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8-K
Regional Management Corp. · Oct 29, 4:41 PM ET
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Regional Management Corp. 8-K
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Contents
132
Article I.DEFINITIONS
Section 1.01 Definitions. Capitalized terms used but not defined in this Indenture are defined in and shall have the respective meanings assigned to them in Part A of Schedule II (together with Part B of such Schedule II, the “Definitions Schedule”) to the Sale and Servicing Agreement of even date herewith, by and among Regional Management Receivables III, LLC (the “Depositor”), Regional Management Corp., as the servicer, the subservicers party thereto, Regional Management North Carolina Receivables Trust and the Issuer. The rules of construction set forth in Part B of the Definitions Schedule shall be applicable to this Indenture.
Article II.THE NOTES
Section 2.01 Form Generally. The Notes shall be designated as the “Regional Management Issuance Trust 2025-2, Personal Loan Asset Backed Notes, Series 2025-2.” The Notes shall be in substantially the form attached as Exhibit A hereto. Except as otherwise expressly
provided herein, the Notes will be issued in fully registered form only and shall be numbered serially for identification. The terms of the Notes set forth in Exhibit A to this Indenture are part of the terms of this Indenture. The Notes shall be typewritten, word processed, printed, lithographed, engraved or produced by any combination of these methods, all as determined by the officers executing such Notes, as evidenced by their execution of such Notes.
Section 2.02 Denominations. Each of the Class A Notes, Class B Notes, Class C Notes and the Class D Notes shall be issued in fully registered form in minimum amounts of $100,000 and in integral multiples of $1,000 in excess thereof.
Section 2.03 Execution, Authentication and Delivery. Each Note shall be executed by manual or facsimile signature on behalf of the Issuer by an Authorized Officer of the Issuer.
Section 2.04 Book-Entry Notes. The Notes, upon original issuance, shall be issued in the form of one or more Notes representing the Book-Entry Notes, to be delivered to the Indenture Trustee as custodian for the Clearing Agency on behalf of the Issuer. The Notes shall initially be registered on the Note Register in the name of the Clearing Agency of its nominee, and no Beneficial Owner will receive a Definitive Note representing such Beneficial Owner’s interest in such Note, except as provided in Section 2.10. Unless and until Definitive Notes have been issued to the applicable Beneficial Owners pursuant to Section 2.10:
Section 2.05 Registration of and Limitations on Transfer and Exchange of Notes; Appointment of Note Registrar.
Section 2.06 Mutilated, Destroyed, Lost or Stolen Notes. If (a) any mutilated Note is surrendered to the Indenture Trustee or the Note Registrar, or the Indenture Trustee or the Note Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (b) in case of destruction, loss or theft there is delivered to the Indenture Trustee, the Issuer, the Depositor or the Note Registrar, as the case may be, such security or indemnity as may be required by it to hold the Issuer, the Depositor, the Note Registrar and the Indenture Trustee harmless, then, in the absence of written notice to the Issuer, the Depositor, the Note Registrar or the Indenture Trustee that such Note has been acquired by a “protected purchaser” (as contemplated by Article 8 of the UCC), the Issuer shall execute, and upon Issuer Order the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note of like tenor and aggregate principal amount, bearing a number not contemporaneously outstanding; provided, however, that if any such mutilated, destroyed, lost or stolen Note shall have become, or within seven (7) days shall be, due and payable, or shall have been selected or called for redemption, instead of issuing a replacement Note, the Issuer may pay such Note without surrender thereof, except that any mutilated Note shall be surrendered. If, after the delivery of such replacement Note or payment of a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a “protected purchaser” (as contemplated by Article 8 of the UCC) of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Issuer and the Indenture Trustee shall be entitled to recover such replacement Note (or such payment) from the Person to whom it was delivered or any Person taking such replacement Note from such Person to whom such replacement Note was delivered or any assignee of such Person, except a “protected purchaser” (as contemplated by Article 8 of the UCC), and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in connection therewith.
Section 2.07 Persons Deemed Owners. The Indenture Trustee, the Note Registrar, the Depositor, the Issuer and any agent of any of them may, prior to due presentation of a Note for registration of transfer, treat the Person in whose name any Note is registered as the holder of such Note for the purpose of receiving distributions pursuant to the terms of this Indenture and for all other purposes whatsoever, and, in any such case, none of the Indenture Trustee, the Note
Registrar, the Depositor, the Issuer nor any agent of any of them shall be affected by any notice to the contrary. Upon any request or inquiry by a Noteholder, the Indenture Trustee or the Note Registrar shall be entitled to receive a certification in form reasonably satisfactory to the Indenture Trustee and the Note Registrar, to enable the Indenture Trustee and the Note Registrar to confirm the status of such entity as a Noteholder.
Section 2.08 Cancellation. All Notes surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly canceled by the Indenture Trustee and shall no longer be considered Outstanding for any purpose hereunder. The Issuer may at any time deliver to the Indenture Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Issuer may have acquired in any lawful manner whatsoever. All Notes delivered by the Issuer or any other Person for cancellation shall be promptly canceled by the Indenture Trustee and such cancellation shall be recorded in the Note Registrar. No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section 2.08, except as expressly permitted by this Indenture. All canceled Notes held by the Indenture Trustee shall be destroyed or retained in accordance with its standard document retention or disposal policy in effect at such time unless the Issuer shall direct prior to destruction that they be returned to the Issuer.
Section 2.09 Notices to Clearing Agency. Whenever a notice or other communication is required to be given to the Noteholders of any Class with respect to which Book-Entry Notes have been issued, unless and until Definitive Notes shall have been issued to the related Beneficial Owners pursuant to Section 2.10 and there are no Book-Entry Notes outstanding, the Indenture Trustee shall transmit all such notices and communications to the Clearing Agency.
Section 2.10 Definitive Notes. If Book-Entry Notes have been issued with respect to any Class and (a) (i) the Issuer advises the Indenture Trustee in writing that the Clearing Agency is no longer willing or able to discharge properly its responsibilities with respect to such Class and (ii) the Issuer is unable to locate and reach an agreement on satisfactory terms with a qualified successor, (b) to the extent permitted by law, the Issuer, at its option, advises the Indenture Trustee in writing that it elects to terminate the book-entry system through the Clearing Agency with respect to such Class or (c) after the occurrence of a Servicer Default or an Event of Default, Beneficial Owners with respect to such Class representing not less than 50% of the principal amount of the Book-Entry Notes of such Class advise the Indenture Trustee and the applicable Clearing Agency in writing through the applicable Clearing Agency Participants that the continuation of a book-entry system with respect to the Notes of such Class is no longer in the best interests of the Beneficial Owners with respect to such Class, then the Indenture Trustee shall notify all Beneficial Owners with respect to such Class, through the Clearing Agency of the occurrence of such event and of the availability of Definitive Notes to Beneficial Owners with respect to such Class. Upon surrender to the Indenture Trustee of such Notes by the Clearing Agency, accompanied by registration instructions from the applicable Clearing Agency for registration, the Issuer shall execute and the Indenture Trustee shall authenticate Definitive Notes of such Class and shall recognize the registered holders of such Definitive Notes as Noteholders under this Indenture. None of the Issuer or the Indenture Trustee shall be liable for any delay in delivery of such instructions, and the Issuer and the Indenture Trustee may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Notes of
such Class, the Indenture Trustee shall recognize the registered Holders of such Definitive Notes of such Class as Noteholders of such Class hereunder. Definitive Notes will be transferable and exchangeable at the Corporate Trust Office of the Indenture Trustee.
Section 2.11 CUSIP Numbers. The Issuer in issuing the Notes may use “CUSIP” numbers (if then generally in use), and, if so, the Indenture Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Noteholders; provided, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will promptly notify the Indenture Trustee in writing of any change in the “CUSIP” numbers.
Article III.REPRESENTATIONS AND COVENANTS OF ISSUER
Section 3.01 Payment of Principal and Interest.
Section 3.02 Maintenance of Office or Agency. The Issuer will maintain an office or agency with the Corporate Trust Office of the Indenture Trustee at Computershare Trust Company, National Association, Attention: Computershare Corporate Trust Services/Asset-Backed Administration, 1505 Energy Park Drive, St. Paul, MN 55108, where Notes may be presented or surrendered for payment and where Notes may be surrendered for registration of transfer or exchange. The Issuer will give prompt written notice to the Indenture Trustee and the Noteholders of any change in the location of any such office or agency.
Section 3.03 Money for Note Payments to Be Held in Trust. As specified in Section 8.02, the Indenture Trustee on behalf of the Issuer shall make or cause to be made all payments of amounts due and payable on or with respect to the Notes, which are to be made from amounts withdrawn from the Collection Account, and no amounts so withdrawn from the Collection Account shall be paid over to the Issuer except as provided in this Indenture.
Section 3.04 Existence. The Issuer will keep in full effect its existence, rights and franchises as a statutory trust under the laws of the State of Delaware and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes, the Trust Estate and each other related instrument or agreement included in the Trust Estate. The Issuer shall not consolidate or merge with or into any other Person and shall not (except as provided herein) convey or transfer its properties and assets substantially as an entirety to any Person.
Section 3.05 Protection of Trust. The Issuer intends that the security interest Granted pursuant to this Indenture in favor of the Indenture Trustee on behalf of the Noteholders is to be
prior to all other Liens in respect of the Collateral, and the Issuer shall take all actions necessary to obtain and maintain, for the benefit of the Indenture Trustee on behalf of the Noteholders, a first Lien on and a first priority, perfected security interest in the Collateral (except to the extent that the interest of Indenture Trustee therein cannot be perfected by the filing of a financing statement). The Issuer shall from time to time execute and deliver all such supplements and amendments hereto and shall file or shall authorize the filing of all such financing statements, continuation statements, instruments of further assurance and other instruments, all as prepared by the Administrator and delivered to the Issuer, and shall take such other action necessary or advisable and reasonably within its power to:
Section 3.06 Opinions as to Trust Estate. On or before June 30th of each calendar year, beginning in 2027, the Issuer will furnish to the Indenture Trustee an Opinion of Counsel either stating that, (i) in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of this Indenture and any other requisite documents and with respect to the authorization, execution and filing of any financing statements and continuation statements as is necessary to maintain the lien and security interest created by this Indenture and reciting the details of such action or (ii) in the opinion of such counsel no such action is necessary to maintain such lien and security interest. Such Opinion of Counsel will also describe the recording, filing, re-recording and refiling of this Indenture and any other requisite documents and the execution and filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain the lien and security interest of this Indenture until June 30th of the following calendar year.
Section 3.07 Performance of Obligations; Servicing of Loans.
Section 3.08 Negative Covenants. So long as any Notes are Outstanding, the Issuer shall not:
Section 3.09 Statements as to Compliance. The Issuer will deliver to the Indenture Trustee, no later than March 31 of each year so long as any Note is Outstanding (commencing March 31, 2027), an Officer’s Certificate stating, as to the Authorized Officer signing such Officer’s Certificate, that:
Section 3.10 Issuer’s Name, Location, etc.
Section 3.11 Amendments.
Section 3.12 No Borrowing. The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except as expressly contemplated by the Transaction Documents and the Notes.
Section 3.13 Guarantees, Loans, Advances and Other Liabilities. Except as expressly contemplated by the Trust Agreement, the Sale and Servicing Agreement or this Indenture, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person.
Section 3.14 Tax Treatment.
Section 3.15 Notice of Events of Default. The Issuer agrees to give the Indenture Trustee, each Noteholder and each Rating Agency written notice of each Event of Default hereunder and each default on the part of any party thereto of its obligations under the Loan Purchase Agreement, in each case no later than five (5) Business Days after the earlier of (i) receipt of written notice of such event or (ii) actual knowledge of a Responsible Officer of the Administrator of such event.
Section 3.16 No Other Business. The Issuer shall not engage in any business other than the purpose and powers set forth in Section 2.03 of the Trust Agreement and all activities incidental thereto.
Section 3.17 Further Instruments and Acts. Upon written request of the Indenture Trustee, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.
Section 3.18 Maintenance of Separate Existence. The Issuer agrees to comply with the separateness covenants in Section 5.09 of the Trust Agreement.
Section 3.19 Perfection Representations, Warranties and Covenants. The perfection representations, warranties and covenants attached hereto as Schedule I shall be deemed to be part of this Indenture for all purposes.
Section 3.20 Other Representations of the Issuer. On the Closing Date, the Issuer makes the following representations and warranties for the benefit of the Noteholders:
Section 3.21 Intercreditor Agreement. The Noteholders shall be deemed to have consented to the Indenture Trustee’s entering into a joinder to the Intercreditor Agreement, dated as of the date hereof, and any control agreement or similar agreement relating thereto to which the Indenture Trustee is a party. The Indenture Trustee is also hereby authorized to execute and deliver such joinder to the Intercreditor Agreement.
Section 3.22 Compliance with Laws. The Issuer shall comply with the requirements of all applicable laws, the non-compliance with which would, individually or in the aggregate, materially adversely affect the ability of the Issuer to perform its obligations under the Notes, this Indenture or the other Transaction Documents to which the Issuer is a party.
Section 3.23 Eligible Assets. The Issuer has not acquired or disposed of and shall not acquire or dispose of “eligible assets” for the primary purpose of recognizing gains or decreasing
losses resulting from market value changes, and such acquisition or disposition shall be in accordance with the documents pursuant to which the Issuer’s securities are issued and shall not result in a downgrading in the rating of any of the Issuer’s fixed-income securities. The Issuer will not acquire or dispose of Sold Assets other than in accordance with the terms of the Transaction Documents.
Article IV.SATISFACTION AND DISCHARGE
Section 4.01 Satisfaction and Discharge of this Indenture. This Indenture shall cease to be of further effect except as to (a) rights of registration of transfer and exchange, (b) substitution of mutilated, destroyed, lost or stolen Notes, (c) the rights of Noteholders to receive payments of principal thereof and interest thereon, (d) Sections 3.03 and 3.08 hereof, (e) the rights and immunities of the Indenture Trustee hereunder, including the rights of the Indenture Trustee under Section 6.07, and the obligations of the Indenture Trustee under Section 4.02, and (f) the rights of such Noteholders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee (including any such property in any Note Account) and payable to all or any of them, and the Indenture Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture when:
Section 4.02 Application of Trust Money. All monies deposited in any Note Account pursuant to Section 4.01 shall be held in trust and the Indenture Trustee, pursuant to the written instructions of the Servicer and in accordance with the provisions of the Notes and this Indenture, shall make or cause to be made payments to the Noteholders for the payment in respect of which such monies have been deposited in any Note Account, of all sums due and to become due thereon for principal and interest; provided, however, such monies need not be segregated from other funds except to the extent required herein or in the Sale and Servicing Agreement or required by law. Upon the satisfaction and discharge of this Indenture and the application of all such monies, the Indenture Trustee shall, and is hereby authorized and directed to, execute and deliver to the North Carolina Trustees notice to the effect that all 2025-2A SUBI Assets have been liquidated into cash and all of such cash has been distributed in accordance with the Indenture together with the 2025-2A SUBI Supplement.
Article V.DEFAULTS AND REMEDIES
Section 5.01 Early Amortization Events. An “Early Amortization Event” means any one of the following events:
Section 5.02 Events of Default. An “Event of Default” means any one of the following events:
Section 5.03 Acceleration of Maturity; Rescission and Annulment.
Section 5.04 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.
Section 5.05 Remedies; Priorities.
Section 5.06 Optional Preservation of the Trust Estate. Subject to Section 5.05(a), if the Notes have been declared to be due and payable under Section 5.03 following an Event of Default and such declaration and its consequences have not been rescinded and annulled, and the Indenture Trustee has not received directions from the Noteholders to the contrary under Section 5.12, the Indenture Trustee may, but need not, elect to maintain possession of the Trust Estate. It is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the payment of principal of and interest on the Notes, and the Indenture Trustee shall take such desire into account when determining whether or not to maintain possession of the Trust Estate. In determining whether to maintain possession of the Trust Estate, the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of any proposed action and as to the sufficiency of the Trust Estate for such purpose. The cost of such opinion shall be reimbursed to the Indenture Trustee from amounts held in the Collection Account pursuant to Section 8.06.
Section 5.07 Limitation on Suits. Subject to the other provisions of this Indenture, no Noteholder shall have any right to institute any Proceedings, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:
Section 5.08 Unconditional Rights of Noteholders to Receive Principal and Interest. Notwithstanding any other provisions in this Indenture but subject to the limitations set forth in Sections 5.05(c), 11.16 and 11.19, the Holder of any Note will have the right, which is absolute and unconditional, to receive payment of the principal of and interest on such Note on the Stated Maturity Date (and such principal shall be due and payable on such Stated Maturity Date) expressed in such Note and to institute suit for the enforcement of any such payment, and such right will not be impaired without the consent of such Holder; provided, however, that notwithstanding any other provision of this Indenture to the contrary, the obligation to pay principal of or interest on the Notes or any other amount payable to any Noteholder will be without recourse to the Issuer (except to the Trust Estate), the Indenture Trustee, the Owner Trustee or any
affiliate, officer, employee or director of any of them, and the obligation of the Issuer to pay principal of or interest on the Notes or any other amount payable to any Noteholder will be subject to Article VIII.
Section 5.09 Restoration of Rights and Remedies. If the Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned, or has been determined adversely to the Indenture Trustee or such Noteholder, then and in every such case the Issuer, the Indenture Trustee or such Noteholder shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee and the Noteholders shall continue as though no such Proceeding had been instituted.
Section 5.10 Rights and Remedies Cumulative. Except as provided in Section 5.05, no right, remedy, power or privilege herein conferred upon or reserved to the Indenture Trustee or the Noteholders is intended to be exclusive of any other right, remedy, power or privilege, and every right, remedy, power or privilege shall, to the extent permitted by law, be cumulative. The assertion or exercise of any right or remedy shall not preclude any other further assertion or the exercise of any other appropriate right or remedy.
Section 5.11 Delay or Omission Not Waiver. No failure to exercise and no delay in exercising, on the part of the Indenture Trustee or of any Noteholder or other Person, any right or remedy occurring hereunder upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article V may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as the case may be.
Section 5.12 Control by Noteholders. The Holders of a majority of the aggregate unpaid principal amount of all Outstanding Notes, if an Event of Default has occurred and is continuing, shall have the right to direct the time, method and place of conducting any Proceeding for any right or remedy available to the Indenture Trustee with respect to the Notes or exercising any trust or power conferred on the Indenture Trustee with respect to the Notes; provided, however, that, subject to Section 6.01 and Section 6.03(d):
Section 5.13 Waiver of Past Defaults. The Required Noteholders may, on behalf of all Noteholders, waive in writing any past default with respect to the Notes and its consequences (including an Event of Default), except that:
Section 5.14 Undertaking for Costs. All parties to this Indenture agree, and each Noteholder by its acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided, that the provisions of this Section shall not apply to (a) any suit instituted by the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of Noteholders (in compliance with Section 5.07), in each case holding in the aggregate more than 10% of the aggregate unpaid principal amount of all Outstanding Notes, or (c) any suit instituted by any Noteholder for the enforcement of the payment of the principal of or interest on any Note on or after the date on which any of such amounts were due pursuant to the terms of such Note (or, in the case of redemption, on or after the applicable Redemption Date).
Section 5.15 Waiver of Stay or Extension Laws. The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may adversely affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
Section 5.16 Action on Notes. The Indenture Trustee’s right to seek and recover judgment on the Notes or under the Indenture shall not be affected by the seeking or obtaining of or application for any other relief under or with respect to the Indenture. Neither the lien of the Indenture nor any rights or remedies of the Indenture Trustee or the Noteholders shall be impaired
by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate or upon any of the assets of the Issuer. Any money or property collected by the Indenture Trustee shall be applied as specified in Section 5.03.
Section 5.17 Sale of Loans.
Section 5.18 Performance and Enforcement of Certain Obligations. If an Event of Default has occurred and is continuing, the Indenture Trustee shall, at the written direction of the Required Noteholders, direct the Issuer to exercise all rights, remedies, powers, privileges and claims the Issuer may have against the Depositor, the Seller, and the Servicer under or in connection with the Loan Purchase Agreement, the Sale and Servicing Agreement and the Loan Purchase Agreement, as applicable, including the right or power to take any action to compel or secure performance or observance by the Depositor, the Servicer, or the Seller of their respective obligations thereunder.
Article VI.THE INDENTURE TRUSTEE
Section 6.01 Duties of the Indenture Trustee.
Section 6.02 Notice of Early Amortization Event or Event of Default; Notice of Breach of Representations or Warranties. Upon the occurrence of any Early Amortization Event or Event of Default of which a Responsible Officer of the Indenture Trustee has actual knowledge or has received notice at the Corporate Trust Office of the Indenture Trustee, the Indenture Trustee shall notify all Noteholders as their names and addresses appear on the Note Register and each Rating Agency of such Early Amortization Event or Event of Default within ten (10) Business Days after such Responsible Officer receives such notice or obtains actual knowledge. Upon obtaining actual knowledge of, or receipt of written notice by, a Responsible Officer of the Indenture Trustee of any breach of any representation or warranty contained in Section 11.2(d) of the 2025-2A SUBI Supplement by the 2025-2A SUBI Servicer with respect to any Loan allocated to the 2025-2A SUBI at the time such representations and warranties were made, the Indenture Trustee shall give prompt written notice thereof to the North Carolina Trust, the 2025-2A SUBI Servicer and the Issuer.
Section 6.03 Certain Matters Affecting the Indenture Trustee. Except as otherwise provided in Section 6.01:
Section 6.04 Not Responsible for Recitals or Issuance of Notes. The recitals contained herein, in any other Transaction Document and in the Notes, except with respect to the Indenture Trustee and its certificate of authentication, shall not be taken as the statements of the Indenture Trustee, and the Indenture Trustee does not assume any responsibility for their correctness. The Indenture Trustee does not make any representation as to the validity, enforceability or sufficiency of the Indenture, the Notes or any related document or as to the perfection or priority of any security interest therein. The Indenture Trustee shall not be accountable for the use or application by the Issuer of the proceeds from the Notes.
Section 6.05 Indenture Trustee May Hold Notes. The Indenture Trustee, the Note Registrar or any other agent of the Issuer, in its individual or any other capacity, may become the owner or pledgee of Notes and subject to Section 6.11, may otherwise deal with the Issuer or its affiliates with the same rights it would have if it were not Indenture Trustee, Note Registrar or such other agent.
Section 6.06 Money Held in Trust. Money held by the Indenture Trustee in trust hereunder need not be segregated from other funds held by the Indenture Trustee in trust hereunder except to the extent required herein or required by law. The Indenture Trustee shall not be under any liability for interest on any money received by it hereunder except (i) as otherwise agreed upon in writing by the Indenture Trustee and the Issuer and (ii) as an obligor with respect to Eligible Investments on which the institution acting as Indenture Trustee is an obligor.
Section 6.07 Compensation, Reimbursement and Indemnification.
Section 6.08 Replacement of Indenture Trustee.
Section 6.09 Successor Indenture Trustee by Merger. If the Indenture Trustee consolidates with, merges or converts into, or transfers or sells all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any further act shall be the successor Indenture Trustee; provided, that such corporation or banking association shall be otherwise qualified and eligible under Section 6.11.
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee.
Section 6.11 Eligibility; Disqualification. The Indenture Trustee shall at all times have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition and its long-term unsecured debt shall be rated at least “Baa3” by Moody’s, at least “BBB-” by S&P and, if rated by Morningstar DBRS, at least “BBB (low)” by Morningstar DBRS. The Indenture Trustee (1) shall meet the requirements of Section 26(a)(1) of the Investment Company Act, (2) shall not be an Affiliate of the Issuer, the Depositor or the initial Servicer and (3) shall not offer or provide credit or credit enhancement to the Issuer. In case at any time the Indenture Trustee shall cease to be eligible in accordance with the provisions of this Section, the Indenture Trustee shall resign immediately in the manner and with the effect specified in Section 6.08.
Section 6.12 Representations and Warranties of the Indenture Trustee. The Indenture Trustee represents and warrants that:
Section 6.13 Execution of Transaction Documents.
Section 6.14 Rule 15Ga-1 Compliance.
Article VII.NOTEHOLDERS’ LIST AND REPORTS
Section 7.01 Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders. The Issuer will furnish or cause to be furnished to the Indenture Trustee (a) not more than five (5) Business Days after each Record Date, a list, in such form as the Indenture Trustee may reasonably require, of the names, addresses and taxpayer identification numbers of the Holders of Notes as they appear on the Note Register as of the most recent Record Date, and (b) at such other times as the Indenture Trustee may request in writing, within thirty (30) days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than ten (10) Business Days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Note Registrar, no such list shall be required to be furnished to the Indenture Trustee.
Section 7.02 Preservation of Information; Communications to Noteholders.
Article VIII.ALLOCATION AND APPLICATION OF COLLECTIONS
Section 8.01 Collection of Money. Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and may receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall apply all such money and property received by it in trust for the related Noteholders and shall apply it as provided in this Indenture. Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any Transaction Document, the Indenture Trustee may, and upon the written direction of the Required Noteholders shall, take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate Proceedings. Any such action shall be without prejudice to any right to claim an Early Amortization Event or an Event of Default under this Indenture and to proceed thereafter as provided in Article V hereof.
Section 8.02 Establishment of the Note Accounts.
Section 8.03 Collections and Allocations.
Section 8.04 Rights of Noteholders. As set forth in the Granting Clauses, the Trust Estate secures the obligation of the Issuer to pay the Holders of the Notes principal and interest and the other obligations of the Issuer under the Notes.
Section 8.05 Release of Trust Estate.
Section 8.06 Application of Available Funds.
Section 8.07 Loan Actions; Renewal Loan Replacements.
Section 8.08 Optional Redemption of the Notes.
Section 8.09 Distributions and Payments to Noteholders.
Section 8.10 Reports and Statements to Noteholders.
Article IX.SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without Consent of Noteholders.
Section 9.02 Supplemental Indentures With Consent of Noteholders. The Issuer, the Servicer and the Indenture Trustee, when authorized by an Issuer Order, also may, with the consent of the Holders of not less than a majority of the aggregate unpaid principal amount of the Outstanding Notes adversely affected, by Act of such Holders delivered to the Issuer and the Indenture Trustee and with prior notice to each Rating Agency, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Noteholders under this Indenture; provided, however, that the Issuer shall have
delivered to the Indenture Trustee (i) an Officer’s Certificate indicating which Outstanding Notes, if any, would be adversely affected and (ii) a Tax Opinion, dated the date of any such action, addressing such action; further provided, that notwithstanding anything to the contrary contained herein, including, without limitation, Section 9.01, no supplemental indenture shall, without the consent of the Holder of each Outstanding Note affected thereby:
Section 9.03 Execution of Supplemental Indentures.In executing any supplemental indenture permitted by this Article IX or the modification thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an Opinion of Counsel and an Officer’s Certificate stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and that all conditions precedent thereto are satisfied.
Section 9.04 Effect of Supplemental Indenture. Upon the execution of any supplemental indenture under this Article IX, this Indenture shall be modified and amended in accordance therewith with respect to the Notes affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Issuer, the Servicer and the Holders of the Notes shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and the terms and conditions of any such supplemental indenture shall be deemed to be a part of this Indenture for any and all purposes.
Section 9.05 Reference in Notes to Supplemental Indentures. Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the Issuer or the Indenture Trustee shall, bear a notation in form approved by the
Indenture Trustee as to any matter provided for in such supplemental indenture. If the Issuer shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for the Outstanding Notes.
Section 9.06 Modification of Obligations of Owner Trustee. Notwithstanding anything in this Article IX to the contrary, no amendment may be made to this Indenture that would adversely affect the rights, indemnities, immunities, liabilities or duties of the Owner Trustee without the written consent of the Owner Trustee.
Article X.TERMINATION
Section 10.01 Termination of Indenture. The respective obligations and responsibilities of the Issuer, the Servicer and the Indenture Trustee created hereby (other than those which by their terms survive) shall terminate upon payment in full of all Outstanding Notes and the satisfaction in full of all other obligations of the Issuer, the Servicer and the Indenture Trustee pursuant to this Indenture. At such time as the Notes and all other Obligations have been paid in full (other than contingent indemnification obligations in which no claim has been made or is reasonably foreseeable), the Trust Estate shall be released from the lien of this Indenture without delivery of any instrument or any further action by any party, and the Indenture Trustee, upon Issuer Order, shall execute and deliver such instruments or documents which the Issuer deems necessary or appropriate to evidence such termination and release.
Section 10.02 Final Distribution.
Article XI.MISCELLANEOUS
Section 11.01 Compliance Certificates.
Section 11.02 Form of Documents Delivered to Indenture Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
Section 11.03 Acts of Noteholders.
Section 11.04 Notices, etc. Any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other documents provided or permitted by the Indenture to be in writing and shall be made upon, given or furnished to, or filed with:
Section 11.05 Notices to Noteholders; Waiver. Where this Indenture provides for notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided), if in writing and mailed by first-class mail postage prepaid or national overnight courier service (or, in the case of a Holder of a Global Note, e-mailed to DTC for further distribution to beneficial owners in accordance with DTC procedure) to each Noteholder affected by such event, at its address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Noteholders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Noteholder shall affect the sufficiency of such notice with respect to other Noteholders and any notice which is mailed in the manner herein provided shall conclusively be presumed to have been duly given.
Section 11.06 Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.
Section 11.07 Successors and Assigns. All covenants and agreements in this Indenture by the Issuer and the Servicer shall bind their respective successors and assigns, whether so expressed or not. All covenants and agreements of the Indenture Trustee in this Indenture shall bind its successors and assigns. Notwithstanding the foregoing, no party hereto may assign its rights or obligations under this Indenture without the prior written consent of each other party hereto unless expressly set forth herein.
Section 11.08 Severability. If any part of this Indenture is held to be invalid or otherwise unenforceable, the rest of this Indenture will be considered severable and will continue in full force.
Section 11.09 Binding Effect; Third Party Beneficiaries. Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto, the third-party beneficiaries named in the last sentence of this Section 11.09, the Noteholders, and their respective successors hereunder, any benefit or any legal or equitable right, remedy or claim under this Indenture. This Indenture benefits and is binding on the parties hereto, and their respective successor and permitted assigns. Each of the Owner Trustee, the Third Party Allocation Agent and the Back-up Servicer is a third-party beneficiary to this Indenture and is entitled to the rights and benefits hereunder and may enforce the provisions hereof as if such Person were a party hereto.
Section 11.10 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.
Section 11.11 Counterparts; Execution. This Indenture may be executed in any number of counterparts, each of which will be considered an original, but all of which together will constitute one agreement. This Agreement shall be valid, binding, and enforceable against a party only when executed by an authorized individual on behalf of the party by means of (i) an electronic signature that complies with the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, and/or any other relevant electronic signatures law including any relevant provisions of the UCC (collectively, “Signature Law”), in each case to the extent applicable; (ii) an original manual signature; or (iii) a faxed, scanned, or photocopied manual signature. Each electronic signature or faxed, scanned, or photocopied manual signature shall for all purposes have the same validity, legal effect, and admissibility in evidence as an original manual signature. Each party hereto shall be entitled to conclusively rely upon, and shall have no liability with respect to, any electronic signature or faxed, scanned, or photocopied manual signature of any other party and shall have no duty to investigate, confirm or otherwise verify the validity or authenticity thereof. Notwithstanding the foregoing, with respect to any notice provided for in this Agreement or any instrument required or permitted to be delivered hereunder, any party hereto receiving or relying upon such notice or instrument shall be entitled to request execution thereof by original manual signature as a condition to the effectiveness thereof. For avoidance of doubt, original manual signatures shall be used for execution or indorsement of writings and authentication of certificates when required under the UCC or other Signature Law due to the character or intended character of the writings.
Section 11.12 Recording of Indenture. If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at its expense accompanied by an Opinion of Counsel (which shall be counsel reasonably acceptable to the Indenture Trustee) to the effect that such recording is necessary either for the protection of the Noteholders or any other Person secured hereunder, or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture. The parties hereto agree to (a) provide access to the Loan Notes and related documentation in its possession for inspection by governmental regulatory agencies and (b) assist in the preparation of any routine reports required by regulatory bodies, if any.
Section 11.13 Inspection. The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee, during the Issuer’s normal business hours, to examine all the books of account, records, reports, and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuer’s affairs, finances and accounts with the Issuer’s officers, employees, and Independent certified public accountants, all at such reasonable times and as often as may be reasonably requested; provided, that no such examination or discussion shall require that the Issuer violate any law or regulation. The Indenture Trustee shall, and shall cause its representatives, to hold in confidence all such information except to the extent disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) and except to the extent that the Indenture Trustee may reasonably determine that such disclosure is consistent with its obligations hereunder or is required by the UCC.
Section 11.14 Trust Obligation. Neither any trustee nor any Beneficiary of the Issuer nor any of their respective officers, directors, employers or agents will have any liability with respect to this Indenture, and recourse may be had solely to the assets of the Issuer with respect thereto. In addition, no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in their respective individual capacities, (ii) any Beneficiary or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of any Beneficiary, the Indenture Trustee or the Owner Trustee in their individual capacities, any Beneficiary, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Beneficiary, the Indenture Trustee or the Owner Trustee in their individual capacities.
Section 11.15 Limitation of Liability of Owner Trustee and Indenture Trustee.
Section 11.16 No Bankruptcy Petition; Disclaimer and Subordination.
Section 11.17 Tax Matters; Administration of Transfer Restrictions.
Section 11.18 Successor Servicer Transfer. The Servicer agrees to reasonably cooperate with the Indenture Trustee and the Successor Servicer (which may be the Back-up Servicer) in transferring all rights, responsibilities, obligations, restrictions, duties and liabilities of the Servicer hereunder to the Successor Servicer.
Section 11.19 Limited Recourse. No recourse under or with respect to any obligation, covenant or agreement of the Issuer as contained in this Indenture or any of the other Transaction Documents or any other agreement, instrument or document to which the Issuer is a party shall be had against any incorporator, stockholder, affiliate, officer, employee or director of the Issuer by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise, it being expressly agreed and understood that the agreements of the Issuer contained in this Indenture and all other agreements, instruments and documents entered into pursuant hereto or in connection herewith are, in each case, solely corporate obligations of the Issuer. Notwithstanding any provisions contained in this Indenture to the contrary, the Issuer shall not, and shall not be obligated to, pay any fees, costs, indemnified amounts or expenses due pursuant to this Indenture other than in accordance with the order of priorities set forth in Section 8.06 of this Indenture. Any amount which the Issuer does not pay pursuant to the operation of the preceding sentence shall not constitute a claim (as defined in §101 of the United States Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et seq.), as amended from time to time) against or obligation of the Issuer for any such insufficiency unless and until funds are available for the payment of such amounts as aforesaid. The parties hereto agree that the provisions under this Section 11.19 shall survive the resignation or removal of any such party to this Indenture and the termination of this Indenture.
Section 11.20 Nature of Noteholders’ Claims. Each Holder, by its ownership of the Notes, will agree that such Holder only has rights against the assets held by the Issuer pursuant to the Transaction Documents, and such Holder will not have rights (whether through the Indenture Trustee, the Issuer, its ownership of any Note or otherwise) to the assets of any other issuing entity under a different securitization with respect to which the Depositor is acting as depositor.
Section 11.21 Force Majeure. In no event shall the Indenture Trustee be personally liable for any failure or delay in the performance of its obligations hereunder or under any other Transaction Document arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, any act or provision of any present or future law or regulation or governmental authority, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, disease, epidemic, pandemic, quarantine, national emergency, interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services, the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility or other force majeure events, it being understood that the Indenture Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
Section 11.22 AML Law. The parties hereto acknowledge that in accordance with laws, regulations and executive orders of the United States or any state or political subdivision thereof as are in effect from time to time applicable to financial institutions relating to the funding of terrorist activities and money laundering, including without limitation the USA Patriot Act (Pub. L. 107-56) and regulations promulgated by the Office of Foreign Asset Control (collectively, “AML Law”), the Indenture Trustee is required to obtain, verify, and record information relating to individuals and entities that establish a business relationship or open an account with the Indenture Trustee. Each party hereby agrees that it shall provide the Indenture Trustee with such identifying information and documentation as the Indenture Trustee may request from time to time in order to enable the Indenture Trustee to comply with all applicable requirements of AML Law.
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