ACCOUNT CONTROL AGREEMENT
among
SKYLEND RECEIVABLES TRUST 2024-1, a Delaware statutory trust, as Issuer
and
ATLANTIC FIDUCIARY SERVICES, INC., a Delaware banking corporation, as Indenture Trustee
and
KEYMARK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association, as Collection Account Bank and Securities Intermediary
Dated as of [●], 2024
DRAFT — EXECUTION VERSION NEVER FINALIZED. This document was circulated in draft form in connection with the proposed issuance of $170,000,000 Class A Asset-Backed Notes and $22,000,000 Class B Asset-Backed Notes by SkyLend Receivables Trust 2024-1. The transaction was formally terminated on May 8, 2024, prior to closing. This Agreement was never executed and never became effective.
TABLE OF CONTENTS
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ACCOUNT CONTROL AGREEMENT
This ACCOUNT CONTROL AGREEMENT (this "Agreement") is entered into as of [●], 2024, by and among:
(1) SKYLEND RECEIVABLES TRUST 2024-1, a Delaware statutory trust (EIN: 93-4201855) (the "Issuer" or the "Trust");
(2) ATLANTIC FIDUCIARY SERVICES, INC., a Delaware banking corporation, having its principal office at 2 Christiana Centre, Suite 1400, Wilmington, Delaware 19801 (the "Secured Party" or the "Indenture Trustee" or "AFS"); and
(3) KEYMARK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association, having its principal office at 600 North King Street, Wilmington, Delaware 19801 (the "Bank" or the "Securities Intermediary" or the "Collection Account Bank").
Each of the Issuer, the Indenture Trustee, and the Bank is sometimes referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, the Issuer, SkyLend Receivables Trust 2024-1, is a Delaware statutory trust formed on February 14, 2024, pursuant to the Trust Agreement dated February 14, 2024 (the "Trust Agreement"), between SkyLend Funding LLC, a Delaware limited liability company (the "Depositor"), and Keymark Trust Company, National Association, as owner trustee (in such capacity, the "Owner Trustee");
WHEREAS, the Issuer proposes to issue $170,000,000 aggregate principal amount of Class A Asset-Backed Notes (the "Class A Notes") and $22,000,000 aggregate principal amount of Class B Asset-Backed Notes (the "Class B Notes" and, together with the Class A Notes, the "Notes") pursuant to an Indenture dated as of [●], 2024 (as the same may be amended, supplemented, or otherwise modified from time to time, the "Indenture"), between the Issuer and Atlantic Fiduciary Services, Inc., as indenture trustee, paying agent, note registrar, and custodian (the "Indenture Trustee");
WHEREAS, the Notes are secured by, among other things, a pool of unsecured consumer installment-loan receivables originated by Skybridge Fintech Ltd., a Delaware corporation ("SBF" or the "Originator"), through its proprietary SkyLend digital lending platform, which receivables were purchased by the Depositor from SBF pursuant to the Receivables Purchase Agreement dated as of [●], 2024 (the "Receivables Purchase Agreement"), between SBF and the Depositor, and subsequently transferred to the Trust by the Depositor pursuant to the Sale and Servicing Agreement dated as of [●], 2024 (the "Sale and Servicing Agreement"), among the Depositor, the Issuer, SBF (as servicer), and Clearview Loan Servicing, Inc., an Ohio corporation (as sub-servicer) (in such capacity, the "Sub-Servicer");
WHEREAS, pursuant to the Indenture, the Issuer is required to establish and maintain (i) a collection account (the "Collection Account") and (ii) a reserve account (the "Reserve Account," and together with the Collection Account, the "Accounts") at the Bank for the benefit of the Indenture Trustee and the holders of the Notes (the "Noteholders");
WHEREAS, the Reserve Account is required to be funded on the Closing Date (as defined in the Indenture) in the amount of $2,000,000, representing 1.00% of the initial aggregate pool balance of the receivables of $200,000,000 (the "Required Reserve Account Balance");
WHEREAS, the Parties desire to enter into this Agreement to establish the Indenture Trustee's "control" (as defined in Articles 8 and 9 of the Uniform Commercial Code as in effect in the State of New York (the "UCC")) over the Accounts and all financial assets, funds, investment property, and security entitlements credited thereto, as required by Section [●] of the Indenture; and
WHEREAS, this Agreement constitutes a "Transaction Document" as defined in the Indenture.
NOW, THEREFORE, in consideration of the mutual agreements, provisions, and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS AND INTERPRETATION
Section 1.01. Definitions.
As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings assigned to such terms in the Indenture.
"Account Collateral" means, collectively, (a) the Accounts, (b) all Cash, Financial Assets, Investment Property, security entitlements, and other funds and property at any time credited to, held in, or otherwise carried in the Accounts, and (c) all proceeds of the foregoing.
"Accounts" means the Collection Account and the Reserve Account, each as established and maintained at the Bank pursuant to Section 2.01 of this Agreement.
"Agreement" means this Account Control Agreement, as the same may be amended, supplemented, or otherwise modified from time to time in accordance with Section 12.04.
"Business Day" means any day other than a Saturday, Sunday, or a day on which banking institutions in the State of New York or the State of Delaware are authorized or obligated by law, regulation, or executive order to remain closed.
"Cash" means United States dollars held in immediately available funds.
"Clearview Servicing Account" means that certain account maintained by Clearview Loan Servicing, Inc. identified as Account No. CLS-SBF-2022-0041, being the upstream servicing account from which collections on the receivables are swept into the Collection Account in accordance with the Sale and Servicing Agreement.
"Closing Date" has the meaning assigned to such term in the Indenture.
"Collection Account" means the segregated deposit account established and maintained at the Bank pursuant to Section 2.01(a), bearing Account No. [●] (to be assigned by the Bank upon opening), in the name of "SkyLend Receivables Trust 2024-1, Collection Account, Atlantic Fiduciary Services, Inc., as Indenture Trustee."
"Depositor" means SkyLend Funding LLC, a Delaware limited liability company.
"Early Amortization Event" has the meaning assigned to such term in the Indenture.
"Entitlement Holder" has the meaning assigned to such term in Section 8-102(a)(7) of the UCC.
"Entitlement Order" has the meaning assigned to such term in Section 8-102(a)(8) of the UCC.
"Event of Default" has the meaning assigned to such term in the Indenture.
"Exclusive Control Notice" has the meaning assigned to such term in Section 3.02(a) of this Agreement.
"Financial Asset" has the meaning assigned to such term in Section 8-102(a)(9) of the UCC.
"Indenture" means the Indenture dated as of [●], 2024, between the Issuer and the 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, in its capacity as indenture trustee, paying agent, note registrar, and custodian under the Indenture, or any successor indenture trustee appointed in accordance with the Indenture.
"Investment Property" has the meaning assigned to such term in Section 9-102(a)(49) of the UCC.
"Issuer" means SkyLend Receivables Trust 2024-1, a Delaware statutory trust.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge, preference, priority, or other security interest or preferential arrangement of any kind or nature whatsoever, including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the UCC or comparable law of any jurisdiction.
"Notes" means the Class A Notes and the Class B Notes, collectively.
"Noteholders" means the registered holders from time to time of the Notes.
"Originator" means Skybridge Fintech Ltd., a Delaware corporation, doing business through its SkyLend digital lending platform.
"Payment Date" has the meaning assigned to such term in the Indenture.
"Permitted Investments" means those investments described in Schedule B hereto and as defined in the Indenture.
"Receivables Purchase Agreement" means the Receivables Purchase Agreement dated as of [●], 2024, between SBF and the Depositor, as the same may be amended, supplemented, or otherwise modified from time to time.
"Required Reserve Account Balance" means $2,000,000, representing 1.00% of the initial aggregate pool balance of the receivables ($200,000,000), or such other amount as may be specified in the Indenture from time to time.
"Reserve Account" means the segregated deposit account established and maintained at the Bank pursuant to Section 2.01(b), bearing Account No. [●] (to be assigned by the Bank upon opening), in the name of "SkyLend Receivables Trust 2024-1, Reserve Account, Atlantic Fiduciary Services, Inc., as Indenture Trustee."
"Sale and Servicing Agreement" means the Sale and Servicing Agreement dated as of [●], 2024, among the Depositor, the Issuer, SBF (as servicer), and Clearview Loan Servicing, Inc. (as sub-servicer), as the same may be amended, supplemented, or otherwise modified from time to time.
"Secured Party" means Atlantic Fiduciary Services, Inc., in its capacity as Indenture Trustee.
"Securities Account" has the meaning assigned to such term in Section 8-501 of the UCC.
"Securities Intermediary" has the meaning assigned to such term in Section 8-102(a)(14) of the UCC.
"Security Entitlement" has the meaning assigned to such term in Section 8-102(a)(17) of the UCC.
"Servicer" means Skybridge Fintech Ltd., a Delaware corporation, in its capacity as servicer under the Sale and Servicing Agreement, or any successor servicer appointed in accordance with the Sale and Servicing Agreement.
"Sub-Servicer" means Clearview Loan Servicing, Inc., an Ohio corporation, in its capacity as sub-servicer under the Sale and Servicing Agreement, or any successor sub-servicer appointed in accordance with the Sale and Servicing Agreement.
"Transaction Documents" has the meaning assigned to such term in the Indenture and includes this Agreement.
"Trust Agreement" means the Trust Agreement dated as of February 14, 2024, between the Depositor and the Owner Trustee, as the same may be amended, supplemented, or otherwise modified from time to time.
"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, that if, by reason of mandatory provisions of law, the perfection, the effect of perfection or non-perfection, or the priority of a security interest in any Account Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, "UCC" shall mean the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection, or priority.
"Waterfall" has the meaning assigned to such term in the Indenture and refers to the priority of payments waterfall applicable to distributions from the Collection Account on each Payment Date.
Section 1.02. UCC Definitions.
The terms "control," "entitlement holder," "entitlement order," "financial asset," "securities account," "securities intermediary," and "security entitlement" shall have the respective meanings ascribed to such terms in Articles 8 and 9 of the UCC as in effect in the State of New York. To the extent that any defined term used herein is defined both in the body of this Agreement and in the UCC, the definition set forth in this Agreement shall control for purposes of this Agreement, except with respect to the terms identified in the immediately preceding sentence, for which the UCC definitions shall apply.
Section 1.03. Rules of Construction.
(a) The headings and captions in this Agreement are inserted for convenience of reference only and shall not define, limit, or otherwise affect the construction or interpretation of any provision hereof.
(b) Unless the context otherwise requires, words importing the singular include the plural and vice versa, words importing any gender include every gender, and references to "persons" include individuals, corporations, limited liability companies, partnerships, trusts, joint ventures, associations, organizations, governmental authorities, and other entities.
(c) References herein to any statute, rule, regulation, or law shall be deemed to include all amendments, supplements, restatements, and replacements thereof, and all rules and regulations promulgated thereunder, unless the context otherwise requires.
(d) The word "including" (and with correlative meaning, "include" and "includes") means "including, without limitation."
(e) References to Articles, Sections, Schedules, and Exhibits are references to the Articles and Sections of, and Schedules and Exhibits to, this Agreement, unless otherwise specified.
(f) References to "herein," "hereof," "hereby," "hereunder," and similar terms refer to this Agreement as a whole and not to any particular provision hereof.
(g) References to any agreement or document shall be deemed to include references to such agreement or document as amended, supplemented, restated, or otherwise modified from time to time in accordance with the terms thereof.
(h) All references to times of day are references to New York City time, unless otherwise specified.
ARTICLE II — THE ACCOUNTS
Section 2.01. Establishment of Accounts.
(a) Collection Account. The Bank shall establish and maintain on its books and records a segregated deposit account in the name of "SkyLend Receivables Trust 2024-1, Collection Account, Atlantic Fiduciary Services, Inc., as Indenture Trustee" (the "Collection Account"). The Collection Account shall be identified by an account number to be assigned by the Bank upon the opening of such account, which account number shall be set forth on Schedule A hereto (as updated upon assignment). The Bank shall maintain the Collection Account separate and apart from all other accounts maintained by the Bank, and the funds and property credited to the Collection Account shall not be commingled with any other funds or property of the Bank, the Issuer, the Servicer, or any other person.
(b) Reserve Account. The Bank shall establish and maintain on its books and records a segregated deposit account in the name of "SkyLend Receivables Trust 2024-1, Reserve Account, Atlantic Fiduciary Services, Inc., as Indenture Trustee" (the "Reserve Account"). The Reserve Account shall be identified by an account number to be assigned by the Bank upon the opening of such account, which account number shall be set forth on Schedule A hereto (as updated upon assignment). The Bank shall maintain the Reserve Account separate and apart from all other accounts maintained by the Bank, including the Collection Account, and the funds and property credited to the Reserve Account shall not be commingled with any other funds or property of the Bank, the Issuer, the Servicer, or any other person.
(c) Securities Account Status. Each Account is, and shall be maintained as, a "securities account" within the meaning of Section 8-501 of the UCC. The Bank hereby confirms that it is acting as a "securities intermediary" (within the meaning of Section 8-102(a)(14) of the UCC) with respect to each Account and all financial assets, security entitlements, and investment property credited thereto.
(d) Entitlement Holder. The Issuer is the "entitlement holder" (within the meaning of Section 8-102(a)(7) of the UCC) with respect to each Account, subject to the control of the Indenture Trustee as provided in Article III of this Agreement.
Section 2.02. Initial Funding.
(a) Reserve Account. The Reserve Account shall be funded on the Closing Date in the amount of $2,000,000 (representing 1.00% of the initial aggregate pool balance of the receivables of $200,000,000), which amount shall be deposited in immediately available funds by wire transfer. Such initial deposit shall constitute the Required Reserve Account Balance.
(b) Collection Account. The Collection Account shall have a zero balance as of the Closing Date. Following the Closing Date, all collections on the receivables shall be swept into the Collection Account from the Clearview Servicing Account (Account No. CLS-SBF-2022-0041) on each Business Day in accordance with the terms and conditions of the Sale and Servicing Agreement.
Section 2.03. Nature of Accounts; Treatment of Items as Financial Assets.
(a) All Cash, securities, instruments, and other property credited to or held in the Accounts, whether now existing or hereafter acquired, shall be treated as "financial assets" within the meaning of Section 8-102(a)(9) of the UCC.
(b) The Bank hereby agrees that it will treat all items credited to the Accounts as financial assets, regardless of whether such items would otherwise be treated as financial assets under Article 8 of the UCC. Without limiting the generality of the foregoing, the Bank agrees that any and all Cash, deposit balances, certificates of deposit, repurchase agreements, investment property, and other property of any kind that is at any time credited to any Account shall be treated as a financial asset for all purposes of Articles 8 and 9 of the UCC.
(c) The Bank will not change the name or account number of any Account without the prior written consent of the Indenture Trustee. The Bank will promptly notify the Indenture Trustee and the Issuer of any change in the Bank's name, location, or organizational identification number.
Section 2.04. Account Statements.
The Bank shall provide monthly account statements with respect to each Account to the following persons within five (5) Business Days after the end of each calendar month:
(a) Issuer: SkyLend Receivables Trust 2024-1, c/o Skybridge Fintech Ltd., 1400 Market Street, Suite 1210, Wilmington, Delaware 19801, Attention: Tomás Reyes, General Counsel;
(b) Servicer: Skybridge Fintech Ltd., 1400 Market Street, Suite 1210, Wilmington, Delaware 19801, Attention: Danielle Prescott, Chief Financial Officer;
(c) Sub-Servicer: Clearview Loan Servicing, Inc., Attention: Meredith Sloane, at such address as may be specified from time to time by the Sub-Servicer; and
(d) Indenture Trustee: Atlantic Fiduciary Services, Inc., 2 Christiana Centre, Suite 1400, Wilmington, Delaware 19801, Attention: David Moynihan, Corporate Trust Officer.
Each such account statement shall set forth in reasonable detail the opening balance, all deposits, withdrawals, transfers, investment earnings, investment losses, and closing balance for each Account during the applicable calendar month. The Bank shall also provide such additional reports and information concerning the Accounts as the Indenture Trustee may reasonably request from time to time.
ARTICLE III — CONTROL
Section 3.01. Entitlement Orders.
(a) Indenture Trustee Entitlement Orders. The Bank shall comply with all entitlement orders originated by the Indenture Trustee with respect to the Accounts without further consent of the Issuer, the Servicer, the Sub-Servicer, the Originator, the Depositor, or any other person. The Bank shall act upon any such entitlement order promptly and in accordance with its terms.
(b) Servicer Entitlement Orders Prior to Exclusive Control Notice. Prior to the delivery by the Indenture Trustee of an Exclusive Control Notice pursuant to Section 3.02, the Bank shall also comply with entitlement orders originated by the Servicer (Skybridge Fintech Ltd.) or its authorized designee (including the Sub-Servicer, Clearview Loan Servicing, Inc.) with respect to the Collection Account, solely to the extent that such entitlement orders are consistent with the payment waterfall set forth in the Indenture (the "Waterfall"). With respect to the Reserve Account, the Servicer's entitlement orders shall be limited to investment directions directing the investment or reinvestment of funds in the Reserve Account in Permitted Investments in accordance with Article IV of this Agreement; the Servicer shall not have authority to direct withdrawals or transfers from the Reserve Account except as expressly authorized by the Indenture. The Bank shall have no duty to verify that any entitlement order originated by the Servicer or the Sub-Servicer is consistent with the Waterfall.
(c) Issuer Consent. The Issuer hereby irrevocably consents to the Bank's compliance with entitlement orders from the Indenture Trustee as set forth in this Section 3.01, without any further consent, direction, or authorization from the Issuer. This consent shall remain effective until the termination of this Agreement in accordance with Article X.
Section 3.02. Exclusive Control Notice.
(a) Delivery of Exclusive Control Notice. Upon the occurrence and during the continuance of an Event of Default under the Indenture, or upon the occurrence of an Early Amortization Event under the Indenture, the Indenture Trustee may deliver to the Bank a written notice substantially in the form of Schedule C hereto (an "Exclusive Control Notice") directing the Bank to cease complying with entitlement orders, instructions, or directions from the Servicer, the Sub-Servicer, and the Issuer with respect to the Accounts.
(b) Effect of Exclusive Control Notice. From and after the Bank's receipt of an Exclusive Control Notice, the Bank shall comply solely with entitlement orders originated by the Indenture Trustee with respect to the Accounts. No further consent, direction, authorization, or instruction of the Issuer, the Servicer, the Sub-Servicer, the Originator, the Depositor, or any other person shall be required for, or shall be a condition to, the Bank's obligation to comply with entitlement orders from the Indenture Trustee, and the Bank shall disregard any entitlement order or instruction received from any person other than the Indenture Trustee following receipt of an Exclusive Control Notice.
(c) Rescission of Exclusive Control Notice. The Indenture Trustee may rescind a previously delivered Exclusive Control Notice by delivering written notice of such rescission to the Bank (with a copy to the Issuer and the Servicer). Upon the Bank's receipt of such rescission notice, the arrangements set forth in Section 3.01(b) shall be reinstated, and the Servicer (and its designee) shall again be authorized to originate entitlement orders with respect to the Collection Account as described therein.
Section 3.03. Acknowledgment of Control.
The Bank hereby acknowledges and agrees that, by virtue of the Bank's agreement to comply with entitlement orders originated by the Indenture Trustee without the further consent of the Issuer or any other person, the Indenture Trustee has "control" (within the meaning of Section 8-106 of the UCC) over each Account and all financial assets, security entitlements, and investment property credited thereto. The Bank confirms that it has not entered into, and will not enter into, any agreement with any other person pursuant to which such other person would have "control" (within the meaning of Section 8-106 of the UCC) over any Account or any financial assets or security entitlements credited thereto, without the prior written consent of the Indenture Trustee.
Section 3.04. Priority.
The Bank's obligation to comply with entitlement orders originated by the Indenture Trustee as provided in this Article III is unconditional and absolute and shall not be affected, impaired, or delayed by:
(a) any conflicting instruction, entitlement order, or direction from the Issuer, the Servicer, the Sub-Servicer, the Originator, the Depositor, or any other person;
(b) any dispute between or among the Issuer, the Servicer, the Sub-Servicer, the Originator, the Depositor, the Indenture Trustee, or any other person;
(c) any claim of the Bank (whether for fees, expenses, indemnification, or otherwise) against the Issuer, the Servicer, or any other person;
(d) any bankruptcy, insolvency, receivership, conservatorship, or similar proceeding involving the Issuer, the Servicer, the Sub-Servicer, the Originator, or the Depositor; or
(e) any other circumstance whatsoever, whether similar or dissimilar to the foregoing.
ARTICLE IV — PERMITTED INVESTMENTS
Section 4.01. Investment of Funds.
Funds on deposit in the Accounts may be invested and reinvested by the Servicer (or by the Sub-Servicer on behalf of the Servicer) in Permitted Investments as defined in the Indenture and as set forth on Schedule B hereto, subject to the delivery of written investment direction to the Bank in form reasonably acceptable to the Bank. Such written investment direction shall specify the Account from which funds are to be invested, the amount to be invested, the type of Permitted Investment, and the maturity date thereof.
In the absence of timely written investment direction from the Servicer (or the Sub-Servicer), funds in the Accounts shall remain uninvested or, at the Bank's election, shall be invested in overnight repurchase agreements fully collateralized by direct obligations of the United States of America, as determined by the Bank in its sole discretion. The Bank shall have no obligation to invest or reinvest funds in the Accounts absent receipt of written investment direction.
Section 4.02. Maturity Limitations.
No Permitted Investment acquired with funds from any Account shall have a stated maturity date later than the Business Day immediately preceding the next Payment Date under the Indenture. In the event that any Permitted Investment is not redeemed, liquidated, or matured on or prior to such date, the Bank shall liquidate such Permitted Investment at the direction of the Indenture Trustee or, in the absence of such direction, shall use commercially reasonable efforts to liquidate such Permitted Investment, and any resulting proceeds shall be credited to the applicable Account.
Section 4.03. Investment Risk.
All investment risk with respect to Permitted Investments (including, without limitation, any depreciation in value, market loss, credit loss, or loss of principal) shall be borne solely by the Issuer, and the proceeds of any Permitted Investment shall be credited to the applicable Account. The Bank shall have no liability for any investment loss, depreciation, or decline in value of any Permitted Investment, except to the extent that such loss is directly and proximately caused by the Bank's gross negligence, willful misconduct, or bad faith, as determined by a court of competent jurisdiction in a final, non-appealable judgment. For the avoidance of doubt, the Bank shall have no obligation to provide investment advice and shall not be deemed a fiduciary with respect to the selection or management of Permitted Investments.
ARTICLE V — APPLICATION OF FUNDS; WATERFALL REFERENCE
Section 5.01. Application of Collections.
Funds in the Collection Account shall be applied on each Payment Date in accordance with the payment waterfall set forth in the Indenture. Without limiting the foregoing, and for informational purposes only, the Waterfall generally provides for the following priority of payments:
(a) first, to the payment of accrued and unpaid interest on the Class A Notes;
(b) second, to the payment of accrued and unpaid interest on the Class B Notes;
(c) third, to the payment of principal on the Class A Notes (allocated sequentially);
(d) fourth, to the payment of principal on the Class B Notes;
(e) fifth, to the replenishment of the Reserve Account to the Required Reserve Account Balance of $2,000,000;
(f) sixth, to the overcollateralization top-up to the target overcollateralization amount of $7,000,000 (representing 3.50% of the initial aggregate pool balance of $200,000,000);
(g) seventh, to the payment of servicing fees and related expenses owed to the Servicer and the Sub-Servicer; and
(h) eighth, any remaining amounts to the holder of the Subordinated Certificate or the Residual Interest (being SBF, acting through SkyLend Funding LLC, or its designee).
The foregoing summary is provided solely for reference and does not modify, amend, or supplement the Waterfall as set forth in the Indenture. In the event of any conflict between this summary and the terms of the Indenture, the Indenture shall control. The Bank shall distribute funds from the Accounts solely upon receipt of entitlement orders from the Indenture Trustee or, prior to the delivery of an Exclusive Control Notice, from the Servicer (or the Sub-Servicer acting on behalf of the Servicer) in conformity with the Waterfall. The Bank shall have no duty or responsibility to verify that any entitlement order is consistent with the Waterfall or any other provision of the Indenture.
Section 5.02. Reserve Account Withdrawals.
Withdrawals from the Reserve Account shall be made only in accordance with the terms and conditions of the Indenture, including:
(a) to cover shortfalls in interest payments on the Class A Notes and the Class B Notes on any Payment Date, to the extent that amounts available in the Collection Account are insufficient to make such interest payments in full;
(b) to cover shortfalls in principal payments on the Notes on any Payment Date, to the extent that amounts available in the Collection Account are insufficient to make such principal payments in full; and
(c) upon the final payment in full of the Notes and the discharge of the Indenture, release of any remaining balance in the Reserve Account to the Issuer (or its designee), in accordance with instructions received from the Indenture Trustee.
The Bank shall not release, distribute, or transfer any funds from the Reserve Account except upon receipt of an entitlement order from the Indenture Trustee or, prior to the delivery of an Exclusive Control Notice, from the Servicer acting in accordance with the Indenture.
ARTICLE VI — REPRESENTATIONS AND WARRANTIES
Section 6.01. Representations and Warranties of the Bank.
The Bank hereby represents and warrants to the Issuer and the Indenture Trustee, as of the date hereof and as of the Closing Date, as follows:
(a) Organization and Good Standing. The Bank is a national banking association duly organized, validly existing, and in good standing under the laws of the United States of America, with full corporate power and authority to execute, deliver, and perform its obligations under this Agreement and to maintain the Accounts as contemplated hereby.
(b) No Violations. The execution, delivery, and performance by the Bank of this Agreement do not and will not (i) violate the Bank's charter, articles of association, or bylaws, (ii) violate any applicable law, rule, regulation, order, judgment, or decree binding on the Bank, or (iii) result in or require the creation or imposition of any Lien on any property or assets of the Bank (other than as contemplated hereby).
(c) Establishment of Accounts; No Adverse Claims. The Accounts have been duly established and are maintained on the books and records of the Bank. No person other than the Indenture Trustee has "control" (within the meaning of Section 8-106 of the UCC) over the Accounts or any financial assets or security entitlements credited thereto, other than any security interest or Lien that the Bank may have in the Accounts, which security interest or Lien is subordinated pursuant to Section 7.02 of this Agreement. The Bank has not received any notice of any Lien on, or claim to, the Accounts or any financial assets credited thereto, other than the security interest of the Indenture Trustee as contemplated by this Agreement and the Indenture.
(d) Jurisdiction. For purposes of Sections 8-110 and 9-305 of the UCC, the Bank's jurisdiction is the State of Delaware. The securities intermediary's jurisdiction with respect to the Accounts is deemed to be the State of New York, as specified in Section 12.02 of this Agreement pursuant to Section 8-110(e) of the UCC.
(e) No Other Agreements. The Bank has not entered into, and is not bound by, any other agreement pursuant to which any person (other than the Indenture Trustee) has "control" over the Accounts or any financial assets or security entitlements credited thereto.
Section 6.02. Representations and Warranties of the Issuer.
The Issuer hereby represents and warrants to the Bank and the Indenture Trustee, as of the date hereof and as of the Closing Date, as follows:
(a) Organization and Good Standing. The Issuer is a Delaware statutory trust duly formed on February 14, 2024, validly existing, and in good standing under the laws of the State of Delaware, with full power and authority to enter into, execute, deliver, and perform its obligations under this Agreement.
(b) Binding Obligation. This Agreement has been duly authorized, executed, and delivered by the Issuer (acting through the Owner Trustee) and constitutes a legal, valid, and binding obligation of the Issuer, enforceable against the Issuer 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 (regardless of whether enforcement is sought in a proceeding in equity or at law).
(c) No Other Control Agreements. The Issuer has not granted and will not grant to any person (other than the Indenture Trustee as provided herein) "control" (within the meaning of Section 8-106 of the UCC) over the Accounts or the Account Collateral. The Issuer has not entered into, and will not enter into, any other account control agreement or similar arrangement with respect to the Accounts without the prior written consent of the Indenture Trustee.
(d) No Adverse Claims. The Issuer has not created, incurred, assumed, or suffered to exist any Lien on the Accounts or the Account Collateral, other than the security interest of the Indenture Trustee as contemplated by the Indenture and this Agreement.
Section 6.03. Representations and Warranties of the Indenture Trustee.
The Indenture Trustee hereby represents and warrants to the Issuer and the Bank, as of the date hereof and as of the Closing Date, as follows:
(a) Organization and Good Standing. Atlantic Fiduciary Services, Inc. is a Delaware banking corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, with full corporate power and authority to execute, deliver, and perform its obligations under this Agreement in its capacity as Indenture Trustee.
(b) Authority. AFS has full power and authority to execute, deliver, and perform this Agreement in its capacity as Indenture Trustee. The execution, delivery, and performance of this Agreement by AFS in such capacity have been duly authorized by all necessary corporate action on the part of AFS and do not violate AFS's certificate of incorporation, bylaws, or any applicable law, rule, or regulation.
(c) Binding Obligation. This Agreement constitutes a legal, valid, and binding obligation of the Indenture Trustee, enforceable against the Indenture Trustee 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.
ARTICLE VII — SUBORDINATION OF BANK'S CLAIMS; NO SETOFF
Section 7.01. No Setoff or Recoupment.
The Bank hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any and all rights of setoff, recoupment, banker's lien, counterclaim, or similar right that it may have, now or in the future, with respect to the Accounts and any financial assets, security entitlements, investment property, Cash, or other funds or property at any time credited to, held in, or otherwise carried in the Accounts. Without limiting the generality of the foregoing, the Bank shall not exercise any such right against the Accounts or the Account Collateral for the payment or recovery of any fees, charges, expenses, or other amounts owed to the Bank by the Issuer, the Servicer, the Sub-Servicer, the Originator, the Depositor, or any other person, whether arising under this Agreement, any fee agreement, or otherwise. The waiver set forth in this Section 7.01 shall be effective regardless of whether an Exclusive Control Notice has been delivered.
Section 7.02. Subordination.
Any security interest, Lien, or claim that the Bank may now or hereafter have in or to the Accounts, the Account Collateral, or any financial assets, security entitlements, or other funds or property credited thereto (whether arising by operation of law, by contract, by the Bank's general terms and conditions, or otherwise) is hereby expressly and irrevocably subordinated to the security interest of the Indenture Trustee in the Accounts and the Account Collateral. The Bank hereby acknowledges and agrees that the Indenture Trustee's security interest in the Accounts and the Account Collateral is senior to, prior to, and has priority over, any interest of the Bank in or to the Accounts or the Account Collateral. The Bank shall not assert, enforce, or seek to enforce any Lien, security interest, or claim against the Accounts or the Account Collateral in derogation of the priority of the Indenture Trustee's security interest as provided herein.
ARTICLE VIII — DUTIES AND LIABILITY OF THE BANK
Section 8.01. Standard of Care.
The Bank shall maintain the Accounts and perform its obligations under this Agreement with the same degree of care as it exercises with respect to similar accounts maintained for its own benefit, but in no event less than a commercially reasonable standard of care. The Bank shall maintain accurate books and records with respect to the Accounts and shall preserve all records relating to the Accounts in accordance with its customary record retention practices and applicable law.
Section 8.02. Limitation of Liability.
(a) The Bank shall not be liable for any loss, damage, cost, or expense of any kind arising out of or in connection with this Agreement or the Accounts, except to the extent that such loss, damage, cost, or expense is directly and proximately caused by the Bank's own gross negligence, willful misconduct, or bad faith, as determined by a court of competent jurisdiction in a final, non-appealable judgment.
(b) Without limiting the generality of Section 8.02(a), the Bank shall have no duty or obligation to:
(i) monitor the use of funds in the Accounts or the application of distributions from the Accounts;
(ii) verify, investigate, or determine whether any entitlement order, instruction, or direction received by the Bank is consistent with the Waterfall, the Indenture, the Sale and Servicing Agreement, or any other Transaction Document;
(iii) monitor the financial condition or performance of the Issuer, the Servicer, the Sub-Servicer, the Originator, or any other person;
(iv) take any action with respect to the Accounts other than as expressly provided in this Agreement; or
(v) inquire into the authority or authorization of any person originating an entitlement order, other than to verify the identity of the person delivering such entitlement order against the list of authorized persons provided to the Bank by the relevant party.
(c) In no event shall the Bank be liable for any consequential, indirect, special, incidental, or punitive damages, regardless of the form of action, whether in contract, tort, strict liability, or otherwise, and regardless of whether the Bank has been advised of the possibility of such damages.
Section 8.03. Force Majeure.
The Bank shall not be liable for any failure or delay in the performance of its obligations under this Agreement to the extent that such failure or delay results from causes beyond the Bank's reasonable control, including, without limitation, acts of God, fire, flood, earthquake, hurricane, pandemic, epidemic, war (whether declared or undeclared), armed conflict, terrorism, riot, civil disturbance, insurrection, strikes, lockouts, labor disputes, governmental action, sanctions, embargo, failure of public utilities or common carriers, interruption or disruption of telecommunications, internet, or power systems, cyberattack, or any similar event beyond the Bank's reasonable control. The Bank shall use commercially reasonable efforts to resume performance as promptly as practicable following the cessation of such force majeure event and shall promptly notify the Issuer and the Indenture Trustee of any such event.
Section 8.04. Reliance on Instructions.
The Bank may rely, and shall be fully protected in relying, upon any entitlement order, notice, instruction, certificate, direction, request, or other communication (including any communication transmitted by electronic means) believed by the Bank in good faith to be genuine and to have been given, signed, or transmitted by an authorized person. The Bank shall not be liable for acting or failing to act in accordance with any such communication, except to the extent that such action or inaction constitutes gross negligence, willful misconduct, or bad faith on the part of the Bank. The Bank may require that any entitlement order or instruction be provided by an authorized representative identified in a certificate of authorized signatories delivered by the relevant party to the Bank from time to time, and the Bank shall be entitled to rely upon such certificate until it receives a replacement certificate.
ARTICLE IX — INDEMNIFICATION
Section 9.01. Indemnification by the Issuer.
The Issuer agrees (from Trust assets only, and not in its individual capacity or from the personal assets of the Owner Trustee, the Depositor, or any other person) to indemnify, defend, and hold harmless the Bank and its directors, officers, employees, agents, and affiliates (each, a "Bank Indemnified Party") from and against any and all claims, demands, actions, suits, proceedings, losses, liabilities, damages, costs, and expenses (including reasonable attorneys' fees and disbursements) (collectively, "Losses") arising out of or in connection with this Agreement, the establishment or maintenance of the Accounts, or the Bank's performance of its obligations hereunder, except to the extent that such Losses are directly and proximately caused by the gross negligence, willful misconduct, or bad faith of such Bank Indemnified Party, as determined by a court of competent jurisdiction in a final, non-appealable judgment. The obligations of the Issuer under this Section 9.01 shall be payable solely from Trust assets in accordance with the priority of payments set forth in the Indenture, and neither the Owner Trustee nor the Depositor shall have any personal liability for any amounts payable by the Issuer hereunder.
Section 9.02. Indemnification by the Bank.
The Bank agrees to indemnify, defend, and hold harmless the Issuer, the Indenture Trustee, and their respective directors, officers, employees, agents, and affiliates (each, a "Non-Bank Indemnified Party") from and against any and all Losses arising out of or resulting from the Bank's gross negligence, willful misconduct, or bad faith in the performance of its obligations under this Agreement, as determined by a court of competent jurisdiction in a final, non-appealable judgment. The Bank's obligations under this Section 9.02 shall not be limited by the amount of any fees paid or payable to the Bank under or in connection with this Agreement.
ARTICLE X — TERMINATION
Section 10.01. Termination Events.
This Agreement shall terminate upon the earliest to occur of:
(a) the date on which all Notes have been paid in full and the Indenture has been satisfied and discharged in accordance with its terms;
(b) written notice from the Indenture Trustee to the Bank that the Accounts are no longer required under the Indenture and that this Agreement may be terminated;
(c) the mutual written agreement of all Parties hereto; and
(d) thirty (30) days' prior written notice from the Bank to the Issuer and the Indenture Trustee, provided that such termination under this clause (d) shall not be effective until a successor Bank has been duly appointed and has executed a replacement account control agreement on substantially similar terms, all in accordance with Article XI of this Agreement.
Note: This Agreement was never executed and the transaction contemplated by the Indenture and the other Transaction Documents was formally terminated on May 8, 2024, prior to the Closing Date. Accordingly, this Agreement never became effective, and none of the obligations set forth herein were triggered.
Section 10.02. Effect of Termination.
Upon the termination of this Agreement pursuant to Section 10.01, all funds, financial assets, security entitlements, and other property remaining in the Accounts shall be transferred, distributed, or otherwise disposed of in accordance with the written instructions of the Indenture Trustee (or, following the satisfaction and discharge of the Indenture, in accordance with the written instructions of the Issuer). Upon such transfer and distribution, the Bank shall close the Accounts and shall be released from all further obligations under this Agreement, other than those obligations that expressly survive termination pursuant to Section 10.03.
Section 10.03. Survival.
The provisions of Section 8.02 (Limitation of Liability), Section 9.01 (Indemnification by the Issuer), Section 9.02 (Indemnification by the Bank), and Section 12.09 (Confidentiality) shall survive the termination of this Agreement.