LIMITED LIABILITY COMPANY AGREEMENT
OF
SKYLEND FUNDING LLC
A Delaware Limited Liability Company
Effective as of January 30, 2024
This Limited Liability Company Agreement (this "Agreement") of SkyLend Funding LLC, a Delaware limited liability company (the "Company"), is entered into and effective as of January 30, 2024, by Skybridge Fintech Ltd., a Delaware corporation, as the sole member of the Company (the "Member").
RECITALS
WHEREAS, the Company was formed as a Delaware limited liability company by the filing of a Certificate of Formation (as defined herein) with the Secretary of State of the State of Delaware on January 30, 2024, pursuant to the Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq. (the "Act");
WHEREAS, the Member desires to enter into this Agreement to set forth the rights, powers, duties, obligations, and liabilities of the Member and the Company, and to establish the governance, management structure, and operating provisions applicable to the Company;
WHEREAS, the Company is formed for the limited purposes described herein, including, without limitation, to act as depositor in connection with a securitization transaction involving the issuance of asset-backed notes by SkyLend Receivables Trust 2024-1, a Delaware statutory trust (the "Trust"), secured by a pool of unsecured consumer installment-loan receivables originated by the Member through its SkyLend platform;
WHEREAS, the Company is intended to be a special-purpose entity, and this Agreement contains covenants and restrictions designed to ensure that the Company maintains its separateness and bankruptcy remoteness in order to support the characterization of the transfers of receivables contemplated by the Securitization Transaction as true sales and to protect the interests of the Company's creditors, including the Indenture Trustee and the holders of asset-backed notes issued by the Trust; and
WHEREAS, the Member acknowledges that the Indenture Trustee and certain other parties to the Securitization Transaction have required, as a condition to the consummation of the Securitization Transaction, that the Company operate in accordance with the separateness covenants and special-purpose entity restrictions set forth herein.
NOW, THEREFORE, the Member hereby declares and agrees as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below:
"Act" means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq., as amended from time to time.
"Administration Agreement" means the Administration Agreement dated on or about February 14, 2024, among the Company, the Trust, and the Member (in its capacity as administrator), as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Agreement" means this Limited Liability Company Agreement of SkyLend Funding LLC, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof.
"Bankruptcy" means, with respect to any person or entity, (a) the filing by such person or entity of a voluntary petition in bankruptcy or any petition or answer seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any applicable federal or state bankruptcy, insolvency, or debtor relief law, (b) the filing against such person or entity of an involuntary petition in bankruptcy or seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any applicable federal or state bankruptcy, insolvency, or debtor relief law that is not dismissed within ninety (90) days after the date of filing, (c) the making by such person or entity of a general assignment for the benefit of its creditors, (d) the appointment of a receiver, trustee, custodian, or liquidator of such person or entity or of all or any substantial part of such person's or entity's property, (e) the admission by such person or entity in writing of its inability to pay its debts generally as they become due, or (f) the taking of any corporate, partnership, limited liability company, or other action by such person or entity in furtherance of any of the foregoing.
"Certificate of Formation" means the Certificate of Formation of the Company filed with the Secretary of State of the State of Delaware on January 30, 2024, as the same may be amended, restated, or supplemented from time to time in accordance with the Act and this Agreement, a copy of which is attached hereto as Exhibit A.
"Company" means SkyLend Funding LLC, a Delaware limited liability company.
"Covered Persons" means the Member, the Manager, any Independent Manager, and their respective affiliates, officers, directors, shareholders, partners, members, managers, employees, agents, and representatives.
"EIN" means the Company's Employer Identification Number assigned by the Internal Revenue Service, which is 93-4187620.
"Indenture" means the Indenture dated on or about February 14, 2024, between SkyLend Receivables Trust 2024-1 and Atlantic Fiduciary Services, Inc., as indenture trustee, pursuant to which the Trust will issue asset-backed notes, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Indenture Trustee" means Atlantic Fiduciary Services, Inc., a Delaware corporation, in its capacity as indenture trustee under the Indenture, and any successor indenture trustee appointed thereunder.
"Independent Manager" has the meaning set forth in Section 6.3 of this Agreement.
"Manager" means the person designated as the manager of the Company pursuant to Article VI of this Agreement. The initial Manager of the Company shall be Danielle Prescott, and any successor Manager appointed in accordance with Section 6.5.
"Material Action" has the meaning set forth in Section 7.2 of this Agreement.
"Member" means Skybridge Fintech Ltd., a Delaware corporation, as the sole member of the Company, having its principal office at 1400 Market Street, Suite 1210, Wilmington, Delaware 19801, Employer Identification Number 84-3291076, and any permitted successor or assign that is admitted as a member of the Company in accordance with the terms of this Agreement.
"Notes" means the asset-backed notes issued by the Trust pursuant to the Indenture and sold in the Securitization Transaction.
"Originator" means Skybridge Fintech Ltd., a Delaware corporation, in its capacity as originator of the Receivables.
"Owner Trustee" means Keymark Trust Company, National Association, a national banking association, in its capacity as owner trustee under the Trust Agreement, and any successor owner trustee appointed thereunder.
"Permitted Activities" has the meaning set forth in Section 2.5 of this Agreement.
"Receivables" means the unsecured consumer installment-loan receivables originated by the Member through its SkyLend platform, including all rights to receive payments thereunder, all security interests or liens and property subject thereto, all guarantees, insurance, and other agreements or arrangements of whatever character from time to time supporting or securing payment of such receivables, and all proceeds of the foregoing.
"Receivables Purchase Agreement" or "RPA" means the Receivables Purchase Agreement dated on or about February 14, 2024, between the Member (as seller and originator) and the Company (as purchaser and depositor), as the same may be amended, restated, supplemented, or otherwise modified from time to time, pursuant to which the Member sells, transfers, assigns, and conveys Receivables to the Company.
"Registered Office" means the registered office of the Company in the State of Delaware, which is initially located at 1400 Market Street, Suite 1210, Wilmington, Delaware 19801, or such other address as may be designated from time to time by the Manager in accordance with the Act.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement dated on or about February 14, 2024, among the Company (as depositor), SkyLend Receivables Trust 2024-1 (as issuer), Skybridge Fintech Ltd. (as servicer), and Clearview Loan Servicing, Inc. (as sub-servicer), as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Securitization Transaction" means the proposed Rule 144A / Regulation S private placement of asset-backed notes by SkyLend Receivables Trust 2024-1, secured by a pool of Receivables, including all related transactions, agreements, and arrangements entered into in connection therewith.
"Transaction Documents" means, collectively, this Agreement, the Certificate of Formation, the Receivables Purchase Agreement, the Sale and Servicing Agreement, the Trust Agreement, the Indenture, the Administration Agreement, and any other agreements, certificates, instruments, or documents executed and delivered by or on behalf of the Company in connection with the Securitization Transaction.
"Trust" means SkyLend Receivables Trust 2024-1, a Delaware statutory trust formed pursuant to the Trust Agreement.
"Trust Agreement" means the Trust Agreement dated on or about February 14, 2024, between the Company (as depositor) and Keymark Trust Company, National Association (as owner trustee), pursuant to which the Trust was created, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
Section 1.2 — Rules of Construction
Unless the context otherwise requires, (a) words importing the singular shall include the plural and vice versa, and words importing any gender shall include all genders; (b) all references to "including" or "include" shall mean "including, without limitation" or "include, without limitation," and shall not be construed to limit any general statement to the specific or similar items or matters immediately following such reference; (c) all references to Articles, Sections, Exhibits, and Schedules shall refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, unless otherwise specified; (d) all references to any agreement, document, or instrument shall mean such agreement, document, or instrument as amended, restated, supplemented, or otherwise modified from time to time, unless otherwise expressly stated; (e) all references to any law, statute, regulation, or rule shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing, or interpreting such law, statute, regulation, or rule; (f) all references to "dollars" or "$" shall mean lawful currency of the United States of America; (g) the words "herein," "hereof," "hereunder," "hereby," and similar words refer to this Agreement as a whole and not to any particular Article, Section, or other subdivision of this Agreement; (h) the headings and captions contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement, and shall not be referred to in connection with the construction or interpretation of this Agreement; and (i) references to "writing" or "written" include electronic communications in any form approved by the Manager, including electronic mail.
ARTICLE II — FORMATION AND PURPOSE
Section 2.1 — Formation
The Company was formed as a limited liability company under the Act on January 30, 2024, upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware. The name of the Company is "SkyLend Funding LLC." A copy of the Certificate of Formation, as filed, is attached hereto as Exhibit A and incorporated herein by reference. The rights, powers, duties, obligations, and liabilities of the Member and the governance and operation of the Company shall be governed by this Agreement and the Act. To the extent of any inconsistency between the provisions of this Agreement and the non-mandatory provisions of the Act, the provisions of this Agreement shall control to the maximum extent permitted by the Act. To the extent that the rights, powers, duties, obligations, and liabilities of the Member are different by reason of any provision of this Agreement than they would be under the Act in the absence of such provision, this Agreement shall, to the extent permitted by the Act, control.
Section 2.2 — Name
The business of the Company shall be conducted under the name "SkyLend Funding LLC." The Company may also conduct business under such other names as the Manager may determine from time to time; provided, however, that any such name shall comply with the requirements of the Act and shall not be likely to cause confusion with the name of the Member, the Trust, or any other affiliate unless such use is consistent with the separateness covenants set forth in Article VII.
Section 2.3 — Registered Office; Registered Agent
The registered office of the Company in the State of Delaware shall be located at 1400 Market Street, Suite 1210, Wilmington, Delaware 19801. The registered agent of the Company at such address shall be Cascade Systems, 160 Greentree Drive, Suite 101, Dover, Delaware 19904. The Manager may change the registered office or the registered agent, or both, from time to time by filing an amendment to the Certificate of Formation or such other filing as may be required under the Act, and by providing written notice of any such change to the Member.
Section 2.4 — Principal Office
The principal place of business of the Company shall be located at 1400 Market Street, Suite 1210, Wilmington, Delaware 19801. The Manager may change the principal office of the Company from time to time upon written notice to the Member; provided, however, that any change of principal office shall be consistent with the separateness covenants set forth in Article VII and shall not adversely affect the Company's status as a special-purpose entity.
Section 2.5 — Purposes and Permitted Activities
The Company is organized for the following limited purposes, and shall not engage in any other business, activity, or undertaking (collectively, the "Permitted Activities"):
(a) To purchase or otherwise acquire from Skybridge Fintech Ltd. unsecured consumer installment-loan receivables originated through the SkyLend platform, and all related rights, interests, and property, pursuant to the Receivables Purchase Agreement;
(b) To transfer, sell, assign, and convey such Receivables and related assets to SkyLend Receivables Trust 2024-1 pursuant to the Sale and Servicing Agreement;
(c) To act as depositor with respect to the Trust and the Securitization Transaction, and to perform all duties and obligations of the depositor under the Trust Agreement, the Sale and Servicing Agreement, the Administration Agreement, and the other Transaction Documents;
(d) To execute and deliver the Trust Agreement, the Sale and Servicing Agreement, the Receivables Purchase Agreement, the Administration Agreement, and any other Transaction Documents to which the Company is or may become a party, and to perform all of its obligations thereunder;
(e) To retain the residual interest, subordinated certificate, or other equity or retained interest in the Trust, if applicable, as contemplated by the Transaction Documents;
(f) To take all actions necessary, appropriate, convenient, or incidental to the foregoing, including opening and maintaining bank accounts, engaging agents, contractors, and professionals, paying expenses, and complying with applicable law; and
(g) To do any and all things necessary, appropriate, or advisable in furtherance of, or incidental to, any of the foregoing purposes.
The Company shall not engage in any business or activity other than the Permitted Activities described in this Section 2.5. The Company shall not acquire any assets other than the Receivables and related rights acquired under the Receivables Purchase Agreement and interests in the Trust (including any subordinated certificate or residual interest), and any cash or other assets received in connection with the foregoing. The restrictions set forth in this Section 2.5 are fundamental to this Agreement and to the structure of the Securitization Transaction, and the Member acknowledges that the Indenture Trustee and the holders of the Notes are relying on such restrictions.
Section 2.6 — Term
The term of the Company shall commence on the date of the filing of the Certificate of Formation with the Secretary of State of the State of Delaware and shall continue in perpetuity unless and until the Company is dissolved in accordance with Article IX of this Agreement and a Certificate of Cancellation is filed with the Secretary of State of the State of Delaware. The Company shall not be dissolved by the admission or withdrawal of any member, or by the occurrence of any event described in Section 18-801(a)(4) of the Act with respect to the Member; in any such event, the business of the Company shall be continued without dissolution in accordance with this Agreement, subject to the Act.
Section 2.7 — Employer Identification Number
The Employer Identification Number of the Company assigned by the Internal Revenue Service is 93-4187620. The Manager shall ensure that the Company uses such number in connection with all filings, reports, returns, and other documents required by applicable law.
ARTICLE III — MEMBER
Section 3.1 — Sole Member
Skybridge Fintech Ltd., a Delaware corporation, is the sole member of the Company. The address of the Member is 1400 Market Street, Suite 1210, Wilmington, Delaware 19801. The Employer Identification Number of the Member is 84-3291076. The Member acknowledges that it is the sole member of the Company and that no other person or entity has been admitted as a member of the Company as of the date of this Agreement.
Section 3.2 — Powers of the Member
The Member shall have the following powers with respect to the Company:
(a) To appoint and remove the Manager in accordance with Section 6.5 of this Agreement;
(b) To appoint and remove the Independent Manager, subject to the provisions of Section 6.3 of this Agreement, including the requirement that no removal or replacement of the Independent Manager shall be effective without the prior written consent of the Indenture Trustee;
(c) To approve any amendment to this Agreement or the Certificate of Formation, subject to the provisions of Article XII;
(d) To approve the dissolution of the Company, subject to the provisions of Article IX and the requirement that the consent of the Independent Manager be obtained prior to any dissolution;
(e) To make capital contributions to the Company at such times and in such amounts as the Member may determine in its sole discretion;
(f) To exercise such other powers as are reserved to the Member under this Agreement or the Act, or as may be necessary or appropriate to protect the Member's interest in the Company.
Notwithstanding the foregoing or any other provision of this Agreement, the Member shall not cause or permit the Company to take any Material Action (as defined in Section 7.2) without the prior unanimous written consent of both the Manager and the Independent Manager. The Member acknowledges that this restriction is a fundamental term of this Agreement and that the Indenture Trustee and the holders of the Notes are relying on such restriction.
Section 3.3 — Liability of the Member
The Member shall not be liable for the debts, obligations, or liabilities of the Company solely by reason of being a member of the Company. The liability of the Member for the debts, obligations, and liabilities of the Company shall be limited to the fullest extent permitted by the Act and other applicable law. Except as otherwise required by the Act or as expressly provided in this Agreement or in the Transaction Documents, no creditor of the Company shall have any right to compel the Member to make any capital contribution to or on behalf of the Company.
Section 3.4 — Sole Member Acknowledgment
The Member acknowledges that the Company is a single-member limited liability company. As such, the Company is intended to be treated as a disregarded entity for federal income tax purposes within the meaning of Treasury Regulations Section 301.7701-3(b)(1)(ii), and all items of income, gain, loss, deduction, and credit of the Company shall be reported on the federal income tax return of the Member. No election to treat the Company as a corporation or as an association taxable as a corporation for federal income tax purposes is contemplated, and no such election shall be made without compliance with Section 10.2 of this Agreement.
ARTICLE IV — CAPITAL CONTRIBUTIONS AND MEMBERSHIP INTEREST
Section 4.1 — Initial Capital Contribution
The Member has made an initial capital contribution to the Company of Ten Dollars ($10.00) in cash, which was contributed upon the formation of the Company. Additional capital contributions may be made from time to time at the sole discretion of the Member; provided, however, that no additional capital contributions shall be required to be made by the Member. The Manager shall maintain a record of all capital contributions made to the Company by the Member.
Section 4.2 — Membership Interest
The Member holds one hundred percent (100%) of the membership interests in the Company. No certificates shall be issued to represent the membership interest. The membership interest of the Member represents the Member's entire economic interest in, and rights with respect to, the Company, including the right to receive distributions, allocations of profits and losses, and the right to vote on or consent to matters submitted to the Member under this Agreement or the Act.
Section 4.3 — Return of Capital
No Member shall have the right to withdraw or receive a return of its capital contribution except as provided in Article IX upon dissolution of the Company, and then only to the extent of any remaining assets after satisfaction of all of the Company's liabilities and obligations to its creditors, including under the Transaction Documents. The Member shall not have any right to demand and receive any distribution from the Company in any form other than cash, except with the consent of the Manager.
Section 4.4 — No Interest on Capital
No interest shall accrue or be payable on any capital contribution made by the Member to the Company. The Company shall not be obligated to pay interest on any capital contribution or to provide any return on any capital contribution, except to the extent of distributions made in accordance with Section 5.2 or Article IX.
ARTICLE V — ALLOCATIONS AND DISTRIBUTIONS
Section 5.1 — Allocations of Profit and Loss
All items of income, gain, loss, deduction, and credit of the Company shall be allocated solely to the Member, as the sole member of the Company. Because the Company is treated as a disregarded entity for federal income tax purposes, all such items shall be reported on the federal income tax return of the Member and shall be treated for federal income tax purposes as items of income, gain, loss, deduction, and credit of the Member. To the extent that the Company is required to file any state or local income tax returns or information returns, the Manager shall cause such returns to be prepared and filed in a manner consistent with the foregoing treatment.
Section 5.2 — Distributions
Distributions of available cash or other property of the Company shall be made to the Member at such times and in such amounts as the Manager shall determine in the Manager's sole discretion; provided, however, that:
(a) No distribution shall be made if, after giving effect to such distribution, the Company would not be able to pay its debts as they become due in the ordinary course of business, or if the Company's total assets would be less than the sum of its total liabilities;
(b) No distribution shall be made in violation of any restriction set forth in the separateness covenants in Section 7.1 of this Agreement;
(c) No distribution shall be made in violation of any restriction or limitation set forth in the Transaction Documents, including the Indenture, the Sale and Servicing Agreement, or the Trust Agreement; and
(d) All distributions shall comply with the requirements of Section 18-607 of the Act.
The Manager shall maintain a record of all distributions made by the Company to the Member, including the date and amount of each distribution.
ARTICLE VI — MANAGEMENT
Section 6.1 — Management by Manager
The business and affairs of the Company shall be managed by a Manager. The initial Manager of the Company shall be Danielle Prescott, who is the Chief Financial Officer of Skybridge Fintech Ltd. The Manager shall have the authority to take all actions on behalf of the Company that are consistent with the Permitted Activities set forth in Section 2.5, subject to the restrictions set forth in Section 6.4 and Article VII of this Agreement. The Manager shall devote such time to the business and affairs of the Company as shall be necessary for the proper management thereof. The Manager shall perform all duties as Manager in good faith and with the care that an ordinarily prudent person in a like position would exercise under similar circumstances.
Section 6.2 — Authority of Manager
Subject to the limitations set forth in this Agreement, the Manager shall have the power and authority to manage the business and affairs of the Company and to take all actions that the Manager deems necessary, appropriate, or advisable in connection with the Permitted Activities, including, without limitation, the following:
(a) To execute and deliver, on behalf of the Company, any and all documents, agreements, certificates, instruments, and other writings in connection with the Securitization Transaction and the Transaction Documents, including the Receivables Purchase Agreement, the Sale and Servicing Agreement, the Trust Agreement, the Administration Agreement, and any amendments, supplements, or modifications thereto;
(b) To open, maintain, and close bank accounts in the name of the Company at such financial institutions as the Manager shall determine, and to designate signatories with respect thereto;
(c) To hire, engage, and terminate agents, contractors, consultants, attorneys, accountants, and other professionals as the Manager may deem necessary or advisable to carry out the Permitted Activities;
(d) To cause the Company to comply with all applicable laws, rules, regulations, and orders of governmental authorities;
(e) To cause the Company to file all necessary certificates, reports, returns, and other documents with the Secretary of State of the State of Delaware and with any other governmental authority;
(f) To take all actions necessary or appropriate to maintain the Company's existence and good standing under the Act;
(g) To cause the Company to pay its debts, liabilities, and expenses from its own funds; and
(h) To take all other actions necessary, appropriate, or advisable to carry out the Permitted Activities and to perform the Company's obligations under the Transaction Documents.
Notwithstanding the foregoing, the Manager shall not have the authority to take any Material Action (as defined in Section 7.2) without the prior unanimous written consent of the Independent Manager. Any action taken by the Manager in violation of this restriction shall be void and of no force or effect.
Section 6.3 — Independent Manager
(a) Requirement. The Company shall at all times have at least one (1) Independent Manager. The Independent Manager shall be a natural person who satisfies all of the following qualifications:
(i) Is not, and has not been at any time during the immediately preceding five (5) years, a member, manager, officer, director, employee, affiliate, associate, supplier, or creditor of the Company, the Member, or any affiliate of the Member (other than service as an independent manager or independent director of the Company or of one or more other special-purpose entities that are not affiliates of the Member, other than as a result of such service);
(ii) Is not, and has not been at any time during the immediately preceding five (5) years, a member of the immediate family of any person described in clause (i) above;
(iii) Has prior experience serving as an independent director or independent manager of a special-purpose entity in connection with structured finance transactions; and
(iv) Understands and acknowledges that his or her duties as Independent Manager include a duty to consider the interests of the Company and its creditors (including the Indenture Trustee and the holders of the Notes), and not solely the interests of the Member, in connection with any vote on or consent to a Material Action.
(b) Initial Independent Manager. The initial Independent Manager of the Company shall be designated and appointed by the Member prior to the execution and delivery of the Transaction Documents, and the name of such person shall be inserted in this Agreement upon appointment. The Independent Manager shall execute an acknowledgment and acceptance of appointment in a form reasonably satisfactory to the Manager and the Indenture Trustee.
(c) Scope of Duties. The Independent Manager's sole function and responsibility with respect to the Company shall be to vote on or consent to any Material Action as set forth in Section 7.2 of this Agreement. The Independent Manager shall have no other duties, obligations, or responsibilities with respect to the management, business, or affairs of the Company, and the Independent Manager shall not be required to attend any meetings or to take any action, other than as expressly provided herein.
(d) Removal and Replacement. The Independent Manager shall not be removed, dismissed, or replaced without the prior written consent of the Indenture Trustee (Atlantic Fiduciary Services, Inc.) or its successor. In the event of the death, incapacity, resignation, removal, or disqualification of the Independent Manager, the Member shall promptly appoint a replacement Independent Manager who satisfies the qualifications set forth in Section 6.3(a), subject to the prior written consent of the Indenture Trustee.
(e) Compensation. The compensation of the Independent Manager shall be established by the Member at a level that is reasonable and customary for independent managers of special-purpose entities in comparable securitization transactions. The Independent Manager shall not be compensated by the Company except as a reasonable fee for service as Independent Manager, and such compensation shall not include any equity interest in, or profit participation with respect to, the Company or the Member.
(f) No Agency. The Independent Manager shall not be an agent of the Company or the Member and shall have no authority to act for, or to bind, the Company or the Member, except as expressly provided in this Agreement with respect to the Independent Manager's consent rights relating to Material Actions.
Section 6.4 — Restrictions on Manager Authority
Notwithstanding any other provision of this Agreement, the Manager shall not cause or permit the Company to:
(a) Engage in any business or activity other than the Permitted Activities set forth in Section 2.5;
(b) Merge, consolidate, or enter into any combination, recapitalization, or reorganization with any other entity;
(c) Take any Material Action without the prior unanimous written consent of the Independent Manager, as required by Section 7.2;
(d) Amend this Agreement or the Certificate of Formation in any manner that would be inconsistent with the Company's status as a special-purpose entity, or that would modify, reduce, or eliminate the separateness covenants set forth in Section 7.1 or the consent rights of the Independent Manager with respect to Material Actions;
(e) Acquire any indebtedness, or create, incur, assume, or suffer to exist any indebtedness, other than indebtedness incurred in connection with the Securitization Transaction and as expressly contemplated by the Transaction Documents;
(f) Make loans or advances to, or guarantee, endorse, or otherwise become liable for the debts, obligations, or liabilities of, any person or entity, including the Member or any affiliate of the Member;
(g) Dissolve, liquidate, or wind up the Company, or consent to any of the foregoing, except in accordance with Article IX of this Agreement and with the prior consent of the Independent Manager; or
(h) Take any action that would cause the Company to cease to be a special-purpose entity or that would be inconsistent with the separateness covenants set forth in Section 7.1.
Section 6.5 — Resignation and Removal of Manager
(a) Resignation. The Manager may resign at any time by giving not less than thirty (30) days' prior written notice to the Member. Such resignation shall take effect at the end of such thirty (30) day period or upon the earlier appointment of a successor Manager by the Member.
(b) Removal. The Member may remove the Manager at any time, with or without cause, by written notice to the Manager. Such removal shall be effective immediately upon delivery of such notice or at such later time as may be specified in such notice.
(c) Successor Manager. Upon the resignation or removal of the Manager, the Member shall promptly appoint a successor Manager. The successor Manager shall have all of the rights, powers, duties, and obligations of the Manager under this Agreement. Until a successor Manager is appointed, the Member shall perform the duties of the Manager or shall designate a person to serve as interim Manager.
Section 6.6 — Officers
The Manager may, from time to time, appoint one or more officers of the Company, including a President, one or more Vice Presidents, a Secretary, a Treasurer, or such other officers as the Manager may deem appropriate, to carry out the day-to-day activities of the Company within the scope of the Permitted Activities. Each officer shall have such duties and authority as may be delegated by the Manager, subject to the limitations set forth in this Agreement. Officers shall serve at the pleasure of the Manager and may be removed by the Manager at any time, with or without cause. The appointment of officers shall not limit or otherwise affect the authority of the Manager, and the Manager may exercise any power or authority that is delegated to an officer notwithstanding such delegation.
ARTICLE VII — SPECIAL-PURPOSE ENTITY COVENANTS (SEPARATENESS COVENANTS)
Section 7.1 — Separateness Covenants
The Company hereby covenants and agrees that, from and after the date of this Agreement and for so long as any obligations of the Trust under the Indenture, or any obligations of the Company under the Transaction Documents, remain outstanding (and for a period of one (1) year and one (1) day following the payment in full of all such obligations), the Company shall comply with the following covenants:
(a) Maintain Separate Existence. The Company shall maintain its existence as a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware, separate and apart from the Member and any other affiliate. The Company shall not commingle its assets with those of the Member or any other person or entity, and shall hold all of its assets in its own name.
(b) Separate Books and Records. The Company shall maintain its own books, records, and accounts separate and apart from those of the Member and any other person or entity. The Company shall maintain accurate and complete records of its own transactions, and all transactions between the Company and the Member or any affiliate of the Member shall be properly documented and reflected in the books and records of the Company.
(c) Separate Financial Statements. If financial statements of the Company are prepared, the Company shall ensure that they are prepared separately from those of the Member and clearly reflect the separate assets, liabilities, and results of operations of the Company. If the Company's financial results are consolidated with those of the Member or any affiliate for financial reporting purposes, the Company shall ensure that any such consolidated financial statements contain a note or other appropriate disclosure indicating that (i) the Company is a separate legal entity from the Member and its affiliates, (ii) the assets of the Company are not available to pay the creditors of the Member or any other person, and (iii) the Company's separate existence should not be disregarded.
(d) Separate Bank Accounts. The Company shall maintain bank accounts in its own name that are separate and distinct from the bank accounts of the Member and any other person or entity. All funds of the Company shall be deposited in or disbursed from such separate bank accounts.
(e) Own Name. The Company shall conduct all of its business in its own name. The Company shall use its own stationery, invoices, checks, and other business forms. The Company shall hold itself out to the public as a legal entity separate and distinct from the Member and any other person or entity.
(f) No Commingling. The Company shall not commingle its funds or other assets with the funds or other assets of the Member or any other person or entity. Any overhead expenses or other shared costs between the Company and the Member or any affiliate of the Member shall be allocated fairly and reasonably and on an arm's-length basis pursuant to written agreements or arrangements.
(g) Arm's-Length Transactions. The Company shall not enter into any transaction with the Member or any affiliate of the Member except on terms that are commercially reasonable and on an arm's-length basis, and that are no less favorable to the Company than would be obtained in a comparable arm's-length transaction with an unrelated third party.
(h) Separate Liabilities. The Company shall pay its own liabilities and expenses from its own funds. The Company shall not assume or guarantee the obligations or liabilities of the Member or any other person or entity, except as expressly contemplated by the Transaction Documents. The Company shall not hold itself out as responsible for the debts or obligations of the Member or any other person or entity.
(i) No Indebtedness. The Company shall not incur any indebtedness, whether direct or contingent, secured or unsecured, other than indebtedness expressly contemplated by the Securitization Transaction and the Transaction Documents. The Company shall not issue any debt securities or instruments other than as contemplated by the Transaction Documents.
(j) Adequate Capitalization. The Company shall maintain capital that is adequate and reasonable in light of its contemplated business activities, purposes, and Permitted Activities. The Member shall not cause the Company to become or remain undercapitalized. The Company shall not make any distribution to the Member if, after giving effect to such distribution, the Company would be left with unreasonably small capital in relation to the business and transactions in which the Company is about to engage.
(k) Observe Formalities. The Company shall observe all limited liability company formalities required by the Act and this Agreement. The Company shall maintain this Agreement and all amendments hereto, shall act through its Manager in accordance with this Agreement, and shall keep appropriate records of all actions taken by the Manager, the Member, and the Independent Manager.
(l) Correct Any Known Misunderstanding. The Company shall use commercially reasonable efforts to correct any known misunderstanding regarding the separate identity of the Company. If the Company becomes aware that any third party may have a misunderstanding as to the Company's separate identity, the Company shall take prompt action to correct such misunderstanding.
(m) No Pledging. The Company shall not pledge, encumber, hypothecate, or otherwise grant any lien on or security interest in its assets for the benefit of the Member or any other entity, except as expressly provided in the Transaction Documents in connection with the Securitization Transaction.
(n) Pay Own Expenses. The Company shall pay the salaries (if any) of its own employees and its own operating expenses from its own funds, or, if any such expenses are shared with the Member or any affiliate, reimburse or be reimbursed by the Member for such shared expenses pursuant to a written allocation agreement on arm's-length terms that fairly and reasonably allocates such expenses.
(o) Maintain Separateness from Trust. The Company shall maintain its separate identity from SkyLend Receivables Trust 2024-1 and shall not hold itself out as being the same entity as the Trust. The Company shall ensure that all transactions between the Company and the Trust are documented and conducted in accordance with the Transaction Documents and on an arm's-length basis.
The failure of the Company or the Member to comply with any of the foregoing covenants shall not affect the status of the Company as a separate legal entity or the limited liability of the Member.
Section 7.2 — Material Actions Requiring Independent Manager Consent
(a) No Material Action shall be taken by the Company, and neither the Member nor the Manager shall cause or permit the Company to take any Material Action, without the prior unanimous written consent of both the Manager and the Independent Manager. For the avoidance of doubt, the Independent Manager shall have the right to vote on, consent to, or withhold consent from any proposed Material Action, and no Material Action shall be effective unless the Independent Manager has provided his or her affirmative written consent thereto.
(b) As used in this Agreement, "Material Action" means any of the following actions:
(i) Filing a voluntary petition in bankruptcy, or consenting to the filing of an involuntary petition in bankruptcy, on behalf of the Company;
(ii) Filing a petition, or consenting to the filing of a petition, seeking reorganization, arrangement, adjustment, winding-up, dissolution, composition, or other similar relief with respect to the Company under any applicable federal, state, or foreign law relating to bankruptcy, insolvency, receivership, or relief of debtors;
(iii) Making a general assignment for the benefit of the creditors of the Company;
(iv) Admitting in writing the Company's inability to pay its debts generally as they become due;
(v) Taking any action to consolidate or merge the Company with or into any other entity, or to effect a recapitalization or reorganization of the Company;
(vi) Dissolving or liquidating the Company, or consenting to the dissolution or liquidation of the Company;
(vii) Amending, modifying, restating, or supplementing this Agreement or the Certificate of Formation in any material respect, including any amendment that would affect the separateness covenants set forth in Section 7.1, the consent rights of the Independent Manager, or the Company's status as a special-purpose entity;
(viii) Selling, transferring, or otherwise disposing of all or substantially all of the Company's assets outside the ordinary course of its Permitted Activities; and
(ix) Taking any other action that, pursuant to the terms of this Agreement or any Transaction Document, requires the vote or consent of the Independent Manager.
(c) In considering whether to consent to any Material Action, the Independent Manager shall owe a fiduciary duty to consider the interests of the Company and its creditors (including the Indenture Trustee and the holders of the Notes), and not solely the interests of the Member. The Independent Manager shall consider, among other factors, whether the proposed Material Action is in the best interests of the Company, taking into account the impact of such action on the Company's creditors and the holders of the Notes.
(d) The form of consent to be executed by the Independent Manager in connection with any proposed Material Action is attached hereto as Exhibit C.
Section 7.3 — Non-Petition Covenant
The Member hereby covenants and agrees that it will not, at any time, institute or cause to be instituted against the Company any case, proceeding, or other action under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, or relief of debtors, seeking to have an order for relief entered with respect to the Company, or seeking to adjudicate the Company as bankrupt or insolvent, or seeking any arrangement, reorganization, adjustment, winding-up, liquidation, dissolution, composition, or other similar relief with respect to the Company or its debts. This covenant is an inducement to the Indenture Trustee and the holders of the Notes to enter into the Securitization Transaction and the Transaction Documents, and this covenant shall be enforceable both before and after the dissolution of the Company. This covenant shall survive the termination of this Agreement and shall continue in full force and effect for a period of one (1) year and one (1) day following the payment in full of all obligations of the Trust under the Indenture and all obligations of the Company under the Transaction Documents.
ARTICLE VIII — EXCULPATION AND INDEMNIFICATION
Section 8.1 — Exculpation
No Covered Person shall be liable to the Company, the Member, or any other person for any loss, damage, claim, liability, cost, or expense (including attorneys' fees) incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed by such Covered Person to be within the scope of the authority conferred by this Agreement and to be in, or not opposed to, the best interests of the Company; provided, however, that no Covered Person shall be exculpated from liability for any act or omission resulting from such Covered Person's fraud, willful misconduct, bad faith, or gross negligence. The provisions of this Section 8.1 shall not be construed to limit or eliminate the duties or liabilities of any Covered Person imposed by applicable law to the extent that such duties or liabilities may not be limited or eliminated under the Act.
Section 8.2 — Indemnification
(a) The Company shall, to the fullest extent permitted by the Act and other applicable law, indemnify, defend, and hold harmless each Covered Person from and against any and all losses, claims, damages, judgments, fines, penalties, liabilities, costs, and expenses (including reasonable and documented attorneys' fees and expenses of investigation and litigation) of every kind and nature, whether known or unknown, fixed or contingent, arising out of or incidental to the conduct of the business of the Company or the performance by such Covered Person of his, her, or its duties on behalf of the Company, except to the extent that any such losses, claims, damages, liabilities, costs, or expenses arise from the fraud, willful misconduct, bad faith, or gross negligence of such Covered Person.
(b) Expenses (including reasonable attorneys' fees) incurred by a Covered Person in defending any claim, demand, action, suit, or proceeding subject to indemnification under this Section 8.2 shall be paid or reimbursed by the Company in advance of the final disposition of such claim, demand, action, suit, or proceeding upon receipt by the Company of an undertaking by or on behalf of such Covered Person to repay such amounts if it shall ultimately be determined that such Covered Person is not entitled to indemnification under this Section 8.2.
(c) The Company may purchase and maintain insurance, at the expense of the Company, on behalf of any Covered Person against any liability asserted against or incurred by such Covered Person in connection with the business or affairs of the Company, whether or not the Company would have the power to indemnify such Covered Person against such liability under this Section 8.2.
(d) The indemnification provided by this Section 8.2 shall be in addition to, and not exclusive of, any other rights to which a Covered Person may be entitled under any agreement, by vote of the Member, or otherwise, and shall continue as to a Covered Person who has ceased to serve in such capacity.
Section 8.3 — Independent Manager Indemnification
The Independent Manager shall be entitled to the same exculpation and indemnification protections set forth in Sections 8.1 and 8.2 as are afforded to other Covered Persons. In addition to and without limiting the foregoing, the Independent Manager shall have no personal liability for acting in good faith in connection with any vote on or consent to a Material Action, and the Company and the Member shall indemnify and hold harmless the Independent Manager from and against any and all losses, claims, damages, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of or related to the Independent Manager's service as Independent Manager, except to the extent arising from the Independent Manager's fraud, willful misconduct, bad faith, or gross negligence.
ARTICLE IX — DISSOLUTION AND WINDING UP
Section 9.1 — Events of Dissolution
The Company shall be dissolved only upon the occurrence of any of the following events:
(a) A determination by the Member to dissolve the Company, with the prior unanimous written consent of the Independent Manager as a Material Action under Section 7.2;
(b) The entry of a decree of judicial dissolution of the Company under Section 18-802 of the Act; or
(c) The occurrence of any event that makes it unlawful for the business of the Company to be carried on, unless the Company is able to cure such event within a reasonable period of time.
Notwithstanding any provision of this Agreement or the Act to the contrary, the Company shall not be dissolved by the death, retirement, resignation, expulsion, Bankruptcy, or dissolution of the Member, or by the occurrence of any event described in Section 18-801(a)(4) of the Act with respect to the Member. In the event of the occurrence of any such event, the business of the Company shall continue without dissolution, and the Company shall continue with any successor or transferee of the Member's interest admitted as a member in accordance with Article XI. The Member acknowledges that the non-dissolution provisions of this Section 9.1 are fundamental to the structure of the Securitization Transaction and that the Indenture Trustee and the holders of the Notes are relying on such provisions.
Section 9.2 — Winding Up
Upon dissolution of the Company in accordance with Section 9.1, the Manager (or, if no Manager is then serving, the Member or such other person as may be designated by the Member) shall wind up the Company's affairs in accordance with the Act. The winding up of the Company shall include the following:
(a) The payment, satisfaction, or discharge of all of the Company's debts, liabilities, and obligations to its creditors, in the order of priority established by the Act and applicable law, including all obligations of the Company under the Transaction Documents;
(b) The establishment of such reserves as the Manager (or the Member, as applicable) deems necessary or appropriate for any contingent or unliquidated liabilities or obligations of the Company;
(c) After the payment or provision for payment of all debts, liabilities, and obligations of the Company and the establishment of reserves, the distribution of the remaining assets of the Company to the Member; and