TRUST AGREEMENT
SkyLend Receivables Trust 2024-1
Dated as of February 14, 2024
between
SKYLEND FUNDING LLC, a Delaware limited liability company, as Depositor,
and
KEYMARK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association, as Owner Trustee
EIN: 93-4201855
TABLE OF CONTENTS
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TRUST AGREEMENT
This TRUST AGREEMENT (this "Agreement"), dated as of February 14, 2024, is entered into between SKYLEND FUNDING LLC, a Delaware limited liability company (the "Depositor"), and KEYMARK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association (the "Owner Trustee").
RECITALS
WHEREAS, SkyLend Funding LLC is a Delaware limited liability company and a wholly owned subsidiary of Skybridge Fintech Ltd., a Delaware corporation (the "Sponsor" or "SBF"), with its principal office at 1400 Market Street, Suite 1210, Wilmington, Delaware 19801 (EIN: 93-4187620);
WHEREAS, the Depositor desires to establish a Delaware statutory trust (the "Trust") pursuant to the Delaware Statutory Trust Act, Title 12, Chapter 38 of the Delaware Code, 12 Del. C. §§ 3801 et seq. (the "DST Act"), for the purposes and subject to the terms set forth herein;
WHEREAS, Keymark Trust Company, National Association, a national banking association duly organized and existing under the laws of the United States of America, with corporate trust powers and with its principal office at 600 North King Street, Wilmington, Delaware 19801, has agreed to act as owner trustee of the Trust in accordance with and subject to the terms and conditions of this Agreement;
WHEREAS, the Trust is being formed in connection with a proposed securitization of consumer installment-loan receivables originated by Skybridge Fintech Ltd. through its proprietary consumer lending platform known as the "SkyLend" platform (collectively, the "Receivables");
WHEREAS, the Trust will issue asset-backed notes (the "Notes") in an aggregate initial principal amount of up to Two Hundred Million Dollars ($200,000,000), consisting of Class A Asset-Backed Notes in an aggregate principal amount of One Hundred Seventy Million Dollars ($170,000,000) and Class B Asset-Backed Notes in an aggregate principal amount of Twenty-Two Million Dollars ($22,000,000), pursuant to an indenture (the "Indenture") to be entered into between the Trust and Atlantic Fiduciary Services, Inc., a Delaware banking corporation, as indenture trustee (the "Indenture Trustee");
WHEREAS, the Notes will be offered and sold (a) in the United States to qualified institutional buyers (as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act")) in reliance on Rule 144A under the Securities Act pursuant to Section 4(a)(2) thereof, and (b) outside the United States to non-U.S. persons (as defined in Regulation S under the Securities Act) in reliance on Regulation S under the Securities Act;
WHEREAS, the Depositor will also receive a residual interest in the Trust (the "Residual Interest") representing the right to receive all residual distributions from the Trust Property after payment of all amounts due under the Indenture and this Agreement; and
WHEREAS, a Certificate of Trust for the Trust was filed with the Secretary of State of the State of Delaware on February 14, 2024, a copy of which is attached hereto as Exhibit A.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Depositor and the Owner Trustee hereby agree as follows:
ARTICLE I — DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.01 — Definitions
As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Indenture.
"Account Control Agreement" means the Deposit Account Control Agreement to be entered into among the Trust, Atlantic Fiduciary Services, Inc. (as Indenture Trustee), and Keymark Trust Company, National Association (in its capacity as collection-account bank), pursuant to which the Indenture Trustee shall be granted control over the Trust's deposit accounts for purposes of Article 9 of the Uniform Commercial Code.
"Administration Agreement" means the Administration Agreement to be entered into between the Trust and Skybridge Fintech Ltd., as administrator of the Trust, pursuant to which the Administrator will agree to provide certain administrative services to the Trust as more fully described therein.
"Administrator" means Skybridge Fintech Ltd., in its capacity as administrator of the Trust under the Administration Agreement, or any successor administrator appointed in accordance with the terms thereof.
"Business Day" means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the States of New York or Delaware are authorized or obligated by law, regulation, or executive order to be closed.
"Certificate of Trust" means the Certificate of Trust for SkyLend Receivables Trust 2024-1 filed with the Secretary of State of the State of Delaware on February 14, 2024, substantially in the form attached hereto as Exhibit A, and any amendment or restatement thereof filed in accordance with the DST Act.
"Class A Notes" means the $170,000,000 aggregate initial principal amount of Class A Asset-Backed Notes to be issued by the Trust pursuant to the Indenture, representing approximately 85% of the aggregate initial principal amount of Notes issued by the Trust.
"Class B Notes" means the $22,000,000 aggregate initial principal amount of Class B Asset-Backed Notes to be issued by the Trust pursuant to the Indenture, representing approximately 11% of the aggregate initial principal amount of Notes issued by the Trust.
"Clearview" or "Sub-Servicer" means Clearview Loan Servicing, Inc., an Ohio corporation with its principal office at 8800 Brecksville Road, Suite 300, Cleveland, Ohio 44141, in its capacity as sub-servicer of the Receivables under the Sale and Servicing Agreement, or any successor sub-servicer appointed thereunder.
"Closing Date" means the date on which the Notes are initially issued and delivered to the purchasers thereof, which is expected to occur on or about March 15, 2024.
"Code" means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute thereto.
"Collection Account" means the segregated trust account established and maintained in the name of the Trust (or the Indenture Trustee on behalf of the Trust) pursuant to the Account Control Agreement, into which all collections on the Receivables are to be deposited.
"Custodial Agreement" means the Custodial Agreement to be entered into between the Trust and Atlantic Fiduciary Services, Inc. (in its capacity as custodian), pursuant to which the Indenture Trustee will hold the receivable files and related documentation on behalf of the Trust.
"Delaware Trustee" means the Owner Trustee, in its capacity as trustee of a Delaware statutory trust under the DST Act.
"Depositor" means SkyLend Funding LLC, a Delaware limited liability company, in its capacity as depositor and the initial holder of the Residual Interest, or any successor thereto.
"DST Act" means the Delaware Statutory Trust Act, 12 Del. C. §§ 3801 et seq., as amended from time to time.
"Eligible Investments" means, at any time, any one or more of the following obligations or securities that mature (or are puttable at par) no later than the Business Day immediately preceding the next succeeding Payment Date (or, in the case of the Reserve Account, no later than the Business Day immediately preceding the date on which amounts in the Reserve Account may be needed): (a) direct obligations of, or obligations the timely payment of principal and interest on which are fully guaranteed by, the United States of America; (b) demand deposits, time deposits, or certificates of deposit of any depository institution or trust company (including the Owner Trustee acting in its individual capacity) incorporated under the laws of the United States of America or any state thereof and subject to supervision and examination by federal or state banking authorities, so long as at the time of investment or contractual commitment to invest the commercial paper or other short-term senior unsecured debt obligations (other than such obligations whose rating is based on the credit of a person other than such depository institution or trust company) of such depository institution or trust company shall have a credit rating from each Rating Agency in its highest investment-grade rating category; (c) commercial paper having, at the time of the investment, a rating from each Rating Agency in its highest rating category for short-term obligations; (d) money market funds rated in the highest rating category by each Rating Agency; and (e) such other investments as may be approved in writing by each Rating Agency.
"Final Scheduled Termination Date" means February 14, 2045, being the date that is 21 years after the date of this Agreement.
"Indenture" means the Indenture to be dated as of the Closing Date between the Trust (as issuer) and Atlantic Fiduciary Services, Inc. (as indenture trustee), as the same may be amended, supplemented, or otherwise modified from time to time in accordance with the terms thereof.
"Indenture Trustee" means Atlantic Fiduciary Services, Inc., a Delaware banking corporation, with its principal office at 2 Christiana Centre, Suite 1400, Wilmington, Delaware 19801, in its capacity as indenture trustee under the Indenture, or any successor indenture trustee appointed thereunder.
"LLC Agreement" means the Limited Liability Company Agreement of SkyLend Funding LLC, as the same may be amended, supplemented, or restated from time to time.
"Noteholder" means any registered holder of a Note from time to time.
"Notes" means, collectively, the Class A Notes and the Class B Notes, and any Note issued in exchange therefor or replacement thereof pursuant to the Indenture.
"Officer's Certificate" means a certificate signed by any authorized officer of the Depositor, the Administrator, the Servicer, or the Owner Trustee, as the context requires.
"Owner Trustee" means Keymark Trust Company, National Association, a national banking association, in its capacity as owner trustee of the Trust under this Agreement, or any successor owner trustee appointed in accordance with the terms hereof. Unless otherwise specified or the context otherwise requires, all references to the Owner Trustee shall refer to the Owner Trustee solely in its capacity as such and not in its individual capacity.
"Owner Trustee Fee" means the fee payable to the Owner Trustee in the amount of Seven Thousand Five Hundred Dollars ($7,500) per annum, payable in equal quarterly installments of One Thousand Eight Hundred Seventy-Five Dollars ($1,875) each, in arrears, from Trust Property in accordance with the priority of payments set forth in the Indenture.
"Payment Date" means the 15th day of each calendar month (or, if such day is not a Business Day, the next succeeding Business Day), commencing on the Payment Date specified in the Indenture.
"Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust (including any statutory trust), unincorporated organization, governmental authority, or other entity.
"Preliminary Purchase Agreement" means the Preliminary Purchase Agreement among the Trust, Skybridge Fintech Ltd., SkyLend Funding LLC, and Halcyon Securities LLC, as initial purchaser.
"Rating Agency" means each of Meridian Credit Ratings, Inc. and Carrollton Ratings Group LLC, or any successor thereto, or, if either such entity shall no longer maintain a rating on any class of the Notes, such other nationally recognized statistical rating organization as may be designated by the Depositor with the consent of the Indenture Trustee.
"Rating Agency Condition" means, with respect to any specified action, the receipt by the Depositor of written confirmation from each Rating Agency then rating the Notes that such action would not result in a reduction, qualification, or withdrawal of the then-current rating assigned by such Rating Agency to any class of Notes.
"Receivables" means the consumer installment-loan receivables originated by Skybridge Fintech Ltd. through the SkyLend platform, together with all rights, remedies, benefits, and proceeds thereof, to be transferred to the Trust pursuant to the Sale and Servicing Agreement.
"Receivables Purchase Agreement" or "RPA" means the Receivables Purchase Agreement between Skybridge Fintech Ltd. (as originator and seller) and SkyLend Funding LLC (as purchaser), pursuant to which the Sponsor sells the Receivables to the Depositor.
"Reserve Account" means the segregated reserve account to be established and funded on the Closing Date in an amount equal to 1.00% of the initial pool balance of the Receivables ($2,000,000), and maintained by the Indenture Trustee for the benefit of the Noteholders in accordance with the Indenture.
"Residual Interest" or "Subordinated Certificate" means the 100% residual interest in the Trust, as evidenced by the Residual Interest Certificate, substantially in the form attached hereto as Exhibit B, having an initial principal amount of Eight Million Dollars ($8,000,000) (representing approximately 4% of the aggregate $200,000,000 deal value), which is retained by SkyLend Funding LLC and which is unrated. The Residual Interest represents the right to receive all distributions from the Trust Property remaining after payment of all amounts due on the Notes, the Owner Trustee Fee, the Indenture Trustee fees, the Servicing Fee, the Sub-Servicing Fee, and all other Trust expenses, in accordance with the priority of payments set forth in the Indenture.
"Residual Interest Certificate" means the certificate evidencing the Residual Interest, substantially in the form attached hereto as Exhibit B.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement to be entered into among SkyLend Funding LLC (as seller), the Trust (as issuer), Skybridge Fintech Ltd. (as servicer), and Clearview Loan Servicing, Inc. (as sub-servicer), as the same may be amended, supplemented, or otherwise modified from time to time in accordance with the terms thereof.
"Securities Act" means the Securities Act of 1933, as amended from time to time.
"Servicer" means Skybridge Fintech Ltd., a Delaware corporation, in its capacity as servicer of the Receivables under the Sale and Servicing Agreement, or any successor servicer appointed thereunder.
"Servicing Fee" means the fee payable to the Servicer for its servicing of the Receivables as set forth in the Sale and Servicing Agreement.
"Sponsor" means Skybridge Fintech Ltd., a Delaware corporation, with its principal office at 1400 Market Street, Suite 1210, Wilmington, Delaware 19801 (EIN: 84-3291076).
"Sub-Servicing Fee" means the fee payable to the Sub-Servicer for its sub-servicing of the Receivables as set forth in the Sale and Servicing Agreement.
"Transaction Documents" means, collectively, this Agreement, the Indenture, the Sale and Servicing Agreement, the Receivables Purchase Agreement, the Administration Agreement, the Account Control Agreement, the Custodial Agreement, the Preliminary Purchase Agreement, and all other agreements, documents, instruments, and certificates executed or delivered in connection with the transactions contemplated hereby, as each may be amended, supplemented, or otherwise modified from time to time. A list of the Transaction Documents to which the Trust is or will be a party is set forth in Schedule I hereto.
"Trust" means SkyLend Receivables Trust 2024-1, a Delaware statutory trust created pursuant to this Agreement and the Certificate of Trust filed with the Secretary of State of the State of Delaware on February 14, 2024 (EIN: 93-4201855).
"Trust Property" means all assets of the Trust, including, without limitation, all right, title, and interest of the Trust in and to (a) the Receivables; (b) all collections on and proceeds of the Receivables; (c) all amounts on deposit in the Collection Account, the Reserve Account, and any other account established for the benefit of the Trust pursuant to the Transaction Documents; (d) all rights under the Transaction Documents; (e) all Eligible Investments and proceeds thereof; and (f) all other property, rights, and interests of every kind and description that may from time to time be transferred, conveyed, pledged, or assigned to, or otherwise acquired by, the Trust.
Section 1.02 — Rules of Construction
(a) Unless the context otherwise requires, words importing the singular number include the plural number and vice versa, and words importing gender include all genders.
(b) References to "herein," "hereof," "hereunder," and words of similar import refer to this Agreement as a whole and not to any particular Section, Article, Exhibit, or Schedule thereof.
(c) References to any Article, Section, Exhibit, or Schedule are to the Articles, Sections, Exhibits, and Schedules of this Agreement unless otherwise specified.
(d) References to any agreement, instrument, or document shall mean such agreement, instrument, or document as the same may be amended, supplemented, restated, or otherwise modified from time to time in accordance with its terms and this Agreement.
(e) References to any Person shall include its successors and permitted assigns.
(f) The headings and table of contents in this Agreement are for convenience of reference only and shall not affect the construction or interpretation of any provision hereof.
(g) References to any statute, regulation, or rule shall mean such statute, regulation, or rule as the same may be amended, modified, or supplemented from time to time, and any successor statute, regulation, or rule thereto.
(h) The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation."
(i) Unless otherwise specified, all references to dollar amounts are references to the lawful currency of the United States of America.
(j) If any date specified herein for the giving of any notice or the taking of any action falls on a day that is not a Business Day, then such date shall be deemed to refer to the next succeeding Business Day.
(k) This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware, as specified in Section 10.02.
ARTICLE II — ORGANIZATION OF THE TRUST
Section 2.01 — Name
The Trust shall be known as "SkyLend Receivables Trust 2024-1." All business of the Trust shall be conducted in such name, and all documents and instruments shall be executed on behalf of the Trust in such name. The Trust shall not conduct business under any other name, trade name, or fictitious name without the prior written consent of the Owner Trustee.
Section 2.02 — Formation and Filing
(a) The Trust has been created as a Delaware statutory trust pursuant to the DST Act. The Certificate of Trust for the Trust was filed with the Secretary of State of the State of Delaware on February 14, 2024. A copy of the Certificate of Trust as filed is attached hereto as Exhibit A.
(b) The Owner Trustee is hereby authorized to execute and file, and shall execute and file at the direction of the Depositor, any amendments to the Certificate of Trust as may be required or permitted by the DST Act or as may otherwise be necessary or appropriate to reflect any amendment to this Agreement or any change in the information set forth in the Certificate of Trust.
(c) The Depositor and the Owner Trustee are hereby authorized to execute and file, or cause to be executed and filed, any other certificates, instruments, or documents, and to take any other actions, as may be necessary or appropriate to maintain the Trust's existence as a Delaware statutory trust under the DST Act, to qualify the Trust to do business in any jurisdiction in which the Trust may conduct business, and to protect the limited liability of the beneficiaries of the Trust.
(d) The Depositor shall pay, or shall cause the Trust to pay, all fees, costs, and expenses incident to the formation and maintenance of the Trust's existence, including all filing fees and taxes required to be paid to the Secretary of State of the State of Delaware.
Section 2.03 — Office and Principal Place of Business
(a) The principal office of the Trust shall be located at c/o Keymark Trust Company, National Association, 600 North King Street, Wilmington, Delaware 19801, or at such other address in the State of Delaware as may be designated by the Depositor by written notice to the Owner Trustee and the Indenture Trustee.
(b) The registered agent of the Trust in the State of Delaware shall be Keymark Trust Company, National Association, at 600 North King Street, Wilmington, Delaware 19801, or at such other address as may be designated from time to time in accordance with the DST Act.
(c) The Depositor may change the Trust's principal place of business upon not less than ten (10) Business Days' prior written notice to the Owner Trustee and the Indenture Trustee, provided that the Trust's principal place of business and registered agent shall at all times be located in the State of Delaware.
Section 2.04 — Purposes and Powers
(a) The Trust is formed solely for the following limited purposes:
(i) To acquire, hold, manage, and dispose of the Trust Property, consisting of consumer installment-loan receivables and related assets originated by the Sponsor through the SkyLend platform;
(ii) To issue the Notes under the Indenture and the Residual Interest under this Agreement;
(iii) To make payments to Noteholders and the holder of the Residual Interest in accordance with the terms of the Indenture and this Agreement, respectively;
(iv) To enter into and perform its obligations under each of the Transaction Documents, including, without limitation, the Indenture, the Sale and Servicing Agreement, the Administration Agreement, the Account Control Agreement, the Custodial Agreement, and any related agreements;
(v) To engage in such other activities as are necessary, incidental, or related to the foregoing, including the establishment and maintenance of bank accounts and the appointment and engagement of agents, service providers, and professionals.
(b) The Trust shall not engage in any activity other than the limited purposes set forth in Section 2.04(a) above, and the Trust shall have no power or authority to take any action not in furtherance of or related to such limited purposes.
(c) The Trust shall have the power to do all things necessary, convenient, or incidental to the accomplishment of the foregoing limited purposes, including, without limitation, the power to enter into contracts, to sue and be sued in its own name, to acquire and hold property, and to execute and deliver instruments and documents.
Section 2.05 — Tax Status
(a) The parties hereto intend that the Trust shall be treated as a grantor trust within the meaning of Subpart E of Subchapter J of Chapter 1 of Subtitle A of the Code (Sections 671 through 679 of the Code) for federal income tax purposes, and not as a partnership, an association taxable as a corporation, or a taxable mortgage pool. The Trust has been assigned Employer Identification Number 93-4201855.
(b) The Depositor and the Owner Trustee agree not to take any position, and shall not cause or permit the Trust to take any position, inconsistent with the foregoing for purposes of any return, report, or filing with the Internal Revenue Service or any other taxing authority.
(c) Neither the Depositor nor the Owner Trustee shall cause the Trust to elect to be classified as a corporation or an association taxable as a corporation for federal income tax purposes under Treasury Regulations Section 301.7701-3 or any successor provision thereto.
(d) The Owner Trustee shall prepare and file, or cause to be prepared and filed, on behalf of the Trust any tax returns, information returns, or other reports that may be required to be filed by or on behalf of the Trust with any federal, state, or local taxing authority, to the extent that the Administrator does not undertake such obligation under the Administration Agreement.
Section 2.06 — Term
The Trust shall continue in existence until the earliest to occur of:
(a) the final payment or other liquidation of the last Receivable held by the Trust and the distribution of all Trust Property in accordance with the terms of the Indenture and this Agreement;
(b) the termination of the Trust in accordance with Article IX hereof; or
(c) the Final Scheduled Termination Date (i.e., February 14, 2045, being the date that is 21 years after the date hereof).
ARTICLE III — THE DEPOSITOR
Section 3.01 — Initial Contribution; Transfer of Trust Property
(a) The Depositor has made, concurrently with the execution and delivery of this Agreement, an initial contribution to the Trust of Ten Dollars ($10.00) in consideration for the Residual Interest, and the Owner Trustee hereby acknowledges receipt of such contribution.
(b) On the Closing Date, the Depositor shall transfer or cause to be transferred to the Trust the Receivables, together with all related rights, interests, collections, and proceeds thereof, pursuant to and in accordance with the Sale and Servicing Agreement. Such transfer is intended to constitute and shall be treated as a true sale and absolute assignment of the Receivables from the Depositor to the Trust for all purposes, including bankruptcy, insolvency, and receivership purposes. In consideration for the transfer of the Receivables, the Depositor shall receive the Residual Interest and the net proceeds of the Notes after payment of all transaction expenses.
(c) The Depositor shall not contribute, transfer, sell, or otherwise convey to the Trust any assets other than the Receivables and the related rights and proceeds as contemplated by the Transaction Documents, without the prior written consent of the Owner Trustee and the Indenture Trustee and, if any Notes remain outstanding, satisfaction of the Rating Agency Condition.
Section 3.02 — Retention of Residual Interest
(a) The Depositor shall be the initial holder of the Residual Interest, which shall have an initial principal amount of Eight Million Dollars ($8,000,000), representing approximately 4% of the aggregate $200,000,000 deal value (including the Notes and the Residual Interest).
(b) The Residual Interest shall not be rated by any Rating Agency.
(c) The Residual Interest shall represent the right of the holder thereof to receive all distributions on and from the Trust Property remaining after payment of all amounts due on the Notes, the Owner Trustee Fee, the Indenture Trustee fees, the Servicing Fee, the Sub-Servicing Fee, and all other Trust expenses, in each case in accordance with the priority of payments set forth in the Indenture.
(d) The Residual Interest may not be transferred, pledged, assigned, or otherwise disposed of except in compliance with all applicable federal and state securities laws and subject to the transfer restrictions set forth in the Residual Interest Certificate. Any purported transfer of the Residual Interest in violation of this Section 3.02(d) shall be null and void and of no force or effect. The Depositor shall provide written notice to the Owner Trustee, the Indenture Trustee, and each Rating Agency of any proposed transfer of the Residual Interest at least thirty (30) days prior to the effective date of such proposed transfer.
Section 3.03 — Depositor Representations and Warranties
The Depositor hereby represents and warrants to the Owner Trustee as of the date hereof and as of the Closing Date as follows:
(a) Organization and Good Standing. The Depositor is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has all necessary power and authority to own its properties and to conduct its business as presently conducted.
(b) Power and Authority. The Depositor has full limited liability company power and authority to execute, deliver, and perform its obligations under this Agreement and each of the other Transaction Documents to which it is or will be a party and to consummate the transactions contemplated hereby and thereby.
(c) Due Authorization, Execution, and Delivery. This Agreement has been duly authorized, executed, and delivered by the Depositor and constitutes the legal, valid, and binding obligation of the Depositor, enforceable against the Depositor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights generally and to general principles of equity (whether considered in a proceeding at law or in equity).
(d) No Conflicts. The execution, delivery, and performance of this Agreement and the other Transaction Documents by the Depositor, and the consummation of the transactions contemplated hereby and thereby, will not (i) violate, conflict with, or result in any breach of any provision of the LLC Agreement of the Depositor, (ii) violate, conflict with, or result in a breach of or constitute a default (or an event that, with notice or lapse of time, or both, would constitute a default) under any indenture, mortgage, deed of trust, loan agreement, or other agreement or instrument to which the Depositor is a party or by which it or any of its properties or assets may be bound, (iii) violate any law, regulation, order, writ, judgment, injunction, decree, determination, or award applicable to the Depositor, or (iv) result in the creation or imposition of any lien, charge, or encumbrance upon any property or asset of the Depositor (other than liens created pursuant to the Transaction Documents).
(e) Governmental Approvals. No consent, approval, authorization, order, registration, qualification, or filing with, or notice to, any federal, state, local, or foreign governmental authority or regulatory body is required for the execution, delivery, and performance by the Depositor of this Agreement or the other Transaction Documents, or for the consummation of the transactions contemplated hereby or thereby, except for such consents, approvals, authorizations, orders, registrations, qualifications, filings, and notices as have already been obtained or made prior to the date hereof and are in full force and effect.
(f) Single-Purpose Entity. The Depositor is a single-purpose entity formed solely for the purpose of acquiring, holding, and transferring the Receivables and related assets, and has complied in all material respects with all separateness covenants set forth in its LLC Agreement since its date of formation. The Depositor has not engaged in any business or activity other than the foregoing since the date of its formation.
Section 3.04 — Authority of Depositor
(a) Subject to the terms and provisions of this Agreement and the Indenture, the Depositor shall have the right and power to direct the Owner Trustee in writing to take such administrative actions on behalf of the Trust as the Depositor may reasonably determine to be necessary or advisable, including, without limitation:
(i) engaging and terminating service providers, agents, custodians, accountants, auditors, and legal counsel on behalf of the Trust;
(ii) executing supplements, amendments, waivers, or consents with respect to any of the Transaction Documents on behalf of the Trust;
(iii) making filings, registrations, and reports with governmental authorities on behalf of the Trust;
(iv) opening and closing bank accounts and investment accounts on behalf of the Trust; and
(v) taking such other actions as the Depositor determines to be necessary or advisable in connection with the administration of the Trust, its assets, or its obligations.
(b) The Depositor shall not direct the Owner Trustee to take any action that would be inconsistent with the terms and provisions of this Agreement or the Indenture, that would violate applicable law, or that would cause the Trust to lose its status as a grantor trust for federal income tax purposes.
(c) To the extent that the Administrator has assumed administrative responsibilities on behalf of the Depositor under the Administration Agreement, the Administrator shall have the authority to direct the Owner Trustee on behalf of the Depositor with respect to the matters described in Section 3.04(a), and the Owner Trustee shall be entitled to rely upon any such direction from the Administrator as though it were a direction from the Depositor.
ARTICLE IV — THE OWNER TRUSTEE
Section 4.01 — Appointment and Acceptance
(a) SkyLend Funding LLC hereby appoints Keymark Trust Company, National Association as Owner Trustee of the Trust, to have all the rights, powers, and duties set forth herein and in the DST Act.
(b) Keymark Trust Company, National Association hereby accepts such appointment and agrees to act as Owner Trustee of the Trust in accordance with and subject to the terms and conditions of this Agreement. The Owner Trustee shall hold legal title to the Trust Property for the benefit of the Noteholders and the holder of the Residual Interest, subject to the Indenture.
(c) The trust officer of the Owner Trustee with responsibility for the administration of this Agreement shall initially be Elaine Marchetti, or such other person as the Owner Trustee may designate from time to time by written notice to the Depositor and the Indenture Trustee.
Section 4.02 — Duties of the Owner Trustee
(a) The Owner Trustee shall hold legal title to all Trust Property for the benefit of the Noteholders and the holder of the Residual Interest and shall protect and conserve such Trust Property in accordance with the terms and provisions of this Agreement and the Indenture.
(b) The Owner Trustee shall execute and deliver, on behalf of the Trust, the Transaction Documents and such other agreements, certificates, instruments, and documents as may be directed by the Depositor (or the Administrator on behalf of the Depositor) in connection with the transactions contemplated by this Agreement and the other Transaction Documents, subject to the terms and conditions hereof.
(c) The Owner Trustee shall perform only the ministerial duties and obligations expressly set forth in this Agreement and in the other Transaction Documents to which it is a party. Without limiting the foregoing, the Owner Trustee shall have no obligation to manage, service, collect, or administer the Receivables or any other Trust Property (such duties being delegated to the Servicer and the Sub-Servicer under the Sale and Servicing Agreement), and the Owner Trustee shall have no duty to monitor or oversee the performance by the Servicer, the Sub-Servicer, the Administrator, or any other party of their respective obligations under the Transaction Documents.
(d) The Owner Trustee shall have no duty to independently verify any data, reports, certificates, calculations, determinations, or information provided to it by the Servicer, the Sub-Servicer, the Administrator, the Depositor, the Indenture Trustee, or any other party, and the Owner Trustee shall be entitled to conclusively rely upon the accuracy, completeness, and correctness of any such data, reports, certificates, calculations, determinations, or information without independent investigation.
(e) Except as expressly provided herein, the Owner Trustee shall have no duty or obligation to take any action under this Agreement unless directed to do so in writing by the Depositor, the Administrator (on behalf of the Depositor), or, following the occurrence and during the continuance of an Event of Default under the Indenture, the Indenture Trustee.
Section 4.03 — Standard of Care; No Personal Liability
(a) The Owner Trustee shall not be personally liable for any act or omission taken or omitted to be taken in good faith and in accordance with the terms of this Agreement, and the Owner Trustee shall not be liable for any error of judgment made in good faith unless such error constitutes willful misconduct, bad faith, or gross negligence on the part of the Owner Trustee.
(b) The Owner Trustee shall not be personally liable for any action taken or omitted at the direction of the Depositor, the Administrator, or the Indenture Trustee, provided that the Owner Trustee has acted in good faith and without willful misconduct, bad faith, or gross negligence. The Owner Trustee shall be fully protected in acting upon any certificate, opinion, notice, request, consent, direction, instruction, or other document or communication furnished to it and reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties.
(c) The Owner Trustee shall not be required to expend or risk its own funds or otherwise incur any personal financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights and powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.
(d) The Owner Trustee may consult with legal counsel (who may be counsel to the Depositor, the Sponsor, or the Owner Trustee), accountants, and other professionals selected by it, and any action taken or omitted to be taken in good faith in accordance with the advice of such counsel, accountants, or professionals shall be full and complete authorization and protection in respect of any action taken, omitted, or suffered by it hereunder. The fees and expenses of such counsel, accountants, and professionals shall be paid from Trust Property or by the Depositor as provided in Section 4.04.
(e) No provision of this Agreement shall require the Owner Trustee to take any action that, in its judgment, would be contrary to applicable law or regulation or would subject the Owner Trustee to personal liability, and the Owner Trustee shall not be deemed to have any knowledge of the occurrence of any event unless a trust officer of the Owner Trustee assigned to and responsible for the administration of this Agreement shall have received written notice thereof from the Depositor, the Administrator, the Servicer, the Indenture Trustee, or any Noteholder.
Section 4.04 — Compensation of the Owner Trustee
(a) As compensation for its services hereunder, the Owner Trustee shall be entitled to receive the Owner Trustee Fee, which shall be Seven Thousand Five Hundred Dollars ($7,500) per annum, payable in equal quarterly installments of One Thousand Eight Hundred Seventy-Five Dollars ($1,875) each, in arrears on each Payment Date (or, if quarterly payment dates differ from the Payment Dates under the Indenture, on such other dates as may be mutually agreed by the Owner Trustee and the Depositor). Payment of the Owner Trustee Fee shall be made from Trust Property in accordance with the priority of payments set forth in the Indenture.
(b) In addition to the Owner Trustee Fee, the Owner Trustee shall be entitled to reimbursement from Trust Property for all reasonable and documented out-of-pocket expenses incurred by the Owner Trustee in connection with the performance of its duties hereunder, including, without limitation, fees and expenses of legal counsel, accountants, and other professionals retained by the Owner Trustee in accordance with Section 4.03(d). Such reimbursement shall be made from Trust Property in accordance with the priority of payments set forth in the Indenture. To the extent that Trust Property is insufficient to pay such expenses, the Depositor shall promptly reimburse the Owner Trustee for any unreimbursed expenses.
(c) The Owner Trustee Fee and expenses payable hereunder shall not be modified or increased without the prior written consent of the Depositor, except in connection with the appointment of a successor Owner Trustee or as otherwise agreed in writing by the Depositor and the Owner Trustee.
Section 4.05 — Indemnification of the Owner Trustee
(a) The Depositor and the Sponsor shall, jointly and severally, indemnify, defend, and hold harmless the Owner Trustee and its officers, directors, employees, agents, and successors (each, an "Owner Trustee Indemnified Party") from and against any and all losses, claims, damages, liabilities, penalties, judgments, settlements, costs, and expenses (including, without limitation, reasonable attorneys' fees and expenses) ("Losses") arising out of or in connection with:
(i) the acceptance or performance of the trusts and duties set forth in this Agreement, the Certificate of Trust, the Indenture, or any other Transaction Document to which the Owner Trustee is a party;
(ii) the Trust's activities, obligations, or liabilities;
(iii) any untrue statement or alleged untrue statement of a material fact contained in any offering document, information memorandum, or other disclosure document relating to the Notes, or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading;
(iv) any breach by the Depositor of any of its representations, warranties, covenants, or obligations under this Agreement; or
(v) any tax liability or filing obligation of the Trust;
provided, however, that neither the Depositor nor the Sponsor shall be required to indemnify any Owner Trustee Indemnified Party for any Losses to the extent that such Losses are determined by a court of competent jurisdiction (in a final, non-appealable judgment) to have resulted from the willful misconduct, bad faith, or gross negligence of such Owner Trustee Indemnified Party.
(b) The indemnification obligations of the Depositor and the Sponsor under this Section 4.05 shall survive the termination of this Agreement and the resignation or removal of the Owner Trustee, and shall be in addition to any other indemnification rights of the Owner Trustee under any other Transaction Document or at law or in equity.
(c) In no event shall the Owner Trustee be required to advance or expend its own funds in connection with any indemnification claim or proceeding.
Section 4.06 — Eligibility Requirements
The Owner Trustee shall at all times satisfy each of the following eligibility requirements:
(a) it shall be a banking corporation, national banking association, or trust company organized and validly existing under the laws of the United States of America or any state thereof;
(b) it shall be authorized under such laws to exercise corporate trust powers;
(c) it shall have a combined capital and surplus of at least Fifty Million Dollars ($50,000,000), as set forth in its most recent published annual report of condition; and
(d) it shall be subject to supervision or examination by a federal or state authority.
If at any time the Owner Trustee ceases to meet any of the foregoing eligibility requirements, it shall promptly notify the Depositor and the Indenture Trustee in writing and shall resign in accordance with Section 4.07.
Section 4.07 — Resignation and Removal
(a) Resignation. The Owner Trustee may resign at any time by giving not less than sixty (60) days' prior written notice to the Depositor, the Indenture Trustee, and each Rating Agency. Such resignation shall not become effective until a successor Owner Trustee has been appointed and has accepted such appointment in accordance with Section 4.08.
(b) Removal. The Depositor may remove the Owner Trustee at any time, with or without cause, by giving not less than thirty (30) days' prior written notice to the Owner Trustee, the Indenture Trustee, and each Rating Agency; provided, however, that no removal shall become effective until a successor Owner Trustee has been appointed and has accepted such appointment in accordance with Section 4.08.
(c) Transition of Records. Upon the effectiveness of any resignation or removal, the outgoing Owner Trustee shall promptly deliver and transfer to the successor Owner Trustee all Trust Property, books, records, files, and documents in its possession relating to the Trust and the Trust Property, and shall execute and deliver such instruments and documents as may reasonably be requested by the successor Owner Trustee or the Depositor to effectuate the transition.
(d) Petition for Appointment. If no successor Owner Trustee has been appointed and has accepted such appointment within ninety (90) days after the Owner Trustee has given notice of its resignation or the Depositor has given notice of the Owner Trustee's removal, the outgoing Owner Trustee may petition the Court of Chancery of the State of Delaware for the appointment of a successor Owner Trustee. The costs and expenses of such proceeding (including, without limitation, reasonable attorneys' fees and expenses) shall be paid from Trust Property or by the Depositor.
Section 4.08 — Successor Owner Trustee
(a) Any successor Owner Trustee shall meet all of the eligibility requirements set forth in Section 4.06 at the time of its appointment and at all times thereafter during the term of its service.
(b) Upon the appointment of a successor Owner Trustee and such successor's acceptance of the appointment, the successor Owner Trustee shall execute and deliver a supplement or amendment to this Agreement, in form and substance reasonably satisfactory to the Depositor and the successor Owner Trustee, pursuant to which the successor Owner Trustee shall become fully vested with all rights, powers, duties, and obligations of the predecessor Owner Trustee under this Agreement as if originally named as Owner Trustee herein.
(c) The Depositor shall provide written notice of any change in the identity of the Owner Trustee to each Rating Agency (currently, Meridian Credit Ratings, Inc. and Carrollton Ratings Group LLC), the Indenture Trustee, and, to the extent required by the Transaction Documents, the Servicer, the Sub-Servicer, and the Administrator, within five (5) Business Days of the effective date of such change.
Section 4.09 — Merger or Consolidation of Owner Trustee
Any entity into which the Owner Trustee may be merged or converted, or any entity resulting from a merger, consolidation, or conversion to which the Owner Trustee is a party, shall be the successor Owner Trustee under this Agreement without the execution or filing of any document or any further act on the part of any of the parties hereto; provided, however, that any such successor entity shall meet the eligibility requirements of Section 4.06. In the event that the Owner Trustee merges, consolidates, or converts into another entity, the Owner Trustee shall promptly provide written notice thereof to the Depositor, the Indenture Trustee, and each Rating Agency.
Section 4.10 — Representations of the Owner Trustee
Keymark Trust Company, National Association, in its capacity as Owner Trustee, hereby represents and warrants to the Depositor as of the date hereof as follows:
(a) Organization and Good Standing. The Owner Trustee is a national banking association duly organized, validly existing, and in good standing under the laws of the United States of America, and has full corporate trust powers to execute and deliver this Agreement and to perform its obligations hereunder.
(b) Power and Authority. The Owner Trustee has full power and authority to execute and deliver this Agreement and each of the other Transaction Documents to which it is a party and to carry out the terms hereof and thereof.
(c) Due Authorization, Execution, and Delivery. This Agreement has been duly authorized by all necessary corporate action on the part of the Owner Trustee and has been duly executed and delivered by the Owner Trustee.
(d) Eligibility. The Owner Trustee meets each of the eligibility requirements set forth in Section 4.06 as of the date hereof.
ARTICLE V — SEPARATENESS COVENANTS
Section 5.01 — Covenants of the Trust
The Trust covenants and agrees that, so long as any Notes remain outstanding, it shall observe and comply with each of the following separateness covenants:
(a) Separate Existence. The Trust shall maintain its existence as a Delaware statutory trust separate and apart from the Depositor, the Sponsor, and their respective affiliates, and shall not merge, consolidate, or amalgamate with any other Person.
(b) Separate Books and Records. The Trust shall maintain its own books and records separate from those of any other Person, including the Depositor, the Sponsor, and their respective affiliates.
(c) No Commingling. The Trust shall not commingle its funds, assets, or property with the funds, assets, or property of any other Person. All collections, deposits, and other Trust Property shall be held in segregated accounts in the name of the Trust or the Indenture Trustee on behalf of the Trust.