UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 21, 2023
FIRST NATIONAL MASTER NOTE TRUST
FIRST NATIONAL FUNDING LLC
FIRST NATIONAL BANK OF OMAHA
(Exact name of Issuing Entity, Depositor/Registrant and Sponsor, as specified in their respective charters)
Nebraska
(State of Incorporation)
| 333-1396730-01, 333-1396730 | 02-0598125 (First National Funding LLC) | |
| (Commission File Number for Registrant and Issuing Entity, respectively) |
(IRS Employer Identification No.) |
| 1620 Dodge Street Stop Code 3201, Omaha, Nebraska | 68197 | |
| (Address of principal executive offices) | (Zip Code) |
(402) 341-0500
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01. Entry into a Material Definitive Agreement.
First National Funding LLC (“Funding”) entered into an Underwriting Agreement, dated April 21, 2023 (“Underwriting Agreement”), among Funding, First National Bank of Omaha, Wells Fargo Securities, LLC, RBC Capital Markets, LLC and J.P. Morgan Securities LLC relating to the Class A Series 2023-1 Asset Backed Notes (the “Offered Notes”), a copy of which is filed with this Form 8-K as Exhibit 1.1, to be issued by First National Master Note Trust (the “Issuer”) described in the related Prospectus dated April 21, 2023.
Item 8.01. Other Events
In order to facilitate the issuance of the Offered Notes (and certain retained notes), Funding will cause the Issuer to enter into a Series 2023-1 Indenture Supplement (the “Indenture Supplement”), to be dated on or about April 27, 2023, by and between the Issuer and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank, National Association) (the “Indenture Trustee”), pursuant to the Second Amended and Restated Master Indenture, by and between the Issuer and the Indenture Trustee, dated as of September 23, 2016. A copy of the form of Indenture Supplement that the Issuer intends to execute is filed with this Form 8-K as Exhibit 4.1.
First National Bank of Omaha, First National Funding LLC and First National Master Note Trust will enter into a Risk Retention Agreement to be dated on or about April 27, 2023. A copy of the form of Risk Retention Agreement that they intend to execute is filed with this Form 8-K as Exhibit 4.2.
The Issuer and the Indenture Trustee will enter into a First Amendment to Second Amended and Restated Master Indenture to be dated on or about April 27, 2023. A copy of the form of First Amendment to Second Amended and Restated Master Indenture Trust that they intend to execute is filed with this Form 8-K as Exhibit 4.3.
In connection with the issuance of the Offered Notes, the chief executive officer of Funding has made the certifications required by Paragraph I.B.1(a) of Form SF-3. Such certifications are being filed with this Form 8-K as Exhibit 36.1 in order to satisfy the requirements of Item 601(b)(36) of Regulation S-K.
The Registrant is filing Exhibits 5.1 and 8.1 in connection with the offer and sale of the Offered Notes.
Item 9.01. Financial Statements and Exhibits.
| (a) | Not applicable. | |
| (b) | Not applicable. | |
| (c) | Not applicable. | |
| (d) | Exhibits |
| EXHIBIT NO. | DOCUMENT DESCRIPTION |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: April 25, 2023 | FIRST NATIONAL FUNDING LLC, as Depositor | |
| By: | First National Funding Corporation, Managing Member | |
| By | /s/ Anthony R. Cerasoli | |
| Anthony R. Cerasoli, President | ||
Exhibit 1.1
UNDERWRITING AGREEMENT
Execution Version
First National Master Note Trust
$350,000,000
Class A Series 2023-1
Asset Backed Notes
Underwriting Agreement
April 21, 2023
Wells Fargo Securities, LLC
550 South Tryon Street, 5th Floor
Charlotte, North Carolina 28202
RBC Capital Markets, LLC
Brookfield Place
200 Vesey Street, 8th Floor
New York, New York 10281
J.P. Morgan Securities LLC
383 Madison Avenue, 8th Floor
New York, New York 10179
each acting on behalf of itself and
as Representative of the several
Underwriters named in Schedule A
hereto (together, the “Representatives”)
Ladies and Gentlemen:
Section 1. Introductory.
First National Funding LLC (“FNF LLC” or the “Transferor”), a limited liability company formed under the laws of the State of Nebraska, proposes to cause First National Master Note Trust (the “Issuer”) to issue and sell $350,000,000 principal amount of Class A Series 2023-1 Asset Backed Notes (the “Notes”) to the Underwriters (as defined hereinafter) for whom you are acting as Representatives.
The Issuer is a Delaware statutory trust formed pursuant to (a) a Trust Agreement, dated as of October 16, 2002, as amended and restated in its entirety by Second Amended and Restated Trust Agreement dated as of September 23, 2016 (collectively, the “Trust Agreement”), between the Transferor and Wilmington Trust Company (“WTC”), as owner trustee (the “Owner Trustee”) and (b) the filing of a certificate of trust with the Secretary of State of Delaware on October 16, 2002. The Notes will be issued pursuant to a Second Amended and Restated Master Indenture, dated as of September 23, 2016 (as amended, the “Master Indenture”), between the Issuer and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as successor indenture trustee to The Bank of New York Mellon Trust Company, N.A. (“U.S. Bank”), as indenture trustee (the “Indenture Trustee”), as supplemented by the Series 2023-1 Indenture Supplement with respect to the Notes to be dated as of the Closing Date (as defined below) (the “Indenture Supplement,” and together with the Master Indenture, the “Indenture”).
The assets of the Issuer include, among other things, certain amounts due (the “Receivables”) on a portfolio of Visa® and MasterCard® revolving credit card accounts owned by the Bank (the “Accounts”).
The Receivables are transferred to the Issuer pursuant to the Second Amended and Restated Transfer and Servicing Agreement, dated as of September 23, 2016 (as amended, the “Transfer and Servicing Agreement”), among the Transferor, First National Bank of Omaha, a national banking association (the “Bank”), as servicer (the “Servicer”) and the Issuer. The Receivables transferred to the Issuer by the Transferor are acquired by the Transferor from the Bank pursuant to the Second Amended and Restated Receivables Purchase Agreement, dated as of September 23, 2016 (as amended, the “Receivables Purchase Agreement”), between the Transferor and the Bank.
The Bank has agreed to provide notices and perform on behalf of the Issuer certain other administrative obligations required by the Transfer and Servicing Agreement, the Master Indenture and each indenture supplement for each series of notes issued by the Issuer, pursuant to the Second Amended and Restated Administration Agreement, dated as of September 23, 2016 (as amended, the “Administration Agreement”), between the Bank, as administrator (in such capacity, the “Administrator”), and the Issuer.
The Bank, as “originator” for purposes of the EU Retention Rules and UK Retention Rules (each as separately defined below), will also make certain representations, warranties and covenants to the Issuer in connection with the EU Retention Rules and UK Retention Rules (with the Indenture Trustee as a third party beneficiary solely for the purpose of obtaining the benefits of those representations, warranties and covenants), on an ongoing basis for so long as the tranche of Notes to which this Agreement applies is outstanding, pursuant to a Risk Retention Agreement, dated on or about the Closing Date (as amended, the “Risk Retention Agreement”), among the Bank, the Transferor and the Issuer. As used in this paragraph, “EU Retention Rules” refers, collectively, to Articles 5 and 6 of Regulation (EU) 2017/2402, together with any relevant regulatory technical standards adopted by the European Commission and any guidance published by the European Union supervisory authorities with respect thereto or to precedent legislation, “UK Retention Rules” refers, collectively, to Articles 5 and 6 of Regulation (EU) 2017/2402 as enacted into the laws of the United Kingdom pursuant to the European Union (Withdrawal) Act 2018, together with any relevant regulatory technical standards adopted by the European Commission prior to January 1, 2021 or by the UK and any guidance published by the European Union supervisory authorities published prior to January 1, 2021 (where such guidance is to be interpreted in light of the United Kingdom's exit from the EU pursuant to relevant guidance issued by the Financial Conduct Authority (the “FCA”)) or by the FCA with respect thereto or to precedent legislation, each as in effect and applicable on the Closing Date.
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The Receivables (and the related accounts) will be subject to review by FTI Consulting, Inc. (the “Asset Representations Reviewer”) in certain circumstances for compliance with certain representations and warranties made about the Receivables, in accordance with the Asset Representations Review Agreement, dated as of September 23, 2016 (as amended or supplemented from time to time, the “Asset Representations Review Agreement”), among the Issuer, the Transferor, the Bank, in its capacity as RPA Seller and as Servicer, and the Asset Representations Reviewer. The Transfer and Servicing Agreement, the Receivables Purchase Agreement, the Indenture, the Trust Agreement, the Administration Agreement, the Risk Retention Agreement and the Asset Representations Review Agreement are referred to herein, collectively, as the “Transaction Documents.”
This Underwriting Agreement is referred to herein as this “Agreement.” To the extent not defined herein, capitalized terms used herein have the meanings assigned in the Transaction Documents.
The Transferor has prepared and filed with the Securities and Exchange Commission (the “Commission”) in accordance with the provisions of the Securities Act of 1933 (the “Act”), (i) a registration statement on Form SF-3 (having the registration numbers 333-265964 and 333-265964-01), including a form of prospectus and such amendments thereto as may have been filed prior to the date hereof, relating to the Notes and the offering thereof in accordance with Rule 415 under the Act. If any post-effective amendment to such registration statement has been filed with respect thereto, prior to the execution and delivery of this Agreement, the most recent such amendments have been declared effective by the Commission. For purposes of this Agreement, “Effective Time” means the date and time as of which each such registration statement, or the most recent post-effective amendment thereto, if any, was declared effective by the Commission, and “Effective Date” means the date of the Effective Time. Such registration statement, as amended at the Effective Time, including all material incorporated by reference therein and including all information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430D under the Act is referred to in this Agreement as the “Registration Statement.” The Registration Statement has been declared effective by the Commission not more than three years prior to the date hereof.
The Transferor proposes to file with the Commission pursuant to Rule 424(b) under the Act (“Rule 424(b)”) a final prospectus (such final prospectus, in the form most recently revised and filed with the Commission pursuant to Rule 424(b), together with any amendment thereof or supplement thereto, is hereinafter referred to as the “Prospectus”) relating to the Notes and the method of distribution thereof.
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At or prior to 11:33 a.m. (New York City Time) on April 21, 2023 (the time the first Contract of Sale (as defined below) was entered into as designated by the Representatives (such time, the “Time of Sale”), the Transferor also had prepared a Preliminary Prospectus dated April 18, 2023, with respect to such Notes (together with the Additional Information, the “Time of Sale Information”). “Preliminary Prospectus” means, with respect to any date or time referred to herein, the most recent preliminary Prospectus (as amended or supplemented, if applicable), which has been prepared and delivered by the Transferor to the Representatives in accordance with the provisions hereof, together with the information referred to under the caption “Static Pool Information” therein regardless of whether it is deemed a part of the Registration Statement or the Prospectus. “Additional Information” means information that is included in any road show presentation the Transferor has approved and the free writing prospectus dated April 18, 2023 with respect to the ratings on the Notes (the “Ratings FWP”).
If, subsequent to the Time of Sale and prior to the Closing Date, the Time of Sale Information included an untrue statement of material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and the Transferor and the Bank have prepared and delivered to the Underwriters a Corrected Prospectus (as defined below), and as a result investors in the Notes elect to terminate their existing “Contracts of Sale” (within the meaning of Rule 159 under the Act) for any Notes and enter into new Contracts of Sale with the Underwriters, then “Time of Sale Information” will refer to the information conveyed to investors at the time of entry into the first such new Contract of Sale in an amended Preliminary Prospectus approved by the Transferor and the Representatives that has been filed with the Commission in accordance with Rule 424(h) (“Rule 424(h)”) under the Act and that corrects such material misstatements or omissions (a “Corrected Prospectus”), together with the Additional Information, and “Time of Sale” will refer to the time and date on which such new Contracts of Sale were entered into.
As used herein, references to any “Free Writing Prospectus” shall mean a “free writing prospectus” as defined in Rule 405 of the Act. For the avoidance of doubt, the Ratings FWP shall constitute a Free Writing Prospectus.
The Transferor and the Bank hereby agree, severally and not jointly, with the Underwriters as follows:
Section 2. Representations and Warranties of the Transferor and the Bank.
Each of the Transferor (the representations and warranties as to the Transferor being given by the Transferor) and the Bank (the representations and warranties as to the Bank being given by the Bank) represents and warrants to, and agrees with, the Underwriters, that:
(a) The Transferor is duly organized, validly existing and in good standing as a limited liability company under the laws of the State of Nebraska, and has all requisite power, authority and legal right to own its property, transact the business in which it is now engaged and conduct its business as described in the Registration Statement, the Preliminary Prospectus and the Prospectus, and to execute, deliver and perform its obligations under this Agreement, the Transfer and Servicing Agreement, the Receivables Purchase Agreement, the Trust Agreement, the Risk Retention Agreement and the Asset Representations Review Agreement and to authorize the issuance of the Notes.
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(b) The Bank is a national banking association duly organized, validly existing and in good standing under the laws of the United States, and has all requisite power, authority and legal right to own its property and conduct its credit card business as such properties are presently owned and such business is presently conducted, and conduct its business as described in the Registration Statement, the Preliminary Prospectus and the Prospectus, and to own the Accounts and to execute, deliver and perform its obligations under this Agreement, the Receivables Purchase Agreement, the Transfer and Servicing Agreement, the Administration Agreement, the Risk Retention Agreement and the Asset Representations Review Agreement.
(c) The execution, delivery and performance of each of the Transaction Documents to which it is a party, and the incurrence of the obligations herein and therein set forth and the consummation of the transactions contemplated hereby and thereby, and with respect to the Transferor, the issuance of the Notes, have been duly and validly authorized by the Transferor and the Bank, as applicable, by all necessary action on the part of the Transferor and the Bank, as applicable.
(d) This Agreement has been duly authorized, executed and delivered by the Transferor and the Bank.
(e) Each of the Transaction Documents has been, or on or before the Closing Date will be, executed and delivered by the Transferor and/or the Bank, as applicable, and when executed and delivered by the other parties thereto, will constitute a legal, valid and binding agreement of the Transferor and/or the Bank, as applicable, enforceable against the Transferor and/or the Bank, as applicable, in accordance with its terms, except, in each case, to the extent that (i) the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium, receivership or other similar laws now or hereafter in effect relating to creditors’ or other obligees’ rights generally or the rights of creditors or other obligees of institutions insured by the FDIC, (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought and (iii) certain remedial provisions of the Indenture may be unenforceable in whole or in part under the UCC, but the inclusion of such provisions does not render the other provisions of the Indenture invalid and notwithstanding that such provisions may be unenforceable in whole or in part, the Indenture Trustee, on behalf of the Noteholders, will be able to enforce the remedies of a secured party under the UCC.
(f) The Notes have been duly authorized and will be issued pursuant to the terms of the Indenture and, when executed by the Owner Trustee on behalf of the Issuer and authenticated by the Indenture Trustee in accordance with the Indenture and delivered pursuant to the Indenture and this Agreement, will be duly and validly executed, issued and outstanding and will constitute legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms, subject to (A) the effect of bankruptcy, insolvency, moratorium, receivership, reorganization, liquidation and other similar laws affecting creditors’ rights generally, (B) the effect of general principles of equity including (without limitation) concepts of materiality, reasonableness, good faith, fair dealing (regardless of whether considered and applied in a proceeding in equity or at law), and also to the possible unavailability of specific performance or injunctive relief, and (C) the unenforceability under certain circumstances of provisions indemnifying a party against liability or requiring contribution from a party for liability where such indemnification or contribution is contrary to public policy. The Notes will be in the form contemplated by the Indenture, and the Notes and the Indenture will conform to the descriptions thereof contained in the Preliminary Prospectus, the Prospectus and the Registration Statement, as amended or supplemented.
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(g) Neither the Transferor nor the Bank is in violation of any Requirement of Law or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan agreement, note, lease or other instrument to which it is a party or by which it is bound or to which any of its property is subject, which violation or defaults separately or in the aggregate would have a material adverse effect on the Issuer, the Transferor or the Bank.
(h) None of the issuance and sale of the Notes or the execution and delivery by the Transferor or the Bank of this Agreement or any Transaction Document to which it is a party, nor the incurrence by the Transferor or the Bank of the obligations herein and therein set forth, nor the consummation of the transactions contemplated hereunder or thereunder, nor the fulfillment of the terms hereof or thereof does or will (i) violate any Requirement of Law presently in effect, applicable to it or its properties or by which it or its properties are or may be bound or affected, (ii) breach or violate any provision of the organizational documents applicable to the Transferor or the Bank, (iii) violate any judgment, order or decree of any court, arbitrator, administrative agency or other governmental authority applicable to the Transferor or the Bank, (iv) conflict with, or result in a breach of, or constitute a default under, any indenture, contract, agreement, mortgage, deed of trust or instrument to which it is a party or by which it or its properties are bound, (v) result in the acceleration of any obligation of the Transferor or the Bank, or (vi) result in the creation or imposition of any Lien upon any of its property or assets, except for those encumbrances created under the Transaction Documents.
(i) All approvals, authorizations, consents, orders and other actions of any Person or of any court or other governmental body or official required in connection with the execution and delivery by the Transferor or the Bank of this Agreement or the Transaction Documents to which it is a party or the consummation of the transactions contemplated hereunder and thereunder, or the fulfillment of the terms hereof and thereof have been or will have been obtained on or before the Closing Date.
(j) All actions required to be taken by the Transferor or the Bank as a condition to the offer and sale of the Notes as described herein or the consummation of any of the transactions described in the Preliminary Prospectus, the Prospectus and the Registration Statement have been or, prior to the Closing Date, will be taken.
(k) The Master Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended (the “TIA”), and complies as to form with the TIA and the rules and regulations of the Securities and Exchange Commission (the “Commission”) thereunder. The Indenture Supplement is not required to be qualified under the TIA.
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(l) The representations and warranties made by the Transferor in the Transfer and Servicing Agreement, the Trust Agreement, and the Receivables Purchase Agreement or made in any Officer’s Certificate of the Transferor delivered pursuant to any Transaction Document to which it is a party will be true and correct at the time made and on and as of the Closing Date as if set forth herein, except that to the extent that any such representation or warranty expressly relates to an earlier or later date, such representation or warranty is true and correct at and as of such earlier or later date.
(m) The representations and warranties made by the Bank in the Receivables Purchase Agreement, and in its capacity as Servicer and Administrator, in the Transfer and Servicing Agreement, the Risk Retention Agreement and the Administration Agreement, respectively, or made in any Officer’s Certificate of the Bank delivered pursuant to any Transaction Document to which it is a party will be true and correct at the time made and on and as of the Closing Date as if set forth herein, except that to the extent that any such representation or warranty expressly relates to an earlier or later date, such representation or warranty is true and correct at and as of such earlier or later date.
(n) The Transferor agrees it has not granted, assigned, pledged or transferred and shall not grant, assign, pledge or transfer to any Person a security interest in, or any other right, title or interest in, the Receivables, except as provided in the Transfer and Servicing Agreement, and agrees to take all action required by the Transfer and Servicing Agreement in order to maintain the security interest in the Receivables granted pursuant to the Transfer and Servicing Agreement and the Indenture, as applicable.
(o) The Bank agrees it has not granted, assigned, pledged or transferred and shall not grant, assign, pledge or transfer to any Person a security interest in, or any other right, title or interest in, the Receivables, except as provided in the Receivables Purchase Agreement and agrees to take all action required by the Receivables Purchase Agreement in order to maintain the security interests in the Receivables granted pursuant to the Receivables Purchase Agreement, the Transfer and Servicing Agreement and the Indenture, as applicable.
(p) (i) The conditions to the use of a registration statement on Form SF-3 under the Act, as set forth in the General Instructions to Form SF-3, and the conditions of Rule 415 under the Act, have been satisfied with respect to the Registration Statement. No stop order suspending the effectiveness of the Registration Statement has been issued, and no proceeding for that purpose has been instituted or threatened by the Commission.
(ii) As of the Closing Date, the Registration Statement, the Preliminary Prospectus, the Prospectus and the Ratings FWP, except with respect to any modification as to which the Representatives have been notified, shall be in all substantive respects in the form furnished to the Representatives or its counsel before such date.
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(q) On the Effective Date, the Registration Statement did conform in all material respects to the applicable requirements of the Act and the rules and regulations of the Commission thereunder (the “Rules and Regulations”) and the TIA and the rules and regulations thereunder and did not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. The Preliminary Prospectus, as of its date, as of the Time of Sale and on the date of this Agreement conforms, and at the time of filing of the Preliminary Prospectus pursuant to Rule 424(h), the Preliminary Prospectus will conform, in all material respects with the requirements of the Act and the Rules and Regulations and the TIA and the rules and regulations thereunder and it does not include, nor will include, any untrue statement of a material fact nor omits, or will omit, to state any material fact required to be stated therein or necessary to make the statements therein not misleading, except that the foregoing does not apply to statements in or omissions from the Preliminary Prospectus in reliance upon and in conformity with Underwriters’ Information (as defined below). On the date of this Agreement, the Registration Statement and the Prospectus conform, and at the time of filing of the Prospectus pursuant to Rule 424(b), the Registration Statement and the Prospectus will conform, in all material respects with the requirements of the Act and the Rules and Regulations and the TIA and the rules and regulations thereunder. Neither of such documents, as of its date, as of the date of this Agreement and as of the Closing Date, includes, or will include, any untrue statement of a material fact or omits, or will omit, to state any material fact required to be stated therein or necessary to make the statements therein not misleading, except that the foregoing does not apply to statements in or omissions from either of such documents based upon Underwriters’ Information (as defined below). Each of the Transferor and the Bank hereby acknowledges that the statements set forth (i) on the cover page of the Prospectus on the line across from “Price to public,” (ii) in the table listing the Underwriters and the Principal Amount of Notes under the heading “Underwriting” in the Prospectus, (iii) in the two tables following the second paragraph under the heading “Underwriting” in the Prospectus and the Preliminary Prospectus and (iv) in the first sentence of the penultimate paragraph under the heading “Underwriting” in the Prospectus and the Preliminary Prospectus (such information, the “Underwriters’ Information”) constitute the only information furnished in writing by or on behalf of the Underwriters for inclusion in the Prospectus or the Preliminary Prospectus.
(r) The Time of Sale Information at the Time of Sale did not, and at the Closing Date will not, include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (it being understood that no representation or warranty is made with respect to the omission of pricing and price-dependent information, which information shall of necessity appear only in the final Prospectus); provided, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information contained in or omitted from either the Registration Statement or the Prospectus based upon Underwriters’ Information.
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(s) Other than with respect to the Preliminary Prospectus, the Prospectus and any Additional Information approved by the Representatives, each of the Transferor, the Bank and the Issuer (including its agents and representatives) has not made, used, authorized or approved and will not make, use, authorize or approve any “written communication” (as defined in Rule 405 under the Act) that constitutes an offer to sell or solicitation of any offer to buy the Notes. The Transferor will file with the Commission any Free Writing Prospectus used by the Transferor, the Bank or the Issuer if such filing is required by Rule 433(d) of the Act. If required by Rule 433(c)(2)(i) of the Act, each Free Writing Prospectus used by the Transferor, the Bank or the Issuer shall contain a legend substantially in the form of and in compliance with Rule 433(c)(2)(i) of the Act, and shall otherwise conform to any requirements for “free writing prospectuses” under the Act.
(t) Since the respective dates as of which information is given in the Registration Statement, the Preliminary Prospectus and the Prospectus, except as otherwise set forth therein, there has not been any material adverse change in the condition, financial or otherwise, or in the earnings, business or operations, of the Bank or the Transferor.
(u) There are no actions, proceedings or investigations pending or, to the best of its knowledge, threatened against or affecting the Transferor or the Bank (or any basis therefor known to the Transferor or the Bank) (i) asserting the invalidity of any of the Transaction Documents, (ii) seeking to prevent the issuance of the Notes or the consummation by the Transferor or the Bank of any of the transactions contemplated by the Transaction Documents, or (iii) which, individually or in the aggregate, if adversely decided, would materially and adversely affect the business, financial condition or results of operations of the Transferor, the Issuer or the Bank or of the Transferor’s or the Bank’s ability to consummate the transactions contemplated by the Transaction Documents.
(v) None of the Issuer, the Transferor, the Bank, any Affiliates thereof or any of their agents has taken any action that would require registration of the Issuer, the Transferor or the Bank under the Investment Company Act of 1940, as amended (the “1940 Act”) nor will the Issuer, the Transferor, the Bank, any Affiliates thereof or any of their agents act, nor have they authorized or will they authorize any person to act, in such a manner. The Issuer satisfies the requirements to rely on the exclusion from the definition of “investment company” provided by Rule 3a-7 under the 1940 Act, although there may be additional statutory or regulatory exclusions or exemptions available to the Issuer. The Issuer is not a “covered fund” for purposes of regulations adopted under Section 13 of the Bank Holding Act of 1956 (hereinafter referred to as the “Volcker Rule”).
(w) The Transferor was not, on the date on which the first bona fide offer of the Notes sold pursuant to this Agreement was made, an “ineligible issuer” as defined in Rule 405 under the Act.
(x) The Bank has provided a written representation (the “17g-5 Representation”) to each nationally recognized statistical rating organization hired by the Bank to rate the Notes (collectively, the “Hired NRSROs”), which satisfies the requirements of paragraph (a)(3)(iii) of Rule 17g-5 (“Rule 17g-5”) of the Exchange Act. The Bank has complied, and has caused the Transferor to comply, with the 17g-5 Representation, other than any breach of the 17g-5 Representation (a) that would not have a material adverse effect on the Notes or (b) arising from a breach by any of the Underwriters of the representation, warranty and covenant set forth in Section 4(g).
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(y) The Transferor has complied with Rule 193 of the Act in all material respects in connection with the offering of the Notes.
(z) None of the Transferor, the Bank nor any of their respective affiliates has engaged any third party to provide due diligence services within the meaning of Rule 17g-10(d)(1) under the Exchange Act or obtained any third-party due diligence report within the meaning of Rule 15Ga-2(d) under the Exchange Act with respect to the Receivables or the transactions contemplated by this Agreement or the other Transaction Documents.
(aa) The Bank is the appropriate entity to comply with all requirements of Regulation RR, 17 C.F.R. § 246.1, et seq. (the “Credit Risk Retention Rules”) implementing the credit risk retention requirements of Section 15G of the Exchange Act that are imposed on a “sponsor of a securitization transaction.” The Bank has complied, directly or (to the extent permitted by the Credit Risk Retention Rules) through one or more “majority-owned affiliates” (as defined in the Credit Risk Retention Rules, a “Majority-Owned Affiliate”), with all requirements imposed on the “sponsor of a securitization transaction” by the Credit Risk Retention Rules through the date hereof. The Bank or one of its Majority-Owned Affiliates will retain, for the period during which it is required to do so under the Credit Risk Retention Rules, a “seller’s interest” (as defined in the Credit Risk Retention Rules) of not less than 5% of the excess of the aggregate unpaid principal balance of all series of notes outstanding under the Indenture (other than notes that are at all times held by the Bank or one or more wholly-owned affiliates) over the aggregate amount of principal collections on deposit in segregated principal or principal accumulation accounts relating to all series of notes outstanding under the Indenture (such excess, the “Adjusted Outstanding ABS Investor Interest”). Neither the Bank nor any Majority-Owned Affiliate will engage in any activities that would constitute impermissible hedging, transfer or financing of such seller’s interest as prohibited by the Credit Risk Retention Rules.
Section 3. Purchase, Sale, Payment and Delivery of the Notes.
(a) On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Transferor agrees to sell to the Underwriters, and the Underwriters, severally and not jointly, agree to purchase from the Transferor, at a purchase price of 99.64144% of the principal amount thereof, $350,000,000 aggregate principal amount of the Notes, each Underwriter to purchase the amounts shown on Schedule A hereto.
(b) The Transferor will cause the Issuer to deliver the Notes to the Underwriters against payment of the purchase price in immediately available funds, drawn to the order of the Transferor, at the office of Kutak Rock LLP, in Omaha, Nebraska at 10:00 a.m., Chicago time, on April 27, 2023, such time being herein referred to as the “Closing Date.” Each of the Notes so to be delivered shall be represented by one or more definitive notes registered in the name of Cede & Co., as nominee for The Depository Trust Company. The Notes will be available for inspection, checking and packaging by the Underwriters at the office at which the Notes are to be delivered in Omaha, Nebraska no later than 4:00 p.m., Chicago time, on the business day prior to the Closing Date.
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Section 4. Offering by Underwriters.
(a) It is understood that after the Effective Date, each Underwriter proposes to offer the Notes for sale to the public (which may include selected dealers) as set forth in the Prospectus.
(b) Each Underwriter shall comply with all applicable laws and regulations in connection with its use of Free Writing Prospectuses, including but not limited to Rules 164 and 433 of the Act.
(c) Other than the Preliminary Prospectus, Prospectus, the Additional Information and other information approved by the Transferor, each Underwriter represents, warrants and agrees with the Transferor and the Bank that it has not made, used, prepared, authorized, approved or referred to and will not make, use, prepare, authorize, approve or refer to any “written communication” (as defined in Rule 405 under the Act) that constitutes an offer to sell or solicitation of an offer to buy the Notes, including, but not limited to, any “ABS informational and computational materials” as defined in Item 1101(a) of Regulation AB under the Act. Notwithstanding the foregoing, the Transferor agrees that the Underwriters may disseminate information on Bloomberg to prospective investors relating solely to (i) information of the type identified in Rule 134 of the Act, (ii) information included in the Preliminary Prospectus, (iii) the status of allocations and subscriptions of the Notes, expected pricing parameters of the Notes and the yields and weighted average lives of the Notes, and (iv) information constituting final terms of the Notes within the meaning of Rule 433(d)(5)(ii) under the Act (each such communication, an “Underwriter Free Writing Prospectus”); provided that in the case of the foregoing clauses (i) through (iv), other than the final pricing terms, such Underwriter Free Writing Prospectus would not be required to be filed with the Commission.
(d) Each Underwriter severally represents, warrants and agrees with the Transferor, the Issuer and the Bank that:
(i) each Underwriter Free Writing Prospectus prepared by it will not, as of the date such Underwriter Free Writing Prospectus was conveyed or delivered to any prospective purchaser of the Notes, include any untrue statement of a material fact or omit any material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading; provided, however, that no Underwriter makes such representation, warranty or agreement to the extent such misstatements or omissions were the result of any inaccurate information which was included in the Preliminary Prospectus, the Prospectus or any written information furnished to the related Underwriter by the Transferor, the Issuer or the Bank expressly for use therein, which information was not corrected by information subsequently provided by the Transferor, the Issuer or the Bank to the related Underwriter within a reasonable period of time prior to the time of use of such Underwriter Free Writing Prospectus;
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(ii) if required by Rule 433(c)(2)(i) of the Act, each Underwriter Free Writing Prospectus prepared by it shall contain a legend substantially in the form of and in compliance with Rule 433(c)(2)(i) of the Act, and shall otherwise conform to any requirements for “free writing prospectuses” under the Act; and
(iii) each Underwriter Free Writing Prospectus prepared by it shall be delivered to the Transferor no later than the date of first use and, unless otherwise agreed to by the Transferor and the related Underwriter, such delivery shall occur no later than the close of business for the Bank (Central Time) on the date of first use; provided, however, if the date of first use is not a Business Day, such delivery shall occur no later than the close of business for the Bank (Central Time) on the first Business Day after such date of first use.
(e) Each Underwriter represents and agrees (i) that it did not enter into any Contract of Sale for any Notes prior to the Time of Sale and (ii) that it will, at any time that such Underwriter is acting as an “underwriter” (as defined in Section 2(a)(11) of the Act) with respect to the Notes, deliver the Preliminary Prospectus to each investor to whom Notes are sold by it during the period prior to the filing of the final Prospectus (as notified to such Underwriter by the Transferor or by the Bank), which delivery shall be prior to the applicable time of any such Contract of Sale with respect to such investor.
(f) In the event the Bank, the Transferor or any Underwriter becomes aware that, as of the Time of Sale, any Time of Sale Information contains or contained any untrue statement of material fact or omits or omitted to state any material fact necessary in order to make the statements contained therein in light of the circumstances under which they were made, not misleading (“Defective Information”), such Underwriter, the Bank or the Transferor, as applicable, shall promptly notify the Representatives and, in the case of any Underwriter giving such notice, the Transferor, of such untrue statement or omission no later than one Business Day after discovery and the Transferor shall prepare and deliver to the Underwriters a Corrected Prospectus. Each Underwriter shall deliver such Corrected Prospectus to any person with whom a Contract of Sale was entered into based on such Defective Information, and such Underwriter shall provide any such person with adequate disclosure of the person’s rights under the existing Contract of Sale and a meaningful ability to elect to terminate or not terminate the prior Contract of Sale and to elect to enter into or not enter into a new Contract of Sale based on the information set forth in the Corrected Prospectus.
(g) Each Underwriter, severally and not jointly, represents and agrees that (a) it has not delivered, and will not deliver without the prior written consent of the Bank, any Rating Information to a Hired NRSRO or other nationally recognized statistical rating organization and (b) it has not participated, and will not participate without the prior written consent of the Bank, in any oral communication regarding Rating Information with any Hired NRSRO or other nationally recognized statistical rating organization; provided, for the avoidance of doubt, that if an Underwriter receives an oral communication from a Hired NRSRO, such Underwriter is authorized to inform such Hired NRSRO that it will respond to the oral communication with a designated representative from the Bank or refer such Hired NRSRO to the Bank, who may respond to the oral communication. For purposes of this paragraph, “Rating Information” means any information, written or oral, provided to a Hired NRSRO that could reasonably be determined to be relevant to (a) determining the initial credit rating for the Notes, including information about the characteristics of the Receivables and the legal structure of the Notes, and (b) undertaking credit rating surveillance on the Notes, including information about the characteristics and performance of the Receivables, in each case as contemplated by Rule 17g5(a)(3)(iii)(C).
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(h) Each Underwriter severally and not jointly represents that it has not engaged any third party to provide due diligence services within the meaning of Rule 17g-10(d)(1) under the Exchange Act or obtained any third-party due diligence report within the meaning of Rule 15Ga-2(d) under the Exchange Act with respect to the Receivables or the transactions contemplated by this Agreement or the other Transaction Documents.
Section 5. Certain Agreements of the Transferor.
The Transferor agrees with the Underwriters that:
(a) Immediately following the execution of this Agreement, the Transferor will transmit the Prospectus to the Commission pursuant to Rule 424(b) by a means reasonably calculated to result in filing with the Commission pursuant to Rule 424(b). The Transferor will not file any amendment of the Registration Statement with respect to the Notes or supplement to the Prospectus unless a copy has been furnished to the Representatives for their review a reasonable time prior to the proposed filing thereof or to which the Representatives shall reasonably object in writing. The Transferor will advise the Representatives promptly of (i) the effectiveness of any amendment or supplementation of the Registration Statement or Prospectus, (ii) any request by the Commission for any amendment or supplementation of the Registration Statement or the Prospectus or for any additional information, (iii) the receipt by the Transferor of any notification with respect to the suspension of qualification of the Notes for sale in any jurisdiction or the initiation or threatening of any proceeding for such purposes and (iv) the institution by the Commission of any stop order proceeding in respect of the Registration Statement, and will use its best efforts to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued.
(b) If at any time when a prospectus relating to the Notes is required to be delivered under the Act, any event occurs as a result of which the Preliminary Prospectus or the Prospectus, as then amended or supplemented, would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Preliminary Prospectus or the Prospectus to comply with the Act, the Transferor promptly will notify the Representatives of such event and prepare and file with the Commission an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance. Neither the Underwriters’ consent to, nor the Underwriters’ delivery of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 7.
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(c) As soon as practicable, the Transferor will cause the Issuer to make generally available to the Noteholders an earnings statement or statements of the Issuer covering a period of at least 12 months beginning after the Effective Date which will satisfy the provisions of Section 11(a) of the Act and Rule 158 of the Commission promulgated thereunder; provided, that this covenant may be satisfied by posting the monthly investor reports for the Trust for each month in such 12-month period on a publicly available website.
(d) The Transferor will furnish to the Representatives and their counsel, without charge, copies of the Registration Statement (one of which will be signed and will include all exhibits), the Preliminary Prospectus and the Prospectus and all amendments and supplements to such documents, in each case as soon as available and in such quantities as the Representatives reasonably request. The Transferor will pay the expenses of printing or other production of all documents relating to the offering of the Notes.
(e) The Transferor will endeavor to qualify the Notes for sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request and the determination of the eligibility for investment of the Notes under the laws of such jurisdictions as the Representatives may designate and will continue such qualifications in effect so long as required for the distribution of the Notes; provided, however, that the Transferor shall not be obligated to qualify to do business in any jurisdiction where such qualification would subject the Transferor to general or unlimited service of process in any jurisdiction where it is not now so subject. The Transferor will promptly advise the Underwriters of the receipt by the Transferor of any notification with respect to the suspension of the qualification of the Notes for sale in any jurisdiction or the initiation or threat of any proceeding for such purpose.
(f) The Transferor will, and will cause the Issuer to, assist the Representatives in making arrangements with DTC, Euroclear and Clearstream, concerning the issue of the Notes, arranging with such clearing agency to permit the Notes to be eligible for clearance and settlement through such clearing agency and related matters.
(g) So long as any Note is outstanding, the Transferor will furnish, or cause the Servicer to furnish, to the Representatives copies of each certificate and the annual statements of compliance delivered to (a) the Owner Trustee, the Indenture Trustee and each Hired NRSRO pursuant to Section 3.05 of the Transfer and Servicing Agreement and independent certified public accountant’s servicing reports furnished to the Indenture Trustee and the Hired NRSROs pursuant to Sections 3.06(a) and (b) of the Transfer and Servicing Agreement, and (b) the Series 2023-1 Noteholders pursuant to Sections 5.03(a) and (d) of the Indenture Supplement, by first class mail promptly after such certificates, statements and reports are furnished to the Owner Trustee, the Indenture Trustee, the Series 2023-1 Noteholders or the Hired NRSROs, as the case may be.
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(h) So long as any Note is outstanding, the Transferor will furnish, or cause the Servicer to furnish, to the Representatives, by first-class mail as soon as practicable (i) all documents concerning the Receivables or the Notes distributed by the Transferor or the Servicer (under the Transfer and Servicing Agreement) to the Owner Trustee, the Indenture Trustee or the Noteholders, or filed with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (ii) any order of the Commission under the Act or the Exchange Act applicable to the Issuer or to the Transferor, or pursuant to a “no-action” letter obtained from the staff of the Commission by the Transferor and affecting the Issuer or the Transferor and (iii) from time to time, such other information concerning the Issuer as the Representatives may reasonably request.
(i) To the extent, if any, that any of the ratings provided with respect to the Notes by any Hired NRSRO are conditional upon the furnishing of documents or the taking of any other actions by the Transferor, the Transferor shall furnish such documents and take any such other actions as are necessary to satisfy such condition.
(j) In connection with any disposition of the Definitive Notes pursuant to a transaction made in compliance with all applicable transfer restrictions contemplated herein and in the Indenture, the Transferor will cause the Issuer to reissue notes evidencing such Definitive Notes as required pursuant to the Indenture.
(k) Until 30 days following the Closing Date, none of the Transferor or any trust or other entity originated, directly or indirectly, by the Transferor (including, without limitation, the Issuer) will, without the prior written consent of the Representatives, which shall not be unreasonably withheld, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce the offering of, any asset-backed securities (other than the Notes, $40,385,000 principal amount of Class B Series 2023-1 Asset Backed Notes (the “Class B Notes”), $44,231,000 principal amount of Class C Series 2023-1 Asset Backed Notes (the “Class C Notes”), any other publicly offered asset-backed securities and any variable funding notes issued pursuant to the renewal of a variable funding note facility that has been privately placed with one or more commercial paper conduits).
(l) The Transferor shall cause its computer records relating to the Receivables to be marked in accordance with Section 2.01(c) of the Transfer and Servicing Agreement to show the Issuer’s absolute ownership of the Receivables, and shall not take any action inconsistent with the Issuer’s ownership of the Receivables, other than as permitted by the Transfer and Servicing Agreement.
(m) The Transferor will enter into or has entered into the Transfer and Servicing Agreement and other instruments to which this Agreement and the Transfer and Servicing Agreement contemplate it will be a party on or prior to the Closing Date. The Transferor will cause the Issuer to enter into any instruments to which this Agreement or any Transaction Document contemplates that either will be a party on or prior to the Closing Date.
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Section 6. Certain Agreements of the Bank.
(a) Until 30 days following the Closing Date, none of the Bank or any trust or other entity originated, directly or indirectly, by the Bank (including, without limitation, the Transferor) will, without the prior written consent of the Representatives, which shall not be unreasonably withheld, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce the offering of, any asset-backed securities (other than the Notes, the Class B Notes, the Class C Notes, any other publicly offered asset-backed securities and any variable funding notes issued pursuant to the renewal of a variable funding note facility that has been privately placed with one or more commercial paper conduits).
(b) The Bank has entered into the Receivables Purchase Agreement, the Asset Representations Review Agreement, the Transfer and Servicing Agreement and will have entered into other instruments to which this Agreement and the Receivables Purchase Agreement, the Asset Representations Review Agreement and the Transfer and Servicing Agreement contemplate it will be a party on or prior to the Closing Date.
(c) The Bank will comply, and will cause the Transferor to comply, with the 17g-5 Representation, other than any breach of the 17g-5 Representation arising from a breach by any of the Underwriters of the representation, warranty and covenant set forth in Section 4(g).
Section 7. Conditions of the Obligations of the Underwriters.
The obligation of the Underwriters to purchase and pay for the Notes will be subject to the accuracy of the representations and warranties by the Transferor and the Bank herein, to the accuracy of the statements of officers of the Transferor and the Bank made pursuant to the provisions hereof, to the performance by the Transferor and the Bank of their respective obligations hereunder and to the following additional conditions precedent:
(a) On or prior to each of the date of this Agreement and the Closing Date, the Representatives shall have received an agreed upon procedures letter or letters of the Bank’s current certified public accountants, dated on or prior to the date of the Preliminary Prospectus and the Prospectus, as applicable, confirming that they are independent public accountants within the meaning of the Act and the applicable published Rules and Regulations thereunder, which letter shall be substantially in the form heretofore agreed to and otherwise in form and in substance satisfactory to the Representatives and their counsel.
(b) Each of the Preliminary Prospectus and the Prospectus shall have been filed with the Commission in accordance with the Rules and Regulations and Section 5(a) of this Agreement; and, prior to the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Transferor or the Representatives, shall be contemplated by the Commission.
(c) Since the respective dates as of which information is given in the Registration Statement, the Preliminary Prospectus and the Prospectus, except as otherwise set forth therein, there has not been a material adverse change in the condition, financial or otherwise, or in the earnings, business or operations, of the Bank or the Transferor, which in any case makes it impracticable or inadvisable in the Representatives’ reasonable judgment to proceed with the public offering or the delivery of the Notes on the terms and in the manner contemplated in the Prospectus.
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(d) Subsequent to the execution and delivery of this Agreement none of the following shall have occurred: (i) trading in securities generally on the New York Stock Exchange, the American Stock Exchange or the over-the-counter market shall have been suspended, limited or minimum prices shall have been established on either of such exchanges or such market by the Commission, by such exchange or by any other regulatory body or governmental authority having jurisdiction or any suspension of trading of any securities of the Issuer, the Bank, the Transferor or First National of Nebraska, Inc. or any of their Affiliates on any exchange or in the over-the-counter market; (ii) a banking moratorium shall have been declared by Federal or state authorities; (iii) any downgrading in the rating of any debt securities of the Issuer, the Bank, the Transferor, First National of Nebraska, Inc. or any of their Affiliates by any “nationally recognized statistical rating organization” (as defined for purposes of Rule 436(g) under the Act), or any public announcement that any such organization has under surveillance or review its rating of any such debt securities (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating); (iv) the United States shall have become engaged in hostilities, there shall have been an escalation of hostilities involving the United States or there shall have been a declaration of a national emergency or war by the United States or any other substantial national or international calamity or emergency which, in the judgment of the Representatives, makes it impractical or inadvisable to proceed with the completion and sale of and payment for the Notes; and (v) any material adverse change in the financial markets for asset-backed securities in the United States which, in the Representatives’ judgment, makes it impractical to proceed with completion of the sale of and payment for the Notes.
(e) The Representatives shall have received an opinion or opinions, dated the Closing Date, of Kutak Rock LLP, special counsel to the Transferor and the Bank, satisfactory in form and substance to the Representatives and their counsel to the effect that:
(i) The Transferor is a limited liability company in good standing, duly organized and validly existing under the laws of the State of Nebraska; First National Funding Corporation (“FNFC”) is a special purpose business corporation in good standing, duly organized and validly existing under the laws of the State of Nebraska; the Bank is a national banking association in good standing, duly organized and validly existing under the laws of the United States of America; and each of the Transferor and the Bank (each referred to in this subsection (e) as an “FNBO Entity”) is duly qualified to do business and is in good standing under the laws of each jurisdiction which requires such qualification wherein it owns or leases material properties or conducts material business, and has full power and authority to own its properties, to conduct its business as described in the Registration Statement, the Preliminary Prospectus and the Prospectus, to enter into and perform its obligations under this Agreement and the Transaction Documents to which it is a party, and to consummate the transactions contemplated thereby.
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(ii) Each of the Transaction Documents, and this Agreement, has been duly authorized, executed and delivered by each FNBO Entity that is a party thereto.
(iii) Neither the execution and delivery of the Transaction Documents and this Agreement, by either FNBO Entity that is party thereto nor the consummation of any of the transactions contemplated therein nor the fulfillment of the terms thereof, conflicts with or violates, results in a material breach of or constitutes a default under (A) any Requirements of Law applicable to such FNBO Entity, (B) any term or provision of any order known to such firm to be currently applicable to such FNBO Entity of any court, regulatory body, administrative agency or governmental body having jurisdiction over such FNBO Entity or (C) any term or provision of any indenture or other agreement or instrument known to such firm to which such FNBO Entity is a party or by which either of them or any of their properties are bound and, as to FNBO, which has been identified to us as material to the business or operations of FNBO.
(iv) Except as otherwise disclosed in the Prospectus (and any supplement thereto) or the Registration Statement, there is no pending or, to the best of such firm’s knowledge, threatened action, suit or proceeding before any court or governmental agency, authority or body or any arbitrator with respect to the Issuer, the Notes, this Agreement, or any of the Transaction Documents, or any of the transactions contemplated therein with respect to an FNBO Entity which, in the case of any such action, suit or proceeding if adversely determined, would have a material adverse effect on the Notes or the Issuer or upon the ability of either FNBO Entity to perform its obligations under this Agreement, the Transaction Documents.
(v) Each of the Transaction Documents to which an FNBO Entity is a party constitutes the legal, valid and binding agreement of such Person under the laws of Nebraska, enforceable against each FNBO Entity that is a party thereto in accordance with its terms, subject to (A) the effect of bankruptcy, insolvency, moratorium, receivership, reorganization, liquidation and other similar laws affecting creditors’ rights generally and the rights of creditors of national banking associations (including, without limitation, the determination pursuant to 12 U.S.C. §1821(e) of any liability for the disaffirmance or repudiation of any contract), (B) the effect of general principles of equity including (without limitation) concepts of materiality, reasonableness, good faith, fair dealing (regardless of whether considered and applied in a proceeding in equity or at law), and also to the possible unavailability of specific performance or injunctive relief, (C) the unenforceability under certain circumstances of provisions indemnifying a party against liability or requiring contribution from a party for liability where such indemnification or contribution is contrary to public policy and (D) the fact that certain remedial provisions of the Indenture may be unenforceable in whole or in part under the UCC, but the inclusion of such provisions does not render the other provisions of the Indenture invalid and notwithstanding that such provisions may be unenforceable in whole or in part, the Indenture Trustee, on behalf of the Noteholders, will be able to enforce the remedies of a secured party under the UCC.
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(vi) Each of this Agreement and the Asset Representations Review Agreement constitutes the legal, valid and binding obligation of the Transferor and the Bank under the laws of the State of New York, enforceable against the Transferor and the Bank in accordance with its terms, subject to (A) the effect of bankruptcy, insolvency, moratorium, receivership, reorganization, liquidation and other similar laws affecting creditors’ rights generally and the rights of creditors of national banking associations (including, without limitation, the determination pursuant to 12 U.S.C. §1821(e) of any liability for the disaffirmance or repudiation of any contract), (B) the effect of general principles of equity including (without limitation) concepts of materiality, reasonableness, good faith, fair dealing (regardless of whether considered and applied in a proceeding in equity or at law), and also to the possible unavailability of specific performance or injunctive relief, and (C) the unenforceability under certain circumstances of provisions indemnifying a party against liability or requiring contribution from a party for liability where such indemnification or contribution is contrary to public policy.
(vii) The Notes are in due and proper form and when executed, authenticated and delivered as specified in the Indenture, and when delivered against payment of the consideration specified in this Agreement, will be validly issued and outstanding, will constitute legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms and will be entitled to the benefits of the Indenture, subject to (A) the effect of bankruptcy, insolvency, moratorium, receivership, reorganization, liquidation and other similar laws affecting creditors’ rights generally, (B) the effect of general principles of equity including (without limitation) concepts of materiality, reasonableness, good faith, fair dealing (regardless of whether considered and applied in a proceeding in equity or at law), and also to the possible unavailability of specific performance or injunctive relief, (C) the unenforceability under certain circumstances of provisions indemnifying a party against liability or requiring contribution from a party for liability where such indemnification or contribution is contrary to public policy and (D) certain remedial provisions of the Indenture may be unenforceable in whole or in part under the UCC, but the inclusion of such provisions does not render the other provisions of the Indenture invalid and notwithstanding that such provisions may be unenforceable in whole or in part, the Indenture Trustee, on behalf of the Noteholders, will be able to enforce the remedies of a secured party under the UCC.
(viii) The Registration Statement has become effective under the Act, the Preliminary Prospectus has been filed with the Commission pursuant to Rule 424(h) in the manner and within the time period required by Rule 424(h), and the Prospectus has been filed with the Commission pursuant to Rule 424(b) thereunder in the manner and within the time period required by Rule 424(b). To the best of such firm’s knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or threatened or contemplated by the Commission.
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(ix) The statements in the Prospectus under the headings “Risk Factors—If a conservator or receiver were appointed for First National Bank of Omaha, or if we become a debtor in a bankruptcy case, delays or reductions in payment of your notes could occur,” “Material Legal Aspects of the Receivables,” “ERISA Considerations” and “Federal Income Tax Consequences” and the statements in the Preliminary Prospectus and the Prospectus under the headings “Structural Summary—Tax Status” and “—ERISA Considerations” to the extent that they constitute matters of law or legal conclusions with respect thereto, have been reviewed by us and are correct in all material respects.
(x) The Transaction Documents and the Notes conform in all material respects to the descriptions thereof contained in the Preliminary Prospectus and the Prospectus.
(xi) The Master Indenture has been duly qualified under the TIA and complies as to form with the TIA and the rules and regulations of the Commission thereunder. The Indenture Supplement is not required to be qualified under the TIA in connection with the Notes. The Issuer is not now, and immediately following the issuance of the Notes pursuant to the Indenture will not be, (i) required to be registered under the 1940 Act or (ii) a “covered fund” for purposes of the Volcker Rule. The Issuer satisfies the requirements to rely on the exclusion from the definition of “investment company” provided by Rule 3a-7 under the 1940 Act, although there may be additional statutory or regulatory exclusions or exemptions available to the Issuer.
(xii) No approval, authorization, consent, order, registration, filing, qualification, license or permit of or with any court or governmental agency or body is required for the consummation by the Bank, FNFC, the Transferor or the Issuer of the transactions contemplated by the Transaction Documents and this Agreement, and the issuance of the Notes, except such as have been obtained under the Act and such as may be required under the Federal Securities laws and the blue sky laws of any jurisdiction inside the United States in connection with the purchase and distribution of the Notes by the Underwriters.
(xiii) For federal income tax purposes: (i) the Notes will be characterized as debt; (ii) the Note Trust will not be classified as an association or publicly traded partnership taxable as a corporation for federal income tax purposes; (iii) the issuance of the Notes will not adversely affect the tax characterization as debt of any outstanding series of notes issued by the Note Trust with respect to which an opinion of counsel was delivered at their time of issuance that such notes would be characterized as debt; and (iv) the issuance of the Notes will not otherwise constitute an event in which a gain or loss would be recognized by any holders of any outstanding series of notes issued by the Note Trust.
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(xiv) The Indenture, the Administration Agreement and the Notes constitute the legal, valid and binding obligation of the Issuer under the laws of the State of Nebraska, subject to (A) the effect of bankruptcy, insolvency, moratorium, receivership, reorganization, liquidation and other similar laws affecting creditors’ rights generally, (B) the effect of general principles of equity including (without limitation) concepts of materiality, reasonableness, good faith, fair dealing (regardless of whether considered and applied in a proceeding in equity or at law), and also to the possible unavailability of specific performance or injunctive relief, (C) the unenforceability under certain circumstances of provisions indemnifying a party against liability or requiring contribution from a party for liability where such indemnification or contribution is contrary to public policy and (D) the fact that certain remedial provisions of the Indenture may be unenforceable in whole or in part under the UCC, but the inclusion of such provisions does not render the other provisions of the Indenture invalid and notwithstanding that such provisions may be unenforceable in whole or in part, the Indenture Trustee, on behalf of the Noteholders, will be able to enforce the remedies of a secured party under the UCC.
(xv) Each of the Registration Statement, as of its effective date, the Preliminary Prospectus and the Prospectus, each as of its date, complied as to form in all material respects with the requirements of the Act and the Rules and Regulations under the Act, except that in each case such counsel need not express any opinion as to the financial and statistical data included therein or excluded therefrom or the exhibits to the Registration Statement and, except as and, to the extent set forth in paragraphs (ix) and (x), such counsel does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement, the Preliminary Prospectus or the Prospectus.
(xvi) If the FDIC were appointed as conservator or receiver for the Bank (a) the FDIC regulation entitled “Treatment of Financial Assets Transferred in Connection with a Securitization or Participation,” 12 C.F.R. §360.6 (the “Rule”) would be applicable to the transfers of Receivables by Bank to Transferor under the Receivables Purchase Agreement, (b) under the Rule, the FDIC could not, by exercise of its authority to disaffirm or repudiate contracts under 12 U.S.C. §1821(e), reclaim or recover the Receivables or the proceeds thereof from Transferor or the Issuer or recharacterize the Receivables or the proceeds thereof as property of Bank or the receivership for Bank, and (c) neither the FDIC (acting for itself as a creditor or as a representative of the Bank or its shareholders or creditors) nor any creditor of the Bank would have the right, under any bankruptcy or insolvency law applicable in the conservatorship or receivership of the Bank, other than Section 11(c) of the Federal Deposit Insurance Act, as amended, 12 U.S.C. §1811 et seq. (the “FDIA”), to avoid transfers of Receivables by the Bank to the Transferor, to recover the Receivables, or to require the Receivables to be turned over to the FDIC or such creditor and (d) there is no power, other than powers referred to in the Rule, that is exercisable by the FDIC as conservator or receiver for the Bank that would permit the FDIC as such conservator or receiver to reclaim or recover the Receivables from the Transferor or to recharacterize the Receivables transferred by the Bank to the Transferor as property of the Bank or of the conservatorship or receivership for the Bank.
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(xvii) Certain matters regarding and related to the limited liability company agreement of the Transferor.
(xviii) Certain matters relating to the characterization of the Receivables under the UCC and to the transfer of the Receivables from the Transferor to the Issuer under the Transfer and Servicing Agreement.
(xix) Certain matters with respect to the attachment and perfection of the ownership interests and security interests granted under the Transaction Documents in the Receivables and the proceeds thereof, including that such assets are not subject to other Liens of record.
Such counsel also shall state that they have participated in conferences with representatives of the Transferor and the Bank and their accountants, the Underwriters and counsel to the Underwriters concerning the Registration Statement, the Preliminary Prospectus, the Prospectus and the Ratings FWP and have considered the matters to be stated therein and the matters stated therein, although they are not independently verifying the accuracy, completeness or fairness of such statements (except as stated in paragraphs (ix) and (x) above) and based upon and subject to the foregoing, nothing has come to such counsel’s attention to cause such counsel to believe that the Registration Statement (excluding any exhibits filed therewith), at the time it became effective, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Preliminary Prospectus and the Ratings FWP, as of its date, as of the Time of Sale and as of the Closing Date, or the Prospectus, as of the date hereof and as of the Closing Date, contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (it being understood that such counsel has not been requested to, and does not, make any comment in such opinion with respect to the financial statements, supporting Schedules and other financial or statistical information contained in the Registration Statement, the Preliminary Prospectus or the Prospectus).
In rendering such opinion, counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the State of New York, State of Nebraska and the United States, to the extent deemed proper and stated in such opinion, upon the opinion of other counsel of good standing believed by such counsel to be reliable and acceptable to the Representatives and their counsel, and (B) as to matters of fact, on certificates of responsible officers of the Issuer, the Bank, the Transferor and public officials.
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(f) The Representatives shall have received from Chapman and Cutler LLP, special counsel for the Underwriters, a negative assurance letter, dated the Closing Date, with respect to such matters relating to this transaction as the Representatives may require, and the Transferor shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.
(g) The Representatives shall have received a certificate from each of the Transferor and the Bank, dated the Closing Date, of a Treasurer, Vice President or more senior officer of the Transferor or the Bank, as the case may be, in which such officer, to the best of his/her knowledge after reasonable investigation, shall state that (u) the representations and warranties of the Transferor and the Bank, as the case may be, in this Agreement are true and correct on and as of the Closing Date, (v) the Transferor or the Bank, as the case may be, has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date, (w) the representations and warranties of the Transferor or the Bank, as the case may be, contained in this Agreement and the Transaction Documents to which it is a party are true and correct as of the dates specified herein and therein, (x) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are threatened by the Commission, (y) nothing has come to such officers’ attention that would lead such officers to believe that the Registration Statement, the Preliminary Prospectus or the Prospectus, and any amendment or supplement thereto, as of its date and as of the Closing Date, contained an untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (z) subsequent to the date of the Preliminary Prospectus, there has been no material adverse change in the financial position or results of operation of the Bank’s credit card business except as set forth in or contemplated by the Preliminary Prospectus and the Prospectus or as described in such certificate.
(h) The Representatives shall have received an opinion of Richards, Layton, & Finger, P.A., counsel to the Owner Trustee, dated the Closing Date, satisfactory in form and substance to the Representatives and their counsel, to the effect that:
(i) The Owner Trustee is validly existing as a corporation in good standing under the laws of the State of Delaware.
(ii) The Owner Trustee has the power and authority to execute, deliver and perform the Trust Agreement.
(iii) The Trust Agreement has been duly authorized, executed and delivered by the Owner Trustee.
(iv) Neither the execution, delivery or performance by the Owner Trustee of the Trust Agreement, nor the consummation of the transactions by the Owner Trustee contemplated thereby, requires the consent or approval of, the withholding of objection on the part of, the giving of notice to, the filing, registration or qualification with, or the taking of any other action in respect of, any governmental authority or agency of the State of Delaware or the United States of America governing the trust powers of the Owner Trustee (other than the filing of the certificate of trust with the Delaware Secretary of State).
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(v) Neither the execution, delivery and performance, by the Owner Trustee, of the Trust Agreement, nor the consummation of the transactions by the Owner Trustee contemplated thereby, is in violation of the charter or bylaws of the Owner Trustee or of any law, governmental rule or regulation of the State of Delaware or of the United States of America governing trust powers of the Owner Trustee.
(i) The Representatives shall have received an opinion of Richards, Layton, & Finger, P.A., special Delaware counsel to the Issuer, dated the Closing Date, satisfactory in form and substance to the Representatives and their counsel, to the effect that:
(i) The Issuer has been duly formed and is validly existing in good standing as a statutory trust under the Delaware Statutory Trust Act, 12 Del. C. 3801 et seq. (referred to in this subsection (h) as the “Trust Act”).
(ii) The Trust Agreement is a legal, valid and binding obligation of the Transferor and the Owner Trustee, enforceable against the Transferor and the Owner Trustee, in accordance with its terms.
(iii) Under the Trust Act and the Trust Agreement, the execution and delivery of the Transfer and Servicing Agreement, and the Indenture, the issuance of the Notes, and the granting of the Collateral to the Indenture Trustee as security for the Notes has been duly authorized by all necessary trust action on the part of the Issuer.
(iv) Under the Trust Act and the Trust Agreement, the Issuer has (i) the power and authority to execute, deliver and perform its obligations under the Administration Agreement, the Indenture and the Transfer and Servicing Agreement (collectively referred to in this subsection (h) as the “Trust Documents”) and the Notes, and (ii) duly authorized, executed and delivered the Administration Agreement, the Indenture, the Transfer and Servicing Agreement and the Notes.
(v) Neither the execution, delivery and performance by the Issuer of the Trust Documents or the Notes, nor the consummation by the Issuer of any of the transactions by the Issuer contemplated thereby, requires the consent or approval of, the withholding of objection on the part of, the giving of notice to, the filing, registration or qualification with, or the taking of any other action in respect of, any governmental authority or agency of the State of Delaware, other than the filing of the certificate of trust with the Delaware Secretary of State which certificate of trust has been duly filed and the filing of any financing statements with the Delaware Secretary of State in connection with the Indenture.
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(vi) Neither the execution, delivery and performance by the Issuer of the Trust Documents, nor the consummation by the Issuer of the transactions contemplated thereby, is in violation of the Trust Agreement or of any law, rule, or regulation of the State of Delaware applicable to the Issuer.
(vii) Under Section 3805(b) of the Act, no creditor of the holder of the beneficial interest in the Trust shall have any right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the Issuer except in accordance with the terms of the Trust Agreement.
(viii) Under Section 3808(a) and (b) of the Act, the Issuer may not be terminated or revoked by the holder of the beneficial interest in the Issuer, and the dissolution, termination or bankruptcy of the holder of the beneficial interest in the Issuer shall not result in the termination or dissolution of the Issuer, except to the extent otherwise provided in the Trust Agreement.
(ix) The Owner Trustee is not required to hold legal title to the Trust Estate in order for the Issuer to qualify as a statutory trust under the Act.
(j) The Representatives shall have received an opinion of Alston & Bird LLP, counsel to the Indenture Trustee, dated the Closing Date, satisfactory in form and substance to the Representatives and their counsel, to the effect that:
(i) The Indenture Trustee is a national banking association, validly existing and in good standing under the federal laws of the United States of America.
(ii) The Indenture Trustee has duly authorized, executed and delivered each of the Indenture, the Class B Note Purchase Agreement and the Class C Note Purchase Agreement.
(iii) Subject to the following sentence, in any action or proceeding arising out of or relating to the Indenture or the Class B Note Purchase Agreement or the Class C Note Purchase Agreement in any court of the State of New York or in any federal court sitting in the State of New York, the choice of the law of Nebraska in the Indenture, the Class B Note Purchase Agreement and the Class C Note Purchase Agreement is valid except to the extent that giving effect to the law of Nebraska would violate a fundamental policy of (i) the State of New York or (ii) any other jurisdiction having a materially greater interest than Nebraska in the determination of the issue, if the law of that jurisdiction would apply to the Indenture, the Class B Note Purchase Agreement or the Class C Note Purchase Agreement or any of the provisions thereof in the absence of a governing law clause. In addition, we have assumed for the purposes of this opinion that in selecting Nebraska law the parties are acting in good faith and without an intent to evade the law.
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(iv) If, notwithstanding the parties’ express choice of Nebraska law addressed in paragraph (iii) above, a court of the State of New York or a federal court sitting in the State of New York were to construe the Indenture or the Class B Note Purchase Agreement or the Class C Note Purchase Agreement under New York law, such court would find the Indenture and the Class B Note Purchase Agreement or the Class C Note Purchase Agreement (as applicable) to be the legal, valid and binding agreement of the Indenture Trustee, enforceable in accordance with its terms against the Indenture Trustee.
(v) The Notes have been duly authenticated by the Indenture Trustee in accordance with the Indenture and the Indenture Supplement.
(vi) Neither the authentication of the Notes, nor the execution, delivery or performance of any of the Indenture, the Class B Note Purchase Agreement or the Class C Note Purchase Agreement, does now, or will hereafter, conflict with, result in a breach or violation of or constitute a default under (1) the Indenture Trustee’s organizational documents, (2) any applicable law governing the banking or trust powers of Indenture Trustee, (3) to our knowledge, any judicial or governmental judgment, decree, injunction or order that is binding on the Indenture Trustee and that would materially and adversely affect its ability to perform its obligations under the Agreements, or (4) to our knowledge, the terms of any material agreement or instrument to which the Indenture Trustee is a party or by which it is bound.
(vii) Neither the authentication of the Notes, nor the execution, delivery or performance of any of the Indenture, the Class B Note Purchase Agreement or the Class C Note Purchase Agreement, does now, or will hereafter, result in the creation or imposition of any lien, charge or encumbrance upon the Collateral or the Trust Estate established pursuant to the Indenture, except for any such lien, charge or encumbrance created by the Indenture, the Class B Note Purchase Agreement or the Class C Note Purchase Agreement.
(viii) No consent, license, approval or authorization of, or filing or registration with, any New York or federal court or governmental authority, bureau or agency is required to be obtained that has not been obtained by the Indenture Trustee in connection with the execution, delivery or performance by the Indenture Trustee of the Agreements, including the authentication and delivery of the Notes as provided in the Indenture and the Indenture Supplement.
(k) The Representatives shall have received reliance letters addressed to the Representatives, dated as of the Closing Date, allowing the Representatives to rely on each opinion of counsel delivered to a Hired NRSRO, the Indenture Trustee, the Transferor or the Bank in connection with the issuance of the Notes and not addressed to the Representatives.
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(l) The Representatives shall have received evidence satisfactory to the Representatives that the Notes shall have obtained the ratings indicated in the Ratings FWP from the Hired NRSROs named therein.
(m) The Transferor will furnish the Representatives with such conformed copies of the above and such other opinions, certificates, information, letters and documents as the Representatives or their counsel reasonably request.
If any of the conditions specified in this Section 7 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Representatives and counsel for the Representatives, this Agreement and all obligations of the Representatives hereunder may be canceled at, or at any time prior to, the Closing Date by the Representatives.
Section 8. Reimbursement of Expenses.
The Transferor agrees to pay all costs and expenses in connection with the transaction herein contemplated (whether or not consummated), including, without limiting the generality of the foregoing: all costs and expenses (i) incident to the preparation, issuance, execution, authentication and delivery of the Notes, (ii) incident to the qualification of the Notes for investment under the laws of such jurisdictions as either Representative designates, (iii) for any filing fee of the National Association of Securities Dealers, Inc. relating to the Notes, (iv) incident to the preparation, printing (including word processing and duplication costs) and delivery of the Preliminary Prospectus and the Prospectus, including any Corrected Prospectus, and, including in each case all exhibits, amendments, attachments and supplements thereto, (v) in connection with the printing (including word processing and duplication costs) and delivery of this Agreement, the Preliminary Prospectus, the Prospectus (including any Corrected Prospectus), the Transaction Documents and the furnishing to the Representatives of copies of the Preliminary Prospectus and the Prospectus (including any Corrected Prospectus) as herein provided, (vi) constituting the fees and disbursements of the Representatives’ counsel and the Bank’s and the Transferor’s counsel and accountants, (vii) payable to each Hired NRSRO in connection with the ratings of the Notes and (viii) in connection with the structuring and marketing of the Notes (and any other miscellaneous expenses in connection therewith); provided that the Representatives shall not be obligated to pay any expenses of a defaulting Representative.
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Section 9. Indemnification and Contribution.
(a) The Transferor and the Bank, jointly and severally, will indemnify and hold harmless each Underwriter, the respective directors, officers, employees and agents of each Underwriter and each Person who controls any Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (the “Indemnified Parties”) from and against any losses, claims, damages or liabilities, joint or several, to which the Underwriters or any of them may become subject, under the Act, the Exchange Act, or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in (i) the Registration Statement, (ii) the Preliminary Prospectus, (iii) the Prospectus or (iv) any Additional Information, or other information provided by the Transferor or the Bank to any holder or prospective purchaser of the Notes, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and will reimburse each such Indemnified Party for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that Transferor and the Bank will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with the Underwriters’ Information; provided further, that such indemnity with respect to any Corrected Statement (as defined below) in such Prospectus shall not inure to the benefit of any Underwriter (or related Indemnified Party) from whom the person asserting any loss, claim, damage or liability purchased the Notes that are the subject thereof if (i) the untrue statement or omission of a material fact contained in a Prospectus was corrected (a “Corrected Statement”) in a Corrected Prospectus, (ii) the Transferor gave such Underwriter prompt written notice of the need for a Corrected Prospectus, and (iii) the Transferor furnished sufficient copies of such Corrected Prospectus to such Underwriter sufficiently prior to the delivery of the confirmation of the sale of such Notes so as to allow a reasonable time for such Underwriter to deliver such Corrected Prospectus to such investor, but such Underwriter did not furnish such Corrected Prospectus to such investor prior to the delivery of such confirmation. This indemnity agreement will be in addition to any liability which the Transferor or the Bank may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Transferor, its directors and officers and each Person who controls the Transferor within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any losses, claims, damages or liabilities to which the Transferor may become subject, under the Act, the Exchange Act, or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus or the Preliminary Prospectus, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with the Underwriters’ Information with respect to such Underwriter; and will reimburse any actual legal or other expenses reasonably incurred by the Transferor and the Bank in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that in no case shall any Underwriter be responsible for any amount in excess of the Underwriter’s discounts or commission applicable to the Notes to be sold by such Underwriter hereunder.
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(c) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action or the assertion by a third party of a claim, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party will not (i) relieve it from any liability which it may have to any indemnified party except and to the extent of any material prejudice to such indemnifying party arising from such failure to provide such notice and (ii) in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in subsection (a) or (b) above. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), provided, however, that if (x) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest which, if such counsel had been retained, would have required such counsel to withdraw from such representation, (y) the indemnified party shall have been advised by counsel that there may be one or more legal defenses available to it that are different from or additional to those available to the indemnifying party or to other indemnified parties, or (z) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after receipt by the indemnifying party of notice of the institution of such action or proceeding, then, in each such case, (1) the indemnifying party shall not have the right to direct the defense of such action on behalf of such indemnified party or parties, (2) such indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties (provided that, if more than one indemnified party is subject to the circumstances described in clause (y), then, to the extent permitted by the rules of professional conduct applicable to attorneys, all such indemnified parties shall be represented by one such separate counsel) and (3) all costs and expenses of each such indemnified party in connection with such action or proceeding shall be paid by the indemnifying party pursuant to subsection (a) or (b) above, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and approval by such indemnified party of counsel appointed to defend such action, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation unless, (i) the indemnified party shall have employed separate counsel in accordance with this sentence or (ii) the indemnifying party has authorized in writing the employment of counsel for the indemnified party at the expense of the indemnifying party. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and does not include a statement as to, or an admission of, fault, culpability or failure to act by or on behalf of such indemnified party.
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(d) If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Transferor and the Bank on the one hand and the Underwriters on the other from the offering of the Notes, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Transferor and the Bank on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations; provided, however, that in no event shall any Underwriter be responsible in the aggregate for any amount in excess of the Underwriter’s discount or commission applicable to the Notes to be sold by such Underwriter hereunder. The relative benefits received by the Transferor and the Bank on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) of the Notes received by the Transferor bear to the total underwriting discounts and commissions received by the Underwriters with respect to the Notes. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Transferor or the Bank or the Underwriters. The Transferor, the Bank and the Representatives agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation that does not take into account the equitable considerations referred to above. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Transferor and the Bank under this Section shall be in addition to any liability which the Transferor or the Bank may otherwise have and shall extend, upon the same terms and conditions, to each Person, if any, who controls any Underwriter within the meaning of the Act or the Exchange Act and each director, officer, employee, and agent of an Underwriter and each such Person shall have the same rights to contribution as the Underwriter; and the obligations of any Underwriter under this Section shall be in addition to any liability that such Underwriter may otherwise have and shall extend, upon the same terms and conditions, to each director of the Transferor or the Bank, to each officer of the Transferor or the Bank who has signed the Registration Statement and to each Person, if any, who controls the Transferor or the Bank within the meaning of the Act or the Exchange Act and each director, officer, employee, and agent of Transferor or Bank and each such Person shall have the same rights to contribution as the Transferor or Bank, as applicable.
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Section 10. Survival of Certain Representations and Obligations.
The respective indemnities, agreements, representations, warranties and other statements of the Transferor and the Bank or their officers and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of the Underwriters, the Transferor, the Bank or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Notes. If this Agreement is terminated or if for any reason other than default by the Underwriters the purchase of the Notes by the Underwriters is not consummated, the Transferor and the Bank shall remain responsible for the expenses to be paid by them pursuant to Section 8 and the respective obligations of the Transferor, the Bank and the Underwriters pursuant to Section 9 shall remain in effect.
Section 11. Obligations of the Underwriters.
(a) Each Underwriter (severally and not jointly) represents and agrees that it has not and will not, directly or indirectly, offer, sell or deliver any of the Notes or distribute the Prospectus or any other offering materials relating to the Notes in or from any jurisdiction except under circumstances that will, to the best of its knowledge and belief, result in compliance with any applicable laws and regulations thereof.
(b) Each Underwriter (severally and not jointly) further represents, warrants and agrees that (i) it has, in the United Kingdom, only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (“FSMA”)) received by it in connection with the issue or sale of any Notes in circumstances under which Section 21(1) of the FSMA does not apply to the Issuer; and (ii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom.
(c) Each Underwriter (severally and not jointly) represents and agrees that it has not offered, sold or otherwise made available and will not offer, sell or otherwise make available any of the Notes to any retail investor in the European Economic Area. For the purposes of this Section 11(b), (i) the expression an “retail investor” means a person who is one (or more) of the following: (A) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU, as amended (“MiFID II”), (B) a customer within the meaning of Directive 2016/97/EC (as amended), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II or (C) not a qualified investor as defined in Directive 2003/71/EC (as amended); and (ii) the expression “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe for the Notes
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Section 12. Default by an Underwriter.
If any one or more Underwriters shall fail to purchase and pay for any of the Notes agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Notes, and if such nondefaulting Underwriters do not purchase all the Notes, this Agreement will terminate without liability to any nondefaulting Underwriter, the Transferor or the Bank. In the event of a default by any Underwriter as set forth in this Section 12, the Closing Date shall be postponed for such period, not exceeding seven days, as the Representatives shall determine in order that the required changes in the Registration Statement and Prospectus or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter for its liability, if any, to the Transferor and the Bank and any nondefaulting Underwriter for damages occasioned by its default hereunder.
Section 13. Notices.
All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed to:
Wells Fargo Securities, LLC
550 South Tryon Street, 5th Floor
Charlotte, North Carolina 28202
Attention: Brian Grushkin
RBC Capital Markets, LLC
Brookfield Place
200 Vesey Street, 8th Floor
New York, New York 10281
Attention: Keith Helwig
J.P. Morgan Securities LLC
383 Madison Avenue, 8th Floor
New York, New York 10179
Attention: Eric Wiedelman
Section 14. Counterparts.
This Agreement shall be valid, binding, and enforceable against a party when executed and delivered by an authorized individual on behalf of the party by means of (i) an original manual signature; (ii) a faxed, scanned, or photocopied manual signature, or (iii) any other electronic signature permitted by 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 Uniform Commercial Code (collectively, “Signature Law”), in each case to the extent applicable. Each faxed, scanned, or photocopied manual signature, or other electronic 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 faxed, scanned, or photocopied manual signature, or other electronic signature, of any other party and shall have no duty to investigate, confirm or otherwise verify the validity or authenticity thereof. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute one and the same instrument. For the avoidance of doubt, original manual signatures shall be used for execution or indorsement of writings when required under the UCC or other Signature Law due to the character or intended character of the writings.
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Section 15. Applicable Law.
This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without reference to its conflict of law provisions (other than Section 5-1401 of the New York General Obligations Law), and obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.
To the extent permitted by applicable law, each of the parties hereto irrevocably waives all right of trial by jury in an action, proceeding or counterclaim arising out of or in connection with this Agreement and the Transaction Documents or any matter arising hereunder or thereunder.
Section 16. Representatives.
The Representatives will act for the several Underwriters in connection with this Agreement and the transactions contemplated hereby and any action undertaken under this Agreement taken by the Representatives will be binding upon the Underwriters.
Section 17. Absence of Fiduciary Relationship.
The Transferor and the Bank acknowledge and agree that:
(a) the Underwriters have been retained solely to act as underwriters in connection with the sale of the Notes and that no fiduciary, advisory or agency relationship between the Transferor, the Bank and the Underwriters has been created in respect of any of the transactions contemplated by this Agreement, irrespective of whether the Underwriters have advised or are advising the Transferor or the Bank on other matters;
(b) the price of the Notes set forth in this Agreement was established by the Transferor and the Bank following discussions and arms-length negotiations with the Underwriters, the Transferor and the Bank are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated by this Agreement;
(c) they have been advised that the Underwriters and their affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Transferor and the Bank and that the Underwriters have no obligation to disclose such interests and transactions to the Transferor or the Bank by virtue of any fiduciary, advisory or agency relationship; and
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(d) they waive, to the fullest extent permitted by law, any claims they may have against the Underwriters for breach of fiduciary duty or alleged breach of fiduciary duty and agree that the Underwriters shall have no liability (whether direct or indirect) to the Transferor or the Bank in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Transferor or the Bank, including stockholders, employees or creditors of the Transferor and the Bank.
Section 18. Non-Petition Covenant.
Each of Wells Fargo Securities, LLC, RBC Capital Markets, LLC and J.P. Morgan Securities LLC, acting on behalf of itself and as a Representative hereby covenants and agrees that it shall not at any time acquiesce, petition or otherwise invoke or cause the Transferor to invoke the process of the United States of America, any State or other political subdivision thereof or any entity exercising executive, legislative, judicial, regulatory, or administrative functions of or pertaining to government for the purpose of commencing or sustaining a case by or against the Transferor under a federal or state bankruptcy, insolvency or other similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Transferor or all or any part of the property or the assets of the Transferor or ordering the winding up or the liquidation of the affairs of the Transferor.
Section 19. Recognition of U.S. Special Resolution Regimes.
(a) Solely to the extent the QFC Stay Rules apply to this Agreement, in the event that any Underwriter that is a Covered Entity and becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(b) Solely to the extent this Agreement contains Default Rights, in the event that any Underwriter is a Covered Entity and becomes, or a BHC Act Affiliate of such Underwriter becomes, in each case, subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
(c) For purposes of this Section 26, the following terms shall have the following meanings:
(i) a “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k);
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(ii) “Covered Entity” means any of the following: (x) a “covered entity” as the term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (y) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (z) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b);
(iii) “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable;
(iv) “QFC Stay Rules” means 12 C.F.R §§ 252.81 et seq.; and
(v) “U.S. Special Resolution Regime” means each of (x) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (y) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
[Signatures Follow on Next Page]
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If you are in agreement with the foregoing, please sign two counterparts hereof and return one to the Transferor whereupon this letter and your acceptance shall become a binding agreement among the Transferor, the Bank and the Underwriters.
| Very truly yours, | ||
| First National Funding LLC | ||
| By: | First National Funding Corporation, its Managing Member | |
| By: | /s/ Anthony R. Cerasoli | |
| Name: Anthony R. Cerasoli | ||
| Title: President | ||
| First National Bank of Omaha | ||
| By: | /s/ Anthony R. Cerasoli | |
| Name: Anthony R. Cerasoli | ||
| Title: President | ||
[Signature Page to Underwriting Agreement]
| The foregoing Agreement is hereby confirmed and accepted as of the date hereof: | ||
| Wells Fargo Securities, LLC | ||
| as Representative of the Underwriters set forth herein | ||
| By: | /s/ Brian C. Grushkin | |
| Name: Brian C. Grushkin | ||
| Title: Managing Director | ||
| RBC Capital Markets, LLC | ||
| as Representative of the Underwriters set forth herein | ||
| By: | /s/ Keith L. Helwig | |
| Name: Keith R. Helwig | ||
| Title: Authorized Signatory | ||
| J.P. Morgan Securities LLC | ||
| as Representative of the Underwriters set forth herein | ||
| By: | /s/ Alexander Wiener | |
| Name: Alexander Wiener | ||
| Title: Executive Director | ||
[Signature Page to Underwriting Agreement]
Schedule A
Class A Notes
| Underwriters | Principal Amount of Class A Notes | |||
| Wells Fargo Securities, LLC | $ | 116,667,000 | ||
| RBC Capital Markets, LLC | $ | 116,667,000 | ||
| J.P. Morgan Securities LLC | $ | 116,666,000 | ||
| Total | $ | 350,000,000 | ||
Exhibit 4.1
Indenture supplement
FORM OF
SERIES 2023-1 INDENTURE SUPPLEMENT
Dated as of April 27, 2023
To
second AMENDED AND RESTATED MASTER INDENTURE
Dated as of September 23, 2016
__________________________
first national MASTER NOTE TRUST,
Issuer,
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
Indenture Trustee on behalf of the Noteholders
FIRST NATIONAL MASTER NOTE TRUST
TABLE OF CONTENTS
Page
| ARTICLE I | |||
| Creation of the Series 2023-1 Notes | 1 | ||
| ARTICLE II | |||
| Definitions | 1 | ||
| ARTICLE III | |||
| Noteholder Servicing Fee | |||
| Section 3.01. | Servicing Compensation | 17 | |
| ARTICLE IV | |||
| Rights of Noteholders and Allocation and Application of Collections | |||
| Section 4.01. | Collections and Allocations | 17 | |
| Section 4.02. | Determination of Monthly Interest | 19 | |
| Section 4.03. | Determination of Monthly Principal | 21 | |
| Section 4.04. | Application of Available Finance Charge Collections and Available Principal Collections | 21 | |
| Section 4.05. | Investor Charge-Offs | 24 | |
| Section 4.06. | Reallocated Principal Collections | 24 | |
| Section 4.07. | Excess Finance Charge Collections | 24 | |
| Section 4.08. | Excess Principal Collections | 25 | |
| Section 4.09. | Certain Series Accounts | 25 | |
| Section 4.10. | Reserve Account | 26 | |
| Section 4.11. | Spread Account | 28 | |
| Section 4.12. | Investment Instructions | 30 | |
| Section 4.13. | Accumulation Period | 30 | |
| Section 4.14. | Suspension of Accumulation Period | 31 | |
| Section 4.15. | [RESERVED.] | 32 | |
| Section 4.16. | Interchange | 32 | |
| Section 4.17. | Foreign Accounts | 33 | |
| Section 4.18. | [RESERVED.] | 33 | |
| Section 4.19. | Asset Representations Review Triggers | 33 | |
| Section 4.20. | Appointment of Asset Representations Reviewer | 37 | |
| Section 4.21. | Dispute Resolution | 38 | |
| Section 4.22. | Investor Communication | 43 | |
| ARTICLE V | |||
| Delivery of Notes; Distributions; Reports to Noteholders | |||
| Section 5.01. | Delivery and Payment for the Series 2023-1 Notes | 43 | |
| Section 5.02. | Distributions | 44 | |
| Section 5.03. | Reports and Statements to Series 2023-1 Noteholders | 44 | |
| Section 5.04. | Annual Servicer’s Certificate | 45 | |
| Section 5.05. | Annual Independent Accountants Servicing Report | 46 | |
| ARTICLE VI | |||
| Series 2023-1 Pay Out Events | 47 | ||
| ARTICLE VII | |||
| Redemption; Final Distributions; Series Termination | |||
| Section 7.01. | Optional Redemption of Series 2023-1 Notes; Final Distributions | 48 | |
| Section 7.02. | Series Termination | 49 | |
| ARTICLE VIII | |||
| Miscellaneous Provisions | |||
| Section 8.01. | Ratification of Indenture; Amendments | 50 | |
| Section 8.02. | Amendments to Asset Representations Review Agreement | 50 | |
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| Section 8.03. | Form of Delivery of the Notes | 50 | |
| Section 8.04. | Counterparts | 50 | |
| Section 8.05. | Governing Law | 50 | |
| Section 8.06. | Limitation of Liability | 51 | |
| Section 8.07. | Rights of Indenture Trustee | 51 | |
| Section 8.08. | Additional Requirements for Registration of and Limitations on Transfer and Exchange of Notes | 51 | |
| Section 8.09. | Notices to Rating Agencies and Indenture Trustee | 52 |
| EXHIBIT A-1 | FORM OF CLASS A ASSET BACKED NOTE, SERIES 2023-1 |
| EXHIBIT A-2 | FORM OF CLASS B ASSET BACKED NOTE, SERIES 2023-1 |
| EXHIBIT A-3 | FORM OF CLASS C ASSET BACKED NOTE, SERIES 2023-1 |
| EXHIBIT B | FORM OF MONTHLY PAYMENT INSTRUCTIONS AND NOTIFICATION TO INDENTURE TRUSTEE |
| EXHIBIT C | FORM OF MONTHLY REPORT TO NOTEHOLDERS |
| EXHIBIT D | FORM OF MONTHLY SERVICER’S CERTIFICATE |
| EXHIBIT E | FORM OF INVESTOR CERTIFICATION |
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FORM OF
SERIES 2023-1 INDENTURE SUPPLEMENT
This SERIES 2023-1 INDENTURE SUPPLEMENT, dated as of April 27, 2023 (this “Indenture Supplement”), between FIRST NATIONAL MASTER NOTE TRUST, a statutory trust organized and existing under the laws of the State of Delaware (herein, “Issuer” or the “Trust”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association, as indenture trustee, not in its individual capacity, but solely as indenture trustee (herein, together with its successors in the trusts thereunder as provided in the Indenture referred to below, “Indenture Trustee”) under the Second Amended and Restated Master Indenture, dated as of September 23, 2016 (the “Indenture”), between Issuer and Indenture Trustee.
Pursuant to Section 2.11 of the Indenture, Transferor may direct Issuer to issue one or more Series of Notes. The Principal Terms of this Series are set forth in this Indenture Supplement to the Indenture.
ARTICLE I
Creation of the Series 2023-1 Notes
There is hereby created and designated a Series of Notes to be issued pursuant to the Indenture and this Indenture Supplement to be known as “First National Master Note Trust, Series 2023-1” or the “Series 2023-1 Notes”. The Series 2023-1 Notes shall be issued in three Classes, known as the “Class A Asset Backed Notes, Series 2023-1,” the “Class B Asset Backed Notes, Series 2023-1,” and the “Class C Asset Backed Notes, Series 2023-1;” provided, however, with respect to Section 2.11(b)(vi) of the Indenture and the Tax Opinion specified therein, clause (d) of the defined term “Tax Opinion” shall not be a condition precedent to the issuance of the “Class B Asset Backed Notes, Series 2023-1” or the “Class C Asset Backed Notes, Series 2023-1”. The Series 2023-1 Notes are secured by the Collateral up to the Collateral Amount and any portion of the Collateral that may be available to the Series 2023-1 Notes under the Indenture and this Indenture Supplement.
Series 2023-1 shall be included in Group One and shall be a Principal Sharing Series. Series 2023-1 shall be an Excess Allocation Series with respect to Group One only. Series 2023-1 shall not be subordinated to any other Series. Series 2023-1 shall not be a Paired Series.
ARTICLE II
Definitions
Whenever used in this Indenture Supplement, the following words and phrases shall have the following meanings, and the definitions of such terms are applicable to the singular as well as the plural forms of such terms and the masculine as well as the feminine and neuter genders of such terms.
“60+-Day Delinquency Rate” means, with respect to any Monthly Period, the delinquency rate calculated as the ratio (expressed as a percentage) of the aggregate dollar amount of the 60+-Day Delinquent Receivables to the aggregate dollar amount of all Receivables, measured as of the end of such Monthly Period.
“60+-Day Delinquent Receivables” means, as of any date of determination, all Receivables (other than repurchased Receivables and Receivables arising in Defaulted Accounts) that are 60 or more days Delinquent as of the last day of the Monthly Period immediately preceding such date of determination, as determined by Servicer in accordance with its customary servicing practices.
“AAA” means the American Arbitration Association.
“Accumulation Period” means, unless a Pay Out Event shall have occurred prior thereto, the period commencing at the opening of business on the Controlled Accumulation Date and ending on the first to occur of (a) the commencement of the Rapid Amortization Period and (b) the Series Termination Date.
“Accumulation Period Length” is defined in Section 4.13.
“Accumulation Shortfall” means (a) for the first Distribution Date during the Accumulation Period, zero; and (b) thereafter, for any Distribution Date during the Accumulation Period, the excess, if any, of the Controlled Deposit Amount for the previous Distribution Date over the amount deposited into the Principal Accumulation Account pursuant to Section 4.04(c)(i) for the previous Distribution Date.
“Allocation Percentage” means, with respect to any Monthly Period, the percentage equivalent of a fraction:
(a) the numerator of which shall be equal to:
(i) for Principal Collections during the Revolving Period, and for Finance Charge Collections during the Revolving Period and the Accumulation Period, and for Default Amounts at any time, the Collateral Amount at the end of the last day of the Prior Monthly Period (or, in the case of the Monthly Period in which the Closing Date occurs, on the Closing Date); or
(ii) for Finance Charge Collections during the Rapid Amortization Period and for Principal Collections during the Rapid Amortization Period and the Accumulation Period, the Collateral Amount at the end of the last day of the Revolving Period, or, with respect to Finance Charge Collections, if later, at the end of the last day of the Accumulation Period;
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provided, however, that prior to the occurrence of a Pay Out Event Transferor may, by written notice to Indenture Trustee, Servicer and each Rating Agency, reduce the numerator used for purposes of allocating Principal Collections and Finance Charge Collections to Series 2023-1 at any time if (x) the Series Rating Agency Condition shall have been satisfied with respect to such reduction and (y) Transferor shall have delivered to Indenture Trustee an Officer’s Certificate to the effect that, based on the facts known to such officer at that time, in the reasonable belief of Transferor, such designation will not cause a Pay Out Event or an event that, after the giving of notice or the lapse of time, would cause a Pay Out Event to occur with respect to Series 2023-1; and provided, further, that Transferor may designate that the numerator for Finance Charge Collections during the Rapid Amortization Period will be the Collateral Amount at the end of the last day of the Prior Monthly Period by notice to Servicer and Indenture Trustee, if the Series Rating Agency Condition has been met; and
(b) the denominator of which shall be the greater of (x) the Aggregate Principal Balance determined as of the close of business on the last day of the Prior Monthly Period and (y) the sum of the numerators used to calculate the allocation percentages for allocations with respect to Finance Charge Collections, Principal Collections or Default Amounts, as applicable, for all outstanding Series on such date of determination; provided, that if one or more Reset Dates occur in a Monthly Period, the denominator of the Allocation Percentage for the portion of the Monthly Period falling on and after such Reset Date and prior to any subsequent Reset Date will be recalculated for such period using amounts determined as of the close of business on the subject Reset Date.
“Annual Servicer Certificate” is defined in Section 5.04(b).
“Asset Representations Review” means any review conducted by the Asset Representations Reviewer pursuant to Section 4.19 of this Indenture Supplement and the Asset Representations Review Agreement with respect to the Subject Receivables and the related Accounts for compliance with the Pool Asset Representations in order to determine, with respect to each Subject Receivable and the related Account, whether the Pool Asset Representations were accurate in all material respects.
“Asset Representations Review Agreement” means that certain Asset Representations Review Agreement, dated as of September 23, 2016 among RPA Seller, Transferor, Servicer, Issuer and the Asset Representations Reviewer, as the same may be amended, amended and restated, modified or supplemented from time to time.
“Asset Representations Reviewer means FTI Consulting, Inc., a Maryland corporation and its successors and any entity resulting from or surviving any consolidation or merger to which it or its successors may be a party, and any successor asset representations reviewer appointed as provided in the Asset Representations Review Agreement.
“Asset Review Quorum” means the Noteholders evidencing at least five percent (5%) of the Outstanding Amount of all Series of Notes Outstanding.
“Available Finance Charge Collections” means, for any Monthly Period, an amount equal to the sum of (a) the Investor Finance Charge Collections for such Monthly Period, plus (b) the Excess Finance Charge Collections allocated to Series 2023-1 for such Monthly Period, plus (c) Principal Accumulation Investment Earnings, if any, with respect to the related Transfer Date, plus (d) amounts on deposit in the Reserve Account and Spread Account deposited into the Finance Charge Account on the related Transfer Date to be treated as Available Finance Charge Collections pursuant to Sections 4.10(b) or (d) and 4.11(g).
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“Available Principal Collections” means, for any Monthly Period, an amount equal to the sum of (a) the Investor Principal Collections for such Monthly Period, minus (b) the amount of Reallocated Principal Collections with respect to such Monthly Period which pursuant to Section 4.06 are required to be applied on the related Distribution Date, plus (c) any Excess Principal Collections allocated to Series 2023-1 for such Monthly Period, plus (d) the aggregate amount to be treated as Available Principal Collections pursuant to Section 4.04(a)(v) and (vi) for the related Distribution Date.
“Available Reserve Account Amount” means, for any Transfer Date, the lesser of (a) the amount on deposit in the Reserve Account (including Investment Earnings to the extent retained in the Reserve Account pursuant to Section 4.10(b) on such date or any prior Transfer Date, and before giving effect to any deposit to or withdrawal from the Reserve Account made or to be made on such date) and (b) the Required Reserve Account Amount for such Transfer Date.
“Available Spread Account Amount” means, for any Transfer Date, an amount equal to the lesser of (a) the amount on deposit in the Spread Account (exclusive of Investment Earnings on such date and before giving effect to any deposit to, or withdrawal from, the Spread Account made or to be made with respect to such date) and (b) the Required Spread Account Amount, in each case on such Transfer Date.
“Base Rate” means, for any Monthly Period, the annualized percentage equivalent of a fraction, (a) the numerator of which is equal to the sum of (i) the Monthly Interest and (ii) the Noteholder Servicing Fee (calculated by assuming that Interchange allocated to Series 2023-1 equals or exceeds Servicer Interchange for such Monthly Period), each with respect to the related Distribution Date, and (b) the denominator of which is the Collateral Amount plus amounts on deposit in the Principal Accumulation Account as of the first day of such Monthly Period.
“Class A Default Interest” is defined in Section 4.02(a).
“Class A Interest Shortfall” is defined in Section 4.02(a).
“Class A Monthly Interest Payment” is defined in Section 4.02(a).
“Class A Note Initial Principal Balance” means $350,000,000.
“Class A Note Interest Rate” means a per annum rate of 5.13%.
“Class A Note Principal Balance” means, on any date of determination, an amount equal to (a) the Class A Note Initial Principal Balance, minus (b) the aggregate amount of principal payments made to Class A Noteholders on or prior to such date.
“Class A Noteholder” means the Person in whose name a Class A Note is registered in the Note Register.
“Class A Notes” means any one of the Notes executed by Issuer and authenticated by or on behalf of Indenture Trustee, substantially in the form of Exhibit A-1.
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“Class A Required Amount” means, for any Distribution Date, an amount equal to the excess of the amounts described in Section 4.04(a)(i) over the Available Finance Charge Collections applied to pay such amount pursuant to Section 4.04(a).
“Class B Default Interest” is defined in Section 4.02(b).
“Class B Interest Shortfall” is defined in Section 4.02(b).
“Class B Monthly Interest Payment” is defined in Section 4.02(b).
“Class B Note Initial Principal Balance” means $47,116,000.
“Class B Note Interest Rate” means a per annum rate equal to 0.00%.
“Class B Note Principal Balance” means, on any date of determination, an amount equal to (a) the Class B Note Initial Principal Balance, minus (b) the aggregate amount of principal payments made to Class B Noteholders on or prior to such date.
“Class B Note Purchase Agreement” means that certain Note Purchase Agreement, dated as of the date hereof, by and among the Indenture Trustee, the Transferor, the Servicer and the Class B Noteholder (or Class B Noteholders) pursuant to which the Class B Noteholder (or Class B Noteholders) agreed to purchase the Class B Notes, as such agreement may be amended, amended and restated, or otherwise modified.
“Class B Noteholder” means any Person in whose name a Class B Note is registered in the Note Register.
“Class B Notes” means any one of the Notes executed by Issuer and authenticated by or on behalf of Indenture Trustee, substantially in the form of Exhibit A-2.
“Class B Required Amount” means, for any Distribution Date, an amount equal to the excess of the amount described in Section 4.04(a)(ii) over the Available Finance Charge Collections applied to pay such amount pursuant to Section 4.04(a).
“Class C Default Interest” is defined in Section 4.02(c).
“Class C Interest Shortfall” is defined in Section 4.02(c).
“Class C Monthly Interest Payment” is defined in Section 4.02(c).
“Class C Note Initial Principal Balance” means $51,603,000.
“Class C Note Interest Rate” means a per annum rate equal to 0.00%.
“Class C Note Principal Balance” means, on any date of determination, an amount equal to (a) the Class C Note Initial Principal Balance, minus (b) the aggregate amount of principal payments made to Class C Noteholders on or prior to such date.
5
“Class C Note Purchase Agreement” means that certain Note Purchase Agreement, dated as of the date hereof, by and among the Indenture Trustee, the Transferor, the Servicer and the Class C Noteholder (or Class C Noteholders) pursuant to which the Class C Noteholder (or Class C Noteholders) agreed to purchase the Class C Notes, as such agreement may be amended, amended and restated, or otherwise modified.
“Class C Noteholder” means any Person in whose name a Class C Note is registered in the Note Register.
“Class C Notes” means any one of the Notes executed by Issuer and authenticated by or on behalf of Indenture Trustee, substantially in the form of Exhibit A-3.
“Closing Date” means April 27, 2023.
“Collateral Amount” means, as of any date of determination, an amount equal to the result of (a) the Initial Collateral Amount, minus (b) the amount of principal previously paid to the Series 2023-1 Noteholders (other than any principal payments made from funds on deposit in the Spread Account), minus (c) the balance on deposit in the Principal Accumulation Account, minus (d) the excess, if any, of the aggregate amount of Investor Charge-Offs and Reallocated Principal Collections over the reimbursements of such amounts pursuant to Section 4.04(a)(vi) prior to such date.
“Controlled Accumulation Amount” means, (a) for any Transfer Date with respect to the Accumulation Period an amount equal to one-twelfth of the Collateral Amount at the end of the Revolving Period; provided, however, that if the Accumulation Period Length is determined to be less than twelve (12) months pursuant to Section 4.13 or 4.14, the Controlled Accumulation Amount shall be equal to (i) the Initial Collateral Amount divided by (ii) the Accumulation Period Length; provided, further, that the Controlled Accumulation Amount for any Transfer Date shall not exceed the Note Principal Balance minus any amount already on deposit in the Principal Accumulation Account on such Transfer Date.
“Controlled Accumulation Date” means April 1, 2025, or such later date as is determined in accordance with Sections 4.13 and 4.14.
“Controlled Deposit Amount” means, for any Transfer Date with respect to the Accumulation Period, an amount equal to the sum of the Controlled Accumulation Amount for such Transfer Date and any existing Accumulation Shortfall.
“Corporate Trust Office” means, with respect to the Indenture Trustee, the principal office at which the Indenture shall be administered, which office at the date of execution of this Indenture Supplement is located at (i) for note transfer purposes, U.S. Bank Trust Company, National Association, 60 Livingston Avenue, Mail Code: EP-MN-WS3D, St. Paul, Minnesota, 55107, Attn: Bondholder Services and (ii) for all other purposes, 190 South LaSalle Street, 7th Floor, Chicago, Illinois 60603.
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“Covered Amount” means an amount, determined as of each Transfer Date for any Interest Period, equal to the sum of (a) the product of (i) a fraction the numerator of which is the actual number of days in such Interest Period and the denominator of which is 360, times (ii) the Class A Note Interest Rate in effect with respect to such Interest Period, times (iii) the aggregate amount on deposit in the Principal Accumulation Account up to the Class A Note Principal Balance as of the Record Date preceding such Transfer Date, plus (b) the product of (i) a fraction the numerator of which is 30 and the denominator of which is 360, times (ii) the Class B Note Interest Rate in effect with respect to such Interest Period, times (iii) the aggregate amount on deposit in the Principal Accumulation Account in excess of the Class A Principal Balance as of the Record Date preceding such Transfer Date up to the Class B Principal Balance as of the Record Date preceding such Transfer Date, plus (c) the product of (i) a fraction the numerator of which is 30 and the denominator of which is 360, times (ii) the Class C Note Interest Rate in effect with respect to such Interest Period, times (iii) the aggregate amount on deposit in the Principal Accumulation Account in excess of the sum of the Class A Principal Balance and the Class B Principal Balance as of the Record Date preceding such Transfer Date.
“Default Amount” means, with respect to any Transfer Date, the aggregate amount of Principal Receivables (other than Ineligible Receivables) in Accounts which became Defaulted Accounts during the Related Monthly Period.
“Default Interest” means, for any Distribution Date, an amount equal to the sum of Class A Default Interest, Class B Default Interest and Class C Default Interest for such Distribution Date.
“Delinquency Trigger” means each occurrence, as determined by Servicer, where the Three-Month Average 60+-Day Delinquency Rate equals or exceeds the then current Delinquency Trigger Rate.”
“Delinquency Trigger Rate” means, initially, 9.00%, which percentage will be reviewed and may be adjusted from time to time by Transferor pursuant to Section 4.19(b) of this Indenture Supplement.
“Dilution” means any downward adjustment made by Servicer in the amount of any Receivable (a) because of a rebate, refund, unauthorized charge, fraudulent or counterfeit charge or billing error to an Obligor, (b) because such Receivable was created in respect of merchandise which was refused or returned by an Obligor or (c) for any other reason other than receiving Collections therefor or charging off such amount as uncollectible.
“Distribution Account” is defined in Section 4.09(a).
“Distribution Date” means June 15, 2023 and the 15th day of each calendar month thereafter, or if such 15th day is not a Business Day, the next succeeding Business Day.
“Excess Servicing Fee” means, for each Distribution Date following a Servicer Default and the appointment of a Successor Servicer, an amount equal to one-twelfth of the product of the Collateral Amount as of the last day of the preceding Monthly Period and the excess of the market rate servicing fee percentage determined by Indenture Trustee over the Series Servicing Fee Percentage plus, if the Indenture Trustee is the Successor Servicer, an amount equal to the amount of the reduction to the applicable Noteholder Servicing Fee pursuant to the second proviso in Section 3.01 which is attributable to the fact that Interchange included in Finance Charge Collections for the Related Monthly Period and allocated to Series 2023-1 is less than Servicer Interchange for such Monthly Period. Indenture Trustee may determine the market rate servicing fee percentage by soliciting three or more written bids from qualified successor servicers and averaging the rates offered in the bids.
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“Expected Principal Payment Date” means April 15, 2026.
“Finance Charge Account” is defined in Section 4.09(a).
“Finance Charge Collections” means Collections of Finance Charge Receivables.
“Finance Charge Shortfall” means, for any Distribution Date and the related Transfer Date, an amount equal to the excess, if any, of (a) the full amount required to be deposited or distributed, without duplication, pursuant to Section 4.04(a)(i) through (viii) on such dates over (b) amounts available for such deposits and distributions from the Available Finance Charge Collections for the Related Monthly Period (excluding any portion thereof attributable to Excess Finance Charge Collections) and the Spread Account.
“Foreign Account” means an Account, which as of July 31, 1995 (or, with respect to Additional Accounts, as of the relevant Addition Date) was an Eligible Account, but subsequent to such date the Obligor of which has provided, as its most recent billing address, an address which is not located in the United States or its territories or possessions.
“Group One” means Series 2023-1 and each other Series specified in the related Indenture Supplement to be included in Group One.
“Initial Collateral Amount” means $448,719,000.
“Interest Period” means, for any Distribution Date, the period from and including the Distribution Date immediately preceding such Distribution Date (or, in the case of the first Distribution Date, from and including the Closing Date) to but excluding such Distribution Date.
“Investment Earnings” means, for any Transfer Date (and the related Distribution Date), all interest and earnings on Permitted Investments included in the applicable Series Account (net of losses and investment expenses) during the period commencing on and including the Transfer Date immediately preceding such Transfer Date and ending on but excluding such Transfer Date.
“Investor Charge-Offs” is defined in Section 4.05.
“Investor Default Amount” means, with respect to any Monthly Period, an amount equal to the product of (a) the Default Amount for such Monthly Period and (b) the Allocation Percentage for Default Amounts for such Monthly Period.
“Investor Finance Charge Collections” means, with respect to any Date of Processing, an amount equal to the product of (a) the Allocation Percentage for such Date of Processing and (b) Finance Charge Collections received on such date and, with respect to any Monthly Period, the aggregate of such sums for each Date of Processing in such Monthly Period.
“Investor Principal Collections” means, with respect to any Date of Processing, an amount equal to the product of (a) the Allocation Percentage for such Date of Processing and (b) Principal Collections received on such Date of Processing and, with respect to any Monthly Period, the aggregate of such sums for each Date of Processing in such Monthly Period.
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“Monthly Interest” means, for any Distribution Date, the sum of the Class A Monthly Interest Payment, the Class B Monthly Interest Payment, and the Class C Monthly Interest Payment for such Distribution Date.
“Monthly Period” means the period from and including the first day of the calendar month preceding a related Distribution Date to and including the last day of such calendar month; provided that the Monthly Period related to the June 15, 2023 Distribution Date means the period from and including the Closing Date to and including May 31, 2023.
“Monthly Principal” is defined in Section 4.03.
“Monthly Principal Reallocation Amount” means, for any Monthly Period, an amount equal to the sum of:
(a) the lower of (i) the Class A Required Amount and (ii) the greater of (A)(x) the product of (I) 22.00% and (II) the Initial Collateral Amount minus (y) the amount of unreimbursed Investor Charge-Offs (after giving effect to Investor Charge-Offs for the Related Monthly Period) and unreimbursed Reallocated Principal Collections (as of the previous Distribution Date) and (B) zero; and
(b) the lower of (i) the sum of the Class B Required Amount and the Servicing Fee Required Amount and (ii) the greater of (A)(x) the product of (I) 11.50% and (II) the Initial Collateral Amount minus (y) the amount of unreimbursed Investor Charge-Offs (after giving effect to Investor Charge-Offs for the Related Monthly Period) and unreimbursed Reallocated Principal Collections (as of the previous Distribution Date and as determined pursuant to clause (a) above) and (B) zero.
“Net Yield” means, with respect to any Monthly Period, Portfolio Yield with respect to such Monthly Period minus the Base Rate with respect to such Monthly Period.
“Note Principal Balance” means, on any date of determination, an amount equal to the sum of the Class A Note Principal Balance, the Class B Note Principal Balance and the Class C Note Principal Balance or, with respect to a particular Class, the Class A Note Principal Balance, the Class B Note Principal Balance or the Class C Note Principal Balance.
“Noteholder Servicing Fee” is defined in Section 3.01.
“Permitted Investments” is defined in Annex A to the Indenture.
“Pool Asset Representations” means, collectively, (i) the representations and warranties made by the Transferor relating to the Receivables under Section 2.04(a)(viii) and (ix) of the Transfer and Servicing Agreement and (ii) the representations and warranties made by the RPA Seller relating to the Receivables under Section 4.02(a)(vii) and (viii) of the Receivables Purchase Agreement.
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“Portfolio Yield” means, for any Monthly Period, the annualized percentage equivalent of a fraction, (a) the numerator of which is equal to (i) the Available Finance Charge Collections (excluding any Excess Finance Charge Collections and any amounts withdrawn from the Spread Account, except that Excess Finance Charge Collections from other Series applied for the benefit of Series 2023-1 Notes may be included if the Rating Agency Condition is met), minus (ii) the Investor Default Amount and the Uncovered Dilution Amount for such Monthly Period and (b) the denominator of which is the Collateral Amount plus amounts on deposit in the Principal Accumulation Account as of the first day of such Monthly Period.
“Principal Account” is defined in Section 4.09(a).
“Principal Accumulation Account” is defined in Section 4.09(a).
“Principal Accumulation Account Balance” means, for any date of determination, the principal amount, if any, on deposit in the Principal Accumulation Account on such date of determination.
“Principal Accumulation Investment Earnings” means, with respect to each Transfer Date, the Investment Earnings, if any, on funds in the Principal Accumulation Account.
“Principal Collections” means Collections of Principal Receivables.
“Principal Shortfall” means (a) for any Distribution Date (and related Transfer Date), with respect to the Revolving Period, zero, (b) for any Distribution Date (and related Transfer Date), with respect to the Accumulation Period, an amount equal to the excess, if any, of the Controlled Deposit Amount with respect to such date over the amount of Available Principal Collections for the Related Monthly Period (excluding any portion thereof attributable to Excess Principal Collections) and (c) for any Distribution Date (and related Transfer Date), with respect to the Rapid Amortization Period, an amount equal to the excess, if any, of the Collateral Amount with respect to such Transfer Date over the amount of Available Principal Collections for the Related Monthly Period (excluding any portion thereof attributable to Excess Principal Collections).
“Prior Monthly Period” means the period from and including the first day of the second calendar month immediately preceding a related Distribution Date to and including the last day of such calendar month. As an illustration, if the related Distribution Date is July 15, 2023, the Monthly Period is June, 2023 and the Prior Monthly Period is May, 2023.
“QIB” means a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act.
“Qualified Dispute Resolution Professional” means an attorney or retired judge that is independent, impartial, knowledgeable and experienced with the laws of the State of New York, specializing in commercial litigation with at least 15 years of experience and whose name is on a list of neutral parties maintained by the AAA.
“Qualified Maturity Agreement” means an agreement in which a Qualified Maturity Agreement Institution agrees to make a deposit into the Principal Accumulation Account on or before the Expected Principal Payment Date in an amount equal to the initial Note Principal Balance (reduced by any amount on deposit in the Principal Accumulation Account. Each Qualified Maturity Agreement must satisfy the Series Rating Agency Condition.
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“Qualified Maturity Agreement Institution” means a counterparty having short-term debt ratings of no less than “P-1/A-1+” by Moody’s and Standard & Poor’s, respectively, or long-term unsecured ratings of no less than “Aa3” by Moody’s and “AA–” by Standard & Poor’s, or otherwise satisfies the Series Rating Agency Condition.
“Quarterly Net Yield” means, for any Distribution Date, the average of the Net Yields for each of the three preceding Monthly Periods, and, for purposes of the June 2023 and July 2023 Distribution Dates, the Net Yields for March of 2023 and April of 2023 shall be deemed to be 10.23% and 10.23%, respectively.
“Rapid Amortization Period” means the period commencing on the date on which a Trust Pay Out Event or a Series 2023-1 Pay Out Event is deemed to occur and ending on the Series Termination Date.
“Rating Agency” means, with respect to each outstanding Class of the Series 2023-1 Notes and as of any date of determination, the rating agency or agencies, if any, selected by the Sponsor to rate such outstanding Class of the Series 2023-1 Notes.
“Rating Agency Condition” means, with respect to any action subject to such condition,
(a) when used in reference to all other Series of Notes, the notifications specified in the definition of “Rating Agency Condition” in the indenture supplement with respect to such Series; and
(b) when used with reference to the Class A Notes, (i) that each Rating Agency shall have notified Issuer and Transferor in writing that the proposed action will not result in a reduction or withdrawal of its rating on the Class A Notes or (ii) if at such time a Rating Agency has informed Issuer and Transferor that such Rating Agency does not provide such notifications for transactions of this type, then as to such Rating Agency or Rating Agencies, Issuer shall deliver written notice of the proposed action to such Rating Agency or Rating Agencies at least 10 Business Days prior to the effective date of such action, or if 10 Business Days prior notice is impractical, such advance notice as is practicable; and
(c) when used in reference to the Class B Notes and the Class C Notes, the Class B Noteholders and the Class C Noteholders shall have consented in writing to such action; and
(d) when used in reference to the Series 2023-1 Notes, (i) with respect to the Class A Notes, (A) that each Rating Agency shall have notified Issuer and Transferor in writing that the proposed action will not result in a reduction or withdrawal of its rating with respect to the Class A Notes or (B) if at such time a Rating Agency has informed Issuer and Transferor that such Rating Agency does not provide such notifications for transactions of this type, then as to such Rating Agency, Issuer shall deliver written notice of the proposed action to such Rating Agency or Rating Agencies at least 10 Business Days prior to the effective date of such action, or if 10 Business Days prior notice is impractical, such advance notice as is practical and (ii) with respect to the Class B Notes and the Class C Notes, the Class B Noteholders and Class C Noteholders have consented in writing to such action.
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Neither the Class B Notes nor the Class C Notes will be rated on the Closing Date.
“Reallocated Principal Collections” means, for any Transfer Date, Investor Principal Collections applied in accordance with Section 4.06 in an amount not to exceed the Monthly Principal Reallocation Amount for the Related Monthly Period.
“Reassignment Amount” means, for any Transfer Date, after giving effect to any deposits and distributions otherwise to be made on the related Distribution Date, the sum of (i) the Note Principal Balance on the related Distribution Date, plus (ii) Monthly Interest for the related Distribution Date and any Monthly Interest previously due but not distributed to the Series 2023-1 Noteholders, plus (iii) the amount of Default Interest, if any, for the related Distribution Date and any Default Interest previously due but not distributed to the Series 2023-1 Noteholders on a prior Distribution Date.
“Representing Party” has the meaning assigned to such term in Section 4.21(a)(i) or Section 4.21(a)(ii) of this Indenture Supplement, as the context requires.
“Repurchase Request” means either a TSA Repurchase Request or an RPA Repurchase Request pursuant to Section 4.21(a)(i) or (ii) of this Indenture Supplement, as the context requires.
“Requesting Party” has the meaning assigned to such term in Section 4.21(a)(i) or Section 4.21(a)(ii) of this Indenture Supplement, as the context requires.
“Required Reserve Account Amount” means, for any Transfer Date on or after the Reserve Account Funding Date, an amount equal to (a) 0.50% of the Note Principal Balance or (b) any other amount designated by Transferor; provided, however, that if such designation is of a lesser amount, Transferor shall (i) provide Servicer and Indenture Trustee with evidence that the Rating Agency Condition shall have been satisfied and (ii) deliver to Indenture Trustee a certificate of an Authorized Officer to the effect that, based on the facts known to such officer at such time, in the reasonable belief of Transferor, such designation will not cause a Pay Out Event or an event that, after the giving of notice or the lapse of time, would cause a Pay Out Event to occur with respect to Series 2023-1.
“Required Retained Transferor Percentage” means, for purposes of Series 2023-1, 4.00%.
“Required Spread Account Amount” means, for any date of determination, (a) prior to the occurrence of a Pay Out Event, the product of (i) the Spread Account Percentage in effect on such date and (ii) the Initial Collateral Amount; provided that the Required Spread Account Amount shall not exceed the Class C Note Principal Balance minus the excess, if any, of the Principal Accumulation Account Balance over the sum of the Class A Note Principal Balance and the Class B Note Principal Balance on such date of determination and (b) after the occurrence of a Pay Out Event, an amount equal to the Class C Note Principal Balance on such date of determination.
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“Reserve Account” is defined in Section 4.09(a).
“Reserve Account Funding Date” means the Transfer Date designated by Servicer which occurs not later than the earliest of (a) the Transfer Date with respect to the Monthly Period which commences three months prior to the commencement of the Accumulation Period (which commencement shall be subject to postponement pursuant to Section 4.14); (b) the first Transfer Date for which the Quarterly Net Yield is less than 2.00%, but in such event the Reserve Account Funding Date shall not be required to occur earlier than the Transfer Date with respect to the Monthly Period which commences twelve months prior to the commencement of the Accumulation Period; (c) the first Transfer Date for which the Quarterly Net Yield is less than 3.00%, but in such event the Reserve Account Funding Date shall not be required to occur earlier than the Transfer Date with respect to the Monthly Period which commences six months prior to the commencement of the Accumulation Period; and (d) the first Transfer Date for which the Quarterly Net Yield is less than 4.00%, but in such event the Reserve Account Funding Date shall not be required to occur earlier than the Transfer Date with respect to the Monthly Period which commences four months prior to the commencement of the Accumulation Period; provided, however, that subject to satisfaction of the Rating Agency Condition, the Reserve Account Funding Date may be any date selected by Servicer; provided, further, that if a Qualified Maturity Agreement has been assigned to the Indenture Trustee in accordance with the provisions of Section 4.14, the Reserve Account Funding Date shall be the Distribution Date immediately following the date on which a Qualified Maturity Agreement is terminated if (w) such Qualified Maturity Agreement is terminated because the provider of such Qualified Maturity Agreement ceases to qualify as a Qualified Maturity Agreement Institution, (x) such Qualified Maturity Agreement is terminated prior to the earlier of the Expected Principal Payment Date and the commencement of the Rapid Amortization Period, (y) such Qualified Maturity Agreement is terminated after the later of the last day of the March, 2025 Monthly Period and, at the election of Transferor, the date to which the commencement of the Accumulation Period may be postponed pursuant to Section 4.13 (as determined on the date of such termination) and (z) Transferor does not obtain a substitute Qualified Maturity Agreement.
“Reserve Account Surplus” means, as of any Transfer Date following the Reserve Account Funding Date, the amount, if any, by which the amount on deposit in the Reserve Account exceeds the Required Reserve Account Amount.
“Reserve Draw Amount” means, with respect to each Transfer Date relating to the Accumulation Period or the first Transfer Date relating to the Rapid Amortization Period, the amount, if any, by which the Principal Accumulation Investment Earnings for such Transfer Date are less than the Covered Amount determined as of such Transfer Date.
“Reset Date” means:
(a) each Addition Date, in each case relating to Additional Accounts;
(b) each Removal Date on which Principal Receivables are removed from the Trust;
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(c) each date on which there is an increase in the outstanding balance of any Variable Interest; and
(d) each date on which a new Series or Class of Notes is issued.
“Review Notice” means any written notice delivered by Indenture Trustee to Transferor, Servicer and all of the Noteholders of Outstanding Notes pursuant to Section 4.19(d)(iv) of this Indenture Supplement to the effect that the requisite percentage of Noteholders casting a vote have directed that an Asset Representations Review be undertaken and specifying the Review Satisfaction Date relating to such direction.
“Review Satisfaction Date” has the meaning assigned to such term in Section 4.19(d)(iv) of this Indenture Supplement.
“Revolving Period” means the period beginning on the Closing Date and ending at the close of business on the day immediately preceding the earlier of the day the Accumulation Period commences or the day the Rapid Amortization Period commences.
“RPA Repurchase Request” has the meaning assigned to such term in Section 4.21(a)(ii) of this Indenture Supplement.
“Rules” means the Commercial Arbitration Rules and Mediation Procedures in effect on the date any third-party mediation or third-party arbitration, as applicable, is initiated by the Requesting Party pursuant to Section 4.21(b) of this Indenture Supplement.
“Series 2023-1” means the Series of Notes the terms of which are specified in this Indenture Supplement.
“Series 2023-1 Final Maturity Date” means the April 16, 2029 Distribution Date.
“Series 2023-1 Note” means a Class A Note, a Class B Note or a Class C Note.
“Series 2023-1 Note Owner” means, with respect to any Series 2023-1 Note which is a Book-Entry Note, the Person who is the owner of such Book-Entry Note as reflected on the books of Clearing Agency, or on the Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an Indirect Participant, in accordance with the rules of such Clearing Agency).
“Series 2023-1 Noteholder” means a Class A Noteholder, a Class B Noteholder or a Class C Noteholder.
“Series 2023-1 Pay Out Event” is defined in the last paragraph of Article VI.
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“Series Allocation Percentage” means, with respect to any Monthly Period, the percentage equivalent of a fraction, the numerator of which is the numerator used in determining the Allocation Percentage for Finance Charge Collections for that Monthly Period and the denominator of which is the sum of the numerators used in determining the Allocation Percentage for Finance Charge Receivables for all outstanding Series for such Monthly Period; provided that if one or more Reset Dates occur in a Monthly Period, the Series Allocation Percentage will be the percentage equivalent of a fraction, the numerator of which is an amount equal to the sum of the numerators used in determining the Allocation Percentage for Finance Charge Collections for Series 2023-1 for each day during that Monthly Period divided by the total number of days in such Monthly Period and the denominator of which is an amount equal to the sum of the numerators used in determining the Allocation Percentages for Finance Charge Receivables for all outstanding Series for each day during such Monthly Period divided by the total number of days in such Monthly Period.
“Series Rating Agency Condition” means, (i) when used in reference to the Class A Notes and any action subject to such condition, (a) that each Rating Agency shall have notified Issuer in writing that such action will not result in any reduction or withdrawal of the rating, if any, of outstanding class of the Series 2023-1 Notes which such Rating Agency has rated at Sponsor’s request or (b) if at such time a Rating Agency has informed Issuer and Transferor that such Rating Agency does not provide such notifications for transactions of this type, then as to such Rating Agency, Issuer shall deliver written notice of the proposed action to such Rating Agency or Rating Agencies at least 10 Business Days prior to the effective date of such action, or if 10 Business Days prior notice is impractical, such advance notice as is practicable; and
(ii) when used in reference to the Class B Notes and the Class C Notes and any action subject to such condition, the written consent of the Class B Noteholders and the Class C Noteholders to such action.
Neither the Class B Notes nor the Class C Notes will be rated on the Closing Date.
“Series Servicing Fee Percentage” means 2% per annum.
“Series Termination Date” means the earlier to occur of (a) the date on which the Note Principal Balance is paid in full and (b) the Series 2023-1 Final Maturity Date.
“Servicer Interchange” means, with respect to any Monthly Period, an amount equal to one-twelfth of the product of (a) 1.50% and (b) the Collateral Amount as of the last day of the preceding Monthly Period; provided, however, that Servicer Interchange for the June 15, 2023 Distribution Date shall be $654,382.
“Servicing Fee Required Amount” means, for any Distribution Date, an amount equal to the excess of the amount described in Section 4.04(a)(iii) over the Available Finance Charge Collections applied to pay such amount pursuant to Section 4.04(a).
“Spread Account” is defined in Section 4.09(a).
“Spread Account Deficiency” means the excess, if any, of the Required Spread Account Amount over the Available Spread Account Amount.
“Spread Account Percentage” means, for any Distribution Date, the applicable percentage specified in the Class C Note Purchase Agreement.
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“Subject Receivables” means, with respect to an Asset Representations Review conducted by the Asset Representations Reviewer pursuant to Section 4.19 of this Indenture Supplement and the Asset Representations Review Agreement, the 60+-Day Delinquent Receivables arising in the Accounts specified on an account schedule prepared by Servicer and delivered to Asset Representations Reviewer for the purposes of an Asset Representations Review. For the avoidance of doubt, on the date that the conditions for an Asset Representations Review have been satisfied, any Receivable that is repurchased or reassigned to Transferor pursuant to the Transfer and Servicing Agreement or the RPA Seller pursuant to the Receivables Purchase Agreement, as applicable, on and after such date will not be a Subject Receivable.
“Three-Month Average 60+-Day Delinquency Rate” means, as of any date of determination, (a) the sum of the 60+-Day Delinquency Rates for three Monthly Periods immediately preceding such date of determination, divided by (b) three (3).
“TSA Repurchase Request” has the meaning assigned to such term in Section 4.21(a)(i) of this Indenture Supplement.
“Uncovered Dilution Amount” means, for any Distribution Date, an amount equal to the product of (a) the Series Allocation Percentage for the Related Monthly Period times (b) the aggregate Dilutions occurring during that Monthly Period as to which any deposit is required to be made to the Excess Funding Account pursuant to Section 3.09 of the Transfer and Servicing Agreement but has not been made (either directly by the Transferor or from Principal Collections otherwise distributable to the Transferor).
“United States Arbitration Act” means the Federal Arbitration Act, 9 U.S.C. §1 et. seq. (2012).
“Verified Note Owner” means a Series 2023-1 Note Owner that has provided Indenture Trustee with (i) a written certification that it is the beneficial owner of a specified Outstanding Amount of Series 2023-1 Notes and (ii) a trade confirmation, an account statement, a letter from a broker dealer acceptable to Indenture Trustee or other similar document acceptable to Indenture Trustee showing that such Series 2023-1 Note Owner is a beneficial owner of such Outstanding Amount of Series 2023-1 Notes.
Each capitalized term defined herein shall relate to the Series 2023-1 Notes and no other Series of Notes issued by Issuer, unless the context otherwise requires. All capitalized terms used herein and not otherwise defined herein have the meanings ascribed to them in Annex A to the Indenture.
The interpretive rules specified in Section 1.02 of the Indenture also apply to this Indenture Supplement. If any term or provision contained herein shall conflict with or be inconsistent with any term or provision contained in the Indenture, the terms and provisions of this Indenture Supplement shall be controlling.
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ARTICLE III
Noteholder Servicing Fee
Section 3.01. Servicing Compensation. The share of the Servicing Fee allocable to Series 2023-1 for any Transfer Date (the “Noteholder Servicing Fee”) shall be equal to one-twelfth of the product of (a) the Series Servicing Fee Percentage and (b) the Collateral Amount as of the last day of the Monthly Period preceding such Transfer Date; provided, however, that with respect to the first Transfer Date, the Noteholder Servicing Fee shall be equal to $872,510; provided, further, that if FNBO or Indenture Trustee is Servicer, the Noteholder Servicing Fee shall be reduced by the amount, if any, by which the Servicer Interchange for such Monthly Period exceeds the amount of Interchange included as Finance Charge Collections allocable to the Series 2023-1 Notes with respect to such Monthly Period pursuant to Section 4.16 of this Indenture Supplement. The remainder of the Servicing Fee shall be paid by the Holders of the Transferor Interest or the Noteholders of other Series (as provided in the related Indenture Supplements) and in no event shall Issuer, Indenture Trustee or the Series 2023-1 Noteholders be liable for the share of the Servicing Fee to be paid by the Holders of the Transferor Interest or the Noteholders of any other Series.
ARTICLE IV
Rights
of Noteholders and Allocation
and Application of Collections
Section 4.01. Collections and Allocations.
(a) Finance Charge Collections, Principal Collections and Receivables in Defaulted Accounts shall be allocated and distributed to Series 2023-1 as set forth in this Article.
(b) On each Date of Processing, Servicer shall allocate to the Series 2023-1 Noteholders the following amounts as set forth below:
(i) Allocations of Finance Charge Collections. An amount equal to the Investor Finance Charge Collections processed on such Date of Processing shall be allocated to the Series 2023-1 Noteholders and, first, deposited to the Finance Charge Account to the extent required by Section 8.04 of the Indenture and Section 4.01(c) below, and, second, paid to the Holder of the Transferor Interest.
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(ii) Allocations of Principal Collections.
(A) Allocations During the Revolving Period.
(1) During the Revolving Period an amount equal to the Investor Principal Collections processed on each Date of Processing, shall be allocated to the Series 2023-1 Noteholders and, first, if any other Principal Sharing Series is outstanding and in its accumulation period or amortization period, deposited to and retained in the Principal Account to the extent necessary for application as Excess Principal Collections for other Principal Sharing Series on the related Distribution Date, second, deposited to the Excess Funding Account to the extent necessary so that (x) the Transferor Interest is not less than the Minimum Transferor Interest and (y) the aggregate Principal Receivables in the Trust equals or exceeds the Minimum Aggregate Principal Receivables and, third, paid to the holder or holders of the Transferor Interest.
(2) With respect to each Monthly Period falling in the Revolving Period, to the extent that Investor Principal Collections allocated to the Series 2023-1 Noteholders pursuant to this Section 4.01(b)(ii) are paid to Transferor, Transferor shall make an amount equal to the Reallocated Principal Collections for the related Transfer Date available on that Transfer Date for application in accordance with Section 4.06.
(B) Allocations During the Accumulation Period. During the Accumulation Period an amount equal to the Investor Principal Collections processed on each Date of Processing shall be allocated to the Series 2023-1 Noteholders and deposited into the Principal Account in accordance with Section 8.04 of the Indenture and Section 4.01(c).
(C) Allocations During the Rapid Amortization Period. During the Rapid Amortization Period, an amount equal to the Investor Principal Collections processed on each Date of Processing shall be allocated to the Series 2023-1 Noteholders and deposited into the Principal Account until applied as provided herein; provided, however, that after the date on which an amount of such Principal Collections equal to the Note Principal Balance has been deposited into the Principal Account, any Investor Principal Collections in excess of such amount shall be, first, if any other Principal Sharing Series is outstanding and in its accumulation period or amortization period, deposited to and retained in the Principal Account for application, to the extent necessary, as Excess Principal Collections to other Principal Sharing Series on the related Distribution Date, second, deposited in the Excess Funding Account to the extent necessary so that (x) the Transferor Interest is not less than the Minimum Transferor Interest and (y) the aggregate Principal Receivables in the Trust equals or exceeds the Minimum Aggregate Principal Receivables and, third, paid to the holder or holders of the Transferor Interest.
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(c) During any period when Servicer is permitted by Section 8.04 of the Indenture to make a single monthly deposit to the Collection Account, amounts allocated to the Noteholders pursuant to Sections 4.01(a) and (b) with respect to any Monthly Period need not be deposited into the Collection Account or any Series Account prior to the related Transfer Date, and, when so deposited, (x) may be deposited net of any amounts required to be distributed to Transferor and, if FNBO is Servicer, Servicer, and (y) shall be deposited into the Finance Charge Account (in the case of Finance Charge Collections) and the Principal Account (in the case of Collections of Principal Receivables (not including any Excess Principal Collections allocated to Series 2023-1 pursuant to Section 8.05 of the Indenture)). The exception to the daily deposit requirements provided by the second paragraph of Section 8.04(a) of the Indenture shall not be available during any Monthly Period during the Rapid Amortization Period, or at any time that (A) the Transferor Interest is less than the Minimum Transferor Interest, (B) the Available Spread Account Amount is less than the Required Spread Account Amount or (C) the aggregate Principal Receivables in the Trust is less than the Minimum Aggregate Principal Receivables. For purposes of the second paragraph of Section 8.04(a) of the Indenture, the amount of Principal Collections required to be deposited or distributed on or prior to the related Distribution Date during the Accumulation Period shall include an amount equal to the Controlled Deposit Amount.
Notwithstanding the provisions of the second paragraph of Section 8.04(a) of the Indenture, all Finance Charge Collections for each Monthly Period shall be deposited daily to the Finance Charge Account and retained therein until the delivery of the statement required by Section 5.03(b). On or after delivery of such statement, Finance Charge Collections for the Related Monthly Period which are not required to be deposited or distributed pursuant to such statement may be withdrawn by Servicer.
(d) On any date, Servicer may withdraw from the Collection Account or any Series Account any amounts inadvertently deposited in such account that should have not been so deposited.
Section 4.02. Determination of Monthly Interest.
(a) The amount of monthly interest (“Class A Monthly Interest Payment”) distributable from the Distribution Account with respect to the Class A Notes on any Distribution Date shall be an amount equal to the product of (i) (A) a fraction, the numerator of which is 30 and the denominator of which is 360, times (B) the Class A Note Interest Rate in effect with respect to the related Interest Period and (ii) the Class A Note Principal Balance as of the close of business on the last day of the preceding Monthly Period (or, with respect to the initial Distribution Date, the Class A Note Initial Principal Balance).
On the Determination Date preceding each Distribution Date, Servicer shall determine the excess, if any (the “Class A Interest Shortfall”), of (x) the aggregate amount accrued pursuant to this Section 4.02(a) as of the prior Distribution Date over (y) the amount actually transferred from the Distribution Account for payment of such amount. If the Class A Interest Shortfall for any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class A Interest Shortfall is fully paid, an additional amount (“Class A Default Interest”) equal to the product of (i) (A) a fraction, the numerator of which is 30 and the denominator of which is 360, times (B) the Class A Note Interest Rate in effect with respect to the related Interest Period and (ii) such Class A Interest Shortfall (or the portion thereof which has not been paid to the Class A Noteholders) shall be payable as provided herein with respect to the Class A Notes. Notwithstanding anything to the contrary herein, Class A Default Interest shall be payable or distributed to the Class A Noteholders only to the extent permitted by applicable law.
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(b) The amount of monthly interest (“Class B Monthly Interest Payment”) distributable from the Distribution Account with respect to the Class B Notes on any Distribution Date shall be an amount equal to the product of (i) (A) a fraction, the numerator of which 30 and the denominator of which is 360, times (B) the Class B Note Interest Rate in effect with respect to the related Interest Period and (ii) the Class B Note Principal Balance as of the close of business on the last day of the preceding Monthly Period (or, with respect to the initial Distribution Date, the Class B Note Initial Principal Balance).
On the Determination Date preceding each Distribution Date, Servicer shall determine the excess, if any (the “Class B Interest Shortfall”), of (x) the aggregate amount accrued pursuant to this Section 4.02(b) as of the prior Distribution Date over (y) the amount of funds actually transferred from the Distribution Account for payment of such amount. If the Class B Interest Shortfall for any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class B Interest Shortfall is fully paid, an additional amount (“Class B Default Interest”) equal to the product of (i) (A) a fraction, the numerator of which is 30 and the denominator of which is 360, times (B) the Class B Note Interest Rate in effect with respect to the related Interest Period and (ii) such Class B Interest Shortfall (or the portion thereof which has not been paid to the Class B Noteholders) shall be payable as provided herein with respect to the Class B Notes. Notwithstanding anything to the contrary herein, Class B Default Interest shall be payable or distributed to the Class B Noteholders only to the extent permitted by applicable law.
(c) The amount of monthly interest (“Class C Monthly Interest Payment”) distributable from the Distribution Account with respect to the Class C Notes on any Distribution Date shall be an amount equal to the product of (i) (A) a fraction, the numerator of which is 30 and the denominator of which is 360, times (B) the Class C Note Interest Rate in effect with respect to the related Interest Period and (ii) the Class C Note Principal Balance as of the close of business on the last day of the preceding Monthly Period (or, with respect to the initial Distribution Date, the Class C Note Initial Principal Balance).
On the Determination Date preceding each Distribution Date, Servicer shall determine the excess, if any (the “Class C Interest Shortfall”), of (x) the aggregate amount accrued pursuant to this Section 4.02(c) as of the prior Distribution Date over (y) the amount of funds actually transferred from the Distribution Account for payment of such amount. If the Class C Interest Shortfall for any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class C Interest Shortfall is fully paid, an additional amount (“Class C Default Interest”) equal to the product of (i) (A) a fraction, the numerator of which is 30 and the denominator of which is 360, times (B) the Class C Note Interest Rate in effect with respect to the related Interest Period and (ii) such Class C Interest Shortfall (or the portion thereof which has not been paid to the Class C Noteholders) shall be payable as provided herein with respect to the Class C Notes. Notwithstanding anything to the contrary herein, Class C Default Interest shall be payable or distributed to the Class C Noteholders only to the extent permitted by applicable law.
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Section 4.03. Determination of Monthly Principal. The amount of monthly principal to be transferred from the Principal Account to the Principal Accumulation Account or the Distribution Account, as applicable, with respect to the Notes on each Transfer Date (the “Monthly Principal”), beginning with the Transfer Date in the month following the month in which the Accumulation Period or, if earlier, the Rapid Amortization Period, begins, shall be equal to the least of (i) the Available Principal Collections on deposit in the Principal Account with respect to such Transfer Date, (ii) for each Transfer Date with respect to the Accumulation Period, the Controlled Deposit Amount for such Transfer Date, (iii) the Collateral Amount (after taking into account any adjustments to be made on such Distribution Date pursuant to Sections 4.05 and 4.06) prior to any deposit into the Principal Accumulation Account on such Transfer Date, and (iv) the Note Principal Balance, minus any amount already on deposit in the Principal Accumulation Account on such Transfer Date.
Section 4.04. Application of Available Finance Charge Collections and Available Principal Collections. On or before each Transfer Date, Servicer shall instruct Indenture Trustee in writing (which writing shall be substantially in the form of Exhibit B) to withdraw or deposit and Indenture Trustee, acting in accordance with such instructions, shall withdraw or deposit on such Transfer Date or the related Distribution Date, as applicable, to the extent of available funds, the amounts required to be withdrawn from the Finance Charge Account, the Principal Account, the Principal Accumulation Account and the Distribution Account as follows:
(a) On each Transfer Date, an amount equal to the Available Finance Charge Collections for the Related Monthly Period will be withdrawn from the Finance Charge Account and distributed, deposited or paid by Indenture Trustee in the following priority:
(i) an amount equal to Class A Monthly Interest Payment for such Distribution Date, plus any Class A Interest Shortfall, plus the amount of any Class A Default Interest for such Distribution Date, plus the amount of any Class A Default Interest previously due but not distributed to Class A Noteholders on a prior Distribution Date shall be deposited into the Distribution Account for distribution to the Class A Noteholders;
(ii) an amount equal to Class B Monthly Interest Payment for such Distribution Date, plus any Class B Interest Shortfall, plus the amount of any Class B Default Interest for such Distribution Date, plus the amount of any Class B Default Interest previously due but not distributed to Class B Noteholders on a prior Distribution Date shall be deposited into the Distribution Account for distribution to the Class B Noteholders;
(iii) an amount equal to the Noteholder Servicing Fee for such Transfer Date, plus the amount of any Noteholder Servicing Fee previously due but not distributed to Servicer on a prior Transfer Date, shall be distributed to Servicer;
(iv) an amount equal to Class C Monthly Interest Payment for such Distribution Date, plus any Class C Interest Shortfall, plus the amount of any Class C Default Interest for such Distribution Date, plus the amount of any Class C Default Interest previously due but not distributed to the Class C Noteholders on a prior Distribution Date shall be deposited into the Distribution Account for distribution to the Class C Noteholders;
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(v) an amount equal to the sum of the Investor Default Amount and any Uncovered Dilution Amount for such Distribution Date shall be treated as a portion of Available Principal Collections for such Distribution Date and deposited into the Principal Account for application pursuant to this Section 4.04;
(vi) an amount equal to the sum of the aggregate amounts of Investor Charge-Offs and Reallocated Principal Collections which have not been previously reimbursed pursuant to this clause (vi) of Section 4.04(a) shall be treated as a portion of Available Principal Collections for such Distribution Date and deposited into the Principal Account for application pursuant to this Section 4.04;
(vii) on each Transfer Date from and after the Reserve Account Funding Date, but prior to the date on which the Reserve Account terminates as described in Section 4.10(f), an amount up to the excess, if any, of the Required Reserve Account Amount over the Available Reserve Account Amount shall be deposited into the Reserve Account;
(viii) an amount equal to the excess, if any, of the Required Spread Account Amount over the Available Spread Account Amount shall be deposited into the Spread Account;
(ix) all remaining amounts will constitute a portion of Excess Finance Charge Collections for such Distribution Date to be applied in accordance with Section 4.07;
(x) any other amount required to be paid or deposited under the terms of the Class B Note Purchase Agreement shall be so paid or deposited;
(xi) any other amount required to be paid or deposited under the terms of the Class C Note Purchase Agreement shall be so paid or deposited; and
(xii) any remaining amount to be paid to Transferor.
(b) On each Transfer Date with respect to the Revolving Period, the Available Principal Collections for the Related Monthly Period on deposit in the Principal Account shall be withdrawn to be treated as Excess Principal Collections for such Distribution Date and applied in accordance with Section 4.08 and Section 8.05 of the Indenture.
(c) On each Transfer Date with respect to the Accumulation Period or the Rapid Amortization Period, an amount equal to the Available Principal Collections for the Related Monthly Period shall be withdrawn from the Principal Account and distributed or deposited in the following order of priority:
(i) on each Transfer Date with respect to the Accumulation Period, an amount equal to the Monthly Principal for such Transfer Date shall be deposited into the Principal Accumulation Account;
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(ii) on each Transfer Date with respect to the Rapid Amortization Period, an amount equal to the Monthly Principal for such Transfer Date shall be deposited into the Distribution Account for distribution ratably to the Class A Noteholders until the Class A Note Principal Balance has been paid in full;
(iii) on each Transfer Date with respect to the Rapid Amortization Period, after giving effect to clause (ii) above, an amount equal to the Monthly Principal remaining, if any, shall be deposited into the Distribution Account for distribution ratably to the Class B Noteholders until the Class B Note Principal Balance has been paid in full;
(iv) on each Transfer Date with respect to the Rapid Amortization Period, after giving effect to clauses (ii) and (iii) above, an amount equal to the Monthly Principal remaining, if any, shall be deposited into the Distribution Account for distribution ratably to the Class C Noteholders until the Class C Note Principal Balance has been paid in full;
(v) on each Transfer Date, an amount equal to any other amounts payable, first, to the Class B Noteholders under the Class B Note Purchase Agreement and second, to the Class C Noteholders under the Class C Note Purchase Agreement; and
(vi) on each Transfer Date with respect to the Accumulation Period or the Rapid Amortization Period, the balance of such Available Principal Collections remaining after giving effect to clauses (i) through (v) above shall be retained in the Principal Account to be treated as Excess Principal Collections and applied in accordance with Section 4.08.
| (d) | On each Distribution Date, Indenture Trustee shall make distributions from the Distribution Account in accordance with Section 5.02 as follows: (i) to the Class A Noteholders, the amount deposited into the Distribution Account pursuant to Section 4.04(a)(i) and (c)(ii); (ii) to the Class B Noteholders, the amount deposited into the Distribution Account pursuant to Section 4.04(a)(ii), and (x) and (c)(iii); and (iii) to the Class C Noteholders, the amount deposited into the Distribution Account pursuant to Section 4.04(a)(iv), (xi) and (c)(iv). |
| (e) | On the earlier to occur of (i) the first Transfer Date during the Rapid Amortization Period and (ii) the Transfer Date immediately preceding the Expected Principal Payment Date, Indenture Trustee shall withdraw from the Principal Accumulation Account and deposit into the Distribution Account amounts necessary to pay, first, to the Class A Noteholders, until paid in full, second, to the Class B Noteholders, until paid in full, and, third, to the Class C Noteholders, until paid in full, the amounts deposited into the Principal Accumulation Account pursuant to Section 4.04(c)(i). In accordance with Section 5.02, on the related Distribution Date, Indenture Trustee shall pay from the Distribution Account to the Class A Noteholders, the Class B Noteholders and the Class C Noteholders, as applicable, the amounts deposited into the Distribution Account for the account of such Noteholders pursuant to this Section 4.04(e). |
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Section 4.05. Investor Charge-Offs. On each Determination Date, Servicer shall calculate the Investor Default Amount and any Uncovered Dilution Amount for the related Distribution Date. If, on any Distribution Date, the sum of the Investor Default Amount and any Uncovered Dilution Amount for such Distribution Date exceeds the amount of Available Finance Charge Collections allocated with respect thereto pursuant to Section 4.04(a)(v) with respect to such Distribution Date, the Collateral Amount will be reduced (but not below zero) by the amount of such excess (such reduction, an “Investor Charge-Off”).
Section 4.06. Reallocated Principal Collections. On each Transfer Date, Servicer shall apply, or shall instruct Indenture Trustee in writing to apply, Investor Principal Collections with respect to such Transfer Date, in an amount not to exceed the Monthly Principal Reallocation Amount for the Related Monthly Period, to fund any deficiency in amounts otherwise available for deposit and distribution pursuant to and in the priority set forth in Section 4.04(a)(i), (ii) and (iii), after giving effect to any application of funds from the Spread Account pursuant to Section 4.11, any application of funds from the Reserve Account pursuant to Section 4.10 and after allocation and application of Excess Finance Charge Collections pursuant to Section 4.07 to cover such payments. On each Transfer Date, the Collateral Amount shall be reduced by the amount of such Reallocated Principal Collections, if any, for such Transfer Date.
Section 4.07. Excess Finance Charge Collections.
(a) Excess Finance Charge Collections from all Excess Allocation Series in Group One will be allocated to cover any Finance Charge Shortfall or finance charge shortfalls for other Excess Allocation Series in Group One pursuant to Section 8.06 of the Indenture except that, following a Servicer Default and the appointment of a Successor Servicer, Excess Finance Charge Collections remaining after their application to cover Finance Charge Shortfalls and other finance charge shortfalls for Group One, shall be paid to the Successor Servicer to pay any unpaid Excess Servicing Fees or other unpaid excess servicing fees for all Excess Allocation Series in Group One prior to any distribution to the holder or holders of the Transferor Interest. If the remaining Excess Finance Charge Collections do not exceed the aggregate amount of such unpaid fees, the remaining Excess Finance Charge Collections shall be allocated among the Group One Excess Allocation Series pro rata based on the amount of unpaid excess servicing fees for each such Series. Excess Finance Charge Collections with respect to Group One shall be allocated to Series 2023-1 in accordance with this Section 4.07, without regard to whether the Rating Agency Condition has been met for purposes of the definition of “Portfolio Yield.” On each Transfer Date, Indenture Trustee, at the written direction of the Servicer, shall deposit Excess Finance Charge Collections allocated to Series 2023-1 to the Finance Charge Account prior to the applications to be made pursuant to Section 4.04.
(b) Any Excess Finance Charge Collections relating to the Series 2023-1 Notes remaining after the application thereof as specified in Section 4.07(a) above, if any, shall be applied, first, pursuant to Section 4.04(a)(x) and (xi) hereof and second, the remaining balance, if any, shall be paid to Transferor pursuant to Section 4.04(a)(xii) hereof.
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Section 4.08. Excess Principal Collections. Excess Principal Collections from all Principal Sharing Series in Group One will be allocated to cover any Principal Shortfall or principal shortfalls for other Principal Sharing Series in Group One pursuant to Section 8.05 of the Indenture. If (i) any Principal Shortfall remains after such allocation, (ii) any Series in Group One is in an Amortization Period and (iii) the amount on deposit in the Excess Funding Account is greater than zero, amounts on deposit in the Excess Funding Account will be treated as Excess Principal Collections and allocated to cover any remaining Principal Shortfall or principal shortfalls for other Principal Sharing Series in Group One pursuant to Section 8.03 of the Indenture. Indenture Trustee, at the written direction of the Servicer, shall deposit Excess Principal Collections allocated to Series 2023-1 to the Principal Accumulation Account or the Distribution Account, as applicable.
Section 4.09. Certain Series Accounts.
(a) The Indenture Trustee or its Affiliate shall establish and maintain with a Qualified Institution, which may be Indenture Trustee, in the name of the Trust, on behalf of the Trust, for the benefit of the Noteholders, six segregated trust accounts with such Qualified Institution (the “Finance Charge Account,” the “Principal Account,” the “Principal Accumulation Account,” the “Distribution Account,” the “Spread Account” and the “Reserve Account”) each bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Series 2023-1 Noteholders. The Finance Charge Account, the Principal Account, the Principal Accumulation Account, the Distribution Account, the Reserve Account and the Spread Account are hereby designated as the Series Accounts for the Series 2023-1 Notes. Except as otherwise provided in Section 4.11, Indenture Trustee shall possess all right, title and interest in all funds on deposit from time to time in each Series Account and in all proceeds thereof. Except as otherwise provided in Section 4.11, each Series Account shall be under the sole dominion and control of Indenture Trustee for the benefit of the Series 2023-1 Noteholders. If at any time the institution holding a Series Account ceases to be a Qualified Institution, Transferor shall notify Indenture Trustee in writing, and Indenture Trustee upon being notified (or Servicer on its behalf) shall, within ten (10) Business Days, establish a new Series Account meeting the conditions specified above with a Qualified Institution, and shall transfer any cash or any investments to such new Series Account. Indenture Trustee, at the written direction of Servicer, shall make withdrawals from and deposits to each Series Account from time to time, in the amounts and for the purposes set forth in this Indenture Supplement. Indenture Trustee at all times shall maintain accurate records reflecting each transaction in each Series Account, so long as such accounts are established and maintained with Indenture Trustee or its Affiliate.
(b) Funds on deposit in each Series Account from time to time shall be invested and reinvested at the written direction of Servicer by Indenture Trustee in Permitted Investments that will mature so that such funds will be available for withdrawal on or prior to the following Transfer Date. In the absence of such direction, such funds shall remain uninvested. The Indenture Trustee shall not be held liable for the performance of any Permitted Investments made in accordance with the terms hereof.
On each Transfer Date with respect to the Accumulation Period and on the first Transfer Date with respect to the Rapid Amortization Period, Indenture Trustee, acting at Servicer’s direction given on or before such Transfer Date, shall transfer from the Principal Accumulation Account to the Finance Charge Account the Principal Accumulation Investment Earnings on deposit in the Principal Accumulation Account for application as Available Finance Charge Collections in accordance with Section 4.04(a).
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Principal Accumulation Investment Earnings (including reinvested interest) shall not be considered part of the amounts on deposit in the Principal Accumulation Account for purposes of this Indenture Supplement.
On each Distribution Date, all Investment Earnings on funds on deposit in the Principal Account, the Finance Charge Account and the Distribution Account shall be deposited by Indenture Trustee in a separate deposit account with a Qualified Institution in the name of Servicer, or a Person designated in writing by Servicer, which shall not constitute a part of the Trust, or shall otherwise be turned over by Indenture Trustee to Servicer.
(c) Indenture Trustee shall hold such of the Permitted Investments of funds in any Series Account as consists of instruments, deposit accounts, negotiable documents, money, goods, letters of credit, and advices of credit in the State of Minnesota. Indenture Trustee shall hold such of the Permitted Investments as constitutes investment property through a securities intermediary, which securities intermediary shall agree with Indenture Trustee that (a) such investment property shall at all times be credited to a securities account of Indenture Trustee, (b) such securities intermediary shall treat Indenture Trustee as entitled to exercise the rights that comprise each financial asset credited to such securities account, (c) all property credited to such securities account shall be treated as a financial asset, (d) such securities intermediary shall comply with entitlement orders originated by Indenture Trustee without the further consent of any other person or entity, (e) such securities intermediary will not agree with any person or entity other than Indenture Trustee to comply with entitlement orders originated by such other person or entity, (f) such securities accounts and the property credited thereto shall not be subject to any lien, security interest or right of set-off in favor of such securities intermediary or anyone claiming through it (other than Indenture Trustee), and (g) such agreement shall be governed by the laws of the State of New York. Terms used in the preceding sentence that are defined in the New York UCC and not otherwise defined herein shall have the meaning set forth in the New York UCC. Except as permitted by this Section 4.09(c), Indenture Trustee shall not hold Permitted Investments through an agent or nominee.
(d) No Permitted Investment in any Series Account shall be disposed of prior to its maturity unless Servicer so directs and either (i) such disposal will not result in a loss of all or part of the principal portion of such Permitted Investment or (ii) prior to the maturity of such Permitted Investment, a default occurs in the payment of principal, interest or any other amount with respect to such Permitted Investment.
Section 4.10. Reserve Account.
(a) Indenture Trustee, at the written direction of Servicer, shall (i) make withdrawals from the Reserve Account from time to time in an amount up to the Available Reserve Account Amount at such time, for the purposes set forth in this Indenture Supplement, and (ii) on each Transfer Date (from and after the Reserve Account Funding Date) prior to termination of the Reserve Account, make a deposit into the Reserve Account in the amount specified in, and otherwise in accordance with, Section 4.04(a)(vii).
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(b) On each Transfer Date, all Investment Earnings accrued since the preceding Transfer Date on funds on deposit in the Reserve Account shall be retained in the Reserve Account (to the extent that the Available Reserve Account Amount is less than the Required Reserve Account Amount) and the balance, if any, shall be deposited into the Finance Charge Account and included in Available Finance Charge Collections for the Related Monthly Period. For purposes of determining the availability of funds or the balance in the Reserve Account for any reason under this Indenture Supplement, Investment Earnings on such funds shall be deemed not to be available or on deposit, except amounts retained pursuant to the preceding sentence.
(c) On or before each Transfer Date with respect to the Accumulation Period and on or before the first Transfer Date with respect to the Rapid Amortization Period, Servicer shall calculate the Reserve Draw Amount; provided, however, that such amount will be reduced to the extent that funds otherwise would be available for deposit in the Reserve Account under Section 4.04(a)(vii) with respect to such Transfer Date.
(d) If for any Transfer Date the Reserve Draw Amount is greater than zero, the Reserve Draw Amount, up to the Available Reserve Account Amount, shall be withdrawn from the Reserve Account on such Transfer Date by Indenture Trustee (acting in accordance with the written instructions of Servicer) and deposited into the Finance Charge Account for application as Available Finance Charge Collections for the Related Monthly Period.
(e) If the Reserve Account Surplus on any Transfer Date, after giving effect to all deposits to and withdrawals from the Reserve Account with respect to such Transfer Date, is greater than zero, Indenture Trustee, acting in accordance with the written instructions of Servicer, shall withdraw from the Reserve Account an amount equal to such Reserve Account Surplus and (i) deposit such amounts in the Spread Account, to the extent that funds on deposit in the Spread Account are less than the Required Spread Account Amount, and (ii) distribute any such amounts remaining after application pursuant to Section 4.10(e)(i) to the Holder of the Transferor Interest.
(f) Upon the earliest to occur of (i) the termination of the Trust pursuant to Article VIII of the Trust Agreement, (ii) the first Transfer Date relating to the Rapid Amortization Period and (iii) the Transfer Date immediately preceding the Expected Principal Payment Date, Indenture Trustee, acting in accordance with the written instructions of Servicer, after the prior payment of all amounts owing to the Series 2023-1 Noteholders that are payable from the Reserve Account as provided herein, shall withdraw from the Reserve Account all amounts, if any, on deposit in the Reserve Account and (A) deposit such amounts in the Spread Account, to the extent that funds on deposit in the Spread Account are less than the Required Spread Account Amount, and (B) distribute any such amounts remaining after application pursuant to Section 4.10(f)(A) to the Holder of the Transferor Interest. The Reserve Account shall thereafter be deemed to have terminated for purposes of this Indenture Supplement. Funds on deposit in the Reserve Account at any time that the Accumulation Period is suspended pursuant to Section 4.14 shall remain on deposit until applied in accordance with Section 4.10(d), (e) or (f).
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Section 4.11. Spread Account.
(a) The Indenture Trustee shall establish and maintain the Spread Account for the benefit of the Class C Noteholders and the Holder of the Transferor Interest, with an account designation clearly indicating that the funds deposited therein are held for the benefit of the Class C Noteholders and the Holder of the Transferor Interest. The Spread Account shall be under the sole dominion and control of Indenture Trustee for the benefit of the Class C Noteholders and the Holder of the Transferor Interest. Indenture Trustee, at the written direction of Servicer, shall (i) make withdrawals from the Spread Account from time to time in an amount up to the Available Spread Account Amount at such time, for the purposes set forth in this Indenture Supplement, and (ii) on each Transfer Date prior to termination of the Spread Account, make a deposit into the Spread Account in the amount specified in, and otherwise in accordance with, Section 4.11(f). The Issuer will not make a deposit into the Spread Account on the Closing Date.
(b) On each Transfer Date (but subject to Section 4.11(c), (d), (e) and (f)), the Investment Earnings, if any, accrued since the preceding Transfer Date on funds on deposit in the Spread Account shall be paid to the Holder of the Transferor Interest by Indenture Trustee upon written direction of Servicer. For purposes of determining the availability of funds or the balance in the Spread Account for any reason under this Indenture Supplement (subject to Section 4.11(c), (d), (e) and (f)), all Investment Earnings shall be deemed not to be available or on deposit; provided that after the maturity of the Series 2023-1 Notes has been accelerated as a result of an Event of Default, all Investment Earnings shall be added to the balance on deposit in the Spread Account and treated like the rest of the Available Spread Account Amount.
(c) If, on any Transfer Date, the aggregate amount of Available Finance Charge Collections otherwise available for application pursuant to Section 4.04(a)(iv) is less than the aggregate amount required to be deposited into the Distribution Account pursuant to Section 4.04(a)(iv), Indenture Trustee, at the written direction of Servicer, shall (i) withdraw from the Spread Account the amount of such deficiency up to the Available Spread Account Amount and, if the Available Spread Account Amount is less than such deficiency, the Indenture Trustee shall also withdraw Investment Earnings credited to the Spread Account in an amount so that the total amount withdrawn equals such deficiency, and (ii) deposit such amount into the Distribution Account for payment to the Class C Noteholders in respect of interest on the Class C Notes pursuant to Section 5.02(c).
(d) On the Series 2023-1 Final Maturity Date or, if sooner, the date on which the Class A Note Principal Balance and the Class B Note Principal Balance have been paid in full, after applying any funds on deposit in the Spread Account as described in Section 4.11(c), Indenture Trustee, at the written direction of Servicer, shall withdraw from the Spread Account an amount equal to the lesser of (i) the Class C Note Principal Balance (after any payments to be made pursuant to Section 4.04(c) on such date) and (ii) the Available Spread Account Amount and, if the amount so withdrawn is not sufficient to reduce the Class C Note Principal Balance to zero, shall also withdraw Investment Earnings credited to the Spread Account up to the amount required to reduce the Class C Note Principal Balance to zero. Indenture Trustee, upon the written direction of Servicer, or Servicer, shall deposit such amounts into the Distribution Account for distribution to the Class C Noteholders in accordance with Section 5.02(c).
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(e) On the earlier to occur of (i) the Series 2023-1 Final Maturity Date and (ii) the day following the occurrence of an Event of Default with respect to Series 2023-1 and acceleration of the maturity of the Series 2023-1 Notes pursuant to Section 5.03 of the Indenture, Servicer shall withdraw from the Spread Account an amount equal to the Available Spread Account Amount and Indenture Trustee or Servicer shall deposit such amounts into the Distribution Account for distribution to the Class C Noteholders until the Class C Note Principal Balance is paid in full, then to the Class A Noteholders until the Class A Note Principal Balance is paid in full, and then to the Class B Noteholders until the Class B Note Principal Balance is paid in full, in that order of priority, in accordance with Section 5.02, to fund any shortfalls in amounts owed to such Noteholders.
(f) If on any Transfer Date, after giving effect to all withdrawals from the Spread Account, the Available Spread Account Amount is less than the Required Spread Account Amount then in effect, (i) Available Finance Charge Collections shall be deposited into the Spread Account pursuant to Section 4.04(a)(viii) up to the amount of the Spread Account Deficiency, (ii) to the extent available, funds shall be withdrawn from the Reserve Account and deposited to the Spread Account pursuant to Section 4.10(e)(i) up to the amount of the Spread Account Deficiency and (iii) to the extent available, funds shall be withdrawn from the Reserve Account and deposited to the Spread Account pursuant to Section 4.10(f)(A) up to the amount of the Spread Account Deficiency. If, after giving effect to the deposits specified in clauses (i), (ii) and (iii) of this paragraph (f) of Section 4.11, there is still a Spread Account Deficiency, Investment Earnings on the Spread Account shall be held and not distributed pursuant to Section 4.11(b) until such Spread Account Deficiency is reduced to zero through subsequent deposits pursuant to Section 4.04(a)(viii) and clauses (ii) and (iii) of this Section 4.11(f).
(g) If, after giving effect to all deposits to and withdrawals from the Spread Account with respect to any Transfer Date, the amount on deposit in the Spread Account exceeds the Required Spread Account Amount, Indenture Trustee acting in accordance with the instructions of Servicer, shall withdraw an amount equal to such excess and deposit it into the Finance Charge Account for application as Available Finance Charge Collections. On the date on which the Class C Note Principal Balance has been paid in full, after making any payments to the Noteholders required pursuant to Section 4.11(c), (d) and (e), Indenture Trustee, at the written direction of Servicer, shall withdraw from the Spread Account all amounts then remaining in the Spread Account and pay such amounts to the Holder of the Transferor Interest.
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Section 4.12. Investment Instructions. Any investment instructions required to be given to Indenture Trustee pursuant to the terms hereof must be given to Indenture Trustee no later than 11:00 a.m., New York City time, on the date such investment is to be made. In the event Indenture Trustee receives such investment instruction later than such time, Indenture Trustee may, but shall have no obligation to, make such investment. In the event Indenture Trustee is unable to make an investment required in an investment instruction received by Indenture Trustee after 11:00 a.m., New York City time, on such day, such investment shall be made by Indenture Trustee on the next succeeding Business Day. In no event shall Indenture Trustee be liable for any investment not made pursuant to investment instructions received after 11:00 a.m., New York City time, on the day such investment is requested to be made.
Section 4.13. Accumulation Period. The Accumulation Period is scheduled to commence at the beginning of business on April 1, 2025; provided that if the Accumulation Period Length (determined as described below) on any Determination Date on or after the January 2025 Determination Date is less than twelve months, the date on which the Accumulation Period actually commences will be changed to the first Business Day of the month that is the number of whole months prior to the month in which the Expected Principal Payment Date occurs equal to the Accumulation Period Length (so that, as a result of such election, the number of Monthly Periods in the Accumulation Period will equal the Accumulation Period Length); provided that (i) the length of the Accumulation Period will not be less than one month, (ii) such determination of the Accumulation Period Length shall be made on each Determination Date on and after the January 2025 Determination Date but prior to the commencement of the Accumulation Period, and any postponement of the Accumulation Period shall be subject to the subsequent lengthening of the Accumulation Period to the Accumulation Period Length determined on any subsequent Determination Date, but the Accumulation Period shall in no event commence prior to the Controlled Accumulation Date, and (iii) notwithstanding any other provision of this Indenture Supplement to the contrary, no postponement of the commencement of the Accumulation Period shall be made after a Pay Out Event shall have occurred and be continuing with respect to any other Series. The “Accumulation Period Length” will mean a number of whole months such that the amount available for distribution of principal on the Series 2023-1 Notes on the Expected Principal Payment Date is expected to equal or exceed the sum of the Class A Note Principal Balance, the Class B Note Principal Balance and the Class C Note Principal Balance, assuming for this purpose that (1) the payment rate with respect to Principal Collections remains constant at the lowest level of such payment rate during the twelve preceding Monthly Periods (or such lower payment rate as Servicer may select), (2) the total amount of Principal Receivables in the Trust (and the principal amount on deposit in the Excess Funding Account, if any) remains constant at the level on such date of determination, (3) no Pay Out Event with respect to any Series will subsequently occur and (4) no additional Series (other than any Series being issued on such date of determination) will be subsequently issued. Servicer shall calculate the Accumulation Period Length on each Determination Date on and after the January 2025 Determination Date as necessary to determine whether the Accumulation Period is postponed and to set the Reserve Account Funding Date. If the calculation results in a postponement, Servicer shall provide notice in writing to Indenture Trustee, Transferor, Issuer and each Rating Agency. Any notice by Servicer confirming the postponement of the Accumulation Period pursuant to this Section 4.13 shall specify (i) the Accumulation Period Length, (ii) the commencement date of the Accumulation Period and (iii) the Controlled Accumulation Amount with respect to each Monthly Period during the Accumulation Period. The method for determining the Accumulation Period Length may be changed if the Rating Agency Condition is met.
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Section 4.14. Suspension of Accumulation Period.
(a) Servicer may elect to suspend the commencement of the Accumulation Period with prior written notice to the Rating Agencies, at any time prior to the Distribution Date preceding the Expected Principal Payment Date. The commencement of the Accumulation Period shall be suspended upon delivery by Servicer to Indenture Trustee of (i) an Officer’s Certificate stating that Servicer has elected to suspend the commencement of the Accumulation Period and that all conditions precedent to such suspension set forth in this Section 4.14 have been satisfied, (ii) a copy of an executed Qualified Maturity Agreement and (iii) an Opinion of Counsel addressed to Indenture Trustee as to the due authorization, execution and delivery and the validity and enforceability of such Qualified Maturity Agreement. Issuer does hereby transfer, assign, set-over, and otherwise convey to Indenture Trustee for the benefit of the Series 2023-1 Noteholders, without recourse, all of its rights under any Qualified Maturity Agreement obtained in accordance with this Section 4.14 and all proceeds thereof. Such property shall constitute part of the Trust Estate and Collateral for all purposes of the Indenture. The foregoing transfer, assignment, set-over and conveyance does not constitute and is not intended to result in a creation or an assumption by Indenture Trustee or any Noteholder of any obligation of Issuer or any other Person in connection with a Qualified Maturity Agreement or under any agreement or instrument relating thereto. Each Qualified Maturity Agreement must satisfy the Series Rating Agency Condition.
Indenture Trustee hereby acknowledges its acceptance, to the extent validly transferred, assigned, set-over or otherwise conveyed to Indenture Trustee, for the benefit of the Series 2023-1 Noteholders, of all of the rights previously held by Issuer under any Qualified Maturity Agreement obtained by Issuer and all proceeds thereof, and declares that it shall hold such rights upon the trust set forth herein and in the Indenture, and subject to the terms hereof and thereof, for the benefit of the Series 2023-1 Noteholders.
(b) Each Qualified Maturity Agreement shall obligate the provider to deposit into the Principal Accumulation Account on or before the Expected Principal Payment Date an amount equal to the initial Note Principal Balance (reduced by any amount on deposit in the Principal Accumulation Account); provided, however, that Issuer may instead elect to fund all or a portion of such deposits with the proceeds of the issuance of a new Series or with the Available Principal Collections with respect to such Transfer Date. The amounts so deposited shall be applied on the Expected Principal Payment Date pursuant to Section 4.04(c) as if the commencement of the Accumulation Period had not been suspended. The Qualified Maturity Agreement may require that during the period when the Accumulation Period is suspended, upon the occurrence of certain events, Available Principal Collections will be deposited into the Principal Accumulation Account.
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(c) Each Qualified Maturity Agreement shall terminate at the close of business on the Expected Principal Payment Date; provided, however, that Servicer may terminate a Qualified Maturity Agreement prior to such Distribution Date, with notice to each Rating Agency, if (i) the Available Reserve Account Amount equals the Required Reserve Account Amount and (ii) one of the following events occurs: (A) Issuer obtains a substitute Qualified Maturity Agreement which satisfies the Series Rating Agency Condition, (B) the provider of the Qualified Maturity Agreement ceases to qualify as a Qualified Maturity Agreement Institution and Issuer is unable to obtain a substitute Qualified Maturity Agreement which satisfies the Series Rating Agency Condition, (C) a Pay Out Event occurs or (D) an event which may be declared to be a Pay Out Event occurs, whether or not it is declared. In addition, if the available Reserve Account Amount equals the Required Reserve Account Amount, Servicer may terminate a Qualified Maturity Agreement prior to the later of (1) the date on which the Accumulation Period was scheduled to begin, before giving effect to the suspension of the Accumulation Period, and (2) the date to which the commencement of the Accumulation Period is postponed pursuant to Section 4.13 (as determined on the Determination Date preceding the date of such termination), in which case the commencement of the Accumulation Period shall be determined as if the commencement had not been postponed. In the event that the provider of a Qualified Maturity Agreement ceases to qualify as a Qualified Maturity Agreement Institution, Servicer shall use its best efforts to obtain a substitute Qualified Maturity Agreement which satisfies the Series Rating Agency Condition, unless a substitute Qualified Maturity Agreement is not required for any of the reasons listed in this paragraph (c) of this Section 4.14.
(d) If a Qualified Maturity Agreement is terminated prior to the earlier of the Expected Principal Payment Date and the commencement of the Rapid Amortization Period and Issuer does not obtain a substitute Qualified Maturity Agreement which satisfies the Series Rating Agency Condition, the Accumulation Period shall commence on the latest of (i) the beginning of business on April 1, 2025, (ii) the date to which the commencement of the Accumulation Period is postponed pursuant to Section 4.l3 (as determined on the date of such termination) and (iii) the first day of the Monthly Period following the date of such termination. The Issuer shall notify the Rating Agencies if it intends to terminate a Qualified Maturity Agreement prior to the Expected Principal Payment Date.
Section 4.15. [RESERVED.]
Section 4.16. Interchange. On or prior to each Determination Date, Transferor shall cause FNBO to notify Servicer of the amount of Interchange to be included as Finance Charge Collections allocable to the Series 2023-1 Notes with respect to the Related Monthly Period, which amount shall be equal to the product of:
(a) the total amount of Interchange paid or payable to FNBO with respect to such Related Monthly Period;
(b) a fraction the numerator of which is the volume during the Related Monthly Period of sales net of cash advances on the Accounts and the denominator of which is the amount of sales net of cash advances during the Related Monthly Period on all VISA and MasterCard accounts owned by FNBO; and
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(c) the Allocation Percentage for Finance Charge Collections with respect to such Related Monthly Period.
On each Transfer Date, Transferor shall pay to Servicer, and Servicer shall deposit into the Finance Charge Account, in immediately available funds, an amount equal to the Interchange to be so included as Finance Charge Collections allocable to the Series 2023-1 Notes with respect to the Related Monthly Period. Transferor hereby assigns, sets over, conveys, pledges and grants a security interest and lien to Indenture Trustee for the benefit of the Series 2023-1 Noteholders its security interest in Interchange and the proceeds of Interchange, as set forth in this Section 4.16. In connection with the foregoing grant of a security interest, this Indenture Supplement shall constitute a security agreement under applicable law. To the extent that an Indenture Supplement for a related Series, other than Series 2023-1, assigns, sets over, conveys, pledges or grants a security interest in Interchange allocable to the Trust, all Notes of any such Series (except that any Series may be subordinated to the Series 2023-1 Notes to the extent specified in any such Indenture Supplement) and the Series 2023-1 Notes shall rank pari passu and be equally and ratably entitled in accordance with their respective allocation percentages for Finance Charge Collections as provided herein to the benefits of such Interchange without preference or priority on account of the actual time or times of authentication and delivery, all in accordance with the terms and provisions of this Indenture Supplement and other related Indenture Supplements.
Section 4.17. Foreign Accounts. So long as any Series 2023-1 Notes are Outstanding, Receivables arising in Foreign Accounts shall constitute Eligible Receivables for all purposes except that, to the extent that such Receivables exceed 1% (or any higher percentage as to which the Rating Agency Condition has been met) of the aggregate Principal Receivables as of the most recently ended Monthly Period, such Receivables may not be counted for purposes of determining compliance with the tests for the Minimum Transferor Interest and the Minimum Aggregate Principal Receivables.
Section 4.18. [RESERVED.]
Section 4.19. Asset Representations Review Triggers.
(a) Delinquency Trigger. Transferor, on behalf of Issuer, shall provide written notice to Indenture Trustee and disclose the occurrence of a Delinquency Trigger in the distribution report on Form 10-D relating to the Monthly Period in which the Delinquency Trigger occurred.
(b) Adjustment of Delinquency Trigger Rate. Transferor shall review and may adjust the Delinquency Trigger Rate upon the occurrence of any of the following events:
(i) the filing of a new registration statement with the Commission relating to any Notes to be offered and sold from time to time by Issuer; or
| (ii) | a change in law or regulation (including any new or revised interpretation of an existing law or regulation) that, in Transferor’s judgment, could reasonably be expected to have a material effect on the delinquency rate for Obligor payments on the Accounts or the manner by which delinquencies are defined or determined; provided, however, that for so long as a Delinquency Trigger has occurred and is continuing, a review of the Delinquency Trigger Rate that would otherwise be required as specified above will be delayed until the date on which Transferor shall, on behalf of Issuer, report in the applicable distribution report on Form 10-D that the Delinquency Trigger is no longer continuing. |
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In case of a review of the Delinquency Trigger Rate undertaken upon the occurrence of an event described in this Section 4.19(b)(i) above, Transferor may increase or decrease the Delinquency Trigger Rate by any amount it reasonably determines to be appropriate based upon the composition of the Receivables at the time of the review. For the avoidance of doubt and with respect to this Section 4.19(b)(i) above, the Delinquency Trigger Rate may be reviewed and adjusted upon the filing of a new shelf registration and not upon the filing of a post-effective amendment to a prior shelf filing. In the case of a review undertaken upon the occurrence of an event described in this Section 4.19(b)(ii) above, Transferor may increase or decrease the Delinquency Trigger Rate by any amount it reasonably determines to be appropriate as a result of the related change in law or regulation (including any new or revised interpretation of an existing law or regulation).
(c) Disclosure of Adjusted Delinquency Trigger Rate on Form 10-D. Transferor shall, on behalf of Issuer, disclose the Delinquency Trigger Rate, as adjusted, in the distribution report on Form 10-D for the Monthly Period in which such adjustment occurs, which report shall also include a description of how the adjusted Delinquency Trigger Rate was deemed to be appropriate pursuant to Section 3.11(a)(iii) of the Transfer and Servicing Agreement.
(d) Noteholder Action to Initiate an Asset Representations Review.
| (i) | Within 90 days following the date upon which Transferor discloses, on behalf of Issuer, the occurrence of a Delinquency Trigger on a distribution report on Form 10-D, the Noteholders holding at least 5% of the Outstanding Amount of all Series of Notes Outstanding as of the date of the Form 10-D filing, may submit a written petition to Indenture Trustee directing that a vote be taken on whether to initiate an Asset Representations Review. Such written petition shall specify the related Delinquency Trigger and Form 10-D filing that gave rise to the Noteholders’ direction. For the avoidance of doubt, as long as a Delinquency Trigger has occurred and is continuing, a new 90-day petition period shall commence each month, beginning on the date on which Transferor discloses in the related distribution report on Form 10-D that the Delinquency Trigger is continuing. |
(ii) If the requisite number of Noteholders submit a written petition to Indenture Trustee directing that a vote be taken in accordance with this Section 4.19(d)(i) above, Indenture Trustee shall (A) promptly provide written notice of such direction to all Noteholders of Outstanding Notes at their addresses appearing in the Note Register and (B) conduct a solicitation of votes of all Noteholders of Outstanding Notes to initiate an Asset Representations Review, which solicitation of votes shall remain open for a 90-day period which begins upon the date Indenture Trustee provided notice of the direction to the Noteholders. With respect to Outstanding Notes that are Book-Entry Notes held through DTC, Indenture Trustee shall conduct the vote pursuant to the voting guidelines promulgated by DTC relating to Notes registered in the name of its nominee, as described in clause (iii) of this Section 4.19(d) below.
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(iii) With respect to Outstanding Notes which are Book-Entry Notes held through DTC, DTC uses a proxy service for voting purposes. Once DTC is notified, it creates an electronic proxy. DTC transfers the right to vote with respect to the related securities via the proxy to the DTC participants that hold positions with respect to the securities in question as of the record date. A DTC participant is responsible for informing the beneficial owner of any action that requires a vote. The beneficial owner instructs the DTC participant via a proxy card or voting instruction form how to vote their interest, and the DTC participant then casts the vote in accordance with the instructions from the beneficial owner.
(iv) If a vote in which an Asset Review Quorum participates occurs within the 90-day period pursuant to this Section 4.19(d)(ii) above and the Noteholders holding more than 50% of the Outstanding Amount of all Notes casting a vote direct that an Asset Representations Review be undertaken (the “Review Satisfaction Date”), then Indenture Trustee shall promptly provide a Review Notice to Transferor, Servicer and all Noteholders of Outstanding Notes in the same manner described above. For the purpose of determining whether the requisite percentage of Noteholders have given any direction, notice or consent under this Section 4.19:
(A) any Notes which Indenture Trustee knows are owned by Issuer, FNBO, Servicer, Transferor, any other Holder of the Transferor Interest, the Asset Representations Reviewer or any of their respective Affiliates will be disregarded and deemed not to be Outstanding,
(B) any Notes so owned that have been pledged in good faith will not be disregarded and may be regarded as Outstanding if the pledgee establishes to Indenture Trustee’s satisfaction the pledgee’s right so to act with respect to such Notes and that the pledgee is the Issuer, FNBO, Servicer, Transferor, any other Holder of the Transferor Interest, the Asset Representations Reviewer or an Affiliate of any of Issuer, FNBO, Servicer, Transferor, any other Holder of the Transferor Interest or the Asset Representations Reviewer; and
(C) if any Noteholder who is not a record holder as reflected on the Note Register seeks to give a direction, notice or consent, Indenture Trustee shall require such Noteholder to provide verification documents to confirm that it is a Verified Note Owner.
(v) Upon receipt of a Review Notice from Indenture Trustee as specified in this Section 4.19(d)(iv) above, Servicer will promptly provide a copy of the Review Notice to the Asset Representations Reviewer and an Asset Representations Review will commence in accordance with the terms of the Asset Representations Review Agreement. In addition, Transferor will include, in the Issuer’s distribution report on Form 10-D relating to the Monthly Period in which a vote described in this Section 4.19(d)(ii) above has occurred, a description of the events which occurred during such Monthly Period that triggered the Asset Representations Review pursuant to Section 3.11(a)(iv)(A) of the Transfer and Servicing Agreement.
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(e) Certain Restrictions Relating to Petitions, Votes and Asset Representations Reviews. Notwithstanding any provisions of this Section 4.19 to the contrary, and subject to additional requirements and conditions set forth in this Section 4.19, for so long as a petition to direct that a vote be taken, a vote itself, or an Asset Representations Review is underway in accordance with this Section 4.19(d)(i) above, this Section 4.19(d)(ii) above or the terms of the Asset Representations Review Agreement, respectively, the requisite number of Noteholders may not initiate another petition, vote or Asset Representations Review unless and until such prior petition, vote or Asset Representations Review is completed. For the purposes of this Section 4.19(e):
| (i) | a petition will be considered completed only (A) if the petition does not result in a vote, (B) if a vote occurs, such vote does not result in an Asset Representations Review or (C) if an Asset Representations Review occurs, at such time as Transferor, on behalf of Issuer, includes a summary of the Asset Representations Reviewer’s final report setting forth the findings of its Asset Representations Review in a distribution report on Form 10-D in accordance with the terms of the Asset Representations Review Agreement; |
| (ii) | a vote will be considered completed only (A) if the vote does not result in an Asset Representations Review or (B) if an Asset Representations Review occurs, at such time as Transferor, on behalf of Issuer, includes a summary of the Asset Representations Reviewer’s final report setting forth the findings of its Asset Representations Review in a distribution report on Form 10-D in accordance with the terms of the Asset Representations Review Agreement; and |
| (iii) | an Asset Representations Review will be considered completed only at such time as Transferor, on behalf of Issuer, includes a summary of the Asset Representations Reviewer’s final report setting forth the findings of its Asset Representations Review in a distribution report on Form 10-D in accordance with the terms of the Asset Representations Review Agreement. |
(f) Cooperation with Asset Representations Reviewer. Each of Indenture Trustee, Transferor, Servicer and Issuer hereby agrees to cooperate with Asset Representations Reviewer in the event an Asset Representations Review is commenced pursuant to this Section 4.19 and the Asset Representations Review Agreement and shall provide Asset Representations Reviewer with any documents or other information in its possession that is reasonably requested by Asset Representations Reviewer in connection with the Asset Representations Review.
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(g) Procedures following Completion of Asset Representations Review. Upon completion of an Asset Representations Review undertaken in accordance with the terms of the Asset Representations Review Agreement, Transferor will review Asset Representations Reviewer’s findings and conclusions in its report relating to the Asset Representations Review and make a determination whether any non-compliance with Pool Asset Representations identified in such report constitutes a breach of any contractual provision in the Transfer and Servicing Agreement or the Receivables Purchase Agreement, as applicable. If Transferor determines that such breach has occurred, it will provide written notice of such breach to Servicer, Indenture Trustee, Owner Trustee, RPA Seller, if applicable, and each Enhancement Provider, if any.
(h) Resignation or Termination of Asset Representations Reviewer. If Asset Representations Reviewer gives notice of its intent to resign or Servicer terminates the Asset Representations Reviewer pursuant to the terms of the Asset Representations Review Agreement or if a vacancy exists in the office of the Asset Representation Reviewer for any reason, (the Asset Representations Reviewer in such event being referred to as the retiring Asset Representations Reviewer), Servicer shall engage and Issuer shall appoint a successor Asset Representations Reviewer in accordance with the provisions of the Asset Representations Review Agreement.
(i) Expenses of Indenture Trustee; No Agency Relationship. Any expenses incurred by Indenture Trustee in connection with a petition, a vote or an Asset Representations Review shall be subject to reimbursement pursuant to Section 6.07 of the Indenture. For the avoidance of doubt, nothing in this Indenture Supplement should be construed to require Indenture Trustee to monitor the obligations or the actions of Asset Representations Reviewer or hold Indenture Trustee liable for the performance of Asset Representations Reviewer or the failure of Asset Representations Reviewer to perform any obligation, duty or agreement in the manner or on the day required to be performed by Asset Representations Reviewer under the Asset Representations Review Agreement.
Section 4.20. Appointment of Asset Representations Reviewer. Pursuant to the Asset Representations Review Agreement, Servicer has engaged and Issuer has appointed FTI Consulting, Inc., a Maryland corporation, as the Asset Representations Reviewer to perform the obligations of the Asset Representations Reviewer set forth therein and herein, respectively. Issuer hereby represents and warrants that the Asset Representations Reviewer (a) is not an Affiliate of FNBO, Transferor, Indenture Trustee or Owner Trustee and (b) has not been hired by FNBO to perform any pre-closing due diligence work relating to the Receivables.
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Section 4.21. Dispute Resolution.
(a) Notice of the Requesting Party to Refer Matter to Third-Party Mediation or Third-Party Arbitration.
(i) Repurchase Request Relating to the Transfer and Servicing Agreement. If any Receivable is subject to repurchase by Transferor pursuant to Section 2.04 of the Transfer and Servicing Agreement and such repurchase is not resolved in accordance with the terms of the Transfer and Servicing Agreement, then Indenture Trustee (at the direction of any Series 2023-1 Noteholder or any Verified Note Owner), any Series 2023-1 Noteholder or any Verified Note Owner (a “Requesting Party”) may submit, to Transferor (a “Representing Party”), a written notice that the Representing Party is obligated to repurchase the Receivable due to an alleged breach of a representation and warranty (a “TSA “Repurchase Request”) and if such TSA Repurchase Request has not been fulfilled or otherwise resolved to the reasonable satisfaction of the Requesting Party within 180 days of the Representing Party’s receipt of such TSA Repurchase Request, then the Requesting Party shall have the right to refer the matter, at its discretion, to either third-party mediation (including non-binding arbitration) or third-party binding arbitration and the Representing Party agrees to participate in the dispute resolution method selected by the Requesting Party.
(ii) Repurchase Request Relating to the Receivables Purchase Agreement. If any Receivable is subject to repurchase by RPA Seller pursuant to Section 6.01 or Section 6.02 of the Receivables Purchase Agreement, as applicable, and such repurchase is not resolved in accordance with the terms of the Receivables Purchase Agreement, then Transferor, Indenture Trustee (at the direction of any Series 2023-1 Noteholder or any Verified Note Owner), any Series 2023-1 Noteholder or any Verified Note Owner (a “Requesting Party”) may submit to RPA Seller (a “Representing Party”), a written notice that the Representing Party is obligated to repurchase the Receivable due to an alleged breach of a representation and warranty (a “RPA Repurchase Request”) and if such RPA Repurchase Request has not been fulfilled or otherwise resolved to the reasonable satisfaction of the Requesting Party within 180 days of the Representing Party’s receipt of such RPA Repurchase Request, then the Requesting Party shall have the right to refer the matter, at its discretion, to either third-party mediation (including non-binding arbitration) or third-party binding arbitration and the Representing Party agrees to participate in the dispute resolution method selected by the Requesting Party.
For the purposes of this Section 4.21, clauses (iii), (iv), (v) and (vi) of paragraph (a) of this Section 4.21, paragraph (b) of this Section 4.21, paragraph (c) of this Section 4.21 and paragraph (d) of this Section 4.21 apply to Section 4.21(a)(i) and (ii), as applicable. Hereafter, the defined term “Repurchase Request” refers to either a TSA Repurchase Request or a RPA Repurchase Request, as the context requires.
(iii) At the end of the 180-day period described above, the Representing Party may provide notice informing the Requesting Party of the status of its Repurchase Request or, in the absence of such notice, the Requesting Party may presume its Repurchase Request remains unresolved.
(iv) The Requesting Party must provide written notice of its intention to refer the matter to either third-party mediation (including non-binding arbitration) or third-party binding arbitration to the Representing Party within 30 calendar days following such 180th day.
(v) Dispute resolution to resolve repurchase obligations will be available to the Requesting Party regardless of whether the requisite percentage of Noteholders voted to direct an Asset Representations Review or whether the Delinquency Trigger has occurred.
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(vi) To the extent a Series 2023-1 Note Owner is a Requesting Party, the Series 2023-1 Note Owner must be a Verified Note Owner. The Series 2023-1 Note Owner shall submit a copy of its Repurchase Request and the verification documentation specified in Article II of this Indenture Supplement under the defined term “Verified Note Owner” to Indenture Trustee. Indenture Trustee shall confirm that the Note Owner has provided Indenture Trustee with evidence that it is a Verified Note Owner and shall provide such evidence to the Issuer.
(b) Provisions Applicable to Third-Party Mediation. If the Requesting Party selects third-party mediation as the resolution method, the following provisions apply:
(i) The mediation will be administered by the AAA pursuant to the Rules. However, if any of the Rules are inconsistent with the procedures applicable to third-party mediation or third-party arbitration in this Section 4.21, the procedures in this Section 4.21 shall control.
(ii) The mediator must be a Qualified Dispute Resolution Professional. Upon being supplied a list, by the AAA, of at least ten potential mediators that are each Qualified Dispute Resolution Professionals, each of the Requesting Party and the Representing Party will have the right to exercise two peremptory challenges within 14 days and to rank the remaining potential mediators in order of preference. The AAA will select the mediator from the remaining potential mediators on the list, respecting the preference choices of the parties to the extent possible.
(iii) Each of the Requesting Party and the Representing Party will use commercially reasonable efforts to begin the mediation within 10 Business Days of the selection of the mediator and to conclude the mediation within 30 days of the start of the mediation.
(iv) The fees and expenses of the mediation (including the fees of the mediator and reasonable attorneys’ fees of the parties) will be allocated as mutually agreed by the Requesting Party and the Representing Party as part of the mediation.
(v) A failure by the Requesting Party and the Representing Party to resolve the disputed matter through mediation shall not preclude either party from seeking a resolution through the initiation of a judicial proceeding in a court of competent jurisdiction, subject to Section 4.21(d) below.
(c) Provisions Applicable to Third-Party Arbitration. If the Requesting Party selects third-party arbitration as the resolution method, the following provisions will apply:
(i) The arbitration will be held in accordance with the United States Arbitration Act, notwithstanding any choice of law provision in the Indenture, and under the auspices of the AAA and in accordance with the Rules. However, if any of the Rules are inconsistent with the procedures applicable to third-party arbitration in this Section 4.21, the procedures in this Section 4.21 shall control.
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(ii) If the Repurchase Request involves the repurchase of an aggregate amount of Receivables of less than five percent (5%) of the total Principal Receivables in the Trust as of the date of the Repurchase Request, a single arbitrator will be used. That arbitrator must be a Qualified Dispute Resolution Professional. Upon being supplied a list of at least ten potential arbitrators that are each Qualified Dispute Resolution Professionals by the AAA, each of the Requesting Party and the Representing Party (as defined below) will have to the right to exercise two peremptory challenges within 14 days and to rank the remaining potential arbitrators in order of preference. The AAA will select the arbitrator from the remaining potential arbitrators on the list, respecting the preference choices of the parties to the extent possible.
(iii) If the Repurchase Request involves the repurchase of an aggregate amount of Receivables equal to or in excess of five percent (5%) of the total Principal Receivables in the Trust as of the date of the Repurchase Request, a three-arbitrator panel will be used. The arbitral panel will consist of three Qualified Dispute Resolution Professionals, (a) one to be appointed by the Requesting Party within five Business Days of providing notice to the Representing Party of its selection of arbitration, (b) one to be appointed by the Representing Party within five Business Days of the Requesting Party’s appointment of an arbitrator, and (c) the third arbitrator, who will preside over the arbitral panel, to be chosen by the two party-appointed arbitrators, within five Business Days of the Representing Party’s appointment of an arbitrator. If any party fails to appoint an arbitrator or the two party-arbitrators fail to appoint a third within the relevant time periods, then the appointments will be made by the AAA pursuant to the Rules.
(iv) Each arbitrator selected for any arbitration will abide by the Code of Ethics for Arbitrators in Commercial Disputes in effect at the time the arbitration is initiated. Prior to accepting an appointment, each arbitrator must promptly disclose any circumstances likely to create a reasonable inference of bias or conflict of interest or likely to preclude completion of the hearings within the prescribed time schedule. Any arbitrator selected may be removed by the AAA for cause consisting of actual bias, conflict of interest or other serious potential for conflict.
(v) The Requesting Party and Representing Party each agree that it is their intention that after consulting with the parties, the arbitrator or arbitral panel, as applicable, will devise procedures and deadlines for the arbitration, to the extent not already agreed to by the parties, with the goal of expediting the proceeding and completing the arbitration within 30 days after the appointment of the arbitrator or arbitral panel, as applicable. The arbitrator or the arbitral panel, as applicable, will have the authority to schedule, hear and determine any and all motions, including dispositive and discovery motions, in accordance with New York law then in effect (including prehearings and post hearing motions), and will do so on the motion of any party to the arbitration. Notwithstanding any other discovery that may be available under the Rules, unless otherwise agreed by the parties, each party to the arbitration will be limited to the following discovery in the arbitration:
(A) Consistent with the expedited nature of arbitration, the Requesting Party and the Representing Party will, upon the written request of the other party, promptly provide the other with copies of documents relevant to the issues raised by any claim or counterclaim on which the producing party may rely in support of or opposition to the claim or defense.
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(B) At the request of a party, the arbitrator or the arbitral panel, as applicable, shall have the discretion to order examination by deposition of witnesses to the extent the arbitrator or the arbitral panel deems such additional discovery relevant and appropriate. Depositions shall be limited to a maximum of three (3) per party and shall be held within thirty (30) calendar days of the making of the request. Additional depositions may be scheduled only with the permission of the arbitrator or the arbitral panel, and for good cause shown. Each deposition shall be limited to a maximum of three (3) hours duration. All objections are served for the arbitration hearing except for objections based on privilege and proprietary or confidential information.
(C) Any dispute regarding discovery, or the relevance or scope thereof, shall be determined by the arbitrator or the arbitral panel, which determination shall be conclusive.
(D) All discovery shall be completed within sixty (60) calendar days following the appointment of the arbitrator or the arbitral panel, as applicable; provided, that the arbitrator or the arbitral panel, as applicable, will have the ability to grant the parties, or either of them, additional discovery to the extent the arbitrator or the arbitral panel, as applicable, determines good cause is shown that such additional discovery is reasonable and necessary.
(vi) The Requesting Party and the Representing Party each agree that it is their intention that the arbitrator or the arbitral panel, as applicable, will resolve the dispute in accordance with the terms of the Transfer and Servicing Agreement or the Receivables Purchase Agreement, as applicable, and may not modify the Transfer and Servicing Agreement or the Receivables Purchase Agreement, as applicable, in any way. The arbitrator or the arbitral panel, as applicable, will not have the power to award punitive damages or consequential damages in any arbitration conducted. The Requesting Party and the Representing Party each agree that in its final determination, the arbitrator or the arbitral panel, as applicable, will determine and award the costs of the arbitration (including the fees of the arbitrator or the arbitral panel, as applicable, the cost of any record or transcript of the arbitration and administrative fees) and reasonable attorneys’ fees to the parties as determined by the arbitrator or the arbitral panel, as applicable, in its reasonable discretion. For the avoidance of doubt, in no event will Indenture Trustee (when acting as Requesting Party at the direction of Series 2023-1 Noteholders) be liable in its individual capacity for such costs. The determination of the arbitrator or the arbitral panel, as applicable, must be consistent with Sections 4.03 and 9.13 of the Transfer and Servicing Agreement or Sections 6.01 or 6.02, as applicable, of the Receivables Purchase Agreement, as the case may be, and will be in writing and counterpart copies will be promptly delivered to the parties. The determination of the arbitrator or the arbitral panel, as applicable, may be reconsidered once by the arbitrator or the arbitral panel, as applicable, upon the motion and at the expense of either party. Following that single reconsideration, the determination of the arbitrator or the arbitral panel, as applicable, will be final and non-appealable and may be entered in and may be enforce in, any court of competent jurisdiction, except in the case of fraud or corruption of the process.
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(vii) By selecting third-party binding arbitration, the Requesting Party is giving up the right to sue in court, including the right to trial by jury.
(viii) No Person may bring a putative or certified class action to arbitration.
(d) Provisions Applicable to Third-Party Mediations and Third-Party Arbitrations. The following provisions will apply to both third-party mediations and third party arbitrations:
| (i) | Any mediation or arbitration will be held in New York, New York. |
| (ii) | Notwithstanding the dispute resolution provisions in this Section 4.21, the parties will have the right to seek a temporary restraining order, a preliminary injunction or attachment order from a competent court of law, provided such relief would otherwise be available by law. |
| (iii) | The details and/or the existence of any unfulfilled Repurchase Request, any informal meetings, mediations or arbitration proceedings, including all offers, promises, conduct and statements, whether oral or written, made in the course of the parties’ attempt to informally resolve an unfulfilled repurchase request, and any discovery undertaken in connection with any arbitration, will be confidential, privileged and inadmissible for any purpose, including impeachment, in any mediation, arbitration or litigation, or other proceeding; provided, however, that any discovery taken in connection with any arbitration will be admissible in that particular arbitration. Such information will be kept strictly confidential and will not be disclosed or discussed with any third party (excluding a party’s attorneys, experts, accountants and other agents and representatives, as reasonably required in connection with the related resolution procedure), except as otherwise required by law, regulatory requirement or court order. If any party to a resolution procedure receives a subpoena or other request for information from a third party (other than a governmental regulatory body) for such confidential information, the recipient will promptly notify the other party to the resolution procedure and will provide the other party with the opportunity to object to the production of its confidential information. Any third party who receives confidential information (other than a governmental regulatory body) must, at the conclusion of the proceedings, submit an affidavit that all such confidential information and any copies thereof were destroyed in a manner to protect such information from any subsequent disclosure. |
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Section 4.22. Investor Communication.
(a) Following receipt of a written request by either Issuer or Indenture Trustee during any Monthly Period (or receipt of written notice from Transferor that Transferor has received such a written request) from a Series 2023-1 Noteholder or a Series 2023-1 Note Owner (subject to the provisions of Section 4.22(b)) seeking to communicate with other Noteholders or Note Owners regarding the exercising their contractual rights under the terms of the Transaction Documents, either Issuer or Indenture Trustee shall provide a copy of the request to the other and Indenture Trustee shall notify Transferor of any such request received by Issuer or Indenture Trustee. Issuer shall cause Transferor to include in the distribution report on Form 10-D relating to the Monthly Period in which the request was received: (a) the name of the Series 2023-1 Noteholder or Series 2023-1 Note Owner, as applicable, delivering such request; (b) the date upon which the request was received; (c) a statement to the effect that Issuer, Indenture Trustee or Transferor, as applicable, has in fact received such a request from a Series 2023-1 Noteholder or a Series 2023-1 Note Owner, as applicable, and that such Series 2023-1 Noteholder or Series 2023-1 Note Owner, as applicable, is interested in communicating with other Noteholders or Note Owners with regard to the possible exercise of rights under the Transaction Documents; and (d) a description of the method that other Noteholders or Note Owners may use to contact the requesting Series 2023-1 Noteholder or Series 2023-1 Note Owner, as applicable.
(b) If Issuer, Indenture Trustee or Transferor receives such request from a Series 2023-1 Note Owner, each of Issuer, Indenture Trustee and Transferor are entitled to verify that such Series 2023-1 Note Owner is a Verified Note Owner prior to Transferor’s inclusion of any request from such Series 2023-1 Note Owner in any distribution report on Form 10-D. Such Series 2023-1 Note Owner shall submit the verification documents specified in Article II of this Indenture Supplement under the defined term “Verified Note Owner” to Indenture Trustee. Indenture Trustee shall confirm that the Note Owner has provided Indenture Trustee with evidence that it is a Verified Note Owner and shall provide such evidence to the Issuer. All expenses relating to investor communication requests shall be paid by the Servicer from its own funds.
ARTICLE V
Delivery of Notes; Distributions; Reports to Noteholders
Section 5.01. Delivery and Payment for the Series 2023-1 Notes. Issuer shall execute and issue, and Indenture Trustee shall authenticate, the Series 2023-1 Notes in accordance with Section 2.03 of the Indenture. Indenture Trustee shall deliver the Series 2023-1 Notes to or upon the written order of Issuer when so authenticated.
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Section 5.02. Distributions.
(a) On each Distribution Date, Indenture Trustee shall distribute to each Class A Noteholder of record on the related Record Date (other than as provided in Section 11.02 of the Indenture) such Class A Noteholder’s pro rata share of the amounts on deposit in the Distribution Account that are allocated and available on such Distribution Date and that are payable to the Class A Noteholders pursuant to this Indenture Supplement.
(b) On each Distribution Date, Indenture Trustee shall distribute to each Class B Noteholder of record on the related Record Date (other than as provided in Section 11.02 of the Indenture) such Class B Noteholder’s pro rata share of the amounts on deposit in the Distribution Account that are allocated and available on such Distribution Date and that are payable to the Class B Noteholders pursuant to this Indenture Supplement.
(c) On each Distribution Date, Indenture Trustee shall distribute to each Class C Noteholder of record on the related Record Date (other than as provided in Section 11.02 of the Indenture) such Class C Noteholder’s pro rata share of the amounts on deposit in the Distribution Account (including amounts withdrawn from the Spread Account at the times and in the amounts specified in Section 4.11) that are allocated and available on such Distribution Date and that are payable to the Class C Noteholders pursuant to this Indenture Supplement.
(d) The distributions to be made pursuant to this Section 5.02 are subject to the provisions of Sections 6.01 and 7.01 of the Transfer and Servicing Agreement, Section 11.02 of the Indenture and Section 7.01 of this Indenture Supplement.
(e) Except as provided in Section 11.02 of the Indenture with respect to a final distribution, distributions to Series 2023-1 Noteholders hereunder shall be made by (i) check mailed to each Series 2023-1 Noteholder (at such Noteholder’s address as it appears in the Note Register), except that for any Series 2023-1 Notes registered in the name of the nominee of a Clearing Agency, such distribution shall be made by wire transfer of immediately available funds and (ii) without presentation or surrender of any Series 2023-1 Note or the making of any notation thereon.
Section 5.03. Reports and Statements to Series 2023-1 Noteholders.
(a) The Indenture Trustee shall make the statement substantially in the form of Exhibit C prepared by Servicer publicly available to the Series 2023-1 Note Owners on its internet website. The Indenture Trustee’s website shall be initially located at https://pivot.usbank.com or at such other address as shall be specified by the Indenture Trustee to the Series 2023-1 Noteholders, the parties to the Transaction Documents and the Issuer (who shall promptly notify the same to the Rating Agencies, if any). Prior to obtaining access to the Indenture Trustee’s website, the Indenture Trustee may require each Series 2023-1 Note Owner to register with the Indenture Trustee using an electronic form available on the website. As part of the registration process, each Series 2023-1 Note Owner may be required to accept such terms, conditions and disclaimers and provide such certifications as the Indenture Trustee may, from time to time, require in accordance with its policies and procedures. The Indenture Trustee will make no representations or warranties as to the accuracy or completeness of information provided by it that was based, in whole or in part, on information received from third parties, and will assume no responsibility for such information. The Indenture Trustee shall not be liable for the dissemination of information in accordance with the terms of this Indenture Supplement. The Indenture Trustee will not be deemed to have knowledge of any information posted on its website solely by virtue of such posting. In addition, the Indenture Trustee may disclaim responsibility for any information for which it is not the original source. Assistance in using the Indenture Trustee’s website may be obtained by calling its customer service desk at (866) 252-4360 and any Series 2023-1 Noteholder or Series 2023-1 Note Owner with questions may direct them to the Indenture Trustee’s bondholder services group at (800) 934-6802.
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(b) Not later than the second Business Day preceding each Distribution Date, Servicer shall deliver to Owner Trustee, Indenture Trustee, Paying Agent, any Enhancement Provider and each Rating Agency (i) a statement substantially in the form of Exhibit B prepared by Servicer and (ii) a certificate of an Authorized Officer substantially in the form of Exhibit D; provided that Servicer may amend the form of Exhibit B from time to time, with the prior written consent of Indenture Trustee and provided further, that the information set forth in Section III of Exhibit B may be provided once for all outstanding Series.
(c) A copy of each statement provided pursuant to paragraph (a) may be obtained by any Series 2023-1 Noteholder by a request in writing to Servicer.
(d) On or before January 31 of each calendar year, beginning with January 31, 2024, Indenture Trustee shall furnish or cause to be furnished to each Person who at any time during the preceding calendar year was a Series 2023-1 Noteholder, a statement prepared by Servicer containing the information which is required to be contained in the statement to Series 2023-1 Noteholders, as set forth in paragraph (a) above, aggregated for such calendar year or the applicable portion thereof during which such Person was a Series 2023-1 Noteholder, together with other information as is required to be provided by an issuer of indebtedness under the Code. Such obligation of Indenture Trustee shall be deemed to have been satisfied to the extent that substantially comparable information shall be provided by Servicer pursuant to any requirements of the Code as from time to time in effect.
Section 5.04. Annual Servicer’s Certificate.
(a) For as long as Transferor is required to report under the Exchange Act and in order to comply with Item 1122(d) and Item 1123 of Regulation AB, respectively, Servicer will provide the Servicing Criteria Compliance Report pursuant to Section 3.05(b) of the Transfer and Servicing Agreement and the Servicer Compliance Certificate pursuant to Section 3.05 (a) of the Transfer and Servicing Agreement. To the extent Servicer is not obligated to provide the Servicing Criteria Compliance Report and the Servicer Compliance Certificate under the Transfer and Servicing Agreement, Servicer may, at its option, continue to provide the Servicing Criteria Compliance Report and the Servicer Compliance Certificate, each, in the time and manner specified in Section 3.05 of the Transfer and Servicing Agreement or Servicer may provide, on an annual basis, the certificate described in paragraph (b) of this Section 5.04.
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(b) On or before March 31 of each calendar year, Servicer will deliver to the Indenture Trustee, Owner Trustee, any Enhancement Provider and each Rating Agency an Officer’s Certificate stating that (a) a review of the activities of Servicer during the 12-month period ending on December 31 of the prior calendar year, and of its performance under the Transfer and Servicing Agreement was made under the supervision of the officer signing such certificate, (b) to the best of such officer’s knowledge based on such review, Servicer has fully performed all its obligations under the Transfer and Servicing Agreement throughout such period, or, if there has been a default in the performance of any such obligation, specifying each such default known to such officer and the nature and status thereof, (c) during such period, for each outstanding Series, Servicer prepared the monthly items required by Section 3.04(b) of the Transfer and Servicing Agreement and each other monthly report required by the applicable Indenture Supplement in accordance with Section 3.04(b) of the Transfer and Servicing Agreement and the applicable provisions of each such Indenture Supplement, (d) the amounts included in such reports agree with the computer records of Servicer and (e) the calculated amounts included in such reports are mathematically correct and made in accordance with the applicable definitions in the Transfer and Servicing Agreement and the other applicable Transaction Documents (the “Annual Servicer Certificate.”) A copy of the Annual Servicer Certificate may be obtained by any Series 2023-1 Noteholder by a request in writing to Indenture Trustee addressed to the Corporate Trust Office.
Section 5.05. Annual Independent Accountants Servicing Report.
(a) For as long as Transferor is required to report under the Exchange Act and in order to comply with Item 1123 of Regulation AB, Servicer shall, pursuant to Section 3.06(a) of the Transfer and Servicing Agreement, provide to Indenture Trustee, Owner Trustee, any Enhancement Provider and each Rating Agency, a copy of the attestation report specified in Section 3.06(a) of the Transfer and Servicing Agreement. To the extent Servicer is not obligated to provide an attestation report under the Transfer and Servicing Agreement, Servicer may, at its option, continue to provide such attestation report, in the time and manner specified in Section 3.06(a) of the Transfer and Servicing Agreement or Servicer may provide, on an annual basis, the accountants servicing report described in paragraph (b) of this Section 5.05.
(b) On or before March 31 of each fiscal year, Servicer shall provide to Indenture Trustee, Owner Trustee, any Enhancement Provider and each Rating Agency, a copy of the report required by 12 C.F.R. § 363.3(b) (or any comparable successor regulation) from a firm of nationally recognized independent certified public accountants (who may also render other services to Servicer or Transferor) to the effect that, in accordance with attestation standards established by the American Institute of Certified Public Accountants, such firm has examined Servicer’s assertion that it maintained effective internal accounting controls during the preceding calendar year, and that such firm is of the opinion that Servicer’s assertion is fairly stated in all material respects, based on the criteria established in “Internal Control–Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. A copy of such report may be obtained by any Series 2023-1 Noteholder by a request in writing to Indenture Trustee addressed to the Corporate Trust Office.
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ARTICLE VI
Series 2023-1 Pay Out Events
If any one of the following events shall occur with respect to the Series 2023-1 Notes:
(a) failure on the part of Transferor (i) to make any payment or deposit required to be made by it by the terms of the Transfer and Servicing Agreement, the Indenture or this Indenture Supplement on or before the date occurring five (5) Business Days after the date such payment or deposit is required to be made therein or herein or (ii) duly to observe or perform in any material respect any other of its covenants or agreements set forth in the Transfer and Servicing Agreement, the Indenture or this Indenture Supplement, which failure has a material adverse effect on the Series 2023-1 Noteholders which continues unremedied for a period of sixty (60) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to Transferor by Indenture Trustee, or to Transferor and Indenture Trustee by Holders of Series 2023-1 Notes evidencing more than 25% of the Note Principal Balance and which continues to materially and adversely affect the interests of the Series 2023-1 Noteholders;
(b) any representation or warranty made by Transferor under the Transfer and Servicing Agreement, or any supplement to either of them, shall prove to have been incorrect in any material respect when made or when delivered, which continues to be incorrect in any material respect for a period of sixty (60) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to Transferor by Indenture Trustee, or to Transferor and Indenture Trustee by Holders of Series 2023-1 Notes evidencing more than 25% of the Note Principal Balance and as a result of which the interests of the Noteholders are materially and adversely affected and continue to be materially and adversely affected for such period; provided, however, that a Series 2023-1 Pay Out Event pursuant to this paragraph (b) of Article VI shall not be deemed to have occurred hereunder if Transferor has accepted reassignment of the related Receivable, or all of such Receivables, if applicable, during such period in accordance with the provisions of the Transfer and Servicing Agreement;
(c) a failure by Transferor under the Transfer and Servicing Agreement to convey Receivables arising under Additional Accounts to the Trust within five Business Days after the day on which it is required to convey such Receivables pursuant to Section 2.06(a) of the Transfer and Servicing Agreement provided that such failure shall not give rise to a Pay Out Event if, prior to the date on which such conveyance was required to be completed, Transferor causes a reduction in the invested amount of any Variable Interest to occur, so that, after giving effect to that reduction, the Transferor Interest is not less than the Minimum Transferor Interest and the Aggregate Principal Receivables are not less than the Minimum Aggregate Principal Receivables;
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(d) any Servicer Default shall occur that would have a material adverse effect on the Series 2023-1 Noteholders;
(e) the Portfolio Yield averaged over three consecutive Monthly Periods is less than the Base Rate averaged over such period;
(f) the Note Principal Balance shall not be paid in full on the Expected Principal Payment Date;
(g) without limiting the foregoing, the occurrence of an Event of Default with respect to Series 2023-1 pursuant to Section 5.02 of the Indenture and acceleration of the maturity of the Series 2023-1 Notes pursuant to Section 5.03 of the Indenture; or
(h) the occurrence of a Trust Pay Out Event as defined in the Indenture;
then, in the case of any event described in paragraphs (a), (b) or (d) of this Article VI, after the applicable grace period, if any, set forth in such paragraphs, either Indenture Trustee or the holders of Series 2023-1 Notes evidencing more than 50% of the aggregate unpaid principal amount of Series 2023-1 Notes by notice then given in writing to Transferor and Servicer (and to Indenture Trustee if given by the Series 2023-1 Noteholders) may declare that a “Series Pay Out Event” with respect to Series 2023-1 (a “Series 2023-1 Pay Out Event”) has occurred as of the date of such notice, and, in the case of any event described in paragraphs (c), (e), (f), (g) or (h) of this Article VI, a Series 2023-1 Pay Out Event shall occur without any notice or other action on the part of Indenture Trustee or the Series 2023-1 Noteholders immediately upon the occurrence of such event.
ARTICLE VII
Redemption;
Final Distributions; Series Termination
Section 7.01. Optional Redemption of Series 2023-1 Notes; Final Distributions.
(a) On any day occurring on or after the date on which the outstanding principal balance of the Series 2023-1 Notes is reduced to 10% or less of the initial Note Principal Balance of the Series 2023-1 Notes, Servicer shall have the option to direct Transferor to redeem the Series 2023-1 Notes, at a purchase price equal to (i) if such day is a Distribution Date, the Reassignment Amount for such Distribution Date or (ii) if such day is not a Distribution Date, the Reassignment Amount for the Distribution Date following such day. This option shall not be exercisable if the purchase price (reduced by the amount on deposit in the Principal Accumulation Account available for distribution to Noteholders) exceeds the lesser of the estimated fair value, or the par value plus accrued interest, of a portion of the Receivables in Eligible Accounts then designated to the Trust equal to the Collateral Amount.
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(b) Servicer shall give Indenture Trustee at least thirty (30) days’ prior written notice of the date on which Servicer intends to direct Transferor to make such optional redemption. Not later than 12:00 noon, New York City time, on such day Transferor shall deposit into the Finance Charge Account and Principal Account, as applicable, in immediately available funds the excess of the Reassignment Amount over the amount, if any, on deposit in the Principal Accumulation Account. Such redemption option is subject to payment in full of the Reassignment Amount. Following such deposit into the Finance Charge Account and Principal Account in accordance with the foregoing, the Collateral Amount for Series 2023-1 shall be reduced to zero and the Series 2023-1 Noteholders shall have no further security interest in the Receivables. The Reassignment Amount shall be distributed as set forth in paragraph (d) of this Section 7.01.
(c) The amount to be paid by Transferor with respect to Series 2023-1 in connection with a reassignment of Receivables to Transferor pursuant to Section 2.04(e) of the Transfer and Servicing Agreement shall equal the Reassignment Amount for the Distribution Date related to the Reassignment Date.
(d) With respect to (a) the Reassignment Amount deposited into the Finance Charge Account and Principal Account pursuant to this Section 7.01 or (b) the proceeds of any sale of Receivables pursuant to Section 5.05(a)(iii) of the Indenture with respect to Series 2023-1, Indenture Trustee shall, in accordance with the written direction of Servicer, not later than 12:00 noon, New York City time, on the related Distribution Date, make distributions of the following amounts (in the priority set forth below and, in each case, after giving effect to any deposits and distributions otherwise to be made on such date) in immediately available funds: (i) (x) the Class A Note Principal Balance on such Distribution Date will be distributed to the Class A Noteholders and (y) an amount equal to the sum of (A) Class A Monthly Interest Payment for such Distribution Date, (B) any Class A Interest Shortfall for such Distribution Date and (C) the amount of Class A Default Interest, if any, for such Distribution Date and any Class A Default Interest previously due but not distributed to the Class A Noteholders on any prior Distribution Date, will be distributed to the Class A Noteholders, (ii) (x) the Class B Note Principal Balance on such Distribution Date will be distributed to the Class B Noteholders and (y) an amount equal to the sum of (A) Class B Monthly Interest Payment for such Distribution Date, (B) any Class B Interest Shortfall for such Distribution Date and (C) the amount of Class B Default Interest, if any, for such Distribution Date and any Class B Default Interest previously due but not distributed to the Class B Noteholders on any prior Distribution Date, will be distributed to the Class B Noteholders, (iii) (x) the Class C Note Principal Balance on such Distribution Date will be distributed to the Class C Noteholders and (y) an amount equal to the sum of (A) Class C Monthly Interest Payment for such Distribution Date, (B) any Class C Interest Shortfall for such Distribution Date, (C) the amount of Class C Default Interest, if any, for such Distribution Date and any Class C Default Interest previously due but not distributed to the Class C Noteholders on any prior Distribution Date will be distributed to the Class C Noteholders and (iv) any excess shall be released to Issuer.
Section 7.02. Series Termination. On the Series 2023-1 Final Maturity Date, the unpaid principal amount of the Series 2023-1 Notes shall be due and payable, and the right of the Series 2023-1 Noteholders to receive payments from Issuer will be limited solely to the right to receive payments pursuant to Section 5.05 of the Indenture. References to the Series Termination Date in Articles IV and V of the Indenture shall be deemed to be references to the Series 2023-1 Final Maturity Date.
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ARTICLE VIII
Miscellaneous Provisions
Section 8.01. Ratification of Indenture; Amendments. As supplemented by this Indenture Supplement, the Indenture is in all respects ratified and confirmed and the Indenture as so supplemented by this Indenture Supplement shall be read, taken and construed as one and the same instrument. This Indenture Supplement may be amended only by a Supplemental Indenture entered in accordance with the terms of Section 10.01 or 10.02 of the Indenture. For purposes of the application of Section 10.02 of the Indenture to any amendment of this Indenture Supplement, the Series 2023-1 Noteholders shall be the only Noteholders whose vote shall be required. Notwithstanding the provisions of Section 10.02 of the Indenture and Section 9.01(b) of the Transfer and Servicing Agreement, this Indenture Supplement may be amended to increase the Series Servicing Fee Percentage with the consent of the Holders of Notes representing more than 66⅔% of the principal balance of each Class of the Outstanding Series 2023-1 Notes and upon compliance with the other provisions of such sections, as applicable, including satisfaction of the Series Rating Agency Condition.
Section 8.02. Amendments to Asset Representations Review Agreement. The Indenture Trustee and each Series 2023-1 Noteholder, by its acceptance of a Series 2023-1 Note, acknowledge that RPA Seller, Transferor, Servicer, Issuer and the Asset Representations Reviewer may amend the Asset Representations Review Agreement, including the content of any exhibit or schedule to the Asset Representations Review Agreement, without the consent of the Indenture Trustee or any Holders of the Series 2023-1 Notes; provided that such amendment shall not, in the reasonable belief of Transferor, adversely affect in any material respect the interests of the Series 2023-1 Noteholders or Indenture Trustee (as evidenced by an Officer’s Certificate of Transferor delivered to Servicer and Indenture Trustee).
Section 8.03. Form of Delivery of the Notes. The Class A Notes shall be Book-Entry Notes and shall be delivered as Registered Notes to U.S. Bank Trust Company, National Association, as agent for DTC, Clearstream and Euroclear Bank S.A./N.V., as provided in Sections 2.01, 2.03 and 2.12 of the Indenture. The Class B Notes and the Class C Notes shall be Definitive Notes and shall be registered in the Note Register in the name of the purchaser or purchasers identified in the applicable Note Purchase Agreement.
Section 8.04. Counterparts. This Indenture Supplement may be executed in two or more counterparts, and by different parties on separate counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument.
Section 8.05. Governing Law. THIS INDENTURE SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEBRASKA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
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Section 8.06. Limitation of Liability. Notwithstanding any other provision herein or elsewhere, this Indenture Supplement has been executed and delivered by Wilmington Trust Company, not in its individual capacity, but solely in its capacity as Owner Trustee of the Trust, in no event shall Wilmington Trust Company, in its individual capacity, have any liability in respect of the representations, warranties, or obligations of Issuer hereunder or under any other document, as to all of which recourse shall be had solely to the assets of Issuer, and for all purposes of this Indenture Supplement and each other document, Owner Trustee (as such or in its individual capacity) shall be subject to, and entitled to the benefits of, the terms and provisions of the Trust Agreement.
Section 8.07. Rights of Indenture Trustee. For the avoidance of doubt, the Indenture Trustee undertakes to perform only such duties as are specifically set forth in this Indenture Supplement, the Indenture and the other Transaction Documents and as such, shall have no obligation or responsibility to monitor or enforce compliance with Regulation RR, nor shall it be liable to any Person for any violation of Regulation RR; provided, that nothing in this Section 8.07 shall alter the Indenture Trustee’s duties, obligations or standard of care as set forth in the Indenture, this Indenture Supplement and the other Transaction Documents. Indenture Trustee shall have herein the same rights, protections, indemnities and immunities as specified in the Indenture.
Section 8.08. Additional Requirements for Registration of and Limitations on Transfer and Exchange of Notes.
(a) All transfers will be subject to the transfer restrictions set forth in the Notes, as set forth as Exhibits A-1, A-2 and A-3, as applicable. The Class B Notes and Class C Notes may be subject to additional transfer restrictions as set forth in the applicable Note Purchase Agreement.
(b) The Class B Notes and Class C Notes have not been, and will not be, registered under the Securities Act or any state securities law. The Class B Notes and the Class C Notes will be offered and sold only to “accredited investors,” as defined in Rule 501 promulgated under the Securities Act, purchasing for their own accounts or to an “accredited investor” purchasing for a single account (which is an institutional “accredited investor”) as to which the purchaser exercises sole investment discretion. No reoffer, resale, pledge or other transfer of any Class B Notes and Class C Notes or any interest therein or participation thereof subsequent to the initial purchase from the Transferor will be made unless such resale or transfer is made pursuant to Rule 144A under the Securities Act to a Person whom the seller of the Class B Notes or Class C Notes reasonably believes is a QIB purchasing for its own account or a QIB purchasing for the account of a QIB, whom the seller has informed, in each case, that the reoffer, resale, pledge or other transfer is being made in reliance Rule 144A and Transferor delivers to Indenture Trustee a Certificate in the form of Exhibit E.
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Section 8.09. Notices to Rating Agencies and Indenture Trustee. (a) Where this Indenture Supplement, the Indenture or any other Transaction Agreement provides for notice to the Rating Agencies, such notice shall be sufficiently given to each Rating Agency (unless otherwise herein or therein expressly provided) if in writing and mailed by first class mail, postage prepaid, or delivered by a national overnight courier service, or delivered by facsimile transmission to such mailing address or facsimile number as may be provided by such Rating Agency.
(b) Where this Indenture Supplement, the Indenture or any other Transaction provides for notice to the Indenture Trustee, such notice shall be sufficient for every purpose thereunder or hereunder if made, given, furnished or filed, in writing, by facsimile transmission, or by courier or overnight delivery to its Corporate Trust Office, or any other address or through other means acceptable to Indenture Trustee previously furnished in writing in accordance with Section 12.04 of the Indenture.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned have caused this Indenture Supplement to be duly executed and delivered by their respective duly authorized officers on the day and year first above written.
| FIRST NATIONAL MASTER NOTE TRUST, as Issuer | ||
| By Wilmington Trust Company, not in its individual capacity, but solely as Owner Trustee | ||
| By | ||
| Name | ||
| Title | ||
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Indenture Trustee | ||
| By | ||
| Name | ||
| Title | ||
| Acknowledged and Accepted: | ||
| FIRST NATIONAL BANK OF OMAHA, | ||
| as Servicer | ||
| By: | ||
| Name: Anthony R. Cerasoli | ||
| Title: Senior Vice President and Treasurer | ||
| FIRST NATIONAL FUNDING LLC, | ||
| as Transferor | ||
| By: | First National Funding Corporation, | |
| its Managing Member | ||
| By: | ||
| Name: Anthony R. Cerasoli | ||
| Title: President | ||
EXHIBIT A-1
FORM OF
CLASS A ASSET BACKED NOTE, SERIES 2023-1
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF COVENANTS AND AGREES THAT IT WILL NOT AT ANY TIME INSTITUTE AGAINST FIRST NATIONAL FUNDING CORPORATION, A NEBRASKA BUSINESS CORPORATION (“FNFC”), TRANSFEROR OR ISSUER, OR SOLICIT OR JOIN OR COOPERATE WITH OR ENCOURAGE ANY INSTITUTION IN INSTITUTING AGAINST FNFC, TRANSFEROR OR ISSUER, ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS, OR OTHER PROCEEDINGS UNDER ANY UNITED STATES FEDERAL OR STATE BANKRUPTCY OR SIMILAR LAW IN CONNECTION WITH ANY OBLIGATION RELATING TO THE NOTES, THE INDENTURE OR ANY OF THE TRANSACTION DOCUMENTS.
THE HOLDER OF THIS CLASS A NOTE, BY ACCEPTANCE OF THIS NOTE, AND EACH HOLDER OF A BENEFICIAL INTEREST THEREIN, AGREES TO TREAT THE CLASS A NOTES AS INDEBTEDNESS FOR APPLICABLE FEDERAL, STATE, AND LOCAL INCOME AND FRANCHISE TAX LAW AND FOR PURPOSES OF ANY OTHER TAX IMPOSED ON, OR MEASURED BY, INCOME.
THE HOLDER OF THIS CLASS A NOTE, BY ACCEPTANCE OF THIS NOTE, ACKNOWLEDGES THAT IT IS NOT PART OF THE ISSUER’S “EXPANDED GROUP” WITHIN THE MEANING OF TREASURY REGULATIONS UNDER SECTION 385 OF THE CODE, OR IT HAS OBTAINED AND PROVIDED AN OPINION OF NATIONALLY RECOGNIZED TAX COUNSEL EXPERIENCED IN SUCH MATTERS THAT UNDER THE EXISTING LAW, ITS ACQUISITION OF A NOTE WILL NOT CAUSE SECTION 385 OF THE CODE, AND THE TREASURY REGULATIONS PROMULGATED THEREUNDER, TO APPLY TO THE CLASS A NOTE.
THE HOLDER OF THIS CLASS A NOTE SHALL BE DEEMED TO REPRESENT AND WARRANT THAT EITHER (I) IT IS NOT ACQUIRING THE NOTE WITH THE PLAN ASSETS OF AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), WHICH IS SUBJECT TO TITLE I OF ERISA, A “PLAN” AS DEFINED IN SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), WHICH IS SUBJECT TO SECTION 4975 OF THE CODE, AN ENTITY DEEMED TO HOLD THE PLAN ASSETS OF ANY OF THE FOREGOING BY REASON OF INVESTMENT BY AN EMPLOYEE BENEFIT PLAN OR PLAN IN SUCH ENTITY, OR A GOVERNMENTAL PLAN, NON U.S. PLAN OR CHURCH PLAN SUBJECT TO APPLICABLE LAW THAT IS SUBSTANTIALLY SIMILAR TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE; OR (II) THE ACQUISITION, HOLDING AND DISPOSITION OF THE CLASS A NOTE WILL NOT GIVE RISE TO A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A GOVERNMENTAL PLAN, NON U.S. PLAN OR CHURCH PLAN, A NON-EXEMPT VIOLATION OF ANY SUBSTANTIALLY SIMILAR APPLICABLE LAW).
| REGISTERED | $350,000,000* |
| No. [•] | CUSIP NO.32113CBV1 |
| ISIN NO. US32113CBV19 |
FIRST NATIONAL MASTER NOTE TRUST
CLASS A ASSET BACKED NOTE, SERIES 2023-1
First National Master Note Trust (herein referred to as “Issuer”), a Delaware statutory trust governed by the Second Amended and Restated Trust Agreement dated as of September 23, 2016, for value received, hereby promises to pay to Cede & Co., or registered assigns, subject to the following provisions, the principal sum of THREE HUNDRED FIFTY MILLION DOLLARS, or such greater or lesser amount as determined in accordance with the Indenture, on the April 16, 2029 Distribution Date, except as otherwise provided below or in the Indenture. Issuer will pay interest on the unpaid principal amount of this Note at the Class A Note Interest Rate on each Distribution Date until the principal amount of this Note is paid in full. Interest on this Note will accrue for each Distribution Date from and including the most recent Distribution Date on which interest has been paid to but excluding such Distribution Date or, for the initial Distribution Date, from and including the Closing Date to but excluding such Distribution Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Principal of this Note shall be paid in the manner specified in the Indenture Supplement referred to on the reverse hereof.
The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by or on behalf of Indenture Trustee, by manual signature, this Note shall not be entitled to any benefit under the Indenture or the Indenture Supplement referred to on the reverse hereof, or be valid for any purpose.
This Note has been executed by Wilmington Trust Company, not in its individual capacity, but solely in its capacity as Owner Trustee of the Issuer, in no event shall Wilmington Trust Company, in its individual capacity, have any liability in respect of the obligations of Issuer hereunder or under any other document, as to all of which recourse shall be had solely to the assets of Issuer, and for all purposes of this Note and each other document, Owner Trustee (as such or in its individual capacity) shall be subject to, and entitled to the benefits of, the terms and provisions of the Trust Agreement.
* Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
A1-2
IN WITNESS WHEREOF, Issuer has caused this Class A Note to be duly executed.
| FIRST NATIONAL MASTER NOTE TRUST, as Issuer | ||
| By Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee under the Trust Agreement | ||
| By | ||
| Name | ||
| Title | ||
Dated: April 27, 2023
A1-3
INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Class A Notes described in the within-mentioned Indenture.
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Indenture Trustee | ||
| By | ||
| Authorized Signatory | ||
| Dated | ||
A1-4
FIRST NATIONAL MASTER NOTE TRUST
CLASS A ASSET BACKED NOTE, SERIES 2023-1
Summary of Terms and Conditions
This Class A Note is one of a duly authorized issue of Notes of Issuer, designated as First National Master Note Trust, Series 2023-1 (the “Series 2023-1 Notes”), issued under a Second Amended and Restated Master Indenture dated as of September 23, 2016 (the “Master Indenture”), between Issuer and U.S. Bank Trust Company, National Association, as indenture trustee (the “Indenture Trustee”), as supplemented by the Indenture Supplement dated as of April 27, 2023 (the “Indenture Supplement”), and representing the right to receive certain payments from Issuer. The term “Indenture,” unless the context otherwise requires, refers to the Master Indenture as supplemented by the Indenture Supplement. The Notes are subject to all of the terms of the Indenture. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in or pursuant to the Indenture. In the event of any conflict or inconsistency between the Indenture and this Note, the Indenture shall control.
The Class B Notes and the Class C Notes will also be issued under the Indenture.
The Noteholder, by its acceptance of this Note, agrees that it will look solely to the property of Issuer allocated to the payment of this Note for payment hereunder and that neither Owner Trustee nor Indenture Trustee is liable to the Noteholders for any amount payable under the Notes or the Indenture or, except in the case of Indenture Trustee as expressly provided in the Indenture, subject to any liability under the Indenture.
This Note does not purport to summarize the Indenture and reference is made to the Indenture for the interests, rights and limitations of rights, benefits, obligations and duties evidenced thereby, and the rights, duties and immunities of Indenture Trustee.
THIS CLASS A NOTE REPRESENTS INDEBTEDNESS OF THE ISSUER AND IS LIMITED BY RECOURSE ONLY TO THE COLLATERAL UP TO THE COLLATERAL AMOUNT AND ANY OTHER PORTION OF THE COLLATERAL THAT MAY BE AVAILABLE FOR YOUR SERIES OF NOTES UNDER THE INDENTURE. THIS CLASS A NOTE DOES NOT REPRESENT AN INTEREST IN THE ISSUER AND DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST IN, FIRST NATIONAL BANK OF OMAHA, FIRST NATIONAL FUNDING CORPORATION, FIRST NATIONAL FUNDING LLC, OR ANY OTHER OF THEIR AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
Issuer, Transferor, Indenture Trustee and any agent of Issuer, Transferor or Indenture Trustee shall treat the person in whose name this Class A Note is registered as the owner hereof for all purposes, and neither Issuer, Transferor, Indenture Trustee nor any agent of Issuer, Transferor or Indenture Trustee shall be affected by notice to the contrary.
THIS CLASS A NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEBRASKA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A1-5
ASSIGNMENT
Social Security or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (name and address of assignee) the within certificate and all rights thereunder, and hereby irrevocably constitutes and appoints attorney, to transfer said certificate on the books kept for registration thereof, with full power of substitution in the premises.
| Dated: | _________________________________** | ||
| Signature Guaranteed: |
** The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.
A1-6
EXHIBIT A-2
FORM OF
CLASS B ASSET BACKED NOTE, SERIES 2023-1
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), IN RELIANCE UPON EXEMPTIONS PROVIDED UNDER THE SECURITIES ACT. NO RESALE OR OTHER TRANSFER OF THIS NOTE MAY BE MADE EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE PROVISIONS UNDER STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH PROVISIONS. THE TRANSFER OF THIS NOTE IS SUBJECT TO CERTAIN CONDITIONS AS SET FORTH IN THE NOTE PURCHASE AGREEMENT RELATING HERETO.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF COVENANTS AND AGREES THAT IT WILL NOT AT ANY TIME INSTITUTE AGAINST FIRST NATIONAL FUNDING CORPORATION, A NEBRASKA BUSINESS CORPORATION (“FNFC”), TRANSFEROR OR ISSUER, OR SOLICIT OR JOIN OR COOPERATE WITH OR ENCOURAGE ANY INSTITUTION IN INSTITUTING AGAINST FNFC, TRANSFEROR OR ISSUER, ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS, OR OTHER PROCEEDINGS UNDER ANY UNITED STATES FEDERAL OR STATE BANKRUPTCY OR SIMILAR LAW IN CONNECTION WITH ANY OBLIGATION RELATING TO THE NOTES, THE INDENTURE OR ANY OF THE TRANSACTION DOCUMENTS.
THE HOLDER OF THIS CLASS B NOTE, BY ACCEPTANCE OF THIS NOTE, AND EACH HOLDER OF A BENEFICIAL INTEREST THEREIN, AGREES TO TREAT THE CLASS B NOTES AS INDEBTEDNESS FOR APPLICABLE FEDERAL, STATE, AND LOCAL INCOME AND FRANCHISE TAX LAW AND FOR PURPOSES OF ANY OTHER TAX IMPOSED ON, OR MEASURED BY, INCOME.
THE HOLDER OF THIS CLASS B NOTE SHALL BE DEEMED TO REPRESENT AND WARRANT THAT IT IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), WHICH IS SUBJECT TO TITLE I OF ERISA, (II) A “PLAN” DESCRIBED IN SECTION 4975(e)1 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), WHICH IS SUBJECT TO SECTION 4975 OF THE CODE, (III) A GOVERNMENT PLAN, A NON-U.S. PLAN OR CHURCH PLAN, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF AN EMPLOYEE BENEFIT PLAN’S OR OTHER PLAN’S INVESTMENT IN SUCH ENTITY, OR (V) A PERSON INVESTING “PLAN ASSETS” OF ANY SUCH PLAN (INCLUDING, FOR PURPOSES OF CLAUSES (IV) AND (V), ANY INSURANCE COMPANY GENERAL ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED.
| REGISTERED | $47,116,000* |
| No. [•] | CUSIP NO.32113CBW9 |
| ISIN NO. US32113CBW91 |
FIRST NATIONAL MASTER NOTE TRUST
CLASS B ASSET BACKED NOTE, SERIES 2023-1
First National Master Note Trust (herein referred to as “Issuer”), a Delaware statutory trust governed by a Second Amended and Restated Trust Agreement dated as of September 23, 2016, for value received, hereby promises to pay to First National Bank of Omaha, or registered assigns, subject to the following provisions, the principal sum of FORTY SEVEN MILLION ONE HUNDRED SIXTEEN THOUSAND DOLLARS, or such greater or lesser amount as determined in accordance with the Indenture, on the April 16, 2029 Distribution Date, except as otherwise provided below or in the Indenture. Issuer will pay interest on the unpaid principal amount of this Note at the Class B Note Interest Rate on each Distribution Date until the principal amount of this Note is paid in full. Interest on this Note will accrue for each Distribution Date from and including the most recent Distribution Date on which interest has been paid to but excluding such Distribution Date or, for the initial Distribution Date, from and including the Closing Date to but excluding such Distribution Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Principal of this Note shall be paid in the manner specified in the Indenture Supplement referred to on the reverse hereof.
The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by or on behalf of Indenture Trustee, by manual signature, this Note shall not be entitled to any benefit under the Indenture or the Indenture Supplement referred to on the reverse hereof, or be valid for any purpose.
This Note has been executed by Wilmington Trust Company, not in its individual capacity, but solely in its capacity as Owner Trustee of the Issuer, in no event shall Wilmington Trust Company, in its individual capacity, have any liability in respect of the obligations of Issuer hereunder or under any other document, as to all of which recourse shall be had solely to the assets of Issuer, and for all purposes of this Note and each other document, Owner Trustee (as such or in its individual capacity) shall be subject to, and entitled to the benefits of, the terms and provisions of the Trust Agreement.
THIS CLASS B NOTE IS SUBORDINATED TO THE EXTENT NECESSARY TO FUND PAYMENTS ON THE CLASS A NOTES TO THE EXTENT SPECIFIED IN THE INDENTURE SUPPLEMENT.
* Denominations of $100,000 and integral multiples of $1,000 in excess thereof.
A2-2
IN WITNESS WHEREOF, Issuer has caused this Class B Note to be duly executed.
| FIRST NATIONAL MASTER NOTE TRUST, as Issuer | ||
| By Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee under the Trust Agreement | ||
| By | ||
| Name | ||
| Title | ||
Dated: April 27, 2023
A2-3
INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Class B Notes described in the within-mentioned Indenture.
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Indenture Trustee | ||
| By | ||
| Authorized Signatory | ||
| Dated | ||
A2-4
FIRST NATIONAL MASTER NOTE TRUST
CLASS B ASSET BACKED NOTE, SERIES 2023-1
Summary of Terms and Conditions
This Class B Note is one of a duly authorized issue of Notes of Issuer, designated as First National Master Note Trust, Series 2023-1 (the “Series 2023-1 Notes”), issued under a Second Amended and Restated Master Indenture dated as of September 23, 2016 (the “Master Indenture”), between Issuer and U.S. Bank Trust Company, National Association, as indenture trustee (the “Indenture Trustee”), as supplemented by the Indenture Supplement dated as of April 27, 2023 (the “Indenture Supplement”), and representing the right to receive certain payments from Issuer. The term “Indenture,” unless the context otherwise requires, refers to the Master Indenture as supplemented by the Indenture Supplement. The Notes are subject to all of the terms of the Indenture. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in or pursuant to the Indenture. In the event of any conflict or inconsistency between the Indenture and this Note, the Indenture shall control.
The Class A Notes and the Class C Notes will also be issued under the Indenture.
The Noteholder, by its acceptance of this Note, agrees that it will look solely to the property of Issuer allocated to the payment of this Note for payment hereunder and that neither Owner Trustee nor Indenture Trustee is liable to the Noteholders for any amount payable under the Notes or the Indenture or, except in the case of Indenture Trustee as expressly provided in the Indenture, subject to any liability under the Indenture.
This Note does not purport to summarize the Indenture and reference is made to the Indenture for the interests, rights and limitations of rights, benefits, obligations and duties evidenced thereby, and the rights, duties and immunities of Indenture Trustee.
THIS CLASS B NOTE REPRESENTS INDEBTEDNESS OF THE ISSUER AND IS LIMITED BY RECOURSE ONLY TO THE COLLATERAL UP TO THE COLLATERAL AMOUNT AND ANY OTHER PORTION OF THE COLLATERAL THAT MAY BE AVAILABLE FOR YOUR SERIES OF NOTES UNDER THE INDENTURE. THIS CLASS B NOTE DOES NOT REPRESENT AN INTEREST IN THE ISSUER AND DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST IN, FIRST NATIONAL BANK OF OMAHA, FIRST NATIONAL FUNDING CORPORATION, FIRST NATIONAL FUNDING LLC, OR ANY OTHER OF THEIR AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
Issuer, Transferor, Indenture Trustee and any agent of Issuer, Transferor or Indenture Trustee shall treat the person in whose name this Class B Note is registered as the owner hereof for all purposes, and neither Issuer, Transferor, Indenture Trustee nor any agent of Issuer, Transferor or Indenture Trustee shall be affected by notice to the contrary.
THIS CLASS B NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEBRASKA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A2-5
ASSIGNMENT
Social Security or other identifying number of assignee ______________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (name and address of assignee) the within certificate and all rights thereunder, and hereby irrevocably constitutes and appoints attorney, to transfer said certificate on the books kept for registration thereof, with full power of substitution in the premises.
| Dated: | ** | |||
| Signature Guaranteed: | ||||
** The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.
A2-6
EXHIBIT A-3
FORM OF
CLASS C ASSET BACKED NOTE, SERIES 2023-1
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), IN RELIANCE UPON EXEMPTIONS PROVIDED UNDER THE SECURITIES ACT. NO RESALE OR OTHER TRANSFER OF THIS NOTE MAY BE MADE EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE PROVISIONS UNDER STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH PROVISIONS. THE TRANSFER OF THIS NOTE IS SUBJECT TO CERTAIN CONDITIONS AS SET FORTH IN THE NOTE PURCHASE AGREEMENT RELATING HERETO.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF COVENANTS AND AGREES THAT IT WILL NOT AT ANY TIME INSTITUTE AGAINST FIRST NATIONAL FUNDING CORPORATION, A NEBRASKA BUSINESS CORPORATION (“FNFC”), TRANSFEROR OR ISSUER, OR SOLICIT OR JOIN OR COOPERATE WITH OR ENCOURAGE ANY INSTITUTION IN INSTITUTING AGAINST FNFC, TRANSFEROR OR ISSUER, ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS, OR OTHER PROCEEDINGS UNDER ANY UNITED STATES FEDERAL OR STATE BANKRUPTCY OR SIMILAR LAW IN CONNECTION WITH ANY OBLIGATION RELATING TO THE NOTES, THE INDENTURE OR ANY OF THE TRANSACTION DOCUMENTS.
THE HOLDER OF THIS CLASS C NOTE, BY ACCEPTANCE OF THIS NOTE, AND EACH HOLDER OF A BENEFICIAL INTEREST THEREIN, AGREES TO TREAT THE CLASS C NOTES AS INDEBTEDNESS FOR APPLICABLE FEDERAL, STATE, AND LOCAL INCOME AND FRANCHISE TAX LAW AND FOR PURPOSES OF ANY OTHER TAX IMPOSED ON, OR MEASURED BY, INCOME.
THE HOLDER OF THIS CLASS C NOTE SHALL BE DEEMED TO REPRESENT AND WARRANT THAT IT IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), WHICH IS SUBJECT TO TITLE I OF ERISA, (II) A “PLAN” DESCRIBED IN SECTION 4975(e)1 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), WHICH IS SUBJECT TO SECTION 4975 OF THE CODE, (III) A GOVERNMENT PLAN, A NON-U.S. PLAN OR CHURCH PLAN, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF AN EMPLOYEE BENEFIT PLAN’S OR OTHER PLAN’S INVESTMENT IN SUCH ENTITY, OR (V) A PERSON INVESTING “PLAN ASSETS” OF ANY SUCH PLAN (INCLUDING, FOR PURPOSES OF CLAUSES (IV) AND (V), ANY INSURANCE COMPANY GENERAL ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED.
| REGISTERED | $51,603,000* |
| No. [•] | CUSIP NO.32113CBX7 |
| ISIN NO. US32113CBX74 |
FIRST NATIONAL MASTER NOTE TRUST
CLASS C ASSET BACKED NOTE, SERIES 2023-1
First National Master Note Trust (herein referred to as “Issuer”), a Delaware statutory trust governed by a Second Amended and Restated Trust Agreement dated as of September 23, 2016, for value received, hereby promises to pay to First National Bank of Omaha or registered assigns, subject to the following provisions, the principal sum of FIFTY-ONE MILLION SIX HUNDRED THREE THOUSAND DOLLARS, or such greater or lesser amount as determined in accordance with the Indenture, on the April 16, 2029 Distribution Date, except as otherwise provided below or in the Indenture. Issuer will pay interest on the unpaid principal amount of this Note at the Class C Note Interest Rate on each Distribution Date until the principal amount of this Note is paid in full. Interest on this Note will accrue for each Distribution Date from and including the most recent Distribution Date on which interest has been paid to but excluding such Distribution Date or, for the initial Distribution Date, from and including the Closing Date to but excluding such Distribution Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Principal of this Note shall be paid in the manner specified in the Indenture Supplement referred to on the reverse hereof.
The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by or on behalf of Indenture Trustee, by manual signature, this Note shall not be entitled to any benefit under the Indenture or the Indenture Supplement referred to on the reverse hereof, or be valid for any purpose.
This Note has been executed by Wilmington Trust Company, not in its individual capacity, but solely in its capacity as Owner Trustee of the Issuer, in no event shall Wilmington Trust Company, in its individual capacity, have any liability in respect of the obligations of Issuer hereunder or under any other document, as to all of which recourse shall be had solely to the assets of Issuer, and for all purposes of this Note and each other document, Owner Trustee (as such or in its individual capacity) shall be subject to, and entitled to the benefits of, the terms and provisions of the Trust Agreement.
THIS CLASS C NOTE IS SUBORDINATED TO THE EXTENT NECESSARY TO FUND PAYMENTS ON THE CLASS A NOTES AND THE CLASS B NOTES TO THE EXTENT SPECIFIED IN THE INDENTURE SUPPLEMENT.
* Denominations of $100,000 and integral multiples of $1,000 in excess thereof.
A3-2
IN WITNESS WHEREOF, Issuer has caused this Class C Note to be duly executed.
| FIRST NATIONAL MASTER NOTE TRUST, as Issuer | ||
| By Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee under the Trust Agreement | ||
| By | ||
| Name | ||
| Title | ||
Dated: April 27, 2023
A3-3
INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Class C Notes described in the within-mentioned Indenture.
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Indenture Trustee | ||
| By | ||
| Authorized Signatory | ||
| Dated | ||
A3-4
FIRST NATIONAL MASTER NOTE TRUST
CLASS C ASSET BACKED NOTE, SERIES 2023-1
Summary of Terms and Conditions
This Class C Note is one of a duly authorized issue of Notes of Issuer, designated as First National Master Note Trust, Series 2023-1 (the “Series 2023-1 Notes”), issued under a Second Amended and Restated Master Indenture dated as of September 23, 2016 (the “Master Indenture”), between Issuer and U.S. Bank Trust Company, National Association, as indenture trustee (“Indenture Trustee”), as supplemented by the Indenture Supplement dated as of April 27, 2023 (the “Indenture Supplement”), and representing the right to receive certain payments from Issuer. The term “Indenture,” unless the context otherwise requires, refers to the Master Indenture as supplemented by the Indenture Supplement. The Notes are subject to all of the terms of the Indenture. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in or pursuant to the Indenture. In the event of any conflict or inconsistency between the Indenture and this Note, the Indenture shall control.
The Class A Notes and the Class B Notes will also be issued under the Indenture.
The Noteholder, by its acceptance of this Note, agrees that it will look solely to the property of Issuer allocated to the payment of this Note for payment hereunder and that neither Owner Trustee nor Indenture Trustee is liable to the Noteholders for any amount payable under the Notes or the Indenture or, except in the case of Indenture Trustee as expressly provided in the Indenture, subject to any liability under the Indenture.
This Note does not purport to summarize the Indenture and reference is made to the Indenture for the interests, rights and limitations of rights, benefits, obligations and duties evidenced thereby, and the rights, duties and immunities of Indenture Trustee.
THIS CLASS C NOTE REPRESENTS INDEBTEDNESS OF THE ISSUER AND IS LIMITED BY RECOURSE ONLY TO THE COLLATERAL UP TO THE COLLATERAL AMOUNT AND ANY OTHER PORTION OF THE COLLATERAL THAT MAY BE AVAILABLE FOR YOUR SERIES OF NOTES UNDER THE INDENTURE. THIS CLASS C NOTE DOES NOT REPRESENT AN INTEREST IN THE ISSUER AND DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST IN, FIRST NATIONAL BANK OF OMAHA, FIRST NATIONAL FUNDING CORPORATION, FIRST NATIONAL FUNDING LLC, OR ANY OTHER OF THEIR AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
Issuer, Transferor, Indenture Trustee and any agent of Issuer, Transferor or Indenture Trustee shall treat the person in whose name this Class C Note is registered as the owner hereof for all purposes, and neither Issuer, Transferor, Indenture Trustee nor any agent of Issuer, Transferor or Indenture Trustee shall be affected by notice to the contrary.
THIS CLASS C NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEBRASKA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A3-5
ASSIGNMENT
Social Security or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (name and address of assignee) the within certificate and all rights thereunder, and hereby irrevocably constitutes and appoints attorney, to transfer said certificate on the books kept for registration thereof, with full power of substitution in the premises.
| Dated: | ** | |||
| Signature Guaranteed: | ||||
** The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.
A3-6
EXHIBIT B
FORM OF
MONTHLY PAYMENT INSTRUCTIONS AND
NOTIFICATION TO INDENTURE TRUSTEE
FIRST
NATIONAL MASTER NOTE TRUST
SERIES 2023-1
The undersigned, a duly authorized representative of First National Bank of Omaha (“FNBO”), as Servicer pursuant to the Second Amended and Restated Transfer and Servicing Agreement, dated as of September 23, 2016 (the “Transfer and Servicing Agreement”), among First National Funding LLC, as transferor (“Transferor”), Servicer and First National Master Note Trust, as issuer (“Issuer”), does hereby certify as follows:
A. Capitalized terms used in this Certificate have their respective meanings set forth in the Second Amended and Restated Master Indenture dated as of September 23, 2016 (the “Indenture”), between Issuer and U.S. Bank Trust Company, National Association, as indenture trustee (“Indenture Trustee”), as supplemented by the Series 2023-1 Indenture Supplement dated as of April 27, 2023 between Issuer and Indenture Trustee (as amended and supplemented, the “Indenture Supplement”).
B. FNBO is Servicer.
C. The undersigned is an Authorized Officer of Servicer.
I. INSTRUCTION TO MAKE [DEPOSITS AND] WITHDRAWALS ON THE TRANSFER DATE ON , 20 .
[From the aggregate Collections wired to the Indenture Trustee with respect to the Related Monthly Period on the Transfer Date, the Indenture Trustee shall make deposits to the Series Accounts for Series 2023-1 as follows:
| To the Finance Charge Account | $ | |||
| To the Principal Account | $ |
[TO BE USED IF SERVICER IS PERMITTED TO MAKE MONTHLY DEPOSITS PURSUANT TO THE TRANSFER AND SERVICING AGREEMENT.]
Pursuant to Section 4.09, Servicer does hereby instruct Indenture Trustee to transfer from the Principal Accumulation Account to the Finance Charge Account, the Principal Accumulation Investment Earnings on deposit in the Principal Accumulation Account, if any, for application as Available Finance Charge Collections in the following amount[s] and to deposit Investment Earnings, if any, on the funds on deposit in the Principal Account, the Finance Charge Account and the Distribution Account to an account designated by Servicer all on the Transfer Date specified above:
| Investment Earnings from Principal Accumulation Account to the Finance Charge Account | $ | |||
| Investment Earnings on Principal Account, Finance Charge Account and Distribution Account to the order of Servicer | $ |
Pursuant to Section 4.10, Servicer does hereby instruct Indenture Trustee to withdraw funds from the Reserve Account, and deposit such funds, all in accordance with Section 4.10, in the following amounts and on the Transfer Date specified above:
| A. | Investment Earnings (to the extent not required for Required Reserve Account Amount) for deposit on the Transfer Date to Finance Charge Account pursuant to Section 4.10(b) | $ | ||
| B. | On each Transfer Date with respect to the Accumulation Period or the Rapid Amortization Period, the Reserve Draw Amount (reduced by amounts otherwise available under Section 4.04(a)(vii) for deposit to the Reserve Account on such Transfer Date) for deposit into the Finance Charge Account pursuant to Section 4.10(d) | $ | ||
| C. | Reserve Account Surplus, after giving effect to all deposits to and withdrawals from the Reserve Account with respect to the Transfer Date, for deposit to the Spread Account to the extent required to meet Required Spread Account Amount, pursuant to Section 4.10(e) | $ | ||
| D. | Remaining Reserve Account Surplus, if any, for distribution to the Holder of the Transferor Interest, pursuant to Section 4.10(e) | $ |
B-2
| E. | On (i) Transfer Date preceding Expected Principal Payment Date, (ii) first Transfer Date relating to Rapid Amortization Period or (iii) termination of the Trust pursuant to Article VII of the Trust Agreement, after all payments set forth above, all remaining funds, for deposit to the Spread Account to the extent required to meet Required Spread Account Amount, pursuant to Section 4.10(f) | $ | ||
| F. | After application pursuant to (E) above, all remaining funds for distribution to the Holder of the Transferor Interest, pursuant to Section 4.10(f) | $ |
Pursuant to Section 4.11, Servicer does hereby instruct Indenture Trustee to withdraw funds from the Spread Account, and deposit such funds, all in accordance with Section 4.11, in the following amounts and on the Transfer Date specified above:
| A. | On the earlier of the Series Termination Date and the day after acceleration of the Notes following an Event of Default, for deposit of the Available Spread Account Amount to the Distribution Account to pay principal, pursuant to Section 4.11(e) | $ | ||
| B. | On any Transfer Date, for deposit to the Distribution Account, pursuant to Section 4.11(c), to the extent required for the deposit to be made pursuant to Section 4.04(a)(iv) (reduced by Available Finance Charge Collections used for such deposit and using Investment Earnings on the Spread Account, if needed) | $ |
B-3
| C. | When the Principal Balance of the Class A Notes and the Class B Notes has been paid in full, for deposit to the Distribution Account, pursuant to Section 4.11(d), to the extent required to reduce Class C Note Principal Balance to zero, and using Investment Earnings on Spread Account, if needed | $ | ||
| D. | On any Transfer Date, Investment Earning on the Spread Account, after application above, to the extent not required to maintain Required Spread Account Amount pursuant to Section 4.11(f), for distribution to the Holder of the Transferor Interest, pursuant to Section 4.11(b) | $ | ||
| E. | On any Transfer Date, after application above, excess over Required Spread Account Amount for deposit to the Finance Charge Account for application as Available Finance Charge Collections pursuant to Section 4.11(g) | $ |
Pursuant to Section 4.04, Servicer does hereby instruct Indenture Trustee (i) to make withdrawals from the Finance Charge Account on the Transfer Date specified above, in an aggregate amount equal to the Available Finance Charge Collections, as set forth below and (ii) to apply the proceeds of such withdrawals in accordance with Section 4.04(a):
| A. | Pursuant to Section 4.04(a)(i), for deposit to the Distribution Account: | |||
| Class A Monthly Interest Payment for the related Interest Period | $ | |||
| Class A Interest Shortfall due to Class A Noteholders | $ | |||
| Class A Default Interest for the related Distribution Date | $ | |||
| Class A Default Interest previously due but not distributed to Class A Noteholders | $ |
B-4
| B. | Pursuant to Section 4.04(a)(ii), for deposit to the Distribution Account: | |||
| Class B Monthly Interest Payment for the related Interest Period | $ | |||
| Class B Interest Shortfall due to Class B Noteholders | $ | |||
| Class B Default Interest for the related Distribution Date | $ | |||
| Class B Default Interest previously due but not distributed to Class B Noteholders | $ | |||
| C. | Pursuant to Section 4.04(a)(iii), for distribution to the Servicer: | |||
| Noteholder Servicing Fee for the related Distribution Date, plus the amount of any Noteholder Servicing Fee previously due but not distributed to Servicer on a prior Distribution Date | $ | |||
| D. | Pursuant to Section 4.04(a)(iv), for deposit into the Distribution Account: | |||
| Class C Monthly Interest Payment for the preceding Interest Period | $ | |||
| Class C Interest Shortfall due to Class C Noteholders | $ |
B-5
| Class C Default Interest for the related Distribution Date | $ | |||
| Class C Default Interest previously due but not distributed to Class C Noteholders | $ | |||
| E. | Pursuant to Section 4.04(a)(v), for deposit to the Principal Account: | |||
| Investor Default Amount to be treated as Available Principal Collections | $ | |||
| Uncovered Dilution Amount for the related Distribution Date to be treated as Available Principal Collections | $ | |||
| F. | Pursuant to Section 4.04(a)(vi), for deposit to the Principal Account: | |||
| Investor Charge Offs and the amount of Reallocated Principal Collections not previously reimbursed to be treated as Available Principal Collections | $ | |||
| G. | Pursuant to Section 4.04(a)(vii): | |||
| Amount to be deposited into the Reserve Account (on and after Reserve Account Funding Date) | $ | |||
| H. | Pursuant to Section 4.04(a)(viii): | |||
| Amounts to be deposited into the Spread Account | $ |
B-6
| I. | Pursuant to Section 4.04(a)(ix): | |||
| The balance will constitute Excess Finance Charge Collections for the related Distribution Date (See III below) | $ |
Pursuant to Section 4.04(b) and (c), Servicer does hereby instruct Indenture Trustee (i) to make withdrawals from the Principal Account on the Transfer Date specified above, in an aggregate amount equal to Available Principal Collections, as set forth below, and (ii) to apply the proceeds of such withdrawals in accordance with Section 4.04(b) and (c):
| A. | Pursuant to Section 4.04(b): | |||
| During the Revolving Period, an amount equal to the Available Principal Collections (including amounts withdrawn from the Finance Charge Account pursuant to Section 4.04(a)(v) and (vi) and excluding Reallocated Principal Collections) to be treated as Excess Principal Collections and applied in accordance with Section 4.08 (See III below) | $ | |||
| B. | Pursuant to Section 4.04(c)(i): | |||
| On each Transfer Date with respect to the Accumulation Period, Monthly Principal for such Transfer Date to be deposited into the Principal Accumulation Account | $ | |||
| C. | Pursuant to Section 4.04(c)(ii): | |||
| On each Transfer Date with respect to the Rapid Amortization Period, Monthly Principal for such Transfer Date to be deposited to the Distribution Account for payment to the Class A Noteholders on the related Distribution Date until an aggregate amount equal to the Class A Note Principal Balance has been so deposited | $ | |||
B-7
| D. | Pursuant to Section 4.04(c)(iii): | |||
| On each Transfer Date with respect to the Rapid Amortization Period, after giving effect to Clause (C) above, remaining Monthly Principal, if any, to be deposited to the Distribution Account for payment to the Class B Noteholders on the related Distribution Date until an aggregate amount equal to the Class B Note Principal Balance has been so deposited | $ | |||
| E. | Pursuant to Section 4.04(c)(iv): | |||
| On each Transfer Date with respect to the Rapid Amortization Period, after giving effect to Clause (D) above, remaining Monthly Principal, if any, to be deposited to the Distribution Account for payment to the Class C Noteholders, on the related Distribution Date until an aggregate amount equal to the Class C Note Principal Balance has been so deposited | $ | |||
| F. | Pursuant to Section 4.04(c)(v): | |||
| Available Principal Collections, if any, remaining after giving effect to Clauses (B) through (E) above, to be treated as Excess Principal Collections | $ | |||
Pursuant to Section 4.06, Servicer does hereby instruct Indenture Trustee (i) to make a withdrawal from the Principal Account on the Transfer Date specified above, as set forth below and (ii) to apply the proceeds of such withdrawal in accordance with Section 4.06:
| Reallocated Principal Collections, up to the amount required to fund any deficiency pursuant to and in the priority set forth in Section 4.04(a)(i),(ii) and (iii) of the Indenture Supplement (after application of Excess Finance Charge Collections from other Series and amounts available from the Reserve Account) to be deposited to the Distribution Account for payment to the Class A and Class B Noteholders or distributed to the Servicer as set forth below | $ | |||
| $ to Distribution Account | ||||
| $ to Servicer | ||||
B-8
II. INSTRUCTIONS TO MAKE CERTAIN PAYMENTS ON THE DISTRIBUTION DATE ON , 20 .
Pursuant to Section 5.02, Servicer does hereby instruct Indenture Trustee or Paying Agent, as the case may be, to pay in accordance with Section 5.02 from the Distribution Account or the Principal Accumulation Account, as applicable, on the Distribution Date specified above, the following amounts:
| A. | Pursuant to 5.02(a): | |||
| (1) | Class A Noteholder’s pro rata share of the amounts on deposit in the Distribution Account that are allocated and available on such Distribution Date to pay interest on the Class A Notes pursuant to the Indenture Supplement | $ | ||
| (2) | Class A Noteholder’s pro rata share of the amounts on deposit in the Distribution Account that are allocated and available on such Distribution Date to pay principal of the Class A Notes pursuant to the Indenture Supplement | $ | ||
| B. | Pursuant to Section 5.02(b): | |||
| (1) | Class B Noteholder’s pro rata share of the amounts on deposit in the Distribution Account that are allocated and available on such Distribution Date to pay interest on the Class B Notes pursuant to the Indenture Supplement | $ | ||
| (2) | Class B Noteholder’s pro rata share of the amounts on deposit in the Distribution Account that are allocated and available on such Distribution Date to pay principal of the Class B Notes pursuant to the Indenture Supplement | $ | ||
B-9
| C. | Pursuant to Section 5.02(c): | |||
| (1) | Class C Noteholder’s pro rata share of the amounts on deposit in the Distribution Account that are allocated and available on such Distribution Date to pay interest on the Class C Notes pursuant to the Indenture Supplement, including amounts withdrawn from the Spread Account | $ | ||
| (2) | Class C Noteholder’s pro rata share of the amounts on deposit in the Distribution Account that are allocated and available on such Distribution Date to pay principal of the Class C Notes pursuant to the Indenture Supplement | $ | ||
B-10
III. EXCESS AMOUNTS.
Pursuant to Section 4.07 and Section 8.06 of the Indenture, Servicer does hereby instruct Indenture Trustee to apply Excess Finance Charge Collections from all Series in Group One in the following amounts and priorities on the Transfer Date specified above:
| A. | Aggregate Excess Finance Charge Collections, by Series: | |||
| Series [ ] | $ | |||
| Series [ ] | $ | |||
| Total | $ | |||
| B. | Allocated to finance charge shortfalls: | |||
| Series [ ] | $ | |||
| Series [ ] | $ | |||
| Total | $ | |||
| C. | Allocated to excess servicing fees: | |||
| Series [ ] | $ | |||
| Series [ ] | $ | |||
| Total | $ | |||
| D. | Remainder distributed to Holder of Transferor Interest | $ | ||
Pursuant to Section 4.08 and Sections 8.03 and 8.05 of the Indenture, Servicer does hereby instruct Indenture Trustee to apply Excess Principal Collections from all Principal Sharing Series in Group One and, if needed, amounts on deposit in the Excess Funding Account, in the following amounts and priorities on the related Distribution Date:
| A. | Aggregate Excess Principal Collections, by Series: | |||
| Series [ ] | $ | |||
| Series [ ] | $ | |||
| Total | $ | |||
B-11
| B. | Allocated to principal shortfalls and deposited to the related Series Account: | |||
| Series [ ] | $ | |||
| Series [ ] | $ | |||
| Total | $ | |||
| C. | Allocated to variable funding series principal payments at Transferor’s direction: | |||
| Series [ ] | $ | |||
| Series [ ] | $ | |||
| Total | $ | |||
| D. | Deposited to Excess Funding Account to maintain Minimum Transferor Interest and Minimum Aggregate Principal Receivables | $ | ||
| E. | Remainder distributed to Holder of Transferor Interest | $ | ||
IN WITNESS WHEREOF, the undersigned has duly executed this certificate this day of , 20 .
| FIRST NATIONAL BANK OF OMAHA, as Servicer |
| By |
| Name |
| Title |
B-12
EXHIBIT C
FORM OF monthly REPORT TO NOTEHOLDERS
FIRST NATIONAL MASTER note TRUST SERIES 2023-1
MONTH ENDING: [__________________]
The undersigned, a duly authorized representative of First National Bank of Omaha (“FNBO”), as Servicer pursuant to the Second Amended and Restated Transfer and Servicing Agreement, dated as of September 23, 2016 (the “Transfer and Servicing Agreement”), among First National Funding LLC, as transferor (“Transferor”), Servicer and First National Master Note Trust, as issuer (“Issuer”), does hereby certify as follows:
(a) The rights of the Issuer under the Transfer and Servicing Agreement have been assigned to U.S. Bank Trust Company, National Association, as indenture trustee (“Indenture Trustee”), under the Second Amended and Restated Master Indenture, dated as of September 23, 2016 (the “Indenture”), by and between Issuer and Indenture Trustee, and acknowledged by Transferor and Servicer, as supplemented by the Series 2023-1 Indenture Supplement, dated as of April 27, 2023, by and between Issuer and Indenture Trustee, and acknowledged by Transferor and Servicer (the “Supplement”). Capitalized terms used in this report have their respective meanings set forth in the Supplement or Indenture, as applicable. References herein to certain sections and paragraphs are references to the respective sections and paragraphs of the Supplement. This report is delivered pursuant to Section 5.03(a) of the Supplement.
(b) FNBO is the Servicer under the Transfer and Servicing Agreement.
(c) The undersigned is a Servicing Officer.
(d) With respect to this Certificate:
| The Monthly Period is: | |
| The Determination Date is: | |
| The Record Date is: | |
| The Transfer Date is: | |
| The Distribution Date is: | |
| The Controlled Accumulation Date is: | |
| The Interest Period begins: | |
| The Interest Period ends: | |
| Number of days in Interest Period: |
[Show by class if different]
(e) To the knowledge of the undersigned, there are no Liens on any Receivables in the Trust except as described below:
[If applicable, insert “None”.]
(f) To the knowledge of the undersigned, no Series 2023-1 Pay Out Event and no Trust Pay Out Event has occurred except as described below:
[If applicable, insert “None”.]
(g) As of the date hereof the Available Spread Account Amount equals the Required Spread Account Amount and if the Reserve Account Funding Date has occurred, the Available Reserve Account Amount equals the Required Reserve Account Amount.
| A. | INFORMATION REGARDING THE PERFORMANCE OF THE RECEIVABLES |
| 1. | Number of Accounts at Beginning of Monthly Period | ||
| Number of Accounts at End of Monthly Period | |||
| Average Account Balance at End of Monthly Period |
| 2. | Principal Receivables |
| (a) | Beginning of Monthly Period |
| (b) | End of Monthly Period |
| (c) | Average Principal Receivables at End of Monthly Period |
| 3. | Increase in Principal Receivables from Account Additions | ||
| Increase in Finance Charge Receivables from Account Additions | |||
| Increase in Total Receivables from Account Additions |
| 4. | Decrease in Principal Receivables from Removed Accounts | ||
| Decrease in Finance Charge Receivables from Removed Accounts | |||
| Decrease in Total Receivables from Removed Accounts |
| 5. | Delinquent Balances |
| Delinquency Category | Aggregate Account Balance | Percentage of Total Receivables | ||||||
| (a)30 to 59 days | $ | % | ||||||
| (b)60 to 89 days | $ | % | ||||||
| (c)90 to 119 days | $ | % | ||||||
| (d)120 to 149 days | $ | % | ||||||
| (e)150 or more days | $ | % | ||||||
| Total: | $ | % | ||||||
| 6. | Aggregate amount of Collections _______ |
| (a) | Total Collections | ||
| (b) | Total Principal Collections | ||
| (c) | Total Finance Charge Collections | ||
| (d) | Aggregate Allocation Percentages for Outstanding Series | ||
| (e) | Aggregate Allocation Percentages of Principal Collections | ||
| (f) | Aggregate Allocation Percentages of Finance Charge Collections |
| 7. | Aggregate amount of Principal Receivables in Accounts which became Defaulted Accounts during the Monthly Period |
| 8. | Servicer Interchange |
C-2
| 9. | The aggregate amount of Finance Charge Collections for the Receivables Trust for the Monthly Period |
| (a) | Interchange | ||
| (b) | Recoveries | ||
| (c) | Finance Charges and Fees | ||
| (d) | Discount Receivables | ||
| Total |
| 10. | Aggregate Uncovered Dilution Amount for the Monthly Period |
| 11. | End of Monthly Period Trust Receivables |
| B. | OUTSTANDING SECURITIES INFORMATION (TRUST LEVEL) |
| 1. | Outstanding principal balance of all securities secured by pool assets (sum of all Series) |
| (a) | At end of prior Distribution Date | ||
| (b) | Increase due to new securities issued | ||
| (c) | Decrease due to principal payments | ||
| (d) | Increases in variable securities | ||
| (e) | Decreases in variable securities | ||
| (f) | At end of Distribution Date |
| C. | INFORMATION REGARDING THE SERIES 2023-1 NOTES |
| 1. | Collateral Amount at the close of business on the prior Distribution Date |
| (a) | Reductions due to Investor Charge-Offs (including Uncovered Dilution Amounts) made on the Distribution Date | ||
| (b) | Reimbursements to be made on the Distribution Date from Available Finance Charge Collections | ||
| (c) | Collateral Amount at the close of business on the Distribution Date |
| 2. | Note Principal Balance at the close of business on the prior Distribution Date |
| (a) | Class A Note Principal Balance | ||
| (b) | Class B Note Principal Balance | ||
| (c) | Class C Note Principal Balance | ||
| Total Note Principal Balance |
| 3. | Series Allocation Percentages for the Monthly Period |
| (a) | Principal Collections | ||
| (b) | Finance Charge Collections | ||
| (c) | Default Amounts |
| 4. | Investor Principal Collections processed during the Monthly Period and allocated to the Series |
| 5. | Excess Principal Collections available from other Group One Series allocated to the Series |
C-3
| 6. | Aggregate amounts treated as Available Principal Collections pursuant to Section 4.04(a)(v) and (vi) | ||
| 7. | Reallocated Principal Collections (up to the Monthly Principal Reallocation Amount) applied pursuant to Section 4.06 | ||
| 8. | AVAILABLE PRINCIPAL COLLECTIONS (4+5+6-7) | ||
| 9. | Principal Accumulation Investment Earnings | ||
| 10. | Investor Finance Charge Collections (including Interchange and Recoveries) processed during the Monthly Period | ||
| 11. | Excess Finance Charge Collections from Group One allocated to the Series | ||
| 12. | Reserve Account withdrawals pursuant to Section 4.10(b) or (d) | ||
| 13. | Excess amounts from Spread Account treated as Available Finance Charge Collections pursuant to Section 4.11(g) | ||
| 14. | AVAILABLE FINANCE CHARGE COLLECTIONS (9+10+11+12+13) | ||
| 15. | Available Finance Charge Collections were allocated in the following priority: |
| (a) | to Class A Noteholders, |
| Class A Monthly Interest | ||
| Class A Interest Shortfall | ||
| Class A Default Amount | ||
| Class A Default Amount previously due but not distributed | ||
| Total |
| (b) | to Class B Noteholders, |
| Class B Monthly Interest | ||
| Class B Interest Shortfall | ||
| Class B Default Amount | ||
| Class B Default Amount previously due but not distributed | ||
| Total |
| (c) | to Servicer, the Noteholder Servicing Fee |
(after adjustment for Servicer Interchange shortfall, if any)
| (d) | to Class C Noteholders, |
| Class C Monthly Interest | ||
| Class C Interest Shortfall | ||
| Class C Default Amount | ||
| Class C Default Amount previously due but not distributed | ||
| Total |
C-4
| (e) | Investor Default Amount and Uncovered Dilution Amount were included in Available Principal Collections |
| (f) | Investor Charge-Offs and Reallocated Principal Collections not previously reimbursed were included in Available Principal Collections |
| (g) | to Reserve Account, excess of Required Reserve Account Amount over the Available Reserve Account Amount |
| (h) | to Spread Account, excess of Required Spread Account Amount over Available Spread Account Amount |
| (i) | balance constitutes Excess Finance Charge Collections |
| 16. | Available Principal Charge Collections were allocated in the following priority: |
| (a) | during Revolving Period, treated as Excess Principal Collections |
| (b) | with respect to Accumulation Period, |
| (i) | Monthly Principal deposited to Principal Accumulation Account |
| (ii) | balance treated as Excess Principal Collections |
| (c) | with respect to Rapid Amortization Period, |
| (i) | Monthly Principal to Class A Noteholders up to Class A Note Principal Balance |
| (ii) | Monthly Principal to Class B Noteholders up to Class B Note Principal Balance |
| (iii) | Monthly Principal to Class C Noteholders up to Class C Note Principal Balance |
| (iv) | balance treated as Excess Principal Collections |
C-5
| 17. | Excess funds were allocated in the following order of priority: |
| (a) | Excess Finance Charge Collections, |
| (i) | to other Excess Allocation Series in Group One, for finance charge shortfalls | ||
| (ii) | to the Successor Servicer, for unpaid excess servicing fees | ||
| For this Series | |||
| For other Series |
| (iii) | the balance to Holder of Transferor Interest |
| (b) | Excess Principal Collections, |
| (i) | to other Excess Allocation Series in Group One, for principal shortfalls | ||
| (ii) | applied as principal for variable funding Certificates or Notes in Group One | ||
| (iii) | the balance to Holder of Transferor Interest |
| 18. | Principal Receivables in Accounts which became Defaulted Accounts during the Monthly Period which were allocated to the Series |
| (a) | Default Amount | ||
| (b) | Allocation Percentage (C.3.(c) above) | ||
| (c) | Total Investor Default Amount (axb) |
| 19. | Uncovered Dilution Amount allocated to the Series for the Monthly Period |
| (a) | Dilutions not covered by Transferor | ||
| (b) | Allocation Percentage (C.3(c) above) | ||
| (c) | Total Uncovered Dilution Amount (axb) |
| 20. | Investor Charge-Offs (including any Uncovered Dilution Amount not covered by Transferor) for the Monthly Period |
| 21. | Ratings of the Class A Notes |
| Moody’s | |||
| Fitch |
| 22. | Note Interest Rate for the Monthly Period |
| (a) | Class A Note Interest Rate | ||
| (b) | Class B Note Interest Rate | ||
| (c) | Class C Note Interest Rate |
| 23. | Ending Note Principal Balance on the Distribution Date, after taking into account distributions on the Notes: |
| (a) | Class A Note Principal Balance | ||
| (b) | Class B Note Principal Balance | ||
| (c) | Class C Note Principal Balance | ||
| Total Note Principal Balance | |||
C-6
| D. | QUARTERLY NET YIELD |
[ ] Monthly Period |
[ ] Monthly Period |
[ ] Monthly Period | ||||
| Yield | [ ]% | [ ]% | [ ]% | |||
| Less Investor Default Amt (18c) | [ ]% | [ ]% | [ ]% | |||
| Less Uncovered Dilution Amt (19c) | [ ]% | [ ]% | [ ]% | |||
| (a) Portfolio Yield | [ ]% | [ ]% | [ ]% | |||
| Monthly Interest | [ ]% | [ ]% | [ ]% | |||
| Plus Noteholder Servicing Fee | [ ]% | [ ]% | [ ]% | |||
| (b) Base Rate | [ ]% | [ ]% | [ ]% | |||
| (a)–(b) = Net Yield Percentage | [ ]% | [ ]% | [ ]% | |||
| Quarterly Net Yield for Distribution Date [ ]% | ||||||
| E. | INFORMATION REGARDING THE PRINCIPAL ACCUMULATION ACCOUNT |
| 1. | Opening Principal Accumulation Account Balance on the Distribution Date |
| 2. | Controlled Deposit Amount to be deposited to the Principal Accumulation Account on the Distribution Date |
| (a) | Controlled Accumulation Amount |
| (b) | Accumulation Shortfall |
| (c) | Controlled Deposit Amount (a+b) |
| 3. | Amounts withdrawn from the Principal Accumulation Account for distribution to Noteholders on the Distribution Date |
| (a) | Distribution in reduction of the Class A Notes |
| (b) | Distribution in reduction of the Class B Notes |
| (c) | Distribution in reduction of the Class C Notes |
| 4. | Principal Accumulation Account ending balance after deposit/withdrawal on the Distribution Date |
| F. | INFORMATION REGARDING THE SPREAD ACCOUNT |
| 1. | Opening Available Spread Account Amount on the Distribution Date |
| 2. | Aggregate amount required to be withdrawn pursuant to Section 4.11(c) for distribution to Class C Noteholders pursuant to Section 4.04(a)(iv) |
| 3. | Aggregate amount required to be withdrawn pursuant to Section 4.11(d) or Section 4.11(e) for distribution in reduction of the Class C Note Principal Balance |
| 4. | Spread Account Percentage for the Distribution Date |
| 5. | Closing Required Spread Account Amount for the Distribution Date |
C-7
| 6. | Amount on deposit in Spread Account after required withdrawals on the Distribution Date (1-(2+3)) |
| 7. | Spread Account Deficiency, if any (5 minus 6) |
| 8. | Amounts deposited pursuant to Section 4.04(a)(viii) and Section 4.10(e) |
| 9. | Remaining Spread Account Deficiency, if any (7 minus 8) |
| 10. | Spread Account Surplus, if any (6 minus 5), included in Available Finance Charge Collections |
| G. | INFORMATION REGARDING THE RESERVE ACCOUNT |
| 1. | Reserve Account Funding Date |
| 2. | Opening Available Reserve Account Amount on the Distribution Date |
| 3. | Aggregate amount required to be withdrawn pursuant to Section 4.10(d) for inclusion in Available Finance Charge Collections: |
| (a) | Covered Amount |
| (b) | Principal Accumulation Investment Earnings |
| (c) | Reserve Draw Amount (a MINUS b) |
| 4. | Required Reserve Account Amount |
| 5. | Reserve Account Surplus (4-(2-3)) |
| H. | INFORMATION REGARDING ACCUMULATION PERIOD |
| 1. | Accumulation Period Length (months) |
| 2. | Controlled Accumulation Amount (as recalculated, if Accumulation Period Length is shortened pursuant to Section 4.13) |
C-8
IN WITNESS thereof, the undersigned has duly executed and delivered this Certificate the day of , 20 .
| FIRST NATIONAL BANK OF OMAHA, | ||
| Servicer | ||
| By | ||
| Name | ||
| Title | ||
C-9
ATTACHMENT
1
To
FORM OF MONTHLY REPORT TO NOTEHOLDERS
SERVICER’S CERTIFICATE
The undersigned, a duly authorized representative of First National Bank of Omaha (“FNBO”), as Servicer pursuant to the Second Amended and Restated Transfer and Servicing Agreement dated as of September 23, 2016 (the “Transfer and Servicing Agreement”), by and between FNBO, as Servicer, First National Funding LLC, as transferor (“Transferor”) and First National Master Note Trust, as issuer (“Issuer”), does hereby certify as follows:
| 1. | The Transferor Interest is less than Minimum Transferor Interest | [Yes][No] |
| (a) | Transferor Interest as of the end of the Related Monthly Period |
| (b) | Minimum Transferor Interest as of the end of the Related Monthly Period |
| 2. | The Aggregate Principal Receivables is less than the Minimum Aggregate Principal Receivables | [Yes][No] |
| (a) | Aggregate Principal Receivables as of the end of the Related Monthly Period |
| (b) | Minimum Aggregate Principal Receivables as of the end of the Related Monthly Period |
| 3. | Are there any material modifications, extensions or waivers to pool asset terms, fees, penalties or payments? (If the answer is ‘Yes’, please describe.) | [Yes][No] |
| 4. | Are there any material breaches of representations and warranties relating to the pool assets or material breaches of covenants under the Transaction Documents? (If the answer is ‘Yes’, please describe.) | [Yes][No] |
| 5. | Are there any material changes in the solicitation, credit-granting, underwriting, origination, acquisition or pool selection criteria or procedures, as applicable, used to originate, acquire or select the new pool assets? (If the answer is ‘Yes’, please describe.) | [Yes][No] |
| 6. | Are there any material changes to the pool assets? (If the answer is ‘Yes’, please describe.) | [Yes][No] |
IN WITNESS thereof, the undersigned has duly executed and delivered this Certificate the day of , 20 .
| FIRST NATIONAL BANK OF OMAHA, | ||
| Servicer | ||
| By | ||
| Name | ||
| Title | ||
EXHIBIT D
FORM OF MONTHLY SERVICER’S CERTIFICATE
FIRST NATIONAL BANK OF OMAHA
FIRST NATIONAL MASTER NOTE TRUST, SERIES 2023-1
The undersigned, a duly authorized representative of First National Bank of Omaha (“FNBO”), as Servicer pursuant to the Second Amended and Restated Transfer and Servicing Agreement, dated as of September 23, 2016 (the “Transfer and Servicing Agreement”), among First National Funding LLC, as transferor (“Transferor”), FNBO, as Servicer and First National Master Note Trust, as issuer (“Issuer”), does hereby certify as follows:
1. Capitalized terms used in this Certificate have their respective meanings set forth in the Transfer and Servicing Agreement or the Second Amended and Restated Master Indenture dated as of September 23, 2016 (the “Master Indenture”), between Issuer and U.S. Bank Trust Company, National Association, as indenture trustee (“Indenture Trustee”), as supplemented by the Series 2023-1 Indenture Supplement, dated as of April 27, 2023, between Issuer and Indenture Trustee (as amended and supplemented, the “Indenture Supplement”) and together with the Master Indenture, the “Indenture”), as applicable.
2. FNBO is, as of the date hereof, Servicer under the Transfer and Servicing Agreement.
3. The undersigned is an Authorized Officer of Servicer.
4. This Certificate relates to the Distribution Date occurring on , 20 .
5. As of the date hereof, to the best knowledge of the undersigned, Servicer has performed in all material respects all of its obligations under the Transfer and Servicing Agreement and the Indenture through the Monthly Period preceding such Distribution Date [or, if there has been a default in the performance of any such obligation, set forth in detail the (i) nature of such default, (ii) the action taken by Servicer, if any, to remedy such default and (iii) the current status of each such default]; if applicable, insert “None”.
6. As of the date hereof, to the best knowledge of the undersigned, no Pay Out Event occurred on or prior to such Distribution Date.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Certificate this day of , 20 .
| FIRST NATIONAL BANK OF OMAHA, | ||
| as Servicer | ||
| By | ||
| Name | ||
| Title | ||
D-2
EXHIBIT E
FORM OF INVESTOR CERTIFICATION
[DATE]
U.S. Bank Trust Company, National Association,
as Indenture Trustee
60 Livingston Avenue
EP-MN-WS3D
St. Paul, MN 55107
Attn: Bondholder Services
Re: First National Master Note Trust, Series 2023-1
Ladies and Gentlemen:
In connection with the issuance of the First National Master Note Trust, Class [B] [C] Note, Series 2023-1 (the “Notes”), we confirm that:
1. We agree to be bound by the restrictions and conditions set forth in the Second Amended and Restated Master Indenture, dated as of September 23, 2016, as supplemented by the Series 2023-1 Indenture Supplement thereto, dated as of April 27, 2023 (collectively, the “Indenture”), each by and between First National Master Note Trust, as Issuer, and U.S. Bank Trust Company, National Association, as indenture trustee (the “Trustee”), and agree to be bound thereby, and not reoffer, resell, pledge or otherwise transfer (any such act, a “Transfer”) the Notes except in compliance with such restrictions and conditions.
2. We understand that the Notes have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities law. We further agree and understand that the Notes may be reoffered, resold, pledged or otherwise transferred only in compliance with the Securities Act and other applicable laws and (i) when pursuant to a transaction complying with the requirements of Rule 144A under the Securities Act only to a person that we reasonably believe is a qualified institutional buyer within the meaning of Rule 144A (a “QIB”) purchasing for its own account or a QIB purchasing for the account of a QIB, whom we have informed, in each case, that the reoffer, resale, pledge or other transfer is being made in reliance on Rule 144A or (ii) to an “accredited investor”, as defined in Rule 501 promulgated under the Securities Act, purchasing for its own account or to an “accredited investor” purchasing for a single account (which is an institutional "accredited investor") as to which the purchaser exercises sole investment discretion.
3. We are [a QIB purchasing for our own account] [a QIB purchasing for the account of a QIB] [an “accredited investor” acquiring the Notes for our own account or for a single account which is an institutional “accredited investor” as to which we exercise sole investment discretion]. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any account for which we are acting are each able to bear the economic risk of our or its investment.
4. We are acquiring the Notes purchased by us for investment purposes and not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act.
5. We hereby agree that we will not resell or otherwise transfer the Notes or any interest therein unless the purchaser thereof provides or has provided to the addressee hereof a letter substantially in the form hereof. We further understand that, on any proposed resale, pledge or transfer of any Notes, we will be required to furnish to the Trustee and the Registrar such certification and other information as the Trustee or the Registrar may reasonably require to confirm that the proposed sale complies with the foregoing restrictions and with the restrictions and conditions of the Notes and the Indenture pursuant to which the Notes were issued. We further understand that Notes purchased by us will bear a legend to the foregoing effect.
6. We are not (i) an employee benefit plan (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) that is subject to the provisions of Title I of ERISA, (ii) a “plan” described in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the “Code”), which is subject to Section 4975 of the Code, (iii) a governmental plan, a non-U.S. plan or church plan, subject to any federal, state or local law which is, to a material extent, similar to the provisions of Section 406 of ERISA or Section 4975 of the Code, (iv) an entity whose underlying assets include plan assets by reason of an employee benefit plan’s or other plan’s investment in such entity, or (v) a person investing “plan assets” of any such plan (including, for purposes of clauses (iv) and (v), any insurance company general account, but excluding any entity registered under the Investment Company Act of 1940, as amended). [For Class B Notes][For Class C Notes]
7. The person signing this letter on behalf of the ultimate beneficial purchaser of the Notes has been duly authorized by such beneficial purchaser of the Notes to do so, and this letter has been duly executed and delivered and constitutes the legal, valid and binding obligation of the purchaser, enforceable against the purchaser in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles affecting the enforcement of creditors’ rights generally and general principles of equity.
You are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.
| Very truly yours, | ||
| [Name of Purchaser] | ||
| By: | ||
| Name: | ||
| Title: | ||
E-2
Exhibit 4.2
RISK RETENTION AGREEMENT
THIS RISK RETENTION AGREEMENT, dated as of April 27, 2023 (this “Agreement”), by and among FIRST NATIONAL BANK OF OMAHA, a national banking association (“FNBO”), FIRST NATIONAL FUNDING LLC, a Nebraska limited liability company (the “Transferor”) and FIRST NATIONAL MASTER NOTE TRUST, a Delaware statutory trust (the “Issuer”).
WITNESSETH:
WHEREAS, FNBO and the Transferor have entered into a Second Amended and Restated Receivables Purchase Agreement, dated as of September 23, 2016 (as amended, restated, supplemented or otherwise modified, the “Receivables Purchase Agreement”) and as acknowledged and accepted by U.S. Bank Trust Company, National Association, as Indenture Trustee (the “Indenture Trustee”), pursuant to which FNBO sells to the Transferor certain Receivables arising in specified Accounts owned by FNBO;
WHEREAS, the Transferor, FNBO, in its capacity as Servicer (the “Servicer”), and the Issuer have entered into a Second Amended and Restated Transfer and Servicing Agreement, dated as of September 23, 2016 (as amended, restated, supplemented or otherwise modified, the “Transfer and Servicing Agreement”) and as acknowledged and accepted by the Indenture Trustee, pursuant to which the Transferor transfers Receivables to the Issuer and the Issuer has engaged the Servicer to administer the Receivables;
WHEREAS, the Issuer and the Indenture Trustee have entered into a Second Amended and Restated Master Indenture, dated as of September 23, 2016 (as amended, restated, supplemented or otherwise modified, the “Master Indenture”), and as acknowledged and accepted by the Transferor and the Servicer, pursuant to which the Issuer has issued and may from time to time issue notes; and
WHEREAS, the Transferor intends to cause the Issuer to issue Class A Asset Backed Notes, Series 2023-1 (the “Class A Notes”) pursuant to the Master Indenture and a Series 2023-1 Indenture Supplement, dated as of April 27, 2023 (as amended, restated, supplemented or otherwise modified, the “Indenture Supplement”), between the Issuer and the Indenture Trustee and as acknowledged and accepted by the Transferor and the Servicer.
NOW, THEREFORE, it is hereby agreed by and between FNBO, the Transferor and the Issuer, as follows:
1. Definitions. All capitalized terms used but not defined herein shall have the meanings given to such terms in Appendix A to the Master Indenture or the Indenture Supplement, as applicable. The following capitalized terms shall have the following meanings:
“AIFM Regulation” means either Directive 2011/61/EU of the European Parliament and of the Council of June 8, 2011 on Alternative Investment Fund Managers, as amended, and Articles 50-56 of the Alternative Investment Managers Fund Regulation ((EU No. 231/2013) or the same as implemented in the laws of the UK by virtue of the European Union (Withdrawal) Act 2018 or otherwise (as applicable).
“Applicable Investor” means any of (a) an EEA or UK (as applicable) credit institution or investment firm, as defined and for the purposes of the CRR, including any consolidated group affiliate thereof, (b) an insurance undertaking by an EEA or UK (as applicable) insurer or a reinsurance undertaking by an EEA or UK (as applicable) reinsurer to which Solvency II applies, (c) an EEA or UK (as applicable) alternative investment fund manager (“AIFM”) as defined in the AIFM Regulation that manages or markets alternative investment funds in the EU or UK (as applicable), (d)(i) an undertaking for collective investment in transfer securities (“UCITS”) EEA or UK ( as applicable) management company by an EEA or UK (as applicable) management company to which the UCITS Directive applies or (ii) an internally managed UCITS, which is an EEA or UK (as applicable) investment company that is authorized in accordance with the UCITS Directive and has not designated such a management company for its management and (e) with certain exceptions, an EEA or UK (as applicable) institution for occupational retirement provision (an “IORP”) falling within the scope of the IORP Directive, or an investment manager or an authorized entity appointed by such an institution for occupational retirement provision as provided in the IORP Directive.
“CRR” means either Regulation (EU) No. 575/2013 of the European Parliament and of the Council, as amended and as supplemented by EU secondary legislation, including the CRR Delegated Regulation or the same as implemented in the laws of the UK by virtue of the European Union (Withdrawal) Act 2018 or otherwise (as applicable).
“CRR Delegated Regulation” means either Commission Delegated Regulation (EU) No. 625/2014 of the European Parliament and of the Council or the same as implemented in the laws of the UK by virtue of the European Union (Withdrawal) Act 2018 or otherwise (as applicable).
“EEA” means the European Economic Area.
“EU” means the European Union.
“EU Due Diligence and Risk Retention Rules” means, with respect to this Agreement, Articles 5 and 6 of EU Securitization Regulation, together with any relevant regulatory technical standards adopted by the European Commission and any guidance published by the European Union supervisory authorities with respect thereto or to precedent legislation (together, “EU delegated regulations and guidance’), each as in effect and applicable on the date the Class A Notes are issued.
“EU Securitization Regulation” means Regulation (EU) 2017/2402 of the European Parliament and of the Council of December 12, 2017.
“European Commission” means the European Commission, an institution of the European Union.
“IORP Directive” means either Directive (EU) 2016/2341 of the European Parliament and of the Council of December 14, 2016 or the same as implemented in the laws of the UK by virtue of the European Union (Withdrawal) Act 2018 or otherwise (as applicable).
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“Solvency II” means either Directive 2009/138/EC of the European Parliament and of the Council of November 25, 2009, as amended or the same as implemented in the laws of the UK by virtue of the European Union (Withdrawal) Act 2018 or otherwise (as applicable).
“UCITS Directive” means either Directive 2009/65/EC of the European Parliament and of the Council of July 13, 2009, as amended or the same as implemented in the laws of the UK by virtue of the European Union (Withdrawal) Act 2018 or otherwise (as applicable).
“UK” means the United Kingdom.
“UK Due Diligence and Risk Retention Rules” means, with respect to this Agreement, Articles 5 and 6 of the UK Securitization Regulation, together with any relevant technical standards adopted by the European Commission prior to January 1, 2021 or by the UK, and any guidance published by the European Union supervisory authorities published prior to January 1, 2021 (where such guidance is to be interpreted in light of the United Kingdom’s exit from the EU pursuant to relevant guidance issued by the Financial Conduct Authority (the “FCA”) or by the FCA with respect thereto or to precedent legislation (together “UK delegated regulations and guidance”), each as in effect and applicable on the date the Class A Notes are issued.
“UK Securitization Regulation” means Regulation (EU) 2017/2402 as it forms part of UK domestic law under the European Union (Withdrawal) Act of 2018, as amended by the Securitization (Amendment) (EU Exit) Regulations 2019.
1. Representations. FNBO represents and warrants to the Issuer and the Indenture Trustee (solely for the benefit of the Applicable Investors) that as of the date hereof:
(a) FNBO has full corporate power and authority to execute and deliver this Agreement and perform the terms and provisions hereof;
(b) The execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action, and do not require any approval or consent of any governmental agency or authority; and
(c) This Agreement is the valid, binding and enforceable obligation of FNBO, except as the same may be limited by receivership, insolvency, reorganization, moratorium or other laws relating to the enforcement of creditors’ rights generally or by general equity principles.
2. Covenants. With reference to Articles 5 and 6 of each of the EU Securitization Regulation and the UK Securitization Regulation, FNBO hereby confirms, represents and warrants to and agrees with, and irrevocably and unconditionally undertakes to the Issuer and the Indenture Trustee, solely for the benefit of each Applicable Investor, on an ongoing basis, so long as any Class A Note remains Outstanding:
(a) FNBO, as “originator,” within the meaning of Article 2(3)(a) of each of the EU Securitization Regulation and the UK Securitization Regulation, for the purposes of each of the EU Securitization Regulation and the UK Securitization Regulation, currently retains, and on an ongoing basis will retain, a material net economic interest that is not less than five percent of the nominal value of the securitized exposures (measured at origination), in a form that is intended to qualify as an originator’s interest as provided in option (b) of Article 6(3) of each of the EU Securitization Regulation and the UK Securitization Regulation, by indirectly holding all the membership interests in the Transferor which in turn holds all or part of the Transferor Interest (the “Retained Interest”);
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(b) With respect to the Retained Interest, FNBO will not change the retention option or the method of calculating its net economic interest in the securitized exposures while the Class A Notes are outstanding, except under exceptional circumstances in accordance with each of the EU Securitization Regulation (as supplemented by applicable EU delegated regulations and guidance) and the UK Securitization Regulation (as supplemented by applicable UK delegated regulations and guidance);
(c) FNBO will not (and will not permit the Transferor or any of its other affiliates to) allow the Retained Interest to be subject to any credit risk mitigation, short position or other hedge or to be sold if, as a result, FNBO would not retain a material net economic interest in an amount that is not less than 5% of the nominal value of the securitized exposures, except to the extent permitted in accordance with Article 6(1) under each of the EU Securitization Regulation (as supplemented by applicable EU delegated regulations and guidance) and the UK Securitization Regulation (as supplemented by applicable UK delegated regulations and guidance); and
(d) FNBO will provide ongoing confirmation of FNBO’s continued compliance with its obligations described in (a) and (c) above in or concurrently with the delivery of each distribution report of the issuing entity on Form 10-D relating to the Class A Notes; provided, however, that FNBO makes no commitment or undertaking to comply with any amendment to the EU Due Diligence and Risk Retention Rules or the UK Due Diligence and Risk Retention Rules that may become effective after the date the Class A Notes are issued.
3. Agreements of Transferor. Transferor hereby acknowledges the terms and conditions of this Agreement and, further, covenants that it will not allow the Retained Interest to be subject to any credit risk mitigation, short position or other hedge or to be sold other than as directed by FNBO and as permitted in accordance with the terms of this Agreement.
4. Limitation of Liability.
(a) It is expressly understood and agreed by the parties hereto that (i) this Agreement is executed and delivered by Wilmington Trust Company not individually or personally but solely as Owner Trustee under the Second Amended and Restated Trust Agreement, dated as of September 23, 2016 (the “Trust Agreement”), between the Transferor and Wilmington Trust Company, and in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as a personal representation, undertaking or agreement by Wilmington Trust Company but is made and intended for the purpose of binding only the Issuer, (iii) nothing herein contained will be construed as creating any liability on the Wilmington Trust Company individually or personally, to perform any covenant of the Issuer either expressed or implied herein, all such liability, if any, being expressly waived by the parties to this Agreement and by any person claiming by, through or under them and (iv) under no circumstances will Wilmington Trust Company be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Agreement or any related documents.
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(b) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN ANY OTHER DOCUMENT OR AGREEMENT RELATING TO THE CLASS A NOTES, IN NO EVENT SHALL FNBO OR THE TRANSFEROR BE LIABLE TO THE INDENTURE TRUSTEE, THE ISSUER, THE OWNER TRUSTEE, ANY APPLICABLE INVESTOR OR ANY OTHER NOTEHOLDER, OR RESPONSIBLE FOR, LOSSES IN RESPECT OF THE CLASS A NOTES OR ANY INTEREST THEREIN, INCLUDING, WITHOUT LIMITATION ANY LOSS OF VALUE OF ANY CLASS A NOTE OR ANY INTEREST THEREIN, DUE TO THE FAILURE OF THE RETAINED INTEREST AND COMPLIANCE BY FNBO AND THE TRANSFEROR WITH THE TERMS OF THIS AGREEMENT TO SATISFY THE EU DUE DILIGENCE AND RISK RETENTION RULES, THE UK DUE DILGIENCE AND RISK RETENTION RULES OR OTHER SIMILAR OR EQUIVALENT PROVISIONS NOW OR HEREAFTER IN EFFECT.
5. Miscellaneous.
(a) THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEBRASKA WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
(b) EACH OF THE PARTIES HERETO (AND EACH APPLICABLE INVESTOR BY ACCEPTING THE BENEFITS HEREOF) HEREBY AGREES TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF NEBRASKA. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
(c) All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including telecopies, email, telegraphic, telex or cable communication) and mailed, emailed (with “PDF” attachment in the case of any signed notice or communication), telecopied with receipt confirmed by telephone, telegraphed, telexed, cabled or delivered, as to each party hereto, at its address set forth below or at such other address as shall be designated by such party in a written notice to the other party hereto. All such notices and communications shall, when mailed, emailed, telecopied, telegraphed, telexed or cabled, be effective when deposited in the mail, emailed, telecopied, delivered to the telegraph company, confirmed by telex answer back or delivered to the cable company, respectively.
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| If to FNBO: | First National Bank of Omaha |
1620 Dodge Street
Stop Code 3271
Omaha, NE 68197-3271
Attention: Treasurer
| If to the Transferor: | First National Funding LLC |
1620 Dodge Street
Stop Code 3271
Omaha, NE 68197-3271
Attention: President
| If to the Issuer: | c/o Wilmington Trust Company |
Rodney Square North
1100 North Market Street
Wilmington, DE 19890
Attention: Corporate Trust Administration
(d) Neither this Agreement nor any term or provision hereof may be changed, waived, discharged or terminated except by a writing signed by a duly authorized officer of the party against whom enforcement of such change, waiver, discharge or termination is sought to be enforced.
(e) Any part, provision, representation, warranty or covenant of this Agreement that is prohibited or is held to be void or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof.
Any part, provision, representation, warranty or covenant of this Agreement that is prohibited or is held to be void or unenforceable in any particular jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
To the extent permitted by applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof.
(f) This Agreement constitutes the entire agreement and understanding of the parties with respect to the matters addressed herein, and this Agreement supersedes any prior agreements and/or understandings, written or oral, with respect to such matters.
(g) The Issuer is a party to this Agreement solely for the purposes of obtaining the benefit of the representations, warranties and covenants contained therein and under no circumstances shall it be deemed to have undertaken any obligations thereunder or by virtue of its entry into this Agreement.
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(h) The Indenture Trustee is a third-party beneficiary of this Agreement solely for the purpose of obtaining the benefit of the representations, warranties and covenants contained herein and under no circumstances shall it be deemed to have undertaken any obligations hereunder. For the avoidance of doubt, in no event shall the Indenture Trustee have any responsibility to calculate, monitor compliance with or be charged with knowledge of the EU Due Diligence and Risk Retention Rules or the UK Due Diligence and Risk Retention Rules, nor shall it be liable to any Applicable Investor, Noteholder or any party whatsoever for any violation of such EU Due Diligence and Risk Retention Rules or the UK Due Diligence and Risk Retention Rules or such similar provisions now or hereafter in effect or for any breach of any term of this Agreement, nor shall it have any obligation to provide or otherwise make available information or documents required by the EU Due Diligence and Risk Retention Rules or the UK Due Diligence and Risk Retention Rules or any other rules or regulations regarding risk retention.
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FNBO, the Transferor and the Issuer have caused this Agreement to be duly executed by their respective officers as of the date first above written.
| FIRST NATIONAL BANK OF OMAHA | ||
| By: | ||
| Name: Anthony R. Cerasoli | ||
| Title: Senior Vice President and Treasurer | ||
| FIRST NATIONAL FUNDING LLC | ||
| By: | First National Funding Corporation, | |
| its Managing Member | ||
| By: | ||
| Name: Anthony R. Cerasoli | ||
| Title: President | ||
| FIRST NATIONAL MASTER NOTE TRUST | ||
| By: | Wilmington Trust Company, not in its individual capacity, but solely as Owner Trustee | |
| By: | ||
| Name: | ||
| Title: | ||
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Exhibit 4.3
FIRST AMENDMENT
TO
SECOND AMENDED AND RESTATED MASTER INDENTURE
THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED MASTER INDENTURE (this “First Amendment”), dated as of April 27, 2023, is by and between FIRST NATIONAL MASTER NOTE TRUST, as statutory trust organized under the laws of the State of Delaware (“Issuer”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION (as successor in interest to U.S. Bank National Association), a national banking association, as Trustee (the “Trustee”).
WHEREAS, the Issuer and the Trustee have executed that certain Second Amended and Restated Master Indenture, dated as of September 23, 2016 (as the same may be further amended, restated, supplemented or otherwise modified and in effect from time to time, the “Indenture”); and
WHEREAS, the Issuer and the Trustee wish to amend the Indenture in accordance with Section 10.01(b) of the Indenture, as provided herein.
NOW THEREFORE, in consideration of the promises and agreements contained herein, the parties hereto agree to amend the provisions of the Indenture as follows:
SECTION 1. Amendment of Section 2.05. The Indenture shall be and hereby is amended by amending and restating the last paragraph of Section 2.05 to read as follows:
Notwithstanding any other provision of the Indenture, with respect to any Notes for which an Opinion of Counsel has not been issued opining that the Notes will be debt for federal income tax purposes, no transfer (or purported transfer) of all or any part of such Notes (or any economic interest therein) shall be effective, and any such transfer (or purported transfer) shall be void ab initio, and no Person shall otherwise become a Holder of such Notes if (i) at the time of transfer (or purported transfer) such Notes are traded on an established securities market or readily tradeable on a secondary market or (ii) after such transfer (or purported transfer) the Trust would have more than 95 Holders of such Notes and any other interests in the Trust for which an Opinion of Counsel is not rendered in connection with the issuance of such interest to the effect that such interest will be characterized as debt for federal income tax purposes. For purposes of determining whether the Trust will have more than 95 Holders, each Person indirectly owning an interest in the Trust through a partnership (including an entity treated as a partnership for federal income tax purposes), a grantor trust or an S corporation (each such entity a “flow through entity”) shall be treated as a Holder unless the Servicer determines, after consulting with qualified tax counsel, that less than substantially all of the value of the beneficial owner’s interest in the flow-through entity is attributable to the flow-through entity’s interest (direct or indirect) in the Trust.
SECTION 2. Amendment of Section 8.04(a). The Indenture shall be and hereby is amended by amending and restating the first sentence of the second paragraph of Section 8.04(a) to read as follows:
Subject to the express terms of any Indenture Supplement, but notwithstanding anything else in the Indenture to the contrary, if FNBO remains the Servicer and (x) for so long as FNBO maintains a short term debt rating of A-1 or better by S&P and P-1 or better by Moody’s, and an issuer default rating of at least F1 or A by Fitch, and if rated by any other Rating Agency, the equivalent rating by that Rating Agency (or such other rating below A-1, P-1 or such equivalent rating, as the case may be, which is satisfactory to each Rating Agency, if any), (y) with respect to Collections allocable to any Series, any other conditions specified in the related Indenture Supplement are satisfied or (z) if FNBO has provided to Indenture Trustee a letter of credit, surety bond or other similar arrangement covering collection risk of Servicer and in each case acceptable to each Rating Agency (as evidenced by a letter from each Rating Agency to the effect that the Rating Agency Condition has been satisfied), if any, Servicer need not make the daily deposits of Collections into the Collection Account as provided in the preceding paragraph, but may make a single deposit in the Collection Account in immediately available funds not later than 12:00 noon, New York City time, on the related Transfer Date.
SECTION 3. Amendments to Annex A. The Indenture shall be and hereby is amended by amending and restating the defined terms “Eligible Deposit Account,” “Permitted Investments” and “Qualified Institution” included in Annex A to the Indenture to read as follows:
“Eligible Deposit Account” means either (a) a segregated account with a Qualified Institution or (b) a segregated trust account with the corporate trust department of a depository institution organized under the laws of the United States, any one of the states thereof, or the District of Columbia (or any domestic branch of a foreign bank), and acting as a trustee for funds deposited in such account, so long as any of the securities of such depository institution shall have a credit rating from each of Moody’s, S&P and in one of Fitch’s generic credit rating categories that signifies investment grade.
“Permitted Investments” means, unless otherwise provided in the Indenture Supplement with respect to any Series (a) negotiable instruments or securities represented by instruments in bearer or registered form which evidence (i) obligations of or fully guaranteed as to timely payment of principal and interest by the United States of America; (ii) time deposits or certificates of deposit of any depository institution or trust company incorporated under the laws of the United States of America or any state thereof and subject to supervision and examination by federal or state banking or depository institution authorities; provided, however, that at the time of the investment or contractual commitment to invest therein, the certificates of deposit or short-term deposits of such depository institution or trust company shall have a credit rating from Moody’s and Standard & Poor’s of “P-1” and “A-1+,” respectively and a deposit rating of at least “F1” or “A” by Fitch, or in the absence of a deposit rating, an issuer default rating of at least “F1” or “A” by Fitch; (iii) commercial paper having, at the time of the Trust’s investment or contractual commitment to invest therein, a rating from Moody’s and Standard and Poor’s of “P-1” and “A-1+,” respectively, and at least “F1” or “A” by Fitch; (iv) bankers acceptances issued by any depository institution or trust company described in clause (a)(ii) above; and (v) investments in money market or common trust funds rated “AAA-m” or “AAA-mg” by Standard & Poor’s, “Aaa” by Moody’s and “AAAmmf” by Fitch or otherwise approved in writing by each Rating Agency; (b) demand deposits in the name of the Note Trust or the Indenture Trustee in any depository institution or trust company referred to in clause (a)(ii) above; and (c) any other investment if each Rating Agency confirms in writing that such investment will not adversely affect its then current rating of the Notes.
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“Qualified Institution” means (i) a depository institution or trust company (which may include Indenture Trustee or an Affiliate of Indenture Trustee, Owner Trustee, Servicer or an Affiliate of Servicer) organized under the laws of the United States of America or any one of the states thereof or the District of Columbia and with deposit insurance provided by the FDIC; provided, however, that at all times the certificates of deposit, short-term deposits or commercial paper or the long-term unsecured debt obligations (other than such obligation whose rating is based on collateral or on the credit of a Person other than such institution or trust company) of such depository institution or trust company shall have a credit rating from Moody’s and Standard & Poor’s of not less than “P-1” and “A-1+,” respectively, in the case of certificates of deposit, short-term deposits or commercial paper, or a rating from Moody’s of not less than “Aa3” and from Standard & Poor’s of not less than “AAA” in the case of the long-term unsecured debt obligations, and a deposit rating of at least “F1” or “A” by Fitch, or in the absence of a deposit rating, an issuer default rating of at least “F1” or “A” by Fitch, or (ii) a depository institution, which may include the Servicer or the Indenture Trustee, which is acceptable to each Rating Agency, as evidenced by a letter from such Rating Agency.
SECTION 4. Effectiveness. The amendment provided for by this First Amendment shall become effective upon receipt by the Trustee of each of the following:
| (a) | the counterparts of this First Amendment, duly executed by the parties hereto; |
| (b) | an Issuer Order pursuant to Section 10.01(b) of the Indenture; |
| (c) | an Officer’s Certificate from the Transferor addressed to the Trustee, to the effect that all requirements for the amendments contained in this First Amendment have been met and Transferor reasonably believes such actions will not have an Adverse Effect; and |
| (d) | an Opinion of Counsel pursuant to Section 10.03 of the Indenture. |
SECTION 5. Indenture in Full Force and Effect as Amended. Except as specifically amended or waived hereby, all of the terms and conditions of the Indenture shall remain in full force and effect. All references to the Indenture in any other document or instrument shall be deemed to mean such Indenture as amended by this First Amendment. This First Amendment shall not constitute a novation of the Indenture, but shall constitute an amendment thereof. The parties hereto agree to by bound by the terms and obligations of the Indenture, as amended by this First Amendment, as through the terms and conditions of the Indenture were set forth herein.
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SECTION 6. Counterparts. This First Amendment may be executed in any number of counterparts and by separate parties hereto on separate counterparts, each of which when executed shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument.
SECTION 7. Governing Law. THIS FIRST AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO CONFLICT OF LAW PROVISIONS WHICH WOULD OTHERWISE REQUIRE THE APPLICATION OF LAWS OF ANY OTHER JURISDICTION), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 8. Defined Terms and Section References. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Indenture. All section or subsection references herein shall mean the Sections or subsections of the Indenture, except as otherwise herein provided.
SECTION 9. The Indenture Trustee. In entering into this Supplemental Indenture, the Indenture Trustee shall be entitled to the benefit of every provision of the Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee, whether or not elsewhere herein so provided. The Indenture Trustee makes no representation as to the validity, execution or sufficiency of this Supplemental Indenture and assumed no responsibility for the correctness of the recitals contained herein, which shall be taken as statements of the Issuer.
[signature pages follow]
4
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this First Amendment to be duly executed by their respective officers as of the day and year first above written.
| FIRST NATIONAL MASTER NOTE TRUST, as Issuer | ||
| By: | Wilmington Trust Company, not in its individual capacity, but solely as Owner Trustee | |
| By: | ||
| Name: | ||
| Title: | ||
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Indenture Trustee | ||
| By: | ||
| Name: | ||
| Title: | ||
| Acknowledged and Accepted: | ||
| FIRST NATIONAL FUNDING LLC, as Transferor | ||
| By: | First National Funding Corporation, Its Managing Member | |
| By: | ||
| Name: Anthony R. Cerasoli | ||
| Title: President | ||
| FIRST NATIONAL BANK OF OMAHA, as Servicer | ||
| By | ||
| Name: Anthony R. Cerasoli | ||
| Title: Senior Vice President and Treasurer | ||
Exhibits 5.1 and 8.1
OPINION LETTER
[Letterhead of Kutak Rock LLP]
April 21, 2023
First National Funding LLC
1620 Dodge Street, Stop Code 3201
Omaha, NE 68197-3201
| Re: | First National Master Note Trust, Series 2023-1 Asset Backed Notes |
| Registration Statement on Form SF-3 (Nos. 333-265694 and 333-265694-1) |
Ladies and Gentlemen:
We have acted as special counsel to First National Funding LLC, a Nebraska limited liability company (the “LLC”), in connection with (i) the filing by the LLC, as registrant, with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”), of the above-captioned Registration Statement on Form SF-3, Registration No. 333-265694 (as amended, the “Registration Statement”), registering debt of First National Master Note Trust (the “Trust”), (ii) the offering of $350,000,000 Class A Series 2023-1 Asset Backed Notes (the “Offered Notes”) and (iii) the issuance of $47,116,000 Class B Series 2023-1 Asset Backed Notes (the “Class B Notes”) and $51,603,000 Class C Series 2023-1 Asset Backed Notes (the “Class C Notes”) and together with the Offered Notes and the Class B Notes and Class C Notes, the “Notes”) described in the Prospectus dated April 21, 2023 (the “Prospectus”), which has been filed by the LLC pursuant to Rule 424(b) under the Act. The Notes will be issued pursuant to the Second Amended and Restated Master Indenture (as amended, the “Master Indenture”) dated as of September 23, 2016, as supplemented by an Indenture Supplement to be dated on or about April 27, 2023 (the “Indenture Supplement,” and together with the Master Indenture, the “Indenture”), each between the Trust and U.S. Bank Trust Company, National Association, as Indenture Trustee, and the Offered Notes will be sold pursuant to an Underwriting Agreement, dated as of April 21, 2023 (the “Underwriting Agreement”), between the LLC, First National Bank of Omaha, Wells Fargo Securities, LLC, RBC Capital Markets, LLC and J.P. Morgan Securities LLC, each as an underwriter and as a representative of the several underwriters named therein. Unless otherwise defined herein, all capitalized terms used herein shall have the meanings assigned to them in the Indenture. This opinion letter is furnished in accordance with the requirements of Item 14 of Form SF-3 and Item 601(b) (5) (i) and (8) of Regulation S-K.
We have examined executed copies of the Master Indenture, the Transfer and Servicing Agreement and the Receivables Purchase Agreement and a form of the Indenture Supplement and forms of the Notes and such other records, documents (collectively, the “Transaction Documents”) and instruments as we have deemed necessary for the purposes of the opinions set forth below. In such examination, we have assumed the following (i) the authenticity of original documents and the genuineness of all signatures; (ii) the conformity to the originals of all documents submitted to us as copies; and (iii) the truth, accuracy and completeness of the information, representations and warranties contained in the records, documents, instruments and certificates we have reviewed. We are familiar with the proceedings taken in connection with the authorization of the issuance and sale of the Notes.
First National Funding LLC
April 21, 2023
Page 2
We have assumed that the Transaction Documents (except with respect to the LLC and the Trust with respect to such Transaction Documents) will be duly authorized by all necessary corporate and limited liability company action. In expressing our opinion, we have assumed, without independent verification, that the facts presented in the Transaction Documents are correct, the Transaction Documents constitute the legal, valid and binding obligations of all such parties (other than the LLC and the Trust), enforceable against such parties in accordance with their respective terms, and the factual representation of the LLC and its affiliates are correct. We have assumed that the purchase price for the Offered Notes will be paid by the various underwriters named in the Prospectus.
The opinion set forth in paragraph 2 of this letter is based upon the applicable provisions of the Internal Revenue Code of 1986, as amended, Treasury regulations promulgated and proposed thereunder, current positions of the Internal Revenue Service (the “IRS”) contained in published Revenue Rulings and Revenue Procedures, current administrative positions of the IRS and existing judicial decisions. This opinion is subject to the explanations and qualifications set forth under the caption “Federal Income Tax Consequences” and under the heading “Structural Summary—Tax Status” in the Prospectus. No tax rulings will be sought from the IRS with respect to any of the matters discussed herein.
On the basis of the foregoing examination and assumptions, and upon consideration of the applicable law, it is our opinion, as of the date hereof, that:
1. The Offered Notes are in due and proper form, and when executed, authenticated and delivered as specified in the Indenture, and delivered against payment of the consideration specified in the Underwriting Agreement, will be legal, valid and binding obligations of the Trust, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and general equitable principles, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealings and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law and the discretion of the court before which any proceeding therefore may be brought.
First National Funding LLC
April 21, 2023
Page 3
2. While the tax description under the heading “Federal Income Tax Consequences” in the Prospectus does not purport to discuss all possible federal income tax ramifications of the purchase, ownership, and disposition of the Offered Notes, particularly to U.S. purchasers subject to special rules under the Internal Revenue Code of 1986, as amended, we hereby adopt and confirm the opinions set forth in the Prospectus under the heading “Federal Income Tax Consequences,” which discusses the federal income tax consequences of the purchase, ownership and disposition of the Offered Notes under existing law. There can be no assurance, however, that the tax conclusions presented therein will not be successfully challenged by the IRS, or significantly altered by new legislation, changes in IRS position or judicial decisions, any of which challenges or alterations may be applied retroactively with respect to completed transactions.
We hereby consent to the filing of this opinion letter as an exhibit to a Form 8-K and to the references to this firm under the headings “Legal Matters,” “Federal Income Tax Consequences” and “Structural Summary—Tax Status” in the Prospectus. In giving such consent we do not admit that we are “experts” within the meaning of the Act or the rules and regulations of the Commission issued thereunder, with respect to any part of the Registration Statement, including this opinion letter as an exhibit or otherwise.
We do not express any opinion herein concerning any law other than the law of the State of Nebraska with respect to instruments and agreements specifically governed by the law of Nebraska and the federal law of the United States.
| Very truly yours, | |
| /s/ KUTAK ROCK LLP | |
| Kutak Rock LLP |
Exhibit 36.1
CEO CERTIFICATION
I, Anthony R. Cerasoli, certify as of April 21, 2023 that:
1. I have reviewed the prospectus, dated April 21, 2023, relating to the First National Master Note Trust, Series 2023-1 Class A Notes, the offer and sale of which are registered (the “securities”) and am familiar with, in all material respects, the following: the characteristics of the securitized assets underlying the offering (the “securitized assets”), the structure of the securitization, and all material underlying transaction agreements as described in the prospectus;
2. Based on my knowledge, the prospectus does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading;
3. Based on my knowledge, the prospectus and other information included in the registration statement of which it is a part fairly present, in all material respects, the characteristics of the securitized assets, the structure of the securitization and the risks of ownership of the securities, including the risks relating to the securitized assets that would affect the cash flows available to service payments or distributions on the securities in accordance with their terms; and
4. Based on my knowledge, taking into account all material aspects of the characteristics of the securitized assets, the structure of the securitization, and the related risks as described in the prospectus, there is a reasonable basis to conclude that the securitization is structured to produce, but is not guaranteed by this certification to produce, expected cash flows at times and in amounts to service scheduled payments of interest and the ultimate repayment of principal on the securities (or other scheduled or required distributions on the securities, however denominated) in accordance with their terms as described in the prospectus.
5. The foregoing certifications are given subject to any and all defenses available to me under the federal securities laws, including any and all defenses available to an executive officer that signed the registration statement of which the prospectus referred to in this certification is part.
[Signature Page Follows]
| By: | /s/ Anthony R. Cerasoli |
| Name: | Anthony R. Cerasoli | |
| Title: | President of First National Funding Corporation, the Managing Member of the Depositor | |
| (chief executive officer of the depositor) |