Senior Debt, or (g) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Junior Creditor in respect of its obligations under this Section 8.1.

Section 8.2 — Application of Turnover Payments.

Any and all amounts, payments, or Distributions received by the Senior Lender pursuant to Section 8.1 shall be applied by the Senior Lender against the Senior Debt in such order and manner as the Senior Lender shall determine in its sole and absolute discretion, whether to principal, interest, fees, expenses, or other amounts constituting the Senior Debt. The Senior Lender shall not be required to provide any accounting to the Junior Creditors with respect to the application of such amounts, except to the extent required by applicable law.

ARTICLE IX — MODIFICATION OF SENIOR DEBT AND JUNIOR DEBT

Section 9.1 — Modifications to Senior Debt.

The Senior Lender may, from time to time, without notice to or consent of the Junior Creditors (except as set forth in Section 6.1(b)), and without in any way releasing, modifying, or otherwise affecting the subordination effected by this Agreement: (a) amend, modify, restate, supplement, extend, renew, increase, or decrease the Senior Debt or the terms of the Senior Loan Agreement, (b) grant extensions of time for payment or performance of any obligation under the Senior Loan Agreement, (c) renew, compromise, or settle any claim against the Company under the Senior Loan Agreement, (d) release, exchange, substitute, add, or otherwise deal with any Collateral or any guarantor or other Person obligated on the Senior Debt, (e) take or refrain from taking any action or exercising any right or remedy under the Senior Loan Agreement, or (f) take any other action that the Senior Lender may deem necessary or advisable with respect to the Senior Debt; and this Agreement shall remain in full force and effect with respect to the Senior Debt as so modified, extended, renewed, or otherwise dealt with, without any further consent or action by the Junior Creditors. Notwithstanding the foregoing, the Company has covenanted in Section 6.1(b) not to agree to certain material modifications to the Senior Loan Agreement without the consent of the Junior Creditors holding a majority in aggregate principal amount of the outstanding Junior Debt, and the Senior Lender acknowledges such covenant.

Section 9.2 — Modifications to Junior Debt.

The Junior Creditors shall not amend, modify, restate, supplement, waive, or otherwise alter the Notes, the Note Purchase Agreement, or any other agreement, instrument, or document evidencing, securing, or relating to the Junior Debt in any manner that is adverse to the interests of the Senior Lender without the prior written consent of the Senior Lender, which consent may be withheld, conditioned, or delayed in the Senior Lender's sole discretion. Without limiting the generality of the foregoing, the Junior Creditors shall not, without the prior written consent of the Senior Lender, make or permit any modification that would:

(a) increase the aggregate principal amount of the Junior Debt beyond Sixty Million Dollars ($60,000,000);

(b) increase the interest rate applicable to the Junior Debt above 6.00% per annum;

(c) shorten or accelerate the Maturity Date to a date earlier than January 15, 2026 (other than an acceleration in connection with an event of default under the Notes in compliance with the standstill provisions of Article III);

(d) add, grant, or create any lien on, security interest in, or other encumbrance against any assets, properties, or rights of the Company as security for the Junior Debt; or

(e) amend, modify, waive, or eliminate any subordination provision contained in the Notes, the Note Purchase Agreement, or this Agreement.

ARTICLE X — RIGHTS OF THE SENIOR LENDER

Section 10.1 — Subrogation.

Upon the Payment in Full of all Senior Debt (and the irrevocable termination of all commitments under the Senior Loan Agreement), the Junior Creditors shall be subrogated to the rights of the Senior Lender with respect to the Senior Debt to the extent that Distributions on the Junior Debt were turned over to the Senior Lender pursuant to Article VIII of this Agreement and applied against the Senior Debt. Such subrogation rights shall entitle the Junior Creditors to receive from the Company, to the extent of such turned-over amounts, amounts that would otherwise have been payable to the Senior Lender on account of the Senior Debt but for the Payment in Full thereof. No such subrogation rights shall arise, accrue, or be exercisable prior to the Payment in Full of the Senior Debt and the termination of all commitments under the Senior Loan Agreement. For the avoidance of doubt, the subrogation rights described in this Section 10.1 shall be subordinate to any then-outstanding Senior Debt and shall be subject to all of the terms and conditions of this Agreement until the Subordination Period has expired.

Section 10.2 — Senior Lender's Right to Deal with the Company.

The Senior Lender may, in its sole discretion and without any obligation to the Junior Creditors, deal with the Company, the Senior Debt, the Collateral, and any guarantor or other Person obligated on the Senior Debt in the same manner and to the same extent as if this

PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT
SUBORDINATION AGREEMENT
DRAFT — For Discussion Purposes Only — December 18, 2023
Prepared by: Calderwood & Harkness LLP, 600 Lexington Avenue, New York, NY 10022 Matter No. 1009-00001
Drafted by: Leonard Ashford, Of Counsel, Emerging Companies & Venture Capital Nina Reyes, Senior Associate, Emerging Companies & Venture Capital
Right-click to update Table of Contents
SUBORDINATION AGREEMENT
This SUBORDINATION AGREEMENT (this "Agreement") is entered into as of [●], 2024 (the "Effective Date"), by and among:
(1) KELVANTIS LENDING CORP., a Delaware corporation, with its principal office at 350 Park Avenue, 18th Floor, New York, NY 10022 (the "Senior Lender");
(2) RIDGELINE VENTURES FUND IV, L.P., a Delaware limited partnership, with its principal office at 800 Boylston Street, 34th Floor, Boston, MA 02199;
(3) BEACON HILL CAPITAL PARTNERS, LLC, a Delaware limited liability company, with its principal office at 222 West Adams Street, Suite 3400, Chicago, IL 60606;
(4) NORTHSTAR INNOVATION FUND II, L.P., a Delaware limited partnership, with its principal office at 555 California Street, Suite 4100, San Francisco, CA 94104;
(5) HALCYON GROWTH EQUITY, L.P., a Delaware limited partnership, with its principal office at 1201 Third Avenue, Suite 5600, Seattle, WA 98101;
(the parties identified in clauses (2) through (5) above, collectively, the "Junior Creditors" or "Noteholders," and each individually, a "Junior Creditor" or "Noteholder"); and
(6) SKYBRIDGE FINTECH LTD., a Delaware corporation (EIN: 83-2147605; DE File Number: 6384291), with its principal office at 1400 Market Street, Suite 2200, Wilmington, DE 19801 (the "Company" or "Borrower").
The Senior Lender, the Junior Creditors, and the Company are each referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS:
A. The Senior Lender and the Company are parties to that certain Loan and Security Agreement, dated as of August 15, 2022, by and between Kelvantis Lending Corp. and Skybridge Fintech Ltd. (as may be amended, restated, supplemented, or otherwise modified from time to time, the "Senior Loan Agreement"), pursuant to which the Senior Lender extended a venture debt facility to the Company in the original principal amount of Fifteen Million Dollars ($15,000,000) (the "Senior Debt"), maturing on August 15, 2025;
B. The Company proposes to issue convertible promissory notes (the "Notes" or "Junior Debt") in the aggregate principal amount of up to Sixty Million Dollars ($60,000,000), bearing interest at the rate of 6.00% per annum (600 basis points), calculated as simple interest computed on a 365-day year basis, maturing twenty-four (24) months from the date of issuance (the "Maturity Date"), pursuant to that certain Note Purchase Agreement, to be dated on or about the date hereof (the "Note Purchase Agreement"), by and among the Company and the Junior Creditors;
C. The Notes will be convertible into equity securities of the Company upon a Qualified Financing (as defined in the Note Purchase Agreement) of at least Eighty Million Dollars ($80,000,000) in new equity capital, at a conversion price equal to the lower of (a) eighty percent (80%) of the price per share in such Qualified Financing (reflecting a twenty percent (20%) discount) or (b) the price per share implied by a Seven Hundred Fifty Million Dollar ($750,000,000) pre-money valuation cap on a fully diluted basis;
D. The Senior Loan Agreement restricts the Company from incurring additional indebtedness without the prior written consent of the Senior Lender, and the Senior Lender is willing to consent to the issuance of the Notes, subject to the terms and conditions of this Agreement;
E. As a condition to the Senior Lender's consent to the issuance of the Notes, and as a condition to the closing of the transactions contemplated by the Note Purchase Agreement, the Parties desire to set forth the relative priorities and rights of the Senior Lender and the Junior Creditors with respect to the Senior Debt and the Junior Debt, and to establish the terms upon which the Junior Debt shall be subordinated to the Senior Debt; and
F. The Company acknowledges and agrees to the subordination of the Junior Debt to the Senior Debt and joins this Agreement to confirm its obligations hereunder and to bind itself to the covenants, restrictions, and undertakings set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms.
As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Senior Loan Agreement or the Note Purchase Agreement, as applicable, unless the context otherwise requires.
"Agreement" means this Subordination Agreement, as may be amended, modified, restated, or supplemented from time to time in accordance with Section 12.6.
"Bankruptcy Event" means, with respect to the Company, (a) the filing by the Company of a voluntary petition for relief under Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.), as amended from time to time (the "Bankruptcy Code"), or any successor statute thereto, (b) the filing of an involuntary petition against the Company under the Bankruptcy Code that is not dismissed within sixty (60) days of filing, (c) the making by the Company of a general assignment for the benefit of creditors, (d) the appointment of a receiver, trustee, custodian, conservator, or similar official for the Company or for all or substantially all of the Company's assets, (e) the entry of an order for relief against the Company in any case under the Bankruptcy Code, or (f) the commencement of any proceeding under any other federal or state insolvency, reorganization, receivership, or similar law now or hereafter in effect relating to the Company.
"blockage Notice" has the meaning set forth in Section 2.2(b).
"Change of Control" has the meaning ascribed to such term in the Note Purchase Agreement. For purposes of this Agreement, references to the payment obligations of the Company upon a Change of Control shall include, without limitation, the obligation to pay the Junior Creditors the greater of (i) two times (2.0x) the outstanding principal amount of the Notes plus all accrued and unpaid interest thereon, or (ii) the amount that would be payable upon conversion of the Notes at the price per share implied by the $750,000,000 valuation cap on a fully diluted basis, in each case as more fully described in the Note Purchase Agreement and the Notes.
"Collateral" means all assets and property of the Company, whether now owned or hereafter acquired, in which the Senior Lender holds or may hereafter hold a security interest, lien, or encumbrance under the Senior Loan Agreement, including, without limitation, all accounts receivable, inventory, equipment, intellectual property, general intangibles, instruments, chattel paper, deposit accounts, investment property, letter-of-credit rights, commercial tort claims, and all proceeds and products thereof, in each case as described in the Senior Loan Agreement.
"Company" means Skybridge Fintech Ltd., a Delaware corporation, and its successors and assigns.
"Conversion" means the conversion of the Notes, in whole or in part, into equity securities of the Company pursuant to and in accordance with the terms and conditions set forth in the Notes and the Note Purchase Agreement, whether such conversion occurs automatically upon a Qualified Financing, optionally at the election of the Noteholders, or upon the Maturity Date at the valuation cap price, as applicable.
"Distribution" means any payment, repayment, prepayment, distribution, transfer, or delivery of cash, property, securities, or other consideration, directly or indirectly, on account of or with respect to the Junior Debt, whether by way of principal, interest, fees, damages, or otherwise, and whether made voluntarily, involuntarily, or by operation of law, including, without limitation, any payment made in connection with a Bankruptcy Event or any plan of reorganization or liquidation.
"Effective Date" has the meaning set forth in the preamble.
"Enforcement Action" means any action, proceeding, or step taken to collect, enforce, accelerate, exercise, or realize upon any rights or remedies with respect to the Junior Debt or any instrument or agreement evidencing or relating to the Junior Debt, including, without limitation, (a) commencing, prosecuting, or joining in any lawsuit, action, proceeding, or arbitration against the Company or any guarantor, (b) accelerating the maturity of any or all of the Junior Debt, (c) exercising any right of setoff, recoupment, or counterclaim against the Company, (d) commencing or joining in any involuntary bankruptcy, insolvency, or similar proceeding against the Company, (e) exercising any right of foreclosure or attachment with respect to any property of the Company, (f) seeking to obtain a judgment, decree, or order against the Company, or (g) seeking to enforce any judgment, decree, or order against the Company or any of its assets.
"Junior Creditors" 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 their respective successors and assigns that become bound by this Agreement in accordance with its terms.
"Junior Debt" means all obligations, liabilities, and indebtedness of the Company to the Junior Creditors under or in connection with the Notes and the Note Purchase Agreement, whether now existing or hereafter arising, including, without limitation, (a) all outstanding principal (in an aggregate amount of up to Sixty Million Dollars ($60,000,000)), (b) all accrued and unpaid interest thereon (at the rate of 6.00% per annum), (c) all premiums, fees, expenses, costs, and charges payable thereunder, and (d) all other amounts of whatever nature that may become due and payable by the Company to the Junior Creditors under or in connection with the Notes or the Note Purchase Agreement.
"Maturity Date" means the date that is twenty-four (24) months from the date of issuance of the Notes, anticipated to be January 15, 2026, as such date may be extended in accordance with the terms of the Notes, subject to Section 9.2 of this Agreement.
"Note Purchase Agreement" means the Note Purchase Agreement, to be dated on or about the Effective Date, by and among the Company and the Junior Creditors, as may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms thereof and subject to Section 9.2 of this Agreement.
"Notes" means the convertible promissory notes issued or to be issued by the Company to the Junior Creditors pursuant to the Note Purchase Agreement, substantially in the form attached hereto as Exhibit B, and all notes issued in exchange therefor, replacement thereof, or substitution therefor.
"Payment in Full" means the indefeasible payment in full in cash of all Senior Debt (including all principal, accrued and unpaid interest, fees, expenses, and all other amounts due and payable under the Senior Loan Agreement) and the irrevocable termination of all commitments and obligations of the Senior Lender to extend credit or make advances under the Senior Loan Agreement. For purposes of this definition, payments that are subject to any right of return, clawback, avoidance, recovery, or disgorgement under any applicable law (including Sections 547 and 548 of the Bankruptcy Code) shall not constitute "indefeasible payment."
"Permitted Junior Payments" has the meaning set forth in Section 2.3.
"Qualified Financing" has the meaning ascribed to such term in the Note Purchase Agreement. For purposes of this Agreement, a "Qualified Financing" means an equity financing of the Company in which the Company raises at least Eighty Million Dollars ($80,000,000) in new equity capital (exclusive of any amounts raised through conversion of the Notes or other convertible instruments) from investors in a bona fide arm's-length transaction.
"Senior Debt" means all obligations, liabilities, and indebtedness of the Company to the Senior Lender under or in connection with the Senior Loan Agreement, whether now existing or hereafter arising, including, without limitation, (a) outstanding principal in the amount of Fifteen Million Dollars ($15,000,000), (b) all accrued and unpaid interest thereon, (c) all fees (including any final payment, prepayment premium, or success fee), expenses (including reasonable attorneys' fees and costs), and charges payable thereunder, (d) all protective advances made by the Senior Lender under the Senior Loan Agreement, and (e) all other amounts of whatever nature that may become due and payable by the Company to the Senior Lender under or in connection with the Senior Loan Agreement, in each case whether or not allowed or allowable as a claim in any Bankruptcy Event. The Senior Debt shall mature on August 15, 2025, unless earlier accelerated, extended, or otherwise modified in accordance with the terms of the Senior Loan Agreement and this Agreement.
"Senior Default" means any "Event of Default" as defined in the Senior Loan Agreement, whether arising from a payment default, a covenant default, a cross-default, a material adverse change, or otherwise.
"Senior Lender" means Kelvantis Lending Corp., a Delaware corporation, and its successors, assigns, and transferees.
"Senior Loan Agreement" has the meaning set forth in Recital A.
"Subordination Period" means the period commencing on the Effective Date and continuing until the first to occur of (a) the Payment in Full of all Senior Debt and the termination of all commitments under the Senior Loan Agreement, and (b) the Payment in Full of all Junior Debt (including by Conversion into equity securities of the Company, which shall be deemed to constitute payment in full of the converted portion of the Junior Debt for purposes of this definition).
Section 1.2 — Rules of Construction.
Unless the context otherwise requires: (a) a term defined in the singular shall have the corresponding meaning when used in the plural, and vice versa; (b) references to "herein," "hereof," "hereunder," and words of similar import shall refer to this Agreement as a whole and not to any particular Article, Section, subsection, or provision; (c) references to any Article, Section, subsection, Exhibit, or Schedule shall refer to the corresponding Article, Section, subsection, Exhibit, or Schedule of this Agreement, unless otherwise specified; (d) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation"; (e) references to any statute or regulation shall include all statutory and regulatory provisions consolidating, amending, replacing, or supplementing such statute or regulation from time to time, and shall include any rules and regulations promulgated thereunder; (f) references to "days" shall mean calendar days unless otherwise specified as "business days"; (g) references to "dollars" or "$" shall mean the lawful currency of the United States of America; (h) references to any Person shall include such Person's successors and permitted assigns; (i) references to any agreement or other document shall mean such agreement or document as from time to time amended, restated, supplemented, or otherwise modified in accordance with its terms and, where applicable, subject to the terms of this Agreement; and (j) in the event of any conflict between the provisions of this Agreement and the provisions of the Notes or the Note Purchase Agreement, the provisions of this Agreement shall control as among the Parties. This Agreement shall be construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (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. The Parties acknowledge that each Party and its counsel have reviewed and revised this Agreement and that no rule of construction to the effect that ambiguities are to be resolved against the drafting party shall apply to the interpretation of this Agreement.
ARTICLE II — SUBORDINATION
Section 2.1 — Subordination of Junior Debt.
(a) Each Junior Creditor hereby agrees, and the Company acknowledges and agrees, that all Junior Debt is, and shall at all times remain, expressly subordinated and made junior and subject in right of payment, to the extent and in the manner set forth in this Agreement, to the prior Payment in Full of all Senior Debt. The subordination effected by this Section 2.1 applies to all principal of the Junior Debt (in an aggregate amount of up to Sixty Million Dollars ($60,000,000)), all accrued and unpaid interest thereon (at the rate of 6.00% per annum, which interest, if calculated on the full aggregate principal amount, would equal approximately Three Million Six Hundred Thousand Dollars ($3,600,000) annually), and all other amounts of whatever kind or nature that may at any time become due and payable under the Notes or the Note Purchase Agreement.
(b) The rights of the Junior Creditors in and to the Junior Debt, and the rights of the Junior Creditors to receive any Distribution on account of the Junior Debt, are and shall at all times be subject to the provisions of this Agreement. During the Subordination Period, no Junior Creditor shall demand, accept, or receive any Distribution on account of the Junior Debt, directly or indirectly, except as expressly permitted under this Agreement. Each Junior Creditor acknowledges and agrees that the subordination and priority provisions set forth in this Agreement are intended for the benefit of the Senior Lender and that the Senior Lender is an intended beneficiary of such provisions.
(c) The priority of the Senior Debt over the Junior Debt established by this Agreement is absolute and unconditional, and shall not be affected by (i) the time, manner, or order of granting, creation, attachment, or perfection of any liens, security interests, or encumbrances held by the Senior Lender or the Junior Creditors, (ii) the time or order of making any loans, advances, or extensions of credit constituting the Senior Debt or the Junior Debt, (iii) any amendment, modification, renewal, extension, refinancing, or supplement of the Senior Debt or the Junior Debt, (iv) any defect in or insufficiency or invalidity of the Senior Loan Agreement, the Notes, or the Note Purchase Agreement, (v) any defense, counterclaim, offset, or claim that the Company may have against the Senior Lender, or (vi) any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Company or any Junior Creditor in respect of the subordination effected hereby.
Section 2.2 — Payment blockage.
(a) During the Subordination Period, the Company shall not make, and the Junior Creditors shall not demand, accept, or receive, directly or indirectly, any Distribution on account of the Junior Debt (other than Permitted Junior Payments as defined in Section 2.3) if, at the time of such Distribution or immediately after giving effect thereto: (i) a Senior Default has occurred and is continuing, or (ii) any payment of principal, interest, or any other amount due under the Senior Loan Agreement on account of the Senior Debt is then past due and remains unpaid.
(b) Upon receipt by the Company and the Junior Creditors (or their designated representative) of a written notice from the Senior Lender (a "blockage Notice") stating that a Senior Default has occurred and is continuing and specifying the nature of such Senior Default in reasonable detail, a payment blockage period shall commence on the date of delivery of such blockage Notice and shall continue until the earliest to occur of: (i) one hundred seventy-nine (179) days after the date of delivery of such blockage Notice, (ii) the date on which the Senior Default specified in such blockage Notice is cured to the satisfaction of the Senior Lender or waived in writing by the Senior Lender, or (iii) the date on which the Senior Lender accelerates the maturity of the Senior Debt and demands payment in full thereof. During any payment blockage period, no Distribution shall be made on account of the Junior Debt (other than Permitted Junior Payments), and neither the Company nor any Junior Creditor shall take any action inconsistent with the payment blockage.
(c) The Senior Lender shall not deliver more than two (2) blockage Notices during any consecutive twelve (12)-month period. In addition, a minimum interval of ninety (90) days must elapse between the expiration or termination of one payment blockage period and the commencement of a subsequent payment blockage period pursuant to a new blockage Notice. Nothing in this Section 2.2(c) shall prevent the Senior Lender from delivering a blockage Notice at any time that a Senior Default has occurred and is continuing, provided that the numerical and timing limitations set forth in the preceding sentences are satisfied.
(d) If the Company makes any Distribution on the Junior Debt in violation of this Section 2.2, or if any Junior Creditor receives any Distribution on the Junior Debt in violation of this Section 2.2, such Distribution shall be received and held in trust by the Company or such Junior Creditor, as applicable, for the benefit of the Senior Lender and shall be promptly turned over and delivered to the Senior Lender in the form received (with any necessary endorsements or assignments) for application against the Senior Debt in accordance with Article VIII. Neither the Company nor any Junior Creditor shall have any right, title, or interest in or to any such Distribution, except as trustee for the Senior Lender.
Section 2.3 — Permitted Junior Payments.
Notwithstanding the provisions of Section 2.2, the following shall constitute "Permitted Junior Payments" and shall not be restricted, blocked, or prohibited by this Agreement:
(a) Conversion of Notes into Equity. The automatic or optional Conversion of the Notes, in whole or in part, into equity securities of the Company upon a Qualified Financing, upon the Maturity Date at the valuation cap price, or otherwise in accordance with the terms of the Notes and the Note Purchase Agreement, as no cash payment is made by the Company to the Junior Creditors on account of such Conversion. For the avoidance of doubt, the issuance of equity securities upon Conversion shall not constitute a "Distribution" for purposes of this Agreement.
(b) Regularly Scheduled Interest Payments. [C&H Note to Client and Whitfield, Pratt & Soo LLP: The current form of Convertible Promissory Note provides for simple interest at 6.00% per annum accruing to conversion or maturity, with no periodic cash interest payments due during the term of the Notes. If the final Note form is revised to provide for periodic cash interest payments (e.g., quarterly or semi-annual), the parties should discuss whether such cash interest payments should be included as Permitted Junior Payments or whether they should be subject to the payment blockage provisions of Section 2.2. To be confirmed prior to execution.]
(c) Change of Control Payments. Subject to Section 2.5, any payment made by the Company to the Junior Creditors upon a Change of Control in accordance with the terms of the Notes and the Note Purchase Agreement, provided that all Senior Debt is indefeasibly repaid in full in cash, and all commitments under the Senior Loan Agreement are irrevocably terminated, concurrently with or prior to the making of any such payment on account of the Junior Debt.
Section 2.4 — Liquidation, Dissolution, Bankruptcy.
(a) Upon the occurrence of any Bankruptcy Event, or upon any dissolution, winding up, liquidation, reorganization, arrangement, adjustment, composition, or similar proceeding relating to the Company, its creditors, or its assets, whether voluntary or involuntary, partial or complete, and whether in bankruptcy, insolvency, receivership, or other similar proceedings, or upon an assignment for the benefit of creditors or any other marshalling of the assets and liabilities of the Company:
(i) All Senior Debt shall first be indefeasibly Paid in Full before any Distribution of any kind or character, whether in cash, property, securities, or otherwise, shall be made on account of or with respect to the Junior Debt;
(ii) Any Distribution of any kind or character, whether in cash, property, securities, or otherwise, that would otherwise be payable or deliverable to the Junior Creditors on account of the Junior Debt shall be paid, delivered, and transferred directly to the Senior Lender (or its designated agent) until the Senior Debt is Paid in Full, and the Junior Creditors hereby irrevocably authorize and direct any trustee in bankruptcy, receiver, assignee for the benefit of creditors, agent, liquidating agent, or other similar Person acting on behalf of the Company or its estate to make such payments and deliveries directly to the Senior Lender;
(iii) If any Junior Creditor fails to file a proof of claim or interest with respect to the Junior Debt in any insolvency proceeding within thirty (30) days of the applicable bar date for the filing of such claims, the Junior Creditors hereby irrevocably authorize the Senior Lender, acting as attorney-in-fact for the Junior Creditors (which appointment is coupled with an interest and is irrevocable), to file proofs of claim on behalf of the Junior Creditors with respect to the Junior Debt, and to accept or reject any plan of reorganization or liquidation on behalf of the Junior Creditors; provided, that such authority shall not limit the right of the Junior Creditors to file their own proofs of claim at any time prior to the expiration of the applicable bar date; and
(iv) The Junior Creditors agree that, to the extent permitted by applicable law, they shall vote their claims in favor of any plan of reorganization or liquidation that is acceptable to the Senior Lender, and shall not vote in favor of any plan that is opposed by the Senior Lender. [Note: This provision is subject to further negotiation. The Junior Creditors may seek to limit the scope of this voting restriction or to preserve their independent right to vote on any plan that adequately provides for the treatment of the Junior Debt. Counsel for the Junior Creditors has indicated they will propose revisions.]
(b) The provisions of this Section 2.4 shall apply regardless of whether the Senior Lender's claims against the Company are allowed, secured, or unsecured in any Bankruptcy Event, and regardless of whether the Senior Lender has filed a proof of claim or is otherwise a party to such proceeding.
Section 2.5 — Change of Control.
(a) The Parties acknowledge that, pursuant to the Notes and the Note Purchase Agreement, upon the occurrence of a Change of Control, the Junior Creditors are entitled to receive from the Company the greater of (i) two times (2.0x) the outstanding principal amount of the Notes held by such Junior Creditor, plus all accrued and unpaid interest thereon, or (ii) the amount that would be payable to such Junior Creditor upon Conversion of the Notes at the price per share implied by the Seven Hundred Fifty Million Dollar ($750,000,000) valuation cap on a fully diluted basis. Based on the aggregate principal amount of Sixty Million Dollars ($60,000,000), the maximum aggregate Change of Control payment to the Junior Creditors under clause (i) above would be One Hundred Twenty Million Dollars ($120,000,000) (exclusive of accrued interest), assuming the 2.0x multiple exceeds the value implied by conversion at the valuation cap.
(b) Notwithstanding any provision of the Notes or the Note Purchase Agreement to the contrary, any payment on account of the Junior Debt upon a Change of Control is and shall remain subject to the prior Payment in Full of all Senior Debt. No Distribution shall be made to any Junior Creditor on account of the Junior Debt in connection with a Change of Control unless and until all Senior Debt has been indefeasibly Paid in Full in cash and all commitments under the Senior Loan Agreement have been irrevocably terminated.
(c) The Company shall provide the Senior Lender with not less than fifteen (15) business days' prior written notice of any proposed Change of Control, together with a reasonably detailed description of the proposed transaction, the identity of the acquirer, the anticipated closing date, and the proposed sources and uses of funds in connection therewith. The Company shall provide such additional information regarding the proposed Change of Control as the Senior Lender may reasonably request.
ARTICLE III — STANDSTILL AND ENFORCEMENT LIMITATIONS
Section 3.1 — Standstill.
During the Subordination Period, no Junior Creditor shall, directly or indirectly, take any Enforcement Action with respect to the Junior Debt without the prior written consent of the Senior Lender, except as expressly provided in Section 3.2. Without limiting the generality of the foregoing, during the Subordination Period, no Junior Creditor shall, without the prior written consent of the Senior Lender:
(a) accelerate the maturity of any or all of the Junior Debt;
(b) commence, prosecute, or join in any lawsuit, action, proceeding, or arbitration against the Company for the collection or enforcement of the Junior Debt;
(c) exercise any right of setoff, recoupment, or counterclaim against the Company with respect to the Junior Debt;
(d) commence, join in, or support any involuntary bankruptcy, insolvency, or similar proceeding against the Company;
(e) seek to attach, levy upon, garnish, or otherwise execute against any assets or property of the Company;
(f) seek to obtain any judgment, decree, or order against the Company with respect to the Junior Debt; or
(g) exercise any other creditor remedy or right against the Company with respect to the Junior Debt, whether at law, in equity, or otherwise.
Each Junior Creditor acknowledges and agrees that the standstill restrictions set forth in this Section 3.1 are a material inducement to the Senior Lender's willingness to consent to the issuance of the Notes and to enter into this Agreement.
Section 3.2 — Standstill Exceptions.
The standstill restrictions set forth in Section 3.1 shall not prevent or restrict the following actions by any Junior Creditor:
(a) Conversion. The Conversion of the Notes into equity securities of the Company in accordance with the terms of the Notes and the Note Purchase Agreement. For the avoidance of doubt, Conversion of the Notes is not an Enforcement Action and shall not be subject to any consent, approval, or standstill requirement under this Agreement.
(b) Filing Proofs of Claim. The filing of proofs of claim or interest in any insolvency, bankruptcy, receivership, or similar proceeding commenced by any party other than such Junior Creditor, to the extent necessary to preserve the Junior Creditor's rights with respect to the Junior Debt; provided, that any Distribution received by any Junior Creditor in such proceeding shall remain subject to the provisions of this Agreement, including the turnover obligations set forth in Article VIII.
(c) Enforcement After Standstill Period. After the expiration of a period of one hundred eighty (180) days following the date on which the Junior Creditors (acting by majority in aggregate principal amount of the outstanding Notes) have accelerated the Junior Debt upon the occurrence and during the continuance of an event of default under the Notes (the "Standstill Period"), the Junior Creditors may take Enforcement Action with respect to the Junior Debt; provided, however, that such right to take Enforcement Action shall be suspended and the Standstill Period shall be tolled during any period in which the Senior Lender has commenced and is diligently pursuing its own enforcement proceedings with respect to the Senior Debt or the Collateral. [Note: The length of the Standstill Period is subject to further negotiation. The Senior Lender may request a longer standstill period (e.g., 270 days or 365 days). Counsel for the Junior Creditors has indicated that any period in excess of 180 days would be commercially unreasonable given the maturity profile of the Notes. The parties should discuss and agree upon the final standstill duration.]
(d) Notices of Default. The delivery of notices of default, acceleration, or other similar notices to the Company under the Notes or the Note Purchase Agreement; provided, that the Junior Creditors shall simultaneously deliver copies of all such notices to the Senior Lender.
Section 3.3 — Notice of Default on Junior Debt.
Each Junior Creditor shall promptly (and in any event within five (5) business days) provide the Senior Lender with written notice of the occurrence of any event of default under the Notes or the Note Purchase Agreement, specifying the nature of such event of default in reasonable detail. In addition, the Junior Creditors shall provide the Senior Lender with copies of any and all notices of default, notices of acceleration, demand letters, or other formal communications delivered by any Junior Creditor to the Company in connection with the Junior Debt, promptly upon delivery thereof. The failure of any Junior Creditor to provide such notice shall not affect the validity of the subordination provisions of this Agreement but may give rise to liability for damages suffered by the Senior Lender as a result of such failure.
ARTICLE IV — LIEN SUBORDINATION
Section 4.1 — No Liens.
(a) Each Junior Creditor acknowledges and agrees that the Notes are and shall at all times be unsecured obligations of the Company. The Notes are not secured by any lien on, security interest in, mortgage, pledge, charge, encumbrance, or other interest in or against any assets, properties, or rights of the Company, whether now owned or hereafter acquired.
(b) No Junior Creditor shall, directly or indirectly, acquire, accept, hold, or obtain any lien on, security interest in, mortgage, pledge, charge, or other encumbrance in or against any assets, properties, or rights of the Company as security for any or all of the Junior Debt, without the prior written consent of the Senior Lender. This restriction applies to liens and security interests of every kind and nature, whether arising by contract, operation of law, or otherwise, and whether voluntary or involuntary.
(c) If, notwithstanding the foregoing, any Junior Creditor acquires, receives, or otherwise obtains any lien on, security interest in, or other encumbrance in or against any assets, properties, or rights of the Company in violation of this Section 4.1, such lien, security interest, or encumbrance shall be and is hereby deemed to be subordinate in all respects to the liens, security interests, and encumbrances of the Senior Lender in the Collateral under the Senior Loan Agreement, regardless of the time, manner, or order of creation, granting, attachment, or perfection thereof. Any such lien or security interest shall be held by the Junior Creditor as trustee for the benefit of the Senior Lender, and the Junior Creditor shall, at its sole cost and expense, promptly execute and deliver to the Senior Lender such releases, termination statements, and other documents as the Senior Lender may reasonably request to evidence the release or subordination of such lien or security interest.
Section 4.2 — Senior Lender's Liens.
(a) Each Junior Creditor acknowledges and agrees that the Senior Lender holds valid, perfected, and enforceable security interests and liens in the Collateral under the Senior Loan Agreement, and that such security interests and liens have priority over any and all claims, interests, or rights of the Junior Creditors with respect to the Collateral.
(b) No Junior Creditor shall, directly or indirectly, contest, challenge, object to, or raise any defense to the validity, perfection, enforceability, or priority of the Senior Lender's security interests and liens in the Collateral, whether in any judicial or administrative proceeding, in any Bankruptcy Event, or otherwise. Each Junior Creditor hereby waives any and all rights it may have to challenge, contest, or object to the Senior Lender's security interests and liens in the Collateral.
ARTICLE V — REPRESENTATIONS AND WARRANTIES
Section 5.1 — Representations and Warranties of the Junior Creditors.
Each Junior Creditor, severally and not jointly, hereby represents and warrants to the Senior Lender and the Company as of the Effective Date as follows:
(a) Organization and Existence. Such Junior Creditor is duly organized, validly existing, and in good standing under the laws of the State of Delaware. Specifically: Ridgeline Ventures Fund IV, L.P. is a Delaware limited partnership; Beacon Hill Capital Partners, LLC is a Delaware limited liability company; Northstar Innovation Fund II, L.P. is a Delaware limited partnership; and Halcyon Growth Equity, L.P. is a Delaware limited partnership. Each Junior Creditor has all requisite organizational power and authority to own, lease, and operate its properties and to conduct its business as presently conducted.
(b) Authority. Such Junior Creditor has all requisite power, authority, and legal capacity to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement by such Junior Creditor have been duly authorized by all necessary action on the part of such Junior Creditor, including, in the case of each limited partnership, authorization by its general partner, and in the case of each limited liability company, authorization by its managing member or members.
(c) Enforceability. This Agreement constitutes a legal, valid, and binding obligation of such Junior Creditor, enforceable against such Junior Creditor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith, and fair dealing), regardless of whether considered in a proceeding in equity or at law.
(d) No Consents Required. No consent, approval, authorization, order, registration, qualification, filing, or notification of or with any governmental authority or regulatory body, or any other Person, is required for the execution, delivery, and performance by such Junior Creditor of this Agreement, other than those that have been duly obtained, made, or given prior to the Effective Date and are in full force and effect.
(e) No Existing Liens. As of the Effective Date, such Junior Creditor does not hold, and has not been granted, any lien on, security interest in, mortgage, pledge, charge, or other encumbrance in or against any assets, properties, or rights of the Company as security for the Junior Debt or any other obligation.
Section 5.2 — Representations and Warranties of the Senior Lender.
Kelvantis Lending Corp. hereby represents and warrants to the Junior Creditors and the Company as of the Effective Date as follows:
(a) Organization and Existence. The Senior Lender is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. The Senior Lender has all requisite corporate power and authority to own, lease, and operate its properties and to conduct its business as presently conducted.
(b) Authority. The Senior Lender has all requisite corporate power and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement by the Senior Lender have been duly authorized by all necessary corporate action.
(c) Enforceability. This Agreement constitutes a legal, valid, and binding obligation of the Senior Lender, enforceable against the Senior Lender in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith, and fair dealing), regardless of whether considered in a proceeding in equity or at law.
(d) Status of Senior Loan Agreement. The Senior Loan Agreement is in full force and effect as of the Effective Date. As of the Effective Date, no Senior Default exists under the Senior Loan Agreement, and to the knowledge of the Senior Lender, no event or condition exists that, with the giving of notice, the passage of time, or both, would constitute a Senior Default. [Note: To be confirmed with Kelvantis Lending Corp. (Ted Marsh, Relationship Manager) prior to execution. If a Senior Default exists or is anticipated, the representation should be qualified accordingly.]
Section 5.3 — Representations and Warranties of the Company.
Skybridge Fintech Ltd. hereby represents and warrants to the Senior Lender and the Junior Creditors as of the Effective Date as follows:
(a) Organization and Existence. The Company is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Delaware. The Company has all requisite corporate power and authority to own, lease, and operate its properties and to conduct its business as presently conducted.
(b) Authority; Board Authorization. The Company has all requisite corporate power and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement by the Company have been duly authorized by all necessary corporate action, including approval by Unanimous Written Consent of the Board of Directors of the Company.
(c) No Conflicts. The execution, delivery, and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not (i) violate or conflict with the Company's Amended and Restated Certificate of Incorporation or Bylaws, (ii) violate or conflict with any law, rule, regulation, order, judgment, decree, or injunction applicable to the Company, or (iii) result in a breach of, constitute a default under, require any consent under, or give rise to any right of termination, cancellation, or acceleration under any material agreement, contract, or instrument to which the Company is a party or by which the Company or any of its assets is bound, except, in the case of clause (iii), as would not reasonably be expected to have a material adverse effect on the Company.
(d) Outstanding Senior Debt. The Senior Debt under the Senior Loan Agreement is in an outstanding principal amount of Fifteen Million Dollars ($15,000,000) as of the Effective Date, with a maturity date of August 15, 2025. The Company has disclosed to the Junior Creditors the interest rate, payment schedule, financial covenants, and other material terms of the Senior Loan Agreement.
(e) Disclosure of Senior Loan Agreement. The Company has disclosed to the Junior Creditors the existence and material terms of the Senior Loan Agreement, and has made available to counsel for the Junior Creditors a true, correct, and complete copy of the Senior Loan Agreement (including all amendments, supplements, and modifications thereto) for review.
ARTICLE VI — COVENANTS
Section 6.1 — Company Covenants.
The Company hereby covenants and agrees with the Senior Lender and the Junior Creditors as follows:
(a) Notice of Defaults. The Company shall provide the Senior Lender and the Junior Creditors with prompt written notice (and in any event within five (5) business days) of the occurrence of (i) any Senior Default under the Senior Loan Agreement, (ii) any event of default under the Notes or the Note Purchase Agreement, or (iii) any event or circumstance that, with the giving of notice, the passage of time, or both, would reasonably be expected to constitute a Senior Default or an event of default under the Notes. Such notice shall specify the nature of the default or event in reasonable detail and shall describe the actions, if any, that the Company proposes to take with respect thereto.
(b) Restrictions on Modification of Senior Loan Agreement. The Company shall not amend, modify, restate, supplement, or otherwise alter the Senior Loan Agreement or any other agreement, instrument, or document evidencing, securing, or relating to the Senior Debt in any manner that would (i) increase the aggregate principal amount of the Senior Debt above Fifteen Million Dollars ($15,000,000) (exclusive of protective advances, interest, fees, and expenses), (ii) extend the maturity date of the Senior Debt beyond August 15, 2025, (iii) increase the interest rate applicable to the Senior Debt, (iv) expand the scope or nature of the Collateral beyond the collateral described in the Senior Loan Agreement as in effect on the Effective Date, or (v) impose any new covenant, condition, or restriction that would materially and adversely affect the rights of the Junior Creditors under this Agreement, the Notes, or the Note Purchase Agreement, in each case without the prior written consent of the Junior Creditors holding a majority in aggregate principal amount of the outstanding Junior Debt. [Note: This protective covenant for the benefit of the Junior Creditors is subject to further negotiation. The Senior Lender may object to certain of these restrictions, and the parties should discuss the scope and application of this provision.]
(c) Compliance with Subordination. The Company shall not make any Distribution on or with respect to the Junior Debt in violation of this Agreement. The Company shall cooperate with the Senior Lender in the enforcement of the subordination provisions of this Agreement and shall take all actions reasonably requested by the Senior Lender to give effect to the intent and purposes hereof.
(d) Delivery of Notices from Senior Lender. The Company shall provide the Junior Creditors with copies of all material notices and communications received from the Senior Lender (including, without limitation, any blockage Notice, notice of default, notice of acceleration, demand for payment, or notice of intention to exercise remedies), promptly upon receipt thereof and in any event within three (3) business days of receipt.
Section 6.2 — Junior Creditor Covenants.
Each Junior Creditor, severally and not jointly, hereby covenants and agrees with the Senior Lender and the Company as follows:
(a) Compliance with Agreement. Such Junior Creditor shall at all times comply with, and shall not take any action inconsistent with, the subordination provisions of Article II, the standstill and enforcement limitations of Article III, and the lien restrictions of Article IV set forth in this Agreement.
(b) Restrictions on Modification of Junior Debt. No Junior Creditor shall amend, modify, restate, supplement, waive, or otherwise alter the Notes, the Note Purchase Agreement, or any other agreement, instrument, or document evidencing, securing, or relating to the Junior Debt in a manner that would (i) increase the aggregate principal amount of the Junior Debt beyond Sixty Million Dollars ($60,000,000), (ii) increase the interest rate applicable to the Junior Debt above 6.00% per annum, (iii) shorten or accelerate the Maturity Date to a date earlier than January 15, 2026 (other than an acceleration in connection with an event of default under the Notes in compliance with the standstill provisions of Article III), (iv) add, grant, or create any lien on, security interest in, or other encumbrance against any assets, properties, or rights of the Company as security for the Junior Debt, or (v) amend, modify, or waive any subordination provision contained in the Notes or the Note Purchase Agreement that is intended for the benefit of the Senior Lender, in each case without the prior written consent of the Senior Lender.
(c) Notice of Assignments and Transfers. Each Junior Creditor shall promptly (and in any event within ten (10) business days) notify the Senior Lender in writing of any proposed or completed assignment, transfer, sale, or other disposition of its Notes or any interest therein, and shall ensure that any assignee, transferee, or other recipient of such Notes executes and delivers to the Senior Lender a Joinder Agreement substantially in the form attached hereto as Exhibit C, pursuant to which such assignee or transferee agrees to be bound by all of the terms and conditions of this Agreement.
Section 6.3 — Senior Lender Covenants.
The Senior Lender hereby covenants and agrees with the Junior Creditors and the Company as follows:
(a) Notice of Defaults and Acceleration. The Senior Lender shall provide the Junior Creditors with prompt written notice (and in any event within five (5) business days) of (i) the occurrence of any Senior Default under the Senior Loan Agreement and (ii) any acceleration of the maturity of the Senior Debt or any demand by the Senior Lender for payment in full of the Senior Debt. Such notice shall specify the nature of the Senior Default or the basis for such acceleration in reasonable detail.
(b) Non-Interference with Conversion. The Senior Lender shall not unreasonably interfere with, obstruct, or impede the Conversion of the Notes into equity securities of the Company upon a Qualified Financing or otherwise in accordance with the terms of the Notes and the Note Purchase Agreement. The parties acknowledge and agree that Conversion of the Notes into equity securities does not constitute a Distribution on the Junior Debt, does not require the payment of cash by the Company to the Junior Creditors, and is permitted under this Agreement as a Permitted Junior Payment pursuant to Section 2.3(a).
ARTICLE VII — CONSENT OF THE SENIOR LENDER
Section 7.1 — Consent to Issuance of Notes.
Kelvantis Lending Corp., as the Senior Lender, hereby consents to the issuance by the Company of the Notes in an aggregate principal amount not to exceed Sixty Million Dollars ($60,000,000) pursuant to the Note Purchase Agreement, notwithstanding any restriction on the incurrence of additional indebtedness contained in Section [●] or any other provision of the Senior Loan Agreement. This consent is specifically limited to the issuance of the Notes as described in this Agreement and in the Note Purchase Agreement, and shall not be construed as a consent to any other indebtedness, obligation, or transaction, whether or not similar to the Notes. This consent does not constitute a waiver of any term, condition, covenant, or provision of the Senior Loan Agreement other than as expressly set forth in Section 7.2, and the Senior Lender reserves all of its rights and remedies under the Senior Loan Agreement except as expressly modified hereby. The consent set forth in this Section 7.1 is conditioned upon the execution and delivery of this Agreement by all Parties hereto, and shall not be effective unless and until this Agreement has been duly executed and delivered by each of the Senior Lender, the Junior Creditors, and the Company.
Section 7.2 — Waiver.
The Senior Lender hereby waives any default or event of default under the Senior Loan Agreement that would otherwise arise solely from (a) the issuance of the Notes by the Company pursuant to the Note Purchase Agreement, (b) the execution and delivery by the Company of this Agreement, the Note Purchase Agreement, and the Notes, and (c) the performance by the Company of its obligations under this Agreement, the Note Purchase Agreement, and the Notes in accordance with the terms thereof. This waiver is limited to the specific events described in the preceding sentence and does not extend to any other default or event of default, whether existing on the Effective Date or arising thereafter. This waiver is in addition to, and shall be supplemented by, the separate Kelvantis Lender Consent and Waiver Letter to be delivered by the Senior Lender to the Company prior to or concurrently with the closing of the transactions contemplated by the Note Purchase Agreement.
ARTICLE VIII — TURNOVER
Section 8.1 — Turnover of Payments.
If any Junior Creditor receives any Distribution on account of the Junior Debt in violation of this Agreement (whether received directly from the Company, from a trustee in bankruptcy, from a receiver, or from any other Person, and whether received in cash, property, securities, or otherwise), such Junior Creditor shall receive and hold such Distribution in trust for the benefit of the Senior Lender and shall promptly (and in any event within five (5) business days of receipt) deliver, transfer, and turn over such Distribution to the Senior Lender, in the form received (with any necessary endorsements, assignments, or instruments of transfer), for application against the Senior Debt in accordance with Section 8.2. Each Junior Creditor hereby appoints the Senior Lender as its attorney-in-fact (which appointment is coupled with an interest and is irrevocable) to endorse any check, draft, instrument, or other item of payment received by such Junior Creditor in violation of this Agreement and to take such other actions as may be reasonably necessary to effectuate the turnover provisions of this Section 8.1.
The turnover obligation set forth in this Section 8.1 is absolute and unconditional and shall not be affected by, and no Junior Creditor may assert as a defense, counterclaim, or setoff, (a) any claim, defense, or counterclaim that the Company or any Junior Creditor may have against the Senior Lender, (b) any invalidity, irregularity, or unenforceability of the Senior Debt or the Senior Loan Agreement, (c) any lack of due execution, validity, or enforceability of this Agreement, (d) any change in the time, manner, or place of payment of the Senior Debt, (e) any release or discharge of the Company or any guarantor from the Senior Debt, (f) any release, substitution, or exchange of any Collateral for the Senior Debt, or (g) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Junior Creditor in respect of its obligations under this Section 8.1.
Section 8.2 — Application of Turnover Payments.
Any and all amounts, payments, or Distributions received by the Senior Lender pursuant to Section 8.1 shall be applied by the Senior Lender against the Senior Debt in such order and manner as the Senior Lender shall determine in its sole and absolute discretion, whether to principal, interest, fees, expenses, or other amounts constituting the Senior Debt. The Senior Lender shall not be required to provide any accounting to the Junior Creditors with respect to the application of such amounts, except to the extent required by applicable law.
ARTICLE IX — MODIFICATION OF SENIOR DEBT AND JUNIOR DEBT
Section 9.1 — Modifications to Senior Debt.
The Senior Lender may, from time to time, without notice to or consent of the Junior Creditors (except as set forth in Section 6.1(b)), and without in any way releasing, modifying, or otherwise affecting the subordination effected by this Agreement: (a) amend, modify, restate, supplement, extend, renew, increase, or decrease the Senior Debt or the terms of the Senior Loan Agreement, (b) grant extensions of time for payment or performance of any obligation under the Senior Loan Agreement, (c) renew, compromise, or settle any claim against the Company under the Senior Loan Agreement, (d) release, exchange, substitute, add, or otherwise deal with any Collateral or any guarantor or other Person obligated on the Senior Debt, (e) take or refrain from taking any action or exercising any right or remedy under the Senior Loan Agreement, or (f) take any other action that the Senior Lender may deem necessary or advisable with respect to the Senior Debt; and this Agreement shall remain in full force and effect with respect to the Senior Debt as so modified, extended, renewed, or otherwise dealt with, without any further consent or action by the Junior Creditors. Notwithstanding the foregoing, the Company has covenanted in Section 6.1(b) not to agree to certain material modifications to the Senior Loan Agreement without the consent of the Junior Creditors holding a majority in aggregate principal amount of the outstanding Junior Debt, and the Senior Lender acknowledges such covenant.
Section 9.2 — Modifications to Junior Debt.
The Junior Creditors shall not amend, modify, restate, supplement, waive, or otherwise alter the Notes, the Note Purchase Agreement, or any other agreement, instrument, or document evidencing, securing, or relating to the Junior Debt in any manner that is adverse to the interests of the Senior Lender without the prior written consent of the Senior Lender, which consent may be withheld, conditioned, or delayed in the Senior Lender's sole discretion. Without limiting the generality of the foregoing, the Junior Creditors shall not, without the prior written consent of the Senior Lender, make or permit any modification that would:
(a) increase the aggregate principal amount of the Junior Debt beyond Sixty Million Dollars ($60,000,000);
(b) increase the interest rate applicable to the Junior Debt above 6.00% per annum;
(c) shorten or accelerate the Maturity Date to a date earlier than January 15, 2026 (other than an acceleration in connection with an event of default under the Notes in compliance with the standstill provisions of Article III);
(d) add, grant, or create any lien on, security interest in, or other encumbrance against any assets, properties, or rights of the Company as security for the Junior Debt; or
(e) amend, modify, waive, or eliminate any subordination provision contained in the Notes, the Note Purchase Agreement, or this Agreement.
ARTICLE X — RIGHTS OF THE SENIOR LENDER
Section 10.1 — Subrogation.
Upon the Payment in Full of all Senior Debt (and the irrevocable termination of all commitments under the Senior Loan Agreement), the Junior Creditors shall be subrogated to the rights of the Senior Lender with respect to the Senior Debt to the extent that Distributions on the Junior Debt were turned over to the Senior Lender pursuant to Article VIII of this Agreement and applied against the Senior Debt. Such subrogation rights shall entitle the Junior Creditors to receive from the Company, to the extent of such turned-over amounts, amounts that would otherwise have been payable to the Senior Lender on account of the Senior Debt but for the Payment in Full thereof. No such subrogation rights shall arise, accrue, or be exercisable prior to the Payment in Full of the Senior Debt and the termination of all commitments under the Senior Loan Agreement. For the avoidance of doubt, the subrogation rights described in this Section 10.1 shall be subordinate to any then-outstanding Senior Debt and shall be subject to all of the terms and conditions of this Agreement until the Subordination Period has expired.
Section 10.2 — Senior Lender's Right to Deal with the Company.
The Senior Lender may, in its sole discretion and without any obligation to the Junior Creditors, deal with the Company, the Senior Debt, the Collateral, and any guarantor or other Person obligated on the Senior Debt in the same manner and to the same extent as if this

PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT

SUBORDINATION AGREEMENT

SUBORDINATION AGREEMENT

RECITALS

WHEREAS:

Record

Parties

Dates

Amounts