SOURCE CODE ESCROW AGREEMENT
Agreement No. SCE-2025-04417
Among
SKYBRIDGE FINTECH LTD. (Depositor)
MERIDIAN NATIONAL BANK, NATIONAL ASSOCIATION (Beneficiary)
and
SENTINEL ESCROW SERVICES, INC. (Escrow Agent)
Dated as of __, 2025
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SOURCE CODE ESCROW AGREEMENT
This Source Code Escrow Agreement (this "Agreement"), dated as of the date last set forth on the signature pages hereto (the "Effective Date"), is entered into by and among:
SKYBRIDGE FINTECH LTD., a Delaware limited company (the "Depositor"), with its principal office at 1400 Concord Pike, Suite 320, Wilmington, DE 19803;
MERIDIAN NATIONAL BANK, NATIONAL ASSOCIATION, a national banking association chartered under the laws of the United States (the "Beneficiary"), with its principal office at 600 Lexington Avenue, 40th Floor, New York, NY 10022; and
SENTINEL ESCROW SERVICES, INC., a California corporation (the "Escrow Agent"), with its principal office at 100 Wilshire Boulevard, Suite 950, Santa Monica, CA 90401.
Depositor, Beneficiary, and Escrow Agent are each referred to herein individually as a "Party" and collectively as the "Parties."
This Agreement is entered into in connection with and is ancillary to that certain Master Software-as-a-Service Agreement between Depositor and Beneficiary, of even date herewith (as amended from time to time, the "MSA"), pursuant to which Depositor licenses the SkyComply™ AI-driven anti-money-laundering and transaction-monitoring platform to Beneficiary on a software-as-a-service basis, with a total contract value of Fifty Million Dollars ($50,000,000) over a five-year initial term.
RECITALS
WHEREAS, Depositor and Beneficiary have entered into the MSA pursuant to which Depositor licenses the SkyComply™ platform (as defined below) to Beneficiary on a software-as-a-service basis for use across Beneficiary's retail banking, commercial banking, and wealth management divisions, covering approximately thirty-two thousand (32,000) licensed users;
WHEREAS, Beneficiary desires assurance of continued access to the source code and related materials for the SkyComply™ platform in the event of certain triggering conditions, including the insolvency or cessation of business operations of Depositor or a material breach by Depositor of its support and maintenance obligations under the MSA;
WHEREAS, Depositor is willing to deposit the Escrow Materials (as defined below) with Escrow Agent for the benefit of Beneficiary, subject to the terms and conditions set forth in this Agreement;
WHEREAS, Escrow Agent is in the business of providing technology escrow services and is willing to accept, hold, and release the Escrow Materials in accordance with the terms and conditions of this Agreement;
WHEREAS, this Agreement is entered into in connection with and is ancillary to the MSA, which is governed by the laws of the State of Delaware; and
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1 — DEFINITIONS
Section 1.1 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below:
"Agreement" means this Source Code Escrow Agreement, including all exhibits and schedules attached hereto, as the same may be amended, modified, or supplemented from time to time in accordance with Section 13.6.
"Beneficiary" means Meridian National Bank, National Association, a national banking association chartered under the laws of the United States, together with its successors and permitted assigns.
"Deposit Notification" means the written notice delivered by Depositor to Escrow Agent and Beneficiary in connection with each deposit of Escrow Materials, substantially in the form attached hereto as Exhibit B.
"Depositor" means Skybridge Fintech Ltd., a Delaware limited company, together with its successors and permitted assigns.
"Escrow Agent" means Sentinel Escrow Services, Inc., a California corporation, together with its successors and permitted assigns.
"Escrow Materials" means all items described in Section 2.1 and Exhibit A attached hereto, including but not limited to: (a) the complete source code for the SkyComply™ platform and all modules, components, and updates thereto; (b) build scripts, makefiles, and compilation instructions; (c) third-party libraries and dependencies (or identification thereof with license information sufficient to obtain the same); (d) database schemas and data dictionaries; (e) technical documentation, including architecture documents, API specifications, and deployment guides; (f) development environment specifications; and (g) encryption keys and key management procedures necessary to build and deploy the software (excluding Beneficiary-specific keys managed under the bring-your-own-key ("BYOK") integration described in the Security Exhibit to the MSA).
"MSA" means the Master Software-as-a-Service Agreement between Depositor and Beneficiary dated as of the date hereof, together with all exhibits thereto (including the SLA Exhibit, the Security Exhibit, the Data Processing Addendum, and the Acceptable Use Policy), the Order Form, and all amendments, supplements, and modifications thereto.
"Objection Notice" has the meaning set forth in Section 5.2.
"Platform Go-Live Date" means the targeted go-live date of March 1, 2026, as defined in and established by the MSA.
"Release Conditions" means the events described in Section 5.1 that trigger the right to release of Escrow Materials to Beneficiary.
"Release Request" has the meaning set forth in Section 5.1.
"SkyComply™" means the proprietary AI-driven anti-money-laundering ("AML") and transaction-monitoring platform developed and owned by Depositor, as more particularly described in the MSA and its associated Order Form.
"Update Deposit" means each quarterly deposit of updated Escrow Materials made by Depositor pursuant to Section 2.3.
"Verification" means the process described in Article 4 of this Agreement.
Section 1.2 — Interpretation
Terms defined in the MSA and not otherwise defined in this Agreement shall have the meanings ascribed to them in the MSA. All references in this Agreement to Articles, Sections, Exhibits, and Schedules are to Articles and Sections of, and Exhibits and Schedules to, this Agreement, unless otherwise expressly stated. The headings of Articles, Sections, and Exhibits are for convenience of reference only and shall not affect the interpretation of this Agreement. The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation." The word "or" is not exclusive. References to "days" shall mean calendar days unless "business days" is expressly specified. As used herein, "business days" means any day other than a Saturday, Sunday, or day on which commercial banks in New York, New York are authorized or required by law to close.
ARTICLE 2 — DEPOSIT OF ESCROW MATERIALS
Section 2.1 — Initial Deposit
Within thirty (30) days following the date of execution of this Agreement, Depositor shall deliver to Escrow Agent the initial Escrow Materials, which shall include all items listed in Exhibit A (Escrow Materials Description) hereto. The initial Escrow Materials shall be delivered in machine-readable format on encrypted media or via secure electronic transfer, in accordance with Section 2.2.
Contemporaneously with the delivery of the initial Escrow Materials, Depositor shall deliver a written Deposit Notification, substantially in the form attached hereto as Exhibit B, to both Escrow Agent and Beneficiary, confirming the contents and completeness of the initial deposit. The Deposit Notification shall include a description of the materials deposited, the version number of the SkyComply™ platform reflected in the deposit, and a certification of completeness signed by an authorized representative of Depositor.
Within five (5) business days following its receipt of the initial Escrow Materials, Escrow Agent shall acknowledge receipt of the initial deposit in writing to both Depositor and Beneficiary. Such acknowledgment shall include the date of receipt and a confirmation that the physical or electronic media received corresponds to the description provided in the Deposit Notification (it being understood that Escrow Agent shall have no obligation at this stage to review, test, or verify the contents of the Escrow Materials).
Section 2.2 — Form and Media of Deposit
All Escrow Materials shall be delivered in industry-standard formats that are commonly used in the software development industry and that are compatible with widely available tools and platforms. Source code shall be delivered in its native programming language format, and all documentation shall be delivered in commonly used file formats (e.g., PDF, Markdown, Microsoft Word, or equivalent).
Depositor shall include with each deposit written instructions sufficient for a reasonably skilled software engineer, possessing general expertise in cloud-based financial technology applications, to compile, build, and deploy the SkyComply™ platform from the deposited materials in a development or staging environment. Such instructions shall identify any proprietary tools, compilers, or utilities required for the build process and shall specify where such tools may be obtained.
Escrow Materials shall be delivered on encrypted physical media (including, without limitation, encrypted USB drives or encrypted external hard drives using AES-256 encryption or equivalent) or via Escrow Agent's secure electronic deposit system, as mutually agreed by the Parties. If physical media is used, Depositor shall deliver the media via a nationally recognized overnight courier service with tracking and signature confirmation. If Escrow Agent's secure electronic deposit system is used, Depositor shall follow the transmission protocols and security requirements specified by Escrow Agent, and Escrow Agent shall provide Depositor with a confirmation of successful receipt and integrity verification (e.g., SHA-256 hash comparison) of the transmitted files.
Section 2.3 — Quarterly Update Deposits
Following the initial deposit, Depositor shall deliver updated Escrow Materials to Escrow Agent on a quarterly basis, which shall mean no less frequently than once every ninety (90) calendar days, calculated from the date of the preceding deposit. Each Update Deposit shall include all modifications, enhancements, patches, bug fixes, new versions, new modules, and updates to the SkyComply™ platform that have been released or deployed to Beneficiary's production environment since the date of the prior deposit.
Each Update Deposit shall be accompanied by a Deposit Notification, substantially in the form attached hereto as Exhibit B, describing the updates included in the deposit, identifying the version number of the SkyComply™ platform as of the date of the Update Deposit, describing any changes from the prior deposit, and confirming the completeness of the deposit.
Escrow Agent shall acknowledge receipt of each Update Deposit in writing to both Depositor and Beneficiary within five (5) business days following receipt thereof, in the same manner as described in Section 2.1.
In the event that Depositor fails to make a timely Update Deposit within the time frames specified herein, Beneficiary may provide written notice of such failure to Depositor, with a copy to Escrow Agent. If Depositor fails to cure such failure within fifteen (15) business days following receipt of such notice, such failure shall constitute a breach of this Agreement and shall entitle Beneficiary to request a Verification under Article 4 at Depositor's expense.
Section 2.4 — Depositor's Representations Regarding Escrow Materials
Depositor represents and warrants to Beneficiary and Escrow Agent, as of the date of each deposit of Escrow Materials (including the initial deposit and each Update Deposit), that:
(a) the Escrow Materials constitute the complete and current source code and related materials necessary to compile, build, and operate the SkyComply™ platform, including all modules, components, and features thereof as then provided to Beneficiary under the MSA;
(b) Depositor has all rights necessary to deposit the Escrow Materials with Escrow Agent, including all intellectual property rights, license rights, and other proprietary rights required to make such deposit and to grant the contingent license described in Section 5.4;
(c) the Escrow Materials do not contain any malicious code, viruses, worms, Trojan horses, time bombs, back doors, drop dead devices, or other disabling devices or code designed to interfere with the proper functioning of the SkyComply™ platform or any system on which it is installed or operated; and
(d) the Escrow Materials, when used in accordance with the accompanying documentation and build instructions, are capable of producing a functional version of the SkyComply™ platform that is materially consistent in functionality, features, and performance with the version of the platform as then provided to Beneficiary under the MSA.
The foregoing representations and warranties are continuing in nature and shall apply to each deposit made hereunder, including each Update Deposit, as of the date of such deposit.
Section 2.5 — Ownership of Escrow Materials
The deposit of Escrow Materials with Escrow Agent pursuant to this Agreement does not transfer, assign, convey, or grant any intellectual property rights whatsoever to Beneficiary or Escrow Agent. Depositor retains all right, title, and interest in and to the Escrow Materials, including all copyrights, patent rights, trade secret rights, and other intellectual property rights embodied therein, subject only to the conditional release rights set forth in Article 5 and the contingent license described in Section 5.4.
Escrow Agent acquires no rights in or to the Escrow Materials other than the limited right to hold, store, and release the Escrow Materials in accordance with the express terms of this Agreement. Escrow Agent shall not use, reproduce, modify, reverse-engineer, or create derivative works of the Escrow Materials for any purpose other than as expressly authorized by this Agreement.
Nothing in this Agreement shall be construed as a sale, assignment, or transfer of ownership of the Escrow Materials from Depositor to Beneficiary or Escrow Agent.
ARTICLE 3 — ESCROW AGENT'S DUTIES AND OBLIGATIONS
Section 3.1 — Safekeeping
Escrow Agent shall store the Escrow Materials in a secure, environmentally controlled facility that is designed to protect against unauthorized access, theft, fire, flood, and other hazards. Escrow Agent's facility shall be equipped with access controls, intrusion detection systems, climate control systems, and fire suppression systems appropriate for the storage of sensitive technology materials.
Escrow Agent shall maintain reasonable physical and logical security controls consistent with industry standards for technology escrow services, including at a minimum: (i) physical access controls restricting entry to authorized personnel only; (ii) electronic access controls including multi-factor authentication for access to electronically stored Escrow Materials; (iii) encryption of all electronically stored Escrow Materials at rest using AES-256 or equivalent encryption; (iv) regular backup of electronically stored Escrow Materials to a geographically separate disaster recovery facility; and (v) logging and monitoring of all access to the Escrow Materials.
Escrow Agent shall not access, copy, modify, distribute, reverse-engineer, disassemble, decompile, or disclose the Escrow Materials or any portion thereof, except as expressly authorized by this Agreement, including in connection with a Verification under Article 4 or a release under Article 5.
Section 3.2 — Segregation
Escrow Agent shall maintain the Escrow Materials in a segregated account identified by Escrow Agreement Number SCE-2025-04417. The Escrow Materials deposited hereunder shall not be commingled with the materials, property, or assets of any other depositor, client, or party. Escrow Agent shall maintain clear and unambiguous identification of the Escrow Materials as belonging to the escrow account established under this Agreement. In the event Escrow Agent stores Escrow Materials electronically, the electronic storage environment shall employ logical segregation controls sufficient to prevent unauthorized cross-account access.
Section 3.3 — Inventory and Records
Escrow Agent shall maintain an accurate and complete written inventory of all Escrow Materials received under this Agreement, including the dates of receipt, a description of the materials and media received, and a reference to the Deposit Notification accompanying each deposit. Escrow Agent shall update such inventory promptly upon receipt of each initial deposit and Update Deposit.
Escrow Agent shall provide copies of the inventory to either Depositor or Beneficiary upon written request by such party. Escrow Agent shall respond to any such request within ten (10) business days of receipt thereof. Escrow Agent shall maintain its records relating to this Agreement for a period of not less than seven (7) years following the termination or expiration of this Agreement.
Section 3.4 — Limited Duties
The Parties acknowledge and agree that Escrow Agent acts solely as a custodian of the Escrow Materials and performs a ministerial function in connection with the holding and release thereof. Escrow Agent has no obligation to review, test, verify, evaluate, or assess the Escrow Materials or to determine whether the Escrow Materials are complete, accurate, functional, or otherwise conform to the requirements of this Agreement or the MSA, except in connection with a Verification conducted in accordance with Article 4 at the request and expense of Beneficiary.
Escrow Agent shall not be liable or responsible for the accuracy, completeness, quality, or functionality of the Escrow Materials. Escrow Agent shall have no duty or obligation to monitor, investigate, or determine whether any Release Condition has occurred or whether any Release Request or Objection Notice is valid, accurate, or properly authorized, except to confirm that such request or notice conforms on its face to the requirements of this Agreement. Escrow Agent shall be entitled to rely conclusively on any written notice, instruction, request, or certificate provided to it by a Party that Escrow Agent reasonably believes to be genuine and to have been signed or delivered by an authorized representative of such Party.
ARTICLE 4 — VERIFICATION
Section 4.1 — Beneficiary's Verification Rights
Beneficiary may, at its sole expense (subject to Section 4.3 with respect to the reimbursement of costs upon discovery of a material deficiency), request that Escrow Agent engage a qualified independent technical expert, mutually acceptable to Depositor and Beneficiary (such acceptance not to be unreasonably withheld, conditioned, or delayed), to verify the Escrow Materials. A Verification may include any or all of the following:
(a) confirmation that the deposit includes all of the items described in Exhibit A hereto, and that the deposited materials are complete and organized in a manner consistent with the applicable Deposit Notification;
(b) compilation and build testing to confirm that the Escrow Materials can be used to produce a functional version of the SkyComply™ platform in a controlled development or staging environment, using the build instructions and documentation included in the Escrow Materials; and
(c) comparison of the compiled and deployed version of the SkyComply™ platform produced from the Escrow Materials against the version of the platform then being provided to Beneficiary under the MSA, to confirm material functional consistency.
Beneficiary may request a Verification no more than once per calendar year during the term of this Agreement; provided, however, that if a Release Condition has occurred or if Beneficiary has a reasonable, good-faith basis to believe that a Release Condition is imminent, Beneficiary may request additional Verifications as reasonably necessary.
Section 4.2 — Verification Procedure
Beneficiary shall provide written notice to both Escrow Agent and Depositor of a Verification request at least twenty (20) business days in advance of the proposed commencement date of the Verification. The notice shall identify the scope of the Verification requested and, if applicable, the identity of the proposed independent technical expert.
Depositor shall cooperate reasonably with the Verification process, including providing reasonable technical assistance, answering questions regarding the build process and development environment, and making available such Depositor personnel as may be reasonably necessary to facilitate the Verification. Depositor's cooperation obligation shall not require Depositor to disclose confidential business information or trade secrets beyond the scope of the Escrow Materials themselves.
The independent technical expert engaged to conduct the Verification shall execute a confidentiality and non-disclosure agreement in a form reasonably acceptable to Depositor prior to accessing the Escrow Materials. Such confidentiality agreement shall, at a minimum, restrict the independent technical expert from disclosing, copying, or using the Escrow Materials or any information derived therefrom for any purpose other than the Verification.
The Verification shall be conducted at Escrow Agent's facilities or via secure remote access to the Escrow Materials, as determined by Escrow Agent in consultation with Depositor and Beneficiary. In no event shall the Escrow Materials be removed from Escrow Agent's custody or control for purposes of Verification. Upon completion of the Verification, the independent technical expert shall prepare a written report summarizing the findings of the Verification and deliver such report to Escrow Agent, Depositor, and Beneficiary. The Verification report shall identify any deficiencies or discrepancies found, if any, and shall include recommendations for remediation.
Section 4.3 — Verification Costs
All costs and expenses of the Verification, including the fees and expenses of the independent technical expert, travel costs, and any facility charges imposed by Escrow Agent, shall be borne by Beneficiary.
Notwithstanding the foregoing, if a Verification reveals a material deficiency in the Escrow Materials — that is, if the deposited materials are insufficient to compile, build, or deploy a functional version of the SkyComply™ platform that is materially consistent with the version then being provided to Beneficiary under the MSA — Depositor shall:
(a) cure the deficiency by delivering corrected or supplemented Escrow Materials to Escrow Agent within fifteen (15) business days following receipt of the Verification report identifying the deficiency; and
(b) reimburse Beneficiary for the reasonable, documented costs and expenses of the Verification that identified such deficiency, including the fees of the independent technical expert, within thirty (30) days of receipt of an invoice therefor from Beneficiary.
Section 4.4 — Depositor's Cure Obligation
If any Verification reveals a deficiency in the Escrow Materials, whether material or otherwise, Depositor shall promptly deposit corrected or supplemented Escrow Materials with Escrow Agent to remedy such deficiency. Each such corrective deposit shall be accompanied by an updated Deposit Notification identifying the deficiency that has been addressed and confirming the completeness of the corrected or supplemented Escrow Materials. Depositor's obligation to cure deficiencies under this Section 4.4 is in addition to, and not in lieu of, Depositor's ongoing obligations under Section 2.3 to make timely quarterly Update Deposits.
ARTICLE 5 — RELEASE OF ESCROW MATERIALS
Section 5.1 — Release Conditions
Escrow Agent shall release the Escrow Materials to Beneficiary upon Escrow Agent's receipt of a written notice from Beneficiary (a "Release Request"), substantially in the form attached hereto as Exhibit C, certifying that one or more of the following Release Conditions has occurred:
(a) Insolvency Event. Depositor: (i) files a voluntary petition in bankruptcy or for reorganization under any applicable bankruptcy, insolvency, or similar law; (ii) has an involuntary petition in bankruptcy or for reorganization filed against it under any applicable bankruptcy, insolvency, or similar law, and such petition is not dismissed within sixty (60) days after the date of filing thereof; (iii) makes a general assignment for the benefit of its creditors; (iv) has a receiver, trustee, custodian, or liquidator appointed for all or substantially all of its assets, and such appointment is not vacated or stayed within sixty (60) days; or (v) becomes insolvent, which for purposes of this Agreement means the inability to pay its debts as they become due in the ordinary course of business.
(b) Material Breach of Support Obligations. Depositor materially breaches its obligations to provide support, maintenance, hosting, or managed services for the SkyComply™ platform under the MSA, including without limitation a failure to meet the uptime service level commitments set forth in the SLA Exhibit to the MSA on a persistent basis, a failure to provide critical security patches or updates in a timely manner, or a material degradation of platform functionality, and such breach remains uncured for sixty (60) days following written notice from Beneficiary to Depositor specifying the breach in reasonable detail (such notice to be delivered in accordance with Article 12 hereof and the notice provisions of the MSA).
(c) Cessation of Business Operations. Depositor ceases to conduct business operations in the ordinary course, including the cessation of development, maintenance, or support of the SkyComply™ platform as a commercially available product, other than by reason of a permitted assignment or transfer of the MSA in accordance with the assignment provisions of the MSA. For purposes of this Section 5.1(c), a change in ownership of Depositor resulting from a merger, acquisition, or sale of all or substantially all of Depositor's assets shall not constitute a cessation of business operations so long as the successor entity assumes and continues to perform Depositor's obligations under the MSA.
Section 5.2 — Release Procedure
Upon receipt of a Release Request from Beneficiary, Escrow Agent shall promptly, and in any event within two (2) business days following receipt thereof, deliver a copy of the Release Request to Depositor at the address specified in Article 12.
Depositor shall have ten (10) business days from the date of receipt of the Release Request (as determined in accordance with Section 12.2) to deliver a written objection (an "Objection Notice") to Escrow Agent, with a copy to Beneficiary, contesting whether a Release Condition has in fact occurred. The Objection Notice shall set forth in reasonable detail the factual and legal basis for Depositor's objection.
If Depositor does not deliver a timely Objection Notice within the ten (10) business day period specified above, Escrow Agent shall release the Escrow Materials to Beneficiary within five (5) business days following the expiration of such period. Release shall be effected by delivery of the Escrow Materials to Beneficiary at the delivery address specified in the Release Request, using the delivery method specified therein (or, if no delivery method is specified, via nationally recognized overnight courier service with tracking and signature confirmation, or via Escrow Agent's secure electronic delivery system, as determined by Escrow Agent in consultation with Beneficiary).
If Depositor delivers a timely Objection Notice, the dispute shall be resolved in accordance with Section 5.3, and Escrow Agent shall not release the Escrow Materials pending resolution of such dispute.
Section 5.3 — Dispute Resolution for Release
If Depositor delivers a timely Objection Notice pursuant to Section 5.2, the following dispute resolution procedure shall apply:
(a) Negotiation. The Parties shall first attempt to resolve the dispute by direct negotiation among senior representatives of Depositor and Beneficiary for a period of fifteen (15) business days following delivery of the Objection Notice (the "Negotiation Period"). During the Negotiation Period, each Party shall designate a senior executive with authority to resolve the dispute, and such executives shall meet (in person or by videoconference) at least once during such period to discuss the dispute in good faith.
(b) Binding Arbitration. If the dispute is not resolved within the Negotiation Period, the dispute shall be submitted to binding arbitration administered by JAMS in New York, New York. The arbitration shall be conducted before a single arbitrator possessing expertise in technology licensing and software escrow matters. The arbitrator shall be selected in accordance with JAMS Comprehensive Arbitration Rules and Procedures, and the arbitration shall be conducted under such rules as modified by this Agreement. The arbitrator shall determine whether the Release Condition asserted in the Release Request has in fact occurred and shall render a written decision within thirty (30) days of the arbitrator's appointment. The arbitrator's decision shall be final and binding upon the Parties and shall be enforceable in any court of competent jurisdiction.
(c) Costs and Fees. The prevailing party in the arbitration shall be entitled to recover its reasonable attorneys' fees, costs, and expenses (including arbitrator fees and JAMS administrative fees) from the non-prevailing party.
(d) Pending Resolution. Pending the resolution of any dispute under this Section 5.3, Escrow Agent shall continue to hold the Escrow Materials securely and shall not release the Escrow Materials to either Depositor or Beneficiary unless and until directed to do so by a final arbitration award, a court order, or the mutual written agreement of Depositor and Beneficiary.
Notwithstanding the foregoing, if the Release Condition asserted in the Release Request is an Insolvency Event under Section 5.1(a) and such Insolvency Event is confirmed by an order of a court of competent jurisdiction (including, without limitation, an order for relief under Title 11 of the United States Code (the "U.S. Bankruptcy Code")), Escrow Agent shall release the Escrow Materials to Beneficiary without regard to any Objection Notice theretofore delivered by Depositor; provided, however, that such release shall be subject to any automatic stay imposed under Section 362 of the U.S. Bankruptcy Code or any other order of the bankruptcy court having jurisdiction over Depositor's case.
Section 5.4 — Effect of Release
Upon the release of the Escrow Materials to Beneficiary pursuant to this Article 5, Beneficiary shall have, and Depositor hereby grants to Beneficiary (effective upon and contingent upon such release), a non-exclusive, non-transferable, perpetual, irrevocable, fully paid-up license to use, reproduce, modify, compile, and create derivative works of the Escrow Materials solely for the purpose of continuing to operate, maintain, support, and enhance the SkyComply™ platform for Beneficiary's internal business purposes as contemplated by the MSA. The foregoing license shall be limited to use by and for the benefit of Beneficiary and its affiliates and shall not include the right to commercialize, market, or distribute the SkyComply™ platform or any derivative works thereof to third parties.
Beneficiary shall not sublicense, distribute, sell, lease, transfer, or otherwise make available the Escrow Materials or any portion thereof to any third party, except that Beneficiary may provide access to the Escrow Materials to Beneficiary's employees, independent contractors, and agents (including third-party consultants and managed service providers) who have a legitimate need to access the Escrow Materials in connection with Beneficiary's operation, maintenance, and support of the SkyComply™ platform, provided that each such individual or entity is bound by written confidentiality obligations no less restrictive than those set forth in the MSA and this Agreement.
The release of Escrow Materials to Beneficiary shall not relieve Depositor of any obligations under the MSA that survive the termination or expiration thereof, including without limitation obligations relating to indemnification, confidentiality, representations and warranties, data return and deletion, and transition assistance.
Section 5.5 — Confidentiality of Escrow Materials Post-Release
Escrow Materials released to Beneficiary pursuant to this Article 5 shall be treated as Confidential Information of Depositor under the confidentiality provisions of the MSA. Beneficiary shall protect the Escrow Materials using at least the same degree of care that Beneficiary uses to protect its own most sensitive confidential and proprietary information, but in no event less than reasonable care. Beneficiary shall restrict access to the Escrow Materials to only those individuals and entities described in Section 5.4, and shall maintain appropriate records of all individuals who access the Escrow Materials.
Without limiting the generality of the foregoing, Beneficiary shall not (a) disclose the Escrow Materials or any information derived therefrom to any competitor of Depositor; (b) use the Escrow Materials to develop or assist in the development of any product or service that competes with the SkyComply™ platform; or (c) file any patent application based on inventions embodied in the Escrow Materials.
ARTICLE 6 — FEES AND EXPENSES
Section 6.1 — Annual Escrow Fee
The annual escrow fee for the services of Escrow Agent under this Agreement shall be Thirteen Thousand Dollars ($13,000.00) per year (the "Annual Fee"). The Annual Fee shall be shared equally between Depositor and Beneficiary, with each Party responsible for Six Thousand Five Hundred Dollars ($6,500.00) per year.
The first Annual Fee shall be due and payable within thirty (30) days following the execution of this Agreement. Escrow Agent shall invoice each of Depositor and Beneficiary for its respective share of the Annual Fee. Subsequent Annual Fees shall be due and payable on each anniversary of the Effective Date during the term of this Agreement. Escrow Agent shall issue invoices for subsequent Annual Fees at least thirty (30) days prior to each anniversary date.
The Annual Fee covers Escrow Agent's standard escrow administration services, including secure storage of Escrow Materials, receipt and acknowledgment of deposits and Update Deposits, maintenance of inventory and records, processing of Release Requests and Objection Notices, and standard administrative correspondence. The Annual Fee does not include fees for Verification services, expedited release processing, or other additional services, which shall be billed separately in accordance with Section 6.2.
Section 6.2 — Additional Fees
Any additional services requested by either Depositor or Beneficiary that are not included in the standard escrow administration services covered by the Annual Fee — including, without limitation, expedited release processing, preparation of additional media copies, special handling or shipping of physical media, coordination of Verification activities (excluding the fees of the independent technical expert, which are addressed in Section 4.3), and any other non-standard services — shall be billed at Escrow Agent's then-current rates, as published on Escrow Agent's website or otherwise communicated to the Parties in writing, and shall be payable by the Party requesting such additional services within thirty (30) days of receipt of an invoice therefor.
Section 6.3 — Late Payments
Fees not paid by either Depositor or Beneficiary within thirty (30) days of the applicable due date shall accrue interest at the rate of one and one-half percent (1.5%) per month (eighteen percent (18%) per annum), or the maximum rate permitted by applicable law, whichever is less, from the due date until paid in full.
If any fees owed by either Party remain unpaid for more than sixty (60) days after the applicable due date, Escrow Agent may, upon thirty (30) days' prior written notice to both Depositor and Beneficiary, suspend the performance of its obligations under this Agreement (other than its obligation to continue to hold the Escrow Materials securely) until all outstanding fees, together with accrued interest, have been paid in full. During any such suspension, Escrow Agent shall continue to store the Escrow Materials in a secure manner in accordance with Section 3.1, but shall have no obligation to accept new deposits, process Release Requests, or provide any other services hereunder. Escrow Agent's right to suspend services under this Section 6.3 shall be in addition to, and not in lieu of, any other remedies available to Escrow Agent at law or in equity.
ARTICLE 7 — TERM AND TERMINATION
Section 7.1 — Term
This Agreement shall commence on the Effective Date and shall continue in effect for the duration of the MSA, including any renewal terms thereof. The MSA has an initial term of five (5) years commencing on the Platform Go-Live Date of March 1, 2026, with up to two (2) successive one-year automatic renewal terms, and the MSA (and, accordingly, this Agreement) shall expire no later than February 28, 2033, unless earlier terminated in accordance with the terms hereof or of the MSA.
Notwithstanding the foregoing, this Agreement shall automatically terminate upon the later of: (a) the expiration or termination of the MSA; and (b) the completion of any pending release process or dispute resolution process under Article 5 that was commenced prior to the expiration or termination of the MSA. In no event shall termination of the MSA deprive Beneficiary of the right to receive Escrow Materials pursuant to a Release Request properly submitted prior to such termination.
Section 7.2 — Early Termination
This Agreement may be terminated prior to the expiration of its term as follows:
(a) Mutual Consent. This Agreement may be terminated at any time by the mutual written consent of all three Parties.
(b) Termination by Beneficiary. Beneficiary may terminate this Agreement upon thirty (30) days' prior written notice to Depositor and Escrow Agent. Upon such termination by Beneficiary, Beneficiary shall be deemed to have irrevocably waived its rights to the release of Escrow Materials hereunder, and Depositor's obligation to continue making Update Deposits shall cease.
(c) Termination by Depositor. Depositor may not unilaterally terminate this Agreement during the term of the MSA without the prior written consent of Beneficiary. Any purported termination by Depositor without Beneficiary's consent shall be void and of no force or effect.
Section 7.3 — Effect of Termination
Upon the termination or expiration of this Agreement (other than by reason of a release of Escrow Materials to Beneficiary pursuant to Article 5), Escrow Agent shall, at Depositor's written instruction (which instruction shall be delivered within thirty (30) days following termination or expiration):
(a) return the Escrow Materials to Depositor by the delivery method specified in Depositor's instruction; or
(b) destroy the Escrow Materials (including all copies thereof) by secure destruction methods appropriate for sensitive technology materials, and provide written certification of such destruction to both Depositor and Beneficiary.
If Depositor fails to provide written instructions within thirty (30) days following termination or expiration, Escrow Agent shall return the Escrow Materials to Depositor at the address specified in Article 12 by nationally recognized overnight courier.
The following provisions shall survive the termination or expiration of this Agreement: Section 2.5 (Ownership of Escrow Materials), Section 5.4 (Effect of Release, to the extent a release has occurred), Section 5.5 (Confidentiality of Escrow Materials Post-Release, to the extent a release has occurred), Article 8 (Limitation of Liability), Article 9 (Indemnification), Article 10 (Confidentiality), Section 13.1 (Governing Law), Section 13.2 (Dispute Resolution), and any other provisions that by their nature are intended to survive.
ARTICLE 8 — LIMITATION OF LIABILITY
Section 8.1 — Escrow Agent's Liability
ESCROW AGENT'S AGGREGATE LIABILITY UNDER THIS AGREEMENT FOR ANY AND ALL CLAIMS, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR OTHERWISE, SHALL NOT EXCEED THE TOTAL FEES ACTUALLY PAID TO ESCROW AGENT UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO THE CLAIM.
IN NO EVENT SHALL ESCROW AGENT BE LIABLE TO DEPOSITOR, BENEFICIARY, OR ANY OTHER PERSON OR ENTITY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES OF ANY KIND, INCLUDING WITHOUT LIMITATION LOST PROFITS, LOST REVENUE, LOSS OF DATA, LOSS OF BUSINESS OPPORTUNITY, OR COST OF PROCUREMENT OF SUBSTITUTE SERVICES, REGARDLESS OF THE FORM OF ACTION AND WHETHER OR NOT ESCROW AGENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Without limiting the generality of the foregoing, Escrow Agent shall not be liable for any loss, damage, cost, or expense resulting from:
(a) the accuracy, completeness, quality, or functionality of the Escrow Materials, or the failure of the Escrow Materials to produce a functional version of the SkyComply™ platform;
(b) actions taken or omitted to be taken by Escrow Agent in good faith and in reliance on instructions, notices, requests, directions, or documents reasonably believed by Escrow Agent to be genuine and to have been signed or delivered by an authorized representative of the applicable Party;
(c) any delay or failure to perform any obligation under this Agreement caused by circumstances beyond Escrow Agent's reasonable control, including without limitation the events described in Section 13.11 (Force Majeure); or
(d) the unauthorized access to, or breach of security with respect to, the Escrow Materials, to the extent such access or breach was not caused by Escrow Agent's failure to maintain the security controls required by Section 3.1.
Section 8.2 — Inter-Party Liability (Depositor and Beneficiary)
As between Depositor and Beneficiary, any liability arising under or in connection with this Agreement (including any claim for breach of the representations and warranties set forth in Section 2.4 or Article 11) shall be governed by the liability provisions of the MSA, including without limitation the aggregate liability cap, the data security super-cap for breaches involving personal data or regulated data, and the mutual consequential damages exclusion set forth therein. Nothing in this Agreement shall be construed to expand, increase, or otherwise modify the liability limitations agreed upon by Depositor and Beneficiary in the MSA.
ARTICLE 9 — INDEMNIFICATION
Section 9.1 — Indemnification of Escrow Agent
Depositor and Beneficiary, jointly and severally, shall indemnify, defend, and hold harmless Escrow Agent and its officers, directors, employees, agents, and representatives from and against any and all third-party claims, demands, actions, suits, proceedings, damages, losses, liabilities, costs, and expenses (including reasonable attorneys' fees and court costs) arising out of or relating to this Agreement or Escrow Agent's performance of its obligations hereunder, except to the extent such claims, damages, losses, costs, or expenses are directly caused by Escrow Agent's gross negligence or willful misconduct.
The indemnification obligations set forth in this Section 9.1 shall survive the termination or expiration of this Agreement and shall remain in full force and effect regardless of any investigation made by or on behalf of Escrow Agent.
As between Depositor and Beneficiary, each shall bear one-half (1/2) of any indemnification obligations arising under this Section 9.1, unless the claim giving rise to the indemnification obligation is attributable solely or primarily to the acts or omissions of one Party, in which case such Party shall bear the full cost of the indemnification. Any dispute between Depositor and Beneficiary regarding allocation of indemnification costs shall be resolved in accordance with the dispute resolution provisions of the MSA.
Section 9.2 — Indemnification Between Depositor and Beneficiary
Indemnification obligations as between Depositor and Beneficiary (including without limitation obligations relating to intellectual property infringement, data breaches, regulatory claims, and third-party claims) are governed exclusively by the MSA and are not modified, expanded, or otherwise affected by this Agreement.
ARTICLE 10 — CONFIDENTIALITY
Section 10.1 — Escrow Agent Confidentiality Obligations
Escrow Agent shall treat the Escrow Materials and all information regarding the contents thereof, including all Deposit Notifications, Release Requests, Objection Notices, Verification reports, and any other information received in connection with the performance of its obligations under this Agreement, as strictly confidential. Escrow Agent shall implement and maintain appropriate administrative, technical, and physical safeguards to protect the confidentiality of the Escrow Materials and all related information.
Escrow Agent shall not disclose, copy, distribute, or permit access to the Escrow Materials or any confidential information received under this Agreement except:
(a) as required to perform its obligations under this Agreement, including storage, release, and facilitation of Verification activities;
(b) as directed by all three Parties in writing;
(c) as required by applicable law, regulation, subpoena, court order, or governmental directive, provided that Escrow Agent shall, to the extent permitted by law, provide prompt written notice to Depositor and Beneficiary prior to making any such disclosure, and shall cooperate with Depositor and Beneficiary in seeking a protective order or other appropriate remedy to limit the scope of such disclosure; or
(d) to Escrow Agent's legal counsel, auditors, or regulators, to the extent necessary and provided that such persons are bound by professional or contractual obligations of confidentiality.
Escrow Agent shall ensure that its employees, agents, and subcontractors who have access to the Escrow Materials or related confidential information are bound by confidentiality obligations no less restrictive than those set forth in this Section 10.1.
Section 10.2 — Confidentiality Among the Parties
The confidentiality obligations as between Depositor and Beneficiary with respect to information exchanged under or in connection with this Agreement are governed by the confidentiality provisions of the MSA. In the event of any conflict between the confidentiality provisions of this Agreement and those of the MSA as between Depositor and Beneficiary, the more restrictive provisions shall apply.
ARTICLE 11 — REPRESENTATIONS AND WARRANTIES
Section 11.1 — Mutual Representations
Each Party represents and warrants to the other Parties that, as of the Effective Date:
(a) it is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization or charter, and has full corporate or organizational power and authority to enter into this Agreement and to perform its obligations hereunder;
(b) the execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate or organizational action on the part of such Party, and this Agreement constitutes a valid and binding obligation of such Party, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and
(c) the execution, delivery, and performance of this Agreement does not and will not (i) violate or conflict with the certificate of incorporation, bylaws, charter, operating agreement, or other organizational documents of such Party; (ii) violate or conflict with any applicable law, regulation, order, judgment, or decree; or (iii) result in a breach of, constitute a default under, or require any consent or approval under, any material contract, agreement, or instrument to which such Party is a party or by which it is bound.
Section 11.2 — Depositor Representations
In addition to the representations and warranties set forth in Section 11.1 and Section 2.4, Depositor represents and warrants to Beneficiary and Escrow Agent that, as of the Effective Date and as of the date of each deposit of Escrow Materials hereunder:
(a) the Escrow Materials deposited and to be deposited with Escrow Agent hereunder are and will be the complete and current source code and related materials for the SkyComply™ platform, including all modules, components, features, and updates thereof as then provided to Beneficiary under the MSA;
(b) Depositor has, and will continue to have, all necessary intellectual property rights (whether owned or validly licensed) to deposit the Escrow Materials with Escrow Agent and to grant the contingent license described in Section 5.4, and such deposit and grant do not and will not infringe, misappropriate, or otherwise violate the intellectual property rights of any third party; and
(c) the Escrow Materials are and will be free of malicious code, viruses, worms, Trojan horses, time bombs, back doors, drop dead devices, and other disabling or destructive code.
Section 11.3 — Escrow Agent Representations
Escrow Agent represents and warrants to Depositor and Beneficiary that, as of the Effective Date:
(a) it has the facilities, personnel, experience, and capability necessary to perform the escrow services described in this Agreement in a professional and workmanlike manner;
(b) its facilities meet or exceed industry standards for the secure storage of technology escrow materials, including appropriate physical security controls, environmental controls, and electronic security measures; and
(c) it maintains commercially reasonable insurance coverage, including errors and omissions insurance and commercial general liability insurance, in amounts sufficient to cover its obligations under this Agreement.
ARTICLE 12 — NOTICES
Section 12.1 — Notice Requirements
All notices, requests, demands, consents, approvals, and other communications required or permitted under this Agreement shall be in writing and shall be delivered to the applicable Party at the address set forth below (or at such other address as such Party may designate from time to time by written notice to the other Parties in accordance with this Article 12) by any of the following methods:
(a) personal delivery;
(b) nationally recognized overnight courier service (e.g., Sundial Data Systems, Halcyon Partners LLC, or Tarrant & Co.);