Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze the indemnification and liability cap provisions currently under negotiation between Skybridge Fintech Ltd. ("Skybridge" or the "Company") and Meridian National Bank, N.A. ("Meridian") in connection with the Master Software-as-a-Service Agreement (the "MSA") for the SkyComply™ AI-driven anti-money laundering ("AML") and transaction-monitoring platform.

II. Background and Deal Context A. Parties and Transaction Overview

1. Skybridge Fintech Ltd. Skybridge Fintech Ltd. is a Delaware limited company (alternative entity), headquartered at 1400 Concord Pike, Suite 320, Wilmington, Delaware 19803. The Company's senior leadership team includes Priya Chandrasekaran (Chief Executive Officer), David Shimura (General Counsel), Amara Okafor (Chief Information Security Officer), Marcus Holt (Chief Technology Officer), and Jonathan Kreske (Chief

2. Meridian National Bank, N.A. Meridian National Bank, N.A. is a national banking association organized under the National Bank Act, with its principal office located at 600 Lexington Avenue, 40th Floor, New York, New York 10022. Meridian is one of the ten largest U.S. commercial banks by total assets, with consolidated total assets of approximately $485 billion as of December 31, 2024. Meridian is a wholly owned su

3. Deployment Scope The MSA contemplates the deployment of Skybridge's SkyComply™ platform across Meridian's retail banking, commercial banking, and wealth management divisions, with approximately 32,000 named users. The SkyComply™ platform will serve as Meridian's primary AI-driven AML transaction-monitoring and suspicious activity reporting system, replacing Meridian's legacy on-premises NICE Bramwell Solutions ins

III. Indemnification Obligations — Structure and Analysis A. Overview of Mutual Indemnification Framework The MSA, as currently drafted, contemplates a mutual indemnification framework. Each party agrees to "indemnify, defend, and hold harmless" the other party and its respective directors, officers, employees, agents, successors, and assigns (collectively, "Indemnitees") from and against specified categories of loss

1. Intellectual Property Infringement Indemnification Scope. Skybridge shall indemnify, defend, and hold harmless Meridian and its Indemnitees from and against any and all losses arising from third-party claims alleging that Meridian's authorized use of the SkyComply™ platform, as permitted under the MSA, infringes, misappropriates, or otherwise violates any third-party intellectual property right, including patents,

2. Data Breach / Data Security Indemnification Scope. Skybridge shall indemnify, defend, and hold harmless Meridian and its Indemnitees from and against losses arising from a breach by Skybridge of its data security and confidentiality obligations under the MSA (including the Security Exhibit and Data Processing Addendum) that results in the unauthorized access, disclosure, acquisition, or exfiltration of Meridian Da

3. Legal/Regulatory Compliance Indemnification Scope. Skybridge shall indemnify, defend, and hold harmless Meridian and its Indemnitees from and against losses arising from Skybridge's material breach of applicable law in the performance of its obligations under the MSA, including the GLBA, BSA/AML regulations promulgated by FinCEN and the OCC, and applicable state data breach notification statutes. This indemnificat

1. Acceptable Use Policy Breaches Scope. Meridian shall indemnify, defend, and hold harmless Skybridge and its Indemnitees from and against losses arising from third-party claims resulting from Meridian's breach of the Acceptable Use Policy set forth in Exhibit D to the MSA. The Acceptable Use Policy governs Meridian's permitted use of the SkyComply™ platform and prohibits, among other things, reverse engineering, un

2. Meridian Data / Content Scope. Meridian shall indemnify, defend, and hold harmless Skybridge and its Indemnitees from and against losses arising from third-party claims alleging that data or content provided by Meridian to Skybridge for processing through the SkyComply™ platform infringes, misappropriates, or otherwise violates any third-party intellectual property right or other proprietary right. This indemnific

3. Meridian Legal Compliance Scope. Meridian shall indemnify, defend, and hold harmless Skybridge and its Indemnitees from and against losses arising from third-party claims resulting from Meridian's material breach of applicable law in connection with Meridian's use of the SkyComply™ platform or Meridian's performance of its obligations under the MSA. Liability Cap. Subject to the general indemnity cap of 1× annual

IV. Liability Caps — Detailed Analysis A. Aggregate Liability Cap Structure. The MSA provides that each party's total aggregate liability arising under or in connection with the MSA, regardless of the form of action (whether in contract, tort, strict liability, or otherwise), shall not exceed 2× the annual fees paid or payable by Meridian in the 12-month period immediately preceding the event first giving rise to the

V. Consequential Damages Exclusion — Regulatory Fines Carve-Out A. Baseline Provision The MSA includes a mutual exclusion of indirect, incidental, consequential, special, and punitive damages, regardless of the form of action and regardless of whether the claiming party has been advised of the possibility of such damages. This is a standard provision in enterprise SaaS agreements and commercial contracts generally, a