Skip to content

Latest commit

 

History

History
62 lines (36 loc) · 7.53 KB

Side Letter.md

File metadata and controls

62 lines (36 loc) · 7.53 KB
Raw

[COMPANY]
[Address]

___________ ____, ____

Bloomberg Beta 2022 L.P.
140 New Montgomery Street
Suite 2200
San Francisco, CA 94105
Attention:

Re: Pro Rata, Information, MFN and Other Rights

Ladies and Gentlemen:

This letter (the “Agreement”) will confirm our agreement that Bloomberg Beta 2022 L.P. (the “Investor”) shall be entitled to the following contractual pro rata, information and MFN rights in respect of [Company], a Delaware corporation (the “Company”), effective and contingent upon its purchase of a simple agreement for future equity of the Company, dated on or about [date] (the “SAFE”). Capitalized terms used herein and not defined shall have the meanings given to them in the SAFE.

  1. Subject to the terms and conditions specified in this Agreement, and notwithstanding anything to the contrary in the SAFE, the Company hereby grants to the Investor a right to purchase its Pro Rata Portion (as defined below) of the equity securities, or instruments convertible into or exercisable or exchangeable for equity securities (the “Equity Securities”), issued by the Company in an Equity Financing (as defined below) at the price and on the terms such shares are offered to other investors in such Equity Financing (the "Pro Rata Right"). The Company shall give Investor a written notice of its bona fide intention to issue such Equity Securities, describing the type of Equity Securities and the price and the general terms upon which the Company proposes to issue such Equity Securities. Investor shall have ten (10) days from the date such notice is effective, to agree in writing to purchase such Investor’s Pro Rata Portion of such Equity Securities. Such purchase shall be completed at the same closing as that of any third party purchasers or at an additional closing thereunder and shall be subject to the Investor signing any purchase and other documents signed by other investors in the Equity Financing.

  2. "Equity Financing" shall mean a sale by the Company of Equity Securities, not including any equity issuance made primarily for non-financing purposes, as determined by the Company in its reasonable discretion.

  3. The Investor's "Pro Rata Portion" shall mean no less than the ratio of (x) the number of shares of Capital Stock issuable from the conversion of the SAFE and any other simple agreements for future equity or convertible securities issued by the Company to the Investor to (y) the Company Capitalization immediately prior to the applicable Equity Financing.

  4. The Company shall deliver to the Investor the following (the “Information Rights”):

    (a) As soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred twenty (120) days after the end of each fiscal year of the Company, a consolidated balance sheet of the Company and its subsidiaries, if any, as at the end of such fiscal year, and consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such year, certified by the Chief Financial Officer of the Company;

    (b) As soon as practicable after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company, and in any event within forty-five (45) days after the end of the first, second, and third quarterly accounting periods in each fiscal year of the Company, an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each such quarterly period, and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such period, subject to changes resulting from normal year-end audit adjustments; and

    (c) Promptly after the commencement thereof, notice of all suits, claims, proceedings or investigations that could materially and adversely affect the Company or any of its affiliates or with respect to the SAFE.

  5. The Company agrees that, until the earlier of (i) conversion of the SAFE pursuant to the closing of the next Equity Financing contemplated by the SAFE or (ii) immediately prior to the consummation of a Change of Control of the Company, if the Company shall offer any investment terms to another investor that are more favorable than those set forth in the SAFE (or any subsequent investment in the Company made by Investor), the same terms shall be automatically deemed to apply retroactively to any and all investments in the Company by Investor that do not have such investment terms that are more favorable, whether pursuant to the SAFE or otherwise. The Company agrees to notify Investor promptly upon proposing to or receiving from another investor terms that are more favorable to the investor than those set forth in the SAFE (or any subsequent investment in the Company made by Investor), as supplemented by this Agreement.

  6. The Company agrees that the SAFE shall not automatically convert into shares of Preferred Stock unless the Company receives aggregate gross proceeds of not less than [$3,000,000] (excluding the aggregate amount of convertible debt securities and simple agreements for future equity of the Company outstanding as of the date of this Agreement or issued after the date of this Agreement).

  7. Without the prior written consent of the Investor, the Company shall not, directly or indirectly, through an affiliate or otherwise, sell, issue, sponsor, create or distribute any digital tokens, blockchain-based assets, cryptocurrency or any other digital assets, including through a Simple Agreement for Future Tokens or other agreement, pre-sale, initial coin offering, token distribution event or crowdfunding.

  8. The rights described in this Agreement are non-assignable (except to affiliates of the Investor) and shall terminate upon the earliest to occur of (a) the conversion of the SAFE pursuant to the closing of the next Equity Financing contemplated by the SAFE; provided, however, that such rights shall survive such closing to the extent such rights are not reflected in the definitive documentation for the Equity Financing contemplated by the SAFE or at any time are not available to the Investor, in which case, the parties hereto will make any amendments necessary to this Agreement so as to preserve the rights of the Investor under this Agreement, (b) the closing of a firm commitment underwriting public offering of the Company’s Common Stock registered under the Securities Act of 1933, as amended, (c) immediately prior to the consummation of Change of Control of the Company, or (d) such time as the Investor no longer qualifies as an “accredited investor,” as that term is then defined in Rule 501(a) under the Securities Act of 1933, as amended.

  9. This Agreement shall be governed by and construed under the laws of the State of [Delaware], without regard to the conflicts of law provisions of such jurisdiction.

  10. This Agreement and the SAFE constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. In the event of any inconsistency between this Agreement and the SAFE, this Agreement shall control.

The undersigned hereby execute and deliver this Agreement as of the date first set forth above. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

Sincerely,
[COMPANY]

By: ____________________
[Name]
[Title]

ACKNOWLEDGED AND AGREED:

Investor:

BLOOMBERG BETA 2022 L.P.

By: ____________________
[____________________]
Authorized Signatory