AMENDED AND RESTATED RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT
Dated as of July 18, 2022
among
SKYBRIDGE FINTECH LTD. a Delaware Corporation
the KEY HOLDERS listed on Exhibit A hereto
and
the INVESTORS listed on Exhibit B hereto
This Amended and Restated Right of First Refusal and Co-Sale Agreement amends and restates in its entirety the Right of First Refusal and Co-Sale Agreement dated March 6, 2020, among Skybridge Fintech Ltd., the Key Holders party thereto, and the Investors party thereto.
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AMENDED AND RESTATED RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT
This AMENDED AND RESTATED RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT (this "Agreement") is made and entered into as of July 18, 2022, by and among Skybridge Fintech Ltd., a Delaware corporation (the "Company"), the Key Holders listed on Exhibit A hereto (each a "Key Holder" and collectively, the "Key Holders"), and the Investors listed on Exhibit B hereto (each an "Investor" and collectively, the "Investors"). The Company, the Key Holders, and the Investors are sometimes referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, the Company is a Delaware corporation with its principal office located at 1600 Market Street, Suite 2200, Wilmington, Delaware 19801;
WHEREAS, the Company, certain Key Holders, and certain investors (collectively, the "Prior Parties") previously entered into that certain Right of First Refusal and Co-Sale Agreement, dated as of March 6, 2020 (the "Prior Agreement"), in connection with the Company's Series A Preferred Stock financing;
WHEREAS, the Company is issuing and selling 7,500,000 shares of Series B Preferred Stock, par value $0.001 per share, at a purchase price of $6.00 per share, for aggregate gross proceeds of $45,000,000, pursuant to that certain Series B Preferred Stock Purchase Agreement, dated as of July 18, 2022, by and among the Company and the investors named therein (the "Purchase Agreement");
WHEREAS, as a condition to the closing of the transactions contemplated by the Purchase Agreement, the Parties desire to amend and restate the Prior Agreement in its entirety in order to provide the Investors with certain rights of first refusal and co-sale rights with respect to certain shares of capital stock of the Company held by the Key Holders, and to impose certain transfer restrictions on such shares, all as more fully set forth herein;
WHEREAS, the Parties agree that this Agreement shall supersede and replace the Prior Agreement in its entirety upon execution hereof, and no rights shall survive under the Prior Agreement following such execution; and
WHEREAS, the execution and delivery of this Agreement is a condition precedent to the obligations of the parties to the Purchase Agreement to consummate the transactions contemplated thereby.
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the consummation of the transactions contemplated by the Purchase Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE 1: DEFINITIONS
Section 1.1 — Definitions
As used in this Agreement, the following terms shall have the meanings set forth below:
"Affiliate" means, with respect to any specified Person, any other Person who or which, directly or indirectly, controls, is controlled by, or is under common control with such specified Person, including any general partner, managing member, officer, director, or trustee of such Person, or any venture capital fund or registered investment company now or hereafter existing that is controlled by one or more general partners, managing members, or investment advisers of, or shares the same management company or investment adviser with, such Person.
"Board of Directors" means the board of directors of the Company, as constituted from time to time.
"Common Stock" means the Common Stock, par value $0.001 per share, of the Company. As of the date hereof, the Company has authorized 30,000,000 shares of Common Stock.
"Company" means Skybridge Fintech Ltd., a Delaware corporation, and any successor entity thereto.
"Deemed Liquidation Event" has the meaning set forth in the Restated Certificate.
"Equity Securities" means (i) any Common Stock, Preferred Stock, or other equity interest in the Company (whether or not currently authorized), including any securities issued or issuable after the date hereof, (ii) any securities directly or indirectly convertible into or exchangeable for Common Stock or other equity securities of the Company, and (iii) any options, warrants, or other rights (whether or not currently exercisable) to acquire any of the foregoing.
"Investor" or "Investors" means each of the persons and entities listed on Exhibit B hereto, being all holders of Preferred Stock of the Company (including holders of Series Seed Preferred Stock, Series A Preferred Stock, and Series B Preferred Stock), together with their respective successors, permitted transferees, and assigns who become parties to this Agreement in accordance with the terms hereof.
"Key Holder" or "Key Holders" means each of the persons listed on Exhibit A hereto, being Naveen Raghavan, Claire Whitmore, and David Okonkwo, together with their respective successors and permitted transferees who become parties to this Agreement in accordance with the terms hereof.
"Key Holder Shares" means (i) all shares of Common Stock, and all shares of Common Stock issuable upon conversion or exercise of any Equity Securities, held by a Key Holder as of the date hereof, and (ii) all shares of Common Stock and all shares of Common Stock issuable upon conversion or exercise of any Equity Securities acquired by a Key Holder after the date hereof, whether pursuant to the exercise of stock options, conversion of other securities, stock dividends, stock splits, or otherwise. As of the date hereof, the Key Holder Shares are as follows:
(a) Naveen Raghavan — 4,200,000 shares of Common Stock (fully vested);
(b) Claire Whitmore — 3,800,000 shares of Common Stock (fully vested); and
(c) David Okonkwo — 600,000 shares of Common Stock (subject to a four (4)-year vesting schedule with a twenty-five percent (25%) cliff, vesting having commenced in January 2021).
"Person" means any individual, corporation, partnership, limited liability company, trust, unincorporated organization, association, joint venture, governmental authority, or any other entity of any kind.
"Preferred Director" means each member of the Board of Directors elected by the holders of Preferred Stock pursuant to the terms of the Restated Certificate and the Amended and Restated Voting Agreement dated as of the date hereof.
"Preferred Stock" means, collectively, the Series Seed Preferred Stock, the Series A Preferred Stock, and the Series B Preferred Stock of the Company.
"Prior Agreement" has the meaning set forth in the recitals hereto.
"Proposed Transfer" means any assignment, sale, offer to sell, pledge, mortgage, hypothecation, encumbrance, disposition of, or any other like transfer or encumbrance of, any Key Holder Shares, or any interest therein, whether direct or indirect, voluntary or involuntary, by operation of law or otherwise, proposed by a Key Holder, except as set forth in Article 4.
"Proposed Transfer Notice" means the written notice from a Key Holder to the Company and each Investor regarding a Proposed Transfer, as described in Section 2.1.
"Prospective Transferee" means the bona fide third-party proposed recipient of Key Holder Shares in a Proposed Transfer.
"Purchase Agreement" means the Series B Preferred Stock Purchase Agreement, dated as of July 18, 2022, by and among the Company and the investors named therein, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms.
"Qualified Public Offering" has the meaning set forth in the Restated Certificate.
"Restated Certificate" means the Amended and Restated Certificate of Incorporation of the Company, as filed with the Secretary of State of the State of Delaware on July 29, 2022, as the same may be further amended, restated, supplemented, or otherwise modified from time to time.
"Series A Preferred Stock" means the Series A Preferred Stock, par value $0.001 per share, of the Company, of which 5,000,000 shares have been designated and are outstanding as of the date hereof, having an original issue price ("OIP") of $2.00 per share.
"Series B Preferred Stock" means the Series B Preferred Stock, par value $0.001 per share, of the Company, of which 7,500,000 shares are being issued and sold pursuant to the Purchase Agreement at an OIP of $6.00 per share.
"Series Seed Preferred Stock" means the Series Seed Preferred Stock, par value $0.001 per share, of the Company, of which 3,000,000 shares have been designated and are outstanding as of the date hereof, having an OIP of $0.50 per share.
"Transaction Documents" means this Agreement, the Purchase Agreement, the Amended and Restated Investors' Rights Agreement dated as of the date hereof, the Amended and Restated Voting Agreement dated as of the date hereof, and the Restated Certificate.
"Transfer" means any assignment, sale, offer to sell, pledge, mortgage, hypothecation, encumbrance, disposition of, or any other transfer or encumbrance of, whether direct or indirect, voluntary, involuntary, or by operation of law.
Section 1.2 — Rules of Construction
Unless the context otherwise requires, the following rules of construction shall apply to this Agreement:
(a) References to "Sections," "Articles," "Exhibits," and "Schedules" refer to sections, articles, exhibits, and schedules of and to this Agreement, unless otherwise specified.
(b) The use of the singular shall include the plural, and vice versa, and the use of any gender shall include any other gender, in each case as the context may require.
(c) The headings and captions used in this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of any provision hereof.
(d) The word "including" (and all grammatical variations thereof) means "including, without limitation," and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.
(e) References to any agreement, instrument, or other document mean such agreement, instrument, or other document as amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms, and references to any statute mean such statute as amended from time to time and include any successor legislation thereto and any rules or regulations promulgated thereunder.
(f) References to "days" mean calendar days unless "business days" are expressly specified. "Business day" means any day that is not a Saturday, a Sunday, or other day on which commercial banks in Wilmington, Delaware or New York, New York are authorized or required by law to remain closed.
(g) References to "hereof," "herein," "hereby," "hereunder," and similar terms refer to this Agreement as a whole and not to any particular provision hereof.
(h) References to "dollars" or "$" refer to United States dollars.
ARTICLE 2: RIGHT OF FIRST REFUSAL
Section 2.1 — Proposed Transfer Notice
Before any Key Holder may effect a Proposed Transfer, such Key Holder (the "Selling Key Holder") shall deliver to the Company and to each Investor a written Proposed Transfer Notice not less than forty-five (45) days prior to the proposed date of the Proposed Transfer. The Proposed Transfer Notice shall include, at a minimum, the following information:
(a) the number and class or series of Key Holder Shares proposed to be transferred by the Selling Key Holder;
(b) the name, address, and other identifying information of the Prospective Transferee;
(c) the proposed purchase price per share and the aggregate consideration to be paid for the Key Holder Shares subject to the Proposed Transfer (including a description of any non-cash consideration in sufficient detail to permit the valuation thereof);
(d) a summary of all material terms and conditions of the Proposed Transfer, including the proposed closing date, any representations, warranties, indemnification obligations, or other material covenants to be included in the definitive documentation, and any conditions to closing; and
(e) a complete and accurate copy of any binding offer, letter of intent, term sheet, or definitive agreement relating to the Proposed Transfer executed by the Selling Key Holder and/or the Prospective Transferee.
The delivery of the Proposed Transfer Notice shall constitute a binding and irrevocable offer by the Selling Key Holder to sell the Key Holder Shares described therein to the Company and/or the Investors, at the same price per share and on the same terms and conditions as set forth in the Proposed Transfer Notice, subject to the procedures set forth in this Article 2. To the extent that any portion of the consideration proposed to be paid by the Prospective Transferee consists of non-cash consideration, the fair market value of such non-cash consideration shall be determined in good faith by the Board of Directors, and such fair market value determination shall be binding on all Parties for purposes of this Article 2.
Section 2.2 — Company Right of First Refusal
Upon receipt of the Proposed Transfer Notice, the Company shall have the first right, but not the obligation, to purchase all or any portion of the Key Holder Shares described in the Proposed Transfer Notice, at the same price per share and on the same terms and conditions as set forth therein (the "Company ROFR"). The Company may exercise the Company ROFR by delivering written notice to the Selling Key Holder (with a copy to each Investor) within fifteen (15) days after the Company's receipt of the Proposed Transfer Notice (the "Company ROFR Period"), specifying the number of Key Holder Shares that the Company elects to purchase. If the Company does not deliver such written notice within the Company ROFR Period, the Company shall be deemed to have waived the Company ROFR in its entirety with respect to such Proposed Transfer.
If the Company does not elect to purchase all of the Key Holder Shares subject to the Proposed Transfer Notice (the shares not elected to be purchased by the Company being referred to herein as the "Available Shares"), the Company shall promptly give written notice to each Investor specifying (i) the number of Key Holder Shares the Company has elected to purchase, (ii) the number of Available Shares, and (iii) that the Investors have the right to purchase the Available Shares in accordance with Section 2.3. Such notice shall be delivered by the Company to the Investors within three (3) business days following the expiration of the Company ROFR Period.
Section 2.3 — Investor Right of First Refusal
Each Investor shall have the right, but not the obligation, to purchase up to its pro rata portion of the Available Shares not purchased by the Company pursuant to Section 2.2 (the "Investor ROFR Shares"), at the same price per share and on the same terms and conditions as set forth in the Proposed Transfer Notice (the "Investor ROFR"). For purposes of this Section 2.3, each Investor's "pro rata portion" shall be determined by multiplying the total number of Available Shares by a fraction:
(i) the numerator of which is the total number of shares of Preferred Stock (on an as-converted-to-Common-Stock basis) held by such Investor as of the date of the Proposed Transfer Notice; and
(ii) the denominator of which is the total number of shares of Preferred Stock (on an as-converted-to-Common-Stock basis) held by all Investors as of the date of the Proposed Transfer Notice.
Each Investor desiring to exercise its Investor ROFR shall deliver written notice to the Selling Key Holder (with a copy to the Company) within fifteen (15) days after receipt of the Company's notice regarding the Available Shares (the "Investor ROFR Period"), specifying the number of Available Shares that such Investor elects to purchase. In the event that an Investor desires to purchase more than its pro rata portion, such Investor shall so indicate in its notice, specifying the maximum number of additional shares such Investor is willing to purchase (an "Oversubscription Election").
If any Investor does not exercise its Investor ROFR in full (or fails to respond within the Investor ROFR Period), the remaining Available Shares not subscribed for shall be allocated among those Investors who have made Oversubscription Elections, in proportion to their respective pro rata portions (as defined above, recalculated among only the oversubscribing Investors), subject to each such Investor's Oversubscription Election limit. In the event that there continue to be Available Shares remaining after such initial reallocation, further reallocation rounds shall be conducted among oversubscribing Investors whose Oversubscription Elections have not yet been fully satisfied, in proportion to their respective pro rata portions (recalculated among the remaining oversubscribing Investors), until all Available Shares have been allocated or no further Oversubscription Elections remain unsatisfied.
For the avoidance of doubt, no Investor shall be obligated to purchase any Available Shares, and the failure of an Investor to exercise its Investor ROFR shall not constitute a waiver of any other rights hereunder.
Section 2.4 — Closing of ROFR Purchases
The closing of the purchase of Key Holder Shares by the Company and/or the Investors pursuant to this Article 2 (the "ROFR Closing") shall occur within ten (10) business days after the expiration of the Investor ROFR Period (or such later date as may be reasonably necessary to comply with applicable laws, rules, and regulations, including any required governmental or regulatory approvals, but in no event later than thirty (30) business days following the expiration of the Investor ROFR Period). At the ROFR Closing:
(a) The Selling Key Holder shall deliver to the Company and/or the purchasing Investors, as applicable, certificates (or appropriate book-entry transfer instructions) representing the Key Holder Shares being purchased, duly endorsed for transfer or accompanied by duly executed stock powers, free and clear of all liens and encumbrances (other than those arising under this Agreement, the other Transaction Documents, and applicable securities laws).
(b) The Company and/or the purchasing Investors, as applicable, shall deliver to the Selling Key Holder payment of the aggregate purchase price for the Key Holder Shares being purchased, in immediately available funds (or, if the Proposed Transfer Notice specifies non-cash consideration, in the form of consideration specified therein or the cash equivalent thereof as determined by the Board of Directors pursuant to Section 2.1), at the same price per share and on the same terms and conditions as set forth in the Proposed Transfer Notice.
Section 2.5 — Sale to Prospective Transferee
If, after the exercise or expiration of all rights of first refusal of the Company and the Investors under Sections 2.2 and 2.3, some or all of the Key Holder Shares described in the Proposed Transfer Notice remain unpurchased (such remaining shares, the "Remaining Shares"), the Selling Key Holder may transfer such Remaining Shares to the Prospective Transferee identified in the Proposed Transfer Notice, subject to each of the following conditions:
(a) The co-sale rights of the Investors set forth in Article 3 shall apply to any transfer of such Remaining Shares, and the Selling Key Holder shall comply with all requirements of Article 3 prior to and in connection with such transfer;
(b) The transfer shall be made at a price per share not less than the price per share set forth in the Proposed Transfer Notice, and on terms and conditions no more favorable to the Prospective Transferee than those specified in the Proposed Transfer Notice (it being understood that any reduction in the purchase price or any change in material terms that is more favorable to the Prospective Transferee shall require the Selling Key Holder to issue a new Proposed Transfer Notice and re-offer the shares to the Company and the Investors pursuant to this Article 2);
(c) The transfer shall be consummated within sixty (60) calendar days after the expiration of the Investor ROFR Period (the "Consummation Period"). If the transfer of the Remaining Shares is not consummated within the Consummation Period for any reason, the Selling Key Holder shall not thereafter transfer any Key Holder Shares without first delivering a new Proposed Transfer Notice in accordance with Section 2.1 and again complying with all provisions of this Article 2 and Article 3; and
(d) The Prospective Transferee shall, as a condition precedent to the consummation of the transfer, execute a written agreement in form and substance reasonably satisfactory to the Company and a majority-in-interest of the Investors, pursuant to which the Prospective Transferee agrees to be bound by the terms and conditions of this Agreement as if such Prospective Transferee were a Key Holder hereunder, with respect to the Key Holder Shares so transferred.
ARTICLE 3: CO-SALE RIGHTS (TAG-ALONG)
Section 3.1 — Co-Sale Right
In the event that any Remaining Shares are to be transferred by a Selling Key Holder to a Prospective Transferee pursuant to Section 2.5, each Investor shall have the right (the "Co-Sale Right"), but not the obligation, to participate in such transfer on the same terms and conditions as the Selling Key Holder, with respect to such Investor's pro rata portion of the transaction. For purposes of this Article 3, each Investor's "pro rata portion" shall equal the product of:
(x) the total number of Remaining Shares to be transferred (i.e., the total Key Holder Shares subject to the Proposed Transfer, less any shares purchased by the Company and/or the Investors pursuant to the ROFR rights in Article 2); multiplied by
(y) a fraction, the numerator of which is the number of shares of Common Stock (including all shares of Common Stock issuable upon conversion of Preferred Stock) held by such Investor as of the date of the Proposed Transfer Notice, and the denominator of which is the sum of (I) the total number of shares of Common Stock (including all shares of Common Stock issuable upon conversion of Preferred Stock) held by all Investors as of the date of the Proposed Transfer Notice, plus (II) the total number of Key Holder Shares held by the Selling Key Holder as of the date of the Proposed Transfer Notice.
Each Investor exercising the Co-Sale Right shall be entitled to sell shares of Common Stock (or, at the election of the Investor, shares of Preferred Stock to be converted into Common Stock immediately prior to the consummation of the sale) held by such Investor, up to the Investor's pro rata portion as calculated above, and on the same terms and conditions, including with respect to price per share, as apply to the Selling Key Holder's sale of Remaining Shares.
Section 3.2 — Exercise of Co-Sale Right
Each Investor desiring to exercise its Co-Sale Right shall deliver written notice (a "Co-Sale Notice") to the Selling Key Holder (with a copy to the Company) within fifteen (15) days after the later of (a) such Investor's receipt of the Proposed Transfer Notice or (b) the expiration of the Investor ROFR Period. The Co-Sale Notice shall set forth the number of shares of Common Stock (or shares of Preferred Stock to be converted into Common Stock) that the Investor wishes to include in the Proposed Transfer, which number shall not exceed such Investor's pro rata portion as determined under Section 3.1.
To the extent that one or more Investors exercise their Co-Sale Rights, the number of Key Holder Shares that the Selling Key Holder may sell in the Proposed Transfer shall be correspondingly and proportionately reduced by the aggregate number of shares to be sold by all participating Investors exercising their Co-Sale Rights, such that the total number of shares sold to the Prospective Transferee in the transaction shall not exceed the number of Remaining Shares specified in the Proposed Transfer Notice.
If an Investor exercises its Co-Sale Right and, as a result, the Selling Key Holder is unable to sell the number of Key Holder Shares originally contemplated in the Proposed Transfer Notice, the Selling Key Holder shall have the option of either (i) consummating the Proposed Transfer with the reduced number of Key Holder Shares, or (ii) withdrawing the Proposed Transfer Notice entirely by delivering written notice to the Company and each Investor.
Section 3.3 — Delivery and Payment
Each Investor participating in a Proposed Transfer pursuant to this Article 3 shall deliver to the Selling Key Holder, at least three (3) business days prior to the anticipated closing of the Proposed Transfer, one or more share certificates (or appropriate instructions for book-entry transfer to Ledgermark Transfer Services, Inc., the Company's transfer agent) representing the shares of capital stock to be sold by such Investor. If the shares to be sold by an Investor are shares of Preferred Stock, the Investor shall, prior to the closing of the Proposed Transfer, cause such shares to be converted into shares of Common Stock in accordance with the terms of the Restated Certificate. All share certificates or book-entry transfer instructions delivered by participating Investors shall be properly endorsed for transfer or accompanied by duly executed stock powers.
The Selling Key Holder shall cause the Prospective Transferee to remit directly to each participating Investor, within five (5) business days following the closing of the Proposed Transfer, that portion of the aggregate sale proceeds to which such Investor is entitled by reason of its participation in the Proposed Transfer, determined on a per-share basis. In the event that the Prospective Transferee refuses to purchase shares from any participating Investor, the Selling Key Holder shall not sell any Key Holder Shares to the Prospective Transferee in such Proposed Transfer unless and until the Prospective Transferee agrees to purchase the shares tendered by all participating Investors simultaneously with the purchase of the Selling Key Holder's shares.
Section 3.4 — Non-Exercise
If no Investor exercises its Co-Sale Right within the applicable fifteen (15)-day period described in Section 3.2, or if each Investor affirmatively waives its Co-Sale Right in writing, the Selling Key Holder may consummate the Proposed Transfer on the terms and conditions set forth in the Proposed Transfer Notice, subject to the remaining provisions of this Agreement (including, without limitation, the requirement that the transfer be consummated within the Consummation Period set forth in Section 2.5(c) and that the Prospective Transferee execute the written agreement required by Section 2.5(d)).
Section 3.5 — Remedies for Non-Compliance
In the event that a Selling Key Holder effects a Proposed Transfer or any other Transfer of Key Holder Shares without complying with the provisions of Article 2 and this Article 3, each Investor shall, in addition to any other remedies available at law or in equity, have the right to require the Selling Key Holder to purchase from such Investor a number of shares of capital stock of the Company equal to the number of shares that such Investor would have been entitled to sell had the Selling Key Holder complied with its obligations under this Article 3 (as determined on the basis of such Investor's pro rata portion calculated in accordance with Section 3.1), at the same price per share as the non-compliant Transfer.
The Selling Key Holder shall be obligated to consummate such purchase within ten (10) business days following delivery of a written notice by the Investor demanding such purchase. This remedy shall be in addition to, and not in substitution for, any other remedies available to the Investors at law or in equity, including the right to seek specific performance, injunctive relief, and damages. No waiver by an Investor of any such non-compliance on any one occasion shall be deemed a waiver of such Investor's rights in respect of any subsequent non-compliance.
ARTICLE 4: EXEMPT TRANSFERS
Section 4.1 — Permitted Transfers
Notwithstanding anything to the contrary contained in this Agreement, the rights of first refusal set forth in Article 2 and the co-sale rights set forth in Article 3 shall not apply to the following transfers by a Key Holder (each, an "Exempt Transfer"):
(a) Transfers to Revocable Trusts. Any transfer of Key Holder Shares to a revocable trust established for the primary benefit of the Key Holder, the Key Holder's spouse or domestic partner, or the Key Holder's lineal descendants (including adopted children and stepchildren), provided that the Key Holder serves as the sole trustee of such trust, or, if the Key Holder is unable or unwilling to serve as trustee, a trustee approved by the Board of Directors;
(b) Transfers to Family Members. Any transfer of Key Holder Shares to the Key Holder's spouse, domestic partner, parents, siblings, children, grandchildren, or other lineal descendants (including adopted children and stepchildren), whether by gift, bequest, devise, or operation of law;
(c) Transfers to Affiliates. Any transfer of Key Holder Shares to an Affiliate of the Key Holder (meaning any entity directly or indirectly controlled by the Key Holder, where "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities, by contract, or otherwise);
(d) Company Repurchases. Any transfer of Key Holder Shares pursuant to the Company's right of repurchase upon termination of the Key Holder's service relationship with the Company at cost (or the lower of cost or fair market value), as set forth in any applicable restricted stock purchase agreement, equity incentive plan, or similar arrangement, including the repurchase of unvested shares (for example, the repurchase of unvested shares of David Okonkwo under his four (4)-year vesting schedule with a twenty-five percent (25%) cliff);
(e) Deemed Liquidation Events. Any transfer of Key Holder Shares made in connection with a Deemed Liquidation Event, as defined in the Restated Certificate, including any merger, consolidation, or sale of all or substantially all of the assets of the Company that has been approved in accordance with the Restated Certificate and applicable law; and
(f) Board-Approved Transfers. Any transfer of Key Holder Shares that has been approved by the Board of Directors of the Company, which approval shall include the affirmative vote or written consent of each Preferred Director then serving on the Board of Directors.
Section 4.2 — Conditions to Exempt Transfers
Notwithstanding the foregoing, no Exempt Transfer shall be effective unless and until each of the following conditions has been satisfied:
(a) The transferee in any Exempt Transfer described in Section 4.1(a), (b), (c), or (f) shall have executed a written agreement, in form and substance reasonably satisfactory to the Company and a majority-in-interest of the Investors, pursuant to which such transferee agrees to be bound by all of the terms and conditions of this Agreement as a Key Holder and to hold the transferred Key Holder Shares subject to all rights and restrictions set forth herein. The Company shall promptly provide a copy of such written agreement to each Investor.
(b) No Exempt Transfer shall relieve the transferring Key Holder of any of the obligations of such Key Holder under this Agreement with respect to any Key Holder Shares retained by such Key Holder following the Exempt Transfer.
(c) The transferring Key Holder shall provide written notice to the Company and each Investor of any Exempt Transfer within ten (10) days following the consummation thereof, which notice shall identify the transferee, the number and class of shares transferred, and the provision of Section 4.1 pursuant to which the transfer was effected.
ARTICLE 5: LEGEND AND STOP-TRANSFER ORDERS
Section 5.1 — Legend on Certificates
Each certificate representing Key Holder Shares, and each book-entry notation with respect to Key Holder Shares maintained by Ledgermark Transfer Services, Inc. (the Company's transfer agent), shall bear a legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN AMENDED AND RESTATED RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT DATED JULY 18, 2022, AS MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. SUCH AGREEMENT PROVIDES FOR CERTAIN RESTRICTIONS ON TRANSFER. THE COMPANY WILL FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE UPON REQUEST."
In addition to the foregoing, each certificate or book-entry notation representing Key Holder Shares shall bear any legend required by applicable federal or state securities laws, including the following (or a substantially similar legend):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."
The Company shall, at its expense, cause the legends referenced in this Section 5.1 to be placed on all certificates representing Key Holder Shares and shall cause appropriate book-entry notations to be made with the transfer agent, in each case promptly following the execution of this Agreement or, with respect to shares subsequently acquired or issued, promptly following the acquisition or issuance thereof.
Section 5.2 — Stop-Transfer Instructions
The Company shall issue and deliver to Ledgermark Transfer Services, Inc. (the Company's transfer agent) irrevocable stop-transfer instructions against any transfer of Key Holder Shares that is subject to the restrictions imposed by this Agreement, unless and until this Agreement terminates in accordance with its terms or the applicable restrictions have been satisfied or waived in accordance with this Agreement. The Company shall not register on the books and records of the Company, and shall instruct the transfer agent not to effect, any Transfer of Key Holder Shares unless such Transfer complies with this Agreement or is otherwise permitted hereunder. The Company shall use commercially reasonable efforts to enforce the stop-transfer instructions and transfer restrictions contemplated by this Section 5.2.
ARTICLE 6: REPRESENTATIONS AND WARRANTIES
Section 6.1 — Key Holder Representations
Each Key Holder hereby represents and warrants, severally and not jointly, to each of the other Parties as follows:
(a) Power and Authority. Such Key Holder has full legal right, power, and authority to execute and deliver this Agreement and to perform the obligations hereunder, and no consent, approval, or authorization of any Person (other than such consents, approvals, and authorizations as have been duly obtained and are in full force and effect) is required in connection therewith.
(b) Valid and Binding Obligation. This Agreement has been duly executed and delivered by such Key Holder and constitutes the valid and legally binding obligation of such Key Holder, enforceable against such Key Holder in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and similar laws affecting creditors' rights generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
(c) No Conflicts. The execution, delivery, and performance of this Agreement by such Key Holder does not and will not (i) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule, or regulation applicable to such Key Holder, (ii) conflict with, result in a breach of, or constitute a default under any agreement, instrument, or arrangement to which such Key Holder is a party or by which such Key Holder or any of such Key Holder's properties is bound, or (iii) result in the creation or imposition of any lien, charge, or encumbrance upon any of the Key Holder Shares, other than as contemplated by this Agreement and the other Transaction Documents.
(d) Ownership of Key Holder Shares. Such Key Holder is the sole legal and beneficial owner of the Key Holder Shares set forth opposite such Key Holder's name on Exhibit A hereto, free and clear of all liens, encumbrances, pledges, security interests, and third-party rights of any kind (other than those created by this Agreement, the Amended and Restated Voting Agreement dated as of the date hereof, applicable securities laws, and, in the case of David Okonkwo, the vesting and repurchase provisions set forth in such Key Holder's restricted stock purchase agreement with the Company).
Section 6.2 — Investor Representations
Each Investor hereby represents and warrants, severally and not jointly, to each of the other Parties as follows:
(a) Power and Authority. Such Investor has full legal right, power, and authority (and, in the case of an entity, has been duly authorized by all necessary corporate, partnership, or limited liability company action, as applicable) to execute and deliver this Agreement and to perform the obligations hereunder.
(b) Valid and Binding Obligation. This Agreement has been duly executed and delivered by such Investor and constitutes the valid and legally binding obligation of such Investor, enforceable against such Investor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and similar laws affecting creditors' rights generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
Section 6.3 — Company Representations
The Company hereby represents and warrants to each of the other Parties as follows:
(a) Organization and Good Standing. The Company is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, lease, and operate its properties and to conduct its business as presently conducted and as proposed to be conducted.
(b) Power and Authority. The Company has full corporate power and authority to execute, deliver, and perform this Agreement, and the execution, delivery, and performance of this Agreement by the Company have been duly authorized by all necessary corporate action on the part of the Company, including approval by the Board of Directors.
(c) Valid and Binding Obligation. This Agreement has been duly executed and delivered by the Company and constitutes the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and similar laws affecting creditors' rights generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
ARTICLE 7: TERMINATION
Section 7.1 — Termination Events
This Agreement (other than those provisions that expressly survive termination as set forth in Section 7.2) shall terminate and be of no further force or effect upon the earliest to occur of the following events:
(a) the closing of a Qualified Public Offering, as defined in the Restated Certificate;
(b) the consummation of a Deemed Liquidation Event, as defined in the Restated Certificate, including, without limitation, any merger, consolidation, or sale of all or substantially all of the Company's assets, in each case, which constitutes a liquidation, dissolution, or winding up of the Company within the meaning of the Restated Certificate;
(c) the written consent of each of the following: (i) the Company, acting through its Board of Directors, (ii) Key Holders holding a majority of the Key Holder Shares then outstanding, and (iii) Investors holding at least a majority of the shares of Preferred Stock then outstanding (voting together as a single class on an as-converted-to-Common-Stock basis), which majority must include holders of a majority of the shares of Series B Preferred Stock then outstanding; or
(d) the date that is five (5) years after the date of this Agreement (i.e., July 18, 2027), unless such date is extended by mutual written agreement of (i) the Company, (ii) Key Holders holding a majority of the Key Holder Shares then outstanding, and (iii) Investors holding at least a majority of the shares of Preferred Stock then outstanding (voting together as a single class on an as-converted-to-Common-Stock basis), which majority must include holders of a majority of the shares of Series B Preferred Stock then outstanding.
Upon termination of this Agreement, all rights of first refusal, co-sale rights, and transfer restrictions set forth herein shall cease to be of any force or effect, and the Company shall promptly (and in any event within five (5) business days following termination) cause the removal of the legend referenced in Section 5.1 from all certificates and book-entry notations representing Key Holder Shares and shall instruct Ledgermark Transfer Services, Inc. to remove all stop-transfer instructions imposed pursuant to Section 5.2.
Section 7.2 — Survival of Certain Provisions
Article 8 (Miscellaneous) shall survive any termination or expiration of this Agreement. In addition, no termination of this Agreement shall relieve any Party of any liability for breach of this Agreement occurring prior to such termination.
ARTICLE 8: MISCELLANEOUS
Section 8.1 — Governing Law
This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware, without giving effect to any choice-of-law or conflict-of-law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
Section 8.2 — Jurisdiction and Venue
Any and all actions, suits, or proceedings arising out of or relating to this Agreement or the transactions contemplated hereby shall be brought and maintained exclusively in the Court of Chancery of the State of Delaware (or, if and only if such court lacks subject matter jurisdiction, any federal court located in the State of Delaware). Each Party hereby irrevocably and unconditionally (a) submits to the exclusive jurisdiction of such courts for purposes of any such action, suit, or proceeding, (b) consents to service of process in connection therewith by any means permitted by applicable law, (c) waives any objection that such Party may now or hereafter have to the laying of venue of any such action, suit, or proceeding in any such court, and (d) waives and agrees not to plead or claim in any such court that any such action, suit, or proceeding brought in any such court has been brought in an inconvenient forum.
Section 8.3 — Entire Agreement
This Agreement, together with the other Transaction Documents (including the Purchase Agreement, the Amended and Restated Investors' Rights Agreement dated as of the date hereof, the Amended and Restated Voting Agreement dated as of the date hereof, and the Restated Certificate), and the exhibits and schedules hereto and thereto, constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written, of the Parties with respect thereto. Without limiting the generality of the foregoing, this Agreement supersedes the Prior Agreement (Right of First Refusal and Co-Sale Agreement dated March 6, 2020) in its entirety, and the Prior Agreement is hereby terminated and of no further force or effect.
Section 8.4 — Amendments and Waivers
No provision of this Agreement may be amended, modified, or supplemented, and no right, power, or remedy of any Party hereunder may be waived, except by a written instrument executed by each of the following: (i) the Company, (ii) Key Holders holding a majority of the Key Holder Shares then outstanding, and (iii) Investors holding at least a majority of the shares of Preferred Stock then outstanding (voting together as a single class on an as-converted-to-Common-Stock basis), which majority must include holders of a majority of the shares of Series B Preferred Stock then outstanding. Any amendment, modification, supplement, or waiver effected in accordance with this Section 8.4 shall be binding upon each of the Parties hereto, including each Party who did not consent to such amendment, modification, supplement, or waiver. No delay or omission by any Party in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or remedy.
Section 8.5 — Notices
All notices, demands, requests, consents, approvals, and other communications required or permitted under this Agreement (collectively, "Notices") shall be in writing and shall be delivered by (A) personal delivery, (B) nationally recognized overnight courier service (with tracking capability), (C) facsimile transmission (with written confirmation of receipt), or (D) electronic mail (with written confirmation of receipt), addressed as follows (or to such other address as any Party may designate from time to time by Notice given in accordance with this Section 8.5):
If to the Company:
Skybridge Fintech Ltd. 1600 Market Street, Suite 2200 Wilmington, DE 19801
Attention: Naveen Raghavan, Chief Executive Officer
Email: n.raghavan@skybridgefintech.com
with a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 919 N. Market Street, Suite 1500 Wilmington, DE 19801
Attention: Miriam Calloway
Email: m.calloway@calderwoodharkness.com
If to a Key Holder:
To the address set forth opposite such Key Holder's name on Exhibit A hereto, or to such other address as such Key Holder may designate from time to time by Notice to the Company and each Investor.
If to an Investor:
To the address set forth opposite such Investor's name on Exhibit B hereto, or to such other address as such Investor may designate from time to time by Notice to the Company and each Key Holder.
Without limiting the foregoing, specific notice addresses for each Investor are as follows:
Granite Peak Ventures, LP: 350 Sand Hill Road, Suite 180 Menlo Park, CA 94025
Attention: Priya Deshmukh
Email: pdeshmukh@granitepeakventures.com
with a copy (which shall not constitute notice) to:
Fenwick, Pratt & Howell LLP 555 California Street, Suite 4000 San Francisco, CA 94104
Attention: Katherine Linfield
Email: klinfield@fenwickpratthowell.com
Ridgeline Capital Partners, LLC: 200 Clarendon Street, 40th Floor Boston, MA 02116
Attention: Thomas Brennan
Email: tbrennan@ridgelinecap.com
Solstice Growth Fund I, LP: 600 Travis Street, Suite 3100 Houston, TX 77002
Attention: Angela Moreau
Email: amoreau@solsticegrowth.com
Harborview Seed Investors LLC: 44 Montgomery Street, Suite 1800 San Francisco, CA 94104
Attention: Elliott Yun
Email: eyun@harborviewseed.com
Any Notice delivered in accordance with this Section 8.5 shall be deemed to have been given and received (i) if delivered personally, upon delivery, (ii) if sent by nationally recognized overnight courier, on the business day following deposit with such courier, (iii) if sent by facsimile, upon confirmation of successful transmission, and (iv) if sent by electronic mail, upon confirmation of receipt by the recipient (excluding any automated "read receipt" or similar response).
Section 8.6 — Successors and Assigns
This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns. No Party may assign any of its rights or delegate any of its obligations under this Agreement except as expressly permitted by the terms hereof (including, without limitation, transfers to permitted transferees under Article 4 and transfers by Investors to their Affiliates, provided that such transferees or Affiliates execute a joinder agreement or other instrument agreeing to be bound by the terms of this Agreement).
Section 8.7 — Severability
If any provision of this Agreement (or any portion thereof) is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision (or the remaining portion of such provision) of this Agreement, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision (or portion thereof) had never been contained herein, so long as the economic and legal substance of the transactions contemplated hereby are not affected in a manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner.