Contract analysis

I. EXECUTIVE SUMMARY This memorandum analyzes the disputed Service Level Agreement ("SLA") provisions in the proposed Master Software-as-a-Service Agreement (the "MSA" or "Agreement") between Skybridge Fintech Ltd. ("Skybridge" or "Licensor") and Meridian National Bank, N.A. ("Meridian" or "Licensee") for the deployment of Skybridge's SkyComply™ AI-driven anti-money laundering ("AML") and transaction-monitoring platf

II. BACKGROUND AND CONTEXT A. Transaction Overview Skybridge Fintech Ltd. is a Delaware limited company (alternative entity) headquartered at 1400 Concord Pike, Suite 320, Wilmington, DE 19803. Skybridge is a growth-stage financial technology company that develops and markets the SkyComply™ platform, an AI-driven SaaS solution for AML compliance, Bank Secrecy Act ("BSA") transaction monitoring, sanctions screening, a

III. CURRENT POSITIONS OF THE PARTIES ON SLA TERMS This section sets forth the current positions of each party on the three principal SLA components: platform availability targets, SLA service credits, and critical incident response times. These positions are reflected in the competing SLA Exhibits (Exhibit A) exchanged between C&H and HTM on September 2 and September 5, 2025, respectively. A. Platform Availability T

1. Skybridge's Position: 99.9% Monthly Uptime Skybridge proposes a monthly platform availability commitment of 99.9%, measured on the basis of each calendar month and calculated as follows: Monthly Uptime Percentage = ((Total Minutes in Month − Scheduled Maintenance Minutes − Unscheduled Downtime Minutes) ÷ (Total Minutes in Month − Scheduled Maintenance Minutes)) × 100 Scheduled maintenance windows are defined as Sa

2. Meridian's Position: 99.95% Monthly Uptime Meridian, through HTM, demands a monthly platform availability commitment of 99.95%, using the same measurement methodology proposed by Skybridge (with scheduled maintenance excluded from the calculation). Meridian's rationale, as communicated in HTM's redline of the SLA Exhibit (received September 5, 2025) and in prior email correspondence between Megan Faircloth and Amy

1. Skybridge's Position: Tiered Credits with Caps Skybridge proposes a four-tier credit structure with both monthly and annual caps, as follows: Monthly Credit Cap: 30% of the applicable monthly subscription fee. Annual Credit Cap: 15% of the applicable annual subscription fee. Termination Right: In addition to the credit mechanism, Skybridge's proposal includes a performance-based termination right: Meridian may ter

2. Meridian's Position: Uncapped Credits Meridian demands that SLA service credits be uncapped — that is, neither the monthly credit cap of 30% nor the annual credit cap of 15% would apply. Meridian also requests higher credit percentages at each tier, though it has not specified the exact percentages it seeks in its initial redline. HTM's cover email (September 5, 2025) states that Meridian will provide a counterpro

IV. ANALYSIS OF THE UPTIME STANDARD DISPUTE A. Quantitative Impact of the 0.05% Differential The 0.05% difference between Skybridge's proposed 99.9% standard and Meridian's demanded 99.95% standard may appear trivial in percentage terms, but the operational impact is significant when translated into permissible unscheduled downtime minutes. Assuming a 30-day calendar month (43,200 total minutes), and excluding the sc

V. ANALYSIS OF SLA CREDIT CAPS A. Financial Exposure Under Current Skybridge Proposal (Capped Credits) The financial exposure under Skybridge's proposed capped credit structure can be quantified with precision. The caps operate as both monthly and annual ceilings on Skybridge's credit obligations, regardless of the severity or frequency of availability shortfalls within the measurement period.

1. Monthly Exposure The monthly credit cap is set at 30% of the applicable monthly subscription fee: This means that in any given month, Skybridge's maximum credit obligation to Meridian is $317,500 (Year 1) or $233,125 (Years 2–5), regardless of whether the Platform was available at 99.8%, 95%, or 0%. The monthly cap thus provides a hard floor on Skybridge's retained revenue for each month and ensures that no single

2. Annual Exposure The annual credit cap operates independently of the monthly cap and is set at 15% of the applicable annual subscription fee: The annual cap functions as a backstop: even if monthly credit obligations are triggered every month of a given year (each up to the 30% monthly cap), the total credits Skybridge is required to issue for that year cannot exceed 15% of the annual fee. This creates a meaningful

3. Maximum Five-Year Exposure Over the full five-year initial term, the maximum aggregate credit exposure under Skybridge's proposal is: Year 1 annual cap: $1,905,000 Years 2–5 annual cap: $1,398,750 × 4 = $5,595,000 Total five-year maximum credit exposure: $1,905,000 + $5,595,000 = $7,500,000 This $7,500,000 maximum represents 15% of the $50,000,000 TCV. Expressed differently, under even a catastrophic, worst-case s

VI. MARKET BENCHMARKING A. Methodology To assess whether the parties' respective positions fall within market norms, I reviewed SLA provisions from the following sources: • Calderwood & Harkness's internal precedent database of technology transactions in the financial services sector, which includes over 200 enterprise SaaS agreements executed between 2019 and 2025. • Publicly available SLA terms from leading enterpr

VII. RISK ASSESSMENT AND STRATEGIC CONSIDERATIONS A. Risks of Conceding to 99.95% Agreeing to Meridian's demand for a 99.95% monthly uptime commitment would expose Skybridge to several material risks: Increased frequency of credit events. With only 21.9 minutes of permissible unscheduled downtime per month, credit events would be triggered more frequently. This is particularly concerning during the initial post-Go-Li

VIII. RECOMMENDED POSITIONS AND COMPROMISE STRATEGIES Based on the foregoing analysis, I recommend the following negotiating positions, presented in order of priority. Each position should be deployed sequentially, with authorization from David Shimura at each stage. A. Primary Recommendation: Hold at 99.9% Uptime Skybridge should maintain its position of 99.9% monthly uptime as the contractual availability commitmen