EXHIBIT 4.1
===============================================================================
FORM OF
TRUST AGREEMENT
by and between
EAGLEMARK CUSTOMER FUNDING CORPORATION-IV,
as Trust Depositor,
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
Dated as of [ ]
===============================================================================
TABLE OF CONTENTS
ARTICLE ONE PAGE
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. CAPITALIZED TERMS. . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS. . . . . . . . . . . . . . 3
SECTION 1.03. USAGE OF TERMS . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.04. SECTION REFERENCES . . . . . . . . . . . . . . . . . . . 3
SECTION 1.05. ACCOUNTING TERMS . . . . . . . . . . . . . . . . . . . . 3
ARTICLE TWO
ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.01. NAME . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.02. OFFICE . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.03. PURPOSES AND POWERS. . . . . . . . . . . . . . . . . . . 4
SECTION 2.04. APPOINTMENT OF OWNER TRUSTEE . . . . . . . . . . . . . . 4
SECTION 2.05. INITIAL CAPITAL CONTRIBUTION OF OWNER TRUST ESTATE . . . 5
SECTION 2.06. DECLARATION OF TRUST . . . . . . . . . . . . . . . . . . 5
SECTION 2.07. LIABILITY OF TRUST DEPOSITOR . . . . . . . . . . . . . . 5
SECTION 2.08. TITLE TO TRUST PROPERTY. . . . . . . . . . . . . . . . . 5
SECTION 2.09. SITUS OF TRUST . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.10. REPRESENTATIONS AND WARRANTIES OF THE TRUST DEPOSITOR. . 6
SECTION 2.11. FEDERAL INCOME TAX ALLOCATIONS . . . . . . . . . . . . . 6
ARTICLE THREE
TRUST CERTIFICATES AND TRANSFER OF INTEREST. . . . . . . . . . . . . . . . 8
SECTION 3.01. INITIAL OWNERSHIP. . . . . . . . . . . . . . . . . . . . 8
SECTION 3.02. THE TRUST CERTIFICATES . . . . . . . . . . . . . . . . . 8
SECTION 3.03. AUTHENTICATION AND DELIVERY OF TRUST CERTIFICATES. . . . 8
SECTION 3.04. REGISTRATION OF TRANSFER AND EXCHANGE OF TRUST
CERTIFICATES . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.05. MUTILATED, DESTROYED, LOST OR STOLEN TRUST CERTIFICATES. 9
SECTION 3.06. PERSONS DEEMED OWNERS. . . . . . . . . . . . . . . . . . 9
SECTION 3.07. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.08. MAINTENANCE OF OFFICE OR AGENCY. . . . . . . . . . . . . 9
SECTION 3.09. TEMPORARY TRUST CERTIFICATES . . . . . . . . . . . . . . 9
SECTION 3.10. APPOINTMENT OF PAYING AGENT. . . . . . . . . . . . . . .10
SECTION 3.11. OWNERSHIP BY TRUST DEPOSITOR OF TRUST CERTIFICATES . . .10
ARTICLE FOUR . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
ACTIONS BY OWNER TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . .12
Section 4.01. Prior Notice to Owners with Respect to Certain Matters .12
SECTION 4.02. ACTION BY OWNERS WITH RESPECT TO CERTAIN MATTERS . . . .12
SECTION 4.03. ACTION BY OWNERS WITH RESPECT TO BANKRUPTCY. . . . . . .12
SECTION 4.04. RESTRICTIONS ON OWNERS' POWER. . . . . . . . . . . . . .12
SECTION 4.05. MAJORITY CONTROL . . . . . . . . . . . . . . . . . . . .13
ARTICLE FIVE
APPLICATION OF TRUST FUNDS;
CERTAIN DUTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
i
SECTION 5.01. ESTABLISHMENT OF TRUST ACCOUNT . . . . . . . . . . . . .14
SECTION 5.02. APPLICATION OF TRUST FUNDS . . . . . . . . . . . . . . .14
SECTION 5.03. METHOD OF PAYMENT. . . . . . . . . . . . . . . . . . . .14
SECTION 5.04. NO SEGREGATION OF MONEYS; NO INTEREST. . . . . . . . . .14
SECTION 5.05. ACCOUNTING AND REPORTS TO THE CERTIFICATEHOLDERS,
OWNERS, THE INTERNAL REVENUE SERVICE AND OTHERS. . . .14
SECTION 5.06. SIGNATURE ON RETURNS; TAX MATTERS PARTNER. . . . . . . .15
ARTICLE SIX
AUTHORITY AND DUTIES OF OWNER TRUSTEE. . . . . . . . . . . . . . . . . . .16
SECTION 6.01. GENERAL AUTHORITY. . . . . . . . . . . . . . . . . . . .16
SECTION 6.02. GENERAL DUTIES . . . . . . . . . . . . . . . . . . . . .16
SECTION 6.03. ACTION UPON INSTRUCTION. . . . . . . . . . . . . . . . .16
SECTION 6.04. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS . . . . . . . . . . . . . . . . . . . . .17
SECTION 6.05. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS . . . . . . . . . . . . . . . . . . . . .17
SECTION 6.06. RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . .17
ARTICLE SEVEN
CONCERNING THE OWNER TRUSTEE . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 7.01. ACCEPTANCE OF TRUSTS AND DUTIES. . . . . . . . . . . . .18
SECTION 7.02. FURNISHING OF DOCUMENTS. . . . . . . . . . . . . . . . .18
SECTION 7.03. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . .19
SECTION 7.04. RELIANCE; ADVICE OF COUNSEL. . . . . . . . . . . . . . .19
SECTION 7.05. NOT ACTING IN INDIVIDUAL CAPACITY. . . . . . . . . . . .19
SECTION 7.06. OWNER TRUSTEE NOT LIABLE FOR TRUST CERTIFICATES, NOTES
OR CONTRACTS . . . . . . . . . . . . . . . . . . . . .19
SECTION 7.07. OWNER TRUSTEE MAY OWN TRUST CERTIFICATES AND NOTES . . .20
ARTICLE EIGHT
COMPENSATION OF OWNER TRUSTEE. . . . . . . . . . . . . . . . . . . . . . .21
SECTION 8.01. OWNER TRUSTEE'S FEES AND EXPENSES. . . . . . . . . . . .21
SECTION 8.02. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . .21
SECTION 8.03. PAYMENTS TO THE OWNER TRUSTEE. . . . . . . . . . . . . .21
ARTICLE NINE
TERMINATION OF TRUST AGREEMENT . . . . . . . . . . . . . . . . . . . . . .22
SECTION 9.01. TERMINATION OF TRUST AGREEMENT . . . . . . . . . . . . .22
SECTION 9.02. DISSOLUTION UPON BANKRUPTCY OF TRUST DEPOSITOR
OR WITHDRAWAL OR REMOVAL OF TRUST DEPOSITOR. . . . . .22
ARTICLE TEN
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES . . . . . . . . . .24
SECTION 10.01. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE . . . . . . .24
SECTION 10.02. RESIGNATION OR REMOVAL OF OWNER TRUSTEE. . . . . . . . .24
SECTION 10.03. SUCCESSOR OWNER TRUSTEE. . . . . . . . . . . . . . . . .24
SECTION 10.04. MERGER OR CONSOLIDATION OF OWNER TRUSTEE . . . . . . . .25
SECTION 10.05. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. . . . . .25
ii
ARTICLE ELEVEN
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 11.01. SUPPLEMENTS AND AMENDMENTS . . . . . . . . . . . . . . .27
SECTION 11.02. NO LEGAL TITLE TO TRUST ESTATE IN OWNERS . . . . . . . .27
SECTION 11.03. LIMITATIONS ON RIGHTS OF OTHERS. . . . . . . . . . . . .28
SECTION 11.04. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 11.05. SEVERABILITY OF PROVISIONS . . . . . . . . . . . . . . .29
SECTION 11.06. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . .29
SECTION 11.07. SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . .29
SECTION 11.09. NO PETITION. . . . . . . . . . . . . . . . . . . . . . .30
SECTION 11.10. NO RECOURSE. . . . . . . . . . . . . . . . . . . . . . .30
SECTION 11.11. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 11.12. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . .30
SECTION 11.13. TRUST CERTIFICATE TRANSFER RESTRICTIONS. . . . . . . . .30
SECTION 11.14. TRUST DEPOSITOR PAYMENT OBLIGATION . . . . . . . . . . .30
EXHIBITS
Exhibit A - Form of Certificate of Trust. . . . . . . . . . . . . . . . A-1
Exhibit B - Form of Trust Certificate . . . . . . . . . . . . . . . . . B-1
iii
TRUST AGREEMENT dated as of [ ], between EAGLEMARK CUSTOMER
FUNDING CORPORATION-IV, a Nevada corporation, as Trust Depositor (the "TRUST
DEPOSITOR"), and Wilmington Trust Company, a Delaware banking corporation, as
owner trustee (the "OWNER TRUSTEE").
WHEREAS, in connection herewith, the Trust Depositor is willing to assume
certain obligations pursuant hereto; and
WHEREAS, in connection herewith, the Trust Depositor is willing to
purchase the Trust Depositor Certificate (as defined herein) to be issued
pursuant to this Agreement and to assume certain obligations pursuant hereto;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. CAPITALIZED TERMS. Except as otherwise provided in
this Agreement, whenever used in this Agreement the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
"ADMINISTRATION AGREEMENT" means the administration agreement, dated as
of the date hereof, among the Trust, the Trust Depositor, the Indenture Trustee
and Eaglemark, as administrator.
"AGREEMENT" means this Trust Agreement, as the same may be amended and
supplemented from time to time.
"APPLICANT" shall have the meaning set forth in Section 3.07.
"BENEFIT PLAN" means (i) an employee benefit plan (as such term is
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code or (iii) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity.
"BOOK-ENTRY TRUST CERTIFICATE" means a beneficial interest in the Trust
Certificates, the ownership of which shall be evidenced by, and transfers of
which shall be made through book entries by a Clearing Agency as described in
Section 3.12.
"BUSINESS TRUST STATUTE" means Chapter 38 of Title 12 of the Delaware
Code, 12 DEL. CODE Section 3801 ET SEQ., as the same may be amended from time
to time.
"CERTIFICATE DEPOSITORY AGREEMENT" means the agreement dated as of the
Closing Date, by and among the Trust, the Owner Trustee, the Administrator and
DTC, as the initial Clearing Agency, substituting, in the form attached hereto
as Exhibit A, relating to the Trust Certificates, other than the Trust
Depositor Certificate, as the same may be amended and supplemented from time to
time.
"CERTIFICATE DISTRIBUTION ACCOUNT" means the account established and
maintained as such pursuant to Section 5.01.
"CERTIFICATE OF TRUST" means the Certificate of Trust filed for the Trust
pursuant to Section 3810(a) of the Business Trust Statute, substantially in the
form of EXHIBIT A hereto.
"CERTIFICATE REGISTER" and "CERTIFICATE REGISTRAR" mean the register
maintained and the register (or any successor thereto) appointed pursuant to
Section 3.04.
1
"CERTIFICATEHOLDER" or "HOLDER" means with respect to Definitive Trust
Certificates the Person in whose name a Trust Certificate is registered in the
Certificate Register and with respect to a Book-Entry Trust Certificate, the
Person who is the owner of such Book-Entry Trust Certificate, as reflected on
the books of the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly or as an indirect participant, in
either case, in accordance with the rules of such Clearing Agency), except
that, solely for the purposes of giving any consent, waiver, request or demand
pursuant to this Agreement, the interest evidenced by any Trust Certificate
registered in the name of the Trust Depositor, Eaglemark or any of their
respective Affiliates shall not be taken into account in determining whether
the requisite percentage necessary to effect any such consent, waiver, request
or demand in respect of the Trust Certificate shall have been obtained.
"CLEARING AGENCY" means an organization registered as a "CLEARING AGENCY"
pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"CLOSING DATE" means on or about [ ].
"CODE" means the Internal Revenue Code of 1986, as amended.
"DEFINITIVE TRUST CERTIFICATES" shall have the meaning set forth in
Section 3.12.
"EAGLEMARK" means Eaglemark, Inc., a Nevada Corporation.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXPENSES" shall have the meaning assigned to such term in Section 8.02.
"INDEMNIFIED PARTIES" shall have the meaning assigned to such term in
Section 8.02.
"INDENTURE" means the Indenture dated as of the date hereof between the
Trust and ▇▇▇▇▇▇ Trust and Savings Bank, as Indenture Trustee.
"INITIAL CERTIFICATE BALANCE" means $[ ].
"NOTE DEPOSITORY AGREEMENT" means the Agreement dated as of the Closing
Date among the Trust, the Indenture Trustee, the Administrator and DTC, as the
initial Clearing Agency, relating to the Notes, as the same may be amended and
supplemented from time to time.
"NOTES" means the Class A-1 Notes and the Class A-2 Notes, in each case
issued pursuant to the Indenture.
"OWNER" means each Holder of a Trust Certificate.
"OWNER TRUSTEE" means Wilmington Trust Company, a Delaware corporation,
not in its individual capacity but solely as owner trustee under this
Agreement, and any successor Owner Trustee hereunder.
"OWNER TRUSTEE CORPORATE TRUST OFFICE" means the office of the Owner
Trustee at which its corporate trust business shall be administered, which
initially shall be ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ Attn: Corporate Trust Administration, or such other office
at such other address as the Owner
2
Trustee may designate from time to time by notice to the Certificateholders,
the Servicer, the Trust Depositor and Eaglemark.
"PAYING AGENT" means any paying agent or co-paying agent appointed
pursuant to Section 3.10.
"PERSON" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof) unincorporated organization or government or any agency or political
subdivision thereof.
"RECORD DATE" means, with respect to any Distribution Date, the last
Business Day of the preceding calendar month.
"SALE AND SERVICING AGREEMENT" means the sale and servicing agreement,
dated as of the date hereof, among the Trust, as Issuer, the Trust Depositor,
Eaglemark, as servicer, and ▇▇▇▇▇▇ Trust and Savings Bank, as Indenture Trustee
as the same may be amended or supplemented from time to time.
"SECRETARY OF STATE" means the Secretary of State of the State of
Delaware.
"TAX MATTERS PARTNER" shall have the meaning provided in Section 5.06(b)
hereof.
"TREASURY REGULATIONS" means regulations, including proposed or temporary
regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"TRUST" means the trust established by this Agreement.
"TRUST CERTIFICATES" means the trust certificates evidencing the
beneficial equity interest of an Owner in the Trust, substantially in the form
of EXHIBIT B hereto.
"TRUST DEPOSITOR" means Eaglemark Customer Funding Corporation-IV in its
capacity as Trust Depositor hereunder, and its successors.
"TRUST DEPOSITOR CERTIFICATE" means the Trust Certificate purchased by
the Trust Depositor on the Closing Date pursuant to Section 3.11, having an
initial principal balance equal to $[ ].
"TRUST ESTATE" means all right, title and interest of the Trust in and to
the property and rights assigned to the Trust pursuant to Article Two of the
Sale and Servicing Agreement, all funds on deposit from time to time in the
Trust Accounts and the Certificate Distribution Account and all other property
of the Trust from time to time, including any rights of the Owner Trustee and
the Trust pursuant to the Sale and Servicing Agreement and the Administration
Agreement.
"UNDERWRITERS" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. and [ ].
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS. Capitalized terms used
that are not otherwise defined herein shall have the meanings ascribed thereto
in the Sale and Servicing Agreement or, if not defined therein, in the
Indenture.
SECTION 1.03. USAGE OF TERMS. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "WRITING" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
amendments, modifications and supplements thereto or any changes therein
entered into in accordance with their respective terms and not prohibited by
this Agreement; references to Persons include their permitted successors and
assigns; and the term "INCLUDING" means "INCLUDING WITHOUT LIMITATION".
3
SECTION 1.04. SECTION REFERENCES. All section references, unless
otherwise indicated, shall be to Sections in this Agreement.
SECTION 1.05. ACCOUNTING TERMS. All accounting terms used but not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles in the United States.
4
ARTICLE TWO
ORGANIZATION
SECTION 2.01. NAME. The Trust created hereby shall be known as
"HARLEY-DAVIDSON EAGLEMARK MOTORCYCLE TRUST [ ]", in which name the
Owner Trustee may conduct the activities of the Trust, make and execute
contracts and other instruments on behalf of the Trust and ▇▇▇ and be sued.
SECTION 2.02. OFFICE. The office of the Trust shall be in care of
the Owner Trustee at the Owner Trustee Corporate Trust Office or at such other
address in Delaware as the Owner Trustee may designate by written notice to the
Owners and the Trust Depositor.
SECTION 2.03. PURPOSES AND POWERS.
(a) The sole purpose of the Trust is to manage the Trust Estate and
collect and disburse the periodic income therefrom for the use and benefit of
the Owners, and in furtherance of such purpose to engage in the following
ministerial activities:
(i) to issue the Notes pursuant to the Indenture and the
Trust Certificates pursuant to this Agreement and to sell the Notes and
the Trust Certificates;
(ii) with the proceeds of the sale of the Notes and the
Trust Certificates, to purchase the Contracts, to fund the Pre-Funding
Account and to pay the organizational, start-up and transactional
expenses of the Trust and to pay the balance to the Trust Depositor
pursuant to the Sale and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey
the Trust Estate pursuant to the Indenture and to hold, manage and
distribute to the Owners pursuant to the Sale and Servicing Agreement any
portion of the Trust Estate released from the Lien of, and remitted to
the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the
Transaction Documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vi) subject to compliance with the Transaction Documents,
to engage in such other activities as may be required in connection with
conservation of the Trust Estate and the making of distributions to the
Owners and the Noteholders.
The Trust shall not engage in any activities other than in connection with the
foregoing. Nothing contained herein shall be deemed to authorize the Owner
Trustee to engage in any business operations or any activities other than those
set forth in the introductory sentence of this Section. Specifically, the
Owner Trustee shall have no authority to engage in any business operations, or
acquire any assets other than those specifically included in the Trust Estate
under Section 1.01, or otherwise vary the assets held by the Trust. Similarly,
the Owner Trustee shall have no discretionary duties other than performing
those ministerial acts set forth above necessary to accomplish the purpose of
this Trust as set forth in the introductory sentence of this Section.
SECTION 2.04. APPOINTMENT OF OWNER TRUSTEE. The Trust Depositor
hereby appoints the Owner Trustee as trustee of the Trust effective as of the
date hereof, to have all the rights, powers and duties set forth herein, and
the Owner Trustee hereby accepts such appointment.
5
SECTION 2.05. INITIAL CAPITAL CONTRIBUTION OF OWNER TRUST ESTATE.
The Trust Depositor hereby sells, assigns, transfers, conveys and sets over to
the Owner Trustee, as of the date hereof, the sum of $1. The Owner Trustee
hereby acknowledges receipt in trust from the Trust Depositor, as of the date
hereof, of the foregoing contribution, which shall constitute the initial Trust
Estate and shall be deposited in the Certificate Distribution Account. The
Trust Depositor shall pay organizational expenses of the Trust as they may
arise or shall, upon the request of the Owner Trustee, promptly reimburse the
Owner Trustee for any such expenses paid by the Owner Trustee.
SECTION 2.06. DECLARATION OF TRUST. The Owner Trustee hereby
declares that it will hold the Trust Estate in trust upon and subject to the
conditions set forth herein for the sole purpose of conserving the Trust Estate
and collecting and disbursing the periodic income therefrom for the use and
benefit of the Owners, subject to the obligations of the Trust under the
Transaction Documents. It is the intention of the parties hereto that the
Trust constitute a business trust under the Business Trust Statute and that
this Agreement constitute the governing instrument of such business trust. It
is the intention of the parties hereto that, solely for income and franchise
tax purposes, the Trust shall be treated as a partnership, with the assets of
the partnership being the Contracts and other assets held by the Trust, the
partners of the partnership being the Certificateholders (including the Trust
Depositor) and the Notes being debt of the partnership. The parties agree
that, unless otherwise required by a final determination to the contrary, the
Trust will file or cause to be filed annual or other necessary returns, reports
and other forms consistent with the characterization of the Trust as a
partnership, the partners of the partnership being the Certificateholders
(including the Trust Depositor) and the Notes being debt of the partnership,
for such tax purposes. The Tax Matters Partner shall prepare and the Owner
Trustee shall file, on behalf of the Trust and Certificateholders, IRS Form
8832 making the protective election for the Trust to be treated as a
partnership for federal income tax purposes as of the Closing Date. Effective
as of the date hereof, the Owner Trustee shall have all rights, powers and
duties set forth herein and in the Business Trust Statute for the sole purpose
and to the extent necessary to accomplish the purpose of this Trust as set
forth in the introductory sentence of Section 2.03.
SECTION 2.07. LIABILITY OF TRUST DEPOSITOR.
(a) Pursuant to Section 3803(a) of the Business Trust Statute, the
Trust Depositor shall be liable directly to and will indemnify any injured
party or any other creditor of the Trust for all losses, claims, damages,
liabilities and expenses of the Trust to the extent that the Trust Depositor
would be liable if the Trust were a partnership under the Delaware Revised
Uniform Limited Partnership Act in which Trust Depositor were a general partner
(including any Illinois personal property replacement tax that is imposed on
the Trust as a partnership); PROVIDED, HOWEVER, that Trust Depositor shall not
be liable for any losses incurred by a Certificateholder in the capacity of an
investor in the Trust Certificates or a Noteholder in the capacity of an
investor in the Notes. In addition, any third party creditors of the Trust
(other than in connection with the obligations described in the immediately
preceding sentence for which the Trust Depositor shall not be liable) shall be
deemed third party beneficiaries of this paragraph. The obligations of the
Trust Depositor under this paragraph shall be evidenced by the Trust
Certificates described in Section 3.11, which for purposes of the Business
Trust Statute shall be deemed to be a separate class of Trust Certificates from
all other Trust Certificates issued by the Trust; provided that the rights and
obligations evidenced by all Trust Certificates, regardless of class, shall,
except as provided in this Section, be identical.
(b) Other than to the extent set forth in Section 2.07(a), no Owner,
solely by virtue of its being the Holder of a Trust Certificate, shall have any
personal liability for any liability or obligation of the Trust.
SECTION 2.08. TITLE TO TRUST PROPERTY. Legal title to the Trust
Estate shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Trust Estate to be vested in an Owner Trustee or Owner Trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
SECTION 2.09. SITUS OF TRUST. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of Illinois
or the State of Delaware. The Trust shall not have any employees in any
state other than Delaware; PROVIDED, HOWEVER, that nothing herein shall
restrict or prohibit the Owner Trustee from having employees within or
without the State of Delaware.
6
Payments will be received by the Trust only in Delaware and payments will be
made by the Trust only from Delaware. The only office of the Trust will be
at the Owner Trustee Corporate Trust Office.
SECTION 2.10. REPRESENTATIONS AND WARRANTIES OF THE TRUST DEPOSITOR.
The Trust Depositor hereby represents and warrants to the Owner Trustee
that:
(i) The Trust Depositor is duly organized and validly existing as
a corporation organized and existing and in good standing under the laws
of the State of Nevada, with power and authority to own its properties
and to conduct its business and had at all relevant times, and has,
power, authority and legal right to acquire and own the Contracts.
(ii) The Trust Depositor is duly qualified to do business as a
foreign corporation in good standing and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business requires such
qualifications.
(iii) The Trust Depositor has the power and authority to execute
and deliver this Agreement and to carry out its terms; the Trust
Depositor has full power and authority to sell and assign the property to
be sold and assigned to and deposited with the Owner Trustee on behalf of
the Trust as part of the Trust Estate and has duly authorized such sale
and assignment and deposit with the Owner Trustee on behalf of the Trust
by all necessary corporate action; and the execution, delivery and
performance of this Agreement have been duly authorized by the Trust
Depositor by all necessary corporate action.
(iv) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or bylaws of the Trust Depositor, or any
indenture, agreement or other instrument to which the Trust Depositor is
a party or by which it is bound; nor result in the creation or imposition
of any Lien upon any of the properties of the Trust Depositor pursuant to
the terms of any such indenture, agreement or other instrument (other
than pursuant to the Transaction Documents); nor violate any law or any
order, rule or regulation applicable to the Trust Depositor of any court
or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Trust
Depositor or its properties.
(v) There are no proceedings or investigations pending, or to the
Trust Depositor's best knowledge threatened, before any court, regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Trust Depositor or its properties: (A) asserting
the invalidity of this Agreement, any of the other Transaction Documents
or the Trust Certificates, (B) seeking to prevent the issuance of the
Trust Certificates or the consummation of any of the transactions
contemplated by this Agreement or any of the other Transaction Documents,
(C) seeking any determination or ruling that might materially and
adversely affect the performance by the Trust Depositor of its
obligations under, or the validity or enforceability of, this Agreement,
any of the other Transaction Documents or the Trust Certificates or (D)
involving the Trust Depositor and which might adversely affect the
federal income tax or other federal, state or local tax attributes of the
Trust Certificates.
SECTION 2.11. FEDERAL INCOME TAX ALLOCATIONS.
(a) Trust items of income, gain, loss and deduction for any month as
determined for federal income tax purposes shall be allocated as follows:
(i) The Certificateholders, as of the first Record Date following
the end of such month, shall be allocated the following items in
proportion to their ownership of the principal amount of Trust
Certificates on such date: (A) interest equal to the Certificate
Interest Distributable Amount for such month, (B) accrued interest on the
excess, if any, of the Certificate Interest Distributable Amount for the
preceding Distribution
7
Date over the amount in respect of interest that is actually deposited
in the Certificate Distribution Account on such preceding Distribution
Date, to the extent permitted by law, at the Pass-Through Rate from
such preceding Distribution Date through the current Distribution Date,
(C) the portion of the market discount on the Contracts accrued during
such quarter that is allocable to the excess, if any, of the initial
aggregate principal amount of the Trust Certificates over their initial
aggregate issue price and (D) any other items of income and gain
payable to the Certificateholders for such month; such sum to be
reduced by any amortization deduction by the Trust of premium on
Contracts that corresponds to any excess of the issue price of Trust
Certificates over their principal amount; and
(ii) to the Trust Depositor to the extent of any remaining items
of income, gain, loss and deduction.
If the items of income or gain of the Trust for any calendar quarter are
insufficient for the allocations described in Section 2.11(a)(i), subsequent
items of income or gain shall first be allocated to make up such shortfall
before being allocated as provided in Section 2.11(a)(ii).
(b) To the extent that the Trust Depositor would be allocated
cumulative items of loss and deduction in excess of the sum of (A) the
cumulative items of income and gain, if any, allocated to the Trust Depositor,
PLUS (B) the cumulative contributions made by the Trust Depositor to the
Trust, PLUS (C) the amount of Trust liabilities or claims, if any, for which
the Trust Depositor is liable pursuant to Section 2.07 or otherwise allocated
under Section 752 of the Code, LESS (D) the cumulative distributions made to
the Trust Depositor pursuant to Section 5.02 hereof, then such excess items of
loss and deduction shall instead be allocated among the Certificateholders
(other than the Trust Depositor) as of the first Record Date following the end
of such quarter in proportion to their ownership of the principal amount of
Trust Certificates on such Record Date until the cumulative items of loss and
deduction allocated to such Certificateholders equal the sum of (I) the
cumulative items of income and gain allocated to such Certificateholders, PLUS
(II) the cumulative contributions made by such Certificateholders to the Trust,
PLUS (III) the amount of Trust liabilities allocated to such Certificateholders
under Section 752 of the Code, LESS (IV) the cumulative distributions made to
the Trust Depositor pursuant to Section 5.02 hereof. Thereafter, any such
excess items of loss and deduction shall be allocated among the Trust Depositor
and the other Certificateholders in accordance with how such Persons are
reasonably expected to bear the economic burden of such items.
(c) The provisions of this Agreement relating to the allocations are
intended to comply with Treasury Regulation Sections 1.704-1 and 1.704-2. The
Trust Depositor and Eaglemark are authorized to modify the allocations in this
paragraph if necessary or appropriate, in its sole discretion, for the
allocations to fairly reflect the economic income, gain or loss to the Trust
Depositor or to the Certificateholders, or as otherwise to cause such
allocations to have substantial economic effect within the meaning of
Regulations Section 1.704-1(b)(2) or to be deemed to be in accordance with the
interests in the Trust under such Treasury Regulations.
8
ARTICLE THREE
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.01. INITIAL OWNERSHIP. Upon the formation of the Trust by
the contribution by the Trust Depositor pursuant to Section 2.05 and until the
issuance of the Trust Certificates, the Trust Depositor shall be the sole
beneficiary of the Trust.
SECTION 3.02. THE TRUST CERTIFICATES. The Trust Certificates shall
be substantially in the form of EXHIBIT B hereto. The Trust Certificates shall
be issuable in minimum denominations of $1,000 and integral multiples of $1,000
in excess thereof; PROVIDED, HOWEVER, that the Trust Certificates issued to the
Trust Depositor pursuant to Section 3.11 may be issued in such denomination as
required to include any residual amount. The Trust Certificates shall be
executed by the Owner Trustee on behalf of the Trust by manual or facsimile
signature of an authorized officer of the Owner Trustee and shall be deemed to
have been validly issued when so executed. Trust Certificates bearing the
manual or facsimile signature of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Owner Trustee
shall be valid and binding obligations of the Trust, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of such Trust Certificates or did not hold such
offices at the date of such Trust Certificates. All Trust Certificates shall
be dated the date of their authentication.
SECTION 3.03. AUTHENTICATION AND DELIVERY OF TRUST CERTIFICATES. The
Owner Trustee shall cause to be authenticated and delivered upon the order of
the Trust Depositor, in exchange for the Contracts and the other assets of the
Trust, simultaneously with the sale, assignment and transfer to the Trust of
the Contracts, and the constructive delivery to the Owner Trustee of the
Contract Files and the other assets of the Trust, Trust Certificates duly
authenticated by the Owner Trustee, in authorized denominations equaling in the
aggregate the Initial Certificate Balance evidencing the entire ownership of
the Trust and Notes issued by the Owner Trustee and authenticated by the
Indenture Trustee in aggregate principal amount of, in the case of (i) Class
A-1 Notes, $[ ], and (ii) Class A-2 Notes,
$[ ]. No Trust Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on
such Trust Certificate a certificate of authentication substantially in the
form set forth in the form of Trust Certificate attached hereto as EXHIBIT B,
executed by the Owner Trustee or its authenticating agent, by manual
signature, and such certificate upon any Trust Certificate shall be
conclusive evidence, and the only evidence, that such Trust Certificate has
been duly authenticated and delivered hereunder. Upon issuance,
authorization and delivery pursuant to the terms hereof, the Trust
Certificates will be entitled to the benefits of this Agreement.
SECTION 3.04. REGISTRATION OF TRANSFER AND EXCHANGE OF TRUST
CERTIFICATES.
(a) The Certificate Registrar shall keep or cause to be kept, a
Certificate Register, subject to such reasonable regulations as it may
prescribe. The Certificate Register shall provide for the registration of
Trust Certificates and transfers and exchanges of Trust Certificates as
provided herein. The Owner Trustee is hereby initially appointed Certificate
Registrar for the purpose of registering Trust Certificates and transfers and
exchanges of Trust Certificates as herein provided. In the event that,
subsequent to the Closing Date, the Owner Trustee notifies the Servicer that it
is unable to act as Certificate Registrar, the Servicer shall appoint another
bank or trust company, having an office or agency located in the City of
Chicago, Illinois, agreeing to act in accordance with the provisions of this
Agreement applicable to it, and otherwise acceptable to the Owner Trustee, to
act as successor Certificate Registrar hereunder.
(b) Upon surrender for registration of transfer of any Trust
Certificate at the Owner Trustee Corporate Trust Office, the Owner Trustee
shall execute, authenticate and deliver (or shall cause its authenticating
agent to authenticate and deliver), in the name of the designated transferee or
transferees, one or more new Trust Certificates in authorized denominations of
a like aggregate principal amount.
(c) At the option of a Certificateholder, Trust Certificates may be
exchanged for other Trust Certificates in authorized denominations of a like
aggregate principal amount, upon surrender of the Trust Certificates to be
exchanged at any such office or agency. Whenever any Trust Certificates are so
surrendered for exchange, the Owner Trustee on behalf of the Trust shall
execute, authenticate and deliver (or shall cause its authenticating agent to
9
authenticate and deliver) the Trust Certificates that the Certificateholder
making the exchange is entitled to receive. Every Trust Certificate presented
or surrendered for registration of transfer or exchange shall be accompanied by
a written instrument of transfer in form satisfactory to the Owner Trustee and
the Certificate Registrar duly executed by the Holder thereof or his attorney
duly authorized in writing.
(d) No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Owner Trustee may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Trust Certificates.
(e) All Trust Certificates surrendered for registration of transfer or
exchange shall be canceled and subsequently destroyed by the Owner Trustee.
SECTION 3.05. MUTILATED, DESTROYED, LOST OR STOLEN TRUST
CERTIFICATES. If (i) any mutilated Trust Certificate is surrendered to the
Certificate Registrar, or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Trust Certificate, and
(ii) there is delivered to the Certificate Registrar and the Owner Trustee such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice that such Trust Certificate has been acquired by
a bona fide purchaser, the Owner Trustee on behalf of the Trust shall execute
and the Owner Trustee or its authenticating agent shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Trust Certificate, a new Trust Certificate of like tenor and fractional
undivided interest. In connection with the issuance of any new Trust
Certificate under this Section, the Owner Trustee may require the payment by
the Holder of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto. Any duplicate Trust Certificate
issued pursuant to this Section shall constitute complete and indefeasible
evidence of ownership in the Trust, as if originally issued, whether or not the
lost, stolen or destroyed Trust Certificate shall be found at any time.
SECTION 3.06. PERSONS DEEMED OWNERS. Prior to due presentation of a
Trust Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar and any of their respective agents may treat the Person
in whose name any Trust Certificate is registered as the owner of such Trust
Certificate for the purpose of receiving distributions pursuant to Section 5.02
and for all other purposes whatsoever, and none of the Owner Trustee, the
Certificate Registrar, any Paying Agent or any of their respective agents shall
be affected by any notice of the contrary.
SECTION 3.07. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. The Owner Trustee shall furnish or cause to be furnished to the
Servicer and the Trust Depositor, within 15 days after receipt by the
Certificate Registrar of a written request therefor from the Servicer or the
Trust Depositor, a list, in such form as the Servicer or the Trust Depositor
may reasonably require, of the names and addresses of the Certificateholders as
of the most recent Record Date. If three or more Certificateholders, or one or
more Certificateholders of Trust Certificates evidencing not less than 25% of
the percentage interests of the Trust Certificates (hereinafter referred to as
"APPLICANTS"), apply in writing to the Owner Trustee, and such application
states that the Applicants desire to communicate with other Certificateholders
with respect to their rights hereunder or under the Trust Certificates and such
application is accompanied by a copy of the communication that such Applicants
propose to transmit, then the Owner Trustee shall, within five Business Days
after the receipt of such application, afford such Applicants access, during
normal business hours, to the current list of Certificateholders. Every
Certificateholder, by receiving and holding a Trust Certificate, agrees with
the Servicer, the Trust Depositor and the Owner Trustee that none of the
Servicer, the Trust Depositor or the Owner Trustee shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Certificateholders hereunder, regardless of the source from which such
information was derived.
SECTION 3.08. MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee
shall maintain in Wilmington, Delaware, an office or offices or agency or
agencies where Trust Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Owner Trustee
in respect of the Trust Certificates and this Agreement may be served. The
Owner Trustee hereby designates the Owner Trustee Corporate Trust Office as its
office for such purposes. The Owner Trustee shall give prompt written notice
to the Trust Depositor, the Servicer and to Certificateholders of any change in
the location of the Certificate Register or any such office or agency.
10
SECTION 3.09. TEMPORARY TRUST CERTIFICATES. Pending the preparation
of definitive Trust Certificates, the Owner Trustee, on behalf of the Trust,
may execute, authenticate and deliver, temporary Trust Certificates that are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Trust
Certificates in lieu of which they are issued. If temporary Trust Certificates
are issued, the Trust Depositor will cause definitive Trust Certificates to be
prepared without unreasonable delay. After the preparation of definitive Trust
Certificates, the temporary Trust Certificates shall be exchangeable for
definitive Trust Certificates upon surrender of the temporary Trust
Certificates at the office or agency to be maintained as provided in Section
3.08, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Trust Certificates, the Owner Trustee shall execute and
authenticate and deliver in exchange therefor a like principal amount of
definitive Trust Certificates in authorized denominations. Until so exchanged,
the temporary Trust Certificates shall in all respects be entitled to the same
benefits hereunder as definitive Trust Certificates.
SECTION 3.10. APPOINTMENT OF PAYING AGENT. The Paying Agent shall
make distributions to Certificateholders from the Certificate Distribution
Account pursuant to Section 5.02(a) and shall report the amounts of such
distributions to the Owner Trustee. Any Paying Agent shall have the revocable
power to withdraw funds from the Certificate Distribution Account for the
purpose of making the distributions referred to above. The Owner Trustee may
revoke such power and remove the Paying Agent if the Owner Trustee determines
in its sole discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect. The Paying Agent
initially shall be ▇▇▇▇▇▇ Trust and Savings Bank, and any co-paying agent
chosen by the Paying Agent that is acceptable to the Owner Trustee. Each
Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Owner Trustee. In the event that ▇▇▇▇▇▇ Trust and Savings Bank
shall no longer be the Paying Agent, the Owner Trustee shall appoint a
successor to act as Paying Agent (which shall be a bank or trust company). The
Owner Trustee shall cause such successor Paying Agent or any additional Paying
Agent appointed by the Owner Trustee to execute and deliver to the Owner
Trustee an instrument in which such successor Paying Agent or additional Paying
Agent shall agree with the Owner Trustee that, as Paying Agent, such successor
Paying Agent or additional Paying Agent will hold all sums, if any, held by it
for payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders. The Paying Agent shall return all unclaimed funds to the
Owner Trustee and upon removal of a Paying Agent such Paying Agent shall also
return all funds in its possession to the Owner Trustee. The provisions of
Sections 7.01, 7.03, 7.04 and 8.01 shall apply to the Owner Trustee also in its
role as Paying Agent, for so long as the Owner Trustee shall act as Paying
Agent and, to the extent applicable, to any other paying agent appointed
hereunder. Any reference in this Agreement to the Paying Agent shall include
any co-paying agent unless the context requires otherwise.
SECTION 3.11. OWNERSHIP BY TRUST DEPOSITOR OF TRUST CERTIFICATES.
The Trust Depositor shall on the Closing Date purchase from the Underwriters
Trust Certificates representing at least 1% of the Initial Certificate Balance
and shall thereafter retain beneficial and record ownership of Trust
Certificates representing at least 1% of the Certificate Balance. Any
attempted transfer of any Trust Certificate that would reduce such interest of
the Trust Depositor below 1% of the Certificate Balance shall be void. The
Owner Trustee shall cause any Trust Certificate issued to the Trust Depositor
on the Closing Date (and any Trust Certificate issued in exchange therefor) to
contain a legend stating "THIS CERTIFICATE IS NON-TRANSFERABLE".
SECTION 3.12. BOOK-ENTRY CERTIFICATES. The Trust Certificates upon
original issuance will be issued in the form of one or more typewritten
certificates representing the Book-Entry Trust Certificates, to be delivered to
DTC, the initial Clearing Agency, by, or on behalf of, the Trust; provided,
however, that one definitive Trust Certificate (as defined below) may be issued
to the Trust Depositor pursuant to Section 3.11. The certificate or
certificates delivered to DTC evidencing such Trust Certificates shall
initially be registered on the Certificate Register in the name of CEDE & CO.,
the nominee of the initial Clearing Agency, and no Certificateholder (other
than the Company) will receive a definitive certificate representing such
Certificateholders' interest in the Trust Certificates, except as provided in
Section 3.14. Unless and until definitive, fully registered Trust Certificates
(the "DEFINITIVE TRUST CERTIFICATES") have been issued to Certificateholders
pursuant to section 3.14:
(i) the provisions of this Section shall be in full force and effect;
11
(ii) the Trust Depositor, the Servicer, the Certificate Registrar and
the Owner Trustee, subject to the provisions and limitations of Sections
2.03 and 2.06, may deal with the Clearing Agency for all purposes
(including the making of distributions on the Trust Certificates) as the
authorized representative of the Certificateholders;
(iii) to the extent that the provisions of this section conflict with any
other provisions of this agreement, the provisions of this Section shall
control;
(iv) the rights of Certificateholder shall be exercised only through the
Clearing Agency (or through procedures established by the Clearing
agency) and shall be limited to those established by law and agreements
between the Holder and the Clearing Agency and/or the Clearing Agency
Participants; pursuant to the Certificate Depository Agreement, unless
and until Definitive Trust Certificates are issued pursuant to Section
3.14, the Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit distributions of
principal and interest on the Trust Certificates to such Clearing Agency
Participants; and
(v) whenever this Agreement requires or permits actions to be taken
based upon instructions or directions of Certificateholders evidencing a
specified percentage of the percentage interests thereof, the Clearing
Agency shall be deemed to represent such percentage only to the extent
that it has received instructions to such effect from Certificateholders
and/or Clearing Agency Participants owning or representing, respectively,
such required percentage of the beneficial interest in Trust Certificates
and has delivered such instructions to the Owner Trustee.
SECTION 3.13. NOTICES TO CLEARING AGENCY. Whenever notice or other
communication to the Certificateholders is required hereunder, unless and until
Definitive Trust Certificates shall have been issued to Certificateholders
pursuant to Section 3.14, the Owner Trustee and the Master Servicer shall give
all such notices and communications specified herein to be given to
Certificateholders to the Clearing Agency.
SECTION 3.14. DEFINITIVE TRUST CERTIFICATES. If (i)(A) the
Administrator advises the Owner Trustee in writing that the Clearing Agency is
no longer willing or able to properly discharge its responsibilities as
described in the Certificate Depository Agreement and (B) the Owner Trustee or
the Administrator is unable to locate a qualified successor, (ii) the
Administrator, at its option, advises the Owner Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency, or (iii)
after the occurrence of an Event of Default or a Termination Event,
Certificateholders representing beneficial interests aggregating more than 50%
of the Certificate Balance advise the Owner Trustee and the Clearing Agency
through the Clearing Agency Participants in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best
interests of the Trust, then the Clearing Agency shall notify all
Certificateholders and the Owner Trustee of the occurrence of any such event
and of the availability of Definitive Trust Certificates to Certificateholders
requesting the same. Upon surrender to the Owner Trustee by the Clearing
Agency of the certificates evidencing the Book-Entry Trust Certificates,
accompanied by registration instructions from the Clearing Agency for
registration, the Owner Trustee shall issue the Definitive Trust Certificates
and deliver such Definitive Trust Certificates in accordance with the
instructions of the Clearing Agency. Neither the Trust Depositor, the
Certificate Registrar nor the Owner Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Trust Certificates, the Owner Trustee shall recognize the Certificateholders of
the Definitive Trust Certificates as Certificateholders hereunder. The Owner
Trustee shall not be liable if the Owner Trustee or the Administrator is unable
to locate a qualified successor Clearing Agency. The Definitive Trust
Certificates shall be printed, lithographed or engraved or may be produced in
any manner as is reasonably acceptable to the Owner Trustee, as evidenced by
its execution thereof.
12
ARTICLE FOUR
ACTIONS BY OWNER TRUSTEE
SECTION 4.01. PRIOR NOTICE TO OWNERS WITH RESPECT TO CERTAIN MATTERS.
Subject to the provisions and limitation of Section 4.04, with respect to the
following matters, the Owner Trustee shall not take action unless at least 30
days before the taking of such action, the Owner Trustee shall have notified
the Certificateholders in writing of the proposed action, the Indenture Trustee
shall have consented to such action in the event any Notes are outstanding and
the Owners shall not have notified the Owner Trustee in writing prior to the
30th day after such notice is given that such Owners have withheld consent or
provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except
claims or lawsuits brought in connection with the collection of the
Contracts) and the compromise of any action, claim or lawsuit brought by
or against the Trust (except with respect to the aforementioned claims or
lawsuits for collection of the Contracts);
(b) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed under
the Business Trust Statute);
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and
such amendment materially and adversely affects the interest of the
Owners;
(e) the amendment, change or modification of the Administration
Agreement, except to cure any ambiguity or to amend or supplement any
provision in a manner or add any provision that would not materially and
adversely affect the interests of the Owners; or
(f) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or pursuant to this
Agreement of a successor Certificate Registrar, or the consent to the
assignment by the Note Registrar, Paying Agent, Indenture Trustee or
Certificate Registrar of its obligations under the Indenture or the
Agreement, as applicable.
SECTION 4.02. ACTION BY OWNERS WITH RESPECT TO CERTAIN MATTERS.
Subject to the provisions and limitations of Section 4.04, the Owner Trustee
shall not have the power, except upon the direction of the Owners, to (a)
remove the Administrator pursuant to Section 8 of the Administration Agreement,
(b) appoint a successor Administrator pursuant to Section 8 of the
Administration Agreement, (c) remove the Servicer pursuant to Section 8.01 of
the Sale and Servicing Agreement, (d) except as expressly provided in the
Transaction Documents, sell the Contracts after the termination of the
Indenture, (e) initiate any claim, suit or proceeding by the Trust or
compromise any claim, suit or proceeding brought by or against the Trust, (f)
authorize the merger or consolidation of the Trust with or into any other
business trust or entity (other than in accordance with Section 3.10 of the
Indenture) or (g) amend the Certificate of Trust. The Owner Trustee shall take
the actions referred to in the preceding sentence only upon written
instructions assigned by the Owners.
SECTION 4.03. ACTION BY OWNERS WITH RESPECT TO BANKRUPTCY. The Owner
Trustee shall not have the power to commence a voluntary proceeding in a
bankruptcy relating to the Trust without the unanimous prior approval of all
Owners and the delivery to the Owner Trustee by each such Owner of a
certificate certifying that such Owner reasonably believes that the Trust is
insolvent.
SECTION 4.04. RESTRICTIONS ON OWNERS' POWER. The Owners shall not
direct the Owner Trustee to take or to refrain from taking any action if such
action or inaction would be contrary to any obligation of the Trust or the
Owner
13
Trustee under this Agreement or any of the Transaction Documents or would
be contrary to the purpose of this Trust as set forth in Section 2.03, nor
shall the Owner Trustee be obligated to follow any such direction, if given.
SECTION 4.05. MAJORITY CONTROL. Except as expressly provided herein,
any action that may be taken by the Owners under this Agreement may be taken by
the Holder of Trust Certificates evidencing not less than a majority of the
Certificate Balance. Except as expressly provided herein, any written notice
of the Owners delivered pursuant to this Agreement shall be effective if signed
by Holder of Trust Certificates evidencing not less than a majority of the
Certificate Balance at the time of the delivery of such notice.
14
ARTICLE FIVE
APPLICATION OF TRUST FUNDS;
CERTAIN DUTIES
SECTION 5.01. ESTABLISHMENT OF TRUST ACCOUNT. The Owner Trustee, for
the benefit of the Certificateholders, shall establish and maintain in the name
of the Trust an Eligible Account (the "CERTIFICATE DISTRIBUTION ACCOUNT"),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Certificateholders.
The Owner Trustee shall possess all right, title and interest in all
funds on deposit from time to time in the Certificate Distribution Account and
in all proceeds thereof. Except as otherwise expressly provided herein, the
Certificate Distribution Account shall be under the sole dominion and control
of the Owner Trustee for the benefit of the Certificateholders. If, at any
time, the Certificate Distribution Account ceases to be an Eligible Account,
the Owner Trustee (or the Trust Depositor on behalf of the Owner Trustee, if
the Certificate Distribution Account is not then held by the Owner Trustee or
an Affiliate thereof) shall within ten Business Days (or such longer period,
not to exceed 30 calendar days, as to which each Rating Agency may consent)
establish a new Certificate Distribution Account as an Eligible Account and
shall transfer any cash and/or any investments to such new Certificate
Distribution Account.
SECTION 5.02. APPLICATION OF TRUST FUNDS.
(a) On each Distribution Date, the Owner Trustee will distribute to
Certificateholders, on a pro rata basis, amounts deposited in the Certificate
Distribution Account pursuant to Section 7.05 of the Sale and Servicing
Agreement with respect to such Distribution Date.
(b) On each Distribution Date, the Owner Trustee shall send to each
Certificateholder the statement or statements provided to the Owner Trustee by
the Servicer pursuant to Section 9.06 of the Sale and Servicing Agreement with
respect to such Distribution Date.
(c) In the event that any withholding tax is imposed on the Trust's
payment (or allocation of income) to a Certificateholder, such tax shall reduce
the amount otherwise distributable to the Certificateholder in accordance with
this Section. The Owner Trustee is hereby authorized and directed to retain
from amounts otherwise distributable to the Owners sufficient funds for the
payment of any tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed
with respect to a Certificateholder shall be treated as cash distributed to
such Certificateholder at the time it is withheld by the Trust and remitted to
the appropriate taxing authority. If there is a possibility that withholding
tax is payable with respect to a distribution, the Owner Trustee may in its
sole discretion withhold such amounts in accordance with the paragraph (c).
SECTION 5.03. METHOD OF PAYMENT. Subject to Section 9.01(c)
respecting the final payment upon retirement of each Certificate, distributions
required to be made to each Certificateholder of record on the related Record
Date shall be made by check mailed to such Certificateholder at the address of
such Holder appearing in the Certificate Register the amount to be distributed
to such Certificateholder pursuant to such Holder's Certificates.
SECTION 5.04. NO SEGREGATION OF MONEYS; NO INTEREST. Subject to
Sections 5.01 and 5.02, moneys received by the Owner Trustee hereunder need not
be segregated in any manner except to the extent required by law or the Sale
and Servicing Agreement and may be deposited under such general conditions as
may be prescribed by law, and the Owner Trustee shall not be liable for any
interest thereon.
SECTION 5.05. ACCOUNTING AND REPORTS TO THE CERTIFICATEHOLDERS,
OWNERS, THE INTERNAL REVENUE SERVICE AND OTHERS. The Owner Trustee shall (a)
maintain (or cause to be maintained) the books of the Trust on a calendar year
basis and the accrual method of accounting, (b) deliver to each Owner, as may
be required by the Code and applicable Treasury Regulations, such information
as may be required (including Schedule K-1) to enable each Owner to prepare
15
its federal and state income tax returns, (c) file such tax returns relating
to the Trust (including a partnership information return, IRS Form 1065) and
make such elections as from time to time may be required or appropriate under
any applicable state or federal statute or any rule or regulation thereunder
so as to maintain the Trust's characterization as a partnership for federal
income tax purposes, (d) cause such tax returns to be signed in the manner
required by law and (e) collect or cause to be collected any withholding tax
as described in and in accordance with Section 5.02(c) with respect to income
or distributions to Owners. The Owner Trustee shall elect under Section 1278
of the Code to include in income currently any market discount that accrues
with respect to the Contracts. The Owner Trustee shall not make the election
provided under Section 754 or Section 761 of the Code.
SECTION 5.06. SIGNATURE ON RETURNS; TAX MATTERS PARTNER.
(a) The Trust Depositor shall sign on behalf of the Trust the tax
returns of the Trust.
(b) The Trust Depositor shall be designated the "TAX MATTERS PARTNER"
of the Trust pursuant to Section 6231(a)(7)(A) of the Code and applicable
Treasury Regulations.
16
ARTICLE SIX
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.01. GENERAL AUTHORITY. Subject to the provisions and
limitations of Sections 2.03 and 2.06, the Owner Trustee is authorized and
directed to execute and deliver the Transaction Documents to which the Trust is
to be a party and each certificate or other document attached as an exhibit to
or contemplated by the Transaction Documents to which the Trust is to be a
party and any amendment or other agreement, as evidenced conclusively by the
Owner Trustee's execution thereof. In addition to the foregoing, the Owner
Trustee is authorized, but shall not be obligated, to take all actions required
of the Trust pursuant to the Transaction Documents. The Owner Trustee is
further authorized from time to time to take such action as the Administrator
recommends with respect to the Transaction Documents.
SECTION 6.02. GENERAL DUTIES. Subject to the provisions and
limitations of Sections 2.03 and 2.06, it shall be the duty of the Owner
Trustee to discharge (or cause to be discharged through the Administrator all
of its responsibilities pursuant to the terms of this Agreement and the
Transaction Documents to which the Trust is a party and to administer the Trust
in the interest of the Owners, subject to the Transaction Documents and in
accordance with the provisions of this Agreement. Without limiting the
foregoing, the Owner Trustee shall on behalf of the Trust file and prove any
claim or claims that may exist against Eaglemark in connection with any claims
paying procedure as part of an insolvency or receivership proceeding involving
Eaglemark. Notwithstanding the foregoing, the Owner Trustee shall be deemed to
have discharged its duties and responsibilities hereunder and under the
Transaction Documents to the extent the Administrator has agreed in the
Administration Agreement to perform any act or to discharge any duty of the
Owner Trustee hereunder or under any Transaction Document, and the Owner
Trustee shall not be held liable for the default or failure of the
Administrator to carry out its obligations under the Administration Agreement.
SECTION 6.03. ACTION UPON INSTRUCTION.
(a) Subject to Article Four, in accordance with the terms of the
Transaction Documents the Owners may by written instruction direct the Owner
Trustee in the management of the Trust.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any other Transaction Document if the Owner Trustee shall
have reasonably determined, or shall have been advised by counsel, that such
action is likely to result in liability on the part of the Owner Trustee or is
contrary to the terms hereof or of any other Transaction Document or is
otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or under
any other Transaction Document, the Owner Trustee shall promptly give notice
(in such form as shall be appropriate under the circumstances) to the Owners
requesting instruction as to the course of action to be adopted, and to the
extent the Owner Trustee acts in good faith in accordance with any written
instruction of the Owners received, the Owner Trustee shall not be liable on
account of such action to any Person. If the Owner Trustee shall not have
received appropriate instruction within ten days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Agreement and the
other Transaction Documents, as it shall deem to be in the best interests of
the Owners, and shall have no liability to any Person for such action or
inaction.
(d) In the event that the Owner Trustee is unsure as to the
applicability of any provision of this Agreement or any other Transaction
Document or any such provision is ambiguous as to its application, or is, or
appears to be, in conflict with any other applicable provision, or in the event
that this Agreement permits any determination by the Owner Trustee or is silent
or in incomplete as to the course of action that the Owner Trustee is required
to take with respect to a particular set of facts, the Owner Trustee may give
notice (in such form as shall be appropriate under the circumstances) to the
Owners requesting instruction and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within ten days
17
of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action not
inconsistent with this Agreement or the other Transaction Documents, as it
shall deem to be in the best interests of the Owners, and shall have no
liability to any Person for such action or inaction.
SECTION 6.04. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of or
otherwise deal with the Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated
hereby to which the Owner Trustee is a party, except as expressly provided by
the terms of this Agreement or any document or written instruction received by
the Owner Trustee pursuant to Section 6.03; and no implied duties or
obligations shall be read into this Agreement or any other Transaction Document
against the Owner Trustee. The Owner Trustee shall have no responsibility for
filing any financing or continuation statement in any public office at any time
or to otherwise perfect or maintain the perfection of any security interest or
lien granted to it hereunder or to prepare or file any Commission filing for
the Trust or to record this Agreement or any other Transaction Document. The
Owner Trustee nevertheless agrees that it will, at its own cost and expense,
promptly take all action as may be necessary to discharge any liens on any part
of the Trust Estate that result from actions by, or claims against, the Owner
Trustee that are not related to the ownership or the administration of the
Trust Estate.
SECTION 6.05. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell, dispose
of or otherwise deal with any part of the Trust Estate except (i) in accordance
with the powers granted to and the authority conferred upon the Owner Trustee
pursuant to this Agreement, (ii) in accordance with the other Transaction
Documents and (iii) in accordance with any document or instruction delivered to
the Owner Trustee pursuant to Section 6.03.
SECTION 6.06. RESTRICTIONS. The Owner Trustee shall not take any
action (i) that is inconsistent with the purposes of the Trust set forth in
Section 2.03 or (ii) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation for federal or state
income tax purposes. The Owners shall not direct the Owner Trustee to take
action that would violate the provisions of this Section.
18
ARTICLE SEVEN
CONCERNING THE OWNER TRUSTEE
SECTION 7.01. ACCEPTANCE OF TRUSTS AND DUTIES. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement. The
Owner Trustee also agrees to disburse all moneys actually received by it
constituting part of the Trust Estate upon the terms of the Transaction
Documents and this Agreement. The Owner Trustee shall not be answerable or
accountable hereunder or under any other Transaction Document under any
circumstances, except (i) for its own willful misconduct or negligence or (ii)
in the case of the inaccuracy of any representation or warranty contained in
Section 7.03 expressly made by the Owner Trustee. In particular, but not by
way of limitation (and subject to the exceptions set forth in the preceding
sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made by a responsible officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the
instructions of the Administrator or any Owner;
(c) no provision of this Agreement or any other Transaction
Document shall require the Owner Trustee to expend or risk funds or
otherwise incur any financial liability in the performance of any of its
rights or powers hereunder or under any Transaction Document if the Owner
Trustee shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Transaction
Documents, including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect
of the validity or sufficiency of this Agreement or for the due execution
hereof by the Trust Depositor or for the form, character, genuineness,
sufficiency, value or validity of any of the Trust Estate, or for or in
respect of the validity or sufficiency of the Transaction Documents,
other than the certificate of authentication on the Trust Certificates,
and the Owner Trustee shall in no event assume or incur any liability,
duty, or obligation to any Noteholder or to any Owner, other than as
expressly provided for herein or expressly agreed to in the Transaction
Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Administrator, the Trust Depositor, the Indenture
Trustee or the Servicer under any of the Transaction Documents or
otherwise and the Owner Trustee shall have no obligation or liability to
perform the obligations of the Trust under this Agreement or the other
Transaction Documents that are required to be performed by the
Administrator under the Administration Agreement, the Indenture Trustee
under the Indenture or the Servicer, or the Trust Depositor under the
Sale and Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by the Agreement, or to
institute, conduct or defend any litigation under this Agreement or
otherwise or in relation to this Agreement or any other Transaction
Document, at the request, order or direction of the Owners, unless such
Owners have offered to the Owner Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may
be incurred by the Owner Trustee therein or thereby. The right of the
Owner Trustee to perform any discretionary act enumerated in this
Agreement or in any other Transaction Document shall not be construed as
a duty, and the Owner Trustee shall not be answerable for other than its
negligence or willful misconduct in the performance of any such act.
19
SECTION 7.02. FURNISHING OF DOCUMENTS. The Owner Trustee shall
furnish to the Owner promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Transaction Documents.
SECTION 7.03. REPRESENTATIONS AND WARRANTIES. The Owner Trustee
hereby represents and warrants to the Trust Depositor and the Owners that:
(a) It is a banking corporation duly organized and validly
existing in good standing under the laws of the State of Delaware. It
has all requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution an delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof
will contravene any federal or Delaware law, governmental rule or
regulation governing the banking or trust powers of the Owner Trustee or
any judgment or order binding on it, or constitute any default under its
charter documents or bylaws or any indenture, mortgage, contract,
agreement or instrument to which it is a party or by which any of its
properties may be bound or result in the creation or imposition of any
lien, charge or encumbrance on the Trust Estate resulting from actions by
or claims against the Owner Trustee individually which are unrelated to
this Agreement or the other Transaction Documents.
SECTION 7.04. RELIANCE; ADVICE OF COUNSEL.
(a) The Owner Trustee shall incur no liability to anyone in acting upon
any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by it to
be genuine and believed by it to be signed by the proper party or parties. The
Owner Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive evidence
that such resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of determination of
which is not specifically prescribed herein, the Owner Trustee may for all
purposes hereof rely on a certificate, signed by the president or any vice
president or by the treasurer or other authorized officers of the relevant
party, as to such fact or matter and such certificate shall constitute full
protection to the Owner Trustee for any action taken or omitted to be taken by
it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the other
Transaction Documents, the Owner Trustee (i) may act directly or through its
agents or attorneys pursuant to agreements entered into by any of them, and the
Owner Trustee shall not be liable for the conduct or misconduct of such agents
or attorneys shall have been selected by the Owner Trustee with reasonable
care, and (ii) may consult with counsel, accountants and other skilled persons
to be selected with reasonable care and employed by it. The Owner Trustee
shall not be liable for anything done, suffered or omitted in good faith by it
in accordance with the written opinion or advice of any such counsel,
accountants or other such persons.
SECTION 7.05. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided
in this Article Seven, in accepting the trusts hereby created, Wilmington Trust
Company acts solely as Owner Trustee hereunder and not in its individual
capacity, and all Persons having any claim against the Owner Trustee by reason
of the transactions contemplated by this Agreement or any other Transaction
Document shall look only to the Trust Estate for payment or satisfaction
thereof.
SECTION 7.06. OWNER TRUSTEE NOT LIABLE FOR TRUST CERTIFICATES, NOTES
OR CONTRACTS. The recitals contained herein and in the Trust Certificates
(other than the signature and countersignature of the Owner Trustee and the
certificate of authentication on the Trust Certificates) shall be taken as the
statements of the Trust Depositor, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity
20
or sufficiency of this Agreement, any other Transaction Document or the Trust
Certificates (other than the signature and countersignature of the Owner
Trustee and the certificate of authentication on the Trust Certificates) or
the Notes, or of any Contract or related documents. The Owner Trustee shall
at no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Contract, or the perfection and
priority of any security interest created by any Contract in any Motorcycle
or the maintenance of any such perfection and priority, or for or with
respect to the sufficiency of the Trust Estate or its ability to generate the
payments to be distributed to Certificateholders under this Agreement or the
Noteholders under the Indenture, including, without limitation, the
existence, condition and ownership of any Motorcycle; the existence and
enforceability of any insurance thereon; the existence and contents of any
Contract on any computer or other record thereof; the validity of the
assignment of any Contract to the Trust or of any intervening assignment; the
completeness of any Contract; the performance or enforcement of any Contract;
the compliance by the Trust Depositor or the Servicer with any warranty or
representation made under any Transaction Document or in any related document
or the accuracy of any such warranty or representation; or any action of the
Administrator, the Indenture Trustee or the Servicer or any subservicer taken
in the name of the Owner Trustee.
SECTION 7.07. OWNER TRUSTEE MAY OWN TRUST CERTIFICATES AND NOTES.
The Owner Trustee in its individual or any other capacity may become the owner
or pledgee of Trust Certificates or Notes and may deal with the Trust
Depositor, the Administrator, the Indenture Trustee and the Servicer in banking
transactions with the same rights as it would have if it were not Owner
Trustee.
21
ARTICLE EIGHT
COMPENSATION OF OWNER TRUSTEE
SECTION 8.01. OWNER TRUSTEE'S FEES AND EXPENSES. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have been
separately agreed upon and which shall be paid consistent with Section 7.05(a)
of the Sale and Servicing Agreement. Additionally, the Owner Trustee shall be
entitled to be reimbursed by the Trust Depositor for its other reasonable
expenses hereunder, including the reasonable compensation, expenses and
disbursements of such agents, representatives, experts and counsel as the Owner
Trustee may employ in connection with the exercise and performance of its
rights and its duties hereunder.
SECTION 8.02. INDEMNIFICATION. The Trust Depositor shall be liable
as primary obligor for, and shall indemnify the Owner Trustee and its
successors, assigns and servants (collectively, the "INDEMNIFIED PARTIES") from
and against, any and all liabilities, obligations, losses, damages, taxes,
claims, actions and suits, and any and all reasonable costs, expenses and
disbursements (including reasonable legal fees and expenses) of any kind and
nature whatsoever (collectively, "EXPENSES") which may at any time be imposed
on, incurred by or asserted against the Owner Trustee or any Indemnified Party
in any way relating to or arising out of this Agreement, the other Transaction
Documents, the Trust Estate, the administration of the Trust Estate or the
action or inaction of the Owner Trustee hereunder, except only that the Trust
Depositor shall not be liable for or required to indemnify an Indemnified Party
from and against Expenses arising or resulting from any of the matters
described in the third sentence of Section 7.01. The indemnities contained in
this Section shall survive the resignation or termination of the Owner Trustee
or the termination of this Agreement. In the event of any claim, action or
proceeding for which indemnity will be sought pursuant to this Section, the
Owner Trustee's choice of legal counsel shall be subject to the approval of the
Trust Depositor, which approval shall not be unreasonably withheld.
SECTION 8.03. PAYMENTS TO THE OWNER TRUSTEE. Any amounts paid to the
Owner Trustee pursuant to this Article shall be deemed not to be a part of the
Trust Estate immediately after such payment.
22
ARTICLE NINE
TERMINATION OF TRUST AGREEMENT
SECTION 9.01. TERMINATION OF TRUST AGREEMENT.
(a) This Agreement (other than Article Eight) and the Trust shall
terminate and be of no further force or effect upon the earlier of (i) final
distribution by the Owner Trustee of all moneys or other property or proceeds
of the Trust Estate in accordance with terms of the Indenture, the Sale and
Servicing Agreement and Article Five, (ii) the expiration of 21 years from the
death of the survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late
Ambassador of the United States to the Court of St. James's, living on the date
hereof and (iii) the time provided in Section 9.02. The bankruptcy,
liquidation, dissolution, death or incapacity of any Owner, other than the
Trust Depositor as described in Section 9.02, shall not (i) operate to
terminate this Agreement or the Trust, (ii) entitle such Owner's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of all or any part of the
Trust or Trust Estate or (iii) otherwise affect the rights, obligations and
liabilities of the parties hereto.
(b) Except as provided in Section 9.01(a), neither the Trust Depositor
nor any Holder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Distribution
Date upon which Certificateholders shall surrender their Trust Certificates to
the Paying Agent for payment of the final distribution and cancellation, shall
be given by the Owner Trustee by letter to Certificateholders mailed within
five Business Days of receipt of notice of such termination from the Servicer
given pursuant to Section 10.01 of the Sale and Servicing Agreement, stating
(i) the Distribution Date upon or with respect to which final payment of the
Trust Certificates shall be made upon presentation and surrender of the Trust
Certificates at the office of the Paying Agent therein designated, (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made
only upon presentation and surrender of the Trust Certificates at the office of
the Paying Agent therein specified. The Owner Trustee shall give such notice
to the Certificate Registrar (if other than the Owner Trustee) and the Paying
Agent at the time such notice is given to Certificateholders. Upon
presentation and surrender of the Trust Certificates, the Paying Agent shall
cause to be distributed to Certificateholders amounts distributable on such
Distribution Date pursuant to Section 5.02.
(d) In the event that all of the Certificateholders shall not surrender
their Trust Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Owner Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Trust Certificates for cancellation and receive the final distribution with
respect thereto. If within one year after the second notice all the Trust
Certificates shall not have been surrendered for cancellation, the Owner
Trustee may take appropriate steps, or may appoint an agent to take appropriate
steps, to contact the remaining Certificateholders concerning surrender of
their Trust Certificates, and the cost thereof shall be paid out of the funds
and other assets that shall remain subject to this Agreement. Any funds
remaining in the Trust after exhaustion of such remedies shall be distributed
by the Owner Trustee to the Trust Depositor.
(e) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
SECTION 9.02. DISSOLUTION UPON BANKRUPTCY OF TRUST DEPOSITOR OR
WITHDRAWAL OR REMOVAL OF TRUST DEPOSITOR. In the event that an Insolvency
Event shall occur with respect to the Trust Depositor or the Trust Depositor
shall withdraw, liquidate or be removed from the Trust, this Agreement shall
be terminated in accordance with Section 9.01 90 days after the date of such
event, unless before the end of such 90-day period, the Owner Trustee shall
have received written instructions from (a) Certificateholders (other than
the Trust Depositor) representing more than 50% of the Certificate Balance
(not including the Certificate Balance of the Trust Certificate held by the
Trust Depositor) and (b) each of the (i) Holders (as defined in the
Indenture) of Class A-1 Notes representing more than 50% of the Outstanding
Amount of the Class A-1 Notes and (ii) Holders (as defined in the Indenture)
of Class A-2 Notes
23
representing more than 50% of the Outstanding Amount of the Class A-2 Notes,
to the effect that each such party disapproves of the liquidation of the
Collateral and termination of the Trust. Promptly after the occurrence of
any Insolvency Event with respect to the Trust Depositor, (A) the Trust
Depositor shall give the Indenture Trustee and the Owner Trustee written
notice of such Insolvency Event, (B) the Owner Trustee shall, upon the
receipt of such written notice from the Trust Depositor, give prompt written
notice to the Certificateholders and the Indenture Trustee, of the occurrence
of such event and (C) the Indenture Trustee shall, upon receipt of written
notice of such Insolvency Event from the Owner Trustee or the Trust
Depositor, give prompt written notice to the Noteholders of the occurrence of
such event; PROVIDED, HOWEVER, that any failure to give a notice required by
this sentence shall not prevent or delay, in any manner, a termination of the
Trust pursuant to the first sentence of this Section 9.02. Upon a
termination pursuant to this Section, the Owner Trustee shall direct the
Indenture Trustee promptly to sell the assets of the Trust (other than the
Trust Accounts and the Certificate Distribution Account) in a commercially
reasonable manner and on commercially reasonable terms. The proceeds of such
a sale of the assets of the Trust shall be treated as collections under the
Sale and Servicing Agreement.
24
ARTICLE TEN
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.01. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall at all times be a corporation satisfying the provisions of
Section 3807(a) of the Business Trust Statute; authorized to exercise
corporate trust powers; having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authorities; and having (or having a parent that has) a rating of at least Baa3
by ▇▇▇▇▇'▇. If such corporation shall publish reports of condition at least
annually pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of this Section, the Owner Trustee shall resign immediately
in the manner and with the effect specified in Section 10.02.
SECTION 10.02. RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Administrator. Upon receiving such
notice of resignation, the Administrator shall promptly appoint a successor
Owner Trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Owner Trustee and one copy to the successor
Owner Trustee. If no successor Owner Trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 10.01 and shall fail to resign after written
request therefor by the Administrator, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or
a receiver of the Owner Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Administrator, may remove the Owner Trustee. If the
Administrator shall remove the Owner Trustee under the authority of the
immediately preceding sentence, the Administrator shall promptly appoint a
successor Owner Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the outgoing Owner Trustee so removed and one
copy to the successor Owner Trustee, and shall pay all fees owed to the
outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.03 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Administrator shall provide notice of such
resignation or removal of the Owner Trustee to each Rating Agency.
SECTION 10.03. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to
the Administrator, and to its predecessor Owner Trustee an instrument accepting
such appointment under this Agreement, and thereupon the resignation or removal
of the predecessor Owner Trustee shall become effective, and such successor
Owner Trustee, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
under this Agreement, with like effect as if originally named as Owner Trustee.
The predecessor Owner Trustee shall upon payment of its fees and expenses
deliver to the successor Owner Trustee all documents and statements and monies
held by it under this Agreement; and the Administrator and the predecessor
Owner Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Owner Trustee all such rights, powers, duties and
obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Administrator shall mail notice thereof to all
Certificateholders, the Indenture Trustee, the Noteholders and each Rating
Agency. If the
25
Administrator shall fail to mail such notice within ten days after acceptance
of such appointment by the successor Owner Trustee, the successor Owner
Trustee shall cause such notice to be mailed at the expense of the
Administrator.
SECTION 10.04. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, without the execution or filing of any instrument or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; PROVIDED, that such corporation shall be eligible pursuant to
Section 10.01 and, PROVIDED, FURTHER, that the Owner Trustee shall mail notice
of such merger or consolidation to each Rating Agency.
SECTION 10.05. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Estate or any financed Motorcycle may at the time be located, the
Administrator and the Owner Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Administrator and Owner Trustee to act as co-trustee, jointly
with the Owner Trustee, or as separate trustee or separate trustees, of all or
any part of the Trust Estate, and to vest in such Person, in such capacity,
such title to the Trust or any part thereof and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Administrator and the Owner Trustee may consider necessary or desirable.
If the Administrator shall not have joined in such appointment within 15 days
after the receipt by it of a request so to do, the Owner Trustee alone shall
have the power to make such appointment. No co-trustee or separate trustee
under this Agreement shall be required to meet the terms of eligibility as a
successor Owner Trustee pursuant to Section 10.01 and no notice of the
appointment of any co-trustee or separate trustee shall be required pursuant to
Section 10.03.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Owner Trustee joining in
such act), except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed, the Owner Trustee
shall be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the holding
of title to the Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Owner Trustee;
(b) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and
(c) the Administrator and the Owner Trustee acting jointly may at
any time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Owner Trustee or separately, as may be provided therein, subject to all
the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of or
affording protection to, the Owner Trustee. Each such instrument shall be
filed with the Owner Trustee and a copy thereof given to the Administrator.
26
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Owner Trustee, to the extent permitted by law, without the appointment
of a new or successor co-trustee or separate trustee.
27
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. SUPPLEMENTS AND AMENDMENTS.
(a) The Agreement may be amended by the Trust Depositor, and the Owner
Trustee, without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or to add any other provisions with respect to
matters or questions arising under this Agreement that shall not be
inconsistent with the provisions of this Agreement; PROVIDED, HOWEVER, that any
such action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any Noteholder or Certificateholder.
(b) This Agreement may also be amended from time to time by the Trust
Depositor, and the Owner Trustee, with the consent of the Holders (as such
term is defined in the Indenture) of Notes evidencing not less than 66 2/3% of
the Outstanding Amount of the Notes, each voting as a separate Class and the
consent of the Holders of Trust Certificates evidencing not less than 66 2/3%
of the Certificate Balance (which consent of any Holder of a Note or Trust
Certificate given pursuant to this Section or pursuant to any other provision
of this Agreement shall be conclusive and binding on such Holders and on all
future Holder of such Note or Trust Certificate, as the case may be, issued
upon the transfer thereof or in exchange thereof or in lieu thereof whether or
not notation of such consent is made thereon), 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 or
the Certificateholders; PROVIDED, HOWEVER, that no such amendment shall
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, (i) collections of payments on Contracts or distributions that shall
be required to be made for the benefit of the Noteholders or the
Certificateholders or any Interest Rate or the Pass-Through Rate or (ii) reduce
the aforesaid percentage of the Outstanding Amount of the Notes and the
Certificate Balance required to consent to any such amendment, without the
consent of the Holders of all outstanding Notes and Trust Certificates.
(c) Prior to the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment
or consent, together with a copy thereof, to the Indenture Trustee, the
Administrator and each Rating Agency.
(d) Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder. It shall not be necessary for
the consent of Certificateholders, Noteholders or the Indenture Trustee
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of Certificateholders provided for in this Agreement or in any other
Transaction Document) and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable requirements
as the Owner Trustee may prescribe.
(e) Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
(f) Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Owner Trustee may, but shall
not be obligated to, enter into any such amendment that affects the Owner
Trustee's own rights, duties or immunities under this Agreement or otherwise.
SECTION 11.02. NO LEGAL TITLE TO TRUST ESTATE IN OWNERS. The Owners
shall not have legal title to any part of the Trust Estate. The Owners shall
be entitled to receive distributions with respect to their undivided ownership
interest herein only in accordance with Articles Five and Nine. No transfer,
by operation of law or otherwise, of any right, title or interest of the Owners
to and in their ownership interest in the Trust Estate shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee to
an accounting or to the transfer to it of legal title to any part of the Trust
Estate.
28
SECTION 11.03. LIMITATIONS ON RIGHTS OF OTHERS. Except for Section
2.07, the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Trust Depositor, the Owners, the Administrator and, to the extent
expressly provided herein, the Indenture Trustee and the Noteholders, and
nothing in this Agreement (other than Section 2.07), whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
SECTION 11.04. NOTICES. All notices, demands, certificates, requests
and communications hereunder ("NOTICES") shall be in writing and shall be
effective (a) upon receipt when sent through the U.S. mails, registered or
certified mail, return receipt requested, postage prepaid, with such receipt to
be effective the date of delivery indicated on the return receipt, or (b) one
Business Day after delivery to an overnight courier, or (c) on the date
personally delivered to an Authorized Officer of the party to which sent, or
(d) on the date transmitted by legible telecopier transmission with a
confirmation of receipt, in all cases addressed to the recipient as follows:
(i) If to the Servicer or Seller:
Eaglemark, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to the Trust Depositor:
Eaglemark Customer Funding Corporation-IV
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) If to the Indenture Trustee:
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Indenture Trust Administration
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(iv) If to the Owner Trustee:
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(v) If to Moody's:
29
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ABS Monitoring Department
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(vi) If to Standard & Poor's:
Standard & Poor's Ratings Services, A
Division of The McGraw Hill Companies
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(vii) If to the Underwriters:
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Asset-Backed Securities Group
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
[ ]
Telecopier No.: [ ]
Each party hereto may, by notice given in accordance herewith to each of the
other parties hereto, designate any further or different address to which
subsequent notices shall be sent.
SECTION 11.05. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the Trust
Certificates or the rights of the Holders thereof.
SECTION 11.06. COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
SECTION 11.07. SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of
the Trust Depositor, and the Owner Trustee and their respective successors and
permitted assigns and each Owner and its successors and permitted assigns, all
as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by an Owner shall bind the successors and assigns of such
Owner.
SECTION 11.08. COVENANTS OF THE TRUST DEPOSITOR. In the event that
(a) the Certificate Balance shall be reduced by Realized Losses and (b) any
litigation with claims in excess of $1,000,000 to which the Trust Depositor
is a party which shall be reasonably likely to result in a material judgment
against the Trust Depositor that the Trust Depositor will not be able to
satisfy shall be commenced, during the period beginning immediately following
the
30
commencement of such litigation and continuing until such litigation is
dismissed or otherwise terminated (and, if such litigation has resulted in a
final judgment against the Trust Depositor, such judgment has been
satisfied), the Trust Depositor shall not pay any dividend to the Servicer,
or make any distribution on or in respect of its capital stock to the
Servicer, or repay the principal amount of any indebtedness of the Trust
Depositor held by the Servicer, unless (i) after giving effect to such
payment, distribution or repayment, the Trust Depositor's liquid assets shall
not be less than the amount of actual damages claimed in such litigation or
(ii) the Rating Agencies shall not downgrade the then existing rating on the
Certificates with respect to any such payment, distribution or repayment.
The Trust Depositor will not at any time institute against the Trust any
bankruptcy proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Certificates,
the Notes, the Trust Agreement or any of the Transaction Documents.
SECTION 11.09. NO PETITION.
(a) The Trust Depositor will not at any time institute against the
Trust any bankruptcy proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Trust Certificates, the Notes, this Agreement or any of the other Transaction
Documents.
(b) The Owner Trustee, by entering into this Agreement, each
Certificateholder, by accepting a Trust Certificate, and the Indenture Trustee
and each Noteholder, by accepting the benefits of this Agreement, hereby
covenant and agree that they will not at any time institute against the Trust
Depositor or the Trust, or join in any institution against the Trust Depositor,
or the Trust of, any bankruptcy proceedings under any United States federal or
state bankruptcy or similar law in connection with any obligations relating to
the Trust Certificates, the Notes, this Agreement or any of the other
Transaction Documents.
SECTION 11.10. NO RECOURSE. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Certificateholder's Trust Certificates
represent beneficial interests in the Trust only and do not represent interests
in or obligations of the Trust Depositor, the Servicer, the Seller, the
Administrator, the Owner Trustee, the Indenture Trustee or any of the
respective Affiliates and no recourse may be had against such parties or their
assets, except as my be expressly set forth or contemplated in this Agreement,
the Trust Certificates or the other Transaction Documents.
SECTION 11.11. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.13. TRUST CERTIFICATE TRANSFER RESTRICTIONS. The Trust
Certificates may not be acquired by or for the account of a Benefit Plan. By
accepting and holding a Trust Certificate, the Holder thereof shall be deemed
to have represented and warranted that it is not a Benefit Plan nor will it
hold such Trust Certificate for the account of a Benefit Plan. By accepting
and holding a Trust Certificate, the Holder thereof shall be deemed to have
represented and warranted that it is not a Benefit Plan.
SECTION 11.14. TRUST DEPOSITOR PAYMENT OBLIGATION. The Trust
Depositor shall be responsible for payment of the Administrator's compensation
pursuant to Section 3 of the Administration Agreement and shall reimburse the
Administrator for all expenses and liabilities of the Administrator incurred
thereunder.
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers hereunto duly authorized, as of the
day and year first above written.
EAGLEMARK CUSTOMER FUNDING CORPORATION-IV,
as Trust Depositor
By:
--------------------------------------------
Printed Name:
-------------------------
Title:
---------------------------------
WILMINGTON TRUST COMPANY, as Owner Trustee
By:
--------------------------------------------
Printed Name:
-------------------------
Title:
---------------------------------
EXHIBIT A
CERTIFICATE OF TRUST OF
HARLEY-DAVIDSON EAGLEMARK MOTORCYCLE TRUST [ ]
This Certificate of Trust of Harley-Davidson Eaglemark Motorcycle Trust
[ ] (the "TRUST"), dated [ ], is being duly executed and filed by
Wilmington Trust Company, a Delaware banking corporation, as Owner Trustee, to
form a business trust under the Delaware Business Trust Act (12 DEL. CODE,
Section 3801 ET SEQ.).
1. NAME. The name of the business trust formed hereby is
Harley-Davidson Eaglemark Motorcycle Trust [ ].
2. DELAWARE TRUSTEE. The name and business address of the Owner
Trustee of the Trust in the State of Delaware is Wilmington Trust Company,
▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
IN WITNESS WHEREOF, the undersigned, being the sole Owner Trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as
Owner Trustee
By:
----------------------------------------
Printed Name:
-----------------------
Title:
------------------------------
A-1
EXHIBIT B
[TO BE INSERTED ON CEDE & CO. CERTIFICATE -
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUST OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THIS TRUST CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE NOTES TO THE
EXTENT DESCRIBED IN THE SALE AND SERVICING AGREEMENT AND INDENTURE REFERRED TO
HEREIN.
THIS TRUST CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
EAGLEMARK CUSTOMER FUNDING CORPORATION-IV, EAGLEMARK, INC. OR ANY AFFILIATE
THEREOF, EXCEPT TO THE EXTENT SET FORTH IN THE TRUST AGREEMENT. THIS TRUST
CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY
STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN UNLESS THE
CONDITIONS SET FORTH IN SECTION 3.04 OF THE TRUST AGREEMENT HAVE BEEN COMPLIED
WITH.
[TO BE INSERTED ON COMPANY CERTIFICATE--
THIS CERTIFICATE IS NON-TRANSFERABLE]
HARLEY-DAVIDSON EAGLEMARK MOTORCYCLE TRUST [ ] CERTIFICATE
NO. ___________
Initial Trust Certificate
Principal Balance $______________
Fractional Interest _________%
THIS CERTIFIES THAT is the registered owner of equity
$ nonassessable, fully-paid, fractional undivided interest in
the Harley-Davidson Eaglemark Motorcycle Trust [ ] (the "TRUST") formed by
Eaglemark Customer Funding Corporation-IV, a Nevada corporation (the "TRUST
DEPOSITOR").
The Trust was created pursuant to a Trust Agreement, dated as of [ ]
(as amended and supplemented from time to time, the "TRUST AGREEMENT"), among
Eaglemark Customer Funding Corporation-IV, as Trust Depositor (the "TRUST
DEPOSITOR"), Eaglemark, Inc. (the "SELLER") and Wilmington Trust Company, as
owner trustee (the "OWNER TRUSTEE"), a summary of certain of the pertinent
provisions of which is set forth below. To the extent not otherwise defined
herein, the capitalized terms used herein have the meanings assigned to them in
(i) the Trust Agreement, (ii) the Sale and Servicing Agreement, dated as of [
] (the "SALE AND SERVICING AGREEMENT"), among the Trust, Eaglemark
Customer Funding Corporation-IV, as depositor (the "TRUST DEPOSITOR"),
Eaglemark, Inc. ("EAGLEMARK"), as Servicer (in such capacity, the "SERVICER")
and ▇▇▇▇▇▇ Trust and Savings Bank, as Indenture Trustee (the "Indenture
Trustee") or (iii) the Indenture, dated as of [ ] (the
"INDENTURE"), between the Trust and the Indenture Trustee.
This Trust Certificate is one of the duly authorized Trust Certificates
designated as "___% HARLEY-DAVIDSON MOTORCYCLE CONTRACT BACKED CERTIFICATES"
(the "TRUST CERTIFICATES"). Also issued under the Indenture are two classes of
notes designated as "___% HARLEY-DAVIDSON MOTORCYCLE CONTRACT BACKED NOTES,
CLASS A-1" and "___% HARLEY-
B-1
DAVIDSON MOTORCYCLE CONTRACT BACKED NOTES, CLASS A-2" (collectively, the
"NOTES"). This Trust Certificate is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the Holder of this Trust Certificate by virtue of its acceptance
hereof assents and by which such Holder is bound. The property of the Trust
includes, among other things, (i) all the right, title and interest of the
Trust Depositor in and to the Initial Contracts listed on the initial List of
Contracts delivered on the Closing Date (including, without limitation, all
security interests and all rights to receive payments which are collected
pursuant thereto on or after the Initial Cutoff Date, including any
liquidation proceeds therefrom, but excluding any rights to receive payments
which were collected pursuant thereto prior to the Initial Cutoff Date), (ii)
all rights of the Trust Depositor under any physical damage or other
individual insurance policy (and rights under a "FORCED PLACED" policy, if
any) relating to any such Contract, an Obligor or a Motorcycle securing such
Contract, (iii) all security interests in each such Motorcycle, (iv) all
documents contained in the related Contract Files, (v) all rights (but not
the obligations) of the Trust Depositor under any related motorcycle dealer
agreements between dealers (i.e., the originators of such Contracts) and the
Trust Depositor, (vi) all rights of the Trust Depositor in the Lockbox, the
Lockbox Account and related Lockbox Agreement to the extent they relate to
such Contracts, (vii) all rights (but not the obligations) of the Trust
Depositor under the Transfer and Sale Agreement, including but not limited to
the Trust Depositor's rights under Article V thereof, (viii) the remittances,
deposits and payments made into the Trust Accounts from time to time and
amounts in the Trust Accounts from time to time (and any investments of such
amounts), and (ix) all proceeds and products of the foregoing (the property
in clauses (i)-(viii) above.
Under the Trust Agreement, there will be distributed on the fifteenth day
of each month or if such day is not a Business Day the next succeeding Business
Day commencing [ ] (each, a "DISTRIBUTION DATE") and ending no later
than the Distribution Date in ___ to the person in whose name this Trust
Certificate is registered as of the last Business Day immediately preceding the
calendar month in which such Distribution Date occurs (each, a "RECORD DATE"),
such Certificateholder's fractional undivided interest in the amount to be
distributed to Certificateholders on such Distribution Date.
The holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate are
subordinated to the rights of the Noteholders to the extent described in the
Sale and Servicing Agreement and the Indenture.
It is the intent of the Seller, the Servicer, the Trust Depositor, Owner
Trustee, Indenture Trustee and the Certificateholders that, for purposes of
federal income, state and local income and single business tax and any other
income taxes, the Trust will be treated as a partnership and the
Certificateholders (including the Trust Depositor) will be treated as partners
in that partnership. The Trust Depositor and the other Certificateholders, by
acceptance of a Trust Certificate, agree to treat, and to take no action
inconsistent with the treatment of, the Trust Certificates for such tax
purposes as partnership interests in the Trust and the Certificateholders
(including the Trust Depositor) as partners in that partnership.
Each Certificateholder, by its acceptance of a Trust Certificate or
beneficial interest in a Trust Certificate, covenants and agrees that such
Certificateholder will not at any time institute against the Trust or the Trust
Depositor, or join in any institution against the Trust or the Trust Depositor,
Eaglemark or the Servicer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Trust Certificates, the Notes, the Trust Agreement
or any of the other Transaction Documents.
Distributions on this Trust Certificate will be made as provided in the
Trust Agreement by the Owner Trustee or its Agent by wire transfer or check
mailed to the Certificateholder of record in the Certificate Register without
the presentation or surrender of this Trust Certificate or the making of any
notation hereon, except that with respect to Trust Certificates registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except
as otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Trust Certificate will be made after due notice by
the Owner Trustee of the pendency of such distribution and only upon
presentation and surrender of this Trust Certificate at the office or agency
maintained for that purpose by the Owner Trustee in the City of Wilmington,
Delaware.
B-2
Reference is hereby made to the further provisions of this Trust
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Owner Trustee, by manual signature, this Trust
Certificate shall not entitle the holder hereof to any benefit under the Trust
Agreement or any other Transaction Document or be valid for any purpose.
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
B-3
[REVERSE OF CERTIFICATE]
The Trust Certificate does not represent an obligation of, or an interest
in the Trust Depositor, Eaglemark, as the Seller or Servicer, the Owner
Trustee, the Indenture Trustee or any of their respective Affiliates and no
recourse may be had against such parties or their assets, except as expressly
set forth or contemplated herein or in the Trust Agreement or the other
Transaction Documents. In addition, this Trust Certificate is not guaranteed
by any governmental agency or instrumentality and is limited in right of
payment to certain collections and recoveries with respect to the Contracts and
certain other amounts, in each case as more specifically set forth herein and
in the Sale and Servicing Agreement. A copy of each of the Sale and Servicing
Agreement and the Trust Agreement may be examined by any Certificateholder upon
written request during normal business hours at the principal office of the
Trust Depositor and at such other places, if any, designated by the Trust
Depositor.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Trust Depositor and the rights of the Certificateholders under the Trust
Agreement at any time by the Trust Depositor and the Owner Trustee with the
consent of the Holders of the Trust Certificates and the Notes, each voting as
a separate class, evidencing not less than 66 2/3% of the Certificate Balance
and 66 2/3% of the Outstanding Amount of the Notes. Any such consent by the
Holder of this Trust Certificate shall be conclusive and binding on such Holder
and on all future Holders of this Trust Certificate and of any Trust
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent is made upon this Trust
Certificate. The Trust Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Trust Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Trust Certificate is registerable in
the Certificate Register upon surrender of this Trust Certificate for
registration of transfer at the offices or agencies of the Certificate
Registrar maintained by the Owner Trustee in Wilmington, Delaware, accompanied
by a written instrument of transfer in form satisfactory to the Owner Trustee
and the Certificate Registrar in Chicago, Illinois executed by the Holder
hereof or such Holder's attorney duly authorized in writing, and thereupon one
or more new Trust Certificates of authorized denominations evidencing the same
aggregate interest in the Trust will be issued to the designated transferee.
The initial Certificate Registrar appointed under the Trust Agreement is ▇▇▇▇▇▇
Trust and Savings Bank.
Except as provided in the Trust Agreement, the Trust Certificates are
issuable only as registered Trust Certificates without coupons in denominations
of $1,000 and in integral multiples of $1,000 in excess thereof. As provided
in the Trust Agreement and subject to certain limitations therein set forth,
Trust Certificates are exchangeable for new Trust Certificates of authorized
denominations evidencing the same aggregate denomination, as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Registrar and any of their respective
agents may treat the Person in whose name this Trust Certificate is registered
as the owner hereof for all purposes, and none of the Owner Trustee, the
Certificate Registrar or any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Sale and Servicing Agreement and the deposition of all
property held as part of the Trust Estate. The Trust Depositor may at its
option purchase the Trust Estate at a price specified in the Sale and Servicing
Agreement, and such purchase of the Contracts and other property of the Trust
will affect early retirement of the Trust Certificates; however, such right of
purchase is exercisable only as of any Distribution Date on which the Pool
Balance has declined to less than 10% of the Initial Pool Balance.
B-4
The Trust Certificates may not be acquired by a Benefit Plan. By
accepting and holding this Trust Certificate, the Holder hereof or, in the case
of Book-Entry Trust Certificate, by accepting a beneficial interest in this
Trust Certificate, the related Certificate Owner, shall be deemed to have
represented and warranted that it is not a Benefit Plan and is not acquiring
this Trust Certificate or an interest therein for the account of such an
entity.
B-5
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Trust Certificate to be duly executed.
Dated: HARLEY-DAVIDSON EAGLEMARK MOTORCYCLE TRUST [ ]
By: WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as Owner Trustee
By:
--------------------------------------------------
Authorized Signatory
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the within-mentioned
Trust Agreement.
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee
By:
-------------------------------
Authorized Signatory
B-6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
------------------------------------------------------------------------------
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
------------------------------------------------------------------------------
to transfer said Trust Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
----------
Signature Guaranteed:
------------------------------------
NOTICE: Signature(s) must be
guaranteed by an eligible guarantor
institution.
------------------------------------
NOTICE: The signature to this
assignment must correspond with the
name of the registered owner as it
appears on the face of the within
Trust Certificate in every
particular, without alteration or
enlargement or any change whatever.
B-7