SALE AND SERVICING AGREEMENT
Dated as of March 11, 2024
(Draft)
among
SKYLEND FUNDING LLC, a Delaware limited liability company, as Depositor,
SKYLEND RECEIVABLES TRUST 2024-1, a Delaware statutory trust, as Issuer,
SKYBRIDGE FINTECH LTD., a Delaware corporation, as Servicer and as Seller,
and
CLEARVIEW LOAN SERVICING, INC., an Ohio corporation, as Sub-Servicer
$170,000,000 Class A Asset-Backed Notes $22,000,000 Class B Asset-Backed Notes
DRAFT — FOR DISCUSSION PURPOSES ONLY — EXECUTION VERSION NEVER FINALIZED
RECITALS
WHEREAS, SkyLend Funding LLC, a Delaware limited liability company (the "Depositor"), is a wholly owned subsidiary of Skybridge Fintech Ltd. (its sole member), formed on January 30, 2024 (EIN: 93-4187620), with its registered office at 1400 Market Street, Suite 1210, Wilmington, Delaware 19801, and was organized for the purpose of, among other things, acquiring, holding, and transferring consumer receivables originated by Skybridge Fintech Ltd. through its direct-to-consumer digital lending platform known as "SkyLend";
WHEREAS, SkyLend Receivables Trust 2024-1, a Delaware statutory trust (the "Trust" or the "Issuer"), was established on February 14, 2024 (EIN: 93-4201855), pursuant to a Trust Agreement dated as of February 14, 2024 (the "Trust Agreement"), between the Depositor and Keymark Trust Company, National Association, as Owner Trustee, for the purpose of acquiring, holding, and financing a pool of unsecured consumer installment loan receivables;
WHEREAS, Skybridge Fintech Ltd. ("SBF") is a Delaware corporation (EIN: 84-3291076) with its headquarters at 1400 Market Street, Suite 1210, Wilmington, Delaware 19801, engaged in the business of originating unsecured consumer installment loans through its direct-to-consumer digital lending platform known as "SkyLend," which was launched in approximately 2019;
WHEREAS, Clearview Loan Servicing, Inc. ("Clearview") is an Ohio corporation with its principal office at 8800 Brecksville Road, Suite 300, Cleveland, Ohio 44141, engaged in the business of servicing consumer receivables, and Clearview has served as the sub-servicer for SBF's consumer loan portfolio pursuant to a Master Servicing Agreement dated as of October 1, 2022 (Servicing Account No. CLS-SBF-2022-0041), between SBF and Clearview, as amended by Amendment No. 1 thereto dated March 18, 2024 (the "Master Servicing Agreement" or "MSA");
WHEREAS, the Depositor has acquired or will acquire the Receivables (as defined herein) from SBF pursuant to a Receivables Purchase Agreement dated as of March 11, 2024 (the "RPA"), between SBF, as seller, and the Depositor, as purchaser, pursuant to which SBF sold, transferred, assigned, set over, and otherwise conveyed to the Depositor all of SBF's right, title, and interest in and to the Receivables;
WHEREAS, the Depositor desires to sell, transfer, assign, set over, and otherwise convey to the Trust, without recourse (except as expressly set forth herein), all of the Depositor's right, title, and interest in and to the Receivables and other Trust Property, and the Trust desires to acquire such Receivables and Trust Property on the terms and conditions set forth herein;
WHEREAS, the Trust intends 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 March 4, 2024 (draft) (the "Indenture"), between the Trust and Atlantic Fiduciary Services, Inc. ("AFS"), as Indenture Trustee, and the proceeds of the Notes will be used to finance the Trust's acquisition of the Receivables and to fund the Reserve Account;
WHEREAS, the Depositor will retain a subordinated certificate representing a residual interest in the Trust in the amount of $8,000,000 (approximately 4% of the aggregate deal value) (the "Residual Interest"), which Residual Interest shall be unrated;
WHEREAS, SBF desires to act as Servicer and Clearview desires to act as Sub-Servicer of the Receivables on behalf of the Trust on the terms and subject to the conditions set forth herein; and
WHEREAS, the parties desire to set forth their respective rights and obligations with respect to the sale, transfer, servicing, and administration of the Receivables on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I — DEFINITIONS
Section 1.01 — Defined Terms
Whenever used in this Agreement, the following terms shall have the meanings set forth below:
"Accounts" means the Collection Account and the Reserve Account.
"Administration Agreement" means the Administration Agreement, dated as of the Closing Date, between the Trust and SBF, as administrator, as the same may be amended, supplemented, or otherwise modified from time to time.
"Aggregate Outstanding Pool Balance" means, as of any date of determination, the aggregate outstanding principal balance of all Receivables in the Pool as of the applicable Determination Date, after giving effect to all collections, charge-offs, repurchases, and adjustments with respect to such Receivables received or made through the end of the related Collection Period.
"Available Funds" means, with respect to any Payment Date, the sum of (a) all collections of interest, principal, fees, and other amounts received on the Receivables during the related Collection Period, (b) all net investment earnings on amounts on deposit in the Collection Account and the Reserve Account during the related Collection Period, (c) all Repurchase Prices received during the related Collection Period, (d) all recoveries on previously charged-off Receivables received during the related Collection Period, and (e) any amounts drawn from the Reserve Account in accordance with the Indenture, less any amounts required to be returned to the Servicer for over-collections or misapplied payments.
"Business Day" means any day other than a Saturday, Sunday, or day on which banking institutions in New York, New York or Wilmington, Delaware are authorized or obligated by law, regulation, or executive order to remain closed.
"Carrollton" means Carrollton Ratings Group LLC, a Delaware limited liability company, and a nationally recognized statistical rating organization ("NRSRO") registered with the Securities and Exchange Commission.
"Charge-Off" means the classification of a Receivable as uncollectible in accordance with the Servicer's charge-off policies as described in Section 4.02.
"Class A Note Rate" means the per annum interest rate applicable to the Class A Notes, which is expected to be in the range of 5.45% to 5.65% per annum (to be determined at pricing).
"Class A Notes" means the $170,000,000 aggregate principal amount of Class A Asset-Backed Notes issued by the Trust pursuant to the Indenture.
"Class B Note Rate" means the per annum interest rate applicable to the Class B Notes, which is expected to be in the range of 6.75% to 7.00% per annum (to be determined at pricing).
"Class B Notes" means the $22,000,000 aggregate principal amount of Class B Asset-Backed Notes issued by the Trust pursuant to the Indenture.
"Clearview" or "Sub-Servicer" means Clearview Loan Servicing, Inc., an Ohio corporation, or any successor thereto in its capacity as Sub-Servicer hereunder.
"ClearCore" means the proprietary servicing platform operated by Clearview, to which Clearview migrated the servicing of SBF receivables from the LoanTrax system in June 2023.
"Closing Date" means the date on which the Notes are issued and delivered to the initial purchasers and the Receivables are conveyed to the Trust in accordance with Section 2.01.
"Collection Account" means the segregated trust account established and maintained by the Indenture Trustee at Keymark Trust Company, N.A. (in its commercial banking capacity) pursuant to the Indenture and the Account Control Agreement, into which all collections on the Receivables shall be deposited.
"Collection Period" means (a) with respect to the first Payment Date, the period from and including the Cut-Off Date to and including the last day of the calendar month preceding such Payment Date, and (b) with respect to each subsequent Payment Date, the preceding calendar month.
"Cumulative Net Loss Ratio" means, as of any Determination Date, the ratio (expressed as a percentage) of (a) the aggregate outstanding principal balance of all Receivables that have been charged off as uncollectible since the Cut-Off Date, net of all recoveries on such Receivables received since the Cut-Off Date, to (b) the Initial Pool Balance.
"CUSIP" means the Committee on Uniform Securities Identification Procedures prefix 87165Q (allocated but unused as of the date hereof).
"Cut-Off Date" means March 31, 2024.
"Depositor" means SkyLend Funding LLC, a Delaware limited liability company, or any successor thereto.
"Determination Date" means, with respect to any Payment Date, the 15th day of the calendar month in which such Payment Date occurs; provided, however, that if such 15th day is not a Business Day, the Determination Date shall be the next succeeding Business Day.
"Early Amortization Event" has the meaning set forth in Section 5.04.
"Eligibility Criteria" means the criteria set forth in Schedule A hereto, each of which must be satisfied with respect to a Receivable as of the Cut-Off Date for such Receivable to be included in the Pool.
"Excess Spread" means, with respect to any Collection Period, the annualized amount (expressed as a percentage of the Aggregate Outstanding Pool Balance) by which collections of interest and fees on the Receivables exceed the sum of (a) the Class A Note interest, (b) the Class B Note interest, (c) the Servicing Fee, and (d) net losses during such Collection Period. Excess Spread is estimated at 2.85% per annum at pricing.
"FICO Score" means the FICO credit score of an Obligor as reported by one or more of the three national credit bureaus at the time of origination of the related Receivable. The weighted average FICO Score of the Pool at origination is 698.
"Geographic Concentration Limit" means the limitation that no single state of Obligor residence shall represent more than 20% of the Aggregate Outstanding Pool Balance as of the Cut-Off Date.
"Indenture" means the Indenture, dated as of March 4, 2024 (draft), between the Trust and Atlantic Fiduciary Services, Inc., as Indenture Trustee, as the same may be amended, supplemented, or otherwise modified from time to time.
"Indenture Trustee" means Atlantic Fiduciary Services, Inc., a Delaware corporation, having its corporate trust office at 2 Christiana Centre, Suite 1400, Wilmington, Delaware 19801 (contact: David Moynihan), or any successor thereto under the Indenture.
"Initial Pool Balance" means $200,000,000, representing the aggregate outstanding principal balance of all Receivables in the Pool as of the Cut-Off Date, after credit and eligibility screening from a gross pool of approximately $213,750,000.
"Investor Report" means the monthly report described in Section 4.08 hereof.
"Master Servicing Agreement" or "MSA" means the Master Servicing Agreement, dated as of October 1, 2022, between SBF and Clearview (Servicing Account No. CLS-SBF-2022-0041), as amended by Amendment No. 1 thereto dated March 18, 2024, and as the same may be further amended, supplemented, or otherwise modified from time to time.
"Maximum Single-Obligor Concentration" means 0.15% of the Initial Pool Balance, which equals $300,000.
"Meridian" means Meridian Credit Ratings, Inc., a New York corporation, and a nationally recognized statistical rating organization ("NRSRO") registered with the Securities and Exchange Commission.
"Noteholder" means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Indenture Trustee.
"Notes" means, collectively, the Class A Notes and the Class B Notes.
"Obligor" means, with respect to any Receivable, each borrower under or obligated on such Receivable.
"Offering Memorandum" means the Preliminary Offering Memorandum, dated April 5, 2024, relating to the offering of the Notes, as the same may be supplemented or amended.
"Overcollateralization Amount" means, as of any Determination Date, the amount by which the Aggregate Outstanding Pool Balance exceeds the aggregate outstanding principal amount of the Notes as of such date.
"Overcollateralization Target" means 3.5% of the Initial Pool Balance, which equals $7,000,000.
"Owner Trustee" means Keymark Trust Company, National Association, having its corporate trust office at 600 North King Street, Wilmington, Delaware 19801 (contact: Elaine Marchetti), not in its individual capacity, but solely as Owner Trustee under the Trust Agreement, or any successor Owner Trustee under the Trust Agreement.
"Payment Application Waterfall" means the order in which collections on each Receivable are applied, as set forth in Section 4.03, being: first, to accrued and unpaid interest on such Receivable; second, to any outstanding fees (including late fees and other charges) on such Receivable; and third, to outstanding principal on such Receivable.
"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 first Payment Date following the Closing Date.
"Permitted Investments" has the meaning given to such term in the Indenture.
"Person" means any individual, corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, government, or any agency or political subdivision thereof.
"Pinnacle" means Pinnacle Growth Equity Partners, LP, a Delaware limited partnership, which holds 62.4% of SBF's fully diluted equity as of the date hereof.
"Pool" means, at any time, all Receivables conveyed to the Trust pursuant to this Agreement and not previously repurchased, charged off, or paid in full.
"Preliminary Purchase Agreement" or "PPA" means the Preliminary Purchase Agreement, among the Trust, SBF, the Depositor, and Halcyon Securities LLC, as initial purchaser, relating to the purchase and sale of the Notes.
"Rating Agencies" means Meridian and Carrollton, or any successor NRSRO engaged to rate the Notes.
"Receivable" means each unsecured consumer installment loan originated by SBF through the SkyLend Platform and conveyed to the Trust pursuant to this Agreement, with original principal amounts ranging from $1,000 to $25,000 and original terms of 12 to 60 months, together with all rights to payment thereunder and all related security interests, liens, and proceeds.
"Receivables Purchase Agreement" or "RPA" means the Receivables Purchase Agreement, dated as of March 11, 2024, between SBF, as seller, and the Depositor, as purchaser, as the same may be amended, supplemented, or otherwise modified from time to time.
"Record Date" means, with respect to each Payment Date, the last Business Day of the calendar month preceding such Payment Date.
"Repurchase Price" means, with respect to any Receivable that is required to be repurchased pursuant to Section 2.05 or Section 10.02, an amount equal to the sum of (a) the outstanding principal balance of such Receivable, plus (b) all accrued and unpaid interest on such Receivable through the date of repurchase, minus (c) any amounts previously collected and remitted with respect to such Receivable after the Cut-Off Date.
"Required Reserve Account Balance" means 1.00% of the Initial Pool Balance, which equals $2,000,000.
"Reserve Account" means the segregated account established and maintained by the Indenture Trustee at Keymark Trust Company, N.A. (in its commercial banking capacity) pursuant to the Indenture and the Account Control Agreement, into which the initial deposit described in Section 4.06 shall be made and which shall be maintained at a balance not less than the Required Reserve Account Balance.
"Residual Interest" means the subordinated certificate representing the residual interest in the Trust, having an initial value of $8,000,000 (approximately 4% of the aggregate deal value), retained by SBF through the Depositor. The Residual Interest is unrated.
"Seller" means Skybridge Fintech Ltd., a Delaware corporation, in its capacity as seller of the Receivables under the RPA.
"Servicer" means Skybridge Fintech Ltd., a Delaware corporation, in its capacity as servicer of the Receivables hereunder, or any successor servicer appointed in accordance with Section 7.03.
"Servicer Termination Event" has the meaning set forth in Section 8.01.
"Servicing Fee" means the fee payable to the Servicer in consideration for its servicing obligations hereunder, as set forth in Section 6.01, being 0.50% per annum of the Aggregate Outstanding Pool Balance, with a first-year estimated fee of $1,000,000.
"Servicing Fee Rate" means 0.50% per annum.
"Servicing Standard" has the meaning set forth in Section 4.01.
"SkyLend Platform" means the direct-to-consumer digital lending platform operated by SBF through which all Receivables in the Pool were originated.
"Static Pool" means the historical performance data for prior vintage pools of consumer loans originated by SBF through the SkyLend Platform.
"Sub-Servicer" means Clearview Loan Servicing, Inc., an Ohio corporation, in its capacity as sub-servicer of the Receivables hereunder and under the Sub-Servicing Agreement, or any successor sub-servicer appointed in accordance with the terms hereof.
"Sub-Servicing Agreement" means the Sub-Servicing Agreement between SBF and Clearview with respect to the servicing of the Receivables conveyed to the Trust, entered into pursuant to and incorporating the terms of the Master Servicing Agreement dated as of October 1, 2022, as amended by Amendment No. 1 thereto dated March 18, 2024 (Servicing Account No. CLS-SBF-2022-0041).
"Sub-Servicing Fee" means the fee payable by the Servicer to the Sub-Servicer out of the Servicing Fee, as set forth in the Sub-Servicing Agreement.
"Trust" or "Issuer" means SkyLend Receivables Trust 2024-1, a Delaware statutory trust established pursuant to the Trust Agreement.
"Trust Agreement" means the Trust Agreement, dated as of February 14, 2024, between the Depositor and Keymark Trust Company, National Association, as Owner Trustee, pursuant to which the Trust was established, as the same may be amended, supplemented, or otherwise modified from time to time.
"Trust Property" means all assets of the Trust, including (a) all Receivables conveyed to the Trust pursuant to this Agreement, (b) all monies due or to become due on or with respect to such Receivables, (c) all security interests and liens in favor of SBF or the Depositor securing payment of such Receivables, (d) all proceeds of the foregoing, (e) all rights of the Trust under this Agreement, the RPA, the Indenture, and the other Transaction Documents, (f) all amounts on deposit in the Collection Account and the Reserve Account, and (g) all records and documents relating thereto.
"UCC" means the Uniform Commercial Code as in effect in the applicable jurisdiction.
"WAC" means the weighted average coupon of the Pool, which is 14.82% as of the Cut-Off Date.
"Weighted Average Life" means the expected weighted average life of the Notes, which is approximately 2.1 years for the Class A Notes and approximately 3.4 years for the Class B Notes, in each case based on the assumptions set forth in the Offering Memorandum.
"Weighted Average Remaining Term" means the weighted average remaining term (in months) of the Receivables in the Pool, which is 38.4 months as of the Cut-Off Date.
Section 1.02 — Rules of Construction
(a) Unless the context otherwise requires, references in this Agreement to Articles, Sections, Schedules, and Exhibits are to the Articles, Sections, Schedules, and Exhibits of this Agreement.
(b) Words importing the singular number include the plural and vice versa, and words importing any gender include all genders.
(c) The words "hereof," "herein," "hereunder," and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement.
(d) The word "including" (and with correlative meaning, "include" and "includes") means including without limiting the generality of any description preceding such word.
(e) Headings and the Table of Contents are included for convenience of reference only and shall not affect the interpretation of this Agreement.
(f) References to any statute, rule, or regulation shall be deemed to include all amendments thereto, all successor statutes, rules, and regulations, and all rules and regulations promulgated thereunder, unless the context otherwise requires.
(g) All interest calculations on the Receivables and the Notes shall be made on the basis specified in the related loan documentation or the Indenture, as applicable. Unless otherwise specified herein, interest on the Notes shall be calculated on a 30/360 basis, and the Servicing Fee shall be calculated on an actual/360 basis.
(h) All monetary amounts referred to herein are in lawful currency of the United States of America.
(i) References to agreements and instruments shall be deemed to include all amendments, supplements, restatements, and other modifications thereto, unless the context otherwise requires or unless the consent or approval of a particular party to such amendment, supplement, restatement, or modification is expressly required herein.
Section 1.03 — Incorporation of Indenture Definitions
Capitalized terms used but not defined in this Agreement shall have the meanings assigned to such terms in the Indenture. In the event of any conflict between the definitions set forth herein and those set forth in the Indenture, the definitions set forth herein shall control for purposes of this Agreement.
ARTICLE II — CONVEYANCE OF RECEIVABLES; REPRESENTATIONS AND WARRANTIES
Section 2.01 — Conveyance of Receivables
(a) On the Closing Date, the Depositor hereby sells, transfers, assigns, sets over, and otherwise conveys to the Trust, without recourse (except as expressly provided in Section 2.05), all of the Depositor's right, title, and interest in and to the following (collectively, the "Conveyed Property"):
(i) all Receivables identified on the Schedule of Receivables attached hereto as Schedule B, having an aggregate outstanding principal balance of approximately $200,000,000 as of the Cut-Off Date (March 31, 2024), as selected from a gross pool of approximately $213,750,000 (consisting of approximately 23,100 individual consumer installment loans) in accordance with the Eligibility Criteria set forth in Schedule A;
(ii) all monies due or to become due on or with respect to such Receivables after the Cut-Off Date, including all scheduled payments of principal and interest, all prepayments, all late charges, all fees, and all other amounts payable by the Obligors thereunder;
(iii) all security interests and liens, if any, in favor of SBF or the Depositor securing payment of such Receivables;
(iv) all proceeds of any and all of the foregoing (including insurance proceeds, if any);
(v) all rights of the Depositor under the RPA with respect to such Receivables, including all repurchase obligations of SBF under the RPA relating to such Receivables; and
(vi) all records, documents, loan files, and data tapes relating to such Receivables, whether in tangible or electronic form.
(b) The conveyance of the Conveyed Property set forth in clause (a) above is intended by the parties to constitute, and shall be construed and treated as, a true sale, absolute transfer, and assignment of the Depositor's right, title, and interest in and to the Conveyed Property, and not merely as a grant of a security interest to secure a borrowing. The Depositor and the Trust each agree to treat the conveyance as a sale for all purposes, including for accounting, tax, and regulatory purposes. Each party shall file any applicable transfer returns, reports, or statements consistently with the foregoing.
(c) Notwithstanding the intent of the parties as set forth in clause (b) above, in the event that, despite the intention of the parties, the conveyance contemplated hereby is characterized as a secured financing rather than a sale, the Depositor hereby grants to the Trust (for the benefit of the Indenture Trustee on behalf of the Noteholders) a first-priority perfected security interest in all of the Depositor's right, title, and interest in and to the Conveyed Property, to secure the payment of all obligations of the Depositor hereunder and under the other Transaction Documents.
(d) In connection with the conveyance contemplated by this Section 2.01, the Depositor shall, on or prior to the Closing Date, cause to be filed UCC-1 financing statements in the State of Delaware naming the Depositor as debtor/seller and the Trust (or the Indenture Trustee on behalf of the Trust) as secured party/purchaser, and shall take all other actions necessary or advisable to perfect the Trust's interest in the Conveyed Property under the UCC of the applicable jurisdiction. The Depositor shall, from time to time, file such continuation statements and amendments as may be necessary to maintain the perfection and priority of such interest.
(e) The Pool consists of approximately 23,100 unsecured consumer installment loans with the following summary characteristics as of the Cut-Off Date:
Section 2.02 — Acceptance by the Trust
The Trust hereby accepts the sale, transfer, assignment, set-over, and conveyance by the Depositor of the Conveyed Property pursuant to Section 2.01 and agrees to hold the Conveyed Property, together with all other Trust Property, for the benefit of the Noteholders and the holder of the Residual Interest, subject to and in accordance with the terms and conditions of this Agreement, the Indenture, the Trust Agreement, and the other Transaction Documents. The Trust hereby acknowledges that, upon such conveyance, the Trust shall have all right, title, and interest in and to the Conveyed Property, subject only to the lien of the Indenture in favor of the Indenture Trustee for the benefit of the Noteholders.
Section 2.03 — Representations and Warranties of the Depositor
The Depositor hereby represents and warrants to the Trust, the Indenture Trustee, and each Noteholder, as of the Closing Date and the Cut-Off 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 the limited liability company power and authority to own its properties, to conduct its business as presently conducted, and to execute, deliver, and perform its obligations under this Agreement and the other Transaction Documents to which it is a party.
(b) Due Authorization; No Conflict. The execution, delivery, and performance by the Depositor of this Agreement and the other Transaction Documents to which it is a party have been duly authorized by all necessary limited liability company action on the part of the Depositor. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby do not (i) violate the Depositor's Certificate of Formation or Limited Liability Company Agreement, (ii) violate any applicable law, rule, regulation, order, writ, judgment, injunction, decree, or award binding on or affecting the Depositor, or (iii) result in a breach of, or constitute a default under, any material agreement, lease, or instrument to which the Depositor is a party or by which it or its property is bound, or result in the creation or imposition of any lien (other than the lien contemplated by this Agreement) upon any of the Depositor's assets.
(c) Consents and Approvals. The Depositor has obtained all consents, licenses, approvals, and authorizations of, and has made all registrations and filings with, any governmental authority or regulatory body required for the execution, delivery, and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, except for UCC filings contemplated by Section 2.01(d), which shall be made on or prior to the Closing Date.
(d) Enforceability. This Agreement 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 laws affecting creditors' rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
(e) Ownership; No Liens. The Depositor is the sole owner of the Receivables and all other Conveyed Property, free and clear of all liens, claims, encumbrances, security interests, and adverse claims of any kind, other than the lien granted to the Trust (and through the Trust to the Indenture Trustee for the benefit of the Noteholders) pursuant to this Agreement and the Indenture. The Depositor has not previously sold, transferred, assigned, or pledged any of the Receivables to any other Person.
(f) Eligibility Criteria. Each Receivable conveyed to the Trust hereunder satisfies, as of the Cut-Off Date, each of the Eligibility Criteria set forth in Schedule A hereto.
(g) Schedule of Receivables. The information set forth in the Schedule of Receivables attached hereto as Schedule B (including the loan identification number, outstanding principal balance, interest rate, origination date, maturity date, remaining term, FICO Score at origination, state of Obligor residence, and delinquency status of each Receivable as of the Cut-Off Date) is true, correct, and complete in all material respects.
(h) Investment Company Act. The Depositor is not, and is not required to be registered as, an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended.
(i) Sole Member. The sole member of the Depositor is Skybridge Fintech Ltd.
(j) Special-Purpose Entity; Separateness. The Depositor is a special-purpose entity organized solely for the purpose of acquiring, holding, and transferring consumer receivables and entering into the Transaction Documents. The Depositor has at all times since its formation complied with all separateness covenants set forth in its Limited Liability Company Agreement, including maintaining separate books and records, separate bank accounts, adequate capitalization, and observing all limited liability company formalities, and has held itself out to the public as a legal entity separate and distinct from its sole member and any other Person.
Section 2.04 — Representations and Warranties Regarding the Receivables
The Depositor hereby represents and warrants to the Trust, the Indenture Trustee, and each Noteholder, as of the Cut-Off Date and the Closing Date, with respect to each Receivable conveyed to the Trust hereunder, as follows:
(a) Nature of Receivable. Each Receivable is an unsecured consumer installment loan originated by SBF through the SkyLend Platform in the ordinary course of SBF's business.
(b) Principal Balance and Term. The original principal amount of each Receivable is not less than $1,000 and not greater than $25,000, and the original term of each Receivable is not less than 12 months and not greater than 60 months.
(c) FICO Score. The FICO Score of each Obligor at the time of origination of the related Receivable meets or exceeds the minimum threshold specified in Schedule A hereto.
(d) Compliance with Law; Underwriting Guidelines. Each Receivable was originated in compliance with (i) SBF's underwriting guidelines as in effect at the time of origination, and (ii) all applicable federal and state consumer-lending laws, rules, and regulations, including the Truth in Lending Act ("TILA"), the Equal Credit Opportunity Act ("ECOA"), the Fair Credit Reporting Act ("FCRA"), and applicable state usury and consumer-protection laws. All required disclosures have been duly made to the Obligor.
(e) Currency. Each Receivable is denominated and payable exclusively in United States dollars.
(f) Delinquency Status. No Receivable is more than 30 days past due as of the Cut-Off Date, as measured on a contractual basis using the Payment Application Waterfall set forth in Section 4.03.
(g) Single-Obligor Concentration. No single Obligor has Receivables in the Pool with an aggregate outstanding principal balance exceeding the Maximum Single-Obligor Concentration of 0.15% of the Initial Pool Balance ($300,000).
(h) Geographic Concentration. The Obligor's state of residence does not result in any single state representing more than 20% of the Aggregate Outstanding Pool Balance as of the Cut-Off Date (the "Geographic Concentration Limit").
(i) UCC Classification. Each Receivable constitutes a "tangible chattel paper," "instrument," or "payment intangible" under the UCC as in effect in the applicable jurisdiction.
(j) No Modification. No Receivable has been modified, waived, amended, or extended in any material respect since origination, except as disclosed on the Schedule of Receivables or in the loan-level data delivered to the Indenture Trustee and the Rating Agencies.
(k) Complete Files. The loan file for each Receivable is complete and in the possession of the Servicer or the Sub-Servicer, and such loan file includes the executed promissory note (or electronic equivalent), all required consumer disclosures, and all other documents required by SBF's origination policies.
(l) No Litigation. There is no pending or, to the knowledge of the Depositor or the Seller, threatened litigation, proceeding, investigation, or dispute with respect to any Receivable that would materially and adversely affect the collectability of such Receivable or the interests of the Trust or the Noteholders therein.
Section 2.05 — Repurchase Obligation
(a) If any representation or warranty made by the Depositor in Section 2.03 or Section 2.04 with respect to any Receivable proves to have been incorrect in any material respect as of the date when made, and such breach of representation or warranty materially and adversely affects the interests of the Trust or the Noteholders in such Receivable, then SBF (as Seller under the RPA) shall, within 60 days of the earlier of (i) discovery of such breach by the Depositor, SBF, the Servicer, or the Sub-Servicer, or (ii) receipt by SBF of written notice of such breach from the Trust, the Indenture Trustee, or any Noteholder (or, in the case of a breach discovered by the Servicer or Sub-Servicer, within 60 days of the Servicer's or Sub-Servicer's report of such breach to SBF), either:
(A) cure such breach in all material respects; or
(B) repurchase such affected Receivable from the Trust at the Repurchase Price (which shall be equal to the outstanding principal balance of such Receivable, plus all accrued and unpaid interest thereon through the date of repurchase, minus any amounts previously collected and remitted with respect to such Receivable after the Cut-Off Date).
(b) The Repurchase Price for any repurchased Receivable shall be deposited by SBF into the Collection Account on or before the date that is 60 days after discovery or notice of the breach, as applicable, and shall be distributed as Available Funds on the next Payment Date.
(c) If SBF fails to cure such breach or repurchase the affected Receivable within the 60-day period specified in clause (a) above, the Servicer shall use commercially reasonable efforts to enforce SBF's repurchase obligation under the RPA, including by initiating appropriate legal proceedings if necessary. The Indenture Trustee shall also have the right, but not the obligation, to enforce such repurchase obligation on behalf of the Trust and the Noteholders.
(d) Promptly upon discovery or receipt of notice of any breach of the representations and warranties set forth in Section 2.03 or Section 2.04, the Depositor or SBF (as applicable) shall notify the Indenture Trustee and each Rating Agency in writing of such breach, the Receivable(s) affected thereby, the nature of the breach, and the corrective action being taken or proposed to be taken.
(e) The repurchase obligation set forth in this Section 2.05 shall constitute the sole remedy of the Trust and the Noteholders with respect to any breach of the representations and warranties set forth in Section 2.03 and Section 2.04, except that nothing herein shall limit any other rights or remedies available to the Trust, the Indenture Trustee, or any Noteholder under this Agreement, the Indenture, or applicable law in the event of fraud or willful misconduct.
Section 2.06 — Representations and Warranties of SBF (as Seller)
SBF hereby represents and warrants to the Depositor, the Trust, the Indenture Trustee, and each Noteholder, as of the Closing Date and the Cut-Off Date, as follows:
(a) Organization and Good Standing. SBF is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Delaware, and has the corporate power and authority to own its properties, to conduct its business as presently conducted, and to execute, deliver, and perform its obligations under this Agreement, the RPA, and the other Transaction Documents to which it is a party. SBF is duly qualified to do business and is in good standing in each jurisdiction where the nature of its business or the ownership of its properties requires such qualification, except where the failure to be so qualified would not have a material adverse effect on its ability to perform its obligations hereunder or under any other Transaction Document.
(b) Lending Licenses. SBF holds all required state lending licenses, permits, and authorizations necessary for the origination of consumer loans through the SkyLend Platform in each state in which Receivables in the Pool were originated, and all such licenses, permits, and authorizations are in full force and effect.
(c) Business Operations. SBF originated approximately $1.4 billion in consumer loans through the SkyLend Platform in its fiscal year ended December 31, 2023 ("FY 2023"). As of December 31, 2023, SBF had approximately 312,000 active borrowers, a gross receivables portfolio of $876,500,000, and a net receivables portfolio (after allowances) of $841,400,000. SBF's total revenue for FY 2023 was $187,300,000, and its total assets as of December 31, 2023, were $1,020,000,000. The SkyLend Platform was launched in approximately 2019.
(d) Independent Auditor. SBF's independent auditor is Rowland & Cross LLP. SBF's financial statements for FY 2023 have been audited by Rowland & Cross LLP in accordance with generally accepted auditing standards, and such audited financial statements have been delivered or made available to the Depositor, the Indenture Trustee, and the Rating Agencies.
(e) No Material Adverse Change. Since December 31, 2023, there has been no material adverse change in the business, financial condition, results of operations, or prospects of SBF that would materially impair its ability to perform its obligations under this Agreement, the RPA, or any other Transaction Document.
(f) Equity Ownership. Pinnacle Growth Equity Partners, LP holds 62.4% of SBF's fully diluted equity as of the date hereof. No change of control of SBF is pending or, to SBF's knowledge, threatened.
(g) Accuracy of Data. All receivable data provided by SBF to the Depositor and the Trust in connection with the transactions contemplated hereby, including the loan-level data tape, pool stratification tables, static-pool performance data for prior vintage pools, and all other data and information provided to the Rating Agencies and to prospective investors, is true, correct, and complete in all material respects as of the date provided.
(h) Due Authorization. The execution, delivery, and performance by SBF of this Agreement and each other Transaction Document to which it is a party have been duly authorized by all necessary corporate action. This Agreement constitutes a legal, valid, and binding obligation of SBF enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws and equitable principles.
(i) No Conflict. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby do not violate SBF's Certificate of Incorporation or Bylaws, any applicable law, or any material agreement to which SBF is a party.
Section 2.07 — Representations and Warranties of the Trust
The Trust, acting through the Owner Trustee, hereby represents and warrants to the Depositor, SBF, Clearview, the Indenture Trustee, and each Noteholder, as of the Closing Date, as follows:
(a) Valid Existence. The Trust is a Delaware statutory trust duly established, validly existing, and in good standing under the laws of the State of Delaware, having been created on February 14, 2024, pursuant to the Trust Agreement (EIN: 93-4201855).
(b) Authority. The Trust has the power and authority to execute, deliver, and perform its obligations under this Agreement and the other Transaction Documents to which it is a party, and the execution, delivery, and performance of this Agreement have been duly authorized by all necessary action.
(c) Enforceability. This Agreement constitutes the legal, valid, and binding obligation of the Trust, enforceable against the Trust in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws and equitable principles.
(d) No Conflict. The execution, delivery, and performance of this Agreement do not violate the Trust Agreement, any applicable law, or any material agreement to which the Trust is a party.
(e) No Business. The Trust has not engaged in any business other than the business contemplated by the Trust Agreement and the Transaction Documents.
ARTICLE III — ADMINISTRATION OF RECEIVABLES
Section 3.01 — Appointment of Servicer
(a) The Trust hereby appoints Skybridge Fintech Ltd. as Servicer of the Receivables for the term of this Agreement, and SBF hereby accepts such appointment and agrees to perform the duties and obligations of the Servicer as set forth herein, in the Indenture, and in the other Transaction Documents.
(b) SBF, in its capacity as Servicer, shall manage, collect, and administer the Receivables on behalf of the Trust in accordance with the Servicing Standard set forth in Section 4.01 and shall have full power and authority, acting alone and on behalf of the Trust, to do or cause to be done any and all things in connection with such management, collection, and administration that SBF may deem necessary or desirable, consistent with the terms of this Agreement, the Indenture, and applicable law.
(c) The Servicer shall maintain all records relating to the Receivables in accordance with its customary practices, and such records shall clearly reflect that the Receivables are owned by the Trust and are subject to the lien of the Indenture in favor of the Indenture Trustee for the benefit of the Noteholders.
Section 3.02 — Appointment of Sub-Servicer
(a) SBF, as Servicer, hereby delegates day-to-day servicing functions with respect to the Receivables to Clearview Loan Servicing, Inc. as Sub-Servicer, pursuant to the terms and conditions of the Sub-Servicing Agreement (incorporating the terms of the Master Servicing Agreement dated as of October 1, 2022, as amended by Amendment No. 1 thereto dated March 18, 2024; Servicing Account No. CLS-SBF-2022-0041). Such day-to-day servicing functions shall include, without limitation, payment processing, account maintenance, customer service, delinquency management, collections, loss mitigation, and reporting.
(b) Clearview hereby accepts the appointment as Sub-Servicer and agrees to perform the day-to-day servicing functions delegated to it by SBF in accordance with the Servicing Standard, the Payment Application Waterfall set forth in Section 4.03, the terms of this Agreement, the Sub-Servicing Agreement, and all applicable laws, rules, and regulations.
(c) Notwithstanding the delegation of day-to-day servicing functions to Clearview as Sub-Servicer, SBF, as Servicer, shall remain primarily responsible for, and shall not be relieved of, any of its servicing obligations under this Agreement by reason of such delegation. SBF shall be responsible for the acts and omissions of the Sub-Servicer as if such acts or omissions were those of the Servicer. Any failure by the Sub-Servicer to perform its obligations under the Sub-Servicing Agreement or this Agreement shall be deemed a failure by the Servicer under this Agreement for all purposes.
(d) As of December 31, 2023, Clearview had approximately $640 million in SBF receivables under management pursuant to the Master Servicing Agreement. Clearview utilizes its ClearCore servicing platform, to which the servicing of SBF receivables was migrated from the prior LoanTrax system in June 2023.
Section 3.03 — Sub-Servicer Representations and Warranties
Clearview hereby represents and warrants to the Trust, SBF, the Depositor, the Indenture Trustee, and each Noteholder, as of the Closing Date, as follows:
(a) Organization and Good Standing. Clearview is a corporation duly organized, validly existing, and in good standing under the laws of the State of Ohio, and is duly qualified to do business in each jurisdiction where the nature of its business or the ownership of its properties requires such qualification.
(b) Corporate Power and Authority. Clearview has the corporate power and authority to execute, deliver, and perform its obligations as Sub-Servicer under this Agreement and the Sub-Servicing Agreement, and the execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate action.
(c) Servicing Systems Capability. Clearview's servicing systems, including the ClearCore platform (deployed following the migration from the LoanTrax system completed in June 2023), are capable of performing all servicing functions required hereunder, including payment processing, account maintenance, delinquency tracking, loss mitigation, collections, charge-off processing, and investor reporting. The ClearCore platform is designed and programmed to apply all payments received on the Receivables in accordance with the Payment Application Waterfall set forth in Section 4.03.
(d) Adequate Staffing and Infrastructure. Clearview has, and shall maintain throughout the term of this Agreement, adequate staffing, management, infrastructure, and internal controls to perform its obligations hereunder in accordance with the Servicing Standard.
(e) Licenses and Approvals. Clearview maintains all licenses, permits, and approvals required by applicable law for the servicing and collection of consumer receivables in each jurisdiction in which Obligors are located, and all such licenses, permits, and approvals are in full force and effect.
(f) Accuracy of Data. All data provided or to be provided by Clearview to the Servicer, the Trust, the Indenture Trustee, and the Rating Agencies, including static-pool performance data, delinquency data, default data, cumulative net loss data, collections data, and loan-level servicing tapes, is and shall be true, correct, and complete in all material respects and has been and shall be compiled in accordance with the Payment Application Waterfall set forth in Section 4.03.
Section 3.04 — Servicer's Duty to Monitor Sub-Servicer
(a) SBF, as Servicer, shall actively oversee and monitor Clearview's performance of its day-to-day servicing obligations with respect to the Receivables, including monitoring Clearview's compliance with the Servicing Standard, the Payment Application Waterfall, and all applicable laws, rules, and regulations.
(b) Without limiting the generality of the foregoing, SBF shall conduct quarterly data reconciliation of the Sub-Servicer's servicing data (including payment histories, delinquency classifications, charge-off data, and cumulative net loss calculations) against SBF's own records and the loan-level data maintained by SBF. Such quarterly reconciliation shall be completed within 30 days following the end of each fiscal quarter.
(c) SBF shall promptly notify the Trust, the Indenture Trustee, and each Rating Agency in writing of any material deficiency in the Sub-Servicer's performance, including any failure by the Sub-Servicer to apply payments in accordance with the Payment Application Waterfall, any material inaccuracy in servicing data, any system failure affecting the ClearCore platform, or any other event or condition that could reasonably be expected to have a material adverse effect on the servicing of the Receivables or the interests of the Noteholders.