Exhibit 10.1

[Execution Version]

 

 

 

SALE AND SERVICING AGREEMENT

Dated as of September 23, 2020

among

REGIONAL MANAGEMENT RECEIVABLES III, LLC,

as Depositor

REGIONAL MANAGEMENT CORP.,

as Servicer

THE SUBSERVICERS PARTY HERETO,

as Subservicers

REGIONAL MANAGEMENT ISSUANCE TRUST 2020-1,

as Issuer

and

REGIONAL MANAGEMENT NORTH CAROLINA RECEIVABLES TRUST

acting hereunder solely with respect to the 2020-1A SUBI

 

 

 

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TABLE OF CONTENTS

 

         Page   ARTICLE I        DEFINITIONS       

Section 1.01

 

Definitions

     1   ARTICLE II        CONVEYANCE OF LOANS       

Section 2.01

 

Conveyance of Loans

     1  

Section 2.02

 

Acceptance by Issuer

     3  

Section 2.03

 

Representations and Warranties of the Depositor Relating to the Depositor

     3  

Section 2.04

 

[Reserved]

     5  

Section 2.05

 

Representations and Warranties of the Depositor Relating to this Agreement and
the Loans

     5  

Section 2.06

 

Repurchase Obligations

     6  

Section 2.07

 

Covenants of the Depositor

     7  

Section 2.08

 

Addition of Loans

     9  

Section 2.09

 

Optional Purchase and Optional Call

     10  

Section 2.10

 

Optional Reassignment of Loans

     10  

Section 2.11

 

Optional Sale of Charged-Off Loans

     11  

Section 2.12

 

Issuer Loan Exclusions

     12  

Section 2.13

 

Investment Company Act Restriction

     12   ARTICLE III        ADMINISTRATION AND SERVICING OF LOANS       

Section 3.01

 

Acceptance of Appointment and Other Matters Relating to the Servicer

     12  

Section 3.02

 

Servicing Compensation

     13  

Section 3.03

 

Representations, Warranties and Covenants of the Servicer and each Subservicer

     14  

Section 3.04

 

Adjustments

     17  

Section 3.05

 

Back-up Servicing Agreement

     17  

Section 3.06

 

Monthly Servicer Report

     17  

Section 3.07

 

Annual Compliance Certificate

     17  

Section 3.08

 

Copies of Reports Available

     18  

Section 3.09

 

Notices To Regional Management Corp

     18  

Section 3.10

 

Subservicing

     18  

Section 3.11

 

Custody of Receivable Files.

     19  

 

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ARTICLE IV        COLLECTIONS AND ALLOCATIONS       

Section 4.01

 

Collections and Allocations

     21   ARTICLE V        OTHER MATTERS RELATING TO THE DEPOSITOR       

Section 5.01

 

Liability of the Depositor

     21  

Section 5.02

 

Merger or Consolidation of the Depositor

     21  

Section 5.03

 

Limitations on Liability of the Depositor

     22  

Section 5.04

 

Limitations on Liability of the Depositor

     23   ARTICLE VI        OTHER MATTERS RELATING TO THE SERVICER AND THE
SUBSERVICERS       

Section 6.01

 

Liability of Servicer and the Subservicers

     23  

Section 6.02

 

Merger or Consolidation of, or Assumption of the Obligations of, the Servicer or
a Subservicer

     23  

Section 6.03

 

Limitation on Liability of the Servicer, the Subservicers and Others

     24  

Section 6.04

 

Servicer Indemnification of the Issuer, the Owner Trustee and the Indenture
Trustee

     25  

Section 6.05

 

Resignation of the Servicer and the Subservicers

     26  

Section 6.06

 

Access to Certain Documentation and Information Regarding the Loans

     26  

Section 6.07

 

Delegation of Duties

     27  

Section 6.08

 

Examination of Records

     27  

Section 6.09

 

Servicer Power of Attorney

     27   ARTICLE VII        INSOLVENCY EVENTS       

Section 7.01

 

Rights upon the Occurrence of an Insolvency Event

     27   ARTICLE VIII        SERVICER DEFAULTS       

Section 8.01

 

Servicer Defaults

     28  

Section 8.02

 

Indenture Trustee to Act; Appointment of Successor

     30  

Section 8.03

 

Rule 15Ga-1 Compliance

     31   ARTICLE IX        TERMINATION       

Section 9.01

 

Termination of Agreement as to Servicing

     32  

 

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ARTICLE X        MISCELLANEOUS PROVISIONS       

Section 10.01

 

Amendment; Waiver of Past Defaults; Assignment

     32  

Section 10.02

 

Protection of Right, Title and Interest of Issuer

     34  

Section 10.03

 

GOVERNING LAW

     35  

Section 10.04

 

Notices

     35  

Section 10.05

 

Severability

     37  

Section 10.06

 

Further Assurances

     37  

Section 10.07

 

Nonpetition Covenant

     38  

Section 10.08

 

No Waiver; Cumulative Remedies

     38  

Section 10.09

 

Counterparts; Execution

     38  

Section 10.10

 

Binding Effect; Third-Party Beneficiaries

     39  

Section 10.11

 

Merger and Integration

     39  

Section 10.12

 

Headings

     39  

Section 10.13

 

Schedules and Exhibits

     39  

Section 10.14

 

Survival of Representations and Warranties

     39  

Section 10.15

 

Limited Recourse

     39  

Section 10.16

 

Rights of the Indenture Trustee

     41  

Section 10.17

 

Series Liabilities

     41  

Section 10.18

 

Intention of the Parties

     41  

Section 10.19

 

Additional Subservicers

     41  

Section 10.20

 

Limitation of Liability of WTNA

     42  

Section 10.21

 

EU Risk Retention

     43  

 

SCHEDULES      Schedule I    —   List of Subservicers Schedule II    —   Part A
– Definitions Schedule      Part B – Rules of Construction Schedule III    —  
Perfection Representations, Warranties and Covenants Schedule IV    —   Loan
Level Representations, Warranties and Covenants EXHIBITS      Exhibit A-1    —  
Form of Initial Loan Assignment Exhibit A-2    —   Form of Additional Loan
Assignment Exhibit B    —   Form of Annual Compliance Certificate Exhibit C    —
  Form of Loan Reassignment Exhibit D    —   Form of Accession Agreement Exhibit
E    —   Conditions to Accession Exhibit F    —   Rule 15Ga-1 Information
Exhibit G    —   Form of Limited Power of Attorney

 

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SALE AND SERVICING AGREEMENT, dated as of September 23, 2020 (this “Agreement”),
among REGIONAL MANAGEMENT RECEIVABLES III, LLC, a Delaware limited liability
company, as depositor (the “Depositor”), REGIONAL MANAGEMENT CORP., a Delaware
corporation, as servicer (the “Servicer”), the Subservicers Party Hereto as
identified in Schedule I hereto, REGIONAL MANAGEMENT ISSUANCE TRUST 2020-1, a
Delaware statutory trust, as issuer (the “Issuer”), and REGIONAL MANAGEMENT
NORTH CAROLINA RECEIVABLES TRUST, acting hereunder solely with respect to the
2020-1A SUBI (the “North Carolina Trust”).

BACKGROUND

Under this Agreement, the Depositor will sell, from time to time, to the Issuer
certain consumer loans and on the Closing Date, the 2020-1A SUBI Certificate.
The Issuer intends to grant a security interest in those loans and in the
2020-1A SUBI Certificate to the Indenture Trustee pursuant to the Indenture.

AGREEMENT

In consideration of the mutual agreements herein contained, each party agrees as
follows for the benefit of the other parties and the Noteholders to the extent
provided herein and in the Indenture:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions. Certain capitalized terms in this Agreement are
defined in and shall have the respective meanings assigned to them in Part A of
Schedule II to this Agreement. The rules of construction set forth in Part B of
Schedule II shall be applicable to this Agreement.

ARTICLE II

CONVEYANCE OF LOANS

Section 2.01 Conveyance of Loans. (a) In consideration of the Issuer’s promise
to pay the Purchase Price with respect to the Sold Assets, the Depositor does
hereby sell, transfer, convey, assign, set-over and otherwise convey to the
Issuer from time to time, without recourse except as provided herein, all its
right, title and interest in, to and under, whether now owned or hereafter
acquired (i) the Purchased Assets, (ii) the right to receive all Collections
with respect to the Purchased Assets after the applicable Cut-Off Date,
(iii) all rights of the Depositor under the Loan Purchase Agreement and (iv) all
proceeds thereof (such property, collectively, the “Sold Assets”); provided,
however, that the Sold Assets shall not include any (x) Reassigned Loan released
in connection with any Issuer Loan Release or (y) Loan reconvened to the
Depositor, Servicer or Subservicer in accordance with the express terms hereof.
Purchased Assets shall not include any Loan reconveyed to the Seller in
accordance with the terms hereof. For the avoidance of doubt, although the
2020-1A SUBI Certificate conveyed by the Depositor to the Issuer hereunder
represents a beneficial interest in the 2020-1A SUBI Loans, no 2020-1A SUBI
Loans are being sold hereunder, and the 2020-1A SUBI Loans continue to be the
property of the North Carolina Trust.

 

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The foregoing does not constitute and is not intended to result in the creation
or an assumption by the Issuer, the Owner Trustee (as such or in its individual
capacity), the Indenture Trustee or any Noteholder of any obligation of the
Seller, the Depositor, the Servicer or any other Person in connection with the
Loans or under any agreement or instrument relating thereto, including any
obligations to Loan Obligors.

(b) In consideration for the purchase of the Sold Assets hereunder, the Issuer
hereby agrees, subject to Article VIII of the Indenture, to pay to the Depositor
on the Closing Date and, on each Payment Date, as applicable, the Purchase Price
for the related Sold Assets, which shall consist of (i) the Notes, (ii) with
respect to any Additional Loans, Collections available for such purpose under
the Indenture, including funds on deposit in the Principal Distribution Account
and (iii) the Trust Certificate or, so long as the Depositor is the holder of
the Trust Certificate, an increase in the value thereof.

(c) The Depositor agrees to authorize, record and file, at the expense of the
Depositor, on or within ten (10) days of the Closing Date, all the financing
statements (and amendments to financing statements when applicable) with respect
to the Loans and the other Sold Assets meeting the requirements of applicable
law in such manner and in such jurisdictions as are necessary to perfect, and
maintain the perfection of, the transfer and assignment of the Loans and the
other Sold Assets to the Issuer as a first-priority ownership interest, and to
deliver a file stamped copy of each such financing statement or other evidence
of such filing to the Issuer and, in the case of amendments to financing
statements, as soon as practicable after receipt thereof by the Depositor. In
the event that any transfer of Sold Assets on any Addition Date requires any
filing or documents necessary to maintain the interest of the Issuer and its
assigns as a first-priority perfected ownership interest, the Depositor shall
cause all such filings and recordings to be made on or within ten (10) days of
the date of such transfer and promptly provide evidence thereof to the Issuer.

(d) On or prior to the Closing Date or the relevant Addition Date, as
applicable, the Depositor shall mark its electronic records with respect to each
Loan sold hereunder with a designation to indicate that such Loans and the
related Sold Assets have been sold to the Issuer under this Agreement and a
security interest therein has been granted to the Indenture Trustee under the
Indenture. The Depositor shall not change any of these entries in its computer
files relating to any such Loan or related Sold Assets except in connection with
any Loan that ceases to be a Sold Asset; provided, that after a Loan shall have
been repaid in full (and all Collections in respect thereof shall have been
deposited into the Collection Account), such entries may be removed consistent
with the Credit and Collection Policy.

(e) The Depositor shall deliver to the Issuer a Loan Schedule, together with the
Initial Loan Assignment, on the Closing Date, identifying the Initial Loans sold
hereunder by the Depositor and the 2020-1A SUBI Certificate sold by the
Depositor to the Issuer on the Closing Date. In addition, the Depositor agrees
no later than the Monthly Determination Date following the end of each
Collection Period, to deliver or cause to be delivered to the Issuer, an updated
Loan Schedule all Loans that will constitute Sold Assets as of the close of
business on the related Loan Action Date (after giving effect to all Loan
Actions on such Loan Action Date). Such Loan Schedule shall also separately
identify each Loan that will be designated as an Excluded Loan.

 

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(f) The parties intend that the transfer of the Sold Assets to the Issuer by the
Depositor be an absolute sale and not a secured borrowing. If the transaction
under this Agreement were determined to be a loan rather than an absolute sale
despite this intent of the parties, the transfers provided for in this Agreement
shall be deemed to be the grant of, and the Depositor hereby grants to the
Issuer a first-priority security interest in all of such entity’s right, title,
and interest, whether now owned or hereafter acquired, in, to, and under the
Sold Assets to secure the payment and performance of all obligations of the
Depositor under this Agreement including the obligation to cause the sale of
Sold Assets and the payment of all monies due under the Sold Assets to the
Issuer and its assigns. This grant is a protective measure and must not be
construed as evidence of any intent contrary to the one expressed in the first
sentence of this paragraph, nor should the intent expressed in the first
sentence of this paragraph be deemed to be an expression of the intended tax
treatment of the conveyance of the Sold Assets.

Section 2.02 Acceptance by Issuer. (a) The Issuer hereby acknowledges its
acceptance of all right, title and interest to the Sold Assets purchased by, and
conveyed to, the Issuer pursuant to Section 2.01. The Issuer further
acknowledges that, prior to or simultaneously with the execution and delivery of
this Agreement, the Depositor delivered to it a Loan Schedule relating to the
Initial Loans (other than the 2020-1A SUBI Loans).

(b) The Issuer hereby agrees not to disclose to any Person any of the loan
numbers or other information contained in the Loan Schedule (including any
supplement thereto) except (i) to the Servicer (or any Subservicer), the Back-up
Servicer, the Image File Custodian or as required by a Requirement of Law
applicable to the Owner Trustee, the Issuer or the North Carolina Trustees,
(ii) in connection with the performance of any of the Issuer’s duties hereunder,
(iii) to the Indenture Trustee in connection with its duties in enforcing the
rights of Noteholders, (iv) to the Seller or (v) to bona fide creditors or
potential creditors of the Seller, the Depositor or the Issuer for the limited
purpose of enabling any such creditor to identify applicable Loans subject to
this Agreement, the 2020-1A SUBI Supplement, the 2020-1A SUBI Servicing
Agreement, the Purchase Agreement, the Loan Purchase Agreement or the Indenture,
provided they agree to keep such information confidential. The Issuer agrees to
take such measures as shall be reasonably requested by the Depositor to protect
and maintain the security and confidentiality of such information and, in
connection therewith, shall allow the Depositor or its duly authorized
representatives to inspect the Owner Trustee’s security and confidentiality
arrangements as they specifically relate to the administration of the Issuer
from time to time during normal business hours upon prior written notice.

(c) The Issuer shall not create, assume or incur indebtedness or other
liabilities in the name of the Issuer other than as expressly contemplated in
the Transaction Documents.

Section 2.03 Representations and Warranties of the Depositor Relating to the
Depositor. The Depositor hereby represents and warrants to the Issuer, as of the
Closing Date and each Addition Date that:

 

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(a) Organization. The Depositor is a limited liability company validly existing
and in good standing under the laws of, and is duly qualified to do business in,
the jurisdiction of its organization, and has full power and authority to own
its properties and conduct its business as presently owned or conducted, and to
execute, deliver and perform its obligations under this Agreement, the Trust
Agreement, the Purchase Agreement, the Loan Purchase Agreement and each other
Transaction Document to which it is a party.

(b) Due Qualification. The Depositor is duly qualified to do business and is in
good standing, as a Delaware limited liability company, and has obtained all
necessary licenses and approvals (whether directly or indirectly through the
Seller or a Subservicer in the applicable jurisdiction), in each jurisdiction in
which failure to so qualify or to obtain such licenses and approvals would have
an Adverse Effect.

(c) Due Authorization. The execution and delivery by the Depositor of this
Agreement and any Transaction Document to which it is a party and the
consummation by the Depositor of the transactions provided for in this Agreement
and any Transaction Document to which it is a party have been duly authorized by
all necessary action on the part of the Depositor.

(d) No Conflict. The execution and delivery by the Depositor of this Agreement
and any Transaction Document to which it is a party and the performance by the
Depositor of the transactions contemplated by this Agreement and any Transaction
Document to which it is a party and the fulfillment by the Depositor of the
terms hereof and thereof applicable to the Depositor, will not conflict with or
violate the organizational documents of the Depositor or any Requirements of Law
applicable to the Depositor or conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a default under, any indenture, contract, agreement, mortgage, deed of
trust or other instrument to which the Depositor is a party or by which it or
its properties are bound.

(e) Enforceability. Each of this Agreement and each other Transaction Document
to which the Depositor is a party is a legal, valid and binding obligation of
the Depositor and is enforceable against the Depositor in accordance with its
terms, except as enforceability may be limited by Debtor Relief Laws or general
principles of equity;

(f) No Proceedings. There are no Proceedings or investigations pending before
any Governmental Authority or, to the best knowledge of the Depositor,
threatened, against the Depositor (i) asserting the invalidity of this Agreement
or any other Transaction Document to which the Depositor is a party,
(ii) seeking to prevent the consummation of any of the transactions contemplated
by this Agreement or any other Transaction Document to which the Depositor is a
party, (iii) seeking any determination or ruling that, in the reasonable
judgment of the Depositor, would materially and adversely affect the performance
by the Depositor of its obligations under this Agreement or any other
Transaction Document to which it is a party, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or enforceability
of this Agreement or any other Transaction Document to which the Depositor is a
party or (v) seeking to affect adversely the income or franchise tax attributes
of the Issuer under the U.S. federal or any state income or franchise tax
systems.

 

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(g) All Consents. All authorizations, consents, orders or approvals of or
registrations or declarations with any Governmental Authority required to be
obtained, effected or given by the Depositor in connection with the execution
and delivery by the Depositor of this Agreement and any Transaction Document to
which it is a party and the performance of the transactions contemplated by this
Agreement and any Transaction Document to which it is a party have been duly
obtained, effected or given and are in full force and effect.

(h) Investment Company Act. It is not an “investment company” required to be
registered under the Investment Company Act.

Section 2.04 [Reserved].

Section 2.05 Representations and Warranties of the Depositor Relating to this
Agreement and the Loans.

(a) Representations and Warranties. The Depositor hereby represents and warrants
to the Issuer and the Servicer as of the Closing Date, as of each Addition Date
and, with respect to each Loan, as of the applicable Cut-Off Date that:

(i) the Loan Schedule, in the case of the Closing Date, or the applicable
Additional Loan Assignment Schedule in the case of an Addition Date, identifies
all of the Loans conveyed by the Depositor to the Issuer or allocated to the
2020-1A SUBI, as applicable, on the Closing Date or such Addition Date, as
applicable, and each such Loan is in all material respects as described in the
Loan Schedule or as will be described in the Additional Loan Assignment
Schedule, as applicable, and when delivered to the Issuer by the Depositor the
information contained in the Loan Schedule or Additional Loan Assignment
Schedule, as applicable, with respect to each Loan will be true, correct and
complete in all material respects as of the related Cut-Off Date;

(ii) with respect to (x) the Initial Loans (other than the 2020-1A SUBI Loans)
and the 2020-1A SUBI Certificate on the Closing Date and (y) with respect to any
Additional Loans (other than the 2020-1A SUBI Loans), upon the applicable
Addition Date, this Agreement constitutes a valid sale, transfer, assignment and
conveyance to the Issuer of all right, title and interest of the Depositor
conveyed to the Issuer by the Depositor and the proceeds thereof or, if this
Agreement does not constitute a sale of such property, it constitutes a grant of
a security interest in such property (and any right, title and interest therein)
to the Issuer, which is enforceable upon execution and delivery of this
Agreement and the Initial Loan Assignment, in the case of any Initial Loan
(other than any 2020-1A SUBI Loan), and upon the execution and delivery of the
applicable Additional Loan Assignment on such Addition Date, in the case of any
Additional Loan (other than any 2020-1A SUBI Loan). Upon the filing of the
applicable financing statements, the Issuer shall have a first-priority
perfected security interest or ownership interest in such property and proceeds;

 

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(iii) each Loan conveyed by the Depositor to the Issuer hereunder on the Closing
Date or the relevant Addition Date, as applicable, was an Eligible Loan as of
the applicable Cut-Off Date for such Loan;

(iv) each of the representations and warranties of the Seller set forth in
Section 4.02(a) of the Loan Purchase Agreement as of the Closing Date or such
Addition Date, as applicable, is true and correct as of such date;

(v) other than the security interest granted and the conveyance to the Issuer
pursuant to this Agreement, the Depositor has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Sold Assets
described in Section 2.01 except as expressly permitted hereunder; and

(vi) each of the representations and warranties set forth in Schedule III is
true and correct as of the Closing Date or such Addition Date, as applicable.

Notwithstanding any other provision of this Agreement or any other Transaction
Document, the perfection representations contained in Schedule III shall be
continuing, and remain in full force and effect until such time as this
Agreement terminates pursuant to Section 9.01 of this Agreement. The parties to
this Agreement: (A) shall not waive any of the perfection representations
contained in Schedule III without satisfying the Rating Agency Notice
Requirement; (B) shall provide each Rating Agency with prompt written notice of
any material breach of perfection representations contained in Schedule III and
(C) shall not waive a breach of any of the perfection representations contained
in Schedule III without satisfying the Rating Agency Notice Requirement.

In addition, in the case of an Excluded Loan that is de-designated as such on
any Loan Action Date, the Depositor represents and warrants to the Issuer and
the Servicer as of such Payment Date that such Loan would constitute an Eligible
Loan as of the end of the related Collection Period if the last day of such
Collection Period were deemed to be such Loan’s Cut-Off Date.

(b) Notice of Breach. The representations and warranties set forth in this
Section 2.05 shall survive the transfers and assignments of the Loans to the
Issuer, the grant of a security interest in the Loans to the Indenture Trustee
pursuant to the Indenture, and the issuance of the Notes. Upon discovery by the
Depositor, the Servicer or the Issuer of a breach of any of the representations
and warranties set forth in this Section 2.05, the party discovering such breach
shall give notice to the other parties and to the Indenture Trustee within five
(5) Business Days following such discovery; provided that the failure to give
notice within five (5) Business Days does not preclude subsequent notice.

Section 2.06 Repurchase Obligations. (a) Upon obtaining actual knowledge of, or
receipt of written notice by, the Indenture Trustee or the Issuer of a breach of
any representation or warranty contained in Section 2.05(a) hereof (or under
Section 4.02(a) of the Loan Purchase Agreement as incorporated pursuant to
Section 2.05(a)(iv) of this Agreement) by the Depositor with respect to a Loan
sold hereunder to the Issuer at the time such representations and warranties
were made, which breach materially adversely affects the interests of the
Noteholders in such

 

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Loan, the party discovering or receiving notice of such breach shall give prompt
written notice thereof to the Seller, the Depositor, the Issuer and the
Indenture Trustee (it being understood that the discovering party shall not be
required to notify itself); provided, that the Indenture Trustee shall not be
deemed to have discovered, or deemed to have notice or knowledge of, any event,
including, without limitation, with respect to a breach of any of the
representations and warranties set forth herein or any other Transaction
Document, unless a Responsible Officer of the Indenture Trustee has actual
knowledge or shall have received written notice thereof. In the case of a breach
of any representation or warranty contained in Section 2.05(a)(i), (iii), (iv)
or (vi) hereof, the Depositor shall immediately exercise its rights under
Section 6.01 of the Loan Purchase Agreement to require the Seller to cure such
breach, or if such breach is not cured during the applicable cure period, to
repurchase such Loan, in each case, in accordance with and subject to
Section 6.01 of the Loan Purchase Agreement. The obligations of the Depositor to
require the Seller to cure or the obligations of the Depositor to repurchase the
affected Loan shall constitute the sole and exclusive remedy, under this
Agreement or otherwise, against the Depositor in respect of a breach by the
Depositor of any representations or warranties contained in Section 2.05(a)(i),
(iii), (iv) or (vi) hereof. In the case of a breach of any representation or
warranty contained in Section 2.05(a)(ii) or (v) with respect to any Loan, which
breach materially adversely affects the interests of the Noteholders in such
Loan (any such breach, a “Direct Depositor Breach”), the Depositor shall either
cure such breach in all material respects within forty-five (45) days from the
date on which the Depositor is notified of, or discovered, such breach or
repurchase the affected Loan at the applicable Repurchase Price in accordance
with Section 2.06(b) hereof. The obligations of the Depositor to so cure such
breach or repurchase the affected Loan shall constitute the sole and exclusive
remedy under this Agreement or otherwise against the Depositor in respect of a
breach by the Depositor of any representations or warranties contained in
Section 2.05(a)(ii) or (v) hereof.

(b) In the event that the Depositor has not cured any Direct Depositor Breach
within the applicable forty-five day period in accordance with (and to the
extent required by) Section 2.06(a) hereof, the Depositor must repurchase its
interests in the affected Loan on the first Payment Date following the end of
the Collection Period in which such forty-five day period expired; provided,
that, in order to effectuate such repurchase, the Depositor shall deposit into
the Collection Account, on or prior to such Payment Date, an amount equal to the
Repurchase Price for such Loan in immediately available funds. Upon receipt of
the applicable Repurchase Price in the Collection Account and release of such
Loan from the lien of the Indenture in accordance with the terms thereof,
automatically and without further action, the Issuer hereby sell to the
Depositor without recourse, representation, or warranty, all of each of the
Issuer’s right, title and interest in, to, and under (i) such Loan, (ii) with
respect to the Issuer, the right to receive Collections in respect of such Loan
from and after the date of such repurchase, (iii) all Sold Assets relating to
such Loan and (iv) all proceeds of any of the property and assets described in
the foregoing clauses (i) through (iii). The Issuer shall execute such documents
and instruments of transfer or assignment and take such other actions as shall
reasonably be requested and provided by the party repurchasing such Loan to
effect the conveyance of such Loan.

Section 2.07 Covenants of the Depositor. The Depositor hereby covenants to the
Issuer and the Servicer, that:

(a) Security Interests. Except for the conveyances hereunder, the Depositor
shall not sell, pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist any Encumbrance arising through or
under the Depositor on, any Sold Assets conveyed by it to the Issuer or any
interest therein, and the Depositor shall defend the right, title and interest
of the Issuer and the Indenture Trustee in, to and under the Sold Assets,
against all claims of third parties claiming through or under the Depositor.

 

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(b) Trust Certificates. Except in connection with any transaction permitted by
Regulation RR and Section 5.02 and as provided in the Indenture and the Trust
Agreement, the Depositor agrees not to transfer, sell, assign, exchange,
participate or otherwise convey or pledge, hypothecate or otherwise grant a
security interest in the Trust Certificates held by the Depositor, and any such
attempted transfer, assignment, exchange, conveyance, pledge, hypothecation,
grant or sale shall be void.

(c) Delivery of Collections. In the event that the Depositor receives
Collections, the Depositor agrees to deposit such Collections into the
Collection Account as soon as practicable after receipt thereof.

(d) Notice of Encumbrances. The Depositor shall notify the Owner Trustee and the
Indenture Trustee promptly after becoming aware of any Encumbrance on any Sold
Asset conveyed by it to the Issuer other than the conveyances hereunder and
under the Loan Purchase Agreement and the Indenture.

(e) Amendment of the Certificate of Formation and Limited Liability Agreement.
The Depositor will not amend in any respect its certificate of formation, the
Depositor LLC Agreement or other organizational documents unless (i) the Rating
Agency Notice Requirement is satisfied, (ii) the Depositor shall have provided
to the Indenture Trustee and the Issuer an Officer’s Certificate of the
Depositor, dated as of the date of such amendment, stating that such amendment
is not reasonably expected to result in an Adverse Effect and (iii) such
amendment is effected in accordance with the terms of the applicable
organizational document.

(f) Separate Existence. The Depositor agrees to comply with the separateness
covenants in Section 4.01 of the Depositor LLC Agreement.

(g) Amendments to Loan Purchase Agreement. The Depositor further covenants that
it shall not enter into, or consent to, any amendments, modifications, waivers
or supplements to, or terminations of, the Loan Purchase Agreement or enter into
a new Loan Purchase Agreement, without the prior written consent of the Issuer.

(h) Enforcement of Loan Purchase Agreement. The Depositor shall take all steps,
as directed by the Issuer (or the Indenture Trustee at the written direction of
the Required Noteholders), to enforce its rights (and the rights of the Issuer
and the Indenture Trustee as assignees of the Depositor) against any Seller with
respect to any matter arising under the Loan Purchase Agreement.

(i) Taxes. The Depositor shall pay out of its own funds, without reimbursement,
the costs and expenses relating to any stamp, documentary, excise, property
(whether on real, personal or intangible property) or any similar tax levied on
the Issuer or the Issuer’s assets that are not expressly stated in this
Agreement to be payable by the Issuer (other than federal, state, local and
foreign income and franchise taxes, if any, or any interest or penalties with
respect thereto, assessed on the Issuer).

 

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(j) Bankruptcy Limitations. The Depositor shall not, without the affirmative
vote of each of the managers of the Depositor (which must include the
affirmative vote of the duly appointed Independent Manager as defined in the
Depositor LLC Agreement): (A) to the fullest extent permitted by applicable law,
dissolve or liquidate, in whole or in part, or institute proceedings to be
adjudicated bankrupt or insolvent, (B) consent to the institution of bankruptcy
or insolvency proceedings against it, (C) file a voluntary bankruptcy petition
or any other petition seeking, or consent to, reorganization or relief under any
applicable federal or state law relating to bankruptcy, (D) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Depositor or a substantial part of its property,
(E) make a general assignment for the benefit of creditors, (F) admit in writing
its inability to pay its debts generally as they become due, or (G) take any
entity action in furtherance of the actions set forth in clauses (A) through (F)
above.

(k) Depositor Acting for Another Issuer. The Depositor shall not act as
depositor for another issuer under a different securitization unless the
Depositor delivers an Officer’s Certificate to the Indenture Trustee to the
effect that, based upon due inquiry, it has reasonably concluded that acting as
depositor for such other issuer under such securitization will not adversely
affect the holders of the Notes in any material respect.

Section 2.08 Addition of Loans. (a) The Depositor, with the consent of the
Issuer (which it may provide or withhold in its sole discretion), may designate
from time to time Additional Loans to be sold to the Issuer pursuant to this
Agreement in exchange for the Purchase Price, in each case on the applicable
Addition Date.

(b) On the applicable Addition Date with respect to any Additional Loans (which
shall be a Payment Date), the Issuer shall acquire such Additional Loans and the
Depositor shall make the following representations on such Addition Date:

(i) as of such Addition Date, no Insolvency Event with respect to the Depositor
shall have occurred and the transfer to the Issuer of such Additional Loans was
not made in contemplation of the occurrence thereof;

(ii) as of the applicable Addition Date, the Revolving Period was then in
effect;

(iii) as of the applicable Addition Date, the Depositor reasonably believed that
the transfer of such Additional Loans to the Issuer would not result in an
Adverse Effect;

(iv) as of the applicable Addition Date, the Depositor shall not have used
selection procedures reasonably believed by the Depositor to be materially
adverse to the interests of the Issuer or any Class of Noteholders in selecting
such Additional Loans to be conveyed to the Issuer; and

 

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(v) in connection with any such acquisition by the Issuer, the terms of the
Indenture (including, without limitation, Section 8.07 thereof) have been
complied with in all material respects.

Notwithstanding the foregoing, no such acquisition of any Additional Loans by
the Issuer hereunder shall occur on any Addition Date unless, on or prior to
such Addition Date, the Depositor shall have delivered to the Issuer an
Additional Loan Assignment with respect to the Additional Loans for such
Addition Date, together with an Additional Loan Assignment Schedule with respect
to such Additional Loans.

Section 2.09 Optional Purchase and Optional Call. (a) On any Business Day
occurring on or after the date on which the Aggregate Note Balance of the
Outstanding Notes is reduced to 10% or less of the Initial Note Balance, the
Servicer shall have the option to purchase all of the Sold Assets at a purchase
price equal to the Redemption Price in accordance with Section 8.08(a) of the
Indenture (an “Optional Purchase”). If the Servicer elects to exercise such
Optional Purchase, it shall comply with all applicable conditions set forth in
Sections 8.08(a) and (c) of the Indenture. Upon proper exercise of such Optional
Purchase and deposit of the Redemption Price into the Principal Distribution
Account and the Collection Account in accordance with Section 8.08(c) of the
Indenture, all of the Sold Assets to be sold in connection with such Optional
Purchase shall be sold to the Servicer. Such Redemption Price shall be applied
to the Notes in accordance with the provisions for the redemption of such Notes
on the applicable Redemption Date as set forth in the Indenture.

(b) At any time on or after the date on which the Loans and related Sold Assets
are released from the lien of the Indenture in connection with an Optional Call
pursuant to Section 8.05(i) of the Indenture, such Loans and related Sold Assets
may be sold, distributed, transferred or otherwise disposed of at the direction
of the Depositor in its sole discretion.

Section 2.10 Optional Reassignment of Loans. (a) Subject to Sections 8.05 and
8.07 of the Indenture, on any Loan Action Date occurring during the Revolving
Period, the Servicer (at the direction of the Depositor or, in the case of
2020-1A SUBI Loans, the Initial Beneficiary), at its sole option, may require
reassignment (or reallocation, as applicable) from the Issuer of its interests
in Loans that were not Charged-Off Loans or Delinquent Loans, in each case, as
of the end of the immediately preceding Collection Period; provided, that the
Servicer shall select such Loans in a manner that the Issuer and the Servicer
reasonably believe is not materially adverse to the interests of any Class of
Noteholders. Any such Loans shall be reassigned to the Depositor (or in the case
of any 2020-1A SUBI Loan, reallocated from the 2020-1A SUBI) for the
Reassignment Price applicable to such Loans, such Reassignment Price to be paid
(i) with respect to Reassigned Loans other than 2020-1A SUBI Loans, for so long
as the Depositor is the holder of the Trust Certificate, and at the Depositor’s
option, by an adjustment to the value of the Trust Certificate, if such
adjustment is available, in which case the Issuer will not receive a cash
payment; provided, that no adjustment to the value of the Trust Certificate
shall cause non-compliance with Regulation RR) or (ii) otherwise, in immediately
available funds to the Servicer (to be deposited in the Principal Distribution
Account). Neither the Servicer (on behalf of the Depositor or the Initial
Beneficiary, as applicable) nor the Depositor shall cause any such reassignment
(or reallocation, as applicable) to occur on any Loan Action Date unless:
(x) (i) no Reinvestment Criteria Event is outstanding and (ii) the reassignment
of such Loans constitutes a Permitted Reassignment, in each case, after giving
effect to all Loan Actions that occur on such Loan Action Date and (y) the
Reassignment Price shall have been paid as described above. No such reassignment
may cause the Issuer to breach or otherwise violate any provision of the
Indenture.

 

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(b) To cause any such reassignment or reallocation, as applicable, of Loans, the
Servicer (on behalf of the Depositor or, in the case of 2020-1A SUBI Loans, the
Initial Beneficiary) shall take the following actions and make the following
determinations:

(i) on or before the Monthly Determination Date relating to the Loan Action Date
on which such reassignment or reallocation, as applicable, is to occur (such
Loan Action Date, the “Reassignment Date”), furnish to the Issuer, the Indenture
Trustee and each Rating Agency a written notice specifying the Loans which are
expected to be reassigned from the Issuer or reallocated from the 2020-1A SUBI,
as applicable;

(ii) on or prior to the applicable Reassignment Date, the Servicer shall
supplement the Loan Schedule by delivering to the Issuer and the Indenture
Trustee a computer file or microfiche or written list (which may be in
electronic form, acceptable to the Indenture Trustee) containing a true and
complete list of the Loans that are to be reassigned or reallocated, as
applicable, on such Reassignment Date, specifying for each such Loan, its loan
number, Loan Principal Balance and the Subservicer, in each case as of the end
of the Collection Period immediately preceding the Collection Period in which
such Reassignment Date occurs; and

(iii) represent and warrant that the list of Loans delivered pursuant to clause
(ii), as of the Reassignment Date, is true and complete in all material
respects.

Within five (5) Business Days after the applicable Reassignment Date of a Loan
(other than a 2020-1A SUBI Loan), the Issuer shall deliver to the Depositor a
Loan Reassignment substantially in the form of Exhibit C, together with any
appropriate UCC releases or termination statements prepared and filed on behalf
of the Issuer.

Section 2.11 Optional Sale of Charged-Off Loans. The Servicer (or any Affiliate
of the Servicer) may undertake to locate a third party purchaser that is not
affiliated with the initial Servicer, any of its Affiliates, the Seller, the
Depositor or the Issuer to purchase from the Issuer any Charged-Off Loans, and
shall have the right to direct the Issuer to sell any such Loans to such third
party purchaser; provided that all recoveries and other amounts collected by the
Issuer, the Depositor or the Servicer (or any Affiliate of the Servicer) with
respect to any Charged-Off Loan (including proceeds of any disposition by the
Servicer or any Affiliate thereof to any third party) in accordance with the
Credit and Collection Policy shall be paid to the Issuer, by deposit in the
Collection Account.

 

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Section 2.12 Issuer Loan Exclusions. Subject to the conditions specified in, and
in accordance with, Section 8.07 of the Indenture and the further conditions
specified in this Section 2.12, on any Loan Action Date during the Revolving
Period, the Servicer (at the direction of the Depositor or the Initial
Beneficiary, as applicable) may require the Issuer to designate one or more
Loans included in the Sold Assets (or in the case of the 2020-1A SUBI, one or
more 2020-1A SUBI Loans) as an Excluded Loan or cause one or more Loans included
in the Sold Assets (or in the case of the 2020-1A SUBI, one or more 2020-1A SUBI
Loans) to cease to be designated as an Excluded Loan. For the avoidance of
doubt, until such time as an Excluded Loan ceases to be so designated, it shall
not be included in the Loan Action Date Loan Pool on any Loan Action Date
(including the Loan Action Date on which it is designated as an Excluded Loan,
but excluding the Loan Action Date on which it is de-designated as such) or
taken into account for purposes of determining whether or not a Reinvestment
Criteria Event has occurred as of the end of the Collection Period preceding any
such Loan Action Date, but it shall otherwise continue to constitute a Sold
Asset (or in the case of the 2020-1A SUBI, a 2020-1A SUBI Loan) and all
Collections in respect thereof during any Collection Period shall constitute
Available Funds on the corresponding Payment Date. The designation of a Loan or
2020-1A SUBI Loan as an Excluded Loan shall be effected by the delivery by the
Depositor (or the Servicer on its behalf) to the Issuer and the Indenture
Trustee on or before the Monthly Determination Date relating to applicable Loan
Action Date of a report identifying each such expected Loan (by loan number and
Seller and Subservicer) as an Excluded Loan. The Excluded Loans outstanding from
time to time for any Loan Action Date shall be identified as such on each Loan
Schedule delivered on the Monthly Determination Date relating to such Loan
Action Date. On any Loan Action Date during the Revolving Period, an Excluded
Loan may be de-designated as such by the delivery by the Depositor (or the
Servicer on its behalf) to the Issuer and the Indenture Trustee on or before the
Monthly Determination Date relating to such Loan Action Date of a report
identifying each such expected Loan (by loan number and Seller and Subservicer)
as ceasing to be designated as an Excluded Loan. No Excluded Loan may be
de-designated as such on any Loan Action Date unless such Loan would constitute
an Eligible Loan as of the close of business on the last day of the Collection
Period immediately preceding such Loan Action Date if such last day were deemed
to be such Loan’s Cut-Off Date.

Section 2.13 Investment Company Act Restriction. Notwithstanding anything to the
contrary in this Agreement, the Depositor and the Issuer hereby acknowledge and
agree that neither the Depositor nor the Issuer shall, and neither shall be
required to, acquire any additional Loans (or, in the case of North Carolina
Loans, beneficial interests therein) or related assets, or purchase, repurchase,
reassign or otherwise dispose of any Loans (or, in the case of North Carolina
Loans, beneficial interests therein) or related assets pursuant to this
Agreement, for the primary purpose of recognizing gains or decreasing losses for
the Depositor or the Issuer as a result of market value changes.

ARTICLE III

ADMINISTRATION AND SERVICING OF LOANS

Section 3.01 Acceptance of Appointment and Other Matters Relating to the
Servicer. (a) The Issuer and the North Carolina Trust authorizes Regional
Management to act as initial Servicer (but without transfer to Regional
Management of the Issuer’s right to service the Loans) and Regional Management
agrees to act as the initial Servicer, in each case hereunder.

 

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(b) The Servicer shall service and administer the Loans, shall collect and
deposit into the Collection Account or other applicable Note Account amounts
received under the Loans, shall charge off Loans deemed to be uncollectible and
shall extend, amend or otherwise modify Loans, all in accordance with its
customary and usual servicing procedures for servicing consumer loans comparable
to the Loans and in accordance with the Credit and Collection Policy and all
applicable Requirements of Law. The Servicer shall have full power and
authority, acting alone or through any party properly designated by it hereunder
and under the 2020-1A SUBI Servicing Agreement, including the Subservicers, to
do any and all things in connection with such servicing and administration which
it may deem necessary or desirable. Without limiting the generality of the
foregoing and subject to Section 8.01, the Servicer or its designee is hereby
authorized and empowered, unless such power is revoked by the Indenture Trustee
on account of the occurrence of a Servicer Default pursuant to Section 8.01, (i)
to make withdrawals or to instruct the Indenture Trustee to make withdrawals
from any Note Account permitted by the terms of this Agreement or the Indenture
and (ii) to execute and deliver, on behalf of the Issuer any and all instruments
of satisfaction or cancellation, or of partial or full release or discharge, to
effect, on behalf of the Issuer and the North Carolina Trust with respect to
Loans in accordance with the requirements of this Agreement and the 2020-1A SUBI
Servicing Agreement and after the delinquency of any Loan and to the extent
permitted under and in compliance with applicable Requirements of Law, to
commence collection proceedings with respect to such Loans. The Issuer, and the
Indenture Trustee shall furnish the Servicer with any documents reasonably
requested by the Servicer or otherwise necessary to enable the Servicer to carry
out its servicing and administrative duties hereunder; provided, however, that
none of the Owner Trustee or the Indenture Trustee shall be liable for any
negligence with respect to, or misuse of, any such documents by the Servicer or
any of its agents and the Servicer shall hold the Owner Trustee and the
Indenture Trustee harmless against any losses, claims, damages, fines or
penalties of any nature incurred in connection therewith.

(c) The Servicer shall pay out of its own funds, without payment or
reimbursement therefor (except as provided in Section 3.02 hereof), all fees,
costs and expenses incurred by the Servicer in connection with the servicing
activities hereunder and under the 2020-1A SUBI Servicing Agreement, including
expenses related to enforcement of the Loans.

(d) The Servicer shall not be required to use separate servicing operations,
offices, employees or accounts for servicing the Loans from the operations,
offices, employees and accounts used by the Servicer in connection with
servicing other consumer loans.

(e) The Servicer shall: (i) not amend any related Contract other than on a per
customer basis in accordance with the Credit and Collection Policy; (ii) comply,
in all material respects, with the terms and conditions of the related
Contracts; and (iii) promptly inform the Issuer, and the Depositor of any
material billing errors, claims, disputes or litigation with respect to the
related Loans.

Section 3.02 Servicing Compensation. As full compensation for its servicing
activities hereunder and as reimbursement for its expenses as set forth in the
immediately following paragraph, the Servicer shall be entitled to receive the
Servicing Fee payable in arrears on each Payment Date on or prior to the
termination of the Issuer pursuant to the terms of the Trust Agreement. The
“Servicing Fee” for any Payment Date, other than the Initial Payment Date, shall

 

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be an amount equal to the product of (i) 4.75%, multiplied by (ii) the aggregate
Loan Principal Balance as of the first day of the related Collection Period,
multiplied by (iii) one-twelfth. The Servicing Fee for the Initial Payment Date
shall be an amount equal to the product of (i) 4.75%, multiplied by (ii) the
aggregate Loan Principal Balance as of the Initial Cut-Off Date, multiplied by
(iii) one-twelfth. The Servicing Fee shall be payable to the Servicer solely to
the extent that amounts are available for payment in accordance with the terms
of the Indenture (including by the Servicer retaining Collections in an amount
up to the aggregate accrued and unpaid Servicing Fee). For the avoidance of
doubt, such Servicing Fee shall also constitute compensation for the Servicer’s
services rendered pursuant to the 2020-1A SUBI Servicing Agreement and related
North Carolina Trust Documents.

The Servicer’s fees, costs and expenses include the reasonable fees and
disbursements of attorneys, independent accountants and all other fees, costs
and expenses incurred by the Servicer in connection with its activities
hereunder, including, without limitation, any fees payable to any Subservicer or
any other Person performing any of the Servicer’s duties and obligations
hereunder. The Servicer shall be required to pay such fees, costs and expenses
for its own account and shall not be entitled to any payment or reimbursement
therefor or to any fee or other payment from, or claim on, any of the assets in
the Trust Estate (other than the Servicing Fee). Notwithstanding the foregoing,
no Successor Servicer will be responsible to pay the fees and expenses of the
Issuer.

The Issuer and the Servicer acknowledge and agree that (i) the servicing
arrangements provided for in this Agreement and under the 2020-1A SUBI Servicing
Agreement, including the Servicing Fee, are on terms consistent with those
arrived at as a result of arm’s length negotiations and that they are typical of
servicing arrangements made for servicing assets such as the Loans, (ii) the
Servicing Fee is expected to more than cover the anticipated costs associated
with the performance by the Servicer of its obligations hereunder with respect
to the Loans, other Sold Assets and the other 2020-1A SUBI Assets, and
constitutes fair consideration and reasonable compensation to the Servicer for
the performance of such obligations, and (iii) an unaffiliated third party
having the requisite experience servicing assets such as the Loans would be
willing to assume the servicing obligations hereunder for compensation
commensurate with the Servicing Fee.

Section 3.03 Representations, Warranties and Covenants of the Servicer and each
Subservicer. The Servicer, each Subservicer and any Successor Servicer by its
appointment hereunder hereby makes, with respect to itself only, on the Closing
Date (or on the date of the appointment of such Successor Servicer) and on each
Addition Date, the following representations, warranties and covenants on which
each of (x) the Issuer shall be deemed to rely in accepting its interest in the
Loans, (y) the Image File Custodian and the Back-up Servicer shall be deemed to
have relied in accepting its appointment as Image File Custodian and Back-up
Servicer, respectively, under the Back-up Servicing Agreement, and (z) the
Indenture Trustee shall be deemed to have relied in accepting the grant of a
security interest in the Loans and in entering into the Indenture:

(a) Organization. It is an organization validly existing and in good standing
under the laws of, and is duly qualified to do business in, the jurisdiction of
its incorporation or organization and has, in all material respects, full power
and authority to own its properties and conduct its consumer loan business as
presently owned or conducted, and to execute, deliver and perform its
obligations under this Agreement and each other Transaction Document to which it
is a party.

 

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(b) Due Qualification. It is in good standing and duly qualified to do business
(or is exempt from such requirements) and has obtained all necessary licenses
and approvals (in the case of the Servicer, whether directly or indirectly
through a Subservicer in the applicable jurisdiction) in each jurisdiction in
which it is performing the primary servicing function for any of the Loans under
this Agreement, except where the failure to be in good standing, so qualify or
obtain licenses or approvals would not have an Adverse Effect.

(c) Due Authorization. The execution, delivery, and performance by it of this
Agreement and the other agreements and instruments executed and delivered by it
as contemplated hereby, have been duly authorized by all necessary action on the
part of such party.

(d) Binding Obligation. This Agreement and each other Transaction Document to
which it is a party constitutes a legal, valid and binding obligation of such
party, enforceable in accordance with its terms, except as such enforceability
may be limited by applicable Debtor Relief Laws or by general principles of
equity (whether considered in a proceeding at law or in equity).

(e) No Conflict. The execution and delivery of this Agreement and each
Transaction Document to which it is a party by it, and the performance by it of
the transactions contemplated by this Agreement and the fulfillment by it of the
terms hereof and thereof applicable to such party, will not conflict with,
violate or result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
any material indenture, contract, agreement, mortgage, deed of trust or other
instrument to which it is a party or by which it or its properties are bound,
except for any such conflict, violation, breach or default which would not have
an Adverse Effect.

(f) No Violation. The execution and delivery by it of this Agreement and each
other Transaction Document to which it is a party, the performance by it of the
transactions contemplated by this Agreement and each other Transaction Document
to which it is a party and the fulfillment by it of the terms hereof and thereof
applicable to such party will not conflict with or violate any Requirements of
Law applicable to such party.

(g) No Proceedings. There are no Proceedings or investigations pending against
it before any Governmental Authority or, to the best of its knowledge,
threatened, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or seeking any determination or ruling that, in
the reasonable judgment of such party, would materially and adversely affect the
performance by it of its obligations under this Agreement and the other
Transaction Documents to which it is a party.

(h) Compliance with Requirements of Law; Credit and Collection Policy. It shall
(i) duly satisfy all obligations on its part to be fulfilled hereunder and the
2020-1A SUBI Servicing Agreement or in connection with each Loan and will
maintain in effect all qualifications required under Requirements of Law in
order to service properly each Loan; (ii) comply in all material respects with
its Credit and Collection Policy and (iii) comply with all other Requirements of
Law in connection with servicing each Loan the failure to comply with which
would have an Adverse Effect.

 

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(i) No Modification, Rescission or Cancellation. It shall not permit any
amendment, waiver, modification, rescission or cancellation of any Loan, except
in accordance with its Credit and Collection Policy, as required by Requirements
of Law or as ordered by a court of competent jurisdiction or other Governmental
Authority.

(j) Protection of Rights. It shall take no action which, nor omit to take any
action the omission of which, would impair, in any material respect, the rights
of the Issuer or the Indenture Trustee in any Loan, nor shall it reschedule,
revise or defer payments due on any Loan, in each case except in accordance with
its Credit and Collection Policy or as required by Requirements of Law.

(k) Credit and Collection Policy. It shall not, and shall not permit any
Subservicer to, amend, modify, waive or supplement the Credit and Collection
Policy in any manner that could reasonably be expected to result in an Adverse
Effect, except as required by Requirements of Law or as ordered by a court of
competent jurisdiction or other Governmental Authority.

(l) Further Assurances. It shall do and perform, from time to time, such acts as
are within its power and authority as the Servicer or a Subservicer, as
applicable, to maintain the perfection and priority of the security interests in
the Loans granted hereunder and under the Loan Purchase Agreement.

(m) [Reserved.]

(n) Change in Underwriting Guidelines. The Servicer shall notify each Rating
Agency of any change to the underwriting guidelines contained in the Credit and
Collection Policy that could reasonably be expected to result in an Adverse
Effect.

In the event any representation, warranty or covenant of the Servicer or any
Subservicer contained in paragraphs (h), (i) or (j) of this Section 3.03 with
respect to any Loan is breached (the “Applicable Representations”), which breach
materially adversely affects the interests of the Noteholders in such Loan, and
is not cured within forty-five (45) days from the first date on which the
Servicer or the breaching Subservicer either (y) is notified by the Issuer, the
Indenture Trustee, the Servicer (with respect to any Subservicer), the North
Carolina Trustees or the Depositor of such breach, or (z) discovered such
breach, then any Loan or Loans to which such event relates shall be assigned and
transferred to the Servicer (or, in the case of the 2020-1A SUBI Loans,
reallocated at the direction of the Servicer) on the terms and conditions set
forth below.

The Servicer shall effect such assignment or reallocation, as applicable, by
making a deposit into the Collection Account or other applicable Note Account in
immediately available funds not later than the Payment Date immediately
following the Collection Period in which such forty-five day period expired in
an amount equal to the Repurchase Price of the affected Loans as of the date of
such deposit. The obligation of the Servicer to accept reassignment,
reallocation or assignment of such Loans, and to make the deposits, if any,
required to be made to the Collection Account or other applicable Note Account
as provided in the preceding paragraph, shall constitute the sole remedy
available to the Issuer, the Depositor, the North Carolina Trust, the
Noteholders or the Indenture Trustee with respect to a breach of such Applicable
Representations, except as provided in Section 6.04.

 

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Upon each such assignment to, reallocation or purchase by the Servicer, the
Issuer shall automatically and without further action sell, transfer, assign,
set-over and otherwise convey to the Servicer, without recourse, representation
or warranty, all right, title and interest of the Issuer in and to such Loans,
all monies due or to become due and all amounts received or receivable with
respect thereto and all proceeds thereof. The Issuer shall execute such
documents and instruments of transfer or assignment and take such other actions
as shall be reasonably requested by the Servicer to effect the conveyance of any
such Loans pursuant to this Section 3.03 but only upon receipt of an Officer’s
Certificate of the Servicer that states that all conditions set forth in this
Section have been satisfied.

Section 3.04 Adjustments. If (i) the Servicer or any Subservicer makes a deposit
into the Collection Account or other applicable Note Account in respect of a
Collection of a Loan and such Collection was received by the Servicer or such
Subservicer in the form of a check or other payment which is not honored or is
reversed for any reason or (ii) the Servicer or any Subservicer makes a mistake
with respect to the amount of any Collection and deposits an amount that is less
than or more than the actual amount of such Collection, the Servicer or such
Subservicer shall appropriately adjust the amount subsequently deposited into
the Collection Account or other applicable Note Account to reflect such
dishonored or reversed payment or mistake. Any such adjustment shall be
reflected in the records of the Servicer or the applicable Subservicer with
respect to such Loan.

Section 3.05 Back-up Servicing Agreement. (a) The Servicer shall comply with its
obligations under the Back-up Servicing Agreement and the other Transaction
Documents to which it is a party (in its capacity as Servicer).

(b) Each Subservicer hereby agrees that it shall cooperate with the Servicer in
the performance of the Servicer’s duties under the Back-up Servicing Agreement,
during any Servicing Centralization Period and any Servicing Transition Period.

Section 3.06 Monthly Servicer Report. Not later than the Monthly Determination
Date relating to each Payment Date, but in no event later than the second
Business Day preceding each Payment Date, the Servicer shall deliver to the
Issuer, each Rating Agency, the Back-up Servicer, the Owner Trustee and the
Indenture Trustee the Monthly Servicer Report, in substantially the form set
forth in the Indenture. The Servicer shall calculate and provide to the
Indenture Trustee in writing all applicable original issue discount information
relating to the Notes in a timely manner in order to enable the Indenture
Trustee to perform any reporting obligations with respect thereto.

Section 3.07 Annual Compliance Certificate. The Servicer shall deliver to the
Issuer, each Rating Agency and the Indenture Trustee on or before March 31 of
each calendar year, beginning with March 31, 2022, an Officer’s Certificate
substantially in the form of Exhibit B hereto, together with an agreed upon
procedures letter delivered by a firm of nationally recognized independent
public accountants (who may also render other services to the Servicer or the
Seller) with respect to the Servicer’s activities under the Transaction
Documents.

 

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Section 3.08 Copies of Reports Available. A copy of each Monthly Servicer Report
and Officer’s Certificate (but not letters or reports from the independent
public accountants) provided pursuant to Section 3.06 or 3.07 will be made
available by the Indenture Trustee to the Noteholders via its website at
www.ctslink.com.

Section 3.09 Notices To Regional Management Corp. In the event that Regional
Management is no longer acting as Servicer, any Successor Servicer shall deliver
to the Issuer, each Rating Agency, the Owner Trustee and the Indenture Trustee
each Monthly Servicer Report, Officer’s Certificate and report required to be
provided thereafter pursuant to Section 3.06, 3.07 or 3.08.

Section 3.10 Subservicing. (a) Each Subservicer shall be responsible for the
servicing and administration of the Loans for which such Subservicer is
designated as the Subservicer on the Loan Schedule; provided, however, that the
Servicer may redesignate the Subservicers for particular Loans from time to
time; provided, further, that any such redesignation will comply with licensing
regulations applicable to such Subservicers. Each Subservicer shall service and
administer the related Loans in accordance with the provisions of Section 3.01.
As part of its servicing activities hereunder, the Servicer shall enforce the
obligations of each Subservicer under this Agreement. Such enforcement,
including, without limitation, the legal prosecution of claims, termination of
Subservicers, and the pursuit of other appropriate remedies, shall be in such
form and carried out to such an extent and at such time as the Servicer, in its
good faith business judgment, would require were it the owner of the related
Loans. The Servicer shall pay the costs of such enforcement at its own expense.

(b) The Servicer shall be entitled to terminate the subservicing of the Loans by
any Subservicer under this Agreement at any time in its sole discretion. In the
event of termination of any Subservicer, the Servicer shall either (A) directly
service the related Loans, but only to the extent the Servicer has the
regulatory authorizations to do so, or (B) appoint another duly licensed
Subservicer to service and administer such Loans and, in either case, such
entity shall assume all such servicing obligations immediately upon such
termination. Notwithstanding anything else to the contrary contained herein, all
rights and obligations of the Subservicers under this Agreement shall terminate
upon the occurrence of a Servicing Transfer Date (including the Servicing
Assumption Date) and the related successor Servicer will not be required to
enforce the obligations of any prior Subservicer that has been terminated in
connection with such Servicing Transfer Date; provided, however, that any
Subservicer may be engaged (and each Subservicer has agreed to reasonably
cooperate with the Back-up Servicer or any other Successor Servicer in arranging
any such engagement) by any Successor Servicer, including the Back-up Servicer,
on terms reasonably satisfactory to such Subservicer, to provide servicing and
administration of the Loans subject to the direction of such Successor Servicer
(including the Back-up Servicer).

(c) Each Subservicer shall make available to the Servicer sufficient information
relating to the subservicing of Loans under this Agreement so as to enable the
Servicer to prepare and deliver the Monthly Servicer Report and Officer’s
Certificate required by Sections 3.06 and 3.07 of this Agreement. Each
Subservicer will provide or cause to be provided to the independent service
provider selected by the Servicer to furnish any report required by Section 3.07
of this Agreement sufficient information relating to the subservicing of Loans
under this Agreement, or reasonable access to the premises of such Subservicer,
as reasonably required by such independent service provider to furnish such
report required by Section 3.07 of this Agreement.

 

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(d) Each Subservicer shall be entitled to compensation for its services as a
Subservicer under this Agreement by the Servicer as agreed to by the Servicer
and such Subservicer, and no Subservicer will be entitled to any fee or other
payment from, or claim on, any of the assets in the Trust Estate.

(e) Notwithstanding the appointment of the Subservicers for any such servicing
and administration of the related Loans or any other purpose hereunder, the
Servicer shall remain obligated and solely liable to the Issuer, the North
Carolina Trust, the Indenture Trustee and the Noteholders for the servicing and
administering of the Loans in accordance with the provisions of Section 3.01
without diminution of such obligation or liability by virtue of such
subservicing arrangement to the same extent and under the same terms and
conditions as if the Servicer alone were servicing and administering the Loans.

(f) The parties hereto acknowledge and agree that Regional North Carolina will
act as the Subservicer with respect to the 2020-1A SUBI Assets.

Section 3.11 Custody of Receivable Files.

(a) Custody. The Issuer, the North Carolina Trust and the Indenture Trustee,
upon the execution and delivery of this Agreement, hereby revocably appoint the
Servicer, and the Servicer hereby accepts such appointment, to act as the agent
(solely in its capacity as Servicer under the Transaction Documents) of the
Issuer, the North Carolina Trust and the Indenture Trustee, solely in the
Servicer’s capacity as custodian of the Contracts.

(b) Safekeeping. The Servicer, in its capacity as custodian, or a Subservicer,
appointed by the Servicer as subcustodian pursuant to Section 3.11(e), shall
hold the Contracts (i) in physical form or (ii) with respect to each Loan
originated in electronic form, in electronic form in the Electronic Vault. The
custodian or, if applicable, any Subservicer appointed by it as subcustodian (in
the case of Loans held in physical form) will hold such Contracts for the
benefit of the Issuer and the Indenture Trustee, as pledgee of the Issuer or the
North Carolina Trust, as applicable; provided, that the Servicer, in its
capacity as custodian, shall ensure that the Electronic Contracts are maintained
by the Electronic Vault Provider as a designated custodian of the Indenture
Trustee (for the benefit of the Noteholders) in the Electronic Vault. The
Electronic Vault will be controlled by the Servicer in its capacity as custodian
hereunder. In performing its duties as custodian, the Servicer shall act in
accordance with its customary servicing practices. The Servicer will promptly
report to the Issuer, the 2020-1A SUBI Trustee and the Indenture Trustee any
failure on its part (or, if applicable, a subcustodian’s part) to hold a
material portion of the Contracts (including Electronic Contracts) and maintain
its account, records, and computer systems as herein provided and promptly take
appropriate action to remedy any such failure. Nothing herein will be deemed to
require an initial review or any periodic review by the Issuer or the Indenture
Trustee of the Contracts. The Servicer may, in accordance with its customary
servicing practices, maintain all or a portion of a Contract in electronic form
in the Electronic Vault

 

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and/or maintain custody of all or any portion of a Contract with one or more
Persons to whom the Servicer has delegated responsibilities in accordance with
Section 6.07. The Servicer will maintain each Contract in the United States (it
being understood that (i) the Contracts, or any part thereof, may be maintained
at the offices of any Person to whom the Servicer has delegated responsibilities
in accordance with Section 6.07 and (ii) Electronic Contracts shall be
maintained in the Electronic Vault). The Servicer will make available to the
Issuer and the Indenture Trustee or their duly authorized representatives,
attorneys or auditors a list of locations of the Contracts upon request.
Notwithstanding any reference herein or in any other Transaction Document to the
Electronic Vault Provider acting as a designated custodian of the Indenture
Trustee, the parties hereto acknowledge and agree that the Indenture Trustee
shall not be liable for, and shall have no duty to supervise or monitor, the
default, misconduct or any other action or omission of the Electronic Vault
Provider, and that the Indenture Trustee may assume the Electronic Vault
Provider’s performance of its duties and obligations under the Transaction
Documents. The Servicer shall cause the Electronic Vault to reflect the name of
the applicable Owner of Record as follows: “Regional Management Issuance Trust
2020-1/Regional Management NC Receivables Trust, solely with respect to 2020-1A
SUBI”.

(c) Effective Period and Termination. The Servicer’s appointment as custodian
with respect to any Loan shall become effective as of the Cut-Off Date for such
Loan and will continue in full force and effect until terminated pursuant to
this Section 3.11(c) (or such Loan ceases to be a Sold Asset or 2020-1A SUBI
Asset, as applicable); provided, the Servicer’s appointment as custodian in
respect of the Initial Loans shall be deemed to have been effective as of the
Initial Cut-Off Date. If Regional Management resigns as Servicer in accordance
with the provisions of this Agreement or if all of the rights and obligations of
the Servicer have been terminated under Section 8.01, the Indenture Trustee may
(and upon the written direction of the Required Noteholders shall) terminate the
appointment of the Servicer as custodian hereunder in the same manner as the
Indenture Trustee may terminate the rights and obligations of the Servicer under
Section 8.01. In the event that the Custodian is terminated in such capacity,
each Subservicer will be terminated as subcustodian for each Loan with respect
to which it is then acting in such capacity. Upon the resignation or termination
of the Servicer in accordance with this Agreement, control of the Contracts in
the Electronic Vault shall be transferred to the Back-up Servicer to the extent
it becomes the successor servicer in accordance with this Agreement, or another
successor servicer. In the event that the Back-up Servicer assumes servicing
responsibilities or a successor Servicer, as applicable, is appointed, the
outgoing Servicer shall promptly transfer to the Back-up Servicer or a successor
Servicer, as applicable, in such manner and to such location as the Back-up
Servicer or a successor Servicer, as applicable, shall reasonably designate, all
of the Contracts and other Related Loan Assets in its possession or control;
provided, however, if the Back-up Servicer is the successor Servicer, it shall
(i) notify the Electronic Vault Provider of the transfer of servicing
responsibilities to the Back-up Servicer as Successor Servicer and (ii) accept
the transfer of possession of the Electronic Vault to the Back-up Servicer as
Successor Servicer; it being agreed by the Servicer that it shall reasonably
cooperate with the Back-up Servicer with respect to effecting any such election,
notification or transfer.

(d) Establishment of Imaging System. Other than with respect to any Electronic
Contract, the Servicer shall maintain an imaging system through which the
original physical Contract and, with respect to any Hard Secured Loan, the
original physical certificate of title with respect to the Titled Asset securing
such Hard Secured Loan may be imaged and captured through a standalone PDF, or
another electronic medium, device and validated through an internal, controlled
process with images captured, stored and identifiable at a central location as a
backup to physical documentation. For the avoidance of doubt, the Servicer shall
cause imaged files with respect to which the related Contract is an Electronic
Contract to be stored in the Electronic Vault and such imaged files will not be
delivered to or reviewed or retained by the Image File Custodian.

 

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(e) Subcustodian. The Servicer, in its capacity as custodian, may appoint a
Subservicer as subcustodian with respect to any Contract pursuant to
Section 6.07. In the event that the custodian is terminated in such capacity
hereunder, each subcustodian will be terminated as subcustodian for each Loan
with respect to which it is then acting in such capacity.

ARTICLE IV

COLLECTIONS AND ALLOCATIONS

Section 4.01 Collections and Allocations. (a) The Servicer shall comply with its
obligations in Article VIII of the Indenture.

(b) Each Subservicer shall deliver any Collections received by such Subservicer
to the Servicer for deposit into the Collection Account in accordance with
Section 8.03 of the Indenture.

ARTICLE V

OTHER MATTERS RELATING TO THE DEPOSITOR

Section 5.01 Liability of the Depositor. The Depositor shall be liable for all
obligations, covenants, representations and warranties of the Depositor arising
under or related to this Agreement and each other Transaction Document to which
it is a party. The Depositor shall be liable only to the extent of the
obligations specifically undertaken by it in its capacity as a Depositor.

Section 5.02 Merger or Consolidation of the Depositor. (a) The Depositor shall
not dissolve, liquidate, consolidate with or merge into any other corporation,
limited liability company or other entity or convey, transfer or sell (other
than conveyances hereunder) its properties and assets substantially as an
entirety to any Person unless:

(i) the entity formed by such consolidation or into which the Depositor is
merged or the Person which acquires by conveyance, transfer or sale the
properties and assets of the Depositor substantially as an entirety shall be, if
the Depositor is not the surviving entity, organized and existing under the laws
of the United States of America or any state or the District of Columbia, and
shall be a special purpose corporation or other special purpose entity whose
powers and activities are limited and, if the Depositor is not the surviving
entity, such entity or Person shall expressly assume, by a written agreement
supplemental hereto, executed and delivered to the Servicer, the Issuer and the
Indenture Trustee, in form reasonably satisfactory to the Servicer, the Issuer
and the Indenture Trustee, the performance of every covenant and obligation of
the Depositor hereunder;

 

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(ii) the Depositor or the surviving or transferee entity, as the case may be,
has delivered to the Issuer and the Indenture Trustee (with a copy to each
Rating Agency) (A) an Officer’s Certificate of the Depositor or such entity
stating that such consolidation, merger, conveyance, transfer or sale and such
supplemental agreement complies with this Section 5.02 and that all conditions
precedent herein provided for relating to such transaction have been complied
with and (B) an Officer’s Certificate of the Depositor or such entity and an
Opinion of Counsel each stating that such supplemental agreement is a valid and
binding obligation of such surviving entity enforceable against such surviving
entity in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors’ rights generally from time to time in
effect or general principles of equity;

(iii) the Depositor or the surviving or transferee entity, as the case may be,
has delivered to the Indenture Trustee and the Servicer an Officer’s Certificate
of the Depositor or such entity to the effect that in the reasonable belief of
the Depositor or such entity, such consolidation, merger, conveyance, transfer,
sale or other specified action will not have an Adverse Effect; and

(iv) the Rating Agency Notice Requirement with respect to such consolidation,
merger, conveyance, transfer, sale or other specified action has been satisfied.

Promptly upon such consolidation, merger, conveyance, transfer or sale, the
Depositor shall deliver written notice of the same to each Rating Agency.

(b) Except in connection with a transaction permitted under the foregoing clause
(a), the obligations, rights or any part thereof of the Depositor hereunder
shall not be assignable nor shall any Person succeed to such obligations or
rights of the Depositor hereunder. The sale or other conveyance of Loans by the
Depositor to the Issuer under this Agreement shall not constitute a conveyance,
transfer or sale of its properties or assets substantially as an entirety to any
Person for purposes of this Section 5.02.

Section 5.03 Limitations on Liability of the Depositor. Subject to Section 5.01,
none of the Depositor or any of the directors, officers, employees, agents,
members or managers of the Depositor acting in such capacities shall be under
any liability to the Issuer, the Servicer, any Subservicer, the Seller, the
North Carolina Trust, the Owner Trustee, the Indenture Trustee, the Noteholders
or any other Person for any action taken or for refraining from the taking of
any action in good faith in such capacities pursuant to this Agreement or any
other Transaction Document, it being expressly understood that such liability is
expressly waived and released as a condition of, and consideration for, the
execution of this Agreement; provided, however, that this provision shall not
protect the Depositor or any such Person against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of reckless disregard
of obligations and its duties hereunder. The Depositor and any director,
officer, employee, member or manager or agent of the Depositor may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person (other than the Depositor) respecting any matters arising hereunder.

 

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Section 5.04 Limitations on Liability of the Depositor.

(a) The Depositor shall not enter into any Permitted Securitization Transaction
Document in connection with any Permitted Securitization unless such Permitted
Securitization Transaction Document contains provisions substantially similar in
form, substance and effect to Sections 10.07(a) and 10.15(a) hereof and
Section 11.19 of the Indenture and Section 9.14 of the Loan Purchase Agreement.

(b) Other than the Transaction Documents, the Depositor shall not enter into any
Permitted Securitization Transaction Document except in connection with a
Permitted Securitization.

ARTICLE VI

OTHER MATTERS RELATING TO THE SERVICER AND THE SUBSERVICERS

Section 6.01 Liability of Servicer and the Subservicers. The Servicer and the
Subservicers shall be liable under this Article VI only to the extent of the
obligations specifically undertaken by the Servicer or such Subservicer in its
capacity as Servicer or Subservicer, as applicable, subject to Section 3.10(e).

Section 6.02 Merger or Consolidation of, or Assumption of the Obligations of,
the Servicer or a Subservicer. Neither the initial Servicer nor a Subservicer
shall consolidate with or merge into any other corporation, limited partnership,
limited liability company or other entity or convey, transfer or sell its
properties and assets substantially as an entirety to any Person (other than any
conveyance, transfer or sale by a Subservicer of its properties and assets to
the initial Servicer or another Subservicer, provided that the transferor
Subservicer continues to exist after such conveyance, transfer or sale), unless:

(a) (i) in the case of any such event by the initial Servicer, the entity formed
by such consolidation or merger into which the initial Servicer is merged (in
each case, if other than the initial Servicer) or the Person which acquires by
conveyance, transfer or sale the properties and assets of the initial Servicer
substantially as an entirety shall be an Eligible Servicer (after giving effect
to such consolidation, merger or transfer) and (ii) in the case of any such
event by the initial Servicer or any Subservicer, if the initial Servicer or
such Subservicer is not the surviving Person, such surviving Person shall
expressly assume, by a written agreement supplemental hereto, executed and
delivered to the Issuer, the Indenture Trustee and the Depositor in a form
reasonably satisfactory to the Issuer, the Indenture Trustee and the Depositor,
the performance of every covenant and obligation of the initial Servicer or such
Subservicer hereunder and under each other Transaction Document to which it is a
party;

 

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(b) the initial Servicer or the Subservicer, as applicable, or the surviving
Person of such consolidation or merger or Person which acquires the properties
and assets of the initial Servicer or Subservicer, as the case may be, has
delivered to the Issuer, the Indenture Trustee and the Depositor (A) an
Officer’s Certificate of the initial Servicer, such Subservicer or such entity,
as applicable, stating that such consolidation, merger, conveyance, transfer or
sale complies with this Section 6.02 and that, in the reasonable determination
of the officer signing such Officer’s Certificate, such consolidation, merger,
conveyance, transfer or sale will not have an Adverse Effect, and (B) an Opinion
of Counsel stating that such supplemental agreement described in clause (a) is a
valid and binding obligation of such surviving or transferee Person enforceable
against such Person in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors’ rights generally from time to time in
effect or general principles of equity; and

(c) the Rating Agency Notice Requirement with respect to such consolidation,
merger, conveyance, transfer or sale has been satisfied,

provided, however, that the sale by the Seller of Loans to the Depositor under
the Loan Purchase Agreement shall not be a conveyance, transfer or sale of its
properties or assets substantially as an entirety to any Person for purposes of
this Section 6.02.

Upon any such merger, consolidation or transfer of all or substantially all of
the assets of the initial Servicer or a Subservicer in accordance with this
Section 6.02, the surviving or transferee Person shall be the successor to and
substituted for the initial Servicer or such Subservicer, as applicable, for all
purposes under this Agreement.

If a Successor Servicer consolidates with, merges or converts into, or transfers
or sells all or substantially all of its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee corporation or banking association without any further act shall be
the successor to and substituted for such Successor Servicer for all purposes
under this Agreement.

Section 6.03 Limitation on Liability of the Servicer, the Subservicers and
Others. (a) Except as provided in Section 6.04, neither the Servicer nor any of
the directors, officers, partners, members, managers, employees or agents of the
Servicer in its capacity as Servicer shall be under any liability to the Issuer,
the Owner Trustee, the North Carolina Trust, the Indenture Trustee, the
Noteholders or any other Person for any action taken or for refraining from the
taking of any action in good faith in its capacity as Servicer in accordance
with this Agreement and the 2020-1A SUBI Servicing Agreement; provided, however,
that this provision shall not protect the Servicer or any such Person against
any liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence (or, if the Servicer is not Regional Management, gross
negligence) in the performance of its duties or by reason of reckless disregard
of its obligations and its duties hereunder. The Servicer and any director,
officer, employee, partner, shareholder, member or manager or agent of the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person (other than the Servicer) respecting any
matters arising hereunder. The Servicer shall not be under any obligation to
appear in, prosecute or defend any legal action which is not incidental to its
duties as Servicer in accordance with this Agreement and which in its reasonable
judgment may involve it in any material expense or liability. In furtherance of
its obligations hereunder, the Servicer may, in its sole discretion, undertake
any such legal action which it may deem necessary or desirable for the benefit
of the Issuer and the Noteholders with respect to this Agreement and the rights
and duties of the parties hereto and the interests of the Issuer and the
Noteholders hereunder.

 

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(b) Except as provided in Section 6.04, neither any Subservicer nor any of the
directors, officers, partners, shareholders members, managers, employees or
agents of a Subservicer in its capacity as a Subservicer shall be under any
liability to the Issuer, the Owner Trustee, the North Carolina Trust, the
Indenture Trustee, the Noteholders, the Servicer or any other Person for any
action taken or for refraining from the taking of any action in good faith in
its capacity as a Subservicer pursuant to this Agreement; provided, however,
that this provision shall not protect a Subservicer or any such Person against
any liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence (or, if such Subservicer is not an Affiliate of Regional
Management, gross negligence) in the performance of its duties or by reason of
reckless disregard of its obligations and its duties hereunder. Each Subservicer
and any director, officer, employee, partner, member or manager or agent of a
Subservicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person (other than such Subservicer)
respecting any matters arising hereunder. No Subservicer shall be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties as a Subservicer in accordance with this Agreement and
which in its reasonable judgment may involve it in any expense or liability.

Section 6.04 Servicer Indemnification of the Issuer, the Owner Trustee and the
Indenture Trustee. The Servicer shall indemnify and hold harmless each of the
Issuer, the Owner Trustee (as such and in its individual capacity), the
Indenture Trustee (as such and in its individual capacity) and any trustees
predecessor thereto (including the Indenture Trustee in its capacity as Note
Registrar), and the Back-up Servicer (as such and in its individual capacity),
the North Carolina Trust, the North Carolina Trustees and their respective
directors, officers, employees, partners, members or managers and agents from
and against any and all loss, liability, expense, damage or injury suffered or
sustained by reason of any acts or omissions of the Servicer (including in its
capacity as 2020-1A SUBI Servicer and as custodian of any Contracts pursuant to
Section 3.11) or a Subservicer with respect to the Issuer in breach of this
Agreement or the 2020-1A SUBI Servicing Agreement or any other Transaction
Document to which the Servicer is a party (other than such as may arise from the
gross negligence or willful misconduct of the Owner Trustee, the Back-up
Servicer or the Indenture Trustee, as applicable), including any judgment,
award, settlement, reasonable attorneys’ fees and other costs or expenses
incurred in connection with the defense of any action, Proceeding or claim. In
addition, the Servicer shall indemnify and hold the Issuer harmless for any tax
or fee to which the Issuer or the North Carolina Trust becomes subject in any
jurisdiction by reason of the Servicer or a Subservicer being located in such
jurisdiction or performing servicing activities in such jurisdiction.
Indemnification pursuant to this Section 6.04 shall not be payable from the Sold
Asset or the 2020-1A SUBI Assets. Notwithstanding anything to the contrary
herein, neither the Servicer nor any Subservicer shall in any event be
responsible or liable for special, indirect, or consequential loss or damage of
any kind whatsoever (including, without limitation, loss of profit) irrespective
of whether the Servicer or such Subservicer, as applicable, has been advised of
the likelihood of such loss or damage and regardless of the form of action.

 

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Section 6.05 Resignation of the Servicer and the Subservicers. (a) The Servicer
shall not resign from the obligations and duties imposed on it hereunder, under
the 2020-1A SUBI Servicing Agreement or the Indenture except upon a
determination that (i) the performance of its duties hereunder, under the
2020-1A SUBI Servicing Agreement or the Indenture is no longer permissible under
applicable law and (ii) there is no reasonable action which the Servicer could
take to make the performance of its duties hereunder, under the 2020-1A SUBI
Servicing Agreement or the Indenture permissible under applicable law. Any
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Owner Trustee, the Back-up
Servicer and the Indenture Trustee. No resignation shall become effective until
a Successor Servicer (which shall be the Back-up Servicer unless the Back-up
Servicer is the resigning Servicer) or the Indenture Trustee shall have assumed
the responsibilities and obligations of the Servicer in accordance with
Section 8.02 hereof, the 2020-1A SUBI Servicing Agreement and the Indenture
(other than in the case of the Back-up Servicer, any such duty or obligation
that it is not required to assume under the express terms of the Back-up
Servicing Agreement, the 2020-1A SUBI Servicing Agreement, this Agreement or the
Indenture). If within one hundred twenty (120) days of the date of the
determination that the Servicer may no longer act as Servicer as described
above, the Indenture Trustee is unable to appoint a Successor Servicer, the
Indenture Trustee shall serve as Successor Servicer. Notwithstanding the
foregoing, the Indenture Trustee shall, if it is legally unable or unwilling so
to act, petition a court of competent jurisdiction to appoint any established
institution qualifying as an Eligible Servicer as the Successor Servicer
hereunder. The Issuer shall give prompt notice to each Rating Agency upon the
appointment of a Successor Servicer.

(b) Notwithstanding Section 6.05(a), the Servicer may, without the requirement
of obtaining the prior consent of any Person, assign part or all of its duties
and obligations hereunder, under the 2020-1A SUBI Servicing Agreement or the
Indenture to an Affiliate of the Servicer so long as (i) such entity is an
Eligible Servicer as of the date of such assignment, and (ii) the Servicer
reasonably determines that such assignment will not materially adversely affect
the interests of any Class of Noteholders; provided, that any such assignment
shall not constitute a resignation pursuant to this Section 6.05

(c) So long as Regional Management remains the Servicer, no Subservicer shall
resign from the obligations and duties hereby imposed on it except with the
consent of the Servicer. Notwithstanding the foregoing, a Successor Servicer
may, without the requirement of obtaining the prior consent of any Person,
delegate any or all of its duties and obligations hereunder, under the 2020-1A
SUBI Servicing Agreement and the Indenture to one or more subservicers;
provided, that such Successor Servicer shall remain obligated and solely liable
to the Depositor, the Indenture Trustee, the North Carolina Trust, and the
Issuer for its duties, obligations and liabilities under this Agreement, the
2020-1A SUBI Servicing Agreement and the Indenture to the same extent and under
the same terms and conditions as if such Successor Servicer were acting alone;
provided, further, that any such delegation shall not constitute a resignation
pursuant to this Section 6.05.

Section 6.06 Access to Certain Documentation and Information Regarding the
Loans. The Servicer and each Subservicer (including in its capacity as custodian
or subcustodian, as applicable) shall provide to the Issuer or the Indenture
Trustee, as applicable, access to the documentation regarding the Loans in such
cases where the Issuer or the Indenture Trustee, as applicable, is required in
connection with the enforcement of the rights of the Issuer, the North Carolina
Trust or the Noteholders or by applicable statutes or regulations to review such
documentation, such access being afforded without charge but only (a) upon
reasonable request,

 

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(b) during normal business hours, (c) subject to the Servicer’s or
Subservicer’s, as applicable, normal security and confidentiality procedures and
(d) at reasonably accessible offices in the continental United States designated
by the Indenture Trustee, the Servicer or Subservicer, as applicable. Nothing in
this Section shall derogate from the obligation of the Depositor, the Issuer,
the North Carolina Trust, the Subservicer and the Servicer to observe any
applicable law or regulation prohibiting disclosure of information regarding the
Loan Obligors and the failure of the Servicer or Subservicer to provide access
as provided in this Section as a result of such obligation shall not constitute
a breach of this Section.

Section 6.07 Delegation of Duties. In the ordinary course of business (and
subject to the standard of care set forth in Section 3.01), the Servicer
(including any Successor Servicer) may at any time delegate its duties hereunder
with respect to the Loans to any Person or enter subservicing arrangements with
any Person (including the Subservicers) that agrees to conduct such duties in
accordance with the Credit and Collection Policy and this Agreement. Such
delegation shall not relieve the Servicer of its liability and responsibility
with respect to such duties, and shall not constitute a resignation pursuant to
Section 6.05.

Section 6.08 Examination of Records. The Depositor, each Subservicer (with
respect to the Loans being subserviced by it) and the Servicer shall indicate
generally in their computer files or other records that the Loans have been
conveyed to the Issuer pursuant to the terms of this Agreement and the 2020-1A
SUBI Supplement. Each of Depositor, each Subservicer and the Servicer shall,
prior to the sale or transfer to a third party of any loan held in its custody,
examine its computer records and other records to determine that such loan is
not, and does not include, a Loan. Upon such examination and conclusion that
such loan is not, and does not include, a Loan, the Depositor, each Subservicer
and the Servicer shall be free to sell, transfer or otherwise assign such loan.

Section 6.09 Servicer Power of Attorney. The Issuer and the North Carolina Trust
hereby authorize the Servicer acting alone or through an Affiliate, including
the Subservicers, to execute, deliver and perform any and all agreements,
documents or certificates as the Issuer may be requested or required by the
Issuer or the North Carolina Trust, as applicable, to undertake in connection
with enforcing its rights as the legal title holder to the Loans. In connection
with the enforcement of any rights of the Issuer or the North Carolina Trust, as
applicable, with respect to any Loan, the Issuer or the North Carolina Trust, as
applicable, shall furnish the Servicer or Subservicers, as applicable, with a
power of attorney (substantially in the form of Exhibit G hereto) and any other
documents reasonably necessary or appropriate to enable the Servicer to enforce
such rights on behalf of the Issuer.

ARTICLE VII

INSOLVENCY EVENTS

Section 7.01 Rights upon the Occurrence of an Insolvency Event. The Depositor
shall, on the day that any Insolvency Event occurs with respect to the
Depositor, immediately cease to transfer Additional Loans to the Issuer and the
Depositor shall promptly give notice to the Indenture Trustee and the Issuer
thereof. Loans transferred to the Issuer prior to the occurrence of such
Insolvency Event and Collections in respect of such Loans transferred to the
Issuer shall continue to be a part of the Sold Assets and shall be allocated and
distributed to Noteholders in accordance with the terms of this Agreement and
the Indenture.

 

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ARTICLE VIII

SERVICER DEFAULTS

Section 8.01 Servicer Defaults. If any one of the following events (a “Servicer
Default”) shall occur and be continuing:

(a) any failure by the Servicer to make any required payment, transfer or
deposit or to give instructions or notice to the Indenture Trustee to make such
payment, transfer or deposit on or before the date such payment, transfer or
deposit or such instruction or notice is required to be made or given, as the
case may be, under the terms of this Agreement, the Indenture, the 2020-1A SUBI
Supplement or the 2020-1A SUBI Servicing Agreement, in an aggregate amount
exceeding $50,000, and which failure continues unremedied for a period of five
(5) Business Days after the earlier of (i) the date on which notice of such
failure, requiring the same to be remedied, shall have been given by registered
or certified mail to the Servicer by the Issuer or the Indenture Trustee, or to
the Servicer, the Issuer and the Indenture Trustee by the Required Noteholders
and (ii) the actual knowledge of the Servicer thereof;

(b) any failure on the part of the Servicer duly to observe or perform any other
covenants or agreements of the Servicer set forth in this Agreement, the
Indenture, the 2020-1A SUBI Supplement or the 2020-1A SUBI Servicing Agreement
or in any certificate delivered by the Servicer pursuant to this Agreement, the
2020-1A SUBI Supplement, the 2020-1A SUBI Servicing Agreement or the Indenture,
which failure has a material adverse effect on the interests of the Noteholders
(as determined by the Threshold Noteholders) and which continues unremedied for
a period of forty-five (45) days after the earlier of (i) the date on which
notice of such failure, requiring the same to be remedied, shall have been given
by registered or certified mail to the Servicer by the Issuer or the Indenture
Trustee, or to the Servicer, the Issuer and the Indenture Trustee by the
Threshold Noteholders and (ii) the actual knowledge of the Servicer thereof;

(c) any representation, warranty or certification made by the Servicer in this
Agreement, the Indenture, the 2020-1A SUBI Supplement or the 2020-1A SUBI
Servicing Agreement or in any certificate delivered by the Servicer pursuant to
this Agreement, the Indenture, the 2020-1A SUBI Supplement or the 2020-1A SUBI
Servicing Agreement shall prove to have been incorrect when made or deemed made
and such failure has a material adverse effect on the Noteholders (as determined
by the Threshold Noteholders) and which continues unremedied for a period of
forty-five (45) days after the earlier of (i) the date on which a notice
specifying such incorrect representation or warranty and requiring the same to
be remedied, shall have been given by registered or certified mail to the
Servicer by the Issuer or the Indenture Trustee, or to the Servicer, the Issuer,
and the Indenture Trustee by the Threshold Noteholders and (ii) the actual
knowledge of the Servicer thereof; or

(d) an Insolvency Event shall occur with respect to the Servicer;

 

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then, in the event of any Servicer Default, so long as a Servicer Default is
continuing, the Indenture Trustee may (and upon the written direction of the
Required Noteholders shall), by notice then given to the Servicer, the Issuer,
the North Carolina Trust and the Back-up Servicer (a “Termination Notice”) (i)
terminate all of the rights and obligations of the Servicer as Servicer under
this Agreement, the 2020-1A SUBI Supplement, the 2020-1A SUBI Servicing
Agreement and the Indenture and (ii) direct the applicable party to terminate
any power of attorney granted to the Servicer or any Subservicer and direct such
party to execute a new power of attorney to the Indenture Trustee or its
designee. The existence of a Servicer Default may be waived with the consent of
the Required Noteholders.

Notwithstanding the foregoing, a delay in or failure of performance referred to
under paragraph (a) above for an additional period of five (5) Business Days
after the applicable grace period or referred to under paragraph (b) or (c)
above for a period of forty-five (45) days after the applicable grace period,
shall not constitute a Servicer Default if such delay or failure could not be
prevented by the exercise of reasonable diligence by the Servicer and such delay
or failure was caused by a Force Majeure Event. If, following the expiration of
such incremental forty-five (45) day grace period in the case of a delay or
failure of performance described in paragraph (b) or (c) above, the applicable
delay or failure of performance remains outstanding but the Servicer continues
to work diligently to remedy such delay or failure of performance, then the
grace period shall be extended for a further thirty (30) days upon notice from
the Servicer to the Indenture Trustee. The preceding sentences will not relieve
the Servicer from using all commercially reasonable efforts to perform its
obligations in a timely manner in accordance with the terms of this Agreement
and the Servicer shall provide the Indenture Trustee, the Issuer and the
Depositor with an Officer’s Certificate giving prompt notice of such failure or
delay, together with a description of its efforts so to perform its obligations.

After receipt by the Servicer of a Termination Notice, and effective on the
Servicing Transfer Date, all authority and power of the Servicer under this
Agreement shall pass to and be vested in the Successor Servicer (a “Servicing
Transfer”) appointed by the Indenture Trustee (at the written direction of the
Required Noteholders if the Successor Servicer is not the Back-up Servicer or
the Indenture Trustee) pursuant to Section 8.02; and, without limitation, the
Indenture Trustee is hereby authorized and empowered (upon the failure of the
Servicer to cooperate promptly) to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, all documents and other instruments
upon the failure of the Servicer to execute or deliver such documents or
instruments, and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such Servicing Transfer. The Servicer
agrees to reasonably cooperate and to cause each Subservicer to reasonably
cooperate (and each Subservicer agrees to cooperate) with the Indenture Trustee
and such Successor Servicer in (i) effecting the termination of the
responsibilities and rights of the Servicer to conduct servicing hereunder and
(ii) transferring all duties and obligations of the Servicer hereunder to such
Successor Servicer, including the transfer to such Successor Servicer of all
authority of the Servicer to service and administer the Loans provided for under
this Agreement, including all authority over all Collections which shall on the
date of transfer be held by the Servicer for deposit, or which have been
deposited by the Servicer, in the Collection Account or other applicable Note
Account, or which shall thereafter be received with respect to the Loans, and in
assisting the Successor Servicer. The Servicer shall transfer to the Successor
Servicer all its electronic records relating to the Loans, together with all
other records, correspondence and documents necessary for the continued
servicing and

 

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administration of the Loans in the manner and at such times as the Successor
Servicer shall reasonably request. Notwithstanding the foregoing, the Servicer
shall be allowed to retain a copy of all records, correspondence and documents
provided to the Successor Servicer in compliance with the Servicer’s
recordkeeping policies or Requirements of Law. The predecessor Servicer shall be
responsible for all expenses incurred in transferring the servicing duties to
the Successor Servicer. To the extent that compliance with this Section shall
require the Servicer to disclose to the Successor Servicer information of any
kind which the Servicer deems to be confidential or give the Successor Servicer
access to software or other intellectual property, the Successor Servicer shall
be required to enter into such customary licensing and confidentiality
agreements as the Servicer shall deem reasonably necessary to protect its
interests.

Section 8.02 Indenture Trustee to Act; Appointment of Successor. (a) On and
after the receipt by the Servicer of a Termination Notice pursuant to
Section 8.01, the Servicer shall continue to perform all servicing functions
under this Agreement and the 2020-1A SUBI Servicing Agreement until the earlier
of (i) the date specified in the Termination Notice or otherwise specified by
the Indenture Trustee and (ii) the Servicing Transfer Date. The Indenture
Trustee shall as promptly as possible after the giving of a Termination Notice
appoint (at the written direction of the Required Noteholders in the case of a
Successor Servicer that is not the Back-up Servicer or the Indenture Trustee) an
Eligible Servicer (which shall be the Back-up Servicer unless the Back-up
Servicer is then acting as the Servicer) as a successor Servicer (the “Successor
Servicer”), and such Successor Servicer shall accept its appointment by a
written assumption in a form acceptable to the Indenture Trustee. In the event
that a Successor Servicer has not been appointed or has not accepted its
appointment at the time when the Servicer ceases to act as Servicer, the
Indenture Trustee without further action shall automatically be appointed the
Successor Servicer. The Indenture Trustee may delegate any of its servicing
obligations to an Affiliate or agent in accordance with Section 3.01(b) and
Section 6.07. Notwithstanding the foregoing, the Indenture Trustee shall, if it
is legally unable or unwilling so to act, petition a court of competent
jurisdiction to appoint any established institution qualifying as an Eligible
Servicer as the Successor Servicer hereunder and under the 2020-1A SUBI
Servicing Agreement. The Indenture Trustee shall give prompt notice to each
Rating Agency upon the appointment of a Successor Servicer.

(b) Upon its appointment, the Successor Servicer shall be the successor in all
respects to the Servicer with respect to servicing functions under this
Agreement and the 2020-1A SUBI Servicing Agreement, and shall be subject to all
the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof (other than in the case of the
Back-up Servicer, any such responsibility, duty or liability that it is not
required to assume under the terms of this Agreement, the Back-up Servicing
Agreement or the 2020-1A SUBI Servicing Agreement), and all references in this
Agreement to the Servicer (including 2020-1A SUBI Servicer) shall be deemed to
refer to the Successor Servicer.

Within five (5) Business Days after the Servicer becomes aware of any Servicer
Default, the Servicer shall give notice thereof to the Issuer, the 2020-1A SUBI
Trustee, the Indenture Trustee, the Back-up Servicer and each Rating Agency.
Upon any termination or appointment of a Successor Servicer pursuant to this
Article VIII, the Indenture Trustee shall give prompt notice thereof to the
Noteholders.

 

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Section 8.03 Rule 15Ga-1 Compliance. (a) To the extent a Responsible Officer of
the Successor Servicer receives a demand for the repurchase of a Loan based on a
breach of a representation or warranty made by the Seller (or, with respect to
the 2020-1A SUBI Loans, the Servicer) of such Loan (each, a “Demand”), the
Successor Servicer agrees (i) if such Demand is in writing, promptly to forward
such Demand to the Depositor, and (ii) if such Demand is oral, to instruct the
requesting party to submit such Demand in writing to the Indenture Trustee and
the Depositor.

(b) In connection with the repurchase of a Loan pursuant to a Demand, any
dispute with respect to a Demand, or the withdrawal or final rejection of a
Demand, the Successor Servicer agrees, to the extent a Responsible Officer of
the Successor Servicer has actual knowledge thereof, promptly to notify the
Depositor in writing.

(c) The Successor Servicer will (i) notify the Depositor, as soon as practicable
and in any event within five (5) Business Days of the receipt thereof and in the
manner set forth in Exhibit F hereof, of all Demands and provide to the
Depositor any other information reasonably requested to facilitate compliance by
it with Rule 15Ga-1 under the Exchange Act, and (ii) if requested in writing by
the Depositor, provide a written certification no later than fifteen (15) days
following any calendar quarter or calendar year that the Successor Servicer has
not received any Demands for such period, or if Demands have been received
during such period, that the Successor Servicer has provided all the information
reasonably requested under clause (i) above with respect to such demands. For
purposes of this Agreement, references to any calendar quarter shall mean the
related preceding calendar quarter ending in March, June, September, or
December, as applicable. The Successor Servicer has no duty or obligation to
undertake any investigation or inquiry related to any repurchases of Loans, or
otherwise assume any additional duties or responsibilities, other than those
express duties or responsibilities the Successor Servicer has hereunder or under
the Transaction Documents, and no such additional obligations or duties are
otherwise implied by the terms of this Agreement. The Depositor has full
responsibility for compliance with all related reporting requirements associated
with the transaction completed by the Transaction Documents and for all
interpretive issues regarding this information.

The Indenture Trustee shall provide the Depositor and the Servicer (each, a
“Regional Party” and, collectively, the “Regional Parties”) with
(i) notification, as soon as practicable and in any event within five
(5) Business Days, of all demands communicated in writing to a Responsible
Officer of the Indenture Trustee for the repurchase or replacement of any Loan
pursuant to this Agreement or the Loan Purchase Agreement, as applicable and
(ii) promptly upon receipt by a Responsible Officer of written request by a
Regional Party, any other information reasonably requested by such Regional
Party to facilitate compliance by the Regional Parties with Rule 15Ga-1 under
the Exchange Act, and Items 1104(e) and 1121(c) of Regulation AB. In no event
shall the Indenture Trustee be deemed to be a “securitizer” as defined in
Section 15G(a) of the Exchange Act, nor shall it have any responsibility for
making any filing to be made by a securitizer under the Exchange Act or
Regulation AB.

 

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ARTICLE IX

TERMINATION

Section 9.01 Termination of Agreement as to Servicing. Unless earlier terminated
as contemplated herein, the appointment of the Servicer and the Subservicers
under this Agreement and the 2020-1A SUBI Servicing Agreement and the respective
obligations and responsibilities of the Issuer, the Depositor, the North
Carolina Trust, the Servicer, the Subservicers and the Indenture Trustee to the
Servicer and the Subservicers, as applicable, under this Agreement and the
2020-1A SUBI Servicing Agreement, and the rights and obligations of the Servicer
and the Subservicers under this Agreement and the 2020-1A SUBI Servicing
Agreement except with respect to the obligations described in Section 10.07,
shall terminate on the date of termination of the Trust Agreement. Such
termination shall be automatic, without any required action of the Depositor,
the North Carolina Trust, the Indenture Trustee, the Issuer or any Noteholder.
The obligations and responsibilities of the Indenture Trustee under this
Agreement shall terminate upon the termination of the Indenture in accordance
with its terms, unless such obligations and responsibilities are terminated
earlier as contemplated herein.

ARTICLE X

MISCELLANEOUS PROVISIONS

Section 10.01 Amendment; Waiver of Past Defaults; Assignment. (a) This Agreement
may be amended from time to time by the Servicer, the Depositor, the North
Carolina Trust, and the Issuer by a written instrument signed by each of them,
but without consent of any of the Noteholders, (i) to correct or supplement any
provisions herein which may be inconsistent with any other provisions herein,
(ii) to conform the terms of this Agreement to the description hereof in the
PPM, or (iii) to add any other provisions with respect to matters or questions
arising under or related to this Agreement which shall not be inconsistent with
the provisions of this Agreement; provided, however, that such action shall not
adversely affect in any material respect the interest of any of the Noteholders
as evidenced by an Officer’s Certificate of the Depositor to such effect
delivered to the Indenture Trustee and the Issuer and the Rating Agency Notice
Requirement shall have been satisfied with respect to such amendment.
Additionally, this Agreement may be amended from time to time (including in
connection with the issuance of a supplement certificate or to change the
definition of Collection Period, Monthly Determination Date or Payment Date) by
the Servicer, the North Carolina Trust, the Depositor and the Issuer by a
written instrument signed by each of them, but without the consent of any of the
Noteholders; provided that (i) the Depositor shall have delivered to the
Indenture Trustee and the Issuer an Officer’s Certificate, dated the date of any
such amendment, stating that the Depositor reasonably believes that such
amendment will not have an Adverse Effect and (ii) the Rating Agency Notice
Requirement shall have been satisfied with respect to any such amendment.
Notwithstanding anything else to the contrary herein, this Agreement may be
amended by the Servicer, the North Carolina Trust, the Depositor and the Issuer
by a written instrument signed by each of them, but without the consent of the
Noteholders, upon satisfaction of the Rating Agency Notice Requirement with
respect to such amendment (without anything further) as may be necessary or
advisable in order to avoid the imposition of any withholding taxes or state or
local income or franchise taxes imposed on the Issuer’s property or its income.

 

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(b) Without limiting Section 10.01(a), this Agreement may also be amended from
time to time by the Servicer, the North Carolina Trust, the Depositor and the
Issuer with the consent of the Required Noteholders, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Noteholders;
provided, however, that no such amendment effected pursuant to this clause
(b) shall (i) reduce in any manner the amount of or delay the timing of any
distributions (changes in Early Amortization Events that decrease the likelihood
of the occurrence thereof shall not be considered delays in the timing of
distributions for purposes of this clause) to be made to Noteholders or deposits
of amounts to be so distributed without the consent of each affected Noteholder,
(ii) change the definition of or the manner of calculating the interest of any
Noteholder without the consent of each affected Noteholder or (iii) reduce the
aforesaid percentage required to consent to any such amendment, in each case,
without the consent of each Noteholder.

(c) Promptly after the execution of any such amendment or consent (other than an
amendment pursuant to paragraph (a)), the Issuer shall furnish notification of
the substance of such amendment to the Indenture Trustee and each Noteholder,
and the Servicer shall furnish notification of the substance of such amendment
to each Rating Agency and the Issuer.

(d) It shall not be necessary for the consent of Noteholders (if required) under
this Section 10.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Noteholders shall be subject to such reasonable
requirements as the Indenture Trustee may prescribe.

(e) The Required Noteholders may, on behalf of all Noteholders, waive any
default by the Depositor, the Issuer or the Servicer in the performance of their
obligations hereunder and its consequences, except the failure to make any
distributions required to be made to Noteholders or to make any required
deposits of any amounts to be so distributed (which such default may only be
waived by 100% of the affected Noteholders). Upon any such waiver of a past
default, such default shall cease to exist, and any default arising therefrom
shall be deemed to have been remedied for every purpose of this Agreement;
provided that no such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.

(f) Any amendment hereunder which affects the rights, duties, immunities or
liabilities of the Owner Trustee or the Indenture Trustee shall require the
Owner Trustee’s or the Indenture Trustee’s, as applicable, written consent. Each
of the Owner Trustee and the Indenture Trustee may, but shall not be obligated
to, enter into any such amendment which affects the Owner Trustee’s or the
Indenture Trustee’s rights, duties, benefits, protections, privileges or
immunities under this Agreement or otherwise. In connection with the execution
of any amendment hereunder on behalf of the Issuer, each of the Owner Trustee
and the Indenture Trustee shall be entitled to receive an Opinion of Counsel and
an Officer’s Certificate to the effect that all conditions precedent thereto
have been satisfied and that such amendment is permitted under the terms of this
Agreement. All reasonable fees, costs and expenses (including reasonable
attorneys’ fees, costs and expenses) incurred in connection with any such
amendment will be payable by the Issuer in accordance with and subject to
Section 8.06 of the Indenture.

 

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(g) Notwithstanding anything in this Section 10.01 to the contrary, no amendment
may be made to this Agreement which would adversely affect in any material
respect the rights or obligations of any Subservicer without the consent of such
Subservicer.

(h) Notwithstanding anything in this Section 10.01 to the contrary, no amendment
may be made to this Agreement which would adversely affect in any material
respect the rights or obligations of the Indenture Trustee without the consent
of the Indenture Trustee.

(i) Except as contemplated in Sections 5.02, 6.02 and 6.05, no party may assign
any interest in this Agreement, except that (i) the Issuer may assign their
interest in this Agreement to the Indenture Trustee under the Indenture and
(ii) any party may assign its interest in this Agreement to any other Person if
(A) at least ten days prior to the assignment notice is given to each other
party hereto, and (B) each other party gives its prior written consent to the
assignment.

Section 10.02 Protection of Right, Title and Interest of Issuer. (a) The
Depositor shall cause this Agreement, all amendments and supplements hereto and
all financing statements and amendments thereto and continuation statements and
any other necessary documents covering the Issuer’s right, title and interest to
the Sold Assets (and the Issuer hereby authorize the Depositor to make such
filings on its behalf to the extent that the applicable UCC provides that the
Issuer is the person authorized to make such filings) to be promptly recorded,
registered and filed, and at all times to be kept recorded, registered and
filed, all in such manner and in such places as may be required by law fully to
preserve and protect the right, title and interest of the Issuer hereunder to
the Sold Assets. The Depositor shall deliver to the Issuer and Indenture Trustee
file-stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such
recording, registration or filing. The Depositor shall cooperate fully with the
Servicer in connection with the obligations set forth above and will execute any
and all documents reasonably required to fulfill the intent of this paragraph.

(b) The Servicer shall cause the 2020-1A Security Agreement, all amendments and
supplements hereto and all financing statements and amendments thereto and
continuation statements and any other necessary documents covering the Related
Collateral (and the Issuer and the North Carolina Trust hereby authorize the
Servicer to make such filings on its behalf to the extent that the applicable
UCC provides that the Issuer and the North Carolina Trust are the persons
authorized to make such filings) to be promptly recorded, registered and filed,
and at all times to be kept recorded, registered and filed, all in such manner
and in such places as may be required by law fully to preserve and protect the
right, title and interest of the Indenture Trustee in the Related Collateral.
The initial Servicer shall deliver to the Issuer and Indenture Trustee
file-stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such
recording, registration or filing. The Servicer shall cooperate fully with the
Issuer, the North Carolina Trust and the Indenture Trustee in connection with
the obligations set forth above and will execute any and all documents
reasonably required to fulfill the intent of this paragraph.

(c) Within thirty (30) days after the Depositor makes any change in its name,
type or jurisdiction of organization, or organizational identification number,
the Depositor shall give the Issuer and the Indenture Trustee notice of any such
change and shall file such financing statements or amendments as may be
necessary to continue the perfection and priority of the Issuer’s security
interest or ownership interest in the Loans and the other Sold Assets.

 

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Section 10.03 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS (OTHER THAN SECTIONS 5-1401
AND 5-1402 OF THE GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.

EACH OF THE PARTIES HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF
ANY NEW YORK STATE COURT SITTING IN THE COUNTY OF NEW YORK FOR PURPOSES OF ALL
LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER
TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM
THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ANY PARTY
HERETO TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OTHER PARTY HERETO OR ANY
OF THEIR PROPERTY IN THE COURTS OF OTHER JURISDICTIONS.

EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE, AMONG ANY
OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO AND INCIDENT TO THE
RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR THE OTHER
TRANSACTION DOCUMENTS.

Section 10.04 Notices. All demands, notices, instructions, directions and
communications under this Agreement must be in writing and will be considered
effective when delivered by hand, electronic communication (including e-mail) by
courier, by overnight delivery service, or by certified mail, return receipt
requested and postage prepaid.

 

  (a)

in the case of the Depositor, to:

979 Batesville Road, Suite B

Greer, South Carolina 29651

Attention: Michael S. Dymski, Vice President, interim Chief Financial Officer
and Chief Accounting Officer

Email: mdymski@regionalmanagement.com

 

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  (b)

in the case of the Servicer, to:

979 Batesville Road, Suite B

Greer, South Carolina 29651

Attention: Michael S. Dymski, Vice President, interim Chief Financial Officer
and Chief Accounting Officer

Email: mdymski@regionalmanagement.com

 

  (c)

in the case of the Issuer, to:

979 Batesville Road, Suite B

Greer, South Carolina 29651

Attention: Michael S. Dymski, Vice President, interim Chief Financial Officer
and Chief Accounting Officer

Email: mdymski@regionalmanagement.com

 

  (d)

in the case of the Owner Trustee, to:

Wilmington Trust, National Association

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890

Attention: Corporate Trust Administration – Regional Management

Issuance Trust 2020-1

 

  (e)

in the case of the Indenture Trustee, to:

Wells Fargo Bank, National Association

Attention: Corporate Trust Services/Structured Products Services

600 S 4th St.

MAC N9300-061

Minneapolis, MN 55415

Telephone: (612) 667-7181

 

  (f)

in the case of the Back-up Servicer, to:

Wells Fargo Bank, National Association

Attention: Corporate Trust Services/Structured Products Services

600 S 4th St.

MAC N9300-061

Minneapolis, MN 55415

Telephone: (612) 667-7181

 

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  (g)

in the case of notice to DBRS Morningstar, at the following addresses:

DBRS, Inc.

140 Broadway

New York, NY 10005

Attention: ABS Surveillance

Email address: ABS_Surveillance@dbrs.com

 

  (h)

in the case of notice to S&P, to:

S&P Global Ratings

55 Water Street

New York, NY 10041-0003

 

  (i)

in the case of notice to the North Carolina Trust, to:

979 Batesville Road, Suite B

Greer, South Carolina 29651

Attention: Michael S. Dymski, Vice President, interim Chief Financial Officer
and Chief Accounting Officer

Email: mdymski@regionalmanagement.com

 

  (j)

to any other Person as specified in the Indenture.

Any of these entities may designate a different address in a notice to the
others under this Section 10.05.

Unless a party hereto otherwise prescribes with respect to itself, notices and
other communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient.

Section 10.05 Severability. If any part of this Agreement is held to be invalid
or otherwise unenforceable, the rest of this Agreement will be considered
severable and will continue in full force.

Section 10.06 Further Assurances. Each party must take all actions that are
reasonably requested by any other party to effect more fully the purposes of
this Agreement. The parties hereto agree to (a) provide access to the Contracts
and related documentation in their possession for inspection by governmental
regulatory agencies and (b) assist in the preparation of any routine reports
required by regulatory bodies, if any.

 

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Section 10.07 Nonpetition Covenant. (a) To the fullest extent permitted by law
and notwithstanding any prior termination of this Agreement, each of the
Servicer, the Subservicers, the North Carolina Trust and the Issuer agree that
it shall not file, commence, join, or acquiesce in a petition or proceeding, or
cause the Depositor to file, commence, join, or acquiesce in a petition or
proceeding, that causes (a) the Depositor to be a debtor under any Debtor Relief
Law or (b) a trustee, conservator, receiver, liquidator, or similar official to
be appointed for the Depositor or any substantial part of its property.

(b) To the fullest extent permitted by law and notwithstanding any prior
termination of this Agreement, each of the Servicer, the Subservicers, the
Depositor and the North Carolina Trust agree that it shall not file, commence,
join, or acquiesce in a petition or proceeding, or cause the Issuer to file,
commence, join, or acquiesce in a petition or proceeding, that causes (a) the
Issuer to be a debtor under any Debtor Relief Law or (b) a trustee, conservator,
receiver, liquidator, or similar official to be appointed for the Issuer or any
substantial part of its property.

(c) To the fullest extent permitted by law and notwithstanding any prior
termination of this Agreement, each of the Servicer, the Subservicers, the
Depositor and the Issuer agree that it shall not file, commence, join, or
acquiesce in a petition or proceeding, or cause the North Carolina Trust to
file, commence, join, or acquiesce in a petition or proceeding, that causes
(a) the North Carolina Trust to be a debtor under any Debtor Relief Law or (b) a
trustee, conservator, receiver, liquidator, or similar official to be appointed
for the North Carolina Trust or any substantial part of its property.

(d) The parties hereto agree that the provisions of this Section 10.07 shall
survive the resignation or removal of any such party from this Agreement and the
termination of this Agreement.

Section 10.08 No Waiver; Cumulative Remedies. No failure to exercise or delay in
exercising any right or remedy under this Agreement will effect a waiver of that
right or remedy. No single or partial exercise of any right or remedy under this
Agreement will preclude any other or further exercise of that right or remedy or
any other right or remedy. Except as otherwise expressly provided, the rights,
remedies, powers and privileges provided under this Agreement are cumulative and
not exhaustive.

Section 10.09 Counterparts; Execution. This Agreement may be executed in any
number of counterparts, each of which will be considered an original, but all of
which together will constitute one agreement. This Agreement shall be valid,
binding, and enforceable against a party only when executed by an authorized
individual on behalf of the party by means of (i) an electronic signature that
complies with the federal Electronic Signatures in Global and National Commerce
Act, state enactments of the Uniform Electronic Transactions Act, and/or any
other relevant electronic signatures law including any relevant provisions of
the UCC (collectively, “Signature Law”), in each case to the extent applicable;
(ii) an original manual signature; or (iii) a faxed, scanned, or photocopied
manual signature. Each electronic signature or faxed, scanned, or photocopied
manual signature shall for all purposes have the same validity, legal effect,
and admissibility in evidence as an original manual signature. Each party hereto
shall be entitled to conclusively rely upon, and shall have no liability with
respect to, any electronic signature or faxed, scanned, or photocopied manual
signature of any other party and shall have no duty to investigate, confirm or
otherwise verify the validity or authenticity thereof. Notwithstanding the
foregoing, with respect to any notice provided for in this Agreement or any
instrument required or permitted to be delivered hereunder, any party hereto
receiving or relying upon such notice or instrument shall be entitled to request
execution thereof by original manual signature as a condition to the
effectiveness thereof.

 

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Section 10.10 Binding Effect; Third-Party Beneficiaries. This Agreement benefits
and is binding on the parties hereto, and their respective successor and
permitted assigns. Each of the Back-up Servicer, the Indenture Trustee and the
Owner Trustee are third-party beneficiaries to this Agreement and is entitled to
the rights and benefits hereunder and may enforce the provisions hereof as if it
were a party hereto.

Section 10.11 Merger and Integration. Except as specifically stated otherwise
herein, this Agreement contains all of the terms and conditions relating to its
subject matter to which the parties have agreed. All prior understandings of any
kind are superseded by this Agreement.

Section 10.12 Headings. The headings are for reference only and must not affect
the interpretation of this Agreement.

Section 10.13 Schedules and Exhibits. All schedules and exhibits are fully
incorporated into this Agreement.

Section 10.14 Survival of Representations and Warranties. All representations,
warranties, and covenants in this Agreement will survive the conveyance of the
Purchased Assets to the Issuer and the grant of a security interest in the
Purchased Assets to the Indenture Trustee under the Indenture.

Section 10.15 Limited Recourse. (a) Notwithstanding anything to the contrary
contained herein, no recourse under or with respect to any obligation, covenant
or agreement of the Depositor as contained in this Agreement or any of the other
Transaction Documents or any other agreement, instrument or document to which
the Depositor is a party shall be had against any incorporator, stockholder,
affiliate, officer, employee or director of the Depositor by the enforcement of
any assessment or by any legal or equitable proceeding, by virtue of any statute
or otherwise; it being expressly agreed and understood that the agreements of
the Depositor contained in this Agreement and all other agreements, instruments
and documents entered into pursuant hereto or in connection herewith are, in
each case, solely corporate obligations of the Depositor. Notwithstanding any
provisions contained in this Agreement to the contrary, the Depositor shall not,
and shall not be obligated to, pay any fees, costs, indemnified amounts or
expenses due pursuant to this Agreement until payment in full of all amounts
that the Depositor is obligated to pay for deposit into the Collection Account
and the Principal Distribution Account pursuant to this Agreement; and all
amounts that the Depositor is obligated, in its capacity as depositor with
respect to any Permitted Securitization, to pay for deposit into any collection
account and any principal distribution account with respect to such Permitted
Securitization pursuant to the sale and servicing agreement for such Permitted
Securitization; provided, however, that the Noteholders shall be entitled to the
benefits of the subordination of the Collections allocable to the Trust
Certificate to the extent provided in the Indenture. Any amount which the
Depositor does not pay pursuant to the operation of the preceding sentence shall
not constitute a claim (as defined in §101 of the United States Bankruptcy
Reform Act of 1978 (11 U.S.C. §101, et seq.), as amended from time to time)
against or obligation of the Depositor for any such insufficiency unless and
until funds are available for the payment of such amounts as aforesaid.

 

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(b) Notwithstanding anything to the contrary contained herein, no recourse under
or with respect to any obligation, covenant or agreement of the Issuer as
contained in this Agreement or any of the other Transaction Documents or any
other agreement, instrument or document to which the Issuer is a party shall be
had against any incorporator, stockholder, affiliate, officer, employee or
director of the Issuer by the enforcement of any assessment or by any legal or
equitable proceeding, by virtue of any statute or otherwise; it being expressly
agreed and understood that the agreements of the Issuer contained in this
Agreement and all other agreements, instruments and documents entered into
pursuant hereto or in connection herewith are, in each case, solely corporate
obligations of the Issuer. Notwithstanding any provisions contained in this
Agreement to the contrary, the Issuer shall not, and shall not be obligated to,
pay any fees, costs, indemnified amounts or expenses due pursuant to this
Agreement other than in accordance with the order of priorities set forth in
Section 8.06 of the Indenture. Any amount which the Issuer does not pay pursuant
to the operation of the preceding sentence shall not constitute a claim (as
defined in §101 of the United States Bankruptcy Reform Act of 1978 (11 U.S.C.
§101, et seq.), as amended from time to time) against or obligation of the
Issuer for any such insufficiency unless and until funds are available for the
payment of such amounts as aforesaid. The Issuer hereby acknowledges and agrees
that it shall have no rights or recourse to (or claim against) the assets of any
issuer or other issuing entity with respect to any Permitted Securitization (it
being understood that this acknowledgement and agreement shall not in any way
limit the Issuer’s rights with respect to the Sold Assets).

(c) Notwithstanding anything to the contrary contained herein, no recourse under
or with respect to any obligation, covenant or agreement of the North Carolina
Trust as contained in this Agreement or any of the other Transaction Documents
or any other agreement, instrument or document to which the North Carolina Trust
is a party shall be had against any incorporator, stockholder, affiliate,
officer, employee or director of the North Carolina Trust by the enforcement of
any assessment or by any legal or equitable proceeding, by virtue of any statute
or otherwise; it being expressly agreed and understood that the agreements of
the North Carolina Trust contained in this Agreement and all other agreements,
instruments and documents entered into pursuant hereto or in connection herewith
are, in each case, solely corporate obligations of the North Carolina Trust.
Notwithstanding any provisions contained in this Agreement to the contrary, the
North Carolina Trust shall not, and shall not be obligated to, pay any fees,
costs, indemnified amounts or expenses due pursuant to this Agreement. Any
amount which the North Carolina Trust does not pay pursuant to the operation of
the preceding sentence shall not constitute a claim (as defined in §101 of the
United States Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et seq.), as
amended from time to time) against or obligation of the North Carolina Trust for
any such insufficiency unless and until funds are available for the payment of
such amounts as aforesaid.

(d) The parties hereto agree that the provisions of this Section 10.15 shall
survive the resignation or removal of any such party to this Agreement and the
termination of this Agreement.

 

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Section 10.16 Rights of the Indenture Trustee. The Indenture Trustee shall be
entitled to all of the same rights, protections, immunities and indemnities set
forth in the Indenture, mutatis mutandis.

Section 10.17 Series Liabilities. (a) The 2020-1A SUBI is a separate series of
the North Carolina Trust as provided in Section 3806(b)(2) of the Delaware
Statutory Trust Statute, (b)(i) claims incurred, contracted for or otherwise
existing with respect to the 2020-1A SUBI or the 2020-1A SUBI Assets, including
claims hereunder, shall be enforceable against the 2020-1A SUBI Assets only, and
not against any UTI Assets or any SUBI assets other than the 2020-1A SUBI Assets
(such other assets, “Other SUBI Assets”) and (ii) claims incurred, contracted
for or otherwise existing with respect to any other SUBI, the UTI or any other
North Carolina Trust Assets shall be enforceable against the North Carolina
Trust Assets with respect to such other SUBI or the UTI or such other North
Carolina Trust Assets only and not against 2020-1A SUBI Assets, (c) except to
the extent required by law or specified in the North Carolina Trust Agreement,
(i) North Carolina Trust Assets with respect to any other SUBI or with respect
to the UTI shall not be subject to claims arising from or with respect to the
2020-1A SUBI, (ii) no creditor or holder of a claim relating to the 2020-1A SUBI
Assets shall be entitled to maintain any action against or recover any UTI
Assets or any Other SUBI Assets, and (iii) no creditor or holder of a claim
relating to any other SUBI, the UTI or any other North Carolina Trust Assets
shall be entitled to maintain any action against or recover any 2020-1A SUBI
Assets, and (d) any purchaser, assignee or pledgee of an interest in the 2020-1A
SUBI, the 2020-1A SUBI Certificate, any other SUBI, any other SUBI certificate,
the UTI or the UTI Certificate must, prior to or contemporaneously with the
grant of any such assignment, pledge or security interest, (i) give to the North
Carolina Trust a non-petition covenant substantially similar to that set forth
in Section 6.9 of the North Carolina Trust Agreement, and (ii) execute an
agreement for the benefit of each holder, assignee or pledgee from time to time
of the UTI or the UTI Certificate and any other SUBI or other SUBI certificate
to release all claims to the UTI Assets and any Other SUBI Assets and in the
event that such release is not given effect, to fully subordinate all claims it
may be deemed to have against the UTI Assets and any Other SUBI Assets.

Section 10.18 Intention of the Parties. It is the intention of the parties
hereto that each transfer and conveyance contemplated by this Agreement shall
constitute an absolute sale of the related Sold Assets from the Depositor to the
Issuer and that the related Sold Assets shall not be part of the Depositor’s
estate or otherwise be considered property of the Depositor in the event of the
bankruptcy, receivership, insolvency, liquidation, conservatorship or similar
proceeding relating to the Depositor or any of each of its property. The intent
expressed in the first sentence of this paragraph should not be deemed to be an
expression of the intended tax treatment of the conveyance of the Sold Assets.
It is not intended that any amounts available for reimbursement of any Sold
Assets be deemed to have been pledged by the Depositor to the Issuer to secure a
debt or other obligation of the Depositor.

Section 10.19 Additional Subservicers. The Depositor agrees that, subject to the
satisfaction of the conditions set forth below, any Affiliate of Regional
Management may be added as a party to this Agreement (an “Accession”) as a
“Subservicer” (each such Person, an “Additional Subservicer”), upon the
Depositor’s receipt of a written request from Regional Management requesting
that such Additional Subservicer be added to this Agreement as a Subservicer at
least five (5) days prior to the first acquisition of Eligible Loans to be
serviced by such Additional Subservicer:

 

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(a) the Depositor shall have delivered to the Indenture Trustee a fully executed
copy of an Accession Agreement substantially in the form of Exhibit D hereto
with respect to such Additional Subservicer;

(b) notice of any Accession and the related Additional Subservicer shall have
been provided to each Rating Agency;

(c) there shall have been delivered to the Indenture Trustee (on behalf of the
Noteholders) an Officer’s Certificate of Regional Management stating that such
Accession is not reasonably expected to result in an Adverse Effect; and

(d) as of the effective date of such Accession, the conditions precedent
applicable to such Additional Subservicer as set forth in Exhibit E shall have
been fulfilled.

Upon the effectiveness of any Accession, this Agreement shall be deemed amended
to include the proposed Additional Subservicer as a “Subservicer” hereunder. For
the avoidance of doubt, any Person to which the Servicer (including any
Successor Servicer) has delegated its duties hereunder in accordance with
Section 6.07 shall not be subject to an Accession or be required to become a
party to this Agreement.

Section 10.20 Limitation of Liability of WTNA.

(a) It is expressly understood and agreed by the parties hereto that (a) this
Agreement is executed and delivered by Wilmington Trust, National Association
(“WTNA”), not individually or personally but solely as Owner Trustee of the
Issuer, in the exercise of the powers and authority conferred and vested in it,
(b) each of the representations, undertakings and agreements herein made on the
part of the Issuer is made and intended not as personal representations,
undertakings and agreements by WTNA but is made and intended for the purpose of
binding only the Issuer, (c) nothing herein contained shall be construed as
creating any liability on WTNA, individually or personally, to perform any
covenant either expressed or implied contained herein, all such liability, if
any, being expressly waived by the parties hereto and by any Person claiming by,
through or under the parties hereto, (d) WTNA has made no investigation as to
the accuracy or completeness of any representations and warranties made by the
Issuer in this Agreement and (e) under no circumstances shall WTNA 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 other
related documents.

(b) It is expressly understood and agreed by the parties hereto that (a) this
Agreement is executed and delivered by WTNA, not individually or personally but
solely as 2020-1A SUBI Trustee of the North Carolina Trust, in the exercise of
the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
North Carolina Trust is made and intended not as personal representations,
undertakings and agreements by WTNA but is made and intended for the purpose of
binding only the North Carolina Trust, (c) nothing herein contained shall be
construed as creating any liability on WTNA,

 

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individually or personally, to perform any covenant either expressed or implied
contained herein, all such liability, if any, being expressly waived by the
parties hereto and by any Person claiming by, through or under the parties
hereto, (d) WTNA has made no investigation as to the accuracy or completeness of
any representations and warranties made by the North Carolina Trust in this
Agreement and (e) under no circumstances shall WTNA be personally liable for the
payment of any indebtedness or expenses of the North Carolina Trust or be liable
for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the North Carolina Trust under this Agreement or
any other related documents.

Section 10.21 EU Risk Retention. None of Regional Management, the Issuer, the
Initial Purchasers or their respective Affiliates or any other person intends to
retain a material net economic interest in the transaction in accordance with
the EU Securitization Regulation or take any other action that may be required
by EU Institutional Investors for the purpose of their compliance with the EU
Securitization Regulation.

[Signature Page Follows]

 

 

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IN WITNESS WHEREOF, the Depositor, the Servicer, the Subservicers, the Issuer
and the North Carolina Trust have caused this Sale and Servicing Agreement to be
duly executed by their respective officers as of the date first above written.

 

REGIONAL MANAGEMENT RECEIVABLES III, LLC, as Depositor By:  

/s/ Michael Dymski

Name:   Michael S. Dymski Title: Vice President, interim Chief Financial Officer
and Chief Accounting Officer REGIONAL MANAGEMENT CORP., as Servicer By:  

/s/ Michael Dymski

Name:   Michael S. Dymski Title: Vice President, interim Chief Financial Officer
and Chief Accounting Officer REGIONAL FINANCE CORPORATION OF ALABAMA, as
Subservicer By:  

/s/ Michael Dymski

Name:   Michael S. Dymski Title: Vice President, interim Chief Financial Officer
and Chief Accounting Officer REGIONAL FINANCE COMPANY OF GEORGIA, LLC, as
Subservicer By:  

/s/ Michael Dymski

Name:   Michael S. Dymski Title: Vice President, interim Chief Financial Officer
and Chief Accounting Officer

 

[Signature page to the Sale and Servicing Agreement]

--------------------------------------------------------------------------------

REGIONAL FINANCE COMPANY OF MISSOURI, LLC, as Subservicer By:  

/s/ Michael Dymski

Name:   Michael S. Dymski Title: Vice President, interim Chief Financial Officer
and Chief Accounting Officer REGIONAL FINANCE COMPANY OF NEW MEXICO, LLC, as
Subservicer By:  

/s/ Michael Dymski

Name:   Michael S. Dymski Title: Vice President, interim Chief Financial Officer
and Chief Accounting Officer REGIONAL FINANCE CORPORATION OF NORTH CAROLINA, as
Subservicer By:  

/s/ Michael Dymski

Name:   Michael S. Dymski Title: Vice President, interim Chief Financial Officer
and Chief Accounting Officer REGIONAL FINANCE COMPANY OF OKLAHOMA, LLC, as
Subservicer By:  

/s/ Michael Dymski

Name:   Michael S. Dymski Title: Vice President, interim Chief Financial Officer
and Chief Accounting Officer

 

[Signature page to the Sale and Servicing Agreement]

--------------------------------------------------------------------------------

REGIONAL FINANCE CORPORATION OF SOUTH CAROLINA, as Subservicer By:  

/s/ Michael Dymski

Name:   Michael S. Dymski Title: Vice President, interim Chief Financial Officer
and Chief Accounting Officer REGIONAL FINANCE CORPORATION OF TENNESSEE, as
Subservicer By:  

/s/ Michael Dymski

Name:   Michael S. Dymski Title: Vice President, interim Chief Financial Officer
and Chief Accounting Officer REGIONAL FINANCE CORPORATION OF TEXAS, as
Subservicer By:  

/s/ Michael Dymski

Name:   Michael S. Dymski Title: Vice President, interim Chief Financial Officer
and Chief Accounting Officer REGIONAL FINANCE COMPANY OF VIRGINIA, LLC, as
Subservicer By:  

/s/ Michael Dymski

Name:   Michael S. Dymski Title: Vice President, interim Chief Financial Officer
and Chief Accounting Officer

 

[Signature page to the Sale and Servicing Agreement]

--------------------------------------------------------------------------------

REGIONAL FINANCE CORPORATION OF WISCONSIN, as Subservicer By:  

/s/ Michael Dymski

Name:   Michael S. Dymski Title: Vice President, interim Chief Financial Officer
and Chief Accounting Officer

 

[Signature page to the Sale and Servicing Agreement]

--------------------------------------------------------------------------------

REGIONAL MANAGEMENT ISSUANCE TRUST 2020-1, as Issuer By:   WILMINGTON TRUST,
NATIONAL ASSOCIATION, not in its individual capacity, but solely as Owner
Trustee of the Issuer By:  

/s/ Rachel Simpson

Name: Rachel Simpson Title: Vice President

 

[Signature page to the Sale and Servicing Agreement]

--------------------------------------------------------------------------------

REGIONAL MANAGEMENT NORTH CAROLINA RECEIVABLES TRUST, acting hereunder solely
with respect to the 2020-1A SUBI By:   WILMINGTON TRUST, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as 2020-1A SUBI Trustee of the North
Carolina Trust By:  

/s/ Rachel Simpson

Name: Rachel Simpson Title: Vice President

 

[Signature page to the Sale and Servicing Agreement]

--------------------------------------------------------------------------------

ACKNOWLEDGED AND AGREED TO AS TO SECTIONS 6.05, 8.01 AND 8.02 BY:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity, but
solely as Indenture Trustee By:  

/s/ Marianna Stershic

Name: Marianna Stershic Title: Vice President

 

[Signature page to the Sale and Servicing Agreement]

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Schedule I

List of Subservicers

Regional Finance Corporation of Alabama

Regional Finance Company of Georgia, LLC

Regional Finance Company of Missouri, LLC

Regional Finance Company of New Mexico, LLC

Regional Finance Corporation of North Carolina

Regional Finance Company of Oklahoma, LLC

Regional Finance Corporation of South Carolina

Regional Finance Corporation of Tennessee

Regional Finance Corporation of Texas

Regional Finance Company of Virginia, LLC

Regional Finance Corporation of Wisconsin

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule I

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Schedule II

Definitions Schedule and Rules of Construction

 

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II

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PART A – Definitions Schedule

“ABL Facility” shall mean the Seventh Amended and Restated Loan and Security
Agreement, dated as of September 20, 2019, among the lenders from time to time
party thereto, Wells Fargo Bank, National Association, as agent, Regional
Management and the other borrowers from time to time party thereto.

“Accession” shall have the meaning specified in Section 10.19 of this Agreement.

“Accession Agreement” shall mean an accession agreement substantially in the
form of Exhibit D of the Sale and Servicing Agreement.

“Account Bank” shall have the meaning specified in Section 8.02(f) of the
Indenture.

“Act” or “Act of Noteholder” shall have the meaning specified in
Section 11.03(a) of the Indenture.

“Addition Date” shall mean, with respect to any Additional Loan, the effective
date of the conveyance or allocation of such Additional Loan, as specified in
the applicable Additional Loan Assignment, which date shall be a Loan Action
Date.

“Additional Cut-Off Date” shall mean (a) with respect to the Loan Purchase
Agreement and each Additional Loan, the Cut-Off Date specified in the related
Additional Loan Assignment, (b) with respect to the Sale and Servicing Agreement
and each Additional Loan, the Cut-Off Date specified in the related Additional
Loan Assignment, (c) with respect to the 2020-1A SUBI Supplement and each
Additional Loan, the Cut-Off Date specified in the related Additional Loan
Assignment, (d) with respect to the Purchase Agreement and each Additional Loan
transferred pursuant thereto, the Cut-Off Date specified in the related
Additional Loan Assignment, (e) with respect to the Omnibus Distribution and
Assignment Agreement and each Additional Loan transferred pursuant thereto, the
Cut-Off Date specified in the related Additional Loan Assignment, and (f) with
respect to any Other Warehouse Purchase Agreement and each Additional Loan
transferred pursuant thereto, the Cut-Off Date specified in the related
Additional Loan Assignment (for the avoidance of doubt, with respect to an
Additional Loan, the Cut-Off Date for such Additional Loan pursuant to (a), (b),
(c), (d), (e) or (f), as applicable, shall be the same date).

“Additional Loan” shall mean (a) with respect to the Loan Purchase Agreement,
each additional non-revolving personal loan that is sold to the Depositor
pursuant to the Loan Purchase Agreement on an Addition Date, which, for the
avoidance of doubt, may include Loans acquired by the Seller from Regional
Originators, (b) with respect to the Sale and Servicing Agreement, each
additional non-revolving personal loan that is acquired by the Issuer pursuant
to the Sale and Servicing Agreement on an Addition Date, (c) with respect to the
2020-1A SUBI Supplement, each additional non-revolving personal loan that is
allocated to the 2020-1A SUBI by the Servicer pursuant to the 2020-1A SUBI
Supplement on an Addition Date, (d) with respect to the Purchase Agreement, each
additional non-revolving personal loan that is sold to the Seller

 

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pursuant to the Purchase Agreement on each Addition Date, (e) with respect to
the Omnibus Distribution and Assignment Agreement, each additional non-revolving
personal loan that is transferred to the Seller pursuant to the Omnibus
Distribution and Assignment Agreement on each Addition Date, and (f) with
respect to any Other Warehouse Purchase Agreement, each additional non-revolving
personal loan that is sold to the Seller pursuant to such Other Warehouse
Purchase Agreement on each Addition Date.

“Additional Loan Assignment” shall mean (a) with respect to the Loan Purchase
Agreement, a written assignment substantially in the applicable form attached to
the Loan Purchase Agreement pursuant to which the Seller designates and assigns
Additional Loans to the Depositor, (b) with respect to the Sale and Servicing
Agreement, a written assignment substantially in the applicable form attached to
the Sale and Servicing Agreement pursuant to which the Depositor designates and
further assigns Additional Loans to the Issuer, (c) with respect to the 2020-1A
SUBI Supplement, a written allocation notice substantially in the applicable
form attached to the 2020-1A SUBI Supplement pursuant to which the Servicer in
accordance with the 2020-1A SUBI Supplement designates and further allocates
Additional Loans that are North Carolina Loans to the 2020-1A SUBI, (d) with
respect to the Purchase Agreement, a written assignment substantially in the
applicable form attached to the Purchase Agreement pursuant to which the
Warehouse Borrower designates and assigns Additional Loans to the Seller,
(e) with respect to the Omnibus Distribution and Assignment Agreement, a written
assignment substantially in the applicable form attached to the Omnibus
Distribution and Assignment Agreement pursuant to which one or more Regional
Originators designate and assign Additional Loans to the Seller, and (f) with
respect to any Other Warehouse Purchase Agreement, a written assignment
substantially in the applicable form attached to such Other Warehouse Purchase
Agreement pursuant to which the applicable warehouse borrowers designate and
assign Additional Loans to the Seller.

“Additional Loan Assignment Schedule” shall mean (a) with respect to the
Purchase Agreement and any Loan Action Date, the schedule to the related
Additional Loan Assignment, listing the Additional Loans conveyed pursuant to
the Purchase Agreement on such Loan Action Date and the related information with
respect thereto required to be included in the Loan Schedule, (b) with respect
to a purchase agreement between the borrower under a warehouse facility other
than the Warehouse Facility and the Seller and any Loan Action Date, the
schedule to the related Additional Loan Assignment, listing the Additional Loans
conveyed pursuant to such purchase agreement on such Loan Action Date and the
related information with respect thereto required to be included in the Loan
Schedule, (c) with respect to the Loan Purchase Agreement and any Loan Action
Date, the schedule to the related Additional Loan Assignment, listing the
Additional Loans conveyed pursuant to the Loan Purchase Agreement on such Loan
Action Date and the related information with respect thereto required to be
included in the Loan Schedule, (d) with respect to the Sale and Servicing
Agreement and any Loan Action Date, the schedule to the related Additional Loan
Assignment, listing the related Additional Loans conveyed pursuant to the Sale
and Servicing Agreement on such Loan Action Date and the related information
with respect thereto required to be included in the Loan Schedule and (e) with
respect to the 2020-1A SUBI Supplement on any Loan Action Date, the schedule to
the related Additional Loan Assignment, listing the related Additional Loans
allocated pursuant to the 2020-1A SUBI Supplement on such Loan Action Date and
the related information with respect thereto required to be included in the Loan
Schedule.

 

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“Additional Subservicer” shall have the meaning specified in Section 10.19 of
this Agreement.

“Adjusted Loan Principal Balance” shall mean, with respect to any Collection
Period, an amount equal to the Loan Principal Balance of all Loans in the Trust
Estate, other than Charged-Off Loans and Excluded Loans, in each case, as of the
close of business on the last day of such Collection Period.

“Administration Agreement” shall mean the Administration Agreement, dated as of
the Closing Date, among the Issuer, the North Carolina Trust, the Administrator
and the Depositor.

“Administrator” shall mean the Person acting in such capacity from time to time
pursuant to and in accordance with the Administration Agreement, which shall
initially be Regional Management.

“Adverse Effect” shall mean, with respect to any action, that such action will
(a) result in the occurrence of an Early Amortization Event or an Event of
Default or (b) materially and adversely affect the Noteholders.

“Affiliate” of any specified Person shall mean any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
“control,” when used with respect to any specified Person, shall mean the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.

“Aggregate Note Balance” shall mean, as of any date of determination, the sum of
the aggregate Class A Note Balance, the aggregate Class B Note Balance, the
aggregate Class C Note Balance and the aggregate Class D Note Balance, in each
case, as of such date of determination.

“Amount Financed” shall mean, with respect to a Loan, the “amount financed” (as
defined in the Federal Truth-in-Lending Act (15 U.S.C. § 1601 et. seq) and its
implementing regulations) and as set forth in the Federal Truth in Lending
disclosure in the related Contract.

“Annual Percentage Rate” or “APR” shall mean, with respect to a Loan, the
“annual percentage rate” (as defined in the Federal Truth-in-Lending Act (15
U.S.C. § 1601 et. seq) and its implementing regulations) and as set forth in the
Federal Truth in Lending disclosure in the related Contract. If, after the
Closing Date, the rate per annum with respect to a Loan as of the related
Cut-Off Date is reduced (i) as a result of an insolvency proceeding involving
the related Loan Obligor or (ii) pursuant to the Servicemembers Civil Relief Act
or similar State law, “Annual Percentage Rate” or “APR” shall refer to such
reduced rate.

“Applicable Law” shall mean, with respect to any Person, all existing and future
applicable laws, rules, regulations (including proposed, temporary and final
income tax regulations), statutes, treaties, codes, ordinances, permits,
certificates, orders and licenses of and interpretations by any Governmental
Authority (including, but not limited to, the federal Dodd-Frank Act; the Truth
in Lending Act and its implementing regulation, Regulation Z, as these

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 3

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appeared under the Federal Reserve Board and, currently, under the CFPB; the
Equal Credit Opportunity Act and its implementing regulation, Regulation B, as
these appeared under the Federal Reserve Board and, currently, under the CFPB;
the Exchange Act; the Fair Credit Reporting Act, including Regulation V; the
Fair Credit Billing Act; the Fair Debt Collection Practices Act; the Federal
Trade Commission Act; the Relief Act; state adoptions of the foregoing federal
laws; state usury laws; and state-specific adoptions of the National Consumer
Act and the Uniform Consumer Credit Code), and applicable judgments, decrees,
injunctions, writs, orders or line actions of any court, arbitrator or other
administrative, judicial or quasi-judicial tribunal or agency of competent
jurisdiction.

“Applicable Representations” shall have the meaning specified in Section 3.03 of
this Agreement.

“Applicable SUBI Fee Letter” means that Schedule of Fees to Serve as Owner
Trustee for Regional Management Issuance Trust 2020-1, dated as of January 31,
2020.

“Assignment Agreement” shall mean (a) an agreement substantially in the form of
Exhibit A to the Purchase Agreement relating to the Loans and other Purchased
Assets purchased by the Seller on the Closing Date, (b) an agreement
substantially in the form of Exhibit A to the Loan Purchase Agreement relating
to the Loans and other Purchased Assets purchased by the Depositor on the
Closing Date and (c) with respect to the 2020-1A SUBI Supplement, a written
allocation notice substantially in the applicable form attached to the 2020-1A
SUBI Supplement pursuant to which the Servicer in accordance with the 2020-1A
SUBI Supplement designates and further allocates Additional Loans that are North
Carolina Loans to the 2020-1A SUBI.

“Authoritative Copy” shall mean, with respect to any Contract that constitutes
Electronic Chattel Paper, the authoritative copy thereof, as such term is used
in Section 9-105 of the UCC.

“Authorized Officer” shall mean:

(a) with respect to the Issuer, (i) any officer of the Owner Trustee who is
authorized to act for the Owner Trustee in matters relating to the Issuer and
who is identified on the list of Authorized Officers, containing the specimen
signature of each such Person, delivered by the Owner Trustee to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter), (ii) any officer of the Administrator who is
authorized to act for the Administrator in matters relating to the Issuer and
who is identified on the list of Authorized Officers (containing the specimen
signatures of such officers) delivered by the Administrator to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter) and (iii) any officer of the Depositor who is
authorized to act for the Depositor in matters relating to the Issuer and who is
identified on the list of Authorized Officers, containing the specimen signature
of each such Person, delivered by the Depositor to the Indenture Trustee on the
Closing Date (as such list may be modified or supplemented from time to time
thereafter);

 

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(b) with respect to the Depositor, any officer of the Depositor who is
identified on the list of Authorized Officers (containing the specimen signature
of each such Person) delivered by the Depositor to the Indenture Trustee on the
Closing Date (as such list may be modified or supplemented from time to time
thereafter);

(c) with respect to the Servicer, any President, Vice President, Treasurer,
Secretary or Assistant Secretary of the Servicer or any other officer who is
authorized to act for the Servicer;

(d) Secretary or Assistant Secretary of the Seller or any other officer who is
authorized to act for the Seller; and

(e) with respect to the Indenture Trustee, any Responsible Officer.

“Available Funds” for any Payment Date shall mean, without duplication, (a) the
Collections received in the Collection Account during the Collection Period,
including any investment earnings in each of the Note Accounts, relating to such
Payment Date (other than amounts permitted to be retained by the Servicer in
respect of Servicing Fees), (b) all amounts on deposit in the Reserve Account as
of the related Monthly Determination Date, and (c) during the Revolving Period,
all amounts on deposit in the Principal Distribution Account as of the
commencement of such Payment Date.

“Back-up Servicer” shall mean, initially, Wells Fargo Bank, National
Association, and at any other time, the Person then acting as “Back-up Servicer”
pursuant to and in accordance with the Back-up Servicing Agreement.

“Back-up Servicer Termination Event” shall mean any Back-up Servicer Termination
Event specified in Section 4.3 of the Back-up Servicing Agreement.

“Back-up Servicing Agreement” shall mean the Back-up Servicing Agreement, dated
as of the Closing Date, among the Issuer, the Depositor, the Indenture Trustee,
the Servicer, the Back-up Servicer, the Image File Custodian, and the North
Carolina Trust pursuant to which the Back-up Servicer has agreed to perform the
back-up servicing duties specified therein for the benefit of the Issuer and the
Noteholders, including with respect to the 2020-1A SUBI Assets.

“Back-up Servicing Fee” shall mean, with respect to (i) any Payment Date other
than the Initial Payment Date, an amount equal to the greater of (a) $8,000 and
(b) the product of (1) 0.06% multiplied by (2) the aggregate Loan Principal
Balance as of the first day of the related Collection Period, multiplied by
(3) one-twelfth, or (ii) the Initial Payment Date, an amount equal to the
product of (x) 0.06%, multiplied by (y) the aggregate Loan Principal Balance as
of the Closing Date, multiplied by (z) a fraction, the numerator of which is the
number of days from the Closing Date through the end of the initial Collection
Period, and the denominator of which is 360.

“Bankruptcy Code” shall mean Title 11 of the United States Code, 11 U.S.C. §§
101 et seq., as amended.

“Bankruptcy Loan” shall mean, to the extent reflected on the servicing systems
of the Servicer, any Loan (a) with respect to which all or any portion of the
Loan Principal Balance thereof has been discharged and has not been reaffirmed
by the related Loan Obligor, or (b) the Loan Obligor of which has filed, or
there has been filed against such Loan Obligor, voluntary or involuntary
proceedings under the Bankruptcy Code or any other Debtor Relief Laws and such
Loan has not been reaffirmed by the Loan Obligor in that proceeding.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 5

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“Beneficial Interests” shall mean the beneficial interests in the Trust
evidenced by the Trust Certificate.

“Beneficial Owner” shall mean, with respect to any Book-Entry Note, the Person
who is the beneficial owner of such Note as reflected on the books of DTC or on
the books of a Person maintaining an account with DTC (directly as a Participant
or indirectly through a Participant, in accordance with the rules of DTC).

“Beneficiary” shall mean the registered holder of a Trust Certificate as
reflected in the register maintained pursuant to Section 10.01(d) of the Trust
Agreement. Initially, the Depositor is the sole Beneficiary.

“Book-Entry Notes” shall mean security entitlements to the Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency, as
described in Section 2.04 of the Indenture.

“Business Day” shall mean any day other than (a) a Saturday or Sunday or (b) any
other day on which banking institutions in New York, New York, Minneapolis,
Minnesota, Greer, South Carolina and Wilmington, Delaware or any other city in
which the Corporate Trust Office of the Indenture Trustee or the Owner Trustee
or the principal executive offices of the Servicer or the Depositor, as the case
may be, are located, are authorized or obligated by law, executive order or
governmental decree to be closed or on which the fixed income markets in New
York, New York are closed.

“Certificate of Trust” shall mean the certificate of trust of the Trust, filed
on January 8, 2020, with the Office of the Secretary of State of the State of
Delaware pursuant to the Delaware Statutory Trust Statute.

“CFPB” shall mean the U.S. Consumer Financial Protection Bureau established by
the Dodd-Frank Act within the Federal Reserve System.

“Charged-Off Loan” shall mean any Loan (i) with respect to which a scheduled
payment thereon remains unpaid for 180 days or more after the related due date
for such payment (or such longer period as permitted in accordance with the
Credit and Collection Policy), or (ii) which has been charged off in full or in
part by the Servicer (as reflected in the records of the Servicer), in each case
in accordance with the Credit and Collection Policy. The Loan Principal Balance
of any Loan that becomes a “Charged-Off Loan” will be deemed to be zero as of
the date it becomes a “Charged-Off Loan.”

“Class” shall mean the Class A Notes, the Class B Notes, the Class C Notes or
the Class D Notes, as the context may require.

“Class A Interest Rate” shall mean 2.34% per annum.

 

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“Class A Monthly Interest Amount” shall mean, for any Payment Date, the amount
of interest accrued during the related Interest Period at the Class A Interest
Rate on the Class A Note Balance as of the close of business on the immediately
preceding Payment Date, calculated on the basis of a 360-day year consisting of
twelve 30-day months (or in the case of the Initial Payment Date, the period
from (and including) the Closing Date to (but excluding) the Initial Payment
Date).

“Class A Note” shall mean any one of the 2.34% Class A Notes executed by the
Owner Trustee on behalf of the Issuer and authenticated by the Indenture
Trustee, substantially in the applicable form attached as Exhibit A to the
Indenture.

“Class A Note Balance” shall initially mean $134,060,000, and thereafter shall
equal the initial Class A Note Balance reduced by all previous payments to the
Class A Noteholders in respect of the principal of the Class A Notes that have
not been rescinded.

“Class B Interest Rate” shall mean 3.23% per annum.

“Class B Monthly Interest Amount” shall mean, for any Payment Date, the amount
of interest accrued during the related Interest Period at the Class B Interest
Rate on the Class B Note Balance as of the close of business on the immediately
preceding Payment Date, calculated on the basis of a 360-day year consisting of
twelve 30-day months (or in the case of the Initial Payment Date, the period
from (and including) the Closing Date to (but excluding) the Initial Payment
Date).

“Class B Note” shall mean any one of the 3.23% Class B Notes executed by the
Owner Trustee on behalf of the Issuer and authenticated by the Indenture
Trustee, substantially in the applicable form attached as Exhibit A to the
Indenture.

“Class B Note Balance” shall initially mean $18,090,000, and thereafter shall
equal the initial Class B Note Balance reduced by all previous payments to the
Class B Noteholders in respect of the principal of the Class B Notes that have
not been rescinded.

“Class C Interest Rate” shall mean 3.80% per annum.

“Class C Monthly Interest Amount” shall mean, for any Payment Date, the amount
of interest accrued during the related Interest Period at the Class C Interest
Rate on the Class C Note Balance as of the close of business on the immediately
preceding Payment Date, calculated on the basis of a 360-day year consisting of
twelve 30-day months (or in the case of the Initial Payment Date, the period
from (and including) the Closing Date to (but excluding) the Initial Payment
Date).

“Class C Note” shall mean any one of the 3.80% Class C Notes executed by the
Owner Trustee on behalf of the Issuer and authenticated by the Indenture
Trustee, substantially in the applicable form attached as Exhibit A to the
Indenture.

“Class C Note Balance” shall initially mean $16,130,000, and thereafter shall
equal the initial Class C Note Balance reduced by all previous payments to the
Class C Noteholders in respect of the principal of the Class C Notes that have
not been rescinded.

 

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“Class D Interest Rate” shall mean 6.77% per annum.

“Class D Monthly Interest Amount” shall mean, for any Payment Date, the amount
of interest accrued during the related Interest Period at the Class D Interest
Rate on the Class D Note Balance as of the close of business on the immediately
preceding Payment Date, calculated on the basis of a 360-day year consisting of
twelve 30-day months (or in the case of the Initial Payment Date, the period
from (and including) the Closing Date to (but excluding) the Initial Payment
Date).

“Class D Note” shall mean any one of the 6.77% Class D Notes executed by the
Owner Trustee on behalf of the Issuer and authenticated by the Indenture
Trustee, substantially in the applicable form attached as Exhibit A to the
Indenture.

“Class D Note Balance” shall initially mean $11,720,000, and thereafter shall
equal the initial Class D Note Balance reduced by all previous payments to the
Class D Noteholders in respect of the principal of the Class D Notes that have
not been rescinded.

“Clearing Agency” shall mean an organization registered as a “clearing agency”
pursuant to Section 17A of the Exchange Act and serving as a clearing agency for
a Series or Class of Book-Entry Notes.

“Clearstream” shall mean Clearstream Banking, société anonyme, a professional
depository incorporated under the laws of Luxembourg, and its successors.

“Closing Date” shall mean September 23, 2020.

“Collection Account” shall have the meaning specified in Section 8.02(a)(i) of
the Indenture.

“Collection Period” shall mean, with respect to each Payment Date, the
immediately preceding calendar month; provided, however, that the initial
Collection Period will commence on the day immediately following the Initial
Cut-Off Date and end on (and include) the last day of the calendar month
immediately preceding the Initial Payment Date.

“Collections” shall mean all amounts collected on or in respect of the Loans
after the applicable Cut-Off Date, including scheduled loan payments (whether
received in whole or in part, whether related to a current, future or prior due
date, whether paid voluntarily by a Loan Obligor or received in connection with
the realization of the amounts due and to become due under any defaulted Loan or
upon the sale of any property acquired in respect thereof), all partial
prepayments, all full prepayments, recoveries, insurance proceeds or any other
form of payment.

“Contract” shall mean, with respect to any Loan, the fully executed original,
electronically authenticated original or authoritative copy (in each case,
within the meaning of the UCC) of any non-revolving promissory note and security
agreement or other form of large personal loan contract entered into by a Loan
Obligor under which an extension of credit by a Regional Originator was made in
the ordinary course of business of such Regional Originator, which contract
contains the terms and conditions applicable to such Loan and any applicable
Truth in Lending disclosure related thereto, in each case, as amended and in
effect from time to time, including any related written allonges or extensions
thereto.

 

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“Corporate Trust Office” shall have the meaning (a) when used in respect of the
Owner Trustee, the address of the Owner Trustee at Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890, Attn: Corporate Trust
Administration, and (b) when used in respect of the Indenture Trustee, the Image
File Custodian or the Back-up Servicer, the address of the Indenture Trustee at
Wells Fargo Center, 600 S. 4th Street, Minneapolis, Minnesota 55415, Attn:
Asset-Backed Securities Department.

“Credit and Collection Policy” shall mean the credit and collection policies and
practices and procedures maintained by the Servicer relating to the Loans, as
the same may be amended, supplemented or otherwise modified from time to time in
accordance with the Sale and Servicing Agreement. If there is a Successor
Servicer, “Credit and Collection Policy” shall mean the customary and usual
servicing, administration and collection practices and procedures used by
servicing companies of comparable experience to the Successor Servicer for
servicing personal loans comparable to the Loans which the Successor Servicer
services for its own account, as the same may be amended, supplemented or
otherwise modified from time to time.

“Custodian” shall mean the Servicer, in its capacity as custodian of the
Contracts under the Sale and Servicing Agreement.

“Cut-Off Date” shall mean the Initial Cut-Off Date or any Additional Cut-Off
Date, as applicable.

“DBRS Morningstar” shall mean DBRS, Inc., or any successor.

“Debtor Relief Laws” shall mean (i) the Bankruptcy Code and (ii) all other
applicable liquidation, conservatorship, bankruptcy, moratorium, arrangement,
receivership, insolvency, reorganization, suspension of payments, adjustment of
debt, marshalling of assets or similar debtor relief laws of the United States,
any state or any foreign country from time to time in effect affecting the
rights of creditors generally.

“Definitive Notes” shall mean, for any Class, the Notes issued in fully
registered, certificated form issued to the owners of such Class or their
nominee.

“Delaware Secretary of State” shall mean the Office of the Secretary of State of
the State of Delaware.

“Delaware Statutory Trust Statute” shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. § 3801 et seq., as amended from time to time.

“Delinquent Loan” shall mean a Loan, other than a Charged-Off Loan, with respect
to which a scheduled monthly payment thereon remains unpaid for 60 days or more
from the related due date in accordance with the Credit and Collection Policy as
reflected in the records of the Servicer or the applicable Subservicer.

 

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“Delinquent Renewal” shall mean, with respect to any Loan in the Trust Estate, a
transaction in which a new non-revolving personal loan originated pursuant to a
Contract is entered into between a Regional Originator and a Loan Obligor, which
new non-revolving personal loan (x) is originated in accordance with Regional’s
delinquent renewal underwriting criteria as set forth in its Credit and
Collection Policy, (y) refinances such Loan in full or in part, and (z) may also
extend additional financing to such Loan Obligor.

“Delinquent Renewal Loan” shall mean the new non-revolving personal loan entered
into between the applicable Regional Originator and the Loan Obligor pursuant to
any Delinquent Renewal.

“Deliveries” shall have the meaning specified in Section 12.02 of the Trust
Agreement.

“Demand” shall have the meaning specified in Section 6.14(a) of the Indenture.

“Depositor” shall mean Regional Management Receivables III, LLC, a limited
liability company formed and existing under the laws of the State of Delaware,
and its permitted successors and assigns.

“Depositor LLC Agreement” shall mean the Amended and Restated Limited Liability
Company Agreement of the Depositor, dated as of June 27, 2018.

“Direct Depositor Breach” shall have the meaning specified in Section 2.06(a) of
this Agreement.

“Directing Holder” shall mean (a) so long as the Indenture shall not have
terminated, the Required Noteholders, and (b) in all other instances, the holder
or holders of more than 50% of the voting power of the Beneficial Interests.

“Disqualification Event” with respect to the Owner Trustee shall mean (a) the
bankruptcy, insolvency or dissolution of the Owner Trustee, (b) the occurrence
of the date of resignation of the Owner Trustee, as set forth in a notice of
resignation given pursuant to Section 8.01 of the Trust Agreement, (c) the
delivery to the Owner Trustee of the instrument or instruments of removal
referred to in Section 8.01 of the Trust Agreement (or, if such instruments
specify a later effective date of removal, the occurrence of such later date),
or (d) the failure of the Owner Trustee to qualify under the requirements of
Section 8.03 of the Trust Agreement.

“Distribution Compliance Period” shall have the meaning specified in
Section 2.05(b) of the Indenture.

“Dodd-Frank Act” shall mean the Dodd-Frank Wall Street Reform and Consumer
Protection Act, which was signed into law on July 21, 2010.

“Dollars,” “$” or “U.S. $” shall mean (a) U.S. dollars or (b) denominated in
U.S. dollars.

“DTC” shall mean The Depository Trust Company, a New York corporation.

 

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“Early Amortization Event” shall mean any Early Amortization Event specified in
Section 5.01 of the Indenture.

“Electronic Chattel Paper” shall have the meaning specified in Article 9 of the
UCC.

“Electronic Collateral Control Agreement” shall mean that certain Electronic
Collateral Control Agreement, dated as of September 23, 2020, by and among the
Indenture Trustee, the Issuer, Regional Management, the North Carolina Trust and
eOriginal, Inc., as the same may be amended, restated, supplemented or otherwise
modified from time to time.

“Electronic Contract” shall mean a Contract that was electronically executed and
authenticated; provided, that an Electronic Contract that has been Exported
shall not constitute an Electronic Contract.

“Electronic Vault” shall mean the electronic vault wherein custody of Electronic
Contracts shall be maintained in electronic form by the Servicer (in its
capacity as custodian under the Transaction Documents) (or any successor
servicer), in each case, through a third-party Electronic Vault Provider that
enables electronic contracting pursuant to the related electronic vault services
agreement.

“Electronic Vault Provider” shall mean eOriginal, Inc., a Delaware corporation,
and any successor or replacement third-party provider of the technology platform
on which the Electronic Vault operates acting in such capacity with the consent
of the Indenture Trustee (with the written consent of the Required Noteholders).

“Electronic Vault Services Agreement” shall mean any agreement between Regional
Management and the Electronic Vault Provider that provides for services related
to the Electronic Vault.

“Electronic Vault System” shall mean the electronic vault system provided by the
Electronic Vault Provider pursuant to the Electronic Vault Services Agreement or
such other electronic system provider as may be mutually agreed upon by the
Issuer, Regional Management and the Indenture Trustee (with the written consent
of the Required Noteholders) that enables electronic contracting.

“Eligible Deposit Account” shall mean either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States or any one of the states thereof, including 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 either (x) (A) such depository institution
has a long-term issuer credit rating of “A-” or higher from S&P and a long-term
issuer credit rating of “Baa1” or higher from Moody’s and (B) any of the
unsecured, unguaranteed senior debt securities of such depository institution
shall have a credit rating from Moody’s in one of its generic credit rating
categories that signifies “Baa2” or higher, or (y) each Rating Agency approves
such segregated trust account in writing.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 11

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“Eligible Institution” shall mean a depository institution organized under the
laws of the United States of America or any one of the states thereof, including
the District of Columbia (or any domestic branch of a foreign bank), which at
all times has (a)(i) a long-term unsecured debt rating of “Baa1” or better by
Moody’s and (ii) a certificate of deposit rating of “P-2” or better by Moody’s
and (b)(i) a long-term issuer credit rating of “A-” or better by S&P and a
long-term issuer credit rating of “Baa1” or better by Moody’s or (ii) a
short-term issuer credit rating of “A-1” or better by S&P and a short-term
issuer credit rating of “P-1” or better by Moody’s. If so qualified, any of the
Indenture Trustee or the Administrator may be considered an Eligible Institution
for the purposes of this definition.

“Eligible Investments” shall mean book-entry securities, negotiable instruments
or securities represented by instruments in bearer or registered form which have
maturities of no later than the Business Day immediately prior to the next
succeeding Payment Date (unless payable on demand, in which case such securities
or instruments may mature on such next succeeding Payment Date) and which
evidence:

(a) direct obligations of, and obligations fully guaranteed as to timely payment
by, the United States of America;

(b) demand deposits, time deposits or certificates of deposit (having original
maturities of no more than 365 days) of depository institutions or trust
companies incorporated under the laws of the United States of America or any
state thereof (or domestic branches of foreign banks) and subject to supervision
and examination by federal or state banking or depository institution
authorities; provided that at the time of the Issuer’s investment or contractual
commitment to invest therein, the short-term debt rating of such depository
institution or trust company will be rated “R-1(high)” or higher by DBRS
Morningstar and “A” or “A-1” by S&P;

(c) commercial paper (having remaining maturities of no more than 30 days)
having, at the time of the Issuer’s investment or contractual commitment to
invest therein, a rating of “R-1(high)” or higher from DBRS Morningstar and a
rating of “A-2” or higher by S&P;

(d) investments in money market funds rated “AAAm” or higher by S&P and an
equivalent rating by DBRS Morningstar or otherwise approved in writing by DBRS
Morningstar, if rated by DBRS Morningstar;

(e) demand deposits, time deposits and certificates of deposit (having original
maturities of no more than 365 days) which are fully insured by the Federal
Deposit Insurance Corporation, having at the time of the Issuer’s investment or
contractual commitment to invest therein, a rating of “A-1+” by S&P and an
equivalent rating by DBRS Morningstar;

(f) notes or bankers’ acceptances (having original maturities of no more than
365 days) issued by any depository institution or trust company referred to in
(b) above;

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 12

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(g) time deposits, other than as referred to in clause (e) above (having
original maturities of no more than 365 days), with a Person (i) the commercial
paper of which is rated “A-1+” by S&P and an equivalent rating by DBRS
Morningstar or (ii) that has a long-term unsecured debt rating of “A+” or higher
by S&P and an equivalent rating by DBRS Morningstar; or

(h) any other investments approved in writing by DBRS Morningstar and by S&P.

Eligible Investments may be purchased by or through the Indenture Trustee or any
of its Affiliates and may include proprietary funds offered or managed by Wells
Fargo or an Affiliate thereof.

“Eligible Loan” shall mean a Loan that as of the applicable Cut-Off Date: (i) is
not categorized as a Bankruptcy Loan, (ii) is either an interest-bearing loan or
a Precompute Loan, (iii) has a fixed-rate of interest, (iv) is denominated in
U.S. dollars, (v) the maturity date therefor had not occurred, (vi) is not a
Delinquent Loan or a Charged-Off Loan, (vii) is not a Revolving Loan, (viii) was
originated at a branch location of a Regional Originator (if the related
Contract was not an Electronic Contract), (ix) if the related Contract is an
Electronic Contract, was originated by a Regional Originator with branch
assistance to an existing or former borrower, (x) was originated in all material
respects in accordance with the Credit and Collection Policy in effect as of the
date of origination of such Loan, (xi) has an origination term of not more than
72 months, (xii) in connection with the origination thereof, a Contract was
created, (xiii) is a Soft Secured Loan, a Hard Secured Loan or an Unsecured
Loan, (xiv) is not secured by real property, (xv) has an Amount Financed that is
greater than $2,500 and less than $20,000, (xvi) the collateral that secures
such Loan had not been, and was not in the process of being, repossessed,
(xvii) is not an Extension Loan, (xviii) is not a Modified Contract, (xix) has
an original and current APR equal to or greater than 5.00% and equal to or less
than 36.00%, (xx) is not subject to litigation or legal proceedings, (xxi) the
Loan Obligor of which had a FICO® score at the time of origination and such
FICO® score was at least 525 (or, in the case of a Loan with two Loan Obligors,
based on the higher of the two FICO® scores at origination) and (xxii) is not a
Delinquent Renewal Loan for which no payment has been made since the related
Delinquent Renewal.

“Eligible Servicer” shall mean the Indenture Trustee, Regional Management, the
Back-up Servicer or an entity which, at the time of its appointment as Servicer,
(a)(i) is the surviving Person of a merger or consolidation with, or the
transferee of all or substantially all of the assets of, Regional Management in
a transaction otherwise complying with the relevant terms of the Sale and
Servicing Agreement, (ii) is servicing a portfolio of personal loans, (iii) is
legally qualified and has the capacity (in each case, either directly or through
one or more subservicers) to service and administer the Loans in accordance with
the Sale and Servicing Agreement and the 2020-1A SUBI Servicing Agreement and
(iv) is qualified to use the software that is then being used to service the
Loans or obtains the right to use or has its own software which is adequate to
perform its duties under the Sale and Servicing Agreement the 2020-1A SUBI
Servicing Agreement or (b)(i) is servicing a portfolio of personal loans,
(ii) is legally qualified and has the capacity (in each case, either directly or
through one or more subservicers) to service and administer Loans in accordance
with the Sale and Servicing Agreement and the 2020-1A SUBI Servicing Agreement,
(iii) has demonstrated the ability to service professionally and competently a
portfolio of loans which are similar to the Loans in accordance with high
standards of skill and care and (iv) is qualified to use the software that is
then being used to service the Loans or obtains the right to use or has its own
software which is adequate to perform its duties under the Sale and Servicing
Agreement and the 2020-1A SUBI Servicing Agreement.

 

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“Encumbrance” shall mean any security interest, mortgage, claim, charge (fixed
or floating), deed of trust, pledge, hypothecation, assignment, deposit
arrangement, equity interest, encumbrance, lien (statutory or other),
preference, participation interest, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including any
conditional sale or other title retention agreement, or any financing lease
having substantially the same economic effect as any of the foregoing, and the
filing of any financing statement under the UCC or comparable law of any
jurisdiction to evidence any of the foregoing; provided, however, that any
assignment permitted by Section 2.05 of, and the lien created by, the Sale and
Servicing Agreement shall not be deemed to constitute an Encumbrance; provided
further, however, that each of (a) the lien created in favor of the Depositor
under the Loan Purchase Agreement, (b) the lien created in favor of the Issuer
under the Sale and Servicing Agreement and (c) the lien created in favor of the
Indenture Trustee under the Indenture shall not be deemed to constitute an
Encumbrance.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

“EU Institutional Investor” means an institutional investor as such term is
defined in Article 2(12) of the EU Securitization Regulation.

“EU Securitization Regulation” means European Union legislation comprising EU
Regulation (EU) 2017/2402.

“Euroclear” shall mean the Euroclear System.

“Event of Default” shall have the meaning specified in Section 5.02 of the
Indenture.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Excluded Loan” shall have the meaning specified in Section 8.07(iii) of the
Indenture.

“Exported” shall mean, with respect to a Contract, the Servicer (acting at the
written direction of the Indenture Trustee) or the Indenture Trustee has
decommissioned the related Electronic Contract and the Authoritative Copy (in
the case of an Electronic Contract that constitutes Electronic Chattel Paper) or
the electronically authenticated original record (in the case of an Electronic
Contract that does not constitute Electronic Chattel Paper), as applicable, of
such Contract is printed out pursuant to a “Paper Out”™ within the meaning
specified in the System Description. “Export” and “Exporting” shall have
correlative meanings.

 

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“Extension Loan” shall mean, as of any date of determination, a personal loan
contract with respect to which the time for payment of any scheduled monthly
payment due under such personal loan contract has been extended for more than
two months (in the aggregate) within the twelve-month period preceding such date
of determination; provided, that if any payment extension in respect of a
personal loan is granted (i) due to the declaration of a state of emergency by
the governor of a U.S. state or the President of the United States, or (ii) due
to the enactment of laws, regulations, executive orders or other guidance by any
governmental authority (including federal, state or local governments), that
mandates the granting of a payment deferral or extension or prevents collection
activities with respect to such loan, then, in the case of clause (i) or (ii),
such extension shall not be counted for purposes of determining whether such
personal loan contract constitutes an “Extension Loan.”

“FATCA” shall have the meaning specified in Section 11.17(a) of the Indenture.

“FATCA Withholding Tax” shall have the meaning specified in Section 11.17(a) of
the Indenture.

“Federal Reserve Board” shall mean the Board of Governors of the Federal Reserve
System.

“First Priority Principal Payment” shall mean, with respect to any Payment Date,
(a) at any time prior to the occurrence of an Event of Default, an amount equal
to the excess (if any) of (i) the Class A Note Balance as of the end of the
related Collection Period over (ii) the Adjusted Loan Principal Balance as of
the end of the related Collection Period and (b) at any time from and after the
occurrence of an Event of Default or on or after the Stated Maturity Date in
respect of the Class A Notes, the Class A Note Balance.

“Force Majeure Event” shall mean an event that occurs as a result of an act of
God, an act of the public enemy, acts of declared or undeclared war (including
acts of terrorism), public disorder, rebellion, sabotage, disease, quarantine,
epidemics, pandemics, landslides, lightning, fire, hurricanes, earthquakes,
floods, other natural disasters, or the declaration of a state of emergency by
the governor of a U.S. state or the President of the United States.

“Fourth Priority Principal Payment” shall mean, with respect to any Payment
Date, (a) at any time prior to the occurrence of an Event of Default, an amount
equal to the excess (if any) of (i) the sum of (A) the Class A Note Balance as
of the end of the related Collection Period plus (B) the Class B Note Balance as
of the end of the related Collection Period plus (C) the Class C Note Balance as
of the end of the related Collection Period plus (D) the Class D Note Balance as
of the end of the related Collection Period minus the amount on deposit in the
Principal Distribution Account (after giving effect to any allocations to the
Principal Distribution Account pursuant to Sections 8.06(a)(v), (vii) and
(ix) of the Indenture) over (ii) the Adjusted Loan Principal Balance as of the
end of the related Collection Period and (b) at any time from and after the
occurrence of an Event of Default or on or after the Stated Maturity Date in
respect of the Class D Notes, the sum of the Class A Note Balance, the Class B
Note Balance, the Class C Note Balance and the Class D Note Balance minus the
amount on deposit in the Principal Distribution Account (after giving effect to
any allocations to the Principal Distribution Account pursuant to Sections
8.06(a)(v), (vii) and (ix) of the Indenture).

“Global Note” shall mean a Rule 144A Global Note or a Regulation S Global Note.

 

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“Governmental Authority” shall mean any federal, state, municipal, national,
local or other governmental department, court, commission, board, bureau,
agency, intermediary, carrier or instrumentality or political subdivision
thereof, or any entity or officer exercising executive, legislative, judicial,
quasi-judicial, regulatory or administrative functions of or pertaining to any
government or any court, in each case, whether of the United States or a state,
territory or possession thereof, a foreign sovereign entity or country or
jurisdiction or the District of Columbia.

“Grant” shall mean to grant, bargain, warrant, alienate, remise, demise,
release, convey, assign, transfer, mortgage, pledge, grant a security interest
in, create a right of set-off against, deposit, set over and confirm. A Grant of
any item of the Trust Estate shall include all rights, powers and options (but
none of the obligations) of the granting party thereunder, including without
limitation the immediate and continuing right to claim for, collect, receive and
give receipt for principal and interest payments in respect of such item of the
Trust Estate, and all other monies payable thereunder, to give and receive
notices and other communications, to make waivers or other agreements, to
exercise all rights and options, to bring any suit in equity, action at law or
other judicial or administrative proceeding in the name of the granting party or
otherwise, and generally to do and receive anything that the granting party may
be entitled to do or receive thereunder or with respect thereto.

“Hard Secured Loan” shall mean a Loan that is, as of the date of the origination
thereof, secured by a lien on one or more Titled Assets.

“Image File Custodian” shall mean Wells Fargo, not in its individual capacity
but solely in its capacity as image file custodian under the Back-up Servicing
Agreement, its successors in interest and any successor image file custodian
under the Back-up Servicing Agreement.

“Image File Custodian Fee” shall mean (i) a one-time fee of $2.10 for each
Imaged File delivered to the Image File Custodian pursuant to the Back-up
Servicing Agreement, (ii) a monthly fee of $0.10 for each Imaged File in the
Image File Custodian’s custody pursuant to the Back-up Servicing Agreement,
payable on each Payment Date beginning in November 2020, (iii) a one-time fee of
$1.00 for each Imaged File deleted pursuant to the Back-up Servicing Agreement,
and (iv) a one-time fee of $0.50 for each Imaged File deleted pursuant to a
deletion request totaling more than 3,000 Imaged Files.

“Imaged File” shall mean, with respect to any Loan (except for a Loan with
respect to which the related Contract is an Electronic Contract or has been
Exported), (a) an imaged copy of the applicable Contract and (b) in the event
such Loan is a Hard Secured Loan, an imaged copy of the certificate of title of
the Titled Asset securing such Hard Secured Loan, in each case, as such document
exists as of the date such imaging is performed with respect to such Loan.

“Indemnified Parties” shall have the meaning specified in Section 6.02 of the
Loan Purchase Agreement or Section 11.02 of the Trust Agreement, as applicable.

“Indenture” shall mean the Indenture, dated as of the Closing Date, among the
Issuer, the Indenture Trustee, the Account Bank and the Servicer, as the same
may be amended, supplemented or otherwise modified from time to time.

 

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“Indenture Trustee” shall mean Wells Fargo Bank, National Association, in its
capacity as indenture trustee under the Indenture, its successors in interest
and any successor indenture trustee under the Indenture.

“Independent” shall mean, when used with respect to any specified Person, that
the Person (a) is in fact independent of the Issuer, any other obligor upon the
Notes, the Depositor, and any Affiliate of any of the foregoing Persons,
(b) does not have any direct financial interest or any material indirect
financial interest in the Issuer, any such other obligor, the Depositor or any
Affiliate of any of the foregoing Persons and (c) is not connected with the
Issuer, any such other obligor, the Depositor or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.

“Independent Manager” shall have the meaning specified in the Depositor LLC
Agreement.

“Initial Beneficiary” shall have the meaning specified in the North Carolina
Trust Agreement.

“Initial Cut-Off Date” shall mean August 31, 2020.

“Initial Loan” shall mean (a) with respect to the Loan Purchase Agreement, each
non-revolving personal loan that is sold to the Depositor pursuant to the Loan
Purchase Agreement on the Closing Date, (b) with respect to the Sale and
Servicing Agreement, each non-revolving personal loan that is acquired by the
Issuer pursuant to the Sale and Servicing Agreement on the Closing Date,
(c) with respect to the 2020-1A SUBI Supplement, each North Carolina Loan that
is allocated to the 2020-1A SUBI on the Closing Date, (d) with respect to the
Purchase Agreement, each non-revolving personal loan that is sold to the Seller
pursuant to the Purchase Agreement on the Closing Date, (e) with respect to the
Omnibus Distribution and Assignment Agreement, each non-revolving personal loan
that is transferred to the Seller pursuant to the Omnibus Distribution and
Assignment Agreement on the Closing Date, and (f) with respect to any Other
Warehouse Purchase Agreement, each non-revolving personal loan that is sold to
the Seller pursuant to such Other Warehouse Purchase Agreement on the Closing
Date.

“Initial Loan Assignment” shall mean a written agreement substantially in the
form of Exhibit A-1 to the Sale and Servicing Agreement relating to the Loans
and other Sold Assets acquired by the Issuer on the Closing Date.

“Initial Note Balance” shall mean $180,000,000.

“Initial Payment Date” shall mean October 15, 2020.

“Initial Purchasers” shall mean Credit Suisse Securities (USA) LLC and Wells
Fargo Securities, LLC.

 

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“Insolvency Event” with respect to any Person, shall occur if (a) such Person
shall file a petition or commence a Proceeding (i) to take advantage of any
Debtor Relief Law or (ii) for the appointment of a trustee, conservator,
receiver, liquidator, or similar official for or relating to such Person or all
or substantially all of its property, or for the winding up or liquidation of
its affairs, (b) such Person shall consent or fail to object to any such
petition filed or Proceeding commenced against or with respect to it or all or
substantially all of its property, or any such petition or Proceeding shall not
have been dismissed or stayed within sixty (60) days of its filing or
commencement, or a court, agency, or other supervisory authority with
jurisdiction shall have decreed or ordered relief with respect to any such
petition or Proceeding, (c) such Person shall admit in writing its inability to
pay its debts generally as they become due, (d) such Person shall make an
assignment for the benefit of its creditors, (e) such Person shall voluntarily
suspend payment of its obligations, or (f) such Person shall take any action in
furtherance of any of the foregoing.

“Intercreditor Agreement” shall mean (a) that certain Third Amended and Restated
Intercreditor Agreement, dated as of September 20, 2019, by and among Regional
Management, Wells Fargo Bank, National Association, as agent, the Intercreditor
Collateral Agent, Regional Management, as servicer under the Term Loan, the
Warehouse Facility and the Outstanding Securitizations, Wells Fargo Securities,
LLC, as administrative agent under the Term Loan, Wells Fargo Bank, National
Association, acting through its Corporate Trust Services division, as
pre-approved Third Party Allocation Agent, the Term Loan Borrower, as special
purpose subsidiary for the Term Loan, the Warehouse Borrower, as special purpose
subsidiary for the Warehouse Facility, Regional Management, Regional Finance
Corporation of South Carolina, Regional Finance Corporation of Georgia, Regional
Finance Corporation of Texas, Regional Finance Corporation of North Carolina,
Regional Finance Corporation of Alabama, Regional Finance Corporation of
Tennessee, Regional Finance Company of Oklahoma, LLC, Regional Finance Company
of New Mexico, LLC, Regional Finance Company of Missouri, LLC, Regional Finance
Company of Georgia, LLC, Regional Finance Company of Mississippi, LLC, Regional
Finance Company of Louisiana, LLC, RMC Financial Services of Florida, LLC,
Regional Finance Company of Kentucky, LLC, Regional Finance Company of Virginia,
LLC, Regional Finance Corporation of Wisconsin and Regional Finance Company of
Illinois, LLC, as Regional borrowers, the 2018-2 Issuer and the 2019-1 Issuer,
as special purpose subsidiaries for the Outstanding Securitizations, Credit
Recovery Associates, Inc. and Upstate Motor Company, as guarantors of the
Regional borrowers, the 2018-2 Indenture Trustee and the 2019-1 Indenture
Trustee, as administrative agents for the Outstanding Securitizations, and any
trustee, custodian, collateral agent, paying agent or other person authorized on
behalf of a Related Secured Party, as the same may be amended, supplemented or
otherwise modified from time to time, and (b) that certain joinder to the
document described in clause (a) above, executed by the Indenture Trustee, the
Issuer and the other parties thereto on the Closing Date.

“Intercreditor Security Agreement” shall mean (a) that certain Second Amended
and Restated Security Agreement, dated as of September 20, 2019, by and among
Regional Management, Regional Finance Corporation of South Carolina, Regional
Finance Corporation of Georgia, Regional Finance Corporation of Texas, Regional
Finance Corporation of North Carolina, Regional Finance Corporation of Alabama,
Regional Finance Corporation of Tennessee, Regional Finance Company of Oklahoma,
LLC, Regional Finance Company of New Mexico, LLC, Regional Finance Company of
Missouri, LLC, Regional Finance Company of Georgia, LLC, Regional Finance
Company of Mississippi, LLC, Regional Finance Company of Louisiana, LLC, RMC
Financial Services of Florida, LLC, Regional Finance Company of Illinois, LLC,
Regional Finance Company of Kentucky, LLC, Regional Finance Company of Virginia,
LLC and Regional Finance Corporation of Wisconsin, as ABL borrowers, Credit
Recovery Associates, Inc. and

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 18

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Upstate Motor Company, as guarantors, the Term Loan Borrower, the Warehouse
Borrower and each additional grantor that is a signatory or becomes a signatory
thereunder, including the 2018-2 Issuer and the 2019-1 Issuer, as entered into
for the benefit of the Intercreditor Collateral Agent, as collateral agent for
the Lender Agents, as the same may be amended, supplemented or otherwise
modified from time to time, and (b) that certain joinder to the document
described in clause (a) above, executed by the Issuer and the other parties
thereto on the Closing Date.

“Interest Period” shall mean, for each Class of Notes and with respect to any
Payment Date, the period from and including the Payment Date immediately
preceding such Payment Date to but excluding such Payment Date (or, in the case
of the Initial Payment Date, the period from and including the Closing Date to
but excluding such Payment Date).

“Interest Rate” shall mean, with respect to the Class A Notes, the Class A
Interest Rate, with respect to the Class B Notes, the Class B Interest Rate,
with respect to the Class C Notes, the Class C Interest Rate, and with respect
to the Class D Notes, the Class D Interest Rate.

“Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as
amended.

“Investment Company Act” shall mean the Investment Company Act of 1940, as
amended.

“IRS” shall mean the U.S. Internal Revenue Service.

“Issuer” shall mean Regional Management Issuance Trust 2020-1, a statutory trust
organized and existing under the laws of the State of Delaware, and its
permitted successors and assigns.

“Issuer Loan Release” shall have the meaning specified in Section 8.07(v) of the
Indenture.

“Issuer Order” shall mean a written order or request signed in the name of the
Issuer by an Authorized Officer and delivered to the Indenture Trustee.

“Later-Sold Note” shall have the meaning specified in Section 3.14(c) of the
Indenture.

“Lien” shall mean, with respect to any property, any mortgage, deed of trust,
pledge, hypothecation, assignment, deposit arrangement, equity interest,
encumbrance, lien (statutory or other), preference, participation interest,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever relating to that property, including any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing and the filing of any financing
statement under the UCC or comparable law of any jurisdiction to evidence any of
the foregoing.

 

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“Liquidation Proceeds” shall mean, for any Collection Period and any Charged-Off
Loan, the amount (which shall not be less than zero) received by the Servicer
and deposited into the Collection Account after such Loan became a Charged-Off
Loan, in connection with the attempted realization of the full amounts due or to
become due under such Loan, whether from the sale or other disposition of any
underlying collateral securing the related Contract, the proceeds of
repossession or any collection effort, the proceeds of recourse or similar
payments payable in respect of such Loan, or otherwise, net of any amounts
required by Applicable Law to be remitted to the related Loan Obligor and net of
any reasonable out-of-pocket expenses (exclusive of overhead) incurred by the
Servicer with respect to the collection and enforcement of such Loan, to the
extent not previously reimbursed to the Servicer.

“Loan” shall mean any Initial Loan or Additional Loan, but excluding any Loan
that has been reassigned to the Seller (or in the case of the 2020-1A SUBI
Loans, reallocated from the 2020-1A SUBI in accordance with the 2020-1A SUBI
Supplement) pursuant to Section 6.01 of the Loan Purchase Agreement or
Section 3.02(d) of the 2020-1A SUBI Servicing Agreement or otherwise in
accordance with the Transaction Documents. Unless otherwise qualified herein,
all references to “Loan” shall include the 2020-1A SUBI Loans.

“Loan Action” shall have the meaning specified in Section 8.07 of the Indenture.

“Loan Action Date” shall mean any Payment Date.

“Loan Action Date Aggregate Principal Balance” shall mean, for any Loan Action
Date, the aggregate Loan Action Date Loan Principal Balance for all Loans in the
Loan Action Date Loan Pool for such Loan Action Date.

“Loan Action Date Loan Pool” shall mean, for any Loan Action Date, all Loans
that (a)(i) constitute part of the Trust Estate and are not Charged-Off Loans,
in each case, as of the end of the Collection Period immediately preceding such
Loan Action Date, or (ii) are added to the Trust Estate on such Loan Action
Date; (b) have not ceased to be part of the Trust Estate after the end of the
Collection Period immediately preceding such Loan Action Date, including as a
result of any Loan Actions on such Loan Action Date; and (c) are not, following
the Loan Actions to be taken on such Loan Action Date, designated as Excluded
Loans.

“Loan Action Date Loan Principal Balance” shall mean, for any Loan and any Loan
Action Date, the Loan Principal Balance of such Loan as of the close of business
on the last day of the Collection Period immediately preceding such Loan Action
Date.

“Loan File” shall mean, with respect to each Loan, (i)(x) in the case of a
Contract (other than an Electronic Contract), the original fully executed
Contract, including, in the case of a Contract which has been Exported, the
physical rendering of the related Electronic Contract produced upon Export,
together with the related document history report, (y) in the case of an
Electronic Contract that constitutes Electronic Chattel Paper, a single
Authoritative Copy of the executed Contract, and (z) in the case of an
Electronic Contract that does not constitute Electronic Chattel Paper, the
electronically authenticated original record of the executed Contract, and
(ii) any additional original executed documents, if any, evidencing a
modification to any of the foregoing documents, whether executed physically or
electronically and whether maintained in tangible or electronic form; provided,
that with respect to clauses (i)(y) and (i)(z), the Electronic Contract is
maintained by the Electronic Vault Provider as a designated custodian of the
Indenture Trustee (for the benefit of the Noteholders) in the Electronic Vault
pursuant to Section 3.11(b) of the Sale and Servicing Agreement.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 20

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“Loan Obligor” shall mean any borrower, co-borrower, guarantor, or other obligor
with respect to a Loan. In respect of each Loan, if there is more than one Loan
Obligor (husband and wife, for example), references herein to Loan Obligor shall
mean any or all of such Loan Obligors, as the context may require.

“Loan Pool” shall mean the pool of Loans (including the 2020-1A SUBI Loans).

“Loan Principal Balance” shall mean as of any determination date with respect to
(a) a Loan other than a Precompute Loan, the outstanding principal balance of
such Loan and (b) a Loan that is a Precompute Loan, the calculated principal
balance of such Precompute Loan, which is the result of (x) the remaining unpaid
amount due in respect of such Precompute Loan minus (y) the unearned interest on
such Precompute Loan calculated on an accrual basis, provided, that the Loan
Principal Balance of any Loan a portion of which has been charged off in
accordance with the Credit and Collection Policy shall be reduced by the portion
so charged off.

“Loan Purchase Agreement” shall mean the Loan Purchase Agreement, dated as of
the Closing Date, between the Seller and the Depositor.

“Loan Reassignment” shall mean a Loan Reassignment in substantially the form of
Exhibit C hereto, or in the case of the 2020-1A SUBI Loans in substantially the
form of the Reallocation Notice of Exhibit D to the 2020-1A SUBI Supplement.

“Loan Schedule” shall mean a complete schedule prepared by the Servicer on
behalf of the Seller and the Depositor identifying all Loans sold by the Seller
to the Depositor (or in the case of the 2020-1A SUBI Loans, allocated to the
2020-1A SUBI in accordance with the 2020-1A SUBI Supplement) on the initial
Closing Date, and which Loans (other than the 2020-1A SUBI Loans), in turn, are
sold by the Depositor to the Issuer on the initial Closing Date, as such
schedule is updated or supplemented from time to time, including, without
limitation, in connection with any Additional Loan Assignment or any
reassignment (or in the case of the 2020-1A SUBI Loans, reallocation of such
2020-1A SUBI Loans from the 2020-1A SUBI) pursuant to Section 2.05 of this
Agreement or Section 11.2(a) of the 2020-1A SUBI Supplement, as applicable, or
otherwise. The Loan Schedule may take the form of a computer file, or another
tangible medium that is commercially reasonable. The Loan Schedule shall
identify each Loan by last name of the Loan Obligor, the Loan Obligor’s account
number, whether such Loan is a Hard Secured Loan (with a certificate of title or
not), the Loan amount, APR, contract term (i.e., the number of payments), branch
state and Loan Obligor’s state of residence at time of origination (to the
extent such information appears in any relevant Imaged File).

“Material Adverse Effect” shall mean, in respect of any Person, a material
adverse change in the business, assets or operations of such Person.

“Modified Contract” shall mean a personal loan contract which, at any time, was
in default and which default was cured by adjusting or amending the contract
terms or accepting a reduced payment, other than a personal loan contract that
was modified in connection with an insolvency proceeding under Chapter 13 of the
Bankruptcy Code.

 

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“Monthly Data Tape” shall mean the electronic files containing the information
necessary for the Servicer to prepare the Monthly Servicer Report pursuant to
Section 3.06 of this Agreement.

“Monthly Determination Date” shall mean, with respect to any Payment Date, the
date that is two (2) Business Days prior to such Payment Date.

“Monthly Net Loss Percentage” shall mean, for any Monthly Determination Date,
the product of (i) the quotient (expressed as a percentage) of (I) the sum of
(x) the aggregate Loan Principal Balance of all Loans that became Charged-Off
Loans during the related Collection Period, plus (y) the aggregate amount by
which the Loan Principal Balance of any Loans (other than Charged-Off Loans)
were reduced due to being charged off in accordance with the Credit and
Collection Policy during the related Collection Period, minus (z) the aggregate
amount of Monthly Recoveries collected during the related Collection Period and
(II) the Adjusted Loan Principal Balance of all Loans in the Trust Estate as of
the close of business on the day immediately prior to the commencement of such
Collection Period, times (ii) twelve (12).

“Monthly Recoveries” shall mean, without duplication, with respect to any Loan,
any amounts (up to the aggregate principal balance of such Loan that has been
charged off in accordance with the Credit and Collection Policy) actually
collected that, in accordance with the Credit and Collection Policy in effect at
the time of such collection, constitute recoveries of amounts that were
previously charged off with respect to such Loan.

“Monthly Servicer Report” shall mean, with respect to each Payment Date, the
certificate of the Servicer delivered pursuant to Section 3.06 of this Agreement
with respect to such Payment Date, in the form attached as Exhibit C to the
Indenture.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Non-Authoritative Copy” shall have the meaning specified in the Electronic
Collateral Control Agreement.

“North Carolina Loans” shall mean North Carolina Receivables as defined in the
North Carolina Trust Agreement.

“North Carolina Trust” shall mean Regional Management North Carolina Receivables
Trust, a Delaware statutory trust.

“North Carolina Trust Agreement” shall mean the Second Amended and Restated
Trust Agreement, dated as of June 28, 2018, by and between Regional North
Carolina, as settlor and initial beneficiary and Wilmington Trust, National
Association, as UTI trustee, Delaware trustee and Administrative Trustee.

“North Carolina Trust Assets” shall have the meaning specified in the North
Carolina Trust Agreement.

“North Carolina Trustees” shall mean Wilmington Trust, National Association, a
national banking association, acting as the “UTI Trustee,” the “Delaware
Trustee,” the “Administrative Trustee,” and the “2020-1A SUBI Trustee,” in such
capacities with respect to the North Carolina Trust.

 

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“Nortridge Loan System” means a third-party technology platform on which the
Regional Management Entities’ underwriting, servicing and collection activity
are logged and maintained and which is integrated into such entities’
information technology infrastructure.

“Note Account” shall mean the Collection Account, the Principal Distribution
Account or the Reserve Account, as applicable.

“Note Purchase Agreement” shall mean that certain Note Purchase Agreement, dated
September 15, 2020 among the Depositor, Regional Management, the Issuer and
Credit Suisse Securities (USA) LLC and Wells Fargo Securities, LLC, as the
Initial Purchasers.

“Note Register” shall mean the register maintained pursuant to Section 2.05(a)
of the Indenture in which the Notes are registered.

“Note Registrar” shall have the meaning specified in Section 2.05(a) of the
Indenture.

“Noteholder” or “Holder” shall mean the Person in whose name a Note is
registered in the Note Register, or such other Person deemed to be a
“Noteholder” or “Holder” pursuant to the Indenture.

“Noteholder FATCA Information” means properly completed and signed tax
certifications (generally, in the case of U.S. federal income tax, IRS Form W-9
(or applicable successor form) in the case of a payee that is “United States
person” within the meaning of Section 7701(a)(30) of the Internal Revenue Code
or the appropriate IRS Form W-8 (or applicable successor form) in the case of a
payee that is not a “United States person” within the meaning of
Section 7701(a)(30) of the Internal Revenue Code) or any other tax documentation
which the Issuer or the Indenture Trustee may reasonably request.

“Noteholder Redemption Notice” shall have the meaning specified in
Section 8.08(c) of the Indenture.

“Notes” shall mean the Class A Notes, the Class B Notes, the Class C Notes or
the Class D Notes issued by the Issuer pursuant to the Indenture.

“NRSROs” shall mean nationally recognized statistical rating organizations.

“NYUCC” shall mean the UCC as in effect in the State of New York.

“Officer’s Certificate” shall mean, except to the extent otherwise specified, a
certificate signed by an Authorized Officer of the Issuer, the Depositor, the
Servicer, the Seller or the Indenture Trustee, as applicable.

 

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“Omnibus Distribution and Assignment Agreement” shall mean that Omnibus
Distribution and Assignment Agreement, dated as of the Closing Date, by and
among the Regional Originators, as assignors, and Regional Management, as
assignee.

“Opinion of Counsel” shall mean a written opinion of counsel, who may be counsel
for, or an employee of, the Person providing the opinion and who shall be
reasonably acceptable to the Person to whom the opinion is to be provided;
provided, however, that any Tax Opinion or other opinion relating to U.S.
federal income tax matters shall be an opinion of nationally recognized tax
counsel experienced in the matters to which such Tax Opinion relates.

“Optional Call” shall have the meaning specified in Section 8.08(b) of the
Indenture.

“Optional Call Amount” shall have the meaning specified in Section 8.08(b) of
the Indenture.

“Optional Purchase” shall have the meaning specified in Section 2.09(a) of this
Agreement.

“Original Loan Principal Balance” shall mean, with respect to any Loan, the
outstanding principal balance of such Loan, or if such Loan is a Precompute
Loan, the principal balance of such Precompute Loan calculated in accordance
with the definition of “Loan Principal Balance,” in each case as of the related
Cut-Off Date with respect to such Loans.

“Other SUBI” shall have the meaning set forth in the 2020-1A SUBI Supplement.

“Other SUBI Assets” shall have the meaning specified in Section 10.17 of this
Agreement.

“Other Warehouse Purchase Agreement” shall mean each purchase agreement entered
into after the Closing Date between Regional Management and one or more
borrowers under one or more warehouse facilities, which borrowers are
wholly-owned special purpose subsidiaries of Regional Management, for the
purpose of transferring Loans directly or indirectly to the Issuer.

“Outstanding” shall mean, as of any date of determination, all Notes previously
authenticated and delivered under the Indenture except:

(a) Notes previously cancelled by the Indenture Trustee or delivered to the
Indenture Trustee for cancellation;

(b) Notes for whose payment or redemption money in the necessary amount has been
previously deposited with the Indenture Trustee for the holders of such Notes;
provided, that if such Notes are to be redeemed, any required notice of such
redemption pursuant to the Indenture or provision for such notice satisfactory
to the Indenture Trustee has been made; and

 

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(c) Notes that have been paid under Section 2.06 of the Indenture or in exchange
for or in lieu of which other Notes have been authenticated and delivered under
the Indenture, other than any such Notes for which there shall have been
presented to the Indenture Trustee proof satisfactory to it that such Notes are
held by a protected purchaser;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver under the Indenture, Notes
owned by the Issuer, any other obligor upon the Notes, the Depositor, the
Servicer or the Seller or any Affiliate thereof shall be disregarded and
considered not to be Outstanding, except that, in determining whether the
Indenture Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that a
Responsible Officer of the Indenture Trustee, as the case may be, has actual
knowledge of being so owned shall be so disregarded. Notes so owned that have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Indenture Trustee the pledgee’s right so
to act for such Notes and that the pledgee is not the Issuer, any other obligor
upon the Notes, the Depositor, the Servicer, or the Seller or any Affiliate
thereof. In making any such determination, the Indenture Trustee may rely on the
representations of the pledgee and shall not be required to undertake any
independent investigation.

“Outstanding Securitizations” shall mean the 2018-2 Securitization and the
2019-1 Securitization.

“Overcollateralization Event” shall mean, for any Loan Action Date, after giving
effect to all Loan Actions to be taken on such Loan Action Date and all payments
and distributions to be made in accordance with Section 8.06 of the Indenture
and all principal payments to be made on the Notes, in each case, on the Payment
Date that occurs on such Loan Action Date, (a) the Loan Action Date Aggregate
Principal Balance minus the Required Overcollateralization Amount is less than
(b) the Aggregate Note Balance minus the amounts on deposit in the Principal
Distribution Account.

“Ownership Interest” shall have the meaning specified in Section 10.01 of the
Trust Agreement.

“Owner of Record” shall mean the owner of an Authoritative Copy (in the case of
an Electronic Contract that constitutes Electronic Chattel Paper) or an
electronically authenticated original record of an executed Contract (in the
case of an Electronic Contract that does not constitute Electronic Chattel
Paper), which, within the Electronic Vault System, is the Issuer, with respect
to all Loans that are not North Carolina Loans, and is the North Carolina Trust,
with respect to all North Carolina Loans.

“Owner Trustee” shall mean Wilmington Trust, National Association, not in its
individual capacity but solely in its capacity as owner trustee under the Trust
Agreement, its successors in interest and any successor owner trustee under the
Trust Agreement.

“Owner Trust Estate” shall have the meaning specified in Section 2.01 of the
Trust Agreement.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 25

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“Participant” shall mean a broker, dealer, bank, other financial institution or
other Person for whom from time to time DTC effects book-entry transfers and
pledges of securities deposited with DTC.

“Payment Date” shall mean the fifteenth (15th) day of each calendar month, or if
such 15th day is not a Business Day, the next succeeding Business Day, beginning
on October 15, 2020.

“Periodic Filing” shall mean any filing or submission that the Trust is required
to make with any federal, state or local authority or regulatory agency.

“Permanent Regulation S Global Note” shall have the meaning specified in
Section 2.05(b) of the Indenture.

“Permitted Assignee” shall mean any Person who, if it were to purchase Loans in
connection with a sale under Sections 5.05 and 5.17 of the Indenture, would not
cause the Issuer to be taxable as a publicly traded partnership for federal
income tax purposes.

“Permitted Lien” shall mean (a) Liens for taxes not delinquent or for taxes
being contested in good faith and by appropriate proceedings, and with respect
to which adequate reserves have been established, and are being maintained, in
accordance with generally accepted accounting principles promulgated or adopted
by the Financial Accounting Standards Board and its predecessors and successors
from time to time, (b) mechanics’, materialmen’s, landlords’, warehousemen’s,
garagemen’s and carriers’ Liens, and other like Liens imposed by law, securing
obligations arising in the ordinary course of business, (c) motor vehicle
accident liens and towing and storage liens, (d) any Lien created by the
Purchase Agreement, the Omnibus Distribution and Assignment Agreement or any
Other Warehouse Purchase Agreement in favor of the Seller, (e) any Lien created
by the Loan Purchase Agreement in favor of the Depositor, (f) any Lien created
by the Sale and Servicing Agreement in favor of the Issuer, (g) any Lien created
by the 2020-1A Security Agreement in favor of the Indenture Trustee and (h) any
Lien created by the Indenture for the benefit of the Indenture Trustee on behalf
of the Noteholders.

“Permitted Reassignment” shall mean with respect to (i) any reassignment by the
Issuer to the Depositor, (ii) any reassignment by the Depositor to the Seller or
(iii) any reallocation from the 2020-1A SUBI to the UTI or an Other SUBI held by
the Initial Beneficiary or the Seller or any other sale of a 2020-1A SUBI Loan
from the 2020-1A SUBI to the Initial Beneficiary or the Seller, so long as,
after giving effect to such reassignment or reallocation, as applicable, and all
other Loan Actions to be taken such Loan Action Date, the aggregate of the Loan
Principal Balances of all Reassigned Loans measured as of the Loan Action Date
on which such Loans became Reassigned Loans for such Loan Action Date and the
preceding eleven (11) consecutive Collection Periods (or, if shorter, the most
recently ended period of consecutive Collection Periods since the Closing Date),
in each case, measured as of the end of the most recently ended Collection
Period prior to such Loan being reassigned (or in the case of the 2020-1A SUBI
Loans, reallocated from the 2020-1A SUBI)) will not exceed 10.0% of the
aggregate Loan Principal Balance as of the Initial Cut-Off Date.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 26

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“Permitted Securitization” shall mean any personal loan securitization
transaction (other than the personal loan securitization transaction evidenced
by the Transaction Documents) pursuant to which the Depositor (i) acts as
depositor, (ii) acquires personal loans from the Seller or Affiliates of
Regional Management, (iii) enters solely into Permitted Securitization
Transaction Documents and (iv) with respect to which Opinions of Counsel
relating to the “true sale” of such personal loans and the “substantive
consolidation” of the Depositor are delivered.

“Permitted Securitization Transaction Documents” shall mean, as the context may
require, the Transaction Documents and/or, with respect to any personal loan
securitization for which the Depositor is acting as depositor, (other than the
personal loan securitization transaction evidenced by the Transaction
Documents), transaction documents that are substantially the same as the
Transaction Documents except for the terms of the securities being issued by the
relevant securitization trust (such as the amount and type of securities,
eligible pool criteria, events of default, early amortization events, maturity
and amortization dates, the length of any applicable revolving period, interest
rates and fees, the priority of payment and other economic terms of such
securities).

“Permitted Transferee” is defined in Section 10.02 of the Trust Agreement.

“Permitted Trust Investments” shall mean any of the following investments:

(a) Marketable securities issued by the U.S. Government and supported by the
full faith and credit of the U.S. Treasury, either by statute or an opinion of
the Attorney General of the United States;

(b) Directly or fully guaranteed obligations of the U.S. Treasury, the
Government National Mortgage Association guaranteed mortgage-back securities,
the consolidated debt obligations of the Federal Home Loan Banks, debt
obligations of Federal Home Loan Mortgage Corp., and debt obligations of Federal
National Mortgage Association;

(c) Certificates of deposit, time deposits, and bankers’ acceptances of any bank
or trust company incorporated under the laws of the United States or any state,
provided that, at the date of acquisition, such investment, and/or the
commercial paper or other short term debt obligation of such bank or trust
company has a short-term credit rating or ratings from Moody’s and/or S&P, each
at least P-1 or A-1;

(d) Deposit accounts with any bank that are insured by the Federal Deposit
Insurance Corporation and whose long-term obligations are rated A2 or better by
Moody’s and/or A or better by S&P;

(e) Commercial paper of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition is rated by
Moody’s and/or S&P, provided each such credit rating is least P-1 and/or A-1;

(f) Money market mutual funds that are registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended, and
operated in accordance with Rule 2a-7 and that at the time of such investment
are rated Aaa by Moody’s and/or AAAm by S&P, including such funds for which the
Owner Trustee or an affiliate provides investment advice or other services;

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 27

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(g) Tax-exempt variable rate commercial paper, tax-exempt adjustable rate option
tender bonds, and other tax-exempt bonds or notes issued by municipalities in
the United States, having a short-term rating of “MIG-1” or “VMIG-1” or a long
term rating of “Aa” (Moody’s), or a short-term rating of “A-1” or a long term
rating of “AA” (S&P);

(h) Repurchase obligations with a term of not more than thirty (30) days, 102%
collateralized, for underlying securities of the types described in clauses
(a) and (b) above, entered into with any bank or trust company or its respective
affiliate meeting the requirements specified in clause (c) above; and

(i) Maturities on the above securities shall not exceed 365 days and all rating
requirements and/or percentage restrictions are based on the time of purchase.

“Person” shall mean any legal person, including any individual, corporation,
limited liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, governmental entity or other entity
of any nature.

“PPM” shall have the meaning specified in Section 9.01(a)(i) of the Indenture.

“Precompute Loan” shall mean any Loan reflected as a “precompute loan” on the
records of the Servicer or the applicable Subservicer.

“Principal Distribution Account” shall have the meaning specified in
Section 8.02(a)(ii) of the Indenture.

“Proceeding” shall mean any suit in equity, action at law or other judicial or
administrative proceeding.

“Purchase Agreement” shall mean the Purchase Agreement, dated as of the Closing
Date, between Regional Management and the Warehouse Borrower.

“Purchase Price” shall have the meaning specified in Section 3.01(a) of the Loan
Purchase Agreement.

“Purchased Assets” shall have the meaning specified in Section 2.01(a) of the
Loan Purchase Agreement.

“QIB” shall mean a “qualified institutional buyer” as defined in Rule 144A.

“Rating Agency” shall mean DBRS Morningstar or S&P, and “Rating Agencies” shall
mean DBRS Morningstar and S&P, collectively.

 

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“Rating Agency Notice Requirement” shall mean, with respect to any action
subject to such condition, (i) the notification in writing by each Rating Agency
then rating any Outstanding Class of Notes (which notification may be in the
form of e-mail, facsimile, press release, posting to its website or other such
means then considered industry standard as determined by the applicable Rating
Agency) that a proposed action will not result in a reduction or withdrawal by
such Rating Agency of the then-current rating of such Class, or (ii) if a Rating
Agency then rating any Outstanding Class of Notes has informed the Issuer that
such Rating Agency does not provide such written notifications for actions of
the type being proposed, then as to such Rating Agency the Issuer shall deliver
written (which may include e-mail) notice of the proposed action to such Rating
Agency or Rating Agencies at least ten (10) Business Days prior to the effective
date of such action (or such shorter notice period if specified in the Indenture
with respect to any specific action, or if ten (10) Business Days prior notice
is impractical, such advance notice as is practicable).

“Reassigned Loan” shall have the meaning specified in Section 8.07(v) of the
Indenture.

“Reassignment Date” shall have the meaning specified in Section 2.10(b)(i) of
this Agreement.

“Reassignment Price” shall mean, with respect to any Reassigned Loan, an amount
equal to the greater of (a) the fair market value of such Reassigned Loan, which
shall be determined as of the close of business on the day prior to the related
Loan Action Date on which such reassignment is to occur, or (b) the outstanding
principal amount of such Reassigned Loan together with all accrued and unpaid
interest thereon to, but excluding, the related Loan Action Date on which such
reassignment is to occur.

“Recharacterized Notes” shall have the meaning specified in Section 3.14(b) of
the Indenture.

“Record Date” shall mean, with respect to any Payment Date, the last Business
Day of the calendar month immediately preceding the calendar month during which
such Payment Date occurs; provided, that the first Record Date shall be the
Closing Date.

“Records” shall mean, with respect to any Contract, all documents, books,
records and other information (including computer programs, tapes, disks, punch
cards, data processing software and related property and rights) maintained with
respect to any related item of the Purchased Assets, Sold Assets or 2020-1A SUBI
Assets, as applicable, and the related Loan Obligor.

“Redeeming Party” shall have the meaning specified in Section 8.08(c) of the
Indenture.

“Redeeming Party Notice” shall have the meaning specified in Section 8.08(c) of
the Indenture.

“Redemption Date” shall have the meaning specified in Section 8.08(c) of the
Indenture.

“Redemption Price” shall have the meaning specified in Section 8.08(a) of the
Indenture.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 29

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“Regional” shall mean Regional Management, together with the Regional
Originators.

“Regional Management” shall mean Regional Management Corp., a Delaware
corporation.

“Regional Management Entities” shall mean Regional Management, the Issuer and
the Regional Originators.

“Regional North Carolina” shall mean Regional Finance Corporation of North
Carolina, a North Carolina corporation.

“Regional Originators” shall mean Regional Finance Corporation of Alabama, an
Alabama corporation, Regional Finance Company of Georgia, LLC, a Delaware
limited liability company, Regional Finance Company of Missouri, LLC, a Delaware
limited liability company, Regional Finance Company of New Mexico, LLC, a
Delaware limited liability company, Regional Finance Corporation of North
Carolina, a North Carolina corporation, Regional Finance Company of Oklahoma,
LLC, a Delaware limited liability company, Regional Finance Corporation of South
Carolina, a South Carolina corporation, Regional Finance Corporation of
Tennessee, a Tennessee corporation, Regional Finance Corporation of Texas, a
Texas corporation, Regional Finance Company of Virginia, LLC, a Delaware limited
liability company, Regional Finance Corporation of Wisconsin, a Wisconsin
corporation, and any additional Regional Affiliate that may originate Loans from
the time after the Closing Date and prior to the end of the Revolving Period.
From time to time after the Closing Date, prior to the end of the Revolving
Period, additional Affiliates of Regional Management may become “Regional
Originators” provided that the Rating Agency Notice Requirement is satisfied.

“Regional Party” or “Regional Parties” shall have the meaning specified in
Section 8.03 of this Agreement.

“Regular Principal Payment Amount” shall mean, with respect to any Payment Date,
an amount equal to the excess (if any) of (a) the Aggregate Note Balance as of
the end of the related Collection Period minus the amount on deposit in the
Principal Distribution Account (after giving effect to any allocations on such
Payment Date to the Principal Distribution Account pursuant to Sections
8.06(a)(v), (vii), (ix) and (xi) of the Indenture) over (b) (i) the Adjusted
Loan Principal Balance as of the end of the related Collection Period minus
(ii) the Required Overcollateralization Amount.

“Regulation RR” shall mean the SEC’s credit risk retention rules, 17 C.F.R. Part
246.

“Regulation S” shall mean Regulation S promulgated under the Securities Act.

“Regulation S Definitive Note” shall have the meaning specified in
Section 2.05(b) of the Indenture.

“Regulation S Global Note” shall have the meaning specified in Section 2.05(b)
of the Indenture.

 

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“Reinvestment Criteria Event” shall mean, for any Loan Action Date, the
existence of any of the following, as determined based on the Loan Principal
Balance and other characteristics of each Loan in the applicable Loan Action
Date Loan Pool as of the end of the Collection Period relating to such Loan
Action Date:

(a) the aggregate Loan Action Date Loan Principal Balance of (i) all Single
State Originated Loans in the Loan Action Date Loan Pool for the Top Three
States for such Loan Action Date shall exceed 80.0% of the Loan Action Date
Aggregate Principal Balance or (ii) all Single State Originated Loans in the
Loan Action Date Loan Pool for any single State shall exceed 35.0% of the Loan
Action Date Aggregate Principal Balance;

(b) the aggregate Loan Action Date Loan Principal Balance of all Single State
Originated Loans in the Loan Action Date Loan Pool for any single State (other
than any Top Three State for such Loan Action Date) shall exceed 15.0% of the
Loan Action Date Aggregate Principal Balance;

(c) the Weighted Average Coupon for such Loan Action Date shall be less than
25.0%;

(d) the Weighted Average Loan Remaining Term for such Loan Action Date shall
exceed 46 months;

(e) the aggregate Loan Action Date Loan Principal Balance of all Loans in the
Loan Action Date Loan Pool that had an original term of greater than 60 months
shall exceed 2.5% of the Loan Action Date Aggregate Principal Balance;

(f) the aggregate Loan Action Date Loan Principal Balance of all Loans in the
Loan Action Date Loan Pool that have received a payment deferment during the
Collection Period relating to such Loan Action Date shall exceed 10.0% of the
Loan Action Date Aggregate Principal Balance;

(g) the aggregate Loan Action Date Loan Principal Balance of all Loans in the
Loan Action Date Loan Pool, the Loan Obligors of which have a FICO® score at the
time of origination within any “FICO® Score Range” listed below, shall exceed
the percentage of the Loan Action Date Aggregate Principal Balance set forth in
the table below opposite such “FICO® Score Range”;

 

FICO® Score Range

   Percentage  

Less than 541

     7.0 % 

Less than 581

     18.0 % 

Less than 621

     50.0 % 

Less than 661

     85.0 % 

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 31

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(h) the aggregate Loan Action Date Loan Principal Balance of all Unsecured Loans
in the Loan Action Date Loan Pool shall exceed 3.0% of the Loan Action Date
Aggregate Principal Balance; and

(i) an Overcollateralization Event exists.

“Related Collateral” shall have the meaning specified in Section 2 of the
2020-1A Security Agreement.

“Related Loan Assets” shall mean (i) with respect to a Loan (other than a
2020-1A SUBI Loan), the Purchased Assets related to such Loan and (ii) with
respect to a 2020-1A SUBI Loan, the Trust Assets related to such 2020-1A SUBI
Loan, in each case, including any proceeds of the foregoing.

“Renewal” shall mean, with respect to any Loan in the Trust Estate, a
transaction in which a new non-revolving personal loan originated pursuant to a
Contract is entered into between a Regional Originator and a Loan Obligor, which
new non-revolving personal loan (x) is originated in accordance with Regional’s
renewal underwriting criteria as set forth in its Credit and Collection Policy,
(y) refinances such Loan in full or in part and (z) may also extend additional
financing to such Loan Obligor.

“Renewal Loan” shall mean the new non-revolving personal loan entered into
between the applicable Regional Originator and the Loan Obligor pursuant to any
Renewal.

“Repurchase Price” shall mean an amount equal to the Purchase Price paid for
such Loan (or in the case of a 2020-1A SUBI Loan, the amount paid in
consideration for the allocation of such Loan to the 2020-1A SUBI) as of the
Closing Date or the related Addition Date, as applicable, less any Collections
representing payment of principal received by the Issuer since the date of the
purchase of such Loan (or in the case of a 2020-1A SUBI Loan, allocation to the
2020-1A SUBI), plus any out-of-pocket costs incurred by the Servicer, the
Depositor or the Issuer, as applicable, in connection with such repurchase or
reallocation.

“Required Noteholders” shall mean, at any time, the Holders of Notes evidencing
more than 50% of the Outstanding Notes.

“Required Overcollateralization Amount” shall mean $7,500,000.

“Requirements of Law” shall mean, for any Person, (a) any certificate of
incorporation, certificate of formation, articles of association, bylaws,
limited liability company agreement, or other organizational or governing
documents of that Person and (b) any law, treaty, statute, regulation, or rule,
or any determination by a Governmental Authority or arbitrator, that is
applicable to or binding on that Person or to which that Person is subject. This
term includes usury laws, the Truth in Lending Act, and Regulation Z and
Regulation B of the Board of Governors of the Federal Reserve System.

“Reserve Account” shall have the meaning specified in Section 8.02(a)(iii) of
the Indenture.

 

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“Reserve Account Draw Amount” shall have the meaning specified in
Section 8.02(a)(iii) of the Indenture.

“Reserve Account Required Amount” shall mean, with respect to the Closing Date
and any Payment Date, an amount equal to $1,875,000.00.

“Responsible Officer” shall mean, (a) with respect to the Indenture Trustee, the
Back-up Servicer, the Image File Custodian or the Owner Trustee, any officer
within the Corporate Trust Office of such Person, as applicable, as the case may
be, including any Vice President, Assistant Vice President, Assistant Treasurer,
Assistant Secretary, or any other officer of such Person, as applicable,
customarily performing functions similar to those performed by any of the above
designated officers, and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer’s knowledge of
and familiarity with the particular subject, in each case having direct
responsibility for the administration of the Indenture and the other Transaction
Documents on behalf of such Person, as applicable, and (b) with respect to any
of Regional Management, the Issuer or the Regional Originators, with respect to
a particular matter, any officer to whom such matter is referred because of such
officer’s knowledge of and familiarity with the particular subject, in each case
having direct responsibility for the administration of the Transaction Documents
on behalf of such Person.

“Revolving Loan” shall mean any personal loan which (a) is reflected as a
“revolving loan” on the records of the Servicer or the applicable Subservicer
and (b) arises under an account pursuant to which an obligor may request future
advances or draws pursuant to the applicable loan agreement.

“Revolving Period” shall mean the period beginning at the close of business on
the Closing Date and ending on the close of business on the earlier of (a) the
Revolving Period Termination Date and (b) the close of business on the Business
Day immediately preceding the day on which an Early Amortization Event or an
Event of Default is deemed to have occurred; provided, that the Revolving Period
shall be reinstated upon the occurrence of either of the following: (x)(i) the
Revolving Period terminated due to the occurrence of an Early Amortization Event
under Section 5.01(a) of the Indenture, and such Early Amortization Event shall
have been cured as of three (3) consecutive Loan Action Dates and (ii) no other
event that would have caused the Revolving Period to terminate shall have
occurred on or prior to, and be continuing as of, such reinstatement; or
(y)(i) the Revolving Period terminated due to the occurrence of an Early
Amortization Event under Section 5.01(b) of the Indenture, and there
subsequently occurs a Loan Action Date with respect to which no Reinvestment
Criteria Event exists and (ii) no other event that would have caused the
Revolving Period to terminate shall have occurred on or prior to, and be
continuing as of, such reinstatement; provided, further that, in the event that
the Revolving Period is reinstated on any Loan Action Date, such reinstatement
shall be given effect for purposes of determining any distributions and
allocations to occur on the Payment Date following such Loan Action Date
pursuant to Section 8.06 and Section 8.07 of the Indenture. For purposes of this
definition, “cured” shall mean that the circumstances that would constitute an
Early Amortization Event do not exist.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 33

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“Revolving Period Termination Date” shall mean the close of business on
September 30, 2023; provided, that, the Revolving Period may terminate earlier
than such date as a result of an Early Amortization Event or an Event of
Default.

“Rule 144A” shall mean Rule 144A promulgated under the Securities Act.

“Rule 144A Definitive Note” shall have the meaning specified in Section 2.05(b)
of the Indenture.

“Rule 144A Global Note” shall have the meaning specified in Section 2.05(b) of
the Indenture.

“Rule 15Ga-1 Information” shall have the meaning specified in Section 6.14(c) of
the Indenture.

“S&P” shall mean Standard & Poor’s Rating Services, a Standard & Poor’s
Financial Services LLC business, and its successors.

“Sale and Servicing Agreement” shall mean the Sale and Servicing Agreement,
dated as of the Closing Date, among the Depositor, the Servicer, the
Subservicers, the Issuer, and the North Carolina Trust.

“SEC” shall mean the United States Securities and Exchange Commission.

“Second Priority Principal Payment” shall mean, with respect to any Payment
Date, (a) at any time prior to the occurrence of an Event of Default, an amount
equal to the excess (if any) of (i) the sum of (A) the Class A Note Balance as
of the end of the related Collection Period plus (B) the Class B Note Balance as
of the end of the related Collection Period minus the amount on deposit in the
Principal Distribution Account (after giving effect to any allocations to the
Principal Distribution Account pursuant to Section 8.06(a)(v) of the Indenture)
over (ii) the Adjusted Loan Principal Balance as of the end of the related
Collection Period and (b) at any time from and after the occurrence of an Event
of Default or on or after the Stated Maturity Date in respect of the Class B
Notes, the sum of the Class A Note Balance and the Class B Note Balance minus
the amount on deposit in the Principal Distribution Account (after giving effect
to any allocations to the Principal Distribution Account pursuant to
Section 8.06(a)(v) of the Indenture).

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Seller” shall mean Regional Management.

“Servicer” shall mean (a) initially Regional Management, in its capacity as
Servicer pursuant to the Sale and Servicing Agreement and the 2020-1A SUBI
Servicing Agreement and any Person that becomes the successor thereto pursuant
to the Sale and Servicing Agreement, and (b) after any Servicing Transfer Date,
the Successor Servicer.

“Servicer Default” shall have the meaning specified in Section 8.01 of this
Agreement.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 34

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“Servicer File” shall mean, with respect to a Loan, each of the following
documents: (i) application of the Loan Obligor for credit; (ii) a copy (but not
the original) of the Contract and any amendments or modifications thereto;
provided, however, if such documents constitute Electronic Contracts, originals
or copies thereof may be accessible via the Electronic Vault System or via the
Nortridge Loan System; and (iii) such other documents as the Servicer
customarily retains in its files in order to accomplish its duties under this
Agreement; provided, that in each case such documents may be in either tangible
or electronic form.

“Servicing Assumption Date” shall have the meaning specified in Section 1.1 of
the Back-up Servicing Agreement.

“Servicing Centralization Period” shall have the meaning specified in
Section 1.1 of the Back-up Servicing Agreement.

“Servicing Fee” shall have the meaning specified in Section 3.02 of this
Agreement.

“Servicing Transfer” shall have the meaning specified in Section 8.01 of this
Agreement.

“Servicing Transfer Date” shall mean the date on which a Successor Servicer has
assumed all of the duties and obligations of the Servicer under the Sale and
Servicing Agreement and the 2020-1A SUBI Servicing Agreement (other than in the
case of the Back-up Servicer, any such duty or obligation that it is not
required to assume under the terms of the Back-up Servicing Agreement, the Sale
and Servicing Agreement or the 2020-1A SUBI Servicing Agreement, as applicable)
after the resignation or termination of the Servicer.

“Servicing Transfer Notice” shall mean a written notice substantially in the
applicable form attached to the Back-up Servicing Agreement from the Indenture
Trustee to the Back-up Servicer.

“Servicing Transition Costs” shall have the meaning specified in Section 1.1 of
the Back-up Servicing Agreement.

“Servicing Transition Period” shall have the meaning specified in Section 1.1 of
the Back-up Servicing Agreement.

“Similar Law” shall mean any non-U.S., federal, state or local law that is
substantially similar to Section 406 of ERISA or Section 4975 of the Internal
Revenue Code.

“Single State Originated Loans” shall mean, with respect to any State and for
any Loan Action Date, all of the Loans in the Loan Action Date Loan Pool with
respect to such Loan Action Date that were originated by any branch within such
State.

“Soft Secured Loan” shall mean a Loan that is, as of the date of the origination
thereof, secured by untitled assets, including but not limited to, personal
property, such as furniture, electronic equipment or other household goods,
subject to limitations imposed by applicable law on the taking of non-purchase
money security interests in such items.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 35

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“Sold Assets” shall have the meaning specified in Section 2.01(a) of this
Agreement.

“State” shall mean any of the fifty (50) states in the United States of America
or the District of Columbia.

“Stated Maturity Date” shall mean, with respect to each Class of Notes,
October 15, 2030.

“SUBI” shall mean special unit of beneficial interest.

“SUBI Certificate Purchase Agreement” shall mean the SUBI Certificate Purchase
Agreement, dated as of the date hereof, by and between Regional North Carolina
and the Seller.

“Subservicer” shall mean (a) prior to any Servicing Transfer Date, each
subservicer identified in Schedule I of the Sale and Servicing Agreement, in its
capacity as a Subservicer pursuant to the Sale and Servicing Agreement, any
person that becomes an Additional Subservicer pursuant to Section 10.19 of this
Agreement and any Person that becomes the successor thereto under Section 6.02
of this Agreement as a “Subservicer” after the Closing Date and any assignee
thereof pursuant to Section 6.05 of this Agreement, and (b) after any Servicing
Transfer Date, any subservicers appointed by the Successor Servicer, which may
include some or all of the subservicers referred to in the foregoing clause (a).

“Successor Servicer” shall mean the successor servicer appointed in accordance
with Section 8.02 of this Agreement.

“System Description” shall mean the written description of the Electronic Vault
System, attached hereto as Exhibit H.

“Tax Opinion” shall mean, with respect to any action, an Opinion of Counsel to
the effect that, for U.S. federal income tax purposes, (a) such action will not
adversely affect the tax characterization as debt of any Note of any Outstanding
Class with respect to which an Opinion of Counsel was delivered at the time of
its original issuance as to the characterization of such Note as debt for U.S.
federal income tax purposes (it being understood that any such Opinion of
Counsel shall not be required to provide any greater level of assurance
regarding the tax characterization of any Class of Notes than was provided in
the original Opinion of Counsel with respect to such Class), (b) such action
will not cause or constitute an event in which gain or loss would be recognized
by the Holder of any Class of Notes with respect to which an Opinion of Counsel
was delivered at the time of original issuance to the effect that such Notes
would be characterized as debt for U.S. federal income tax purposes (it being
understood that no such Opinion of Counsel shall be required with respect to
Notes as to which no Opinion of Counsel for U.S. federal income tax purposes was
delivered), and (c) such action will not cause the Issuer to be classified as an
association (or publicly traded partnership) taxable as a corporation.

“Temporary Regulation S Global Note” shall have the meaning specified in
Section 2.05(b) of the Indenture.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 36

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“Term Loan” shall mean that certain secured amortizing term loan financing of
Regional Management.

“Term Loan Borrower” shall mean Regional Management Receivables, LLC, a Delaware
limited liability company, and a wholly-owned special purpose subsidiary of
Regional Management.

“Termination Notice” shall have the meaning specified in Section 8.01 of this
Agreement.

“Third Party Allocation Agent” shall mean the pre-approved third party
allocation agent pursuant to the Intercreditor Agreement, which as of the
Closing Date is Wells Fargo.

“Third Priority Principal Payment” shall mean, with respect to any Payment Date,
(a) at any time prior to the occurrence of an Event of Default, an amount equal
to the excess (if any) of (i) the sum of (A) the Class A Note Balance as of the
end of the related Collection Period plus (B) the Class B Note Balance as of the
end of the related Collection Period plus (C) the Class C Note Balance as of the
end of the related Collection Period minus the amount on deposit in the
Principal Distribution Account (after giving effect to any allocations to the
Principal Distribution Account pursuant to Sections 8.06(a)(v) and (vii) of the
Indenture) over (ii) the Adjusted Loan Principal Balance as of the end of the
related Collection Period and (b) at any time from and after the occurrence of
an Event of Default or on or after the Stated Maturity Date in respect of the
Class C Notes, the sum of the Class A Note Balance, the Class B Note Balance and
the Class C Note Balance minus the amount on deposit in the Principal
Distribution Account (after giving effect to any allocations to the Principal
Distribution Account pursuant to Sections 8.06(a)(v) and (vii) of the
Indenture).

“Threshold Noteholders” shall mean, at any time, the Holders of Notes evidencing
more than 25% of the Outstanding Notes.

“Titled Asset” shall mean a motor vehicle, boat, motorcycle, all-terrain vehicle
or other asset for which, under applicable State law, a certificate of title is
issued and any security interest therein is required to be perfected by notation
on such certificate of title or recorded with the relevant Governmental
Authority that issued such certificate of title.

“Top Three States” shall mean, for any Loan Action Date, the three States that
have the highest concentrations of Single State Originated Loans in the Loan
Action Date Loan Pool with respect to such Loan Action Date.

“Transaction Documents” shall mean the Certificate of Trust; the Trust
Agreement; the Note Purchase Agreement; the SUBI Certificate Purchase Agreement;
the Purchase Agreement; the Omnibus Distribution and Assignment Agreement; any
Other Warehouse Purchase Agreement; the Loan Purchase Agreement; the Sale and
Servicing Agreement; the Electronic Vault Services Agreement; the Electronic
Collateral Control Agreement; the Indenture; the Administration Agreement; the
Back-up Servicing Agreement; the Intercreditor Agreement; the Intercreditor
Security Agreement; the North Carolina Trust Agreement; the UTI Administration
Agreement; the 2020-1A SUBI Servicing Agreement; the 2020-1A SUBI Supplement;
the 2020-1A Security Agreement; and such other documents and certificates
delivered in connection with the foregoing.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 37

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“Trust” shall mean the Trust established by the Trust Agreement.

“Trust Assets” shall have the meaning specified in Section 2.1(a) of the North
Carolina Trust Agreement.

“Trust Account” shall mean the account established by the Owner Trustee on
behalf of the Trust pursuant to Section 4.04 of the Trust Agreement.

“Trust Agreement” shall mean the Amended and Restated Trust Agreement relating
to the Issuer, dated as of the Closing Date, between the Depositor and the Owner
Trustee.

“Trust Certificate” shall have the meaning specified in Section 10.01 of the
Trust Agreement.

“Trust Company” shall mean Wilmington Trust, National Association or any
successor thereto that is acting as Owner Trustee.

“Trust Estate” shall have the meaning specified in the Granting Clause of the
Indenture.

“UCC” shall mean the Uniform Commercial Code of the applicable jurisdiction.

“Unsecured Loan” shall mean a Loan that is, as of the date of the origination
thereof, not secured.

“UTI” shall have the meaning specified in the North Carolina Trust Agreement.

“UTI Administration Agreement” shall mean the UTI Administration Agreement,
dated as of June 28, 2018, by and between Regional North Carolina and Regional
Management.

“UTI Trustee” shall mean Wilmington Trust, National Association, and any Person
that becomes the successor thereto pursuant to the North Carolina Trust
Agreement.

“Volcker Rule” shall mean Section 619 of the Dodd-Frank Act, together with any
implementing regulations.

“Warehouse Borrower” shall mean Regional Management Receivables II, LLC.

“Warehouse Facility” shall mean the Amended and Restated Credit Agreement, dated
as of October 17, 2019, as amended by the omnibus amendment, dated as of
August 18, 2020, by and among the Warehouse Borrower, Regional Management, as
servicer, the lenders from time to time thereto, the agents from time to time
thereto, Wells Fargo Bank, National Association, as account bank, image file
custodian and back-up servicer, Wells Fargo Bank, National Association, as
administrative agent, and Credit Suisse AG, New York Branch, as structuring and
syndication agent.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 38

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“Weighted Average Coupon” shall mean, with respect to any Loan Action Date, the
weighted average APR of all Loans in the Loan Action Date Loan Pool for such
Loan Action Date, determined based upon (i) the Loan Action Date Loan Principal
Balance of such Loans and (ii) the APR of such Loans as of the close of business
on the last day of the Collection Period immediately preceding such Loan Action
Date (or, if such Loan did not exist as of the last day of such Collection
Period, the date on which such Loan was originated).

“Weighted Average Loan Remaining Term” shall mean, with respect to any Loan
Action Date, the weighted average remaining term to maturity (as set forth in
the applicable Contracts) of all Loans in the Loan Action Date Loan Pool for
such Loan Action Date, determined based upon (i) the Loan Action Date Loan
Principal Balance of such Loans and (ii) the remaining term to maturity of such
Loans as of the close of business on the last day of the Collection Period
immediately preceding such Loan Action Date (or, if such Loan did not exist as
of the last day of such Collection Period, the date on which such Loan was
originated).

“Wells Fargo” shall mean Wells Fargo Bank, National Association, a national
banking association, and its permitted successors and assigns.

“WTNA” shall mean Wilmington Trust, National Association.

“2018-2 Indenture” shall mean the Indenture, dated as of December 13, 2018,
among Regional Management Issuance Trust 2018-2, as issuer, Regional Management,
as servicer, Wells Fargo Bank, N.A., as indenture trustee and as account bank.

“2018-2 Indenture Trustee” shall mean Wells Fargo Bank, N.A., in its capacity as
indenture trustee under the 2018-2 Indenture.

“2018-2 Issuer” shall mean Regional Management Issuance Trust 2018-2.

“2018-2 Securitization” shall mean the asset-backed securitization transaction
in an aggregate principal amount of $130,085,000 consummated by Regional
Management as of December 13, 2018.

“2019-1 Indenture” shall mean the Indenture, dated as of October 31, 2019, among
Regional Management Issuance Trust 2019-1, as issuer, Regional Management, as
servicer, Wells Fargo Bank, N.A., as indenture trustee and as account bank.

“2019-1 Indenture Trustee” shall mean Wells Fargo Bank, N.A., in its capacity as
indenture trustee under the 2019-1 Indenture.

“2019-1 Issuer” shall mean Regional Management Issuance Trust 2019-1.

“2019-1 Securitization” shall mean the asset-backed securitization transaction
in an aggregate principal amount of $130,000,000 consummated by Regional
Management as of October 31, 2019.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 39

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“2020-1A Security Agreement” shall mean the Security Agreement, dated as of the
Closing Date, among the North Carolina Trust, the Issuer, Regional North
Carolina and the Indenture Trustee.

“2020-1A SUBI” shall have the meaning specified in the 2020-1A SUBI Supplement.

“2020-1A SUBI Assets” shall have the meaning specified in the 2020-1A SUBI
Supplement.

“2020-1A SUBI Certificate” shall have the meaning specified in the 2020-1A SUBI
Supplement.

“2020-1A SUBI Loans” shall have the meaning specified in the 2020-1A SUBI
Supplement.

“2020-1A SUBI Servicer” shall have the meaning specified in the 2020-1A SUBI
Servicing Agreement.

“2020-1A SUBI Servicing Agreement” shall mean the 2020-1A SUBI Servicing
Agreement, dated as of the Closing Date, among the North Carolina Trust, the
Issuer, as 2020-1A SUBI holder, and Regional Management, as 2020-1A SUBI
Servicer.

“2020-1A SUBI Transferred Assets” shall have the meaning specified in
Section 2.01 of the SUBI Certificate Purchase Agreement.

“2020-1A SUBI Supplement” shall mean the 2020-1A SUBI Supplement to the North
Carolina Trust Agreement, dated as of the Closing Date, among Regional North
Carolina, as settlor and initial beneficiary, the Issuer, as 2020-1A SUBI
beneficiary and 2020-1A SUBI holder, and Wilmington Trust, National Association,
as UTI trustee, 2020-1A SUBI trustee and Administrative Trustee.

“2020-1A SUBI Trustee” shall mean Wilmington Trust, National Association, in its
capacity as 2020-1A SUBI Trustee.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 40

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Part B – Rules of Construction

(a) All terms defined in this Appendix or any Transaction Document shall have
the defined meanings when used in any certificate or other document made or
delivered pursuant hereto or thereto unless otherwise defined therein.

(b) As used in this Appendix or any Transaction Document, accounting terms that
are not defined herein or therein, and accounting terms partly defined herein or
therein shall have the respective meanings given to them under generally
accepted accounting principles. To the extent that the definitions of accounting
terms in this Appendix or any Transaction Document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Appendix or such Transaction Document will
control.

(c) Any reference in this Appendix or any Transaction Document to “the Rating
Agency” shall only apply to any specific rating agency if such rating agency is
then rating any Class of Notes at the request of the Issuer or Depositor and
otherwise such references shall have no force or effect; provided, that, in the
event that the Depositor, the Issuer or any representative thereof requested
that such rating agency cease rating the Notes, such references shall continue
in full force and effect. Any reference in this Appendix or any Transaction
Document to a specified rating level from any rating agency shall mean at least
such specified rating and any rating level higher than the rating level
specified shall also be deemed to satisfy the referenced rating requirement.

(d) With respect to any Payment Date or Loan Action Date, (i) the “related
Collection Period” shall mean the Collection Period immediately prior to the
Collection Period in which such Payment Date or Loan Action Date occurs and
(ii) the “related Monthly Determination Date” shall mean the Monthly
Determination Date first preceding such Payment Date, and the relationships
among Collection Periods and Monthly Determination Dates will be correlative to
the foregoing relationships.

(e) Each defined term used in this Appendix or any Transaction Document has a
comparable meaning when used in its plural or singular form. Each
gender-specific term used in this Appendix or any Transaction Document has a
comparable meaning whether used in a masculine, feminine or gender-neutral form.

(f) Unless otherwise specified, references in this Appendix or any Transaction
Document to any amount as on deposit or outstanding on any particular date shall
mean such amount at the close of business on such day.

(g) The words “hereof”, “herein” and “hereunder” and words of similar import
when used in this Appendix or any Transaction Document shall refer to this
Appendix or such Transaction Document as a whole and not to any particular
provision or subdivision of this Appendix or such Transaction Document;
references to any subsection, Section, Schedule or Exhibit contained in this
Appendix or any Transaction Document are references to subsections, Sections,
Schedules and Exhibits in or to this Appendix or such Transaction Document
unless otherwise specified; and the term “including” shall mean “including
without limitation.” The word “or” when used in this Appendix or any Transaction
Document is not exclusive. Whenever the

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 41

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term “including” (whether or not followed by the phrase “but not limited to” or
“without limitation” or words of similar effect) is used in this Appendix or any
Transaction Document in connection with a listing of items within a particular
classification, that listing will be interpreted to be illustrative only and
will not be interpreted as a limitation on, or exclusive listing of, the items
within that classification.

(h) Terms used in this Appendix or any Transaction Document herein that are
defined in the NYUCC and not otherwise defined shall have the meanings set forth
in the NYUCC unless the context requires otherwise.

(i) Any reference in this Appendix or any Transaction Document to the
“Appendix,” this “Appendix,” the “Agreement,” this “Agreement” or words of like
import shall be a reference to this Appendix or such Transaction Document as it
may be amended, supplemented or modified from time to time. Any definition of or
reference to any agreement, instrument or other document in this Appendix or any
Transaction Document shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth in any Transaction Document).

(j) Any reference in this Appendix or any Transaction Document to a “beneficial
interest” in a security also shall mean a security entitlement with respect to
such security, and any reference herein to a “beneficial owner” or “beneficial
holder” of a security also shall mean the holder of a security entitlement with
respect to such security.

(k) Any reference in this Appendix or any Transaction Document to any law shall
include all statutory and regulatory provisions consolidating, amending,
replacing or interpreting such law and any reference to any law or regulation
shall, unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time.

(l) Any reference to any Person shall include such Person’s respective permitted
successors and assigns.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule II - 42

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Schedule III

Perfection Representations, Warranties and Covenants

In addition to the representations, warranties and covenants contained in this
Sale and Servicing Agreement, the Depositor hereby represents, warrants, and
covenants to the Issuer as follows on the Closing Date (it being understood that
each such representation, warranty and covenant is not being made in respect of
any 2020-1A SUBI Loan):

1. This Sale and Servicing Agreement creates a valid and continuing security
interest (as defined in the applicable UCC) in the Loans in favor of the Issuer,
which security interest is prior to all other Liens (other than Permitted
Liens), and is enforceable as such as against creditors of and purchasers from
the Depositor.

2. The Loans constitute “tangible chattel paper,” “payment intangibles,”
“accounts,” “instruments,” “general intangibles” or “electronic chattel paper”
within the meaning of the UCC.

3. The Depositor owns and has good and marketable title to the Loans free and
clear of any Lien (other than any Permitted Lien), claim or encumbrance of any
Person.

4. The Depositor will cause, within ten (10) days after the effective date of
this Sale and Servicing Agreement, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the sale of and the security interest in the
each Loan sold by the Depositor, and if any additional such filing is necessary
in connection with any Additional Loans sold by the Depositor to the Issuer, the
Depositor will cause such filings to be made within ten (10) days of the
applicable Addition Date. All financing statements referred to in this paragraph
contain a statement that: “A purchase of or security interest in any collateral
described in this financing statement will violate the rights of the Secured
Party/Purchaser”.

5. (a) Other than the conveyance (including any security interest granted) to
the Issuer pursuant to this Sale and Servicing Agreement, the Depositor has not
pledged, assigned, sold, granted a security interest in, or otherwise conveyed
any of the Sold Assets (other than any such pledge, assignment, sale, grant or
conveyance that is no longer effective); and (b) the Depositor has not
authorized the filing of, and is not aware of, any financing statements against
the Depositor that include a description of collateral covering any Loan sold by
the Depositor to the Issuer other than any financing statement (i) relating to
the conveyance of the Loans by the Warehouse Borrower to the Seller under the
Purchase Agreement, (ii) relating to the conveyance of Loans by a borrower under
a warehouse facility pursuant to an Other Warehouse Purchase Agreement, if
applicable, (iii) relating to the conveyance of Loans by a Regional Originator
to the Seller under the Omnibus Distribution and Assignment Agreement,
(iv) relating to the conveyance of the 2020-1A SUBI Certificate by Regional
North Carolina to the Seller under the SUBI Certificate Purchase Agreement,
(v) relating to the pledge of the 2020-1A SUBI Assets by each of the North
Carolina Trust and the Issuer to the Indenture Trustee, (vi) relating to the
conveyance of the 2020-1A SUBI Certificate and the Loans (other than the 2020-1A
SUBI Loans) by the Seller to the Depositor pursuant to the Loan Purchase
Agreement, (vii) relating to the conveyance of the Loans (other than the 2020-1A
SUBI Loans) by the Depositor to the Issuer pursuant to the Sale and Servicing
Agreement, (viii) relating to the security interest granted to the Indenture
Trustee under the Indenture or (ix) that has been terminated.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule III - 1

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6. The Depositor is not aware of any material judgment, ERISA or tax lien
filings against the Depositor.

7. On the date of the conveyance of any Loan by the Depositor to the Issuer, the
Seller (or any Affiliate thereof) has in its possession all original copies of
the instruments and tangible chattel paper that constitute or evidence each Loan
sold by the Seller to the Depositor; and none of the tangible chattel paper that
constitute or evidence such Loan sold by such Seller to the Depositor has any
stamps, marks or notations indicating that such Loan has been pledged, assigned
or otherwise conveyed to any Person other than the Seller, the North Carolina
Trust, the Depositor, the Issuer or the Indenture Trustee other than any such
stamps, marks or notations that relate to a pledge, assignment, conveyance or
other interest that has been cancelled, terminated or voided (or if such stamp,
mark or notation is in the name of an agent (or any predecessor agent) under the
ABL Facility, the Issuer has the right to cancel or void such stamp, mark or
notation without the consent of such agent (or any predecessor agent, as
applicable), and such agent (or any predecessor agent, as applicable) has
released in writing its lien on such Contract).

8. Notwithstanding any other provision of this Sale and Servicing Agreement or
any other Transaction Document, the perfection representations, warranties and
covenants contained in this Schedule III shall be continuing, and remain in full
force and effect until such time as all obligations under this Sale and
Servicing Agreement have been finally and fully paid and performed.

9. The Depositor has received all consents and approvals to the sale of each
Loan sold by it under the Sale and Servicing Agreement to the Issuer required by
the terms of the Sale and Servicing Agreement to the extent that it constitutes
an instrument.

10. To the extent that any Contract relating to a Loan constitutes Electronic
Chattel Paper, there is only one single Authoritative Copy of each electronic
“record” constituting or evidencing a Contract that is Electronic Chattel Paper,
the record or records composing the Electronic Chattel Paper are created, stored
and assigned in such a manner that (A) a single authoritative copy of the record
or records exists which is unique, identifiable and unalterable (other than a
revision that is readily identifiable as an authorized or unauthorized
revision), (B) each copy of the authoritative copy and any copy of a copy is
readily identifiable as a copy that is not the authoritative copy, (C) the
authoritative copy has been communicated to and is maintained by the Electronic
Vault Provider as a designated custodian of the Indenture Trustee, (D) all
copies or revisions that add or change an identified assignee of the
Authoritative Copy of such Contract that constitutes or evidences the Loan must
be made with the participation of the Indenture Trustee, and (E) such
Authoritative Copy identifies only the Indenture Trustee as the assignee. To the
extent that any Contract relating to a Loan constitutes Electronic Chattel
Paper, none of the Seller, the Servicer, the Electronic Vault Provider nor any
other Person has communicated an Authoritative Copy of such Contract that
constitutes or evidences the Loan to any Person other than the Electronic Vault
Provider as a designated custodian of the Indenture Trustee pursuant to the
terms of the Sale and Servicing Agreement and the Electronic Collateral Control
Agreement from and after the Closing Date or the applicable Addition Date.

 

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The parties to this Sale and Servicing Agreement shall provide each Rating
Agency with prompt written notice of any material breach of the perfection
representations, warranties and covenants contained in this Schedule III, and
shall not, without satisfying the Rating Agency Notice Requirement, waive a
breach of any of such perfection representations, warranties or covenants.

The Depositor covenants that, in order to evidence the interests of the Issuer
under this the Sale and Servicing Agreement, the Depositor shall take such
action, or execute and deliver such instruments as may be necessary or advisable
(including, without limitation, such actions as are requested by the Issuer) to
maintain and perfect, as a first-priority interest, the Issuer’s security
interest in the Loans.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule III - 3

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Schedule IV

Loan Level Representations, Warranties and Covenants

With respect to any Loan that is sold by the Seller to the Depositor (or in the
case of the 2020-1A SUBI Loans, allocated to the 2020-1A SUBI by the Servicer in
accordance with the 2020-1A SUBI Supplement) the following representations and
warranties are made as of the Closing Date and on each Addition Date as
applicable:

 

  1.

(A) With respect to a Loan other than a North Carolina Loan, immediately prior
to the sale and assignment to the Depositor, (i) the Seller has sole and
exclusive ownership of such Loan and any Related Loan Assets free and clear of
any Lien (other than any Permitted Lien), (ii) the Loan Purchase Agreement
effects a valid sale to the Depositor of such Loan and the Related Loan Assets
free and clear of any Liens (other than any Permitted Lien), (iii) upon the
Closing Date or Addition Date, as applicable, with respect to such Loan,
(a) there will be vested in the Depositor sole and exclusive ownership of such
Loan and all Related Loan Assets free and clear of any Lien (other than any
Permitted Lien) of any Person claiming through or under the Seller and in
compliance with all Requirements of Law applicable to the Seller and (b) there
will have been effected a valid assignment of the Seller’s interest in such Loan
and all Related Loan Assets, enforceable against the Seller and, upon the filing
of all appropriate UCC financing statements, against all other persons,
including creditors of and all other entities that have purchased or will
purchase assets from the Seller, (iv) no filings, notices or other compliance
with any bulk sales provisions of the UCC or other applicable Requirements of
Law in respect of bulk sales are required to be made by the Seller, the
Depositor or any Affiliate thereof and (v) such Loan is not subject to any right
of set off or similar right, and (B) with respect to a North Carolina Loan only,
(i) immediately prior to the contribution and assignment to the North Carolina
Trust, Regional North Carolina has sole and exclusive ownership of such North
Carolina Loan and any related Contributed Assets free and clear of any Lien
(other than any Permitted Lien), (ii) the Transfer and Contribution Agreement
effects a valid contribution to the North Carolina Trust of such North Carolina
Loan and the related Contributed Assets free and clear of any Liens (other than
any Permitted Lien), (iii) upon the Closing Date or Addition Date, as
applicable, with respect to each North Carolina Loan to be allocated to the
2020-1A SUBI, (a) there will be vested in the North Carolina Trust sole and
exclusive ownership of such Loan and all related 2020-1A SUBI Assets free and
clear of any Lien (other than any Permitted Lien) of any Person claiming through
or under Regional North Carolina and in compliance with all Requirements of Law
applicable to Regional North Carolina and (b) there will have been effected a
valid assignment of Regional North Carolina’s interest in such Loan and all
related 2020-1A SUBI Assets, enforceable against Regional North Carolina and,
upon the filing of all appropriate UCC financing statements, against all other
persons, including creditors of and all other entities that have purchased or
will purchase assets from Regional North Carolina, (iv) no filings, notices or
other compliance with any bulk sales provisions of the UCC or other applicable
Requirements of Law in respect of bulk sales are required to be made by the
Regional North Carolina, the North Carolina Trust or any Affiliate thereof and
(v) such Loan is not subject to any right of set off or similar right.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule IV - 1

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  2.

All consents, licenses, approvals or authorizations of, or registrations or
declarations with, any Governmental Authority that are required in connection
with the sale of such Loan and the Related Loan Assets (or in the case of the
2020-1A SUBI Loans, the allocation of such Loan and related 2020-1A SUBI Assets)
or in order for the Depositor (or in the case of the 2020-1A SUBI Loans, the
Issuer) or any transferee thereof to realize all rights and benefits with
respect to such Loan and the Related Loan Assets, in each case have been
obtained or made by it or an Affiliate thereof and are fully effective.

 

  3.

It has not used any selection procedure adverse to the interests of the
Depositor (or in the case of the 2020-1A SUBI Loans, the North Carolina Trust),
its transferees or the Noteholders in selecting the related Loans to be sold
under the Loan Purchase Agreement (or in the case of the 2020-1A SUBI Loans,
allocated to the 2020-1A SUBI) on the Closing Date or such Addition Date, as
applicable.

 

  4.

The Loan Schedule (as supplemented by any applicable additional Loan Schedule)
identifies each Loan conveyed by the Seller to the Depositor or allocated to the
2020-1A SUBI, as applicable, on the Closing Date or such Addition Date, as
applicable.

 

  5.

As of the applicable Cut-Off Date, such Loan was an Eligible Loan.

 

  6.

Such Loan complies in all material respects with the terms of the applicable
Contract.

 

  7.

The Contract for such Loan is a legal, valid and binding obligation of the
applicable Regional Originator thereunder and the related Loan Obligor and any
guarantor or co-signer named therein, in each case enforceable in accordance
with its terms (except as enforceability may be limited by Debtor Relief Laws or
general principles of equity), and, to its knowledge, is not subject to offset,
recoupment, adjustment or any other claim.

 

  8.

It or an Affiliate thereof has in its possession all original copies of the
instruments and tangible chattel paper (if any) that constitute or evidence such
Loan on the Closing Date or such Addition Date, as applicable.

 

  9.

None of the tangible chattel paper that constitute or evidence such Loan on the
Closing Date or such Addition Date, as applicable, has any stamps, marks or
notations indicating that such Loan has been pledged, assigned or otherwise
conveyed to any Person other than the Seller, the North Carolina Trust, the
Depositor, the Issuer or the Indenture Trustee, other than any such stamps,
marks or notations that relate to a pledge, assignment, conveyance or other
interest that has been cancelled, terminated or voided (or if such stamp, mark
or notation is in the name of an agent (or any predecessor agent) under the ABL
Facility, the Issuer has the right to cancel or void such stamp, mark or
notation without the consent of such agent (or any predecessor agent, as
applicable), and such agent (or any predecessor agent, as applicable) has
released in writing its lien on such Contract).

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule IV - 2

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  10.

The Contract for such Loan is freely assignable and such Contract does not
require the approval or consent of any related Loan Obligor or any other person
to effectuate the valid assignment of the same by the Regional Originator, the
Seller, the North Carolina Trust or any Affiliate thereof.

 

  11.

Such Loan has been serviced and at all times maintained in accordance with the
Credit and Collection Policy by it or an Affiliate thereof.

 

  12.

Such Loan arises from or in connection with a bona fide sale or loan transaction
(including any amounts in respect of interest amounts and other charges and fees
assessed on such Loan).

 

  13.

Each Loan Obligor of such Loan is an individual, and such Loan has not been
entered into with any corporation, partnership, association or other similar
entity.

 

  14.

Such Loan, the related Contract and all other related documents comply in all
material respects with all Requirements of Law. It and each Affiliate thereof
has complied in all material respects with all applicable Requirements of Law
with respect to the origination, marketing, maintenance and servicing of such
Loan and the disclosures in respect thereof including any change in the terms of
such Loan. The interest rates, fees and charges in connection with such Loan
comply, in all material respects, with all Requirements of Law.

 

  15.

(A) It or an Affiliate thereof has performed all obligations required to be
performed by it or any Affiliate to date under the related Contract, and all
actions of it or an Affiliate thereof taken with respect to such Contract prior
to the Closing Date or the related Addition Date, as applicable, have been in
compliance, in all material respects, with such Contract; (B) neither the Seller
nor any Affiliate is in default under such Contract; and (C) no event has
occurred under such Contract that, with the lapse of time or action by the
applicable Loan Obligor or any third party, is reasonably likely to result in a
material default by it or any Affiliate under, any such Contract.

 

  16.

It and each Affiliate thereof (A) has complied in all material respects with the
Credit and Collection Policy relating to such Loan at all times; (B) has not
entered into any transaction or made any commitment or agreement in connection
with such Loan, other than in the ordinary course of such person’s business
consistent in all material respects with the Credit and Collection Policy as in
effect on the date of such transaction, commitment or agreement; and (C) has not
amended the terms of any related Contract except in accordance in all material
respects with the Credit and Collection Policy relating to such Loan as in
effect on the date of such amendment.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule IV - 3

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  17.

Neither it nor any Affiliate thereof has any known material obligations,
commitments or other liabilities, absolute or contingent, relating to such Loan
or the Related Loan Assets.

 

  18.

It or an Affiliate thereof has properly and timely filed all foreign, federal,
state, county, local and other tax returns, including information returns
required by law to be filed prior to the Closing Date or the applicable Addition
Date with respect to such Loan and the Related Loan Assets and has withheld,
paid or accrued all amounts shown thereon to be due that are due prior to the
applicable Cut-Off Date or accrue prior to such time.

 

  19.

The related Contract, together with its other records relating to such Loan are
complete in all material respects and, upon conveyance thereof to the Depositor
under the Loan Purchase Agreement (or in the case of a 2020-1A SUBI Loan,
allocation to the 2020-1A SUBI), the Custodian (or any applicable subcustodian
or designee of the Indenture Trustee) will be in possession of (or, in the case
of an Electronic Contract, the Electronic Vault will contain) all documents
necessary to enforce the rights and remedies of the Regional Originator (as
assigned in accordance with the Transaction Documents) in respect of such Loan
against the Loan Obligor in accordance with the related Contract.

 

  20.

No transfer of such Loan and Related Loan Assets to the Depositor (or in the
case of a 2020-1A SUBI Loan, no allocation of such 2020-1A SUBI Loan and related
2020-1A SUBI Assets) is being made with intent to hinder, delay or defraud any
of its creditors.

 

  21.

To the extent that any Contract relating to such Loan constitutes an instrument
or tangible chattel paper (each within the meaning of Section 9-102 of the UCC),
there is only one original of such executed Contract.

 

  22.

(I) (A) With respect to any Initial Loan, either (x) the Imaged File for such
Initial Loan shall have been delivered to the Image File Custodian on or prior
to the Closing Date or (y) to the extent that such Loan is a Hard Secured Loan
for which the related certificate of title has not yet been issued, (i) the
documents specified in clause (a) of the definition of Imaged File have been
delivered to the Image File Custodian and (ii) a valid application for the
certificate of title and the applicable fee have been delivered to the
appropriate authority in accordance with 9-303(b) of the UCC, in each case, on
or prior to the Closing Date (provided, however, that this clause (A)(y)(ii)
shall be deemed breached if such documents are not delivered to the Image File
Custodian within one hundred eighty (180) days after the Closing Date); and
(B) with respect to any Additional Loan, it shall have delivered (or caused to
be delivered) either (x) the Imaged File for such Additional Loan to the Image
File Custodian on or prior to the applicable Addition Date or (y) to the extent
that such Loan is a Hard Secured Loan for which the related certificate of title
has not yet been issued by the appropriate authority, (i) the documents
specified in clause (a) of the definition of Imaged File have been delivered to
the Image File Custodian and (ii) a valid application for the certificate of
title and the applicable

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule IV - 4

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  fee have been delivered to the appropriate authority in accordance with
9-303(b) of the UCC, in each case, on or prior to the applicable Addition Date
(provided, however, that this clause (B)(y)(ii) shall be deemed breached if such
documents are not delivered to the Image File Custodian within one hundred
eighty (180) days after the applicable Addition Date); and (II) in connection
with any such delivery of one or more Imaged Files to the Image File Custodian,
it shall specify (or cause to be specified) the Loans to which such delivered
Imaged Files relate; provided that the foregoing requirements shall not apply
with respect to each Loan originated in electronic form.

 

  23.

(A) With respect to a Loan other than a 2020-1A SUBI Loan, the Loan Purchase
Agreement, all documents or instruments delivered pursuant to the Loan Purchase
Agreement by or with reference to the Seller or any transaction under the Loan
Purchase Agreement, including any Additional Loan Assignment and the assignment
agreement (the “Conveyance Papers”) and any statement, report or other document
furnished pursuant to the Loan Purchase Agreement or during the Depositor’s due
diligence with respect to the Loan Purchase Agreement and the Conveyance Papers,
including documents and information in magnetic or electronic form, are true and
correct in all material respects and do not contain any untrue statement of fact
by the Seller or omit to state a fact necessary to make the statements of the
Seller contained in the Loan Purchase Agreement or therein, in light of the
circumstances under which such statements were made, not misleading, and
(B) with respect to a 2020-1A SUBI Loan only, the 2020-1A SUBI Supplement and
the 2020-1A SUBI Servicing Agreement, all documents or instruments delivered
pursuant to the 2020-1A SUBI Supplement and the 2020-1A SUBI Servicing Agreement
by or with reference to the Servicer or any transaction under such agreements,
including any allocation notice or reallocation notice and any statement, report
or other document furnished pursuant to such 2020-1A SUBI Supplement and the
2020-1A SUBI Servicing Agreement or during the Servicer’s due diligence with
respect to such agreement, including documents and information in magnetic or
electronic form, are true and correct in all material respects and do not
contain any untrue statement of fact by the Servicer or omit to state a fact
necessary to make the statements of the Servicer contained in either the 2020-1A
SUBI Supplement and the 2020-1A SUBI Servicing Agreement or therein, in light of
the circumstances under which such statements were made, not misleading.

 

  24.

(i) (x) The Loan Purchase Agreement creates a valid and continuing ownership or
security interest (as defined in the applicable UCC) in the 2020-1A SUBI
Certificate and such Loan (other than a 2020-1A SUBI Loan) sold by the Seller in
favor of the Depositor, which security interest or ownership interest is prior
to all other Liens (other than Permitted Liens), and is enforceable as such as
against creditors of and purchasers from the Seller, and (y) with respect to a
2020-1A SUBI Loan only, the Transfer and Contribution Agreement creates a valid
and continuing ownership or security interest (as defined in the applicable UCC)
in such 2020-1A SUBI Loan transferred by Regional North Carolina to the North
Carolina Trust, which security interest or ownership interest is prior to all
other Liens (other than Permitted Liens), and is enforceable as such as against
creditors of and purchasers from Regional North Carolina;

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule IV - 5

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(ii) such Loan constitutes “tangible chattel paper,” “electronic chattel paper,”
“payment intangibles,” “accounts,” “instruments” or “general intangibles” within
the meaning of the UCC;

(iii) (x) with respect to a Loan other than a 2020-1A SUBI Loan, the Seller owns
and has good and marketable title to such Loan and the related Purchased Assets
sold by the Seller free and clear of any Lien, claim or encumbrance of any
Person and (y) with respect to a 2020-1A SUBI Loan, the North Carolina Trust
owns and has good and marketable title to such 2020-1A SUBI Loan, free and clear
of any Lien, claim or encumbrance of any Person (in each case, other than any
Permitted Liens);

(iv) it has received all consents and approvals to the sale of each Loan
required by the terms of the applicable Contract to the extent that it
constitutes an instrument;

(v) it has caused or will cause, within ten (10) days after the Closing Date,
the filing of all appropriate financing statements in the proper filing office
in the appropriate jurisdictions under applicable law in order to perfect the
sale of and the security interest in the Purchased Assets sold by the Seller to
the Depositor (or with respect to the 2020-1A SUBI Loans, the 2020-1A SUBI
Assets contributed by Regional North Carolina to the North Carolina Trust), and
if any additional such filing is necessary in connection with any transfer of
Additional Loans, it will cause such filings to be made within ten (10) days of
the applicable Addition Date; all such financing statements referred to in this
paragraph contain a statement that: “A purchase of or security interest in any
collateral described in this financing statement will violate the rights of the
Secured Party/Purchaser”;

(vi) (a) other than the security interest granted and the conveyance to the
Depositor pursuant to the Loan Purchase Agreement, it has not pledged, assigned,
sold, granted a security interest in, or otherwise conveyed any Purchased Assets
sold by the Seller (other than any such pledge, assignment, sale, grant or
conveyance that is no longer effective); and

(b) it has not authorized the filing of, and is not aware of, any financing
statements against the Seller that include a description of collateral covering
any Loans other than any financing statement (1) relating to the conveyance of
the Loans by the Warehouse Borrower to the Seller under the Purchase Agreement,
(2) relating to the conveyance of Loans by a borrower under a warehouse facility
pursuant to an Other Warehouse Purchase Agreement, if applicable, (3) relating
to the conveyance of Loans by a Regional Originator to the Seller under the
Omnibus Distribution and Assignment Agreement, (4) relating to the conveyance of
the 2020-1A SUBI Certificate by Regional North Carolina to the Seller under the
SUBI Certificate Purchase Agreement, (5) relating to the pledge of the 2020-1A
SUBI Assets by each of the North Carolina Trust and the Issuer to the

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule IV - 6

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Indenture Trustee, (6) relating to the conveyance of the 2020-1A SUBI
Certificate and the Loans (other than the 2020-1A SUBI Loans) by the Seller to
the Depositor pursuant to the Loan Purchase Agreement, (7) relating to the
conveyance of the Loans (other than the 2020-1A SUBI Loans) by the Depositor to
the Issuer pursuant to the Sale and Servicing Agreement, (8) relating to the
security interest granted to the Indenture Trustee under the Indenture or
(9) that has been terminated;

(vii) it is not aware of any material judgment, ERISA or tax lien filings
against it;

(viii) the Seller (or any Affiliate thereof) has in its possession all original
copies of the instruments and tangible chattel paper that constitute or evidence
each Loan sold by it (or in the case of a 2020-1A SUBI Loan, allocated to the
2020-1A SUBI); and none of the tangible chattel paper that constitute or
evidence such Loan has any stamps, marks or notations indicating that such Loan
has been pledged, assigned or otherwise conveyed to any Person other than the
Seller, the North Carolina Trust, the Depositor, the Issuer or the Indenture
Trustee, other than any such stamps, marks or notations that relate to a pledge,
assignment, conveyance or other interest that has been cancelled, terminated or
voided (or if such stamp, mark or notation is in the name of an agent (or any
predecessor agent) under the ABL Facility, the Issuer has the right to cancel or
void such stamp, mark or notation without the consent of such agent (or any
predecessor agent, as applicable), and such agent (or any predecessor agent, as
applicable) has released in writing its lien on such Contract); and

(ix) to the extent that any Contract relating to a Loan constitutes Electronic
Chattel Paper, there is only one single Authoritative Copy of each electronic
“record” constituting or evidencing a Contract that is Electronic Chattel Paper,
the record or records composing the Electronic Chattel Paper are created, stored
and assigned in such a manner that (A) a single authoritative copy of the record
or records exists which is unique, identifiable and unalterable (other than a
revision that is readily identifiable as an authorized or unauthorized
revision), (B) each copy of the authoritative copy and any copy of a copy is
readily identifiable as a copy that is not the authoritative copy, (C) the
authoritative copy has been communicated to and is maintained by the Electronic
Vault Provider as a designated custodian of the Indenture Trustee, (D) all
copies or revisions that add or change an identified assignee of the
Authoritative Copy of such Contract that constitutes or evidences the Loan must
be made with the participation of the Indenture Trustee, and (E) such
Authoritative Copy identifies only the Indenture Trustee as the assignee. To the
extent that any Contract relating to a Loan constitutes Electronic Chattel
Paper, none of the Seller, the North Carolina Trust, the Servicer (including in
its capacity as 2020-1A SUBI Servicer), the Electronic Vault Provider nor any
other Person has communicated an Authoritative Copy of such Contract that
constitutes or evidences the Loan to any Person other than the Electronic Vault
Provider as a designated custodian of the Indenture Trustee pursuant to the
terms of the Sale and Servicing Agreement and the Electronic Collateral Control
Agreement from and after the Closing Date or the applicable Addition Date.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) - Schedule IV - 7

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Exhibit A-1

Form of Initial Loan Assignment

This INITIAL LOAN ASSIGNMENT (this “Agreement”), dated [__________], 2020, is by
Regional Management Receivables III, LLC, a Delaware limited liability company
(the “Assignor”), in favor of Regional Management Issuance Trust 2020-1, a
Delaware statutory trust (the “Assignee”). Capitalized terms used herein but not
defined shall have the meaning ascribed to such terms in the Sale and Servicing
Agreement, dated as of September 23, 2020 (the “Sale and Servicing Agreement”)
among the Assignor, the Assignee, the North Carolina Trust, Regional Management
Corp., as Servicer, the Subservicers party thereto and Wells Fargo Bank,
National Association, as Image File Custodian.

For good and valuable consideration, the receipt and sufficiency of which hereby
are acknowledged, the parties hereto hereby agree as follows:

In accordance with the terms and conditions of the Sale and Servicing Agreement,
the Assignor hereby confirm the sale, transfer, conveyance and assignment to the
Assignee of all of the right, title and interest of the Assignor, as Purchaser,
in, to and under the Loans identified on Schedule A (the “Initial Assigned
Loans”) and the other Sold Assets related thereto. The Cut-Off Date for the
Initial Assigned Loans is August 31, 2020.

The Assignor specifically reserve and do not confirm the assignment to the
Assignee hereunder of any of their rights, title or interest in, to and under,
and all obligations of the Assignor with respect to, any loans which are not the
initial Loans set forth on Schedule A and are not the subject of this Agreement.

Schedule A hereto includes the information with respect to the initial Loans
required to be included in the Loan Schedule to be delivered under the Sale and
Servicing Agreement on the Closing Date.

The Owner Trustee is executing this Agreement not in its individual capacity,
but solely as Owner Trustee on behalf of the Issuer and, accordingly, the Owner
Trustee shall incur no personal liability in connection herewith or the
transactions contemplated hereby.

[Signature Page Follows]

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit A-1 – 1

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have caused this Initial Loan Assignment to be
executed by their duly authorized officers as of the date first above written.

 

ASSIGNOR: REGIONAL MANAGEMENT RECEIVABLES III, LLC, as Depositor By:  

                          

  Name: Michael S. Dymski   Title: Vice President, interim Chief Financial
Officer and Chief Accounting Officer ASSIGNEE: REGIONAL MANAGEMENT ISSUANCE
TRUST 2020-1, as Issuer By: WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Owner Trustee of the Issuer By:  

 

Name: Title:

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit A-1 – 2

--------------------------------------------------------------------------------

Schedule A

Loan Schedule

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit A-1 – 3

--------------------------------------------------------------------------------

Exhibit A-2

Form of Additional Loan Assignment

This ADDITIONAL LOAN ASSIGNMENT (this “Agreement”), dated as of the applicable
Addition Date] (the “Addition Date”), is by Regional Management Receivables III,
LLC, a Delaware limited liability company (the “Assignor”), in favor of Regional
Management Issuance Trust 2020-1, a Delaware statutory trust (the “Assignee”).
Capitalized terms used herein but not defined shall have the meaning ascribed to
such terms in the Sale and Servicing Agreement, dated as of September 23, 2020
(the “Sale and Servicing Agreement”) among the Assignor, the Assignee, the North
Carolina Trust, Regional Management Corp., as Servicer, the Subservicers party
thereto and Wells Fargo Bank, National Association, as Image File Custodian.

For good and valuable consideration, the receipt and sufficiency of which hereby
are acknowledged, the parties hereto hereby agree as follows:

In accordance with the terms and conditions of the Sale and Servicing Agreement,
the Assignor hereby confirms the sale, transfer, conveyance and assignment to
the Assignee all of the right, title and interest of the Assignor, as
Purchasers, in, to and under the Additional Loans identified on Schedule A (the
“Assigned Additional Loans”) and the other Sold Assets related thereto. The
Cut-Off Date for the Assigned Additional Loans is [_________].

The Assignor specifically reserve and do not confirm the assignment to the
Assignee hereunder any of its right, title or interest in, to and under and all
obligations of the Assignor with respect to any loans which are not the
Additional Loans set forth on Schedule A and are not the subject of this
Agreement.

Schedule A hereto includes the information required to be included in the Loan
Schedule with respect to the Assigned Additional Loans and the Loan Schedule is
hereby supplemented to include the Assigned Additional Loans and other
information included in Schedule A.

[Signature Page Follows]

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit A-2 – 1

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have caused this Additional Loan Assignment to
be executed by their duly authorized officers as of the date first above
written.

 

ASSIGNOR: REGIONAL MANAGEMENT RECEIVABLES III, LLC, as Depositor By:  

 

  Name: Michael S. Dymski   Title: Vice President, interim Chief Financial
Officer and Chief Accounting Officer ASSIGNEE:

REGIONAL MANAGEMENT ISSUANCE

TRUST 2020-1, as Issuer

By: REGIONAL MANAGEMENT CORP.,

as Administrator

By:  

 

Name: Title:

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit A-2 – 2

--------------------------------------------------------------------------------

SCHEDULE A

LOAN SCHEDULE

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit A-2 – 3

--------------------------------------------------------------------------------

EXHIBIT B

FORM OF ANNUAL COMPLIANCE CERTIFICATE

The undersigned, the duly [OFFICER TITLE] of (“[___________________]”), does
hereby certify that:

(1) [___________________] is, as of the date hereof, the Servicer under that
certain Sale and Servicing Agreement, dated as of September 23, 2020 (as amended
and supplemented, or otherwise modified and in effect from time to time, the
“Sale and Servicing Agreement”) among the Assignor, the Assignee, the North
Carolina Trust, Regional Management Corp., as Servicer, the Subservicers party
thereto and Wells Fargo Bank, National Association, as Image File Custodian.

(2) The undersigned is an Authorized Officer of the Servicer and is duly
authorized pursuant to the Sale and Servicing Agreement to execute and deliver
this Officer’s Certificate to the Issuer, each Rating Agency and the Indenture
Trustee.

(3) A review of the activities of the Servicer during preceding calendar year
and of its performance under the Sale and Servicing Agreement was conducted
under my supervision.

(4) Based on such review, the Servicer has, to the best of my knowledge,
performed in all material respects all of its obligations under the Sale and
Servicing Agreement and other Transaction Documents throughout such year and no
Servicer Default has occurred and is continuing, except as set forth in
paragraph 5 below.

(5) The following is a description of each Servicer Default known to me to have
occurred and be continuing as of the date of this Officer’s Certificate made by
the Servicer during the calendar year ended December 31, ________, which sets
forth in detail the (a) nature of each such Servicer Default, (b) the action
taken by the Servicer, if any, to remedy each such Servicer Default and (c) the
current status of each such Servicer Default: (If applicable, insert “None.”)

Capitalized terms used but not defined herein are used as defined in the Sale
and Servicing Agreement.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit B-1

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each of the undersigned has duly executed this Officer’s
Certificate this ____ day of ____________.1

 

 

By:  

 

  Name:  

 

  Title:  

 

 

1 

Required to be delivered on or before March 31 of each calendar year, beginning
with March 31, 2022 pursuant to Section 3.07 of the Sale and Servicing
Agreement.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit B-2

--------------------------------------------------------------------------------

EXHIBIT C

FORM OF LOAN REASSIGNMENT

This LOAN REASSIGNMENT (this “Agreement”) dated as of [date of applicable
Document Delivery Date], by Regional Management Issuance Trust 2020-1, a
Delaware statutory trust (the “Assignor”), in favor of Regional Management
Receivables III, LLC, a Delaware limited liability company (the “Assignee”).
Capitalized terms used herein but not defined shall have the meaning ascribed to
such terms in the Sale and Servicing Agreement, dated as of September 23, 2020
(the “Sale and Servicing Agreement”) among the Assignor, the Assignee, the North
Carolina Trust, Regional Management Corp., as Servicer, the Subservicers party
thereto and Wells Fargo Bank, National Association, as Image File Custodian.

For good and valuable consideration, the Assignor hereby agrees as follows:

In accordance with the terms and conditions of the Sale and Servicing Agreement,
the Assignor hereby grants, transfers and assigns to the Assignee all of the
right, title and interest of the Assignor in, to and under (i) the Loans
identified on Schedule A (the “Reassigned Loans”), (ii) the Purchased Assets
related thereto, (iii) the right to receive all Collections with respect to the
Purchased Assets after the date hereof, and (iv) all proceeds thereof.

The Assignee hereby accepts such assignment and shall deliver to or at the
direction of the Assignor the consideration identified in the preceding
paragraph.

Notwithstanding anything to the contrary herein, in no event shall any Loans or
related Purchased Assets be transferred from the Assignor to the Assignee
pursuant to this Agreement unless such Loans and related Purchased Assets have
been released from the lien of the Indenture in accordance with the terms
thereof.

The Assignor specifically reserves and does not assign to the Assignee hereunder
any of its right, title or interest in, to and under and all obligations of the
Assignor with respect to any Loans which are not the Reassigned Loans set forth
on Schedule A and are not the subject of this Agreement.

The Owner Trustee is executing this Agreement not in its individual capacity,
but solely as Owner Trustee on behalf of the Issuer and, accordingly, the Owner
Trustee shall incur no personal liability in connection herewith or the
transactions contemplated hereby.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit C-1

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have caused this Loan Reassignment to be
executed by their duly authorized officers as of the date first above written.

 

ASSIGNOR: REGIONAL MANAGEMENT ISSUANCE TRUST 2020-1, as Issuer By: REGIONAL
MANAGEMENT CORP., as Administrator By:  

 

Name: Title: ASSIGNEE: REGIONAL MANAGEMENT RECEIVABLES III, LLC, as Depositor
By:  

 

  Name: Michael S. Dymski   Title: Vice President, interim Chief Financial
Officer and Chief Accounting Officer

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit C-2

--------------------------------------------------------------------------------

SCHEDULE A

LOAN SCHEDULE

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit C-3

--------------------------------------------------------------------------------

EXHIBIT D

FORM OF ACCESSION AGREEMENT

THIS ACCESSION AGREEMENT dated as of [____] [__], [____] (this “Agreement”) is
by and among _______________________, a __________________ (the “Company”), and
Regional Management Receivables III, LLC (the “Depositor”).

Reference is made to the Sale and Servicing Agreement, dated as of September 23,
2020 (as amended, restated, modified or supplemented from time to time, the
“Sale and Servicing Agreement”), among the Depositor, Regional Management Corp.,
as Servicer, the Subservicers party thereto, the North Carolina Trust and
Regional Management Issuance Trust 2020-1, as Issuer.

Capitalized terms used herein without definition shall have the meanings given
to them in the Sale and Servicing Agreement.

Pursuant to Section 10.19 of the Sale and Servicing Agreement, an Affiliate of
Regional Management may be added as a party to the Sale and Servicing Agreement
as a Subservicer upon satisfaction of the conditions set forth in the Sale and
Servicing Agreement, including the delivery to the Indenture Trustee of a fully
executed copy of this Agreement.

In connection therewith:

1. The Company hereby joins in and agrees to be bound by and to comply with each
and every provision of the Sale and Servicing Agreement as a Subservicer
thereunder.

2. The Company hereby represents and warrants that each representation and
warranty contained in Section 3.03 of the Sale and Servicing Agreement is true
and correct with respect to the Company as of the date of this Agreement, as if
such representations and warranties were set forth at length herein.

3. This Accession Agreement shall be a Transaction Document, shall be binding
upon and enforceable against the Company and its successors and assigns, and
shall inure to the benefit of and be enforceable by the Depositor and its
assigns.

[Signature Page Follows]

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit D-1

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each party hereto has caused this Accession Agreement to be
executed by its duly authorized officer as of the date first above written.

 

[NAME OF COMPANY] By:  

 

Name: Title: REGIONAL MANAGEMENT RECEIVABLES III, LLC, as Depositor By:  

 

  Name: Michael S. Dymski   Title: Vice President, interim Chief Financial
Officer and Chief Accounting Officer

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit D-2

--------------------------------------------------------------------------------

EXHIBIT E

CONDITIONS TO ACCESSION

The Depositor shall have received each of the following in form and substance
satisfactory to the Depositor and any assignee thereof:

(i) a fully-executed copy of an Accession Agreement with respect to the
Additional Subservicer;

(ii) a certificate of the Secretary or Assistant Secretary of the Additional
Subservicer, dated the date of the proposed Accession, certifying (a) the names
and true signatures of the incumbent officers of the Additional Subservicer
authorized to sign on behalf of the Additional Subservicer this Agreement
Agreements and all other documents to be executed by the Additional Subservicer
hereunder or in connection herewith, (b) that the copy of the certificate of
formation or articles of incorporation of the Additional Subservicer, as
applicable, is a complete and correct copy and that such certificate of
formation or articles of incorporation have not been amended, modified or
supplemented and are in full force and effect, (c) that the copy of the limited
liability company agreement or by-laws, as applicable, of the Additional
Subservicer are a complete and correct copy, and that such limited liability
company agreement or by-laws have not been amended, modified or supplemented and
are in full force and effect, and (d) the resolutions of the board of directors
or board of managers of the Additional Subservicer approving and authorizing the
execution, delivery and performance by the Additional Subservicer of this
Agreement and all other documents to be executed by the Additional Subservicer
hereunder or in connection herewith;

(iii) a good standing certificate for the Additional Subservicer, dated as of a
recent date, issued by the Secretary of State of the Additional Subservicer’s
State of formation or incorporation, as applicable;

(iv) an Opinion of Counsel from counsel to the Additional Subservicer with
respect to corporate matters;

(v) an Opinion of Counsel from counsel to the Additional Subservicer with
respect to the true sale of Loans sold by the Additional Subservicer and the non
consolidation of the Additional Subservicer with the Depositor; and

(vi) an Officer’s Certificate stating that all conditions precedent to the
effectiveness of such Accession are satisfied.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit E-1

--------------------------------------------------------------------------------

EXHIBIT F

RULE 15GA-1 INFORMATION

Reporting Period:

 

☐

Check here if nothing to report.

 

Asset

Class

 

Shelf

  

Series

Name

  

CIK

 

Originator

 

Loan

No

 

Servicer

Loan
No

 

Outstanding

Principal

Balance

 

Repurchasing

Type

 

Indicate Repurchase Activity During the Reporting Period by Checkmark or by 
Date
Reference (as Applicable)

                                     

Subject to
Demand

 

Repurchased

or Replaced

 

Repurchase

Pending

 

Demand

in Dispute

 

Demand

Withdrawn

 

Demand

Rejected

TERMS AND DEFINITIONS

NOTE: Any date included on this report is subject to the descriptions below.
Dates referenced on this report for this Transaction where the Servicer is not
the Repurchase Enforcer (as defined below), availability of such information may
be dependent upon information received from other parties.

References to “Repurchaser” shall mean the party obligated under the Transaction
Documents to repurchase a Loan. References to “Repurchase Enforcer” shall mean
the party obligated under the Transaction Documents to enforce the obligations
of any Repurchaser.

Outstanding Principal Balance: For purposes of this report, the Outstanding
Principal Balance of a Loan in this Transaction equals the remaining outstanding
principal balance of the Loan reflected on the distribution or payment reports
at the end of the related reporting period, or if the Loan has been liquidated
prior to the end of the related reporting period, the final outstanding
principal balance of the Loan reflected on the distribution or payment reports
prior to liquidation.

Subject to Demand: The date when a demand for repurchase is identified and coded
by the Servicer or Indenture Trustee as a repurchase related request.

Repurchased or Replaced: The date when a Loan is repurchased or replaced. To the
extent such date is unavailable, the date upon which the Servicer or Indenture
Trustee obtained actual knowledge a Loan has been repurchased or replaced.

Repurchase Pending: A Loan is identified as “Repurchase Pending” when a demand
notice is sent by the Indenture Trustee, as Repurchase Enforcer, to the
Repurchaser. A Loan remains in this category until (i) a Loan has been
Repurchased, (ii) a request is determined to be a “Demand in Dispute,” (iii) a
request is determined to be a “Demand Withdrawn,” or (iv) a request is
determined to be a “Demand Rejected.”

With respect to the Servicer only, a Loan is identified as “Repurchase Pending”
on the date (y) the Servicer sends notice of any request for repurchase to the
related Repurchase Enforcer, or (z) the Servicer receives notice of a repurchase
request but determines it is not required to take further action regarding such
request pursuant to its obligations under the applicable Transaction Documents.
The Loan will remain in this category until the Servicer receives actual
knowledge from the related Repurchase Enforcer, Repurchaser, or other party,
that the repurchase request should be changed to “Demand in Dispute”, “Demand
Withdrawn”, “Demand Rejected”, or “Repurchased.”

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit F-1

--------------------------------------------------------------------------------

Demand in Dispute: Occurs (i) when a response is received from the Repurchaser
which refutes a repurchase request, or (ii) upon the expiration of any
applicable cure period.

Demand Withdrawn: The date when a previously submitted repurchase request is
withdrawn by the original requesting party. To the extent such date is not
available, the date when the Servicer or the Indenture Trustee receives actual
knowledge of any such withdrawal.

Demand Rejected: The date when the Indenture Trustee, as Repurchase Enforcer,
has determined that it will no longer pursue enforcement of a previously
submitted repurchase request. To the extent such date is not otherwise
available, the date when the Servicer receives actual knowledge from the
Indenture Trustee, as Repurchase Enforcer that it has determined not to pursue a
repurchase request.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit F-2

--------------------------------------------------------------------------------

EXHIBIT G

LIMITED POWER OF ATTORNEY

REGIONAL MANAGEMENT ISSUANCE TRUST 2020-1 (the “Grantor”), hereby makes,
constitutes and appoints each of Regional Management Corp., a Delaware
corporation (the “Servicer”) and Regional Finance Corporation of Alabama, an
Alabama corporation, Regional Finance Company of Georgia, LLC, a Delaware
limited liability company, Regional Finance Company of Missouri, LLC, a Delaware
limited liability company, Regional Finance Company of New Mexico, LLC, a
Delaware limited liability company, Regional Finance Corporation of North
Carolina, a North Carolina corporation, Regional Finance Company of Oklahoma,
LLC, a Delaware limited liability company, Regional Finance Corporation of South
Carolina, a South Carolina corporation, Regional Finance Corporation of
Tennessee, a Tennessee corporation, Regional Finance Corporation of Texas, a
Texas corporation, Regional Finance Company of Virginia, LLC, a Delaware limited
liability company, and Regional Finance Corporation of Wisconsin, a Wisconsin
corporation (collectively, the “Subservicers”) (each Subservicer and the
Servicer individually and collectively, the “Grantee”), by and through
themselves, their affiliates and their permitted subcontractors, and their
respective officers, designees and attorneys-in-fact, its true and lawful
Attorneys-in-Fact with full power of substitution, and hereby authorizes and
empowers each Grantee, in the name of and on behalf of the Grantor, to have full
power and authority to take any and all lawful acts which it may deem necessary
or desirable to effect the servicing and administration of the Loans pursuant to
the Sale and Servicing Agreement, dated as of September 23, 2020, among the
Grantor, as Issuer, Regional Management Receivables III, LLC, as Depositor, the
Servicer, the Subservicers and the North Carolina Trust, acting thereunder
solely with respect to the 2020-1A SUBI (the “Sale and Servicing Agreement”),
including, but not limited to:

(i) Collecting amounts payable under the Loans,

(ii) Bringing legal actions, enforcing legal prosecution of claims and pursuing
any other appropriate remedies in connection with the servicing and
administration of the Loans, and

(iii) Signing, executing, acknowledging, delivering, filing for record and/or
recording on behalf of the Grantor all such documents, reports, filings,
instruments, certificates and opinions required in connection with the
foregoing, including, without limitation, notices, proofs of claim, affidavits,
sworn statements, agreed orders, stipulations, modification agreements,
subordination agreements, endorsements, allonges, assignments, and cancellations
of promissory notes or other instruments evidencing secured or unsecured
indebtedness; and assignments, full and partial releases, and terminations of
UCC financing statements, motor vehicle liens, or other evidence or instrument
of lien or security,

in each case, to the extent the Servicer or any Subservicer is authorized to
take such action pursuant to the Sale and Servicing Agreement.

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit G-1

--------------------------------------------------------------------------------

The power herein granted to the Attorney-in-Fact shall include the power to name
itself as grantee, assignee, or beneficiary of said instrument or act.

The Grantor gives said Attorney-in-Fact full power and authority to execute such
instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the Grantor might or could do, and hereby does
ratify and confirm all that said Attorney-in-Fact shall lawfully do or cause to
be done by authority hereof.

Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of Attorney, and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect and has not
been revoked unless an instrument of revocation has been made in writing by the
Grantor. Capitalized terms used herein but not defined shall have the meanings
set forth in the Sale and Servicing Agreement.

The Owner Trustee is executing this Agreement not in its individual capacity,
but solely as Owner Trustee on behalf of the Issuer and, accordingly, the Owner
Trustee shall incur no personal liability in connection herewith or the
transitions contemplated hereby.

[Remainder of Page Intentionally Left Blank]

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit G-2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, this Power of Attorney is executed by Grantor as of the date
first above written.

 

REGIONAL MANAGEMENT ISSUANCE TRUST 2020-1, as Issuer By: WILMINGTON TRUST,
NATIONAL ASSOCIATION, not in its individual capacity, but solely as Owner
Trustee of the Issuer By:  

                                  

Name: Title:

STATE OF             }

}ss.:

COUNTY OF         }

On this ____ day of ___________________, 2020, before me, the under-signed
officer, personally appeared _____________________________, and acknowledged
that he or she, as such ______________________ [title of officer] on behalf of
Wilmington Trust, National Association, solely in its capacity as Owner Trustee,
being authorized so to do, executed the foregoing instrument for the purposes
therein contained, by signing the name of the Owner Trustee by himself or
herself as __________________.

In witness whereof I hereunto set my hand and official seal.

 

 

Notary Public

[Notarial Seal]

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit G-3

--------------------------------------------------------------------------------

EXHIBIT H

System Description

[On file with the Indenture Trustee]

 

SALE AND SERVICING AGREEMENT (RMIT 2020-1) – Exhibit H-1