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slfh-descriptionofsecuri

Exhibit 4.4  DESCRIPTION OF SECURITIES  The following summary of the material terms of the capital stock of Sunlight Financial Holdings Inc.  (“Sunlight”) is not intended to be a complete summary of the rights and preferences of such securities. We urge  you to read our Second Amended and Restated Certificate of Incorporation (“Second A&R Charter”) in its  entirety for a complete description of the rights and preferences of our capital stock and the warrant agreement  dated November 24, 2020 (the “warrant agreement”) and form of warrant for a description of the terms of the  public and private placement warrants, which are filed or incorporated by reference as exhibits to the Annual  Report on Form 10-K of which this exhibit is a part. Unless the context requires otherwise, all references to  “we”, “us,” “our,” the “Company” and “Sunlight” in this section refer solely to Sunlight Financial Holdings  Inc. and not to our subsidiaries.  General  On July 9, 2021 (the “Closing Date”), the Company consummated the transactions contemplated by that certain  Business Combination Agreement (the “Business Combination Agreement”), dated as of January 23, 2021, by and  among Spartan Acquisition Corp. II, a Delaware corporation incorporated on August 17, 2020 as a publicly-traded  special purpose acquisition company sponsored by funds managed by an affiliate of Apollo Global Management, Inc.  (the “Sponsor”) and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock  purchase, reorganization or similar business combination with one or more businesses (“Spartan”), Sunlight Financial  LLC and the Spartan Subsidiaries, FTV Blocker and Tiger Blocker (each as defined in the Business Combination  Agreement). On the Closing Date, Spartan changed its name to “Sunlight Financial Holdings Inc.” and Sunlight  Financial LLC became the operating subsidiary of Sunlight Financial Holdings Inc., organized in an “Up-C” structure  (the “Business Combination”).  Authorized and Outstanding Stock  The Second A&R Charter provides for authorized shares of all classes of capital stock in the aggregate  amount of 500,000,000 shares, consisting of 465,000,000 shares of common stock, including 420,000,000 shares  of Class A Common Stock, par value $0.0001 per share (“Class A Common Stock”), 20,000,000 shares of Class  B Common Stock, par value $0.0001 per share (“Class B Common Stock” or “Founder Shares”), and 65,000,000  shares of Class C Common Stock, par value $0.0001 per share (“Class C Common Stock” and together with the  Class A Common Stock, the “Common Stock”), and 35,000,000 shares of Preferred Stock, par value $0.0001  per share (“Preferred Stock”); the Second A&R Charter specifies the rights of the Class C Common Stock in  order to provide for our “Up-C” structure. As of March 22, 2022, there were 84,803,687 shares of Class A  Common Stock outstanding, 0 shares of Class B Common Stock outstanding and 47,595,455 shares of Class C  Common Stock outstanding.   Voting Power  Except as otherwise expressly provided in the Second A&R Charter or required by applicable law, each  holder of Common Stock has the right to one vote per share of Common Stock held of record by such holder;  provided, however, that, except as otherwise required by law, holders of Common Stock are not entitled to vote  on any amendment to the Second A&R Charter (including any certificate of designation relating to any series of  Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders  of such affected series are entitled, either separately or together as a class with the holders of one or more other  such series, to vote thereon pursuant to the Second A&R Charter (including any certificate of designation relating  to any series of Preferred Stock).   Dividends  Subject to applicable law and the rights, if any, of the holders of one or more outstanding series of Preferred  Stock, holders of shares of Class A Common Stock are entitled to receive such dividends and distributions in  cash, stock or otherwise as may be declared thereon by the Board of Directors of Sunlight (the “Board”) in its  discretion from time to time out of funds of Sunlight legally available therefor and shall share equally on a per  share basis in all such dividends or other distributions.   

 

  No Preemptive or Similar Rights   Our Common Stock is not entitled to preemptive rights and is not subject to conversion, redemption or  sinking fund provisions.   Liquidation, Dissolution and Winding Up   Subject to the rights, if any, of the holders of one or more outstanding series of Preferred Stock and after  payment or provision for payment of the debt and other liabilities of Sunlight, holders of shares of Class A  Common Stock are entitled to receive (ratably in proportion to the number of shares held by them) the assets  and funds of Sunlight available for distribution in the event of any liquidation, dissolution or winding up of the  affairs of Sunlight, whether voluntary or involuntary. A liquidation, dissolution or winding up of the affairs of  Sunlight, as such terms are used in subparagraph C(d) of the Second A&R Charter, shall not be deemed to be  occasioned by or to include any consolidation or merger of Sunlight with or into any other person or a sale, lease,  exchange, conveyance or other disposition of all or any part of its assets.   Class B Common Stock   The Second A&R Charter authorizes 20,000,000 shares of Class B Common Stock. Under the Second A&R  Charter, each share of Class B Common Stock automatically converted into shares of Class A Common Stock  on a one-to-one basis upon the consummation of the Business Combination.   Class C Common Stock   Shares of Class C Common Stock shall be redeemable for shares of Class A Common Stock on the terms and  subject to the conditions set forth in the Fifth Amended and Restated Limited Liability Company Agreement of  Sunlight Financial LLC (the “Sunlight A&R LLC Agreement”). Sunlight will at all times reserve and keep  available out of its authorized but unissued shares of Class A Common Stock, solely for the purpose of issuance  upon redemption of the outstanding shares of Class C Common Stock for Class A Common Stock pursuant to  the Sunlight A&R LLC Agreement, such number of shares of Class A Common Stock that shall be issuable upon  any such redemption pursuant to the Sunlight A&R LLC Agreement; provided, however, that nothing contained  herein shall be construed to preclude Sunlight from satisfying its obligations in respect of any such redemption  of shares of Class C Common Stock pursuant to the Sunlight A&R LLC Agreement by delivering to the holder  of shares of Class C Common Stock upon such redemption, cash in lieu of shares of Class A Common Stock in  the amount permitted by and provided in the Sunlight A&R LLC Agreement or shares of Class A Common Stock  which are held in the treasury of Sunlight. All shares of Class A Common Stock that shall be issued upon any  such redemption will, upon issuance in accordance with the Sunlight A&R LLC Agreement, be validly issued,  fully paid and non-assessable. All shares of Class C Common Stock redeemed shall be cancelled.   Preferred Stock   The Second A&R Charter provides that shares of Preferred Stock may be issued from time to time in one or  more classes or series. The Board is authorized to fix the designation, voting powers, preferences and relative,  participating, optional or other rights (and the qualifications, limitations or restrictions thereof) of the shares of  each such series and to increase (but not above the total number of authorized shares of the class) or decrease  (but not below the number of shares of such series then outstanding) the number of shares of any such series.   The number of authorized shares of Preferred Stock may also be increased or decreased (but not below the  number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting  power of all the then-outstanding shares of capital stock of Sunlight entitled to vote generally, voting together  as a single class, without a separate vote of the holders of the Preferred Stock or any classes or series thereof,  unless a vote of any such holders is required pursuant to the terms of any certificate of designation designating  a series of Preferred Stock.   The Board is able to, without stockholder approval, issue Preferred Stock with voting and other rights that could  adversely affect the voting power and other rights of the holders of the Common Stock and could have anti- takeover effects. The ability of the Board to issue Preferred Stock without stockholder approval could have the  effect of delaying, deferring or preventing a change of control of Sunlight or the removal of Sunlight’s  

 

  management. As of the date of our Annual Report on Form 10-K, Sunlight had no outstanding shares of Preferred  Stock.   Registration Rights   Certain holders of Class A Common Stock are entitled to registration rights as described under “Registration  Rights” below.   Warrants   Public Stockholders’ Warrants   Each whole warrant entitles the registered holder to purchase one whole share of our Class A Common Stock at  a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on the later of 12  months from the Closing Date or 30 days after the completion of the Business Combination, provided in each  case that we have an effective registration statement under the Securities Act covering the shares of Class A  Common Stock issuable upon exercise of the warrants and a current prospectus relating to them is available (or  we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant  agreement) and such shares are registered, qualified or exempt from registration under the securities, or blue  sky, laws of the state of residence of the holder. Pursuant to the warrant agreement, a warrantholder may exercise  its warrants only for a whole number of shares of Class A Common Stock. This means that only a whole warrant  may be exercised at any given time by a warrantholder. No fractional warrants will be issued upon separation of  the units and only whole warrants can be traded. Accordingly, unless a warrantholder has purchased at least two  units, they will not be able to receive or trade a whole warrant. The warrants will expire five years after the  Closing Date, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation, as applicable.   We will not be obligated to deliver any shares of Class A Common Stock pursuant to the exercise of a warrant  and will have no obligation to settle such warrant exercise unless a registration statement under the Securities  Act with respect to the shares of Class A Common Stock underlying the warrants is then effective and a  prospectus relating thereto is current, subject to our satisfying our obligations described below with respect to  registration. No warrant will be exercisable and we will not be obligated to issue shares of Class A Common  Stock upon exercise of a warrant unless the Class A Common Stock issuable upon such warrant exercise has  been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the  registered holder of the warrants. In the event that the conditions in the two immediately preceding sentences  are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant  and such warrant may have no value and expire worthless. In no event will we be required to net cash settle any  warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a  unit containing such warrant will have paid the full purchase price for the unit solely for the share of Class A  Common Stock underlying such unit.   On July 30, 2021, we have filed with the SEC a registration statement for the registration, under the Securities  Act, of the shares of Class A Common Stock issuable upon exercise of the warrants, which was declared effective  on September 7, 2021. We will use our best efforts to maintain the effectiveness of such registration statement,  and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions  of the warrant agreement. Notwithstanding the above, if our Class A Common Stock is at the time of any exercise  of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security”  under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who  exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act  and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we  will be required to use our best efforts to register or qualify the shares under applicable blue sky laws to the  extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering  the warrants for that number of shares of Class A Common Stock equal to the lesser of (A) the quotient obtained  by dividing (x) the product of (i) the number of shares of our Class A Common Stock underlying the warrants,  and (ii) the excess of the “fair market value” (defined below) over the exercise price of the warrants by (y) such  fair market value and (B) the product of the number of warrants surrendered and 0.361. The “fair market value”  as used in this paragraph shall mean the average reported last sale price of our Class A Common Stock for the  

 

  10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the  warrant agent.   Redemption of warrants when the price per share of Class A Common Stock equals or exceeds $18.00   Once the warrants become exercisable, we may redeem the outstanding warrants:   • in whole and not in part;   • at a price of $0.01 per warrant;   • upon a minimum of 30 days’ prior written notice of redemption, or the 30-day redemption period, to  each warrantholder; and   • if, and only if, the reported last sale price of the Class A Common Stock equals or exceeds $18.00 per  share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for  any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on  which we send the notice of redemption to the warrantholders.     We will not redeem the warrants as described above unless a registration statement under the Securities Act  covering the shares of Class A Common Stock issuable upon exercise of the warrants is effective and a current  prospectus relating to those shares of Class A Common Stock is available throughout the 30-day redemption  period. If and when the warrants become redeemable by us, we may exercise our redemption right even if we  are unable to register or qualify the underlying securities for sale under all applicable state securities laws.   We have established the last of the redemption criterion discussed above to prevent a redemption call unless  there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are  satisfied and we issue a notice of redemption of the warrants, each warrantholder will be entitled to exercise its  warrant prior to the scheduled redemption date. However, the price of the Class A Common Stock may fall below  the $18.00 redemption trigger price (as adjusted for stock splits, stock dividends, reorganizations,  recapitalizations and the like) as well as the $11.50 (for whole shares) warrant exercise price after the redemption  notice is issued.   Redemption of warrants when the price per share of Class A Common Stock equals or exceeds $10.00   Once the warrants become exercisable, we may redeem the outstanding warrants:   • in whole and not in part;   • at a price of $0.10 per warrant, provided that holders will be able to exercise their warrants on a cashless  basis prior to redemption and receive that number of shares of Class A Common Stock determined by  reference to the table below, based on the redemption date and the “fair market value” of our Class A  Common Stock except as otherwise described below;   • upon a minimum of 30 days’ prior written notice to each warrantholder;   • if, and only if, the reported last sale price of our Class A Common Stock equals or exceeds $10.00 per  share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) on  the trading day prior to the date on which we send the notice of redemption to the warrantholders; and   • if the reported last sale price of our Class A Common Stock on the trading day prior to the date on which  we send the notice of redemption to the warrantholders is less than $18.00 per share (as adjusted for  stock splits, stock dividends, reorganizations, recapitalizations and the like), the private placement  warrants must also be concurrently called for redemption on the same terms as the outstanding public  warrants, as described above.     Beginning on the date the notice of redemption is given until the warrants are redeemed or exercised, holders  may elect to exercise their warrants on a cashless basis. The numbers in the table below represent the number of  shares of Class A Common Stock that a warrantholder will receive upon a cashless exercise in connection with  a redemption by us pursuant to this redemption feature, based on the “fair market value” of our Class A Common  

 

  Stock on the corresponding redemption date (assuming holders elect to exercise their warrants and such warrants  are not redeemed for $0.10 per warrant), and the number of months that the corresponding redemption date  precedes the expiration date of the warrants, each as set forth in the table below.  Redemption Date   (period to expiration of  warrants)     Fair Market Value of Class A Common Stock     ≤$10.00    $11.00    $12.00    $13.00    $14.00    $15.00    $16.00    $17.00    ≥$18.00   60 months      0.261      0.281     0.297      0.311     0.324     0.337     0.348     0.358     0.361    57 months      0.257      0.277     0.294      0.310     0.324     0.337     0.348     0.358     0.361    54 months      0.252      0.272     0.291      0.307     0.322     0.335     0.347     0.357     0.361    51 months      0.246      0.268     0.287      0.304     0.320     0.333     0.346     0.357     0.361    48 months      0.241      0.263     0.283      0.301     0.317     0.332     0.344     0.356     0.361    45 months      0.235      0.258     0.279      0.298     0.315     0.330     0.343     0.356     0.361    42 months      0.228      0.252     0.274      0.294     0.312     0.328     0.342     0.355     0.361    39 months      0.221      0.246     0.269      0.290     0.309     0.325     0.340     0.354     0.361    36 months      0.213      0.239     0.263      0.285     0.305     0.323     0.339     0.353     0.361    33 months      0.205      0.232     0.257      0.280     0.301     0.320     0.337     0.352     0.361    30 months      0.196      0.224     0.250      0.274     0.297     0.316     0.335     0.351     0.361    27 months      0.185      0.214     0.242      0.268     0.291     0.313     0.332     0.350     0.361    24 months      0.173      0.204     0.233      0.260     0.285     0.308     0.329     0.348     0.361    21 months      0.161      0.193     0.223      0.252     0.279     0.304     0.326     0.347     0.361    18 months      0.146      0.179     0.211      0.242     0.271     0.298     0.322     0.345     0.361    15 months      0.130      0.164     0.197      0.230     0.262     0.291     0.317     0.342     0.361    12 months      0.111      0.146     0.181      0.216     0.250     0.282     0.312     0.339     0.361    9 months      0.090      0.125     0.162      0.199     0.237     0.272     0.305     0.336     0.361    6 months      0.065      0.099     0.137      0.178     0.219     0.259     0.296     0.331     0.361    3 months      0.034      0.065     0.104      0.150     0.197     0.243     0.286     0.326     0.361    0 months      -      -     0.042      0.115     0.179     0.233     0.281     0.323     0.361    The “fair market value” of our Class A Common Stock shall mean the average reported last sale price of our  Class A Common Stock for the 10 trading days immediately following the date on which the notice of redemption  is sent to the holders of warrants. We will provide our warrantholders with the final fair market value no later  than one business day after the ten-trading day period described above ends.   The exact fair market value and redemption date may not be set forth in the table above, in which case, if the  fair market value is between two values in the table or the redemption date is between two redemption dates in  the table, the number of shares of Class A Common Stock to be issued for each warrant exercised will be  

 

  determined by a straight-line interpolation between the number of shares set forth for the higher and lower fair  market values and the earlier and later redemption dates, as applicable, based on a 365 or 366-day year, as  applicable. For example, if the average reported last sale price of our Class A Common Stock for the 10 trading  days immediately following the date on which the notice of redemption is sent to the holders of the warrants is  $11.00 per share, and at such time there are 57 months until the expiration of the warrants, holders may choose  to, in connection with this redemption feature, exercise their warrants for 0.277 shares of Class A Common Stock  for each whole warrant. For an example where the exact fair market value and redemption date are not as set  forth in the table above, if the average reported last sale price of our Class A Common Stock for the 10 trading  days immediately following the date on which the notice of redemption is sent to the holders of the warrants is  $13.50 per share, and at such time there are 38 months until the expiration of the warrants, holders may choose  to, in connection with this redemption feature, exercise their warrants for 0.298 shares of Class A Common Stock  for each whole warrant. In no event will the warrants be exercisable on a cashless basis in connection with this  redemption feature for more than 0.361 shares of Class A Common Stock per whole warrant (subject to  adjustment). Finally, as reflected in the table above, if the warrants are “out of the money” (i.e. the trading price  of our Class A Common Stock is below the exercise price of the warrants) and about to expire, they cannot be  exercised on a cashless basis in connection with a redemption by us pursuant to this redemption feature, since  they will not be exercisable for any shares of Class A Common Stock.   This redemption feature differs from the typical warrant redemption features used in some other blank check  offerings, which typically only provide for a redemption of warrants for cash (other than the private placement  warrants) when the trading price for the Class A Common Stock exceeds $18.00 per share for a specified period  of time. This redemption feature is structured to allow for all of the outstanding warrants to be redeemed when  the Class A Common Stock is trading at or above $10.00 per share, which may be at a time when the trading  price of our Class A Common Stock is below the exercise price of the warrants. We have established this  redemption feature to provide us with the flexibility to redeem the warrants without the warrants having to reach  the $18.00 per share threshold. Holders choosing to exercise their warrants in connection with a redemption  pursuant to this feature will, in effect, receive a number of shares for their warrants, based on the “redemption  price” as determined pursuant to the above table. We have calculated the “redemption prices” as set forth in the  table above to reflect a Black-Scholes option pricing model with a fixed volatility input as of the date of the IPO  prospectus. This redemption right provides us with an additional mechanism by which to redeem all of the  outstanding warrants and therefore have certainty as to our capital structure as the warrants would no longer be  outstanding and would have been exercised or redeemed, and we will effectively be required to pay the  redemption price to warrantholders if we choose to exercise this redemption right, it will allow us to quickly  proceed with a redemption of the warrants if we determine it is in our best interest to do so. As such, we would  redeem the warrants in this manner when we believe it is in our best interest to update our capital structure to  remove the warrants and pay the redemption price to the warrantholders.   As stated above, we can redeem the warrants when the Class A Common Stock is trading at a price starting at  $10.00, which is below the exercise price of $11.50, because it will provide certainty with respect to our capital  structure and cash position while providing warrantholders with the opportunity to exercise their warrants on a  cashless basis for the applicable number of shares of Class A Common Stock. If we choose to redeem the  warrants when the Class A Common Stock is trading at a price below the exercise price of the warrants, this  could result in the warrantholders receiving fewer shares of Class A Common Stock than they would have  received if they had chosen to wait to exercise their warrants for shares of Class A Common Stock if and when  such shares of Class A Common Stock were trading at a price higher than the exercise price of $11.50.   No fractional shares of Class A Common Stock will be issued upon exercise. If, upon exercise, a holder would  be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the  number of shares of Class A Common Stock to be issued to the holder.   Redemption Procedures   A holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such  holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such  person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own  in excess of 9.8% (or such other amount as a holder may specify) of the shares of Class A Common Stock  outstanding immediately after giving effect to such exercise.   

 

  Anti-Dilution Adjustments   The stock prices set forth in the column headings of the table above shall be adjusted as of any date on which  the number of shares issuable upon exercise of a warrant is adjusted pursuant to the following two paragraphs.  The adjusted stock prices in the column headings shall equal the stock prices immediately prior to such  adjustment, multiplied by a fraction, the numerator of which is the number of shares deliverable upon exercise  of a warrant immediately prior to such adjustment and the denominator of which is the number of shares  deliverable upon exercise of a warrant as so adjusted. The number of shares in the table above shall be adjusted  in the same manner and at the same time as the number of shares issuable upon exercise of a warrant.   If the number of outstanding shares of Class A Common Stock is increased by a stock dividend payable in shares  of Class A Common Stock, or by a split-up of shares of Class A Common Stock or other similar event, then, on  the effective date of such stock dividend, split-up or similar event, the number of shares of Class A Common  Stock issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding  shares of Class A Common Stock. A rights offering to holders of Class A Common Stock entitling holders to  purchase shares of Class A Common Stock at a price less than the fair market value will be deemed a stock  dividend of a number of shares of Class A Common Stock equal to the product of (i) the number of shares of  Class A Common Stock actually sold in such rights offering (or issuable under any other equity securities sold  in such rights offering that are convertible into or exercisable for Class A Common Stock) multiplied by (ii) one  (1) minus the quotient of (x) the price per share of Class A Common Stock paid in such rights offering divided  by (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or  exercisable for Class A Common Stock, in determining the price payable for Class A Common Stock, there will  be taken into account any consideration received for such rights, as well as any additional amount payable upon  exercise or conversion and (ii) fair market value means the average last reported sale price of Class A Common  Stock as reported for the ten (10) trading day period ending on the trading day prior to the first date on which  the shares of Class A Common Stock trade on the applicable exchange or in the applicable market, regular way,  without the right to receive such rights   If the number of outstanding shares of our Class A Common Stock is decreased by a consolidation, combination,  reverse stock split or reclassification of shares of Class A Common Stock or other similar event, then, on the  effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the  number of shares of Class A Common Stock issuable on exercise of each warrant will be decreased in proportion  to such decrease in outstanding shares of Class A Common Stock.   Whenever the number of shares of Class A Common Stock purchasable upon the exercise of the warrants is  adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise  price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares  of Class A Common Stock purchasable upon the exercise of the warrants immediately prior to such adjustment,  and (y) the denominator of which will be the number of shares of Class A Common Stock so purchasable  immediately thereafter.   In case of any reclassification or reorganization of the outstanding shares of Class A Common Stock (other than  those described above or that solely affects the par value of such shares of Class A Common Stock), or in the  case of any merger or consolidation of us with or into another corporation (other than a consolidation or merger  in which we are the continuing corporation and that does not result in any reclassification or reorganization of  our outstanding shares of Class A Common Stock), or in the case of any sale or conveyance to another  corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in  connection with which we are dissolved, the holders of the warrants will thereafter have the right to purchase  and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of the shares  of our Class A Common Stock immediately theretofore purchasable and receivable upon the exercise of the  rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash)  receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following  any such sale or transfer, that the holder of the warrants would have received if such holder had exercised his,  her or its warrants immediately prior to such event. If less than 70% of the consideration receivable by the  holders of Class A Common Stock in such a transaction is payable in the form of Class A Common Stock in the  successor entity that is listed for trading on a national securities exchange or is quoted in an established over- 

 

  the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the  registered holder of the warrant properly exercises the warrant within thirty days following public disclosure of  such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the  Black-Scholes value (as defined in the warrant agreement) of the warrant. The purpose of such exercise price  reduction is to provide additional value to holders of the warrants when an extraordinary transaction occurs  during the exercise period of the warrants pursuant to which the holders of the warrants otherwise do not receive  the full potential value of the warrants.   The warrants have been issued in registered form under a warrant agreement between Continental Stock Transfer  & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may  be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but  requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change  that adversely affects the interests of the registered holders of public warrants.     You should review a copy of the warrant agreement, which is incorporated by reference as an exhibit to the  Annual Report on Form 10-K of which this exhibit is a part, for a complete description of the terms and  conditions applicable to the warrants.   The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the  offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and  executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable),  by certified or official bank check payable to us, for the number of warrants being exercised. The warrantholders  do not have the rights or privileges of holders of Class A Common Stock or any voting rights until they exercise  their warrants and receive shares of Class A Common Stock. After the issuance of shares of Class A Common  Stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all  matters to be voted on by stockholders.   No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder  would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest  whole number of shares of Class A Common Stock to be issued to the warrantholder.   Private Placement Warrants   The private placement warrants (including the shares of Class A Common Stock issuable upon exercise of the  private placement warrants) are transferable, assignable or salable, and they are not redeemable by us (except as  described above under “- Redemption of warrants when the price per share of Class A Common Stock equals or  exceeds $10.00”) so long as they are held by the Sponsor or its permitted transferees. The Sponsor, or its  permitted transferees, has the option to exercise the private placement warrants for cash or on a cashless basis.  Except as described below, the private placement warrants have terms and provisions that are identical to those  of the warrants sold in connection with the IPO, including as to exercise price, exercisability and exercise period.  If the private placement warrants are held by holders other than the Sponsor or its permitted transferees, the  private placement warrants will be redeemable by us in all redemption scenarios and exercisable by the holders  on the same basis as the warrants sold in connection with the IPO.   If holders of the private placement warrants elect to exercise them on a cashless basis, they would pay the  exercise price by surrendering his, her or its warrants in exchange for that number of shares of Class A Common  Stock equal to the quotient obtained by dividing (x) the product of (A) the number of shares of Class A Common  Stock underlying the warrants and (B) the excess of the “fair market value” (defined below) over the exercise  price of the warrants by (y) the fair market value. The “fair market value” shall mean the average reported last  sale price of the Class A Common Stock for the ten (10) trading days ending on the third trading day prior to the  date on which the notice of warrant exercise is sent to the warrant agent.   Our Transfer Agent and Warrant Agent   The Transfer Agent for our Class A Common Stock and warrant agent for our warrants is Continental Stock  Transfer & Trust Company.   

 

  Certain Anti-Takeover Provisions of Delaware Law and our Second A&R Charter and Bylaws   We have not opted out of Section 203 of the Delaware General Corporate Law (the “DGCL”) under the Second  A&R Charter. Under Section 203 of the DGCL, Sunlight will be prohibited from engaging in any business  combination with any stockholder for a period of three years following the time that such stockholder (the  “interested stockholder”) came to own at least 15% of the outstanding voting stock of Sunlight (the  “acquisition”), except if:   • the Board approved the acquisition prior to its consummation;     • the interested stockholder owned at least 85% of the outstanding voting stock upon consummation of  the acquisition; or     • the business combination is approved by the Board, and by a 2/3 majority vote of the other stockholders  in a meeting.     Generally, a “business combination” includes any merger, consolidation, asset or stock sale or certain other  transactions resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an  “interested stockholder” is a person who, together with that person’s affiliates and associates, owns, or within  the previous three years owned, 15% or more of our voting stock.   Under certain circumstances, declining to opt out of Section 203 of the DGCL will make it more difficult for a  person who would be an “interested stockholder” to effect various business combinations with Sunlight for a  three-year period. This may encourage companies interested in acquiring Sunlight to negotiate in advance with  the Board because the stockholder approval requirement would be avoided if the Board approves the acquisition  which results in the stockholder becoming an interested stockholder. This may also have the effect of preventing  changes in the Board and may make it more difficult to accomplish transactions which stockholders may  otherwise deem to be in their best interests.   Our Second A&R Charter and Bylaws include a number of provisions that may have the effect of deterring  hostile takeovers or delaying or preventing changes in control of our management team, including the following:   • Board of Directors Vacancies. Our Second A&R Charter and Bylaws authorize the Board to fill vacant  directorships, including newly-created seats. In addition, the number of directors constituting the Board  will be set only by resolution adopted by a majority vote of directors then in office. These provisions  will prevent a stockholder from increasing the size of the Board and gaining control of the Board by  filling the resulting vacancies with its own nominees.     • Classified Board. Our Second A&R Charter and Bylaws provide that the Board is classified into three  classes of directors, each of which will hold office for a three-year term. In addition, directors may only  be removed from the Board for cause and only by the approval of a majority of our then-outstanding  shares of our Common Stock. A third party may be discouraged from making a tender offer or otherwise  attempting to obtain control of us as it is more difficult and time consuming for stockholders to replace  a majority of the directors on a classified board of directors.     • Stockholder Action; Special Meeting of Stockholders. Our Second A&R Charter provides that  stockholders will not be able to take action by written consent, and will only be able to take action at  annual or special meetings of our stockholders. Stockholders will not be permitted to cumulate their  votes for the election of directors. Our Bylaws further provide that special meetings of our stockholders  may be called only by a majority vote of the entire Board, the chairman of the Board or our president.     

 

  • Advance Notice Requirements for Stockholder Proposals and Director Nominations. Our Bylaws  provide advance notice procedures for stockholders seeking to bring business before our annual meeting  of stockholders, or to nominate candidates for election as directors at any meeting of stockholders. Our  Bylaws also specify certain requirements regarding the form and content of a stockholder’s notice.  These provisions may preclude our stockholders from bringing matters before our annual meeting of  stockholders or from making nominations for directors at our meetings of stockholders.     • Issuance of Undesignated Preferred Stock. The Board has the authority, without further action by the  holders of Common Stock, to issue up to 35,000,000 shares of undesignated Preferred Stock with rights  and preferences, including voting rights, designated from time to time by the Board. The existence of  authorized but unissued shares of Preferred Stock will enable the Board to render more difficult or  discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or  otherwise.     Exclusive Forum   Unless Sunlight consents in writing to the selection of an alternative forum, to the fullest extent permitted by  law, the federal district courts of the United States of America are the sole and exclusive forum for the resolution  of any complaint asserting a cause of action arising under the federal securities laws of the United States.   Unless Sunlight consents in writing to the selection of an alternative forum, the Court of Chancery of the State  of Delaware is the sole and exclusive forum to bring: (a) any derivative action or proceeding brought on behalf  of Sunlight; (b) any action asserting a claim of breach of a fiduciary duty owed by a director, officer or other  employee of Sunlight or Sunlight’s stockholders; (c) any action or proceeding asserting a claim against Sunlight  or any director, officer or other employee of Sunlight arising out of or pursuant to any provision of the DGCL,  the Second A&R Charter or the Bylaws of Sunlight (as each may be amended from time to time); (d) any action  asserting a claim against Sunlight or any director or officer or other employee of Sunlight governed by the  internal affairs doctrine, except for, as to each of (a) through (d) above, (i) any action as to which the Court of  Chancery determines that there is an indispensable party not subject to the personal jurisdiction of the Court of  Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery  within ten (10) days following such determination), which is vested in the exclusive jurisdiction of a court or  forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter  jurisdiction.   Rule 144   Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies   Rule 144 is not available for the resale of securities initially issued by shell companies (other than business  combination related shell companies) or issuers that have been at any time previously a shell company. However,  Rule 144 also includes an important exception to this prohibition if the following conditions are met:   • the issuer of the securities that was formerly a shell company has ceased to be a shell company;     • the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange  Act;     • the issuer of the securities has filed all Exchange Act reports and materials required to be filed, as  applicable, during the preceding 12 months (or such shorter period that the issuer was required to file  such reports and materials), other than Current Reports on Form 8-K; and     • at least one year has elapsed from the time that the issuer filed current Form 10 type information with  the SEC reflecting its status as an entity that is not a shell company.   

 

    As a result, our initial stockholders will be able to sell their Founder Shares and private placement warrants, as  applicable, pursuant to Rule 144 without registration one year after we filed our Form 8-K containing the Form  10 type information on July 15, 2021, although these shares may be sold sooner to the extent they have been  registered on a registration statement that has been declared effective by the SEC.   Registration Rights   Certain Stockholders’ Registration Rights   Sunlight, the Sponsor, Tiger Infrastructure Partners Sunlight Feeder LP, Tiger Infrastructure Partners Co-Invest  B LP (together with Tiger Infrastructure Partners Sunlight Feeder LP, “Tiger”), FTV V, L.P. and certain holders  party thereto (collectively, the “IRA Holders”), entered into the Investor Rights Agreement, pursuant to which,  among other things, (a) that certain Registration Rights Agreement, dated November 24, 2020, was terminated  and (b) certain resale registration rights were granted with respect to (i) the private placement warrants (including  any shares of Common Stock issued or issuable upon the exercise of any such private placement warrants), (ii)  any outstanding shares of Class A Common Stock held by an IRA Holder at any time, whether held on the date  of the Investor Rights Agreement or acquired after the date of the Investor Rights Agreement, (iii) any equity  securities (including the shares of Common Stock issued or issuable upon the exercise of any such equity  security) of Sunlight issuable upon conversion of any working capital loans in an amount up to $1,500,000 made  to Sunlight by an IRA Holder, (iv) any shares of Class A Common Stock issued or issuable upon exchange of  Sunlight Class EX Units and Class C Common Stock issued to a Holder under the Business Combination  Agreement and (v) any other equity security of Sunlight issued or issuable with respect to any such shares of  Common Stock by way of a stock dividend or stock split or in connection with a combination of shares,  recapitalization, merger, consolidation or reorganization.   Furthermore, pursuant to the Investor Rights Agreement, we have filed a prospectus (at our sole cost and  expense) registering the resale of certain securities held by or issuable to the IRA Holders. In certain  circumstances, Tiger and FTV V, L.P. can demand up to three underwritten offerings in the aggregate and the  Sponsor can demand up to one underwritten offering. Each IRA Holder will be entitled to customary piggyback  registration rights.   PIPE Shares   Pursuant to the Subscription Agreements, we have filed a prospectus registering the resale of 25,000,000 shares  of Class A Common Stock at a purchase price of $10.00 per share.   Public Warrants   Under the terms of the warrant agreement relating to the public warrants, we have filed the registration statement  and we are obligated to use our best efforts to maintain the effectiveness of such registration statement, and a  current prospectus relating thereto, until the expiration of the public warrants.   Lock-Up Agreements   Pursuant to the closing of the Business Combination Agreement:   • pursuant to the Investor Rights Agreement, Tiger and FTV V, L.P. agreed to the same lock-up  restrictions applicable to the Sponsor and the board of directors and management team of Sunlight;     • subject to certain exceptions, all Sunlight employees and former employees who, as of immediately  after the Closing Date, held 100,000 shares or more of Class A Common Stock or Class EX Units and  a corresponding number of shares of Class C Common Stock, agreed that: (x) 20% of the Class A  Common Stock or Class EX Units and a corresponding number of shares of Class C Common Stock (as  applicable, “Restricted Stock”) held by it, him or her will be subject to lock-up transfer restrictions until  the one-year anniversary of the Closing Date, with the potential for Early Release (as defined below)  

 

  after six months following the Closing Date and (y) 80% of the Restricted Stock held by it, him or her  will be subject to lock-up transfer restrictions until the 15-month anniversary of the Closing Date, with  the potential for Early Release after nine months following the Closing Date;     • certain executives of Sunlight agreed that: (a) 20% of the Restricted Stock held by it, him or her will be  subject to lock-up transfer restrictions until the 16-month anniversary of the Closing Date, with the  potential for Early Release after nine months following the Closing Date and (b) 80% of the Restricted  Stock held by it, him or her will be subject to lock-up transfer restrictions until the 20-month anniversary  of the Closing Date, with potential for Early Release after 14 months following the Closing Date; and     • all other persons who held equity or equity-based awards in respect of less than 100,000 shares of  Restricted Stock as of immediately prior to at the Closing Date, agreed that 100% of the Restricted  Stock held by it, him or her will be subject to lock-up transfer restrictions until the six-month anniversary  of the Closing Date; provided, that with respect to any such person that is not a Sunlight employee,  Sunlight will request and use commercially reasonable efforts to obtain such agreement from such  person;     where applicable, subject to exceptions included in such lock-up agreements, including for “net settlement” of  distributions of Class A Common Stock to holders of certain company awards as contemplated by Section 2.02(e)  of the Business Combination Agreement in respect of applicable tax withholding obligations.   An “Early Release” shall be achieved if the last sale price of the Class A Common Stock equals or exceeds  $12.00 per share for any 20 trading days within any 30-trading day period commencing at the period specified  above after the Closing Date.    On July 9, 2021, the parties to the Business Combination Agreement agreed to waive the closing condition that  certain individuals enter into lock-up agreements as set forth in Section 8.02(m) of the Business Combination  Agreement, with respect to one individual investor.   Listing of Securities   Our Class A Common Stock is listed on the NYSE under the symbol “SUNL” and our publicly-traded warrants  are listed on the NYSE under the symbol “SUNL WS”.a11thamendmentto1stamend

ELEVENTH AMENDMENT  TO FIRST AMENDED AND RESTATED LOAN PROGRAM AGREEMENT  This ELEVENTH AMENDMENT TO THE FIRST AMENDED AND RESTATED LOAN  PROGRAM AGREEMENT (this “Amendment”) is made as of March 30, 2021 (the “Amendment Effective  Date”) by and between CROSS RIVER BANK, an FDIC-insured New Jersey state-chartered bank  (“Bank”), and SUNLIGHT FINANCIAL LLC, a Delaware limited liability company (“Sunlight”), amends  the terms of that certain First Amended and Restated Loan Program Agreement dated as of February 12,  2018, by and between Bank and Sunlight (as previously amended, the “Existing Agreement” and as  amended by this Amendment, the “Agreement”). Sunlight and Bank are collectively referred to herein as  the “Parties”. Capitalized terms used herein but not otherwise defined herein shall have the meanings set  forth therefor in the Existing Agreement.  RECITALS  WHEREAS, the Existing Agreement allows the Parties to mutually agree in writing to modify the  Existing Agreement;  WHEREAS, the Parties now desire to amend certain terms and conditions in the Existing  Agreement to permit Sunlight to establish the Prescreen Program (as defined herein);  NOW, THEREFORE, in consideration of the foregoing premises and the following terms, and  for other good and valuable consideration, the Parties, intending to be legally bound, further agree as  follows:  1. AMENDMENTS TO THE EXISTING AGREEMENT 1.1. Section 2 of the Existing Agreement is hereby amended by adding the new Section 2.7 at  the end thereof as follows:  Section 2.7    Prescreen Program.  (a) The Parties acknowledge and agree that Sunlight is establishing a program (the “Prescreen Program”) pursuant to which Sunlight will receive  Consumer Leads from participating Dealers for the purpose of prescreening such  Consumer Leads and making firm offers of credit to the applicable consumer in  connection with any such Consumer Leads that are successfully prescreened (each,  a “Prescreened Consumer”) by Experian Information Solutions, Inc. or any other  applicable credit reporting agency (each, an “Applicable Credit Reporting  Agency”) As used herein, “Consumer Leads” means any lead for a prospective  consumer that is submitted to Sunlight by any Dealer for the purposes of the  Prescreen Program.  (b) Notwithstanding anything herein to the contrary: (i) Sunlight acknowledges and agrees that Sunlight shall serve as Bank’s agent for the limited purpose of submitting Consumer  Leads to any Applicable Credit Reporting Agency and delivering firm  offers of credit to any Preapproved Consumer, in each case, pursuant to  the Prescreen Program; and  (ii) accordance with Section 6.1, Sunlight shall be obligated to reimburse Bank for any reasonable and documented expenses of Bank  incurred in connection with the Prescreen Program, including, without  limitation, any fees and expenses paid to any Applicable Credit Reporting  Agency.  2. EFFECTIVENESS OF THE AGREEMENT Exhibit 10.38 

 

2.1 Unless otherwise defined or modified in this Amendment, all capitalized words or terms used  in this Amendment shall have the definitions ascribed to such words or terms in the Existing  Agreement. From and after the effectiveness of this Amendment, references in the Existing  Agreement to “the Agreement” or words of similar effect, shall refer to the Existing Agreement  as amended by this Amendment.  2.2 Except as expressly amended and modified by this Amendment, all terms and conditions set  forth in the Existing Agreement shall remain unmodified, binding, and in full force and effect.  This Amendment as applied to the Existing Agreement and the Administration Agreement  collectively set forth the entire agreement and understanding of the Parties regarding the  particular subject matter of this Amendment, and merges and supersedes all prior or  contemporaneous agreements, discussions and correspondence pertaining to the subject matter  of this Amendment. This Amendment may be executed in counterpart copies, each of which,  and together, shall be effective as original, binding instruments. Delivery of an executed  counterpart of a signature page of this Amendment by telecopy, e-mailed .pdf or any other  electronic means that reproduces an image of the actual executed signature page shall be  effective as delivery of a manually executed counterpart of this Amendment.  2.3 This Amendment shall be governed by and construed in accordance with the laws of the State  of New York, including general obligations law Section 5-1401, but otherwise without regard  to the conflict of laws principles thereof.  [remainder of page intentionally blank]  2  

 

IN WITNESS WHEREOF, each of the Parties hereto has caused this Amendment to be duly  executed as of the day and year first above written.  SUNLIGHT FINANCIAL LLC  By:   Name: Barry Edinburg  Title: Chief Financial Officer  CROSS RIVER BANK  By:   Name: Gilles Gade  Title: Chief Executive Officer  By:   Name: Arlen Gelbard  Title: General Counsel  /s/ Barry Edinburg /s/ Gilles Gade /s/ Arlen Gelbard

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