Contract analysis

I. Purpose and Scope This memorandum provides an internal analysis of the payment waterfall mechanics under the draft Indenture dated March 4, 2024 (the "Indenture"), between SkyLend Receivables Trust 2024-1 (the "Trust" or "SRT 2024-1"), as issuer, and Atlantic Fiduciary Services, Inc. ("AFS"), as indenture trustee, paying agent, note registrar, and custodian. The analysis is intended to assist the Calderwood & Hark

II. Transaction Overview and Capital Structure A. Parties and Structure Summary Set forth below is a summary of the principal parties to the transaction and their respective roles, together with relevant organizational and contact information: Originator / Sponsor / Servicer: Skybridge Fintech Ltd. ("SBF"), a Delaware corporation with its principal executive offices at 1400 Market Street, Suite 1210, Wilmington, Dela

III. Loan-Level Payment-Application Waterfall (Servicing Level) A. Contractual Payment-Application Priority The loan-level payment-application waterfall governs how individual borrower payments received by the sub-servicer are applied at the loan level. This waterfall is set forth in Section 4.03 of the Master Servicing Agreement dated October 1, 2022, between SBF and Clearview, as confirmed and incorporated by Amend

1. First, to accrued and unpaid interest;

2. Second, to fees (including late fees, returned-payment fees, and other charges assessed under the applicable loan agreement); and

3. Third, to principal (reducing the outstanding principal balance of the loan). This payment-application waterfall governs the manner in which individual borrower payments received by Clearview, as sub-servicer, are applied at the loan level before collections are aggregated and remitted to the Trust's collection account. It is critically important to distinguish this loan-level payment-application waterfall from th

IV. Trust-Level Priority of Payments (Indenture Waterfall) A. Available Funds Definition "Available Funds," as defined in Section 1.01 of the draft Indenture, means, for each payment period, the sum of all collections received on the receivables during the related collection period, including: (a) scheduled principal and interest payments received from borrowers; (b) prepayments (whether voluntary or involuntary) of

1. Indenture Trustee Fees and Expenses. First, to AFS, in its capacity as indenture trustee, paying agent, note registrar, and custodian, the monthly installment of the annual trustee fee ($12,500 per annum, payable in monthly installments of approximately $1,041.67), plus reimbursement of any reasonable out-of-pocket expenses incurred by AFS in the performance of its duties during the related collection period, subj

2. Owner Trustee Fees and Expenses. Second, to Keymark, in its capacity as owner trustee, the monthly installment of the annual owner trustee fee ($7,500 per annum, payable in monthly installments of $625.00), plus reimbursement of any reasonable out-of-pocket expenses incurred by Keymark in the performance of its duties during the related collection period.

3. Administration Fees and Expenses. Third, to SBF, in its capacity as administrator of the Trust, any administration fees and reimbursable expenses incurred during the related collection period. The administration fee is set at an annual rate to be finalized prior to closing, which is expected to be nominal and is intended to cover SBF's costs of preparing and filing SEC reports (if applicable), maintaining the Trus

4. Class A Note Interest. Fourth, to the holders of the Class A Notes, accrued and unpaid interest on the Class A Notes at the applicable Class A Note rate (target coupon range: 5.45%–5.65%) for the related interest accrual period, calculated on a 30/360 basis on the outstanding principal amount of the Class A Notes. At the midpoint coupon of 5.55% and an initial principal amount of $170,000,000, the monthly Class A

5. Class B Note Interest. Fifth, to the holders of the Class B Notes, accrued and unpaid interest on the Class B Notes at the applicable Class B Note rate (target coupon range: 6.75%–7.00%) for the related interest accrual period, calculated on a 30/360 basis on the outstanding principal amount of the Class B Notes. At the midpoint coupon of 6.875% and an initial principal amount of $22,000,000, the monthly Class B i

6. Shortfall Carryover Amounts. Sixth, to the extent of any unpaid interest from prior periods (commonly referred to as "shortfall carryover amounts"), distributed first to Class A noteholders and then to Class B noteholders, in each case together with interest on such unpaid amounts at the applicable note rate. Shortfall carryover amounts accrue interest at the applicable note rate (i.e., Class A shortfalls accrue a

1. Class A Note Principal. First, to the holders of the Class A Notes, the scheduled principal distribution amount for the Class A Notes (as determined by reference to the amortization schedule set forth in the Indenture), plus any accelerated principal amounts allocated to the Class A Notes. The Class A Notes are structured as "sequential pay" — meaning that all principal is allocated to the Class A Notes first, unt

2. Class B Note Principal. Second, to the holders of the Class B Notes, the scheduled principal distribution amount for the Class B Notes. The Class B Notes receive principal payments only after the Class A Notes have been paid in full (during the normal amortization period). During the revolving period (if any), neither class receives principal distributions.

3. Reserve Account Deposits. Third, to the reserve account, to the extent necessary to replenish the reserve account to its required balance of $2,000,000 (1.00% of the initial pool balance).

4. Overcollateralization Account Deposits. Fourth, to the overcollateralization account, to the extent necessary to build or maintain the overcollateralization target of $7,000,000 (3.5% of the initial pool balance), or, after the Step-Down Date and provided the step-down conditions are satisfied, to the overcollateralization floor of $4,000,000 (2.00% of the initial pool balance).

5. Residual Interest Distribution. Fifth, any remaining amounts (representing excess spread after all senior obligations have been satisfied and credit-enhancement accounts have been funded to their required levels) are distributed to the residual interest holder, SkyLend Funding LLC (and thereby to SBF as the sole member of SkyLend Funding LLC). D. Combined Waterfall — Complete Priority of Payments For ease of refer

1. Servicing Fee (Off the Top): 0.50% per annum of the outstanding pool balance as of the first day of the related collection period, payable to Clearview (through SBF as servicer). Estimated at approximately $83,333 per month on the initial $200,000,000 pool balance, declining as the pool amortizes.

2. Indenture Trustee Fees and Expenses: Payable to AFS. Approximately $1,042 per month, plus reimbursable expenses.

3. Owner Trustee Fees and Expenses: Payable to Keymark. Approximately $625 per month, plus reimbursable expenses.

4. Administration Fees and Expenses: Payable to SBF as administrator.

5. Class A Note Interest: Accrued and unpaid interest on the Class A Notes at the applicable rate.

6. Class B Note Interest: Accrued and unpaid interest on the Class B Notes at the applicable rate.

7. Class A Note Principal: Scheduled and accelerated principal on the Class A Notes (sequential pay).

8. Class B Note Principal: Scheduled and accelerated principal on the Class B Notes (sequential pay, commencing after Class A retirement during normal amortization).

9. Reserve Account Replenishment: To the reserve account, to maintain or restore the required balance of $2,000,000.

10. Overcollateralization Account Replenishment: To the overcollateralization account, to build or maintain the applicable overcollateralization target (initially $7,000,000; reduced to $4,000,000 after step-down).

11. Residual Interest Distribution: Any remaining amounts (excess spread) distributed to SkyLend Funding LLC as holder of the Residual Interest. Note regarding Early-Amortization Period: During an early-amortization period, the waterfall set forth above is modified as described in Section VII below. In particular, during an early-amortization period, all Available Funds (after payment of the servicing fee and trustee

V. Overcollateralization Mechanics A. Initial Overcollateralization Target The overcollateralization ("OC") target for the transaction is set at 3.5% of the initial pool balance, which equals $7,000,000 (calculated as $200,000,000 × 3.5%). Overcollateralization is achieved when the aggregate outstanding pool balance (i.e., the total principal balance of the receivables held by the Trust) exceeds the aggregate outstan

VI. Reserve Account A. Required Balance The reserve account is established under the Indenture as an additional source of liquidity and credit enhancement for the benefit of the noteholders. The required balance of the reserve account is 1.00% of the initial pool balance, which equals $2,000,000 (calculated as $200,000,000 × 1.00%). The reserve account is funded at closing from the proceeds of the offering. The reser

VII. Early-Amortization Events and Triggers A. Definition and Consequence An "Early Amortization Event" under the Indenture is an event that, upon its occurrence and (if applicable) the delivery of notice to the indenture trustee by the party responsible for providing such notice, causes the Trust to enter an "early-amortization period" (also referred to as an "accelerated amortization period"). The concept of early

1. Delinquency Trigger. The three-month rolling average of 60+ day delinquencies exceeds 4.50% of the current pool balance. This trigger is measured monthly, based on the delinquency data reported by Clearview in its monthly servicer report. The trigger is automatic — that is, once the three-month rolling average exceeds 4.50%, the early-amortization period commences without the need for notice or any opportunity to

2. Cumulative Net Loss Trigger. Cumulative net losses exceed specified thresholds in accordance with the following loss-trigger schedule: This trigger is measured on a cumulative basis as of each payment date, using the net loss data reported by Clearview in its monthly servicer report. Like the delinquency trigger, this trigger is automatic and does not require notice or provide a cure opportunity. The trigger sched

3. Excess-Spread Trigger. The three-month rolling average of annualized excess spread falls below 1.00%. This trigger is designed to identify situations in which the transaction's primary credit-enhancement mechanism (excess spread) has deteriorated to a level that may be insufficient to maintain the OC target and protect noteholders against further credit deterioration. The trigger is measured monthly and is automat

4. Overcollateralization Deficiency. The overcollateralization amount (i.e., the balance in the overcollateralization account) falls below the OC floor of 2.00% of the initial pool balance ($4,000,000) for two consecutive payment dates. The two-consecutive-period requirement provides a limited degree of tolerance for temporary fluctuations in the OC level, recognizing that the OC amount may temporarily dip below the

5. Servicer Default. A "Servicer Termination Event" occurs under the Sale and Servicing Agreement. Servicer Termination Events include, but are not limited to: (a) failure by the servicer or sub-servicer to remit collections to the Trust's collection account within the time periods specified in the Sale and Servicing Agreement; (b) failure by the servicer or sub-servicer to deliver monthly servicing reports within th

6. Seller/Originator Default. A breach of any representation or warranty under the Receivables Purchase Agreement that is not cured within the applicable cure period (sixty (60) days after written notice) and results in the repurchase obligation exceeding a specified dollar threshold. The RPA contains extensive representations and warranties by SBF concerning the receivables, including representations regarding the v

7. Reserve Account Deficiency. The reserve account balance falls below 50% of the required balance (i.e., below $1,000,000) for two consecutive payment dates. Like the OC deficiency trigger, this trigger includes a two-consecutive-period cure opportunity. If the reserve account is replenished above the 50% threshold before two consecutive periods have elapsed, the trigger is not deemed to have occurred.

8. Regulatory Event. Any change in law or regulation that makes the Trust's activities unlawful or that materially and adversely affects the Trust's ability to collect on the receivables. This trigger is broadly drafted and encompasses federal, state, or local legislative or regulatory changes that could impair the Trust's operations, including changes to consumer lending laws, usury restrictions, collection practice

9. Insolvency Event. The insolvency or bankruptcy of SBF, SkyLend Funding LLC, or any entity in the securitization chain. This includes the filing of a voluntary petition in bankruptcy, the entry of an order for relief in an involuntary case, the appointment of a receiver or custodian, or the making of a general assignment for the benefit of creditors by any such entity. This trigger is immediate and has no cure peri

VIII. Step-Down Conditions A. Step-Down Date Definition The "Step-Down Date" is defined in Section 1.01 of the draft Indenture as the later of: (i) the payment date occurring twelve (12) months after the closing date (the "Minimum Seasoning Date"); and (ii) the first payment date on which the performance conditions set forth in Section 5.09 of the Indenture (the "Step-Down Conditions") are satisfied. The Step-Down Da