EXHIBIT 10.1
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FORM OF
SALE AND SERVICING AGREEMENT
among
HARLEY-DAVIDSON EAGLEMARK MOTORCYCLE TRUST [ ],
as Issuer,
EAGLEMARK CUSTOMER FUNDING CORPORATION-IV,
as Trust Depositor,
EAGLEMARK, INC.,
as Servicer
and
XXXXXX TRUST AND SAVINGS BANK,
as Indenture Trustee
Dated as of [ ]
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PAGE
TABLE OF CONTENTS
ARTICLE ONE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. USAGE OF TERMS.. . . . . . . . . . . . . . . . . . . . .15
SECTION 1.03. SECTION REFERENCES.. . . . . . . . . . . . . . . . . . .15
SECTION 1.04. CALCULATIONS.. . . . . . . . . . . . . . . . . . . . . .15
SECTION 1.05. ACCOUNTING TERMS.. . . . . . . . . . . . . . . . . . . .15
ARTICLE TWO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACTS . . . . . . . . . . . . . .16
SECTION 2.01. CLOSING. . . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 2.02. CONDITIONS TO THE CLOSING. . . . . . . . . . . . . . . .17
SECTION 2.03. ACCEPTANCE BY OWNER TRUSTEE. . . . . . . . . . . . . . .18
SECTION 2.04. CONVEYANCE OF SUBSEQUENT CONTRACTS.. . . . . . . . . . .18
ARTICLE THREE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . .21
SECTION 3.01. REPRESENTATIONS AND WARRANTIES REGARDING THE TRUST
DEPOSITOR. . . . . . . . . . . . . . . . . . . . . . .21
SECTION 3.02. REPRESENTATIONS AND WARRANTIES REGARDING THE
SERVICER.. . . . . . . . . . . . . . . . . . . . . . .22
ARTICLE FOUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS . . . . . . .24
SECTION 4.01. CUSTODY OF CONTRACTS.. . . . . . . . . . . . . . . . . .24
SECTION 4.02. FILING.. . . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 4.03. NAME CHANGE OR RELOCATION. . . . . . . . . . . . . . . .25
SECTION 4.04. CHIEF EXECUTIVE OFFICE.. . . . . . . . . . . . . . . . .25
SECTION 4.05. COSTS AND EXPENSES.. . . . . . . . . . . . . . . . . . .25
ARTICLE FIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
SERVICING OF CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 5.01. RESPONSIBILITY FOR CONTRACT ADMINISTRATION.. . . . . . .26
SECTION 5.02. STANDARD OF CARE.. . . . . . . . . . . . . . . . . . . .26
SECTION 5.03. RECORDS. . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 5.04. INSPECTION.. . . . . . . . . . . . . . . . . . . . . . .26
SECTION 5.05. TRUST ACCOUNTS.. . . . . . . . . . . . . . . . . . . . .26
SECTION 5.06. ENFORCEMENT. . . . . . . . . . . . . . . . . . . . . . .27
SECTION 5.07. TRUSTEES TO COOPERATE. . . . . . . . . . . . . . . . . .28
SECTION 5.08. COSTS AND EXPENSES.. . . . . . . . . . . . . . . . . . .28
SECTION 5.09. MAINTENANCE OF SECURITY INTERESTS IN MOTORCYCLES.. . . .29
SECTION 5.10. SUCCESSOR SERVICER/LOCKBOX AGREEMENTS. . . . . . . . . .29
ARTICLE SIX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
THE TRUST DEPOSITOR . . . . . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 6.01. CORPORATE EXISTENCE. . . . . . . . . . . . . . . . . . .30
SECTION 6.02. LIABILITY OF TRUST DEPOSITOR; INDEMNITIES. . . . . . . .30
SECTION 6.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, TRUST DEPOSITOR; CERTAIN
LIMITATIONS. . . . . . . . . . . . . . . . . . . . . .31
SECTION 6.04. LIMITATION ON LIABILITY OF TRUST DEPOSITOR AND
OTHERS.. . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 6.05. TRUST DEPOSITOR NOT TO RESIGN. . . . . . . . . . . . . .32
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PAGE
SECTION 6.06. TRUST DEPOSITOR WILL OWN CERTIFICATES. . . . . . . . . .32
ARTICLE SEVEN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
DISTRIBUTIONS; RESERVE FUND . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 7.01. MONTHLY DISTRIBUTIONS. . . . . . . . . . . . . . . . . .33
SECTION 7.02. FEES.. . . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 7.03. ADVANCES; REALIZATION OF CARRYING CHARGE.. . . . . . . .33
SECTION 7.04. INTEREST RESERVE ACCOUNT.. . . . . . . . . . . . . . . .33
SECTION 7.05. DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . .34
SECTION 7.06. RESERVE FUND; CERTIFICATE RESERVE AMOUNT.. . . . . . . .35
SECTION 7.07. ESTABLISHMENT OF PRE-FUNDING ACCOUNT.. . . . . . . . . .35
SECTION 7.08. REPURCHASES OF CONTRACTS FOR BREACH OF
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . .36
SECTION 7.09. REASSIGNMENT OF REPURCHASED CONTRACTS. . . . . . . . . .36
SECTION 7.10. SELLER'S REPURCHASE OPTION.. . . . . . . . . . . . . . .37
ARTICLE EIGHT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
EVENTS OF TERMINATION; SERVICE TRANSFER . . . . . . . . . . . . . . . . .38
SECTION 8.01. EVENTS OF TERMINATION. . . . . . . . . . . . . . . . . .38
SECTION 8.02. SERVICE TRANSFER.. . . . . . . . . . . . . . . . . . . .38
SECTION 8.03. SUCCESSOR SERVICER TO ACT; APPOINTMENT OF SUCCESSOR
SERVICER.. . . . . . . . . . . . . . . . . . . . . . .39
SECTION 8.04. NOTIFICATION TO CERTIFICATEHOLDERS.. . . . . . . . . . .39
SECTION 8.05. EFFECT OF TRANSFER.. . . . . . . . . . . . . . . . . . .39
SECTION 8.06. DATABASE FILE. . . . . . . . . . . . . . . . . . . . . .40
SECTION 8.07. SUCCESSOR SERVICER INDEMNIFICATION.. . . . . . . . . . .40
SECTION 8.08. RESPONSIBILITIES OF THE SUCCESSOR SERVICER.. . . . . . .40
ARTICLE NINE. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 9.01. MONTHLY REPORTS. . . . . . . . . . . . . . . . . . . . .41
SECTION 9.02. OFFICER'S CERTIFICATE. . . . . . . . . . . . . . . . . .41
SECTION 9.03. OTHER DATA.. . . . . . . . . . . . . . . . . . . . . . .41
SECTION 9.04. ANNUAL REPORT OF ACCOUNTANTS.. . . . . . . . . . . . . .41
SECTION 9.05. ANNUAL STATEMENT OF COMPLIANCE FROM SERVICER.. . . . . .42
SECTION 9.06. MONTHLY REPORTS TO SECURITYHOLDERS.. . . . . . . . . . .42
ARTICLE TEN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
SECTION 10.01. SALE OF TRUST ASSETS.. . . . . . . . . . . . . . . . . .44
ARTICLE ELEVEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
SECTION 11.01. AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . .45
SECTION 11.02. PROTECTION OF TITLE TO TRUST.. . . . . . . . . . . . . .45
SECTION 11.03. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . .47
SECTION 11.04. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . .47
SECTION 11.05. SEVERABILITY OF PROVISIONS.. . . . . . . . . . . . . . .48
SECTION 11.06. ASSIGNMENT.. . . . . . . . . . . . . . . . . . . . . . .48
SECTION 11.07. THIRD PARTY BENEFICIARIES. . . . . . . . . . . . . . . .48
SECTION 11.08. COUNTERPARTS.. . . . . . . . . . . . . . . . . . . . . .48
SECTION 11.09. HEADINGS.. . . . . . . . . . . . . . . . . . . . . . . .48
SECTION 11.10. LIMITATION OF LIABILITY OF OWNER TRUSTEE AND
INDENTURE TRUSTEE. . . . . . . . . . . . . . . . . . .49
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PAGE
Exhibit A
[Form of Assignment]. . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B
[Form of Closing Certificate of Trust Depositor]. . . . . . . . . . . . B-1
Exhibit C
[Form of Closing Certificate of Servicer/Seller]. . . . . . . . . . . . C-1
Exhibit D
[Form of Opinion of Counsel for Trust Depositor
Regarding General Corporate Matters
(Including Perfection Opinion). . . . . . . . . . . . . . . . . . . . . D-1
Exhibit E
[Form of Opinion of Counsel for Trust
Depositor Regarding the "TRUE SALE" Nature
of the Transaction] . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
Exhibit F
[Form of Opinion of Counsel for Trust
Depositor Regarding Non-consolidation]. . . . . . . . . . . . . . . . . F-1
Exhibit G
[Form of Certificate Regarding Repurchased Contracts] . . . . . . . . . G-1
Exhibit H
[List of Contracts] . . . . . . . . . . . . . . . . . . . . . . . . . . H-1
Exhibit I
[Form of Monthly Report to Noteholders And Certificateholders]. . . . . I-1
Exhibit J
[Seller's Representations and Warranties] . . . . . . . . . . . . . . . J-1
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Exhibit K
[Lockbox Bank and Lockbox Account]. . . . . . . . . . . . . . . . . . . K-1
Exhibit L
[Form of Contract Stamp]. . . . . . . . . . . . . . . . . . . . . . . . L-1
Exhibit M
[Form of Subsequent Transfer Agreement] . . . . . . . . . . . . . . . . M-1
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EXHIBITS
Exhibit A Form of Assignment . . . . . . . . . . . . . . . . . . . A-1
Exhibit B Form of Closing Certificate of Trust Depositor . . . . . B-1
Exhibit C Form of Closing Certificate of Seller/Servicer . . . . . C-1
Exhibit D Form of Opinion of Counsel for Trust Depositor
regarding general corporate matters (including
perfection opinion). . . . . . . . . . . . . . . . . . D-1
Exhibit E Form of Opinion of Counsel for Trust Depositor
regarding the "TRUE SALE" nature of the
transaction . . . . . . . . . . . . . . . . . . . . . E-1
Exhibit F Form of Opinion of Counsel for Trust Depositor
regarding non-consolidation. . . . . . . . . . . . . . F-1
Exhibit G Form of Certificate Regarding Repurchased Contracts. . . G-1
Exhibit H List of Contracts. . . . . . . . . . . . . . . . . . . . H-1
Exhibit I Form of Monthly Report to Noteholders and
Certificateholders . . . . . . . . . . . . . . . . . . I-1
Exhibit J Seller's Representations and Warranties . . . . . . . . J-1
Exhibit K Lockbox Bank and Lockbox Account . . . . . . . . . . . . K-1
Exhibit L Form of Contract Stamp . . . . . . . . . . . . . . . . . L-1
Exhibit M Form of Subsequent Transfer Agreement. . . . . . . . . . M-1
v
SALE AND SERVICING AGREEMENT, dated as of [ ], among
Harley-Davidson Eaglemark Motorcycle Trust [ ] (together with its
successors and assigns, the "ISSUER" or the "TRUST"), Eaglemark Customer Funding
Corporation-IV (together with its successor and assigns, the "TRUST DEPOSITOR"),
Xxxxxx Trust and Savings Bank (solely in its capacity as Indenture Trustee
together with its successors and assigns, the "INDENTURE TRUSTEE") and
Eaglemark, Inc. (solely in its capacity as Servicer together with its successor
and assigns, "EAGLEMARK" or the "SERVICER").
WHEREAS the Issuer desires to purchase from the Trust Depositor an
initial and subsequent pool of fixed-rate, simple interest motorcycle
conditional sales contracts relating to Harley-Davidson motorcycles or, in
certain limited instances, motorcycles manufactured by an affiliate of
Harley-Davidson, Buell Motorcycle Company, (collectively, the "CONTRACTS")
originated by Eaglemark and subsequently sold by Eaglemark to the Trust
Depositor;
WHEREAS the Trust Depositor is willing to sell the Contracts to the
Issuer pursuant to the terms hereof; and
WHEREAS the Servicer is willing to service the Contracts pursuant to the
terms hereof;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. DEFINITIONS. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"ADDITION NOTICE" means, with respect to any transfer of Subsequent
Contracts to the Issuer pursuant to Section 2.04 and the Trust Depositor's
corresponding prior purchase of such Contracts from the Seller, a notice, which
shall be given at least 10 days prior to the related Subsequent Transfer Date,
identifying the Subsequent Contracts to be transferred and the aggregate
Principal Balance of such Subsequent Contracts.
"ADVANCE" means, with respect to any Distribution Date, the amounts, if
any, deposited by the Servicer in the Collection Account for such Distribution
Date pursuant to Section 7.03.
"AFFILIATE" of any specified Person means any other Person controlling or
controlled by, or under common control with, such specified Person. For the
purposes of this definition, "CONTROL" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "CONTROLLING" or "CONTROLLED" have meanings
correlative to the foregoing.
"AGREEMENT" means this Sale and Servicing Agreement, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"AGGREGATE PRINCIPAL BALANCE" will equal the sum of the Principal
Balances of each outstanding Contract and the Pre-Funded Amount, if any. At the
time of initial issuance of the Securities, the initial aggregate principal
amount of the Securities will equal the Initial Pool Balance plus the initial
Pre-Funded Amount.
"AGGREGATE PRINCIPAL BALANCE DECLINE" means, with respect to any
Distribution Date, the amount by which the Aggregate Principal Balance as of the
Distribution Date immediately preceding such Distribution Date (or as of the
Cutoff Date in the case of the first Distribution Date) exceeds the Aggregate
Principal Balance as of such Distribution Date.
"AVAILABLE AMOUNT" means, with respect to any Distribution Date, the
amount of funds on deposit in the Reserve Fund on such Distribution Date less
the Certificate Reserve Amount with respect to such Distribution Date before
giving effect to any reduction thereto on such date.
"AVAILABLE MONIES" means, with respect to any Distribution Date, the sum
of the Available Interest and the Available Principal for such Distribution
Date.
"AVAILABLE INTEREST" means, with respect to any Distribution Date, the
total (without duplication) of the following amounts received by the Servicer on
or in respect of the Contracts during the related Due Period: (i) all amounts
received in respect of interest on the Contracts (as well as Late Payment
Penalty Fees and Extension Fees), (ii) the interest component of all Net
Liquidation Proceeds, (iii) the interest component of the aggregate of the
Repurchase Prices for Contracts repurchased by the Trust Depositor pursuant to
Section 7.08, (iv) all Advances made by the Servicer pursuant to Section 7.03,
(v) the interest component of all amounts paid by the Trust Depositor in
connection with an optional repurchase of the Contracts pursuant to Section
7.10, (vi) all amounts received in respect of Carrying Charges transferred from
the Interest Reserve Account pursuant to Section 7.03, and (vii) all amounts
received in respect of interest, dividends, gains, income and earnings on
investment of funds in the Trust Accounts as contemplated in Section 5.05(d).
"AVAILABLE PRINCIPAL" means, with respect to any Distribution Date, the
total (without duplication) of the following amounts received by the Servicer on
or in respect of the Contracts during the related Due Period: (i) all amounts
received in respect of principal on the Contracts, (ii) the principal component
of all Net Liquidation Proceeds, (iii) the principal component of the aggregate
of the Repurchase Prices for Contracts repurchased by the Trust Depositor
pursuant to Section 7.08, and (iv) the principal component of all amounts paid
by the Trust Depositor in connection with an optional repurchase of the
Contracts pursuant to Section 7.10.
"AVERAGE DELINQUENCY RATIO" means, for any Distribution Date, the
arithmetic average of the Delinquency Ratios for such Distribution Date and the
two immediately preceding Distribution Dates.
"AVERAGE LOSS RATIO" means, for any Distribution Date, the arithmetic
average of the Loss Ratios for such Distribution Date and the two immediately
preceding Distribution Dates.
"BASE PROSPECTUS" means the Prospectus dated August [ ], 1998 relating
to the Harley-Davidson Eaglemark Motorcycle Trusts.
"BUELL" means Buell Motorcycle Company.
"BUSINESS DAY" means any day other than a Saturday or a Sunday, or
another day on which banking institutions in the city of Chicago, Illinois,
Wilmington, Delaware or New York, New York are authorized or obligated by law,
executive order, or governmental decree to be closed.
"CALCULATION DAY" means the last day of each calendar month.
"CARRYING CHARGES" means (i) the product of (x) the weighted average of
the Class A-1 Rate, the Class A-2 Rate and the Pass-Through Rate and (y) the
undisbursed funds (excluding investment earnings) in the Pre-Funding Account (as
of the last day of the related Due Period) over (ii) the amount of any
investment earnings on funds in the Pre-Funding Account which was transferred to
the Interest Reserve Account, as well as interest earnings on amounts in the
Interest Reserve Account.
"CERTIFICATE BALANCE" equals $[ ] on the Closing Date, and,
thereafter, equals the Initial Certificate Balance, reduced by all amounts
allocable to principal previously distributed to Certificateholders.
"CERTIFICATE DEPOSITORY AGREEMENT" has the meaning specified in the Trust
Agreement.
2
"CERTIFICATE DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of the Certificate Principal Distributable Amount and
the Certificate Interest Distributable Amount for such Distribution Date.
"CERTIFICATE DISTRIBUTION ACCOUNT" shall have the meaning specified in
the Trust Agreement.
"CERTIFICATE FINAL DISTRIBUTION DATE" means the [ ]
Distribution Date.
"CERTIFICATE INTEREST CARRYOVER SHORTFALL" means, with respect to any
Distribution Date, the excess of the sum of the Certificate Monthly Interest
Distributable Amount for the immediately preceding Distribution Date and any
outstanding Certificate Interest Carryover Shortfall on such preceding
Distribution Date, over the amount in respect of interest on the Certificates
that is actually deposited in the Certificate Distribution Account on such
preceding Distribution Date, plus interest on such excess, to the extent
permitted by law, at the Pass-Through Rate for the related Interest Period.
"CERTIFICATE INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of the Certificate Monthly Interest Distributable
Amount for such Distribution Date and the Certificate Interest Carryover
Shortfall for such Distribution Date.
"CERTIFICATE MONTHLY INTEREST DISTRIBUTABLE AMOUNT" means, with respect
to any Distribution Date, 30 days of interest (or in the case of the first
Distribution Date, interest accrued from and including the Closing Date to but
excluding such Distribution Date) at the Pass-Through Rate on the outstanding
principal amount of the Certificates on the immediately preceding Distribution
Date, after giving effect to all payments of principal to the Certificateholders
on such preceding Distribution Date (or, in the case of the first Distribution
Date, on the original principal amount of the Certificates).
"CERTIFICATE MONTHLY PRINCIPAL DISTRIBUTABLE AMOUNT" will mean, with
respect to any Distribution Date, the Certificate Percentage of the Principal
Distributable Amount for such Distribution Date.
"CERTIFICATE PERCENTAGE" means (i) for each Distribution Date to but
excluding the Distribution Date on which the principal amount of the Class A-2
Notes is reduced to zero, 0%; (ii) on the Distribution Date on which the
principal amount of the Class A-2 Notes is reduced to zero, such percentage that
equals 100% minus the Note Percentage for such Distribution Date; and (iii) 100%
thereafter.
"CERTIFICATE POOL FACTOR" means, as of the close of business on any
Distribution Date, a seven-digit decimal figure equal to the Certificate Balance
(after giving effect to any reductions therein to be made on such Distribution
Date) divided by the Certificate Initial Balance. The Certificate Pool Factor
will be 1.0000000 as of the Closing Date; thereafter, the Certificate Pool
Factor will decline to reflect reductions in the Certificate Balance.
"CERTIFICATE PRINCIPAL CARRYOVER SHORTFALL" means, as of the close of any
Distribution Date, the excess of the sum of the Certificate Monthly Principal
Distributable Amount and any outstanding Certificate Principal Carryover
Shortfall from the immediately preceding Distribution Date, over the amount in
respect of principal that is actually deposited in the Certificate Distribution
Account on such Distribution Date.
"CERTIFICATE PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of the Certificate Monthly Principal Distributable
Amount and (ii) any outstanding Certificate Principal Carryover Shortfall as of
the close of the immediately preceding Distribution Date; PROVIDED, HOWEVER,
that the Certificate Principal Distributable Amount shall not exceed the
Certificate Balance. In addition, on the Certificate Final Distribution Date,
the principal required to be deposited into the Certificate Distribution Account
will include the amount necessary to reduce the Certificate Balance to zero.
"CERTIFICATE REGISTER" shall have the meaning specified in the Trust
Agreement.
3
"CERTIFICATE RESERVE AMOUNT" means the sum of the Initial Certificate
Reserve Amount and the Subsequent Certificate Reserve Amount, as such amount may
be reduced or restored from time to time pursuant to Section 7.05.
"CERTIFICATEHOLDERS" shall have the meaning specified in the Trust
Agreement.
"CERTIFICATES" means the Trust Certificates (as such term is defined in
the Trust Agreement).
"CLASS" means all Notes whose form is identical except for variation in
denomination, principal amount or owner.
"CLASS A-1 FINAL DISTRIBUTION DATE" means the [ ]
Distribution Date.
"CLASS A-1 NOTEHOLDER" means the Person in whose name a Class A-1 Note is
registered in the Note Register, as such term is defined in the Indenture.
"CLASS A-1 RATE" means [ ]% per annum.
"CLASS A-2 FINAL DISTRIBUTION DATE" means the [ ]
Distribution Date.
"CLASS A-2 NOTEHOLDER" means the Person in whose name a Class A-2 Note is
registered in the Note Register.
"CLASS A-2 RATE" means [ ]% per annum.
"CLOSING DATE" means [ ].
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" means as defined in the "granting clause" of the Indenture.
"COLLECTION ACCOUNT" means a trust account as described in Section 5.05
maintained in the name of the Indenture Trustee and which shall be an Eligible
Account.
"COMPUTER DISK" means the computer disk generated by the Servicer which
provides information relating to the Contracts and which was used by the Seller
in selecting the Contracts sold to the Trust Depositor pursuant to the Transfer
and Sale Agreement (and any Subsequent Purchase Agreement) by the Trust
Depositor in selecting the Contracts sold to the Trust pursuant to this
Agreement (and any Subsequent Transfer Agreement), and includes the master file
and the history file as well as servicing information with respect to the
Contracts.
"CONTRACT ASSETS" has the meaning assigned in Section 2.01 (and 2.04, as
applicable in the case of Subsequent Contracts) of the Transfer and Sale
Agreement.
"CONTRACT FILE" means, as to each Contract, (a) the original copy of the
Contract, including the executed conditional sales contract or other evidence of
the obligation of the Obligor, (b) the original title certificate to the
Motorcycle and, where applicable, the certificate of lien recordation, or, if
such title certificate has not yet been issued, an application for such title
certificate, or other appropriate evidence of a security interest in the covered
Motorcycle; (c) the assignments of the Contract; (d) the original copy of any
agreement(s) modifying the Contract including, without limitation, any extension
agreement(s) and (e) documents evidencing the existence of physical damage
insurance covering such Motorcycle.
"CONTRACT RATE" means, as to any Contract, the annual rate of interest
specified in the Contract.
4
"CONTRACTS" means the motorcycle conditional sales contracts described
in the List of Contracts and constituting part of the Trust Corpus (as such list
may be supplemented from time to time to reflect transfers of Subsequent
Contracts), and includes, without limitation, all related security interests and
any and all rights to receive payments which are collected pursuant thereto on
or after the Initial Cutoff Date or, with respect to any Subsequent Contracts,
any related Subsequent Cutoff Date, but excluding any rights to receive payments
which are collected pursuant thereto prior to the Initial Cutoff Date, or with
respect to any Subsequent Contracts, any related Subsequent Cutoff Date.
"CORPORATE TRUST OFFICE" means the office of the Indenture Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of the execution of this Agreement is
located at the address set forth in Section 11.04.
"CRAM DOWN LOSS" means, with respect to a Contract, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the Principal Balance of such Contract the amount of such reduction
(with a "CRAM DOWN LOSS" being deemed to have occurred on the date of issuance
of such order).
"CUMULATIVE LOSS RATIO" means, as of any Distribution Date, the fraction
(expressed as a percentage) computed by the Servicer by dividing (i) the
aggregate Net Liquidation Losses for all Contracts since the Cutoff Date through
the end of the related Due Period by (ii) the sum of (A) the Principal Balance
of the Contracts as of the Cutoff Date plus (B) the Principal Balance of any
Subsequent Contracts as of the related Subsequent Cutoff Date.
"CUTOFF DATE" means either or both (as the context may require) the
Initial Cutoff Date and any Subsequent Cutoff Date.
"DEFAULTED CONTRACT" means a Contract with respect to which there has
occurred one or more of the following: (i) all or some portion of any payment
under the Contract is 120 days or more delinquent, (ii) repossession (and
expiration of any redemption period) of a Motorcycle securing a Contract or
(iii) the Servicer has determined in good faith that an Obligor is not likely to
resume payment under a Contract.
"DELINQUENCY AMOUNT" means, as of any Distribution Date, the Principal
Balance of all Contracts that were delinquent 60 days or more as of the end of
the related Due Period (including Contracts in respect of which the related
Motorcycles have been repossessed and are still inventory).
"DELINQUENT INTEREST" means, for each Contract and each Determination
Date as to which the full payment due in the related Due Period has not been
paid (any such payment being "DELINQUENT" for purposes of this definition), all
interest accrued on such Contract from the Due Date in the Due Period one month
prior to the Due Period in which the payment is delinquent.
"DELINQUENCY RATIO" means, for any Distribution Date, the fraction
(expressed as a percentage) computed by dividing (a) the Delinquency Amount
during the immediately preceding Due Period by (b) the Principal Balance of the
Contracts as of the beginning of the related Due Period.
"DETERMINATION DATE" means the fourth Business Day following the
conclusion of a Due Period during the term of this Agreement.
"DISTRIBUTION DATE" means the fifteenth day of each calendar month during
the term of this Agreement, or if such day is not a Business Day, the next
succeeding Business Day, with the first such Distribution Date hereunder being
[ ].
"DUE DATE" means, with respect to any Contract, the day of the month on
which each scheduled payment of principal and interest is due on such Contract,
exclusive of days of grace.
5
"DUE PERIOD" means a calendar month during the term of this Agreement,
and the Due Period related to a Determination Date or Distribution Date shall be
the calendar month immediately preceding such date; PROVIDED, HOWEVER, that with
respect to the Initial Determination Date or Initial Distribution Date, the Due
Period shall be the period from the Initial Cutoff Date to and including
[ ].
"EAGLEMARK FINANCIAL" has the meaning assigned in Section 5.10 hereof.
"ELIGIBLE ACCOUNT" means a segregated direct deposit account maintained
with a depository institution or trust company organized under the laws of the
United States of America, or any of the States thereof, or the District of
Columbia, having a certificate of deposit, short-term deposit or commercial
paper rating of at least A-1+ by Standard & Poor's and P-1 by Moody's.
"ELIGIBLE INVESTMENTS" mean book-entry securities, negotiable instruments
or securities represented by instruments in bearer or registered form which
evidence:
(a) direct obligations of, and obligations fully guaranteed as
to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
of any depository institution or trust company incorporated under the
laws of the United States of America or any State (or any domestic branch
of a foreign bank) and subject to supervision and examination by Federal
or State banking or depository institution authorities; PROVIDED,
HOWEVER, that at the time of the investment or contractual commitment to
invest therein, the commercial paper or other short-term senior unsecured
debt obligations (other than such obligations the rating of which is
based on the credit of a Person other than such depository institution or
trust company) thereof shall have a credit rating from the Rating Agency
in the highest investment category granted thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from the Rating Agency
in the highest investment category granted thereby;
(d) investments in money market funds having a rating from the
Rating Agency in the highest investment category granted thereby
(including funds for which the Indenture Trustee or the Trustee or any of
their respective Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution
or trust company referred to in CLAUSE (b); and
(f) repurchase obligations with respect to any security that is
a direct obligation of, or fully guaranteed as to timely payment by, the
United States of America or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit of the
United States of America, in either case entered into with a depository
institution or trust company (acting as principal) described in CLAUSE
(b).
"EVENT OF TERMINATION" means an event specified in Section 8.01.
"EXCESS AMOUNTS" shall have the meaning specified in Section 7.05(b).
"FINAL DISTRIBUTION DATE" means with respect to (i) the Notes, the Class
A-1 Final Distribution Date or the Class A-2 Final Distribution Date, as the
case may be or (ii) the Certificates, the Certificate Final Distribution Date.
"FUNDING PERIOD" means the period beginning on the Closing Date and
ending on the first to occur of (a) the Distribution Date on which the amount on
deposit in the Pre-Funding Account (after giving effect to any transfers
therefrom in connection with the transfer of Subsequent Contracts to the Trust
on such Distribution Date) is less than $150,000, (b) the date on which an Event
of Termination occurs, (c) the date on which an Insolvency Event occurs with
6
respect to the Trust Depositor and (d) the close of business on the date which
is 90 days from and including the Closing Date.
"HOLDER" means, with respect to a (i) Certificate, the Person in whose
name such Certificate is registered in the Certificate Register and (ii) Note,
the Person in whose name such Note is registered in the Note Register.
"INDENTURE" means the Indenture, dated as of the date hereof, between the
Issuer and the Indenture Trustee.
"INDENTURE TRUSTEE" means the Person acting as Indenture Trustee under
the Indenture, its successors in interest and any successor trustee under the
Indenture.
"INDENTURE TRUSTEE FEE" means, with respect to any Distribution Date,
one-twelfth of the product of .009% and the sum of (i) the Principal Balance
of the Contracts as of the beginning of the related Due Period and (ii) the
Pre-Funded Amount as of the beginning of such period; PROVIDED, HOWEVER, in
no event shall such fee be less than $200.00 per month.
"INDEPENDENT", when used with respect to any specified Person, means such
a Person who (i) is in fact independent of the Issuer, the Trust Depositor or
the Servicer, (ii) is not a director, officer or employee of any Affiliate of
the Issuer, the Trust Depositor or the Servicer, (iii) is not a person related
to any officer or director of the Issuer, the Trust Depositor or the Servicer or
any of their respective Affiliates, (iv) is not a holder (directly or
indirectly) of more than 10% of any voting securities of Issuer, the Trust
Depositor or the Servicer or any of their respective Affiliates, and (v) is not
connected with the Issuer, the Trust Depositor or the Servicer as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
"INITIAL CLASS A-1 NOTE BALANCE" means $[ ].
"INITIAL CLASS A-2 NOTE BALANCE" means $[ ].
"INITIAL CERTIFICATE BALANCE" means $[ ].
"INITIAL CERTIFICATE RESERVE AMOUNT" means $[ ].
"INITIAL CONTRACTS" means those Contracts conveyed to the Trust on the
Closing Date.
"INITIAL CUTOFF DATE" means [ ].
"INITIAL POOL BALANCE" means the Principal Balance of the Contracts as of
the Initial Cutoff Date and on each Subsequent Cutoff Date the Principal Balance
of the Contracts on such subsequent Cutoff Date.
"INSOLVENCY EVENT" means, with respect to a specified Person, (i) the
entry of a decree or order for relief by a court or regulatory authority having
jurisdiction in respect of such Person in an involuntary case under the federal
bankruptcy laws, as now or hereafter in effect, or any other present or future,
federal or state, bankruptcy, insolvency or similar law, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or other
similar official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days; (ii) the commencement of an involuntary case under the
federal bankruptcy laws, as now or hereinafter in effect, or another present or
future federal or state bankruptcy, insolvency or similar law and such case is
not dismissed within 60 days; or (iii) the commencement by such Person of a
voluntary case under the federal bankruptcy laws, as now or hereinafter in
effect, or any other present or future federal or state, bankruptcy, insolvency
or similar law, or the consent by such Person to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
or other similar official for such Person or for any substantial part of its
property, or the making by such Person of an assignment for the benefit of
creditors or the failure by such Person generally to pay its debts as such debts
become due or the taking of corporate action by such Person in furtherance of
any the foregoing.
7
"INTEREST PERIOD" means, with respect to any Distribution Date, the
period from and including the fifteenth day of the month of the Distribution
Date immediately preceding such Distribution Date (or, in the case of the first
Distribution Date, the Closing Date) to but excluding the fifteenth day of the
month of such Distribution Date.
"INTEREST RATE" means the Class A-1 Rate or the Class A-2 Rate, as
applicable.
"INTEREST RESERVE ACCOUNT" means the account designated as the Interest
Reserve Account in, and which is established and maintained pursuant to, Section
7.04 hereof.
"INTEREST RESERVE AMOUNT" means, as of any date of determination, the
amount on deposit in the Interest Reserve Account on such date, and as of the
Closing Date shall be $[ ].
"INVESTMENT EARNINGS" means, with respect to any Distribution Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts, other than the Pre-Funding Account, to be
deposited into the Collection Account on such Distribution Date pursuant to
Section 5.05(b).
"ISSUER" means the Harley-Davidson Eaglemark Motorcycle Trust [ ].
"LATE PAYMENT PENALTY FEES" means any late payment fees paid by Obligors
on Contracts after all sums received have been allocated first to regular
installments due or overdue and all such installments are then paid in full.
"LIEN" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Contract by operation of law.
"LIQUIDATED CONTRACT" means a Contract with respect to which there has
occurred one or more of the following: (i) 90 days have elapsed following the
date of repossession (and expiration of any redemption period) with respect to
the Motorcycle securing such Contract, (ii) such Contract is a Defaulted
Contract with respect to which the Servicer has determined in good faith that
all amounts expected to be recovered have been received, or (iii) all or any
portion of any payment is delinquent 150 days or more.
"LIST OF CONTRACTS" means the list identifying each Contract constituting
part of the Trust Corpus, which list shall consist of the initial List of
Contracts reflecting the Initial Contracts transferred to the Trust on the
Closing Date, together with any Subsequent List of Contracts reflecting the
Subsequent Contracts transferred to the Trust on the related Subsequent Transfer
Date, and which list (a) identifies each Contract and (b) sets forth as to each
Contract (i) the Principal Balance as of the applicable Cutoff Date, (ii) the
amount of monthly payments due from the Obligor, (iii) the Contract Rate and
(iv) the maturity date, and which list (as in effect on the Closing Date) is
attached to this Agreement as EXHIBIT J.
"LOCKBOX" means the Lockbox maintained by the Lockbox Bank identified on
EXHIBIT K hereto.
"LOCKBOX ACCOUNT" means the account maintained with the Lockbox Bank and
identified on EXHIBIT K hereto.
"LOCKBOX AGREEMENT" means the Fourth Amended and Restated Lockbox
Administration Agreement dated as of April 1, 1998 by and among the Servicer,
the Trust Depositor, Eaglemark Customer Funding Corporation-II, Eaglemark
Customer Funding Corporation-III, Norwest Bank Minnesota, National Association
(the "PREDECESSOR TRUSTEE"), the Trustee and Financial Security Assurance Inc.
("FSA", with respect to certain prior trusts, the "PRIOR TRUSTS"), with respect
to the Lockbox Account, unless such agreement shall be terminated in accordance
with its terms, in which event "LOCKBOX AGREEMENT" shall mean such other
agreement, in form and substance acceptable to the above-described parties and
FSA, or if an Insurer Default (as defined in FSA's documentation relating to
such Prior Trusts) shall have occurred and be continuing or FSA is owed no
obligation with respect to such Prior Trusts, the majority of the
Certificateholders with respect to such Prior Trusts), the Servicer, the Trustee
and the Lockbox Bank.
8
"LOCKBOX BANK" means the financial institution maintaining the Lockbox
Account and identified on EXHIBIT K hereto or any successor thereto acceptable
to a majority of the Certificateholders.
"LOSS RATIO" means, for any Distribution Date, the fraction (expressed as
a percentage) derived by dividing (x) Net Liquidation Losses for all Contracts
that became Liquidated Contracts during the immediately preceding Due Period
multiplied by twelve by (y) the outstanding Principal Balances of all Contracts
as of the beginning of the Due Period.
"MANDATORY SPECIAL REDEMPTION" means the prepayment, in part, made to the
Class A-1 Noteholders and Class A-2 Noteholders without premium made on the
Distribution Date on or immediately following the last day of the Funding Period
in the event that any amount remains on deposit in the Pre-Funding Account after
giving effect to the purchase of all Subsequent Contracts, including any such
purchase on such date.
"MONTHLY REPORT" shall have the meaning specified in Section 9.06.
"MONTHLY SERVICING FEE" means, as to any Distribution Date, one-twelfth
of the product of 1% and the Principal Balance of the Contracts as of the
beginning of the related Due Period.
"MOODY'S" means Xxxxx'x Investors Service, Inc. or any successor thereto.
"MOTORCYCLE" means a motorcycle manufactured by Harley-Davidson, Inc. (or
in certain limited instances Buell) securing a Contract.
"NET LIQUIDATION LOSSES" means, as of any Distribution Date, with respect
to a Liquidated Contract, the amount, if any, by which (a) the outstanding
Principal Balance of such Liquidated Contract plus accrued and unpaid interest
thereon at the Contract Rate to the date on which such Liquidated Contract
became a Liquidated Contract exceeds (b) the Net Liquidation Proceeds for such
Liquidated Contract.
"NET LIQUIDATION PROCEEDS" means, as to any Liquidated Contract, the
proceeds realized on the sale or other disposition of the related Motorcycle,
including proceeds realized on the repurchase of such Motorcycle by the
originating dealer for breach of warranties, and the proceeds of any insurance
relating to such Motorcycle, after payment of all reasonable expenses incurred
thereby, together, in all instances, with the expected or actual proceeds of any
recourse rights relating to such Contract as well as any post-disposition
proceeds received by the Servicer.
"NOTE DEPOSITORY AGREEMENT" shall have the meaning specified in the
Indenture.
"NOTE DISTRIBUTABLE AMOUNT" means, with respect to any Distribution Date,
the sum of the Note Principal Distributable Amount and the Note Interest
Distributable Amount for such Distribution Date.
"NOTE DISTRIBUTION ACCOUNT" means the account established and maintained
as such pursuant to Section 5.05.
"NOTE INTEREST CARRYOVER SHORTFALL" means, with respect to any
Distribution Date and a Class of Notes, the excess, if any, of the sum of the
Note Interest Distributable Amount for such Class for the immediately preceding
Distribution Date plus any outstanding Note Interest Carryover Shortfall for
such Class on such preceding Distribution Date, over the amount in respect of
interest that is actually deposited in the Note Distribution Account with
respect to such Class on such preceding Distribution Date, plus, interest on
such excess to the extent permitted by applicable law, at the related Interest
Rate for the related Interest Period.
"NOTE INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date and a Class of Notes, the sum of the Note Monthly Interest
Distributable Amount and the Note Interest Carryover Shortfall for such Class of
Notes for such Distribution Date.
"NOTE MONTHLY INTEREST DISTRIBUTABLE AMOUNT" means, with respect to
any Distribution Date, interest accrued from and including the fifteenth day
of the month of the preceding calendar month to, but excluding, the fifteenth
day
9
of the calendar month in which such Distribution Date occurs (or in the case
of the first Distribution Date, interest accrued from and including the
Closing Date to but excluding such Distribution Date) at the related Interest
Rate for each Class of Notes on the outstanding principal amount of the Notes
of such Class on the immediately preceding Distribution Date, after giving
effect to all payments of principal to Noteholders of such Class on or prior
to such preceding Distribution Date (or, in the case of the first
Distribution Date, on the original principal amount of such Class of Notes).
"NOTE MONTHLY PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the Note Percentage of the Principal Distributable Amount for
such Distribution Date.
"NOTE PERCENTAGE" means, (i) for each Distribution Date to but excluding
the Distribution Date on which the principal amount of the Class A-2 Notes is
reduced to zero, 100%; (ii) on the Distribution Date on which the principal
amount of the Class A-2 Notes is reduced to zero, such percentage which
represents the fraction of the Principal Distributable Amount necessary to
reduce the principal amount of the Class A-2 Notes to zero; and (iii) 0.0%
thereafter.
"NOTE POOL FACTOR" means with the respect to any Class of Notes as of the
close of business on any Distribution Date, a seven-digit decimal figure equal
to the outstanding principal amount of such Class of Notes (after giving effect
to any reductions thereof to be made on such Distribution Date) divided by the
original outstanding principal amount of such Class of Notes.
"NOTE PRINCIPAL CARRYOVER SHORTFALL" means, as of the close of any
Distribution Date, the excess of the sum of the Note Principal Distributable
Amount and any outstanding Note Principal Carryover Shortfall from the
immediately preceding Distribution Date over the amount in respect of principal
that is actually deposited in the Note Distribution Account on such Distribution
Date.
"NOTE PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of the Note Monthly Principal Distributable Amount
for such Distribution Date and the Note Principal Carryover Shortfall as of the
close of the immediately preceding Distribution Date; PROVIDED, HOWEVER, that
the Note Principal Distributable Amount shall not exceed the outstanding
principal amount of the Notes; and provided, further, that the Note Principal
Distributable Amount (i) on the Class A-1 Final Distribution Date shall not be
less than the amount that is necessary (after giving effect to other amounts to
be deposited in the Note Distribution Account on such Distribution Date and
allocable to principal) to reduce the outstanding principal amount of the Class
A-1 Notes to zero, and (ii) on the Class A-2 Final Distribution Date shall not
be less than the amount that is necessary (after giving effect to other amounts
to be deposited in the Note Distribution Account on such Distribution Date and
allocable to principal) to reduce the outstanding principal amount of the Class
A-2 Notes to zero.
"NOTE REGISTER" shall have the meaning specified in the Indenture.
"OBLIGEE" means the Person to whom an Obligor is indebted under a
Contract.
"OBLIGOR" means a Motorcycle buyer or other person who owes payments
under a Contract.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an Assistant Secretary of
any Person delivering such certificate and delivered to the Person to whom such
certificate is required to be delivered. In the case of an Officers'
Certificate of the Servicer, at least one of the signing officers must be a
Servicing Officer. Unless otherwise specified, any reference herein to an
Officers' Certificate shall be to an Officers' Certificate of the Servicer.
"OPINION OF COUNSEL" means a written opinion of counsel (who may be
counsel to the Trust Depositor or the Servicer) acceptable to the Indenture
Trustee or the Owner Trustee, as the case may be.
"OWNER TRUSTEE" means the Person acting, not in its individual capacity,
but solely as Owner Trustee under the Trust Agreement, its successors in
interest and any successor owner trustee under the Trust Agreement.
10
"OWNER TRUSTEE'S FEE" means $[ ] per month.
"PASS-THROUGH RATE" means [ ]% per annum.
"PAYING AGENT" means as described in Section 6.11 of the Indenture and
Section 3.10 of the Trust Agreement.
"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.
"POOL BALANCE" means as of any date, the Principal Balance of Contracts
as of the close of business on such date.
"PRE-FUNDED AMOUNT" means as of any date, the amount on deposit in the
Pre-Funding Account at the close of business on such date.
"PRE-FUNDING ACCOUNT" means the account designated as the Pre-Funding
Account in, and which is established and maintained pursuant to Section 7.07.
"PRINCIPAL BALANCE" means (a) with respect to any Contract as of any
date, an amount equal to the unpaid principal balance of such Contract as of the
opening of business on the Initial Cutoff Date or related Subsequent Cutoff
Date, as applicable, reduced by the sum of (x) all payments received by the
Servicer as of such date allocable to principal and (y) any Cram Down Loss in
respect of such Contract; PROVIDED, HOWEVER, that (i) if (x) a Contract is
repurchased by the Seller pursuant to Section 5.01 of the Transfer and Sale
Agreement and Section 7.08 hereof because of a breach of representation or
warranty, or if (y) the Trust Depositor gives notice of its intent to purchase
the Contracts in connection with an optional termination of the Trust pursuant
to Section 5.02 of the Transfer and Sale Agreement and Section 7.10 hereof, in
each case the Principal Balance of such Contract or Contracts shall be deemed as
of the related Determination Date to be zero for the Due Period in which such
event occurs and for each Due Period thereafter, (ii) from and after the third
Due Period succeeding the final Due Period in which the Obligor is required to
make the final scheduled payment on a Contract, the Principal Balance, if any,
of such Contract shall be deemed to be zero, and (iii) from and after the Due
Period in which a Contract becomes a Liquidated Contract, the Principal Balance
of such Contract shall be deemed to be zero; and (b) where the context requires,
the aggregate of the Principal Balances described in clause (a) for all such
Contracts.
"PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any Distribution
Date, the Aggregate Principal Balance Decline for such Distribution Date.
"PROSPECTUS" means the Base Prospectus together with the Supplement.
"QUALIFIED ELIGIBLE INVESTMENTS" means Eligible Investments acquired by
the Indenture Trustee in its name and in its capacity as Indenture Trustee,
which are held by the Indenture Trustee in the Pre-Funding Account, the Interest
Reserve Account or the Reserve Fund and with respect to which (a) the Indenture
Trustee has noted its interest therein on its books and records, and (b) the
Indenture Trustee has purchased such investments for value without notice of any
adverse claim thereto (and, if such investments are securities or other
financial assets or interests therein, within the meaning of Section 8-102 of
the UCC as enacted in Illinois, without acting in collusion with a securities
intermediary in violating such securities intermediary's obligations to
entitlement holders in such assets, under Section 8-504 of such UCC, to maintain
a sufficient quantity of such assets in favor of such entitlement holders), and
(c) either (i) such investments are in the possession of the Indenture Trustee,
or (ii) such investments, (A) if certificated securities and in bearer form,
have been delivered to the Indenture Trustee, or in registered form, have been
delivered to the Indenture Trustee and either registered by the issuer in the
name of the Indenture Trustee or endorsed by effective endorsement to the
Indenture Trustee or in blank; (B) if uncertificated securities, the ownership
of which has been registered to the Indenture Trustee on the books of the issuer
thereof (or another person, other than a securities intermediary, either becomes
the registered owner of the uncertified security on behalf of the Indenture
Trustee or, having previously become
11
the registered owner, acknowledges that it holds for the Indenture Trustee);
or (C) if securities entitlements (within the meaning of Section 8-102 of the
UCC as enacted in Illinois) representing interests in securities or other
financial assets (or interests therein) held by a securities intermediary
(within the meaning of said Section 8-102), a securities intermediary
indicates by book entry that a security or other financial asset has been
credited to the Indenture Trustee's securities account with such securities
intermediary. Any such Qualified Eligible Investment may be purchased by or
through the Indenture Trustee or any of its affiliates.
"RATING AGENCY" means each of Moody's and Standard & Poor's, so long as
such Persons maintain a rating on the Certificates; and if either Moody's or
Standard & Poor's no longer maintains a rating on the Certificates, such other
nationally recognized statistical rating organization selected by the Trust
Depositor.
"RECORD DATE" means, with respect to any Distribution Date, the Business
Day immediately preceding such date.
"REIMBURSEMENT AMOUNT" has the meaning assigned in Section 7.03 hereof.
"REPURCHASE PRICE" means, with respect to a Contract to be repurchased
hereunder an amount equal to (a) the remaining principal balance of such
Contract, plus (b) accrued and unpaid interest at the Contract Rate on such
Contract through the end of the immediately preceding Due Period.
"RESERVE FUND" means the Reserve Fund established and maintained pursuant
to Section 7.06 hereof.
"RESERVE FUND INITIAL DEPOSIT" means $[ ].
"RESERVE FUND DEPOSITS" means all moneys deposited in the Reserve Fund
from time to time including, but not limited to, the Reserve Fund Initial
Deposit and the Reserve Fund Additional Deposits as well as any monies deposited
therein pursuant to Section 7.05(b), all investments and reinvestments thereof,
earnings thereon, and proceeds of the foregoing, whether now or hereafter
existing.
"RESERVE FUND TRIGGER EVENT" means the occurrence with respect to any
Distribution Date (i) the Average Delinquency Ratio for such Distribution Date
is equal to or greater than (a) [ ]% with respect to any Distribution Date
which occurs within the period from the Closing Date to, and inclusive of, the
first anniversary of the Closing Date, (b) [ ]% with respect to any
Distribution Date which occurs within the period from the day after the first
anniversary of the Closing Date to, and inclusive of, the second anniversary of
the Closing Date, or (c) [ ]% with respect to any Distribution Date which
occurs within the period from the day after the second anniversary of the
Closing Date to, and inclusive of, the third anniversary of the Closing Date or
(d) [ ]% with respect to any Distribution Date occurring after the third
anniversary of the Closing Date; (ii) the Average Loss Ratio for such
Distribution Date is equal to or greater than (a) [ ]% with respect to any
Distribution Date which occurs within the period from the Closing Date to, and
inclusive of, the eighteen months following the Closing Date or (b) [ ]%
with respect to any Distribution Date which occurs following the eighteen month
period following the Closing Date; or (iii) the Cumulative Loss Ratio for such
Distribution Date is equal to or greater than (a) [ ]% with respect to any
Distribution Date which occurs within the period from the Closing Date to, and
inclusive of, the first anniversary of the Closing Date, (b) [ ]% with
respect to any Distribution Date which occurs within the period from the day
after the first anniversary of the Closing Date to, and inclusive of, the second
anniversary of the Closing Date, (c) [ ]% with respect to any Distribution
Date which occurs within the period from the day after the second anniversary of
the Closing Date to, and inclusive of, the third anniversary of the Closing
Date, or (d) [ ]% with respect to any Distribution Date occurring after the
third anniversary of the Closing Date.
"RESPONSIBLE OFFICER" means, with respect to the Owner Trustee, any
officer in its Corporate Trust Administration Department (or any similar group
of a successor Owner Trustee) and with respect to the Indenture Trustee, the
chairman and any vice chairman of the board of directors, the president, the
chairman and vice chairman of any executive committee of the board of directors,
every vice president, assistant vice president, the secretary, every assistant
secretary, cashier or any assistant cashier, controller or assistant controller,
the treasurer, every assistant
12
treasurer, every trust officer, assistant trust officer and every other
officer or assistant officer of the Trustee customarily performing functions
similar to those performed by persons who at the time shall be such officers,
respectively, or to whom a corporate trust matter is referred because of
knowledge of, familiarity with, and authority to act with respect to a
particular matter.
"SECURITIES" means the Notes and the Certificates.
"SECURITYHOLDERS" means the Holders of the Notes or the Certificates.
"SELLER" means Eaglemark, Inc., a Nevada corporation, or its successor,
in its capacity as Seller of Contract Assets under the Transfer and Sale
Agreement and any Subsequent Purchase Agreement.
"SERVICER" means Eaglemark, Inc., a Nevada corporation, or its successor,
until any Service Transfer hereunder and thereafter means the Successor Servicer
appointed pursuant to Article VIII below with respect to the duties and
obligations required of the Servicer under this Agreement.
"SERVICE TRANSFER" has the meaning assigned in Section 8.02(a).
"SERVICING FEE" means, on any Determination Date, the sum of (a) the
Monthly Servicing Fee payable on the related Distribution Date, (b) Late Payment
Penalty Fees received by the Servicer during the related Due Period, and (c)
extension fees received by the Servicer during the related Due Period.
"SERVICING OFFICER" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Contracts whose name
appears on a list of servicing officers appearing in an Officer's Certificate
furnished to the Indenture Trustee by the Servicer, as the same may be amended
from time to time.
"SHORTFALL" means, with respect to a Distribution Date as determined in
accordance with Section 7.05(a), the amounts described in clauses (v) through
(viii) thereof over Available Monies (after the payment of amounts described in
clauses (i) through (iv) of Section 7.05 on such Distribution Date) in the
Collection Account with respect to the related Due Period.
"SPECIFIED RESERVE FUND BALANCE" means with respect to any Distribution
Date will be an amount equal to the sum of (i) [ ]% of the Principal
Balance of the Contracts in the Trust as of the first day of the immediately
preceding Due Period and (ii) $[ ]; PROVIDED, HOWEVER, in the event a
Reserve Fund Trigger Event occurs with respect to a Distribution Date and has
not terminated for three consecutive Distribution Dates (inclusive of the
respective Distribution Date), the Specified Reserve Fund Balance shall be equal
to the sum of (i) [ ]% of the Principal Balance of the Contracts in the
Trust as of the first day of the immediately preceding Due Period and (ii) $[
]. Notwithstanding the foregoing, in no event shall the Specified Reserve
Fund Balance be less than the sum of (i) [ ]% of the aggregate of the
Initial Class A-1 Note Balance, Initial Class A-2 Note Balance and the Initial
Certificate Balance and (ii) $[ ]. As of any Distribution Date, the
amount of funds actually on deposit in the Reserve Fund may, in certain
circumstances, be less than the Specified Reserve Fund Balance.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, A Division
of The McGraw Hill Companies, or any successor thereto.
"SUBSEQUENT CERTIFICATE RESERVE AMOUNT" means the amount on each
Subsequent Transfer Date equal to [ ]% of the aggregate balance of the
Subsequent Contracts conveyed by the Trust.
"SUBSEQUENT CONTRACTS" means all Contracts sold and transferred to the
Trust pursuant to Section 2.04.
"SUBSEQUENT CUTOFF DATE" means the date specified as such for Subsequent
Contracts in the related Subsequent Transfer Agreement.
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"SUBSEQUENT LIST OF CONTRACTS" means a list, in the form of the initial
List of Contracts delivered on the Closing Date, but listing each Subsequent
Contract transferred to the Trust pursuant to the related Subsequent Transfer
Agreement.
"SUBSEQUENT PURCHASE AGREEMENT" means, with respect to any Subsequent
Contracts, the agreement between the Seller and the Trust Depositor pursuant to
which the Seller will transfer the Subsequent Contracts to the Trust Depositor,
the form of which is attached to the Transfer and Sale Agreement as EXHIBIT C.
"SUBSEQUENT RESERVE FUND AMOUNT" means the amount on each Subsequent
Transfer Date equal to [ ]% of the aggregate balance of the Subsequent
Contracts conveyed to the Trust.
"SUBSEQUENT TRANSFER AGREEMENT" means the agreement described in Section
2.04 hereof.
"SUBSEQUENT TRANSFER DATE" means any date during the Funding Period on
which Subsequent Contracts are transferred to the Trust.
"SUCCESSOR SERVICER" means a servicer described in Section 8.02(b).
"SUPPLEMENT" means the Prospectus Supplement dated
[ ].
"TRANSACTION DOCUMENTS" means this Agreement, the Transfer and Sale
Agreement, the Lockbox Agreement, the Indenture, the Trust Agreement, the
Administration Agreement, the Note Depository Agreement, the Certificate
Depository Agreement, any Subsequent Transfer Agreement and any Subsequent
Purchase Agreement.
"TRANSFER AND SALE AGREEMENT" means the Transfer and Sale Agreement
dated as of the date hereof by and between the Seller and the Trust
Depositor, as amended, supplemented or otherwise modified from time to time.
"TRUST" means the trust created by this Agreement, comprised of the
Trust Corpus.
"TRUST ACCOUNTS" means, collectively, the Collection Account, the
Pre-Funding Account, the Note Distribution Account and the Reserve Fund, or
any of them.
"TRUST ACCOUNT PROPERTY" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form
of deposit accounts, physical property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Fund Initial Deposit, and all
proceeds of the foregoing.
"TRUST AGREEMENT" means the Trust Agreement, dated as of the date hereof,
among the Trust Depositor and the Owner Trustee.
"TRUST CORPUS" has the meaning given to such term in Section 2.01(b)
hereof (and in Section 2.04(a) hereof in respect of Subsequent Contracts and
related assets transferred to the Trust pursuant to Subsequent Transfer
Agreements).
"TRUST DEPOSITOR" has the meaning assigned such term in the preamble
hereunder or any successor thereto.
"TRUST ESTATE" shall have the meaning specified in the Trust Agreement.
"TRUSTEES" means the Owner Trustee and the Indenture Trustee.
"TRUSTEES' FEES" means the Owner Trustee's Fee and the Indenture
Trustee's Fee.
"UCC" means the Uniform Commercial Code as enacted in Illinois or Nevada,
as applicable.
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"UNCOLLECTIBLE ADVANCE" means with respect to any Determination Date and
any Contract, the amount, if any, advanced by the Servicer pursuant to Section
7.03 which the Servicer has as of such Determination Date determined in good
faith will not be ultimately recoverable by the Servicer from insurance policies
on the related Motorcycle, the related Obligor or out of Net Liquidation
Proceeds with respect to such Contract. The determination by the Servicer that
it has made an Uncollectible Advance shall be evidenced by an Officer's
Certificate delivered to the Trustee.
"UNDERWRITERS" means Salomon Brothers Inc and [ ].
"UNITED STATES" means the United States of America.
"VICE PRESIDENT" of any Person means any vice president of such Person,
whether or not designated by a number or words before or after the title "VICE
PRESIDENT," who is a duly elected officer of such Person.
"WTC" means Wilmington Trust Company, in its individual capacity.
SECTION 1.02. 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."
SECTION 1.03. SECTION REFERENCES. All section references, unless
otherwise indicated, shall be to Sections in this Agreement.
SECTION 1.04. CALCULATIONS. Except as otherwise provided herein, all
interest rate and basis point calculations hereunder will be made on the basis
of a 360-day year and twelve 30-day months and will be carried out to at least
three decimal places.
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.
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ARTICLE TWO
ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACTS
SECTION 2.01. CLOSING. (a) There is hereby created by the Trust
Depositor, as settlor, a separate trust which shall be known as the
Harley-Davidson Eaglemark Motorcycle Trust [ ]. The Trust shall
be administered pursuant to the provisions of this Agreement for the benefit
of the Noteholders and Certificateholders. The Owner Trustee is hereby
specifically empowered to conduct business dealings on behalf of the Trust in
accordance with the terms hereof.
(b) On the Closing Date, the Trust Depositor shall sell, transfer,
assign, set over and otherwise convey to the Trust by execution of an assignment
substantially in the form of EXHIBIT J hereto, without recourse other than as
expressly provided herein, (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 (other than the
Reserve Fund) from time to time (and any investments of such amounts), and (ix)
all proceeds and products of the foregoing (the property in clauses (i)-(ix)
above, being the "TRUST CORPUS"). Although the Trust Depositor and the Owner
Trustee agree that such transfer is intended to be a sale of ownership of the
Trust Corpus, rather than the granting of a security interest to secure a
borrowing, and that the Trust Corpus shall not be property of the Trust
Depositor, in the event such transfer is deemed to be of a mere security
interest to secure a borrowing, the Trust Depositor shall be deemed to have
granted the Owner Trustee for the benefit of the Trust a perfected first
priority security interest in such Trust Corpus and this Agreement shall
constitute a security agreement under applicable law.
(c) The Trust Depositor also hereby pledges and grants a first
priority perfected security interest in, in favor of the Indenture Trustee for
the benefit of the Securityholders, all its right, title and interest in and to
the following (all being collectively referred to herein as the "OTHER
COLLATERAL"):
(i) the Reserve Fund (including the Certificate Reserve Amount)
established pursuant to Section 7.06 hereof (including, without
limitation, the Reserve Fund Initial Deposit, as well as the Initial
Certificate Reserve Amount, made therein by the Trust Depositor on the
Closing Date, and all additional monies, checks, securities, investments
and other items or documents at any time held in or evidencing the
Reserve Fund, including all rights to receive any amounts to be deposited
from time to time therein);
(ii) all of the Trust Depositor's right, title and interest in
and to investments made with proceeds of the property described in clause
(i) above; and
(iii) all distributions, revenues, products, substitutions,
benefits, profits and proceeds, in whatever form, of any of the
foregoing;
in each case as collateral security for the obligations of the Trust in respect
of the Notes and the Certificates which, in accordance with and subject to the
limitations and provisions hereof, may be satisfied or paid from such Other
Collateral.
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SECTION 2.02. CONDITIONS TO THE CLOSING. On or before the Closing Date,
the Trust Depositor shall deliver or cause to be delivered the following
documents to the Owner Trustee:
(a) The initial List of Contracts, certified by the Chairman of
the Board, President or any Vice President of the Trust Depositor,
together with an assignment substantially in the form of EXHIBIT A
hereto.
(b) A certificate of an officer of the Seller substantially in
the form of EXHIBIT B to the Transfer and Sale Agreement and of an
officer of the Trust Depositor substantially in the form of EXHIBIT B
hereto.
(c) Opinions of counsel for the Seller and the Trust Depositor
substantially in the form of EXHIBITS D, E and F hereto (and including as
an addressee thereof each Rating Agency).
(d) A letter from Xxxxxx Xxxxxxxx LLP, or another nationally
recognized accounting firm, addressed to the Seller and the Underwriters
and stating that such firm has reviewed a sample of the Initial Contracts
and performed specific procedures for such sample with respect to certain
contract terms and which identifies those Initial Contracts which do not
conform.
(e) Copies of resolutions of the Board of Directors of each of
the Seller/Servicer and the Trust Depositor or of the Executive Committee
of the Board of Directors of each of the Seller/Servicer and the Trust
Depositor approving the execution, delivery and performance of this
Agreement and the other Transaction Documents to which any of them is a
party, as applicable, and the transactions contemplated hereunder and
thereunder, certified in each case by the Secretary or an Assistant
Secretary of the Seller/Servicer and the Trust Depositor.
(f) Officially certified, recent evidence of due incorporation
and good standing of each of the Seller and the Trust Depositor under the
laws of Nevada.
(g) Evidence of proper filing with the appropriate offices in
Nevada and Illinois of UCC financing statements executed by the Seller,
as debtor, naming the Trust Depositor as secured party (and the Owner
Trustee as assignee) and identifying the Contract Assets as collateral;
and evidence of proper filing with the appropriate offices in Nevada and
Illinois of UCC financing statements executed by the Trust Depositor, as
debtor, naming the Owner Trustee as secured party and identifying the
Trust Corpus as collateral; and evidence of proper filing with
appropriate officers in Delaware of UCC financing statements executed by
the Trust and naming the Indenture Trustee, as secured party and
identifying the Collateral, as collateral; and evidence of proper filing
with the appropriate offices in Nevada and Illinois of UCC financing
statements executed by the Trust Depositor, as debtor, naming the
Indenture Trustee, as secured party and identifying the Other Collateral,
as collateral.
(h) An Officer's Certificate listing the Servicer's Servicing
Officers.
(i) Evidence of deposit in the Collection Account of all funds
received with respect to the Initial Contracts on or after the Initial
Cutoff Date to the Closing Date, together with an Officer's Certificate
from the Trust Depositor to the effect that such amount is correct.
(j) The Officer's Certificate of the Seller specified in
Section 2.02(h) of the Transfer and Sale Agreement.
(k) Evidence of deposit in the Reserve Fund of the Reserve Fund
Initial Deposit by the Trust Depositor.
(l) A fully executed Transfer and Sale Agreement.
(m) A fully executed Trust Agreement.
17
(n) A fully executed Administration Agreement.
(o) A fully executed Indenture.
SECTION 2.03. ACCEPTANCE BY OWNER TRUSTEE. On the Closing Date, if the
conditions set forth in Section 2.02 have been satisfied, the Owner Trustee
shall issue on behalf of the Trust to, or upon the order of, the Trust Depositor
the Certificates representing ownership of a beneficial interest in 100% of the
Trust and the Indenture Trustee shall issue to, or upon the order of, the Trust
Depositor the Notes secured by the Collateral.
SECTION 2.04. CONVEYANCE OF SUBSEQUENT CONTRACTS. (a) Subject to the
conditions set forth in paragraph (b) below, the Trust Depositor, shall sell,
transfer, assign, set over and otherwise convey to the Trust, without recourse
other than as expressly provided herein and therein, (i) all the right, title
and interest of the Trust Depositor in and to the Subsequent Contracts listed on
the Subsequent List of Contracts (including, without limitation, all security
interests and all rights to receive payments which are collected pursuant
thereto on or after the related Subsequent Cutoff Date, including any
liquidation proceeds therefrom, but excluding any rights to receive payments
which were collected pursuant thereto prior to such Subsequent Cutoff Date),
(ii) all rights of the Trust Depositor under any physical damage or other
individual insurance policy (or 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
related to such Contracts (to the extent not already conveyed under Section
2.01(b)), including but not limited to the Trust Depositor's related rights
under Article V thereof, as well as all rights, but not the obligations, of the
Trust Depositor under the Subsequent Purchase Agreement related to such
Contracts, (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
related to such Contracts (to the extent not already conveyed under Section
2.01(b)) (and any investments of such amounts), and (ix) all proceeds and
products of the foregoing (the property in clauses (i)-(ix) above, upon such
transfer, becoming part of the "TRUST CORPUS"). Although the Trust Depositor
and the Owner Trustee agree that such transfer is intended to be a sale of
ownership, rather than the granting of a security interest to secure a
borrowing, and that the Trust Corpus following such transfer shall not be
property of the Trust Depositor, in the event such transfer is deemed to be of a
mere security interest to secure a borrowing, the Trust Depositor shall be
deemed to have granted the Owner Trustee for the benefit of the Trust a
perfected first priority security interest in such Trust Corpus and this
Agreement shall constitute a security agreement under applicable law.
(b) The Trust Depositor shall transfer to the Trust the Subsequent
Contracts and the other property and rights related thereto described in
paragraph (a) above only upon the satisfaction of each of the following
conditions on or prior to the related Subsequent Transfer Date:
(i) The Trust Depositor shall have provided the Owner Trustee,
the Indenture Trustee, the Underwriters and the Rating Agencies with a
timely Addition Notice and shall have provided any information reasonably
requested by any of the foregoing with respect to the Subsequent
Contracts;
(ii) the Funding Period shall not have terminated;
(iii) the Trust Depositor shall have delivered to the Owner
Trustee a duly executed written assignment (including an acceptance by
the Owner Trustee) in substantially the form of EXHIBIT M hereto (the
"SUBSEQUENT TRANSFER AGREEMENT"), which shall include a Subsequent List
of Contracts listing the Subsequent Contracts;
(iv) the Trust Depositor shall have deposited or caused to be
deposited in the Collection Account all collections received with respect
to the Subsequent Contracts on or after the related Subsequent Cutoff
Date;
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(v) as of each Subsequent Transfer Date, neither the Seller nor
the Trust Depositor was insolvent nor will either of them have been made
insolvent by such transfer nor is either of them aware of any pending
insolvency;
(vi) the applicable Subsequent Reserve Fund Amount and the
Subsequent Certificate Reserve Amount for such Subsequent Transfer Date
shall have been deposited by the Indenture Trustee from the Pre-Funding
Account to the Reserve Fund;
(vii) each Rating Agency shall have notified the Trust Depositor,
the Owner Trustee and the Indenture Trustee in writing that following
such transfer the Class A-1 Notes and Class A-2 Notes will be rated in
the highest rating category by such Rating Agency and the Certificates
will be rated at least its rating as of the Closing Date by Standard &
Poor's and Moody's;
(viii) such addition will not result in a material adverse tax
consequence to the Trust or the Certificateholders as evidenced by an
Opinion of Counsel to be delivered by the Trust Depositor to the Owner
Trustee, Indenture Trustee, the Rating Agencies and the Underwriters;
(ix) the Trust Depositor shall have delivered to the Owner
Trustee and the Indenture Trustee an Officers' Certificate confirming the
satisfaction of each condition precedent specified in this paragraph (b);
(x) the Trust Depositor shall have delivered to the Rating
Agencies and the Underwriters one or more opinions of counsel with
respect to the transfer of the Subsequent Contracts substantially in the
form of the opinions of counsel delivered to such Persons on the Closing
Date;
(xi) no selection procedures believed by the Trust Depositor to
be adverse to the interests of the Noteholders or Certificateholders
shall have been utilized in selecting the Subsequent Contracts;
(xii) the Trust Depositor shall have delivered to the Rating
Agencies evidence that (A) the weighted average annual percentage rate of
the Contracts collectively, following the transfer of the Subsequent
Contracts, is not less than [ ]%, (B) that the weighted average
calculated remaining term to maturity of the Contracts collectively,
following the transfer of the Subsequent Contracts, does not exceed [
] months, and (C) the Principal Balance of all Contracts from Buell
motorcycles as conveyed to the Trust (including all Subsequent Contracts)
does not exceed 2.5% of the Principal Balance of all Contracts conveyed
by the Trust;
(xiii) the Trust Depositor shall have delivered to the Rating
Agencies, a report with respect to certain agreed-upon procedures
relating to the Subsequent Contracts being transferred, confirming that
procedures were performed substantially similar to such procedures as
were performed in connection with the transfer of the Initial Contracts;
(xiv) each of the representations and warranties made by the
Seller pursuant to Section 3.01 of the Transfer and Sale Agreement with
respect to the Subsequent Receivables shall be true and correct as of the
related Subsequent Transfer Date, and the Seller shall have performed all
obligations to be performed by it hereunder on or prior to such
Subsequent Transfer Date;
(xv) the Seller shall, at its own expense, on or prior to the
Subsequent Transfer Date indicate in its Computer Disk that the
Subsequent Receivables identified on the Subsequent List of Contracts in
the Subsequent Transfer Agreement have been sold to the Issuer pursuant
to this Agreement and the Transfer and Sale Agreement; and
(xvi) the Seller shall have taken any action required to maintain
the first perfected ownership interest of the Issuer in the Owner Trust
Estate and the first perfected security interest of the Indenture Trustee
in the Collateral.
19
(c) The Trust Depositor covenants to transfer (at or prior to the end
of the Funding Period) to the Trust pursuant thereto Subsequent Contracts with
an aggregate Principal Balance equal to $[ ]; PROVIDED,
HOWEVER, that in complying with such covenant, the Trust Depositor agrees to
make no more than one separate transfer of Subsequent Contracts per monthly
period (as measured by the corresponding Distribution Dates). In the event that
the Trust Depositor shall fail to deliver and sell to the Trust any or all of
such Subsequent Receivables by the date on which the Funding Period ends and the
Pre-Funded Amount is greater than $150,000 on such date, the Trust Depositor
shall cause to be deposited into the Collection Account the amount then on
deposit in the Pre-Funding Account; PROVIDED, HOWEVER, that the foregoing shall
be the sole remedy of the Trust, the Owner Trustee, the Indenture Trustee or the
Securityholders with respect to a failure of the Trust Depositor to comply with
such covenant.
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ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
The Seller under the Transfer and Sale Agreement has made, and upon
execution of each Subsequent Purchase Agreement is deemed to remake, each of the
representations and warranties set forth in EXHIBIT J hereto and has consented
to the assignment by the Trust Depositor to the Issuer of the Trust Depositor's
rights with respect thereto. Such representations speak as of the execution and
delivery of this Agreement and as of the Closing Date in the case of the Initial
Contracts, and as of the applicable Subsequent Transfer Date in the case of the
Subsequent Contracts, but shall survive the sale, transfer and assignment of the
Contracts to the Trust. Pursuant to Section 2.01 of this Agreement, the Trust
Depositor has sold, assigned, transferred and conveyed to the Issuer as part of
the Trust Corpus its rights under the Transfer and Sale Agreement, including
without limitation, the representations and warranties of the Seller therein as
set forth in EXHIBIT J attached hereto, together with all rights of the Trust
Depositor with respect to any breach thereof including any right to require the
Seller to repurchase any Contract in accordance with the Transfer and Sale
Agreement. It is understood and agreed that the representations and warranties
set forth or referred to in this Section shall survive delivery of the Contract
Files to the Owner Trustee or any custodian.
The Trust Depositor hereby represents and warrants to the Owner Trustee
that it has entered into the Transfer and Sale Agreement with the Seller, that
the Seller has made the representations and warranties in the Transfer and Sale
Agreement as set forth in EXHIBIT J hereto, that such representations and
warranties run to and are for the benefit of the Trust Depositor, and that
pursuant to Section 2.01 of this Agreement the Trust Depositor has transferred
and assigned to the Owner Trustee all rights of the Trust Depositor to cause the
Seller under the Transfer and Sale Agreement to repurchase Contracts in the
event of a breach of such representations and warranties.
SECTION 3.01. REPRESENTATIONS AND WARRANTIES REGARDING THE TRUST
DEPOSITOR. By its execution of this Agreement and each Subsequent Transfer
Agreement, the Trust Depositor represents and warrants to the Owner Trustee, the
Indenture Trustee, the Noteholders and the Certificateholders that:
(a) ASSUMPTION OF TRUST DEPOSITOR'S REPRESENTATIONS AND
WARRANTIES. The representations and warranties set forth in EXHIBIT J
are true and correct.
(b) ORGANIZATION AND GOOD STANDING. The Trust Depositor is a
corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and has the corporate
power to own its assets and to transact the business in which it is
currently engaged. The Trust Depositor is duly qualified to do business
as a foreign corporation and is in good standing in each jurisdiction in
which the character of the business transacted by it or properties owned
or leased by it requires such qualification and in which the failure so
to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Trust
Depositor or the Trust.
(c) AUTHORIZATION; VALID SALE; BINDING OBLIGATIONS. The Trust
Depositor has the power and authority to make, execute, deliver and
perform this Agreement and the other Transaction Documents to which it is
a party and all of the transactions contemplated under this Agreement and
the other Transaction Documents to which it is a party, and to create the
Trust and cause it to make, execute, deliver and perform its obligations
under this Agreement and the other Transaction Documents to which it is a
party and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and the other
Transaction Documents to which it is a party and to cause the Trust to be
created. This Agreement and the related Subsequent Transfer Agreement,
if any, shall effect a valid sale, transfer and assignment of the Trust
Corpus, enforceable against the Trust Depositor and creditors of and
purchasers from the Trust Depositor. This Agreement and the other
Transaction Documents to which the Trust Depositor is a party constitute
the legal, valid and binding obligation of the Trust Depositor
enforceable in accordance with their terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and by the availability of
equitable remedies.
21
(d) NO CONSENT REQUIRED. The Trust Depositor is not required
to obtain the consent of any other party or any consent, license,
approval or authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement or the other Transaction Documents to which it is a party.
(e) NO VIOLATIONS. The execution, delivery and performance of
this Agreement and the other Transaction Documents to which it is a party
by the Trust Depositor, and the consummation of the transactions
contemplated hereby and thereby, will not violate any provision of any
existing law or regulation or any order or decree of any court or of any
Federal or state regulatory body or administrative agency having
jurisdiction over the Trust Depositor or any of its properties or the
Articles of Incorporation or Bylaws of the Trust Depositor, or constitute
a material breach of any mortgage, indenture, contract or other agreement
to which the Trust Depositor is a party or by which the Trust Depositor
or any of the Trust Depositor's properties may be bound, or result in the
creation or imposition of any security interest, lien, charge, pledge,
preference, equity or encumbrance of any kind upon any of its properties
pursuant to the terms of any such mortgage, indenture, contract or other
agreement, other than as contemplated by the Transaction Documents.
(f) LITIGATION. No litigation or administrative proceeding of
or before any court, tribunal or governmental body is currently pending,
or to the knowledge of the Trust Depositor threatened, against the Trust
Depositor or any of its properties or with respect to this Agreement, the
other Transaction Documents to which it is a party or the Certificates
(1) which, if adversely determined, would in the opinion of the Trust
Depositor have a material adverse effect on the business, properties,
assets or condition (financial or otherwise) of the Trust Depositor or
the Trust or the transactions contemplated by this Agreement or the other
Transaction Documents to which the Trust Depositor is a party or (2)
seeking to adversely affect the federal income tax or other federal,
state or local tax attributes of the Certificates or Notes.
(g) PLACE OF BUSINESS; NO CHANGES. The Trust Depositor's sole
place of business (within the meaning of Article 9 of the UCC) is as set
forth in Section 11.04 below. The Trust Depositor has not changed its
name, whether by amendment of its Articles of Incorporation, by
reorganization or otherwise, and has not changed the location of its
place of business, within the four months preceding the Closing Date.
(h) The Trust Depositor will always own a Certificate equal to
at least one percent (1.00%) of the outstanding certificate balance.
Such representations speak as of the execution and delivery of this Agreement
and as of the Closing Date in the case of the Initial Contracts, and as of the
applicable Subsequent Transfer Date in the case of the Subsequent Contracts, but
shall survive the sale, transfer and assignment of the Contracts to the Trust.
SECTION 3.02. REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICER. The
Servicer represents and warrants to the Owner Trustee, the Indenture Trustee,
the Noteholders and the Certificateholders that:
(a) ORGANIZATION AND GOOD STANDING. The Servicer is a
corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and has the corporate
power to own its assets and to transact the business in which it is
currently engaged. The Servicer is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which
the character of the business transacted by it or properties owned or
leased by it requires such qualification and in which the failure so to
qualify would have a material adverse effect on the business, properties,
assets, or condition (financial or otherwise) of the Servicer or the
Trust. The Servicer is properly licensed in each jurisdiction to the
extent required by the laws of such jurisdiction to service the Contracts
in accordance with the terms hereof.
(b) AUTHORIZATION; BINDING OBLIGATIONS. The Servicer has the
power and authority to make, execute, deliver and perform this Agreement
and the other Transaction Documents to which the Servicer is a party and
all of the transactions contemplated under this Agreement and the other
Transaction Documents to which the Servicer is a party, and has taken all
necessary corporate action to authorize the execution, delivery
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and performance of this Agreement and the other Transaction Documents
to which the Servicer is a party. This Agreement and the other
Transaction Documents to which the Servicer is a party constitute the
legal, valid and binding obligation of the Servicer enforceable in
accordance with their terms, except as enforcement of such terms may
be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies.
(c) NO CONSENT REQUIRED. The Servicer is not required to
obtain the consent of any other party or any consent, license, approval
or authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement and the other Transaction Documents to which the Servicer is a
party.
(d) NO VIOLATIONS. The execution, delivery and performance of
this Agreement and the other Transaction Documents to which the Servicer
is a party by the Servicer will not violate any provisions of any
existing law or regulation or any order or decree of any court or of any
Federal or state regulatory body or administrative agency having
jurisdiction over the Servicer or any of its properties or the Articles
of Incorporation or Bylaws of the Servicer, or constitute a material
breach of any mortgage, indenture, contract or other agreement to which
the Servicer is a party or by which the Servicer or any of the Servicer's
properties may be bound, or result in the creation of or imposition of
any security interest, lien, pledge, preference, equity or encumbrance of
any kind upon any of its properties pursuant to the terms of any such
mortgage, indenture, contract or other agreement, other than this
Agreement.
(e) LITIGATION. No litigation or administrative proceeding of
or before any court, tribunal or governmental body is currently pending,
or to the knowledge of the Servicer threatened, against the Servicer or
any of its properties or with respect to this Agreement, any other
Transaction Document to which the Servicer is a party which, if adversely
determined, would in the opinion of the Servicer have a material adverse
effect on the business, properties, assets or condition (financial or
otherwise) of the Servicer or the Trust or the transactions contemplated
by this Agreement or any other Transaction Document to which the Servicer
is a party.
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ARTICLE FOUR
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS;
SECTION 4.01. CUSTODY OF CONTRACTS. (a) Subject to the terms and
conditions of this Section 4.01, the contents of each Contract File shall be
held in the custody of the Servicer for the benefit of, and as agent for, the
Noteholders, the Certificateholders, the Indenture Trustee and the Owner Trustee
as the owner thereof.
(b) The Servicer agrees to maintain the related Contract Files at its
offices where they are currently maintained, or at such other offices of the
Servicer in the State of Nevada as shall from time to time be identified to the
Trustees by written notice. The Servicer may temporarily move individual
Contract Files or any portion thereof without notice as necessary to conduct
collection and other servicing activities in accordance with its customary
practices and procedures; PROVIDED, HOWEVER, that the Servicer will take all
action necessary to maintain the perfection of the Trust's interest in the
Contracts and the proceeds thereof. It is intended that by the Servicer's
agreement pursuant to Section 4.01(a) above and this Section 4.01(b) the
Trustees shall be deemed to have possession of the Contract Files for purposes
of Section 9-305 of the Uniform Commercial Code of the State in which the
Contract Files are located.
(c) As custodian, the Servicer shall have and perform the following
powers and duties:
(i) hold the Contract Files on behalf of the Noteholders and
the Certificateholders and the Owner Trustee and the Indenture Trustee,
maintain accurate records pertaining to each Contract to enable it to
comply with the terms and conditions of this Agreement, maintain a
current inventory thereof, conduct annual physical inspections of
Contract Files held by it under this Agreement and certify to the Owner
Trustee and the Indenture Trustee annually that it continues to maintain
possession of such Contract Files;
(ii) implement policies and procedures in writing and signed by
a Servicing Officer with respect to persons authorized to have access to
the Contract Files on the Servicer's premises and the receipting for
Contract Files taken from their storage area by an employee of the
Servicer for purposes of servicing or any other purposes;
(iii) attend to all details in connection with maintaining
custody of the Contract Files on behalf of the Noteholders and the
Certificateholders, the Owner Trustee and the Indenture Trustee;
(iv) at all times maintain the original of the fully executed
Contract and store such original Contract in a fireproof vault;
(v) stamp each Contract on both the first and the signature
page (if different) as of the Closing Date (or Subsequent Transfer Date,
as the case may be) in the form attached hereto as EXHIBIT L;
(vi) within 30 days of the Closing Date (or Subsequent Transfer
Date, as the case may be) deliver an Officer's Certificate to the Owner
Trustee and the Indenture Trustee certifying that as of a date no earlier
than the Closing Date (or Subsequent Transfer Date, as the case may be)
it has conducted an inventory of the Contract Files (which in the case of
Subsequent Contracts, need be only of the Contract Files related to such
Subsequent Contracts) and that there exists a Contract File for each
Contract and stating all exceptions to such statement, if any; and
(vii) within 185 days of the Closing Date (or Subsequent Transfer
Date, as the case may be) deliver an Officer's Certificate to the Owner
Trustee listing each Contract with respect to which there did not exist
as of 180 days of the Closing Date (or Subsequent Transfer Date, as the
case may be) an original title certificate to the motorcycle and the
certificate of lien recordation relating thereto.
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(d) In performing its duties under this Section 4.01, the Servicer
agrees to act with reasonable care, using that degree of skill and care that it
exercises with respect to similar contracts for the installment purchase of
consumer goods owned and/or serviced by it, and in any event with no less degree
of skill and care than would be exercised by a prudent servicer of motorcycle
conditional sales contracts. The Servicer shall promptly report to the Owner
Trustee and the Indenture Trustee any failure by it to hold the Contract Files
as herein provided and shall promptly take appropriate action to remedy any such
failure. In acting as custodian of the Contract Files, the Servicer further
agrees not to assert any legal or beneficial ownership interest in the Contracts
or the Contract Files, except as provided in Section 5.06. The Servicer agrees
to indemnify the Noteholders, the Certificateholders, the Owner Trustee and the
Indenture Trustee for any and all liabilities, obligations, losses, damages,
payments, costs, or expenses of any kind whatsoever which may be imposed on,
incurred by or asserted against the Noteholders, the Certificateholders, the
Owner Trustee and the Indenture Trustee as the result of any act or omission by
the Servicer relating to the maintenance and custody of the Contract Files;
PROVIDED, HOWEVER, that the Servicer will not be liable for any portion of any
such amount resulting from the gross negligence or willful misconduct of any
Noteholder, Certificateholder, the Owner Trustee or the Indenture Trustee. The
Trustees shall have no duty to monitor or otherwise oversee the Servicer's
performance as custodian hereunder.
SECTION 4.02. FILING. On or prior to the Closing Date, the Servicer
shall cause the UCC financing statement(s) referred to in Section 2.02(g) hereof
to be filed and from time to time the Servicer shall take and cause to be taken
such actions and execute such documents as are necessary or desirable or as the
Owner Trustee or Indenture Trustee may reasonably request to perfect and protect
the Trust's first priority perfected interest in the Trust Corpus against all
other persons, including, without limitation, the filing of financing
statements, amendments thereto and continuation statements, the execution of
transfer instruments and the making of notations on or taking possession of all
records or documents of title.
SECTION 4.03. NAME CHANGE OR RELOCATION. (a) During the term of this
Agreement, neither the Seller nor the Trust Depositor shall change its name,
identity or structure or relocate its chief executive office without first
giving at least 30 days' prior written notice to the Owner Trustee and the
Indenture Trustee.
(b) If any change in either the Seller's or the Trust Depositor's
name, identity or structure or other action would make any financing or
continuation statement or notice of lien filed under this Agreement seriously
misleading within the meaning of applicable provisions of the UCC or any title
statute, the Servicer, no later than five days after the effective date of such
change, shall file such amendments as may be required to preserve and protect
the Trust's interests in the Trust Corpus and the proceeds thereof. In
addition, neither the Seller nor the Trust Depositor shall change its place of
business (within the meaning of Article 9 of the UCC) from the location
specified in Section 11.04 below unless it has first taken such action as is
advisable or necessary to preserve and protect the Trust's interest in the Trust
Corpus. Promptly after taking any of the foregoing actions, the Servicer shall
deliver to the Owner Trustee and the Indenture Trustee an opinion of counsel
reasonably acceptable to the Owner Trustee stating that, in the opinion of such
counsel, all financing statements or amendments necessary to preserve and
protect the interests of the Owner Trustee in the Trust Corpus have been filed,
and reciting the details of such filing.
SECTION 4.04. CHIEF EXECUTIVE OFFICE. During the term of this Agreement,
the Trust Depositor will maintain its chief executive office in one of the
States of the United States, except Louisiana, Tennessee, Colorado, Kansas, New
Mexico, Oklahoma, Utah or Wyoming.
SECTION 4.05. COSTS AND EXPENSES. The Servicer agrees to pay all
reasonable costs and disbursements in connection with the perfection and the
maintenance of perfection, as against all third parties, of the Trust's right,
title and interest in and to the Contracts (including, without limitation, the
security interest in the Motorcycles granted thereby).
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ARTICLE FIVE
SERVICING OF CONTRACTS
SECTION 5.01. RESPONSIBILITY FOR CONTRACT ADMINISTRATION. The Servicer
will have the sole obligation to manage, administer, service and make
collections on the Contracts and perform or cause to be performed all
contractual and customary undertakings of the holder of the Contracts to the
Obligor. The Owner Trustee, at the written request of a Servicing Officer,
shall furnish the Servicer with any powers of attorney or other documents
necessary or appropriate in the opinion of the Owner Trustee to enable the
Servicer to carry out its servicing and administrative duties hereunder. The
Servicer is hereby appointed the servicer hereunder until such time as any
Service Transfer may be effected under Article VIII.
SECTION 5.02. STANDARD OF CARE. In managing, administering, servicing
and making collections on the Contracts pursuant to this Agreement, the Servicer
will exercise that degree of skill and care consistent with the skill and care
that the Servicer exercises with respect to similar contracts serviced by the
Servicer, and, in any event no less degree of skill and care than would be
exercised by a prudent servicer of motorcycle conditional sales contracts;
PROVIDED, HOWEVER, that notwithstanding the foregoing, the Servicer shall not
release or waive the right to collect the unpaid balance on any Contract.
SECTION 5.03. RECORDS. The Servicer shall, during the period it is
servicer hereunder, maintain such books of account and other records as will
enable the Owner Trustee and the Indenture Trustee to determine the status of
each Contract.
SECTION 5.04. INSPECTION. (a) At all times during the term hereof, the
Servicer shall afford the Owner Trustee and the Indenture Trustee and their
respective authorized agents reasonable access during normal business hours to
the Servicer's records relating to the Contracts and will cause its personnel to
assist in any examination of such records by the Owner Trustee or the Indenture
Trustee, or such authorized agents and allow copies of the same to be made. The
examination referred to in this Section will be conducted in a manner which does
not unreasonably interfere with the Servicer's normal operations or customer or
employee relations. Without otherwise limiting the scope of the examination the
Owner Trustee or the Indenture Trustee may, using generally accepted audit
procedures, verify the status of each Contract and review the Computer Disk and
records relating thereto for conformity to Monthly Reports prepared pursuant to
Article IX and compliance with the standards represented to exist as to each
Contract in this Agreement.
(b) At all times during the term hereof, the Servicer shall keep
available a copy of the List of Contracts at its principal executive office for
inspection by Certificateholders.
SECTION 5.05. TRUST ACCOUNTS. (a) On or before the Closing Date, the
Trust Depositor shall establish the Collection Account, Note Distribution
Account, Pre-Funding Account and Reserve Fund, each in the name of the Indenture
Trustee for the benefit of the Noteholders and the Certificateholders,
respectively. The Indenture Trustee is hereby required to ensure that each of
the Trust Accounts is established and maintained as an Eligible Account.
(b) The Indenture Trustee shall deposit (or the Servicer shall
deposit, with respect to payments by or on behalf of the Obligors received
directly by the Servicer), without deposit into any intervening account, into
the Collection Account as promptly as practical (but in any case not later than
the second Business Day following the receipt thereof):
(i) With respect to principal and interest on the Contracts (as
well as Late Payment Penalty Fees and extension fees) received on or
after the Initial Cutoff Date or Subsequent Cutoff Date, as applicable
(which for the purpose of this paragraph (b)(i) shall include those
monies in the Lockbox Account allocable to principal and interest on the
Contracts), all such amounts received by the Owner Trustee or Servicer;
(ii) All Net Liquidation Proceeds related to the Contracts;
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(iii) The aggregate of the Repurchase Prices for Contracts
repurchased by the Trust Depositor as described in Section 7.08;
(iv) All Advances made by the Servicer pursuant to Section
7.03(a);
(v) All amounts paid by the Trust Depositor in connection with
an optional repurchase of the Contracts described in Section 7.10;
(vi) All amounts realized in respect of Carrying Charges
transferred from the Interest Reserve Account as contemplated in Section
7.03(b); and
(vii) All amounts received in respect of interest, dividends,
gains, income and earnings on investments of funds in the Trust Accounts
(except the Reserve Fund) as contemplated herein.
(c) The Indenture Trustee shall, if amounts remain on deposit in the
Pre-Funding Account at the expiration of the Funding Period, make a demand,
immediately upon expiration of the Funding Period, upon the Trust Depositor to
cause to be deposited into the Collection Account the amount then in deposit in
the Pre-Funding Account.
(d) If the Servicer so directs, in writing, the Indenture Trustee
shall invest the amounts in the Trust Accounts in Qualified Eligible Investments
that mature not later than one Business Day prior to the next succeeding
Distribution Date. Once such funds are invested, the Indenture Trustee shall
not change the investment of such funds. Any loss on such investments shall be
deposited in the applicable Trust Account by the Servicer out of its own funds
immediately as realized. Funds in the Trust Accounts not so invested must be
insured to the extent permitted by law by the Bank Insurance Fund or the Savings
Association Insurance Fund of the Federal Deposit Insurance Corporation.
Subject to the restrictions herein, the Indenture Trustee may purchase a
Qualified Eligible Investment from itself or an Affiliate. Subject to the
other provisions hereof, the Indenture Trustee shall have sole control over each
such investment and the income thereon, and any certificate or other instrument
evidencing any such investment, if any, shall be delivered directly to the
Indenture Trustee or its agent, together with each document of transfer, if any,
necessary to transfer title to such investment to the Indenture Trustee in a
manner which complies with this Section 5.05(d). All interest, dividends, gains
upon sale and other income from, or earnings on, investments of funds in the
Trust Accounts shall be deposited in the Collection Account pursuant to Section
5.05(b) and distributed on the next Distribution Date pursuant to Section 7.05.
The Trust Depositor and the Trust agree and acknowledge that the Indenture
Trustee is to have "CONTROL" (within the meaning of Section 8-102 of the UCC as
enacted in Illinois) of collateral comprised of "INVESTMENT PROPERTY" (within
the meaning of Section 9-115 of the UCC as enacted in Illinois) for all purposes
of this Agreement.
SECTION 5.06. ENFORCEMENT. (a) The Servicer will, consistent with
Section 5.02, act with respect to the Contracts in such manner as will maximize
the receipt of principal and interest on such Contracts.
(b) The Servicer may xxx to enforce or collect upon Contracts, in its
own name, if possible, or as agent for the Trustees. If the Servicer elects to
commence a legal proceeding to enforce a Contract, the act of commencement shall
be deemed to be an automatic assignment of the Contract to the Servicer for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding it is held that the Servicer may not enforce a Contract on the ground
that it is not a real party in interest or a holder entitled to enforce the
Contract, the Owner Trustee (or the Indenture Trustee) on behalf of the Trust
shall, at the Servicer's expense, take such steps as the Servicer deems
reasonably necessary to enforce the Contract, including bringing suit in its
name or the names of the Noteholders under the Indenture and the
Certificateholders as owners of the Trust.
(c) The Servicer shall exercise any rights of recourse against third
persons that exist with respect to any Contract in accordance with the
Servicer's usual practice. In exercising recourse rights, the Servicer is
authorized on the Owner Trustee's behalf to reassign the defaulted Contract or
the related Motorcycle to the person against whom recourse exists at the price
set forth in the document creating the recourse; PROVIDED, HOWEVER, the Servicer
in exercising recourse against any third persons as described in the immediately
preceding sentence shall do so in such manner as to maximize the aggregate
recovery with respect to the Contract; and PROVIDED FURTHER, HOWEVER, that
notwithstanding the
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foregoing the Servicer in its capacity as such may exercise such recourse
only if such Contract was not required to be repurchased by the Seller
pursuant to the Transfer and Sale Agreement or was required to be repurchased
by the Seller and the Seller has defaulted on such repurchase obligation.
(d) The Servicer will not permit any rescission or cancellation of any
Contract due to the acts or omissions of the Trust Depositor.
(e) The Servicer may grant to the Obligor on any Contract an
extension of payments due under such Contract; PROVIDED that (i) the
extension period is limited to 45 days, (ii) the Obligor has not received an
extension during the previous twelve-month period, (iii) the evidence
supports the Obligor's willingness and capability to resume monthly payments,
(iv) such extension is consistent with the Servicer's customary servicing
procedures and is consistent with Section 5.02, (v) such extension does not
extend the maturity date of the Contract beyond the latest maturity date of
any of the Contracts as of the Initial Cutoff Date (or, if a transfer of
Subsequent Contracts to the Trust occurs, beyond the latest maturity date of
such Subsequent Contracts) and (vi) the aggregate Principal Balances of
Contracts which have had extensions granted does not exceed more than 3.00%
of the aggregate of the Initial Class A-1 Note Balance, the Initial Class
A-2 Note Balance and the Initial Certificate Balance.
(f) The Servicer will not add to the outstanding Principal Balance of
any Contract the premium of any physical damage or other individual insurance on
a Motorcycle securing such Contract it obtains on behalf of the Obligor under
the terms of such Contract, but may create a separate Obligor obligation with
respect to such premium if and as provided by the Contract.
(g) If the Servicer shall have repossessed a Motorcycle on behalf of
the Trust, the Servicer shall either (i) maintain at its expense physical damage
insurance with respect to such Motorcycle, or (ii) indemnify the Trust against
any damage to such Motorcycle prior to resale or other disposition. The
Servicer shall not allow such repossessed Motorcycles to be used in an active
trade or business, but rather shall dispose of the Motorcycle in a reasonable
time in accordance with the Servicer's normal business practices.
SECTION 5.07. TRUSTEES TO COOPERATE. Upon payment in full on any
Contract, the Servicer will notify the Trustees and the Trust Depositor on the
next succeeding Distribution Date by certification of a Servicing Officer (which
certification shall include a statement to the effect that all amounts received
in connection with such payments which are required to be deposited in the
Collection Account pursuant to Section 5.05 have been so deposited) and shall
(if the Servicer is not then in possession of the Contracts and Contract Files)
request delivery of the Contract and Contract File to the Servicer. Upon
receipt of such delivery and request, the Trustees shall promptly release or
cause to be released such Contract and Contract File to the Servicer. Upon
receipt of such Contract and Contract File, each of the Trust Depositor and the
Servicer is authorized to execute an instrument in satisfaction of such Contract
and to do such other acts and execute such other documents as the Servicer deems
necessary to discharge the Obligor thereunder and eliminate the security
interest in the Motorcycle related thereto. The Servicer shall determine when a
Contract has been paid in full; to the extent that insufficient payments are
received on a Contract credited by the Servicer as prepaid or paid in full and
satisfied, the shortfall shall be paid by the Servicer out of its own funds.
From time to time as appropriate for servicing and repossession in connection
with any Contract, if the Servicer is not then in possession of the Contracts
and Contract Files, the Indenture Trustee shall, upon written request of a
Servicing Officer and delivery to the Indenture Trustee of a receipt signed by
such Servicing Officer, cause the original Contract and the related Contract
File to be released to the Servicer and shall execute such documents as the
Servicer shall deem reasonably necessary to the prosecution of any such
proceedings. Such receipt shall obligate the Servicer to return the original
Contract and the related Contract File to the Indenture Trustee when the need by
the Servicer has ceased unless the Contract shall be repurchased as described in
Section 7.10. Upon request of a Servicing Officer, the Indenture Trustee shall
perform such other acts as reasonably requested by the Servicer and otherwise
cooperate with the Servicer in the enforcement of the Certificateholders' rights
and remedies with respect to Contracts.
SECTION 5.08. COSTS AND EXPENSES. All costs and expenses incurred by the
Servicer in carrying out its duties hereunder, fees and expenses of accountants
and payments of all fees and expenses incurred in connection with the
enforcement of Contracts (including enforcement of defaulted Contracts and
repossessions of Motorcycles securing such Contracts when such Contracts are not
repurchased pursuant to Section 7.08) and all other fees and expenses not
28
expressly stated hereunder to be for the account of the Trust shall be paid by
the Servicer and the Servicer shall not be entitled to reimbursement hereunder.
SECTION 5.09. MAINTENANCE OF SECURITY INTERESTS IN MOTORCYCLES. The
Servicer shall take such steps as are necessary to maintain continuous
perfection and the first priority of the security interest created by each
Contract in the related Motorcycle. The Owner Trustee hereby authorizes the
Servicer to take such steps as are necessary to perfect such security interest
and to maintain the first priority thereof in the event of a relocation of a
Motorcycle or for any other reason.
SECTION 5.10. SUCCESSOR SERVICER/LOCKBOX AGREEMENTS. The Servicer shall
use its best efforts to cause Obligors to make all payments on the Contracts
directly to one or more Lockbox Banks, acting as agent for the Trust pursuant to
a Lockbox Agreement. In the event the Servicer shall for any reason no longer
be acting as such, the Successor Servicer shall thereupon assume all of the
rights and obligations of the outgoing servicer under the Lockbox Agreement;
PROVIDED, HOWEVER, that the Successor Servicer shall not be liable for any acts
or obligations of the Servicer prior to such succession. In such event, the
Successor Servicer shall be deemed to have assumed all of the outgoing
Servicer's interest therein and to have replaced the outgoing Servicer as a
party to each such Lockbox Agreement to the same extent as if such Lockbox
Agreement had been assigned to the Successor Servicer, except that the outgoing
Servicer shall not thereby be relieved of any liability or obligations on the
part of the outgoing Servicer to the Lockbox Bank under such Lockbox Agreement.
The outgoing Servicer shall, upon the request of the Owner Trustee, but at the
expense of the outgoing Servicer, deliver to the Successor Servicer all
documents and records relating to each such Lockbox Agreement and an accounting
of amounts collected and held by the Lockbox Bank and otherwise use its best
efforts to effect the orderly and efficient transfer of any Lockbox Agreement to
the Successor Servicer. In connection with its assumption of all of the rights
and obligations of the outgoing Servicer, the Successor Servicer shall deliver a
written notice to Norwest Financial Information Services Group to the effect
that the outgoing Servicer has been terminated as Servicer or has resigned as
Servicer hereunder. Such notice shall also include a request to Norwest
Financial Information Services Group to assign to the Successor Servicer the
rights under that certain Agreement between Norwest Financial Information
Services Group and Eaglemark Financial Services, Inc., a Delaware corporation
("EAGLEMARK FINANCIAL"), dated as of November 4, 1992 (the "NORWEST AGREEMENT")
insofar as such rights relate to the Contracts, and an agreement on the part of
the Successor Servicer to assume the obligations under the Norwest Agreement
insofar as such obligations relate to the servicing of the Contracts. No such
assignment and assumption will relieve the Trust Depositor or Eaglemark
Financial of its obligations under the Norwest Agreement.
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ARTICLE SIX
THE TRUST DEPOSITOR
SECTION 6.01. CORPORATE EXISTENCE. During the term of this Agreement,
the Trust Depositor will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the other Transaction
Documents and each other instrument or agreement necessary or appropriate to the
proper administration of this Agreement and the transactions contemplated
hereby. In addition, all transactions and dealings between the Trust Depositor
and its Affiliates will be conducted on an arm's-length basis.
SECTION 6.02. LIABILITY OF TRUST DEPOSITOR; INDEMNITIES. The Trust
Depositor shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Trust Depositor under this Agreement.
The Trust Depositor shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, WTC, the Indenture Trustee and the Servicer from and against
any taxes that may at any time be asserted against any such Person with respect
to the transactions contemplated herein and in the other Transaction Documents,
including any sales, gross receipts, general corporation, tangible personal
property, Illinois personal property replacement privilege or license taxes
(but, in the case of the Issuer, not including any taxes asserted with respect
to, and as of the date of, the sale of the Contracts to the Issuer or the
issuance and original sale of the Securities, or asserted with respect to
ownership of the Contracts, or federal or other income taxes arising out of
distributions on the Certificates or the Notes) and costs and expenses in
defending against the same.
The Trust Depositor shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, WTC, the Indenture Trustee and the Securityholders from and
against any loss, liability or expense incurred by reason of the Trust
Depositor's willful misfeasance, bad faith or negligence (other than errors in
judgment) in the performance of its duties under this Agreement, or by reason of
reckless disregard of its obligations and duties under this Agreement.
The Trust Depositor shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, WTC and the Indenture Trustee from and against all costs,
expenses, losses, claims, damages and liabilities arising out of or incurred in
connection with the acceptance or performance of the trusts and duties herein
and, in the case of the Owner Trustee, in the Trust Agreement and, in the case
of the Indenture Trustee, in the Indenture, except to the extent that such cost,
expense, loss, claim, damage or liability in the case of (i) the Owner Trustee
or WTC, as the case may be, shall be due to the willful misfeasance, bad faith
or negligence of the Owner Trustee or WTC, as the case may be, or shall arise
from the breach by the Owner Trustee or WTC, as the case may be, of any of its
representations or warranties set forth in Section 7.03 of the Trust Agreement,
or (ii) the Indenture Trustee, shall be due to the willful misfeasance, bad
faith or negligence of the Indenture Trustee.
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 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; 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
Trust Depositor shall not be liable) shall be deemed third party beneficiaries
of this paragraph. The obligations of Trust Depositor under this paragraph
shall be evidenced by the Trust Certificates described in the Trust Agreement,
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.
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Indemnification under this Section shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Trust Depositor shall have made any indemnity payments pursuant to this Section
and the Person to or on behalf of whom such payments are made thereafter shall
collect any of such amounts from others, such Person shall promptly repay such
amounts to the Trust Depositor, without interest.
SECTION 6.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, TRUST DEPOSITOR; CERTAIN LIMITATIONS.
(a) The Trust Depositor shall not consolidate with or merge into any
other corporation or convey, transfer or lease substantially all of its assets
as an entirety to any Person unless the corporation formed by such consolidation
or into which the Trust Depositor has merged or the Person which acquires by
conveyance, transfer or lease substantially all the assets of the Trust
Depositor as an entirety, can lawfully perform the obligations of the Trust
Depositor hereunder and executes and delivers to the Owner Trustee and the
Indenture Trustee an agreement in form and substance reasonably satisfactory to
the Owner Trustee and the Indenture Trustee which contains an assumption by such
successor entity of the due and punctual performance and observance of each
covenant and condition to be performed or observed by the Trust Depositor under
this Agreement. The Trust Depositor shall provide notice of any merger,
consolidation or succession pursuant to this Section to each Rating Agency and
shall receive from each Rating Agency a letter to the effect that such merger,
consolidation or succession will not result in a qualification, downgrading or
withdrawal of the then-current ratings of each Class of Notes or the
Certificates. The Trust Depositor and Eaglemark shall maintain separate
corporate offices.
(b) Notwithstanding any other provision of this Section and any
provision of law, the Trust Depositor shall not do any of the following:
(i) engage in any business or activity other than as set forth
in its Articles of Incorporation;
(ii) without the affirmative vote of a majority of the members
of the Board of Directors of the Trust Depositor (which must include the
affirmative vote of at least two duly appointed Independent directors)
(A) dissolve or liquidate, in whole or in part, or institute proceedings
to be adjudicated bankrupt or insolvent, (B) consenting to the
institution of bankruptcy or insolvency proceedings against it, (C) file
a petition seeking or consent to reorganization or relief under any
applicable federal or state law relating to bankruptcy, (D) consent to
the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the corporation or a
substantial part of its property, (E) make a general assignment for the
benefit of creditors, (F) admit in writing its inability to pay its debts
generally as they become due, or (G) take any corporate action in
furtherance of the actions set forth in clauses (A) through (F) above;
PROVIDED, HOWEVER, that no director may be required by any shareholder of
the Trust Depositor to consent to the institution of bankruptcy or
insolvency proceedings against the Trust Depositor so long as it is
solvent; or
(iii) merge or consolidate with any other corporation, company or
entity or sell all or substantially all of its assets or acquire all or
substantially all of the assets or capital stock or other ownership
interest of any other corporation, company or entity.
SECTION 6.04. LIMITATION ON LIABILITY OF TRUST DEPOSITOR AND OTHERS. The
Trust Depositor and any director or officer or employee or agent of the Trust
Depositor may rely in good faith on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Trust Depositor and any director or officer or employee or agent
of the Trust Depositor shall be reimbursed by the Owner Trustee or the Indenture
Trustee, as the case may be, for any contractual damages, liability or expense
incurred by reason of the Owner Trustee's or the Indenture Trustee's willful
misfeasance, bad faith or negligence (except errors in judgment) in the
performance of their respective duties hereunder, or by reason of reckless
disregard of their respective obligations and duties hereunder. The Trust
Depositor shall not be under any obligation to appear in, prosecute or defend
any legal action that shall not be incidental to its obligations under this
Agreement, and that in its opinion may involve it in any expense or liability.
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SECTION 6.05. TRUST DEPOSITOR NOT TO RESIGN. Subject to the provisions
of Section 6.03, the Trust Depositor shall not resign from the obligations and
duties hereby imposed on it as Trust Depositor hereunder.
SECTION 6.06. TRUST DEPOSITOR WILL OWN CERTIFICATES. The Trust Depositor
and any Affiliate thereof will in its individual or any other capacity become
the owner or pledgee of Certificates with the same rights as it would have if it
were not the Trust Depositor or an Affiliate thereof, except as expressly
provided herein or in any Transaction Document. Certificates so owned by or
pledged to the Trust Depositor or such Affiliate shall have an equal and
proportionate benefit under the provisions of this Agreement, without
preference, priority or distinction as among all of the Certificates, as the
case may be.
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ARTICLE SEVEN
DISTRIBUTIONS; RESERVE FUND
SECTION 7.01. MONTHLY DISTRIBUTIONS. (a) Each Noteholder and
Certificateholder as of the related Record Date shall be paid on the next
succeeding Distribution Date by check mailed to such Noteholder or
Certificateholder at the address for such Noteholder or Certificateholder
appearing on the Note Register or Certificate Register or by wire transfer if
such Noteholder or Certificateholder provides written instructions to the
Indenture Trustee, respectively, at least ten days prior to such Distribution
Date.
(b) The Indenture Trustee shall serve as the paying agent hereunder
(the "PAYING AGENT") and shall make the payments to the Noteholders and
Certificateholders required hereunder. The Indenture Trustee hereby agrees that
all amounts held by it for payment hereunder will be held in trust for the
benefit of the Noteholders and Certificateholders.
SECTION 7.02. FEES. The Trustees shall be paid the Trustees' Fees and
the Servicer shall be paid the Monthly Servicing Fee, each of which shall be
paid solely from the monies and in accordance with the priorities described in
Section 7.05(a). No recourse may be had to the Seller, Trust Depositor,
Trustees, Servicer, or any of their respective Affiliates in the event that
amounts available under Section 7.05(a) are insufficient for payment of the
Trustees' Fee and the Monthly Servicing Fee.
SECTION 7.03. ADVANCES; REALIZATION OF CARRYING CHARGE. (a) On each
Determination Date, the Servicer shall compute the amount of Delinquent
Interest, if any, on the Contracts for the immediately preceding Due Period.
Not later than each Determination Date, the Servicer shall advance (each, an
"ADVANCE") such Delinquent Interest by depositing the aggregate amount of such
Delinquent Interest in the Collection Account; PROVIDED, HOWEVER, that the
Servicer shall be obligated to advance Delinquent Interest only to the extent
that the Servicer, in its sole discretion, expects that such Advance will not
become an Uncollectible Advance. The Servicer shall indicate on each Monthly
Report (i) the amount of Delinquent Interest, if any, on the Contracts for the
related Due Period and (ii) the amount of the Advance, if any, made by the
Servicer in respect of such Delinquent Interest pursuant to this Section 7.03.
If the amount of such Advance is less than the amount of the Delinquent
Interest, the relevant Monthly Report shall be accompanied by a certificate of a
Servicing Officer setting forth in reasonable detail the basis for the
determination by the Servicer that the portion of the Delinquent Interest not
advanced would become an Uncollectible Advance. By each Determination Date, the
Servicer shall determine the amount of prior unreimbursed Advances for which it
desires to be reimbursed pursuant to the provisions of this Section (such
amount, the "REIMBURSEMENT AMOUNT"). The Servicer shall be entitled to be
reimbursed for any outstanding Advance with respect to a Contract by means of a
first priority withdrawal from the Collection Account of such Reimbursement
Amount as provided in Section 7.05(a)(ii).
(b) The Servicer shall determine no later than 12:00 noon, New York
City time, on the second Business Day prior to a Distribution Date the Carrying
Charges in respect of the upcoming Distribution Date. To the extent of such
amount, the Indenture Trustee shall transfer an amount equal to the Carrying
Charges from the Interest Reserve Account (solely to the extent of the amount
then on deposit) into the Collection Account as contemplated in Section
5.05(b)(vi) hereof.
SECTION 7.04. INTEREST RESERVE ACCOUNT.
(a) On or prior to the Closing Date, the Trust Depositor shall
establish in the name of the Indenture Trustee on behalf of the Securityholders,
an Eligible Account designated "EAGLEMARK CUSTOMER FUNDING-IV INTEREST RESERVE
ACCOUNT - HARLEY DAVIDSON EAGLEMARK MOTORCYCLE TRUST [ ] - XXXXXX
TRUST AND SAVINGS BANK, AS INDENTURE TRUSTEE" (such account being the "Interest
Reserve Account").
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(b) No withdrawals may be made of funds in the Interest Reserve
Account except as provided in (c) below. Except as specifically provided, funds
in the Interest Reserve Account shall not be commingled with funds in any other
account established with respect to the Notes, Certificates or with any other
monies.
(c) All investment earnings realized in respect of amounts in the Pre-
Funding Account shall be deposited when and as received in the Interest Reserve
Account, such that the Pre-Funded Amount shall never exceed the amount initially
deposited into the Pre-Funding Account on the Closing Date. With respect to
amounts on deposit in the Interest Reserve Account, the Indenture Trustee shall
disburse from such funds the amount specified in respect of Carrying Charges in
accordance with Section 7.03 herein. In the event that (i) the Funding Period
has terminated, (ii) all amounts on deposit in the Pre-Funding Account have been
disbursed, (iii) a Distribution Date has elapsed following the occurrence of
both (i) and (ii), and (iv) all amounts referred to in clause (ii) have been
applied, then any amounts remaining in the Interest Reserve Account shall be
allocated and distributed to the Trust Depositor.
SECTION 7.05. DISTRIBUTIONS.
(a) On each Distribution Date, the Servicer will allocate Available
Monies in the following order of priority:
(i) to the Mandatory Special Redemption subaccount in the Note
Distribution Account to the Class A-1 Noteholders and Class A-2 Noteholders, the
amount of any Mandatory Special Redemption, pro rata, calculated on the then
current principal balance of the Class A-1 and Class A-2 Notes with the amounts
derived from draws on the Pre-Funding Account (which amounts are available for
payment of such Mandatory Special Redemptions and not for any other purpose), to
be distributed (i) to the Class A-1 Noteholders, in an amount equal to the Class
A-1 Percentage multiplied by the amount in the Mandatory Special Redemption
Subaccount and (ii) to the Class A-2 Noteholders, in an amount equal to the
Class A-2 Percentage multiplied by the amount in the Mandatory Special
Redemption Subaccount with the amounts derived from draws on the Pre-Funding
Account (which amounts are available solely for payment of such Mandatory
Special Redemptions and not for any other purpose); PROVIDED, HOWEVER, in the
event the amount in the Mandatory Special Redemption subaccount is less than
$150,000 such amount shall be distributed solely to the Class A-1 Noteholders;
(ii) to the Servicer from Available Monies, the Reimbursement Amount to
the Servicer for Advances previously made;
(iii) to the Servicer from Available Monies, the Servicing Fee,
including any unpaid Servicing Fee with respect to one or more prior Due
Periods;
(iv) to the Indenture Trustee and the Owner Trustee from Available
Monies, any accrued and unpaid Indenture Trustee's Fees and Owner Trustee's
Fees, respectively, with respect to one or more prior Due Periods;
(v) to the Note Distribution Account from Available Monies, together
with any amounts deposited therein pursuant to Section 7.06, the Note Interest
Distributable Amount to the holders of the Notes at their respective Interest
Rates;
(vi) to the Note Distribution Account from Available Monies, together
with any amounts deposited therein pursuant to Section 7.06, the Note Principal
Distributable Amount to the holders of the Class A-1 Notes until the principal
amount of the Class A-1 Notes has been reduced to zero, and second to the
holders of the Class A-2 Notes until the principal amount of the Class A-2 Notes
has been reduced to zero;
(vii) to the Certificate Distribution Account from Available Interest,
together with any amounts deposited therein pursuant to Section 7.06, the
Certificate Interest Distributable Amount to the holders of the Certificates;
provided, however, in the event Available Interest is insufficient to make such
payment, from such other monies as may be available to the Trust.
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(viii) to the Certificate Distribution Account from Available Principal,
together with any amounts deposited therein pursuant to Section 7.06, the
Certificate Principal Distributable Amount to the holders of the Certificates;
provided, however, in the event Available Principal is insufficient to make such
payment, from such monies as may be available to the Trust; and
(b) in the event that the distributions described in clauses (i)
through (viii) above have been funded exclusively from Available Monies, any
remaining Available Monies ("EXCESS AMOUNTS") will be deposited into the
Reserve Fund, until the amount on deposit therein equals the Specified Reserve
Fund Balance, with any excess over the Specified Reserve Fund Balance being
distributed to the Trust Depositor. The Servicer shall at the written direction
of the Trust Depositor invest the funds in the Reserve Fund in Qualified
Eligible Investments. Funds in the Reserve Fund shall be invested in
investments that mature on or before the Business day prior to each Distribution
Date. Once such funds are invested, the Indenture Trustee shall not change the
investment of such funds prior to maturity. Upon any such investment, the
Indenture Trustee shall, consistent with the definition of Qualified Eligible
Investment herein, make an appropriate notation of security interest in such
Qualified Eligible Investment on the Indenture Trustee's records, by book entry
or otherwise. All income and gain realized from any such investments as well as
any interest earned on Reserve Fund Deposits shall be deposited and retained in
the Reserve Fund (subject to Section 7.06(e)). Losses, if any, realized on
amounts in the Reserve Fund invested pursuant to this paragraph shall first be
credited against undistributed investment earnings on amounts in the Reserve
Fund invested pursuant to this paragraph, and shall thereafter be deemed to
reduce the amount on deposit in the Reserve Fund. The Trust Depositor and the
Indenture Trustee shall not be liable for the amount of any loss incurred in
respect of any investment, or lack of investment, of funds held in the Reserve
Fund. All income or loss on funds held in the Reserve Fund shall be taxable to
the Trust Depositor.
SECTION 7.06. RESERVE FUND; CERTIFICATE RESERVE AMOUNT.
(a) On or prior to the Closing Date, the Owner Trustee, on behalf of
the Trust Depositor shall deposit the Reserve Fund Initial Deposit and the
Initial Certificate Reserve Amount into the Reserve Fund from the net proceeds
of the Securities. The Reserve Fund will be held by the Indenture Trustee for
the benefit of the Securityholders in order to effectuate the subordination of
the rights of the Securityholders to the extent described above.
(b) The Indenture Trustee shall determine no later than 10:00 a.m.,
Chicago, Illinois time, on the Distribution Date (but after making, and taking
into account, the determination, demand and transfer of funds contemplated in
Section 7.05 above) whether there exists a Shortfall with respect to the
upcoming Distribution Date. In the event that the Indenture Trustee determines
that there exists a Shortfall, the Indenture Trustee shall no later than 12:00
noon, Chicago, Illinois time, on such Distribution Date remit monies from the
Reserve Fund in respect of such Shortfall for deposit in the Note Distribution
Account or Certificate Distribution Account, as applicable.
(c) If funds, up to the Available Amount, in the Reserve Fund are
insufficient to distribute the interest or principal due on the Certificates,
funds available from the Certificate Reserve Amount will be withdrawn from the
Reserve Fund and deposited into the Certificate Distribution Account, solely to
distribute interest on the Certificates on each Distribution Date and to
distribute interest or principal on the Certificates on the Certificate Final
Distribution Date.
(d) Any Excess Amounts will be applied first to the Specified Reserve
Fund Balance (other than the Certificate Reserve Amount) and second to restore
the Certificate Reserve Amount to $[ ].
(e) On each Distribution Date on which the amount on deposit in the
Reserve Fund (after giving effect to all deposits thereto and withdrawals
therefrom on such Distribution Date) is greater than the Specified Spread
Account Balance, the Indenture Trustee shall release its lien on any remaining
amounts to the Trust Depositor.
SECTION 7.07. ESTABLISHMENT OF PRE-FUNDING ACCOUNT.
(a) On or prior to the Closing Date, the Trust Depositor shall
establish in the name of the Indenture Trustee on behalf of the Securityholders,
an Eligible Account designated "EAGLEMARK CUSTOMER FUNDING-IV PRE-FUNDING
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ACCOUNT - HARLEY DAVIDSON EAGLEMARK MOTORCYCLE TRUST [ ] - XXXXXX TRUST
AND SAVINGS BANK, AS INDENTURE TRUSTEE" (such account being the "Pre-Funding
Account").
(b) During the Funding Period, following receipt from the Trust
Depositor of an Addition Notice, and upon further receipt of a written demand
from the Trust Depositor for a disbursement of funds from the Pre-Funding
Account to be made on or before the date on which the Funding Period terminates
(which written demand must be delivered not later than one Business Day prior to
the requested date of funding and must be accompanied by the written consent of
the Indenture Trustee), the Indenture Trustee will disburse the amount demanded
from the Pre-Funding Account to Eaglemark upon the order of the Trust Depositor
for the purpose of purchasing Subsequent Contracts from Eaglemark pursuant to a
Subsequent Purchase Agreement. With respect to amounts still remaining on
deposit in the Pre-Funding Account on the date upon which the Funding Period
ends (and provided a timely written demand for funding as described above has
not been received requesting funding on such date) the Indenture Trustee shall
immediately transfer all funds remaining in the Pre-Funding Account to the Note
Distribution Account.
(c) If (x) the Pre-Funded Amount has not been reduced to zero on
the Distribution Date on which the Funding Period ends (or, if the Funding
Period does not end on a Distribution Date, on the first Distribution Date
following the end of the Funding Period) or (y) the Pre-Funded Amount has
been reduced to $150,000 or less on any Determination Date, in either case
after giving effect to any reductions in the Pre-Funded Amount on such
Distribution Date or Determination Date pursuant to paragraph (a) above, the
Trust Depositor shall instruct the Indenture Trustee to withdraw from the
Pre-Funding Account the Pre-Funded Amount and, in the case of (x), on such
Distribution Date or, in the Determination Date (i) if the Pre-Funded Amount
is equal to or less than $150,000, deposit the Pre-Funded Amount in the Note
Distribution Account for payment as principal of the Class A-1 Notes up to
the Outstanding Amount thereof and then for payment of principal of the Class
A-2 Notes and (ii) if the Pre-Funded Amount is greater than $150,000, deposit
the Pre-Funded Amount in the Note Distribution Account for payment as
principal of the Class A-1 Notes and Class A-2 Notes, pro rata, calculated on
the then current principal balance of the Class A-1 and Class A-2 Notes.
SECTION 7.08. REPURCHASES OF CONTRACTS FOR BREACH OF REPRESENTATIONS AND
WARRANTIES.
Upon a discovery by the Servicer, the Trust Depositor or the Trustees of
a breach of a representation or warranty of the Seller as set forth in EXHIBIT J
hereto or as made in any Subsequent Purchase Agreement relating to Subsequent
Contracts that materially adversely affects the Trust's interest in such
Contract (without regard to the benefits of the Reserve Fund), the party
discovering the breach shall give prompt written notice to the other parties;
PROVIDED, that the Trustees shall have no duty or obligation to inquire or to
investigate the breach by the Seller of any of such representations or
warranties. The Seller, as provided in the Transfer and Sale Agreement and in
accordance with this Section 7.08, shall repurchase a Contract at its Repurchase
Price, two Business Days prior to the first Determination Date after the Seller
becomes aware, or should have become aware, or receives written notice from the
Trustee, the Servicer or the Trust Depositor of any breach of a representation
or warranty of the Seller set forth in Article III of the Transfer and Sale
Agreement that materially and adversely affects such Contract or the Trust's
interest in such Contract and which breach has not been cured; PROVIDED,
HOWEVER, that with respect to any Contract incorrectly described on the List of
Contracts with respect to unpaid Principal Balance which the Seller would
otherwise be required to repurchase under the Transfer and Sale Agreement, the
Seller may, in lieu of repurchasing such Contract, deposit in the Collection
Account not later than one Business Day after such Determination Date cash in an
amount sufficient to cure such deficiency or discrepancy; and PROVIDED FURTHER
that with respect to a breach of representation or warranty relating to the
Contracts in the aggregate and not to any particular Contract the Seller may
select Contracts (without adverse selection) to repurchase such that had such
Contracts not been included as part of the Trust Corpus there would have been no
breach of such representation or warranty; PROVIDED FURTHER that (a) the failure
of a Contract File to be complete or of the original certificate of title and
evidence of recordation of such certificate to be included in the Contract File
as of 180 days after the Closing Date (or Subsequent Transfer Date, in the case
of Subsequent Contracts) or (b) the failure to maintain perfection of the
security interest in the Motorcycle securing a Contract in accordance with
Section 5.09, shall be deemed to be a breach materially and adversely affecting
the Trust's interest in the Contract or in the related Contracts.
Notwithstanding any other provision of this Agreement, the obligation of the
Seller under the Transfer and Sale Agreement and described in this Section 7.08
shall not terminate or be deemed released by any party hereto upon a
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Service Transfer pursuant to Article VIII. The repurchase obligation
described in this Section 7.08 is in no way to be satisfied with monies in
the Reserve Fund.
SECTION 7.09. REASSIGNMENT OF REPURCHASED CONTRACTS. Upon receipt by the
Indenture Trustee for deposit in the Collection Account of the Repurchase Price
as described in Section 7.08 or Section 7.10, and upon receipt of a certificate
of a Servicing Officer in the form attached hereto as EXHIBIT G, the Indenture
Trustee shall assign to the Seller all of the Trust's right, title and interest
in the repurchased Contract without recourse, representation or warranty, except
as to the absence of liens, charges or encumbrances created by or arising as a
result of actions of the Trustee.
SECTION 7.10. SELLER'S REPURCHASE OPTION. As provided in the Transfer
and Sale Agreement, on written notice to the Indenture Trustee at least 20 days
prior to a Distribution Date, and provided that the Pool Balance is then less
than 10% of the Initial Pool Balance, and provided a valuation letter is
delivered as required in Section 5.02 of the Transfer and Sale Agreement, the
Seller, through the Trust Depositor, may (but is not required to) repurchase on
that Distribution Date all outstanding Contracts at a price equal to the
aggregate of the Class A-2 Principal Balance and the Certificate Balance on the
previous Distribution Date plus the aggregate of the Note Interest Distributable
Amount and the Certificate Interest Distributable Amount for the current
Distribution Date thereon, the Reimbursement Amount (if any) as well as accrued
and unpaid Monthly Servicing Fees and Trustees' Fees to the date of such
repurchase. Such price is to be deposited in the Collection Account one
Business Day before such Distribution Date, against the Owner Trustee's and
Indenture Trustee's release of the Contracts and the Contract Files to the
Seller.
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ARTICLE EIGHT
EVENTS OF TERMINATION; SERVICE TRANSFER
SECTION 8.01. EVENTS OF TERMINATION. "EVENT OF TERMINATION" means the
occurrence of any of the following:
(a) Any failure by the Servicer or the Seller to make any payment or
deposit required to be made hereunder or in the Transfer and Sale Agreement (or
in any Subsequent Purchase Agreement or Subsequent Transfer Agreement) and the
continuance of such failure for a period of four Business Days after the date on
which such payment or deposit was due;
(b) Failure on the Servicer's or the Seller's part to observe or
perform in any material respect any covenant or agreement in the Certificates,
this Agreement or in the Transfer and Sale Agreement (or in any Subsequent
Purchase Agreement or Subsequent Transfer Agreement) (other than a covenant or
agreement, the breach of which is specifically addressed elsewhere in this
Section) which continues unremedied for 30 days after the date on which such
failure commences;
(c) Any assignment by the Servicer or the Seller of its duties or
rights hereunder or under the Transfer and Sale Agreement (or under any
Subsequent Purchase Agreement or Subsequent Transfer Agreement), except as
specifically permitted hereunder or thereunder, or any attempt to make such an
assignment;
(d) An involuntary case under any applicable bankruptcy, insolvency or
other similar law shall have been commenced in respect of the Servicer or Trust
Depositor and shall not have been dismissed within 90 days, or a court having
jurisdiction in the premises shall have entered a decree or order for relief in
respect of either the Servicer or Trust Depositor in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of either the Servicer or Trust Depositor, or
for any substantial liquidation or winding up of their respective affairs;
(e) The Servicer or Trust Depositor shall have commenced a voluntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall have consented to the entry of an order for relief
in an involuntary case under any such law, or shall have consented to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian or sequestrator (or other similar official) of the Servicer
or Trust Depositor, as the case may be, or for any substantial part of their
respective property, or shall have made any general assignment for the benefit
of their respective creditors, or shall have failed to, or admitted in writing
its inability to, pay its debts as they become due, or shall have taken any
corporate action in furtherance of the foregoing;
(f) Any failure by the Servicer to deliver to the Trustees the Monthly
Report pursuant to the terms of this Agreement which remains uncured for five
Business Days after the date which such failure commences;
(g) Any representation, warranty or statement of the Servicer made in
this Agreement, in any Subsequent Transfer Agreement or any certificate, report
or other writing delivered pursuant hereto shall prove to be incorrect in any
material respect as of the time when the same shall have been made and the
incorrectness of such representation, warranty or statement has a material
adverse effect on the Trust and, within 30 days after written notice thereof
shall have been given to the Servicer or the Trust Depositor by the Indenture
Trustee, the circumstances or condition in respect of which such representation,
warranty or statement was incorrect shall not have been eliminated or otherwise
cured.
SECTION 8.02. SERVICE TRANSFER. (a) If an Event of Termination has
occurred and is continuing, (x) Noteholders representing more than 50% of the
outstanding balance of the Notes voting as a single class and Certificateholders
with aggregate fractional interests representing more than 50% or more of the
Trust or (y) the Indenture Trustee may, by written notice delivered to the
parties hereto, terminate all (but not less than all) of the Servicer's
management, administrative, servicing, custodial and collection functions (such
termination being herein called a "SERVICE TRANSFER").
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(b) Upon receipt of the notice required by Section 8.02(a) (or, if
later, on a date designated therein), all rights, benefits, fees, indemnities,
authority and power of the Servicer under this Agreement, whether with respect
to the Contracts, the Contract Files or otherwise, shall pass to and be vested
in the Indenture Trustee (the "SUCCESSOR SERVICER") pursuant to and under this
Section 8.02; and, without limitation, the Successor Servicer is authorized and
empowered to execute and deliver on behalf of the Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do any and all
acts or things necessary or appropriate to effect the purposes of such notice of
termination. The Servicer agrees to cooperate with the Successor Servicer in
effecting the termination of the responsibilities and rights of the Servicer
hereunder, including, without limitation, the transfer to the Successor Servicer
for administration by it of all cash amounts which shall at the time be held by
the Servicer for deposit, or have been deposited by the Servicer, in the
Collection Account, or for its own account in connection with its services
hereafter or thereafter received with respect to the Contracts. The Servicer
shall transfer to the Successor Servicer all records held by the Servicer
relating to the Contracts in such electronic form as the Successor Servicer may
reasonably request and (ii) any Contract Files in the Servicer's possession. In
addition, the Servicer shall permit access to its premises (including all
computer records and programs) to the Successor Servicer or its designee, and
shall pay the reasonable transition expenses of the Successor Servicer. Upon a
Service Transfer, the Successor Servicer shall also be entitled to receive the
Servicing Fee for performing the obligations of the Servicer.
SECTION 8.03. SUCCESSOR SERVICER TO ACT; APPOINTMENT OF SUCCESSOR
SERVICER. On or after a Service Transfer pursuant to Section 8.02, the
Successor Servicer shall be the successor in all respects to the Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof, and the terminated Servicer shall be relieved of such responsibilities,
duties and liabilities arising after such Service Transfer; PROVIDED, HOWEVER,
that (i) the Successor Servicer will not assume any obligations of the Servicer
described in Section 8.03 and (ii) the Successor Servicer shall not be liable
for any acts or omissions of the Servicer occurring prior to such Service
Transfer or for any breach by the Servicer of any of its representations and
warranties contained herein or in any related document or agreement.
Notwithstanding the above, if the Successor Servicer is legally unable or
unwilling to act as Servicer, Noteholders representing more than 50% or more of
the outstanding balance of each Class of Notes and Certificateholders with
aggregate fractional interests representing more than 50% or more of the Trust,
may appoint a successor servicer (other than the original Servicer or an
Affiliate of the original Servicer) to act as Servicer. As compensation
therefor, the successor servicer shall be entitled to receive reasonable
compensation equal to the Monthly Servicing Fee. The Owner Trustee, Noteholders
and the Indenture Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
To the extent the terminated Servicer has made Advances, it shall be entitled to
reimbursement of the same notwithstanding its termination hereunder, to the same
extent as if it had continued to service the Contracts hereunder.
SECTION 8.04. NOTIFICATION TO CERTIFICATEHOLDERS. (a) Promptly
following the occurrence of any Event of Termination, the Servicer shall give
written notice thereof to the Trustees, the Trust Depositor and each Rating
Agency at the addresses described in Section 11.04 hereof and to the Noteholders
and Certificateholders at their respective addresses appearing on the Note
Register and the Certificate Register, respectively.
(b) Within 10 days following any termination or appointment of a
Successor Servicer pursuant to this Article VIII, the Indenture Trustee shall
give written notice thereof to each Rating Agency and the Trust Depositor at the
addresses described in Section 11.04 hereof, and to the Noteholders and
Certificateholders at their respective addresses appearing on the Note Register
and the Certificate Register, respectively.
SECTION 8.05. EFFECT OF TRANSFER. (a) After a Service Transfer, the
terminated Servicer shall have no further obligations with respect to the
management, administration, servicing, custody or collection of the Contracts
and the Successor Servicer appointed pursuant to Section 8.03 shall have all of
such obligations, except that the terminated Servicer will transmit or cause to
be transmitted directly to the Successor Servicer for its own account, promptly
on receipt and in the same form in which received, any amounts (properly
endorsed where required for the Successor Servicer to collect them) received as
payments upon or otherwise in connection with the Contracts.
39
(b) A Service Transfer shall not affect the rights and duties of the
parties hereunder (including but not limited to the indemnities of the Servicer)
other than those relating to the management, administration, servicing, custody
or collection of the Contracts.
SECTION 8.06. DATABASE FILE. The Servicer will provide the Successor
Servicer with a magnetic tape containing the database file for each Contract (i)
as of the Cutoff Date, (ii) the Subsequent Cutoff Date, (iii) thereafter, as of
the last day of the preceding Due Period on each Determination Date prior to a
Servicer Termination Event and (iv) on and as of the Business Day before the
actual commencement of servicing functions by the Successor Servicer following
the occurrence of a Servicer Termination Event.
SECTION 8.07. SUCCESSOR SERVICER INDEMNIFICATION. The Servicer shall
defend, indemnify and hold the Successor Servicer and any officers, directors,
employees or agents of the Successor Servicer harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments and any other costs, fees, and expenses that the Successor Servicer
may sustain in connection with the claims asserted at any time by third parties
against the Successor Servicer which result from (i) any willful or grossly
negligent act taken or omission by the Servicer or (ii) a breach of any
representations of the Servicer in Section 3.02 hereof. The indemnification
provided by this Section 8.07 shall survive the termination of this Agreement.
SECTION 8.08. RESPONSIBILITIES OF THE SUCCESSOR SERVICER. The Successor
Servicer will not be responsible for delays attributable to the Servicer's
failure to deliver information, defects in the information supplied by the
Servicer or other circumstances beyond the control of the Successor Servicer.
The Successor Servicer will make arrangements with the Servicer for the
prompt and safe transfer of, and the Servicer shall provide to the Successor
Servicer, all necessary servicing files and records, including (as deemed
necessary by the Successor Servicer at such time): (i) microfiche loan
documentation, (ii) servicing system tapes, (iii) Contract payment history, (iv)
collections history and (v) the trial balances, as of the close of business on
the day immediately preceding conversion to the Successor Servicer, reflecting
all applicable loan information.
The Successor Servicer shall have no responsibility and shall not be in
default hereunder nor incur any liability for any failure, error, malfunction or
any delay in carrying out any of its duties under this Agreement if any such
failure or delay results from the Successor Servicer acting in accordance with
information prepared or supplied by a Person other than the Successor Servicer
or the failure of any such Person to prepare or provide such information. The
Successor Servicer shall have no responsibility, shall not be in default and
shall incur no liability (i) for any act or failure to act by any third party,
including the Servicer, the Trust Depositor or the Trustees or for any
inaccuracy or omission in a notice or communication received by the Successor
Servicer from any third party or (ii) which is due to or results from the
invalidity, unenforceability of any Contract with applicable law or the breach
or the inaccuracy of any representation or warrant made with respect to any
Contract.
40
ARTICLE NINE
REPORTS
SECTION 9.01. MONTHLY REPORTS. No later than 10:00 a.m. Chicago,
Illinois time two Business Days following each Determination Date, the Servicer
shall cause the Trustees and each Rating Agency to receive a "MONTHLY REPORT"
substantially in the form of EXHIBIT I hereto.
SECTION 9.02. OFFICER'S CERTIFICATE. Each Monthly Report delivered
pursuant to Section 9.01 shall be accompanied by a certificate of a Servicing
Officer certifying the accuracy of the monthly report and that no event of
termination or event that with notice or lapse of time or both would become an
event of termination has occurred, or if such event has occurred and is
continuing, specifying the event and its status.
SECTION 9.03. OTHER DATA. In addition, the Trust Depositor and the
Servicer shall, upon the request of the Trustees, Moody's or Standard & Poor's,
furnish the Trustees, Moody's or Standard & Poor's, as the case may be, such
underlying data as may be reasonably requested.
SECTION 9.04. ANNUAL REPORT OF ACCOUNTANTS.
(a) The Servicer shall cause a firm of nationally recognized
independent certified public accountants (the "INDEPENDENT ACCOUNTANTS"), who
may also render other services to the Servicer, Eaglemark Financial or to the
Trust Depositor, to deliver to the Trustees, the Underwriters and each Rating
Agency, on or before March 31 (or 90 days after the end of the Servicer's
fiscal year, if other than December 31) of each year, beginning on March 31,
[ ], with respect to the twelve months ended the immediately preceding
December 31 (or other applicable date), a statement (the "ACCOUNTANT'S
REPORT") addressed to the Board of Directors of the Servicer and to the
Trustees to the effect that such firm has audited the financial statements of
Eaglemark Financial and issued its report thereon and that such audit:
(1) was made in accordance with generally accepted auditing
standards, and accordingly included such tests of the accounting records
and such other auditing procedures as such firm considered necessary in
the circumstances;
(2) included an examination of documents and records relating
to the servicing of motorcycle conditional sales contracts under pooling
and servicing agreements substantially similar to one another (such
statement to have attached thereto a schedule setting forth the pooling
and servicing agreements covered thereby, including this Agreement);
(3) included an examination of the delinquency and loss
statistics relating to Eaglemark Financial's portfolio of motorcycle
conditional sales contracts; and
(4) except as described in the statement, disclosed no
exceptions or errors in the records relating to motorcycle loans serviced
for others that, in the firm's opinion, generally accepted auditing
standards requires such firm to report.
The Accountant's Report shall further state that:
(1) a review in accordance with agreed upon procedures was made
of one randomly selected Monthly Report; and
(2) except as disclosed in the Report, no exceptions or errors
in the Monthly Report so examined were found.
(b) The Accountant's Report shall also indicate that the firm is
independent of Eaglemark Financial within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants.
41
SECTION 9.05. ANNUAL STATEMENT OF COMPLIANCE FROM SERVICER. The
Servicer will deliver to the Trustees, the Underwriters and each of the
Rating Agencies, on or before January 31 of each year commencing January 31,
[ ], an Officer's Certificate stating that (a) a review of the
activities of the Servicer during the prior calendar year and of its
performance under this Agreement was made under the supervision of the
officer signing such certificate and (b) to such officer's knowledge, based
on such review, the Servicer has fully performed all its obligations under
this Agreement, or, if there has been a default in the performance of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. A copy of such certificate may be obtained by any
Certificateholder by a request in writing to the Trustee.
SECTION 9.06. MONTHLY REPORTS TO SECURITYHOLDERS. (a) On or before two
Business Days prior to each Distribution Date, the Servicer shall prepare and,
concurrently with each distribution to Certificateholders and Noteholders
pursuant to Article VII, deliver to the Indenture Trustee, in its capacity as
Note Registrar and Certificate Registrar and Paying Agent, shall cause to be
delivered and mailed to each Holder of a Class A-1 Notes, Class A-2 Notes and
each Certificateholder at the address appearing on the Note Register and
Certificate Register, respectively a statement as of the related Distribution
Date setting forth (the "MONTHLY REPORT"):
(i) the amount of Certificateholder's distribution allocable to
principal of the Certificates and the amount of Noteholder's principal
distribution;
(ii) the amount of the Certificateholder's distribution
allocable to interest and the amount of Noteholder's interest
distribution;
(iii) the amount of fees payable out of the Trust, separately
identifying the Monthly Servicing Fee and the Trustees' Fees;
(iv) the amount of any Note Interest Carryover Shortfall, Note
Principal Carryover Shortfall, Certificate Interest Carryover Shortfall
and Certificate Principal Carryover Shortfall on such Distribution Date
and the change in such amounts from those with respect to the immediately
preceding Distribution Date;
(v) the Note Pool Factor for each Class of Notes and the
Certificate Pool Factor, in each case of such Distribution Date;
(vi) the amount of the distributions described in (i) or (ii)
above payable pursuant to a claim on the Reserve Fund or from any other
source not constituting Available Monies and the amount remaining in the
Reserve Fund after giving effect to all deposits and withdrawals from the
Reserve Fund on such date;
(vii) the amount of any Mandatory Special Redemption to be made
on such Distribution Date;
(viii) for each Distribution Date during the Funding Period, the
remaining Pre-Funded Amount;
(ix) for each Distribution Date during the Funding Period to and
including the Distribution Date immediately following the end of the
Funding Period, the Principal Balance and number of Subsequent Contracts
conveyed to the Trust during the related Due Period;
(x) the remaining Principal Balance after giving effect to the
distribution of principal (and Mandatory Special Redemption, if any) to
each class of Notes and Certificates to be made on such Distribution
Date;
(xi) the number and aggregate principal balance of Contracts
delinquent 31-59 days, 60-89 days and 90 or more days, computed as of the
end of the related Due Period;
(xii) the number and aggregate principal balance of Contracts
that became Liquidated Contracts during the immediately preceding Due
Period, the amount of liquidation proceeds for such Due Period, the
42
amount of liquidation expenses being deducted from liquidation proceeds
for such Due Period, the Net Liquidation Proceeds and the Net Liquidation
Losses for such Due Period;
(xiii) the Loss Ratio, Average Loss Ratio, Cumulative Loss Ratio,
the Delinquency Ratio and the Average Delinquency Ratio as of such
Distribution Date;
(xiv) the number of Contracts and the aggregate Principal Balance
of such Contracts, as of the first day of the Due Period relating to such
Distribution Date (after giving effect to payments received during such
Due Period and to any transfers of Subsequent Contracts to the Trust
occurring on or prior to such Distribution Date);
(xv) the aggregate Principal Balance and number of Contracts
that were repurchased by the Seller pursuant to the Agreement with
respect to the related Due Period, identifying such Contracts and the
Repurchase Price for such Contracts; and
(xvi) such other customary factual information as is available to
the Servicer as the Servicer deems necessary and can reasonably obtain
from its existing data base to enable the Noteholders and
Certificateholders to prepare their tax returns.
(b) Within 75 days after the end of each calendar year, the Servicer
shall prepare and the Note Register and Certificate Registrar, respectively
shall mail to each Noteholder or Certificateholder of record at any time during
such year a report as to the aggregate amounts reported pursuant to subsections
(i), (ii), (iii) and (iv) of this Section, attributable to such Noteholder or
Certificateholder.
43
ARTICLE TEN
TERMINATION
SECTION 10.01. SALE OF TRUST ASSETS.
(a) Upon any sale of the assets of the Trust pursuant to Section 9.02
of the Trust Agreement, the Servicer shall instruct the Indenture Trustee to
deposit the proceeds from such sale after all payments and reserves therefrom
have been made (the "INSOLVENCY PROCEEDS") in the Collection Account. On the
Distribution Date on which the Insolvency Proceeds are deposited in the
Collection Account (or, if such proceeds are not so deposited on a Distribution
Date, on the Distribution Date immediately following such deposit), the Servicer
shall instruct the Indenture Trustee to make the following deposits (after the
application on such Distribution Date of Available Monies and funds on deposit
in the Reserve Fund pursuant to Section 7.06) from the Insolvency Proceeds and
any funds remaining on deposit in the Reserve Fund (including the proceeds of
any sale of investments therein as described in the following sentence):
(i) to the Note Distribution Account, any portion of the Note
Interest Distributable Amount not otherwise deposited into the Note
Distribution Account on such Distribution Date;
(ii) to the Note Distribution Account, the outstanding principal
amount of the Notes (after giving effect to the reduction in the
outstanding principal amount of the Notes to result from the deposits
made in the Note Distribution Account on such Distribution Date and on
prior Distribution Dates);
(iii) to the Certificate Distribution Account, any portion of the
Certificate Interest Distributable Amount not otherwise deposited into
the Certificate Distribution Account on such Distribution Date; and
(iv) to the Certificate Distribution Account, the Certificate
Balance (after giving effect to the reduction in the Certificate Balance
to result from the deposits made in the Certificate Distribution Account
on such Distribution Date).
(b) As described in Article Nine of the Trust Agreement, notice of any
termination of the Trust shall be given by the Servicer to the Owner Trustee and
the Indenture Trustee as soon as practicable after the Servicer has received
notice thereof.
(c) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder and
the Owner Trustee will succeed to the rights of, and assume the obligations of,
the Indenture Trustee pursuant to this Agreement.
44
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. AMENDMENT.
(a) This Agreement may be amended by the Trust Depositor, the
Servicer, the Indenture Trustee and the Owner Trustee on behalf of the Issuer,
collectively, without the consent of any Securityholders, (i) to cure any
ambiguity, to correct or supplement any provisions in this Agreement which are
inconsistent with the provisions herein, 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, (ii) to add or provide any
credit enhancement for any Class of Notes or the Certificates and (iii) to
change any provision applicable for determining the Specified Reserve Fund
Balance or the manner in which the Reserve Fund is funded (in each case with the
approval of the Insurer); 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 Securityholder and provided, further, that in connection with
any amendment pursuant to clause (iii) above, the Servicer shall deliver to the
Owner Trustee and the Indenture Trustee a letter from Standard & Poor's (so long
as Standard & Poor's is a Rating Agency) and Moody's (so long as Xxxxx'x is a
Rating Agency) to the effect that such amendment will not cause its then-current
rating on any Class of Notes or the Certificates to be qualified, reduced or
withdrawn.
(b) This Agreement may also be amended from time to time by the
Trust Depositor, the Servicer, the Indenture Trustee and the Owner Trustee on
behalf of the Issuer, with the consent of the Holders of Notes evidencing
more than 50% of the Outstanding Amount of the Notes, and the consent of
Certificateholders evidencing more than 50% of the Certificate Balance, 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)(a) collections of
payments on the Contracts or distributions that shall be required to be made
on any Note or Certificate or any Interest Rate or the Pass-Through Rate, (b)
except as otherwise provided in Section 10.01(a), the Specified Reserve Fund
Balance or the manner in which the Reserve Fund is funded or (ii) reduce the
aforesaid percentage of the Outstanding Amount of the Notes and the
Certificate Balance, the Holders of which are required to consent to any such
amendment, without the consent of the Holders of all Notes and Certificates
of the relevant Class then outstanding.
(c) Prior to the execution of any such amendment or consent, the
Indenture Trustee shall furnish written notification of the substance of such
amendment or consent, together with a copy thereof, to each Rating Agency.
(d) Promptly after the execution of any such amendment or consent, the
Owner Trustee and the Indenture Trustee, as the case may be, shall furnish
written notification of the substance of such amendment or consent to each
Certificateholder and Noteholder, respectively. It shall not be necessary for
the consent of Noteholders and Certificateholders pursuant to Section 11.01(b)
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 of evidencing the authorization by
Noteholders and Certificateholders of the execution thereof shall be subject to
such reasonable requirements as the Owner Trustee or the Indenture Trustee may
prescribe.
(e) Prior to the execution of any amendment to this Agreement, 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 which affects the Owner Trustee's own rights, duties or
immunities under this Agreement or otherwise.
SECTION 11.02. PROTECTION OF TITLE TO TRUST.
(a) The Servicer shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such manner
and in such places as may be required by law fully to preserve, maintain and
45
protect the interest of the Issuer, the Securityholders, the Indenture Trustee
and the Owner Trustee in the Contracts and in the proceeds thereof. The
Servicer shall deliver (or cause to be delivered) to the Owner Trustee and the
Indenture Trustee file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.
(b) Neither the Seller, the Trust Depositor nor the Servicer shall
change its name, identity or corporate structure in any manner that would, could
or might make any financing statement or continuation statement filed in
accordance with Section 4.02(a) seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Issuer, the Owner
Trustee and the Indenture Trustee at least 60 days' prior written notice thereof
and shall have promptly filed appropriate amendments to all previously filed
financing statements or continuation statements.
(c) The Seller, the Trust Depositor and the Servicer shall give the
Issuer, the Owner Trustee and the Indenture Trustee at least 60 days' prior
written notice of any relocation of the principal executive office of Eaglemark
or the Trust Depositor and the Servicer (in the case of notice provided by the
Servicer) if, as a result of such relocation, the applicable provisions of the
UCC would require filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall promptly file
any such amendment or new financing statement. The Servicer shall at all times
maintain each office from which it shall service Contracts, and its principal
executive office, within the United States.
(d) The Servicer shall maintain or cause to be maintained accounts and
records as to each Contract accurately and in sufficient detail to permit (i)
the reader thereof to know at any time the status of such Contract, including
payments and recoveries made and payments owing (and the nature of each) and
(ii) reconciliation between payments or recoveries on (or with respect to) each
Contract and the amounts from time to time deposited in or credited to the
Collection Account in respect of each Contract.
(e) The Servicer shall maintain or cause to be maintained its computer
systems so that, from and after the time of sale under this Agreement of the
Contracts, the Servicer's master computer records (including any backup
archives) that shall refer to a Contract indicate clearly the interest of the
Issuer and the Indenture Trustee in such Contract and that such Contract is
owned by the Issuer and has been pledged to the Indenture Trustee. Indication
of the Issuer's ownership of and the Indenture Trustee's interest in a Contract
shall be deleted from or modified on the Servicer's computer systems when, and
only when, the related Contract shall have been paid in full or repurchased or
shall have become a Liquidated Contract.
(f) If at any time the Trust Depositor or the Servicer shall propose
to sell, grant a security interest in, or otherwise transfer any interest in
automotive retail installment sales contracts to any prospective purchaser,
lender or other transferee, the Servicer shall give or cause to be given to such
prospective purchaser, lender or other transferee computer tapes, records or
print-outs (including any restored from back-up archives) that, if they shall
refer in any manner whatsoever to any Contract, shall indicate clearly that such
Contract has been sold and is owned by the Issuer and has been pledged to the
Indenture Trustee.
(g) The Servicer shall permit the Owner Trustee and the Insurer and
its agents, at any time during normal business hours, to inspect, audit and make
copies of and abstracts from the Servicer's records regarding any Contract.
(h) Upon request, the Servicer shall furnish to the Owner Trustee and
the Indenture Trustee, within five Business Days, a list of all Contracts then
held as part of the Trust Estate, together with a reconciliation of such list to
the Schedule of Contracts and to each of the Monthly Reports furnished before
such request indicating removal of Contracts from the Trust.
(i) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and each Rating Agency promptly after the execution and delivery of this
Agreement and of each amendment hereto, an Opinion of Counsel either (A) stating
that, in the opinion of such counsel, all financing statements and continuation
statements have been executed and filed that are necessary fully to preserve and
protect the interest of the Owner Trustee and the Indenture Trustee and
46
reciting the details of each filings or referring to prior Opinions of
Counsel in which such details are given, or (B) stating that, in the opinion
of such counsel, no such action shall be necessary to preserve and protect
such interest.
SECTION 11.03. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Illinois and the obligations, rights,
and remedies of the parties under the Agreement shall be determined in
accordance with such laws, except that the duties of the Owner Trustee shall be
governed by the laws of the State of Delaware.
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.
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopier No.: (000) 000-0000
(ii) If to the Trust Depositor:
Eaglemark Customer Funding Corporation-IV
0000 Xxxxxxxxxx Xxx
Xxxxxx Xxxx, Xxxxxx 00000
Telecopier No.: (000) 000-0000
(iii) If to the Indenture Trustee:
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Indenture Trust Administration
Telecopier No.: (000) 000-0000
(iv) If to the Owner Trustee:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Telecopier No.: (000) 000-0000
47
(v) If to Moody's:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ABS Monitoring Department
Telecopier No.: (000) 000-0000
(vi) If to Standard & Poor's:
Standard & Poor's Ratings Services, A
Division of The McGraw Hill Companies
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
(vii) If to the Underwriters:
Xxxxxxx Xxxxx Xxxxxx Inc.
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset-Backed Securities Group
Telecopier No.: (000) 000-0000
[ ]
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 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 Notes or
Certificates or the rights of the Holders thereof.
SECTION 11.06. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, as provided in Sections 6.03 and 8.02, this Agreement may not
be assigned by the Trust Depositor or the Servicer without the prior written
consent of Holders of Notes aggregating not less than 66-2/3% of each Class and
Certificateholders evidencing not less than 66-2/3% of the Certificate Balance.
SECTION 11.07. THIRD PARTY BENEFICIARIES. Except as otherwise
specifically provided herein, the parties hereto hereby manifest their intent
that no third party other than the Insurer shall be deemed a third party
beneficiary of this Agreement, and specifically that the Obligors are not third
party beneficiaries of this Agreement.
SECTION 11.08. COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall
together constitute but one and the same instrument.
48
SECTION 11.09. 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 11.10. LIMITATION OF LIABILITY OF OWNER TRUSTEE AND INDENTURE
TRUSTEE.
(a) Notwithstanding anything contained herein to the contrary, this
instrument has been countersigned by Wilmington Trust Company, not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer,
and in no event shall Wilmington Trust Company in its individual capacity or any
beneficial owner of the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder,
as to all of which recourse shall be had solely to the assets of the Issuer.
For all purposes of this Agreement, in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles Six, Seven and
Eight of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Xxxxxx Trust and Savings Bank, not in its
individual capacity but solely as Indenture Trustee, and in no event shall
Xxxxxx Trust and Savings Bank have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant hereto,
as to all of which recourse shall be had solely to the assets of the Issuer.
49
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
HARLEY-DAVIDSON EAGLEMARK MOTORCYCLE TRUST [ ]
By: Wilmington Trust Company, not in its
individual capacity but solely as
Owner Trustee on behalf of the Trust
By:
----------------------------------------
Printed Name
-------------------------
Title:
------------------------------
EAGLEMARK CUSTOMER FUNDING CORPORATION-IV, as
Trust Depositor
By:
----------------------------------------
Printed Name
-------------------------
Title:
------------------------------
EAGLEMARK INC, as Servicer
By:
----------------------------------------
Printed Name
-------------------------
Title:
------------------------------
XXXXXX TRUST AND SAVINGS BANK, not in its
individual capacity but solely as Indenture
Trustee
By:
----------------------------------------
Printed Name
-------------------------
Title:
------------------------------
50
EXHIBIT A
[Form of Assignment]
In accordance with the Sale and Servicing Agreement (the "SALE AND
SERVICING AGREEMENT") dated as of [ ] made by and between
the undersigned, as Trust Depositor ("TRUST DEPOSITOR"), Eaglemark, Inc., as
Servicer, Xxxxxx Trust and Savings Bank, as Indenture Trustee and
Harley-Davidson Eaglemark Motorcycle Trust [ ] (the "TRUST"), as
assignee thereunder, the undersigned does hereby sell, transfer, convey and
assign, set over and otherwise convey to the Trust (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 (other than the Reserve Fund) from
time to time (and any investments of such amounts), and (ix) all proceeds and
products of the foregoing
This Assignment is made pursuant to and in reliance upon the
representation and warranties on the part of the undersigned contained in
Article III of the Agreement and no others.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed this _____ day of [ ].
EAGLEMARK CUSTOMER FUNDING CORPORATION-IV
By:
----------------------------------------
Printed Name
-------------------------
Title:
------------------------------
A-1
EXHIBIT B
[Form of Closing Certificate of Trust Depositor]
EAGLEMARK CUSTOMER FUNDING CORPORATION-IV
PRESIDENT'S CERTIFICATE
The undersigned certifies that he is President of Eaglemark Customer
Funding Corporation-IV, a Nevada corporation (the "TRUST DEPOSITOR"), and
that as such is duly authorized to execute and deliver this certificate on
behalf of the Trust Depositor in connection with the Sale and Servicing
Agreement (the "AGREEMENT") dated as of [ ] (the "EFFECTIVE
DATE") by and among the Trust Depositor, Xxxxxx Trust and Savings Bank (the
"INDENTURE TRUSTEE"), as Indenture Trustee, Eaglemark, Inc. ("EAGLEMARK"),
as Servicer, and Harley-Davidson Eaglemark Motorcycle Trust [ ]
("ISSUER") (all capitalized terms used herein without definition have the
respective meanings set forth in the Agreement), and further certifies as
follows:
(1) Attached hereto as EXHIBIT I is a true and correct copy of
the Articles of Incorporation of the Trust Depositor, together with all
amendments thereto as in effect on the date hereof.
(2) There has been no other amendment or other document filed
affecting the Articles of Incorporation of the Trust Depositor since
_____, and no such amendment has been authorized by the Board of
Directors or shareholders of the Trust Depositor.
(3) Attached hereto as EXHIBIT II is a Certificate of the
Secretary of State of the State of Nevada dated [ ]
stating that the Trust Depositor is duly incorporated under the laws of
the State of Nevada and is in good standing.
(4) Attached hereto as EXHIBIT III is a true and correct copy
of the By-laws of the Trust Depositor, as amended, which were in full
force and effect on [ ], and at all times subsequent
thereto.
(5) Attached hereto as EXHIBIT IV is a true and correct copy of
resolutions adopted pursuant to the unanimous written consent of the
Board of Directors of the Trust Depositor relating to the execution,
delivery and performance of the Agreement; the Transfer and Sale
Agreement dated as of the Effective Date between the Trust Depositor and
Eaglemark; the Trust Agreement dated as of the Effective Date between the
Trust Depositor and the Wilmington Trust Company (the "Owner Trustee"),
as Owner Trustee; the Administrative Agreement dated as of the Effective
Date between the Trust Depositor, the Issuer, the Indenture Trustee,
Eaglemark, as Administrator; the Underwriting Agreement dated
[ ] among the Trust Depositor, Eaglemark and Salomon
Brothers Inc and [ ] (collectively, the "PROGRAM
AGREEMENTS"). Said resolutions have not been amended, modified,
annulled or revoked, and are on the date hereof in full force and
effect and are the only resolutions relating to these matters which
have been adopted by the Board of Directors.
(6) No event with respect to the Trust Depositor has occurred
and is continuing which would constitute an Event of Termination or an
event that, with notice or the passage of time or both, would become an
Event of Termination under the Agreement. To the best of my knowledge
after reasonable investigation, there has been no material adverse change
in the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Trust Depositor, whether or not
arising in the ordinary course of business since the respective dates as
of which information is given in the Offering Memorandum and except as
set forth therein.
(7) All federal, state and local taxes of the Trust Depositor
due and owing as of the date hereof have been paid.
B-1
(8) All representations and warranties of the Trust Depositor
contained in the Program Agreements or any other related documents, or in
any document, certificate or financial or other statement delivered in
connection therewith are true and correct as of the date hereof.
(9) There is no action, investigation or proceeding pending or,
to our knowledge, threatened against the Trust Depositor before any
court, administrative agency or other tribunal (a) asserting the
invalidity of the Program Agreements; (b) seeking to prevent the
consummation of any of the transactions contemplated by the Program
Agreements; or (c) which is likely materially and adversely to affect the
Trust Depositor's performance of its obligations under, or the validity
or enforceability of, the Program Agreements.
(10) No consent, approval, authorization or order of, and no
notice to or filing with, any governmental agency or body or state or
federal court is required to be obtained by the Trust Depositor for the
Trust Depositor's consummation of the transactions contemplated by the
Program Agreements, except such as have been obtained or made and such as
may be required under the blue sky laws of any jurisdiction in connection
with the issuance and sale of the Certificates.
(11) The Trust Depositor is not a party to any agreements or
instruments evidencing or governing indebtedness for money borrowed or by
which the Trust Depositor or its property is bound (other than the
Program Agreements). Neither Eaglemark's transfer and assignment of the
Contract Assets to the Trust Depositor, the Trust Depositor's concurrent
transfer and assignment of the Trust Corpus to the Trust, nor the
concurrent transfer and assignment of the Collateral by the Trust to the
Indenture Trustee nor the issuance and sale of the Certificates and the
Notes, nor the execution and delivery of the Program Agreements, nor the
consummation of any other of the transactions contemplated therein, will
violate or conflict with any agreement or instrument to which the Trust
Depositor is a party or by which it is otherwise bound.
(12) In connection with the transfer of Contracts and related
collateral contemplated in the Agreement, (a) the Trust Depositor has not
made such transfer with actual intent to hinder, delay or defraud any
creditor of the Trust Depositor, and (b) the Trust Depositor has not
received less than a reasonably equivalent value in exchange for such
transfer, is not on the date thereof insolvent (nor will become insolvent
as a result thereof), is not engaged (or about to engage) in a business
or transaction for which it has unreasonably small capital, and does not
intend to incur or believe it will incur debts beyond its ability to pay
when matured.
(13) Each of the agreements and conditions of the Trust
Depositor to be performed on or before the Closing Date pursuant to the
Program Agreements have been performed in all material respects.
* * * *
B-2
IN WITNESS WHEREOF, I have affixed my signature hereto this ___ day
of [ ].
By:
--------------------------------------
Printed Name:
----------------------
Title: President
-----------------------------
EXHIBIT C
[Form of Closing Certificate of Servicer/Seller]
EAGLEMARK, INC.
PRESIDENT'S CERTIFICATE
The undersigned certifies that he is President of Eaglemark, Inc.
("EAGLEMARK"), and that as such he is duly authorized to execute and deliver
this certificate on behalf of Eaglemark, as Servicer, in connection with the
Sale and Servicing Agreement (the "SALE AND SERVICING AGREEMENT") dated as of
[ ] (the "EFFECTIVE DATE") by and among Eaglemark, as Servicer,
Eaglemark Customer Funding Corporation-IV ("CFC"), Xxxxxx Trust and Savings
Bank, as Indenture Trustee and Harley-Davidson Eaglemark Motorcycle Trust
[ ]("ISSUER"), in connection with the Transfer and Sale Agreement
dated as of the Effective Date (the "TRANSFER AND SALE AGREEMENT") by and
between Eaglemark and CFC (all capitalized terms used herein without
definition having the respective meanings set forth in the Sale and Servicing
Agreement), and further certifies as follows:
(1) Attached hereto as EXHIBIT I is a true and correct copy of
the Articles of Incorporation of Eaglemark, together with all amendments
thereto as in effect on the date hereof.
(2) There has been no other amendment or other document filed
affecting the Articles of Incorporation of Eaglemark since July 6, 1995,
and no such amendment has been authorized by the Board of Directors or
shareholders of Eaglemark.
(3) Attached hereto as EXHIBIT II is a Certificate of the
Secretary of State of the State of Nevada dated [ ]
stating that Eaglemark is duly incorporated under the laws of the State
of Nevada and is in good standing.
(4) Attached hereto as EXHIBIT III is a true and correct copy
of the By-laws of Eaglemark which were in full force and effect on
November 5, 1992 and at all times subsequent thereto.
(5) Attached hereto as EXHIBIT IV is a true and correct copy of
resolutions adopted pursuant to a unanimous written consent of the Board
of Directors of Eaglemark and relating to the authorization, execution,
delivery and performance of the Transfer and Sale Agreement; the Sale and
Servicing Agreement; the Underwriting Agreement dated [ ] among
Eaglemark, CFC and Salomon Brothers Inc and [ ] (the
"UNDERWRITING AGREEMENT"); and the Administration Agreement dated
[ ]among Eaglemark, CFC, the Issuer and Xxxxxx Trust and
Savings Bank, as Indenture Trustee (the "INDENTURE TRUSTEE") (the
"ADMINISTRATION AGREEMENT"). Said resolutions have not been amended,
modified, annulled or revoked, and are on the date hereof in full
force and effect and are the only resolutions relating to these
matters which have been adopted by the Board of Directors.
(6) No event with respect to Eaglemark has occurred and is
continuing which would constitute an Event of Termination or an event
that, with notice or the passage of time, would constitute an Event of
Termination under the Sale and Servicing Agreement. To the best of my
knowledge after reasonable investigation, there has been no material
adverse change in the condition, financial or otherwise, or the earnings,
business affairs or business prospects of Eaglemark, whether or not
arising in the ordinary course of business, since the respective dates as
of which information is given in the Offering Memorandum and except as
set forth therein.
(7) All federal, state and local taxes of Eaglemark due and
owing as of the date hereof have been paid.
C-1
(8) All representations and warranties of Eaglemark contained
in the Transfer and Sale Agreement, the Sale and Servicing Agreement, the
Underwriting Agreement and the Administration Agreement (collectively,
the "PROGRAM AGREEMENTS") or in any document, certificate or financial or
other statement delivered in connection therewith are true and correct as
of the date hereof.
(9) There is no action, investigation or proceeding pending or,
to my knowledge, threatened against Eaglemark before any court,
administrative agency or other tribunal (a) asserting the invalidity of
any Program Agreement to which Eaglemark is a party; or (b) which is
likely materially and adversely to affect Eaglemark's performance of its
obligations under, or the validity or enforceability of, the Program
Agreements.
(10) No consent, approval, authorization or order of, and no
notice to or filing with, any governmental agency or body or state or
federal court is required to be obtained by Eaglemark for Eaglemark's
consummation of the transactions contemplated by the Program Agreements,
except such as have been obtained or made and such as may be required
under the blue sky laws of any jurisdiction in connection with the
issuance and sale of the Notes or Certificates.
(11) SCHEDULE A hereto contains a complete list of all material
agreements (other than the Transfer and Sale Agreement) or instruments
evidencing or governing indebtedness for money borrowed to which
Eaglemark is a party or by which Eaglemark or its property is bound.
Neither Eaglemark's transfer and assignment of the Contract Assets to
CFC, CFC's concurrent transfer and assignment of the Trust Corpus to the
Trust, nor the concurrent transfer and assignment by the Trust of the
Collateral to the Indenture Trustee, nor the issuance and sale of the
Notes or Certificates or the entering into of the Program Agreements, nor
the consummation of any other of the transactions contemplated therein,
will violate or conflict with any agreement or instrument to which
Eaglemark is a party or by which it is otherwise bound.
(12) In connection with the transfers of Contracts and related
assets contemplated in the Transfer and Sale Agreement, (a) Eaglemark has
not made such transfer with actual intent to hinder, delay or defraud any
creditor of Eaglemark, and (b) Eaglemark has not received less than a
reasonably equivalent value in exchange for such transfer, is not on the
date hereof insolvent (nor will Eaglemark become insolvent as a result
thereof), is not engaged (or about to engage) in a business or
transaction for which it has unreasonably small capital, and does not
intend to incur or believe it will incur debts beyond its ability to pay
when matured.
(13) The sole shareholder of Eaglemark is Eaglemark Financial
Services, Inc., a Delaware corporation, which has its chief executive
office and only office in Chicago, Illinois, and has no other offices in
any other state.
(14) Each of the agreements and conditions of Eaglemark to be
performed or satisfied on or before the Closing Date under the Program
Agreements has been performed or satisfied in all material respects.
(15) Each Contract being transferred pursuant to the Transfer
and Sale Agreement is evidenced by a written agreement providing for a
repayment obligation as well as a security interest in the related
Motorcycle securing such obligation, and conforms as to these matters in
all material respects with the form of written Contract provided as
EXHIBIT A hereto (with such minor variations as to specific terms as may
be required or deemed desirable in respect of the laws or requirements of
particular states).
(16) Eaglemark has not executed for filing any UCC financing
statements listing the Contract Assets as collateral other than financing
statements relating to the transactions contemplated in the Transfer and
Sale Agreement and in the agreements listed on SCHEDULE A hereto.
* * * * * *
C-2
IN WITNESS WHEREOF, I have affixed my signature hereto this ___ day
of [ ].
By:
--------------------------------------------
Printed Name:
Title: President
EXHIBIT D
[Form of Opinion of Counsel for Trust Depositor
Regarding General Corporate Matters
(Including Perfection Opinion)]
D-1
EXHIBIT E
[Form of Opinion of Counsel for Trust
Depositor Regarding the "TRUE SALE" Nature
of the Transaction]
E-1
EXHIBIT F
[Form of Opinion of Counsel for Trust
Depositor Regarding Non-consolidation]
F-1
EXHIBIT G
[Form of Certificate Regarding Repurchased Contracts]
Eaglemark, Inc.
Certificate Regarding Repurchased Contracts
The undersigned certifies that he is a Vice President of Eaglemark, Inc.,
a Nevada corporation (the "SERVICER"), and that as such is duly authorized to
execute and deliver this certificate on behalf of the Servicer pursuant to
Section 7.08 of the Sale and Servicing Agreement (the "AGREEMENT") dated as of [
] by and among Eaglemark Customer Funding Corporation-IV, as Trust
Depositor, the Servicer, Xxxxxx Trust and Savings Bank, as Indenture Trustee,
and Harley-Davidson Eaglemark Motorcycle Trust [ ] (all capitalized
terms used herein without definition having the respective meanings specified in
the Agreement), and further certifies that:
1. The Contracts on the attached schedule are to be repurchased by
the Seller on the date hereof pursuant to Section 7.08 of the
Agreement and Section 5.01 of the Transfer and Sale Agreement.
2. Upon deposit of the Repurchase Price for such Contracts, such
Contracts may, pursuant to Section 7.08 of the Agreement, be
assigned by the Trustee to the Seller.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ______ day
of _____________.
Eaglemark, Inc.
By:
-------------------------------------------
Printed Name:
--------------------
Title:
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G-1
EXHIBIT H
[List of Contracts]
H-1
EXHIBIT I
[Form of Monthly Report to Noteholders And Certificateholders]
Harley-Davidson Eaglemark Motorcycle Trust [ ]
$[ ] [ ]% Harley-Davidson Motorcycle Contract Backed Notes, Class A-1
$[ ] [ ]% Harley-Davidson Motorcycle Contract Backed Notes, Class A-2
$[ ] [ ]% Harley-Davidson Motorcycle Contract Backed Certificates
Monthly Report
For the [ ] Distribution Date
A. Calculation of Available Monies
1. Available Principal (as defined in Article I of the
Sale and Servicing Agreement) $____________
2. Available Interest (as defined in Article I of the
Sale and Servicing Agreement) $____________
3. Available Monies (l. plus 2.) $____________
B. Calculation of Principal Distributable Amount (as
defined in Article I of the Sale and Servicing
Agreement) $____________
C. Calculation of Available Interest (as defined in Article
I of the Sale and Servicing Agreement). $___________
D. Calculation of Note Monthly Principal Distributable
Amount $___________
1. Note Percentage for such Distribution Date
(a) for each Distribution Date to but
excluding the Distribution Date on which
the principal amount of the Class A-1
Notes is reduced to zero 100.00%
(b) on the Distribution Date on which the
principal amount of the Class A-1 Notes is
reduced to zero, such percentage which
represents the fraction of the Principal
Distributable Amount necessary to reduce
the principal amount of the Class A-2 Notes
to zero 100.00%
(c) after the principal amount of the Class A-2
Notes have been reduced to zero 0.00%
2. Principal Distributable Amount (from B) $__________
I-1
3. Note Monthly Principal Distributable Amount for
(a) Class A-1 Notes (D.1(a) multiplied by D.2
until Principal Balance of Class A-1 Notes
Principal Balance is zero) $__________
(b) Class A-2 Notes (D.1(b) multiplied by D.2
until Class A-2 Notes Principal Balance is
zero) $___________
(c) Note Principal Carryover Shortfall $___________
(d) Special Mandatory Redemption Amounts (from Pre-
Funding Account as defined in Article I of the
Sale and Servicing Agreement) $___________
(e) Note Monthly Principal Distributable Amount
(the sum of items 3(a), 3(b) and 3(c) $__________
E. Calculation of Note Monthly Interest Distributable
Amount.
1. Class A-l Interest Rate ___%
2. Class A-2 Interest Rate ___%
3. One-twelfth of the Class A-1 Interest Rate times the
Class A-1 Note Balance from and including the
fifteenth day of the month based on a 360-day year
of 12 months of 30 days each (or from and including
the Closing Date with respect to the first
Distribution Date) to but excluding the fifteenth
day of the month of the current Distribution Date $__________
4. One-twelfth of the Class A-2 Note Interest Rate
times the Class A-2 Note Balance from and including
the fifteenth day of the month based on a 360-day
year of 12 months of 30 days each (or from and
including the Closing Date with respect to the
first Distribution Date) to but excluding the
fifteenth day of the month of the current
Distribution Date $__________
5. Interest Carryover Shortfall for such
Distribution Date $__________
6. Note Monthly Interest Distributable Amount (the sum
of items 3, 4 and 5) $__________
F. Calculation of Note Distributable Amount (sum of D.3(e)
plus E.6.) $_________
I-2
G. Calculation of Certificate Principal
Distributable Amount
1. Certificate Balance $___________
2. Available Principal $__________
3. Certificate Percentage for each respective
Distribution Date
3(a). for each Distribution Date to but excluding the
Distribution Date on which the Principal Amount of
the Class A-2 Notes is reduced to zero 0.00%
3(b). on any Distribution Date until the Principal
Amount of the Class A-2 Notes is reduced to zero,
such percentage that equals 100% minus the Note
Percentage for such Distribution Date ____%
3(c). thereafter 100.00%
4(a). Available Principal multiplied by the Certificate
Percentage for such Distribution Date $__________
4(b). Certificate Principal Carryover Shortfall for
such Distribution Date $__________
5. Certificate Principal Distributable Amount (the
sum of 4.(a) and 4.(b)) $_________
H. Calculation of Certificate Interest Distributable Amount
1. Certificate Pass-Through Rate ___%
2(a). One-twelfth of the Certificate Pass-Through Rate
times the Certificate Balance on the immediately
preceding Distribution Date, after giving effect to
all payments of principal to the Certificateholders
and such preceding Distribution Date (or in case of
the first Distribution Date on the original
Principal Amount of the Certificates) based on a
360-day year of 12 months of 30 days each. $__________
2(b). Certificate Interest Carryover Shortfall for such
Distribution Date $__________
3. Certificate Interest Distributable Amount (sum of
2.(a) and 2.(b)) $__________
I. Calculation of Certificate Distributable Amount (sum of $__________
G.5 and H.3)
J. Fees
1. The Monthly Servicing Fee for such Distribution
Date (1/12 of the product of 1% and the Principal
Balance of the Contracts as of the beginning of
the related Due Period) $___________
I-3
2. Late Payment Penalty Fees for such Distribution
Date $___________
3. Extension Fees for such Distribution Date $___________
4. Owner Trust Fee equal to $[ ] per month $___________
5. Trustee's Fee for such Distribution Date excluding
expense component (1/12 of the product of .009% and
the sum of (i) the Principal Balance of the
Contracts as of the beginning of the related Due
Period and (ii) the Pre-Funded Amount as of the
beginning of such Period; provided, however, in no
event shall such fee be less than $200.00 per
month) $___________
K. CALCULATION OF THE AVAILABLE MONIES FOR SUCH DISTRIBUTION
DATE
1. The amount of funds deposited into the Collection
Account pursuant to Section 5.05(b) of the Sale
and Servicing Agreement with respect to the
related Due Period $__________
a. All amounts received by the Indenture Trustee
or the Servicer with respect to principal and
interest on the Contracts, as well as Late
Payment Penalty Fees and Extensions Fees for
the related Due Period $__________
b. All Net Liquidation Proceeds $__________
c. The aggregate of the Repurchase Prices for
Contracts required to be repurchased by the
Seller as described in Section 7.08 of the
Sale and Servicing Agreement $__________
d. All Advances made by Servicer pursuant to
Section 7.03(a) of the Sale and Servicing
Agreement $__________
e. All amounts paid by the Seller in connection
with an optional repurchase of the Contracts
described in Section 7.10 of the Sale and
Servicing Agreement $__________
f. All amounts obtained from the Indenture
Trustee in respect of Carrying Charges to be
deposited into the Collection Account for the
upcoming Distribution Date as contemplated in
Section 7.03(b) of the Sale and Servicing
Agreement $___________
g. All amounts received in respect of interest,
dividends, gains, income and earnings on
investments of funds in the Trust Accounts as
contemplated in Section 5.05(b)(viii) of the
Sale and Servicing Agreement $__________
h. Total amount of funds deposited into the
Collection Account pursuant to Section
5.05(b) (the sum of a. through g.) $__________
I-4
2. The amount of funds permitted to be withdrawn from
the Collection Account pursuant to clauses (ii)
through (iv) of Section 7.05(a) of the Sale and
Servicing Agreement with respect to the related
Due Period $___________
a. Amounts to be paid to the Servicer as the
Reimbursement Amount in accordance with
Section 7.03(a) of the Sale and Servicing
Agreement $___________
b. Amounts to be paid to the Servicer in respect
to the Servicing Fee for the related Due
Period $__________
c. Amounts to be paid to the Indenture Trustee
in respect of the Indenture Trustee's Fee
for the related Due Period $___________
d. Amounts to be paid to the Owner Trustee in
respect of the Owner Trustee Fee for the
related Due Period $___________
e. Total amount of funds permitted to be
withdrawn from the Collection Account
pursuant to clauses (ii) through (iv) Section
7.05(a) of the Sale and Servicing Agreement
with respect to the related Due Period (sum
of a. through d.) $_________
3. The Available Monies (not including amounts
from Reserve Fund Account) for such
Distribution Date available to pay Note
Distributable Amounts and Certificate
Distributable Amounts (1(h) minus 2(e)) $_____________
4. The Available Monies otherwise distributable to
the Certificateholders that will be distributed
to the Noteholders on such Distribution Date $__________
L. The shortfall of Available Monies for such Distribution
Date to pay either the Note Distributable Amount or the
Certificate Distributable Amount (the Available Monies
for such Distribution Date minus the sum of the Note
Distributable Amount as set forth in F. and the
Certificate Distributable Amount as set forth in I.) $__________
M. The amount to be withdrawn from the Reserve Fund (or
Certificate Reserve Fund) on such Distribution Date to
cover the Note Distributable Amount or the Certificate
Distributable Amount for such Distribution Date $__________
N. Interest Earnings on the Reserve Fund. $____________
O. The amount on deposit in the Reserve Fund after giving
effect to deposits and withdrawals therefrom on such
Distribution Date $__________
I-5
P. The Reserve Fund Requisite Amount for such Distribution
Date will be an amount equal to the sum of (i) [
]% of the Principal Balance of the Contracts in the
Trust as of the first day of the immediately preceding
Due Period and (ii) $[ ]; provided,
however, in the event a Reserve Fund Trigger Event
occurs with respect to a Distribution Date and has not
terminated for three (3) consecutive Distribution Dates
(inclusive) such amount shall be equal to the sum of
(i) [ ]% of the Principal Balance of the
Contracts in the Trust as of the first day of the
immediately preceding Due Period) and, (ii) $[
]. Notwithstanding the foregoing, in no event
shall the Specified Reserve Fund Balance be less than
the sum of (i) [ ]% of the aggregate of the
Initial Class A-1 Note Balance, Initial Class A-2 Note
Balance and Initial Certificate Balance and (ii) $[ ] $__________
Q. The Pool Factor
1. The Class A-1 Note Pool Factor immediately before such
Distribution Date ____________
2. The Class A-2 Note Pool Factor immediately after such
Distribution Date ____________
3. The Certificate Pool Factor immediately after such
Distribution Date ____________
4. The Class A-1 Note Pool Factor immediately before such
Distribution Date ____________
5. The Class A-2 Note Pool Factor immediately after such
Distribution Date ____________
6. The Certificate Pool Factor
immediately after such Distribution Date ____________
R. Delinquent Contracts
1. 31-59 Days #______ $___________
2. 60-89 Days #______ $___________
3. 90 or More Days #______ $___________
S. Liquidated Contracts
1. Total Liquidated Contracts #______ $___________
2. Identity (attach)
3. Liquidation proceeds for the Due Period $___________
4. Liquidation expenses for the Due Period $___________
I-6
5. Net Liquidation Proceeds for the Due Period $___________
6. Net Liquidation Losses for the Due Period $___________
T. Advances
1. Unreimbursed Advances prior to such Distribution Date $___________
2. Amount paid to Servicer on such Distribution Date to
reimburse Servicer for such unreimbursed Advances $___________
3. Amount of Delinquent Interest for such Distribution $___________
Date
4. Amount of new Advances on such Distribution Date (if
such amount is less than the amount of Delinquent
Interest, attach the certificate required by Section
7.03 of the Sale and Servicing Agreement) $___________
5. Total of unreimbursed Advances after new Advances on
such Distribution Date $___________
U. Repurchased Contracts
1. Number of Contracts to be repurchased by the Seller
pursuant to Section 7.08 of the Sale and Servicing
Agreement $___________
2. Principal Amount of such Contracts $__________
3. Related Repurchase Price of such Contracts $__________
V. Contracts
1. Number of Contracts as of beginning of Due Period $___________
2. Principal Balance of Contracts as of beginning of Due
Period $_________
3. Number of Contracts as of end of Due Period $__________
4. Principal Balance of Contracts as of end of Due Period $__________
5. Pre-Funded Amount as of beginning of Due Period $__________
6. Pre-Funded Amount as of end of Due Period $_________
W. Interest Reserve Account
1. Interest Reserve Amount as of previous Distribution
Date $_________
2. Carrying Charges (if any) to be paid on upcoming
Distribution Date $_________
I-7
3. Interest Reserve Amount as of upcoming Distribution
Date $_________
X. Ratios
1. Cumulative Loss Ratio
a. The aggregate Net Liquidation Losses for all
Contracts since the Cutoff Date through the
end of the related Due Period $_________
b. The sum of the Principal Balance of the
Contracts as of the Cutoff Date plus the
Principal Balance of any Subsequent Contracts
as of the related Subsequent Cutoff Date $_________
c. The Cumulative Loss Ratio for such
Distribution Date (the quotient of a. divided
by b., expressed as a percentage) $_________
2. Average Delinquency Ratio for such Distribution Date
(a) The Delinquency Amount (the Principal Balance
of all Contracts that were delinquent 60 days
or more as of the end of the Due Period) $________
(b) The Delinquency Ratio (the fraction (expressed
as a percentage) computed by dividing (a) the
Delinquency Amount during the immediately
preceding Due Period by (b) the Principal
Balance of the Contracts as of the beginning
of the related Due Period) for such
Distribution Date _____%
(c) The Delinquency Ratio for the prior
Distribution Date _____%
(d) The Delinquency Ratio for the second prior
Distribution Date _____%
(e) The Average Delinquency Ratio (the arithmetic
average of a. through c.) _____%
3. Average Loss Ratio for such Distribution Date
(a) Net Liquidation Losses $________
(b) The Loss Ratio for (the fraction (expressed as
a percentage) derived by dividing (x) Net
Liquidation Losses for all Contracts that
became Liquidated Contracts during the
immediately preceding Due Period multiplied by
twelve by (y) the outstanding Principal
Balances of all Contracts as of the beginning
of the Due Period) such Distribution Date _____%
I-8
(c) The Loss Ratio for the prior Distribution Date _____%
(d) The Loss Ratio for the second prior
Distribution Date _____%
(e) The Average Loss Ratio (the arithmetic average
of a. through c.) _____%
4. Computation of Reserve Fund Requisite Amount
Trigger Events
(1) Average Delinquency Ratio (if (a) (i) Average
Delinquency Ratio greater than or equal to [ ]% with
respect to any Distribution Date which occurs within the
period from the Closing Date to, and inclusive
of, the first anniversary of the Closing Date,
(ii) [ ]% with respect to any Distribution Date
which occurs within the period from the day after the first
anniversary of the Closing Date to, and inclusive of, the
second anniversary of the Closing Date or (iii) [ ]%
for any Distribution Date which occurs within the period from
the day after the second anniversary of the Closing Date to,
and inclusive of, the third anniversary of the Closing Date
or (iv) [ ]% for any Distribution Date following the
third anniversary of the Closing Date, then a Reserve Fund
Trigger Event) ____%
(2) Average Loss Ratio (if Average Loss Ratio is
large than (i) [ ]% with respect to any
Distribution Date which occurs within the
period from the Closing Date to, and inclusive
of, the eighteen months following the Closing
Date or (ii) [ ]% with respect to any
Distribution Date which occurs following the
eighteen month period following the Closing
Date, then a Reserve Fund Trigger Event) _____%
(3) Cumulative Loss Ratio (if Cumulative Loss
Ratio is greater than or equal to (i) [ ]% with
respect to any Distribution Date which occurs within the
period from the Closing Date to, and inclusive
of, the first anniversary of the Closing Date,
(ii) [ ]% with respect to any Distribution Date
which occurs within the period from the day
after the first anniversary of the Closing Date to, and
inclusive of, the second anniversary of the
Closing Date, (iii) [ ]% for any
Distribution Date following the second anniversary
of the Closing Date Ratio equal to or greater
than a Reserve Fund Trigger Event), or (iv) [ ]%
following the third anniversary of the Closing
Date _____%
I-9
EXHIBIT J
[Seller's Representations and Warranties]
(1) REPRESENTATIONS AND WARRANTIES REGARDING SELLER. Seller
represents and warrants, as of the execution and delivery of this Agreement and
as of the Closing Date, in the case of the Initial Contracts, and as of the
applicable Subsequent Transfer Date, in the case of Subsequent Contracts, that:
(a) ORGANIZATION AND GOOD STANDING. Seller is a corporation
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization and has the corporate power to own
its assets and to transact the business in which it is currently engaged.
Seller is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction in which the character of the
business transacted by it or properties owned or leased by it requires
such qualification and in which the failure so to qualify would have a
material adverse effect on the business, properties, assets, or condition
(financial or otherwise) of Seller or Trust Depositor. Seller is
properly licensed in each jurisdiction to the extent required by the laws
of such jurisdiction to service the Contracts in accordance with the
terms of the Sale and Servicing Agreement.
(b) AUTHORIZATION; BINDING OBLIGATION. Seller has the power
and authority to make, execute, deliver and perform this Agreement and
the other Transaction Documents to which the Seller is a party and all of
the transactions contemplated under this Agreement and the other
Transaction Documents to which the Seller is a party, and has taken all
necessary corporate action to authorize the execution, delivery and
performance of this Agreement and the other Transaction Documents to
which the Seller is a party. This Agreement and the other Transaction
Documents to which the Seller is a party constitute the legal, valid and
binding obligation of Seller enforceable in accordance with their terms,
except as enforcement of such terms may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and by the availability of equitable remedies.
(c) NO CONSENT REQUIRED. Seller is not required to obtain the
consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement and the other
Transaction Documents to which the Seller is a party.
(d) NO VIOLATIONS. Seller's execution, delivery and
performance of this Agreement and the other Transaction Documents to
which the Seller is a party will not violate any provision of any
existing law or regulation or any order or decree of any court or the
Articles of Incorporation or Bylaws of Seller, or constitute a material
breach of any mortgage, indenture, contract or other agreement to which
Seller is a party or by which Seller or any of Seller's properties may be
bound.
(e) LITIGATION. No litigation or administrative proceeding of
or before any court, tribunal or governmental body is currently pending,
or to the knowledge of Seller threatened, against Seller or any of its
properties or with respect to this Agreement or any other Transaction
Document to which the Seller is a party which, if adversely determined,
would in the opinion of Seller have a material adverse effect on the
business, properties, assets or condition (financial or other) of Seller
or the transactions contemplated by this Agreement or any other
Transaction Document to which the Seller is a party.
(f) PLACE OF BUSINESS; NO CHANGES. Seller's sole place of
business (within the meaning of Article 9 of the UCC) is as follows:
Eaglemark, Inc.
0000 Xxxxxxxxxx Xxx
Xxxxxx Xxxx, Xxxxxx 00000
J-1
Seller has not changed its name whether by amendment of its Articles of
Incorporation, by reorganization or otherwise, and has not changed the
location of its place of business (except within Carson City, Nevada),
within the four months preceding the Closing Date.
(2) REPRESENTATIONS AND WARRANTIES REGARDING EACH CONTRACT. Seller
represents and warrants as to each Contract as of the execution and delivery of
this Agreement and as of the Closing Date, in the case of the Initial Contracts,
and as of the applicable Subsequent Transfer Date, in the case of Subsequent
Contracts, that:
(a) LIST OF CONTRACTS. The information set forth in the List
of Contracts (or Subsequent List of Contracts, in the case of Subsequent
Contracts) is true, complete and correct as of the Initial Cutoff Date or
applicable Subsequent Cutoff Date, as the case may be.
(b) PAYMENTS. As of the Initial Cutoff Date or applicable
Subsequent Cutoff Date, as the case may be, the most recent scheduled
payment with respect to any Contract either had been made or was not
delinquent for more than 30 days. To the best of Seller's knowledge, all
payments made on each Contract were made by the respective Obligor.
(c) NO WAIVERS. As of the Closing Date (or the applicable
Subsequent Transfer Date, in the case of Subsequent Contracts), the terms
of the Contracts have not been waived, altered or modified in any
respect, except by instruments or documents included in the related
Contract File.
(d) BINDING OBLIGATION. Each Contract is the genuine, legal,
valid and binding obligation of the Obligor thereunder and is enforceable
in accordance with its terms, except as such enforceability may be
limited by laws affecting the enforcement of creditors' rights generally.
(e) NO DEFENSES. No Contract is subject to any right of
rescission, setoff, counterclaim or defense, including the defense of
usury, and the operation of any of the terms of such Contract or the
exercise of any right thereunder will not render the Contract
unenforceable in whole or in part or subject to any right of rescission,
setoff, counterclaim or defense, including the defense of usury, and no
such right of rescission, setoff, counterclaim or defense has been
asserted with respect thereto.
(f) INSURANCE. As of the Closing Date (or the applicable
Subsequent Transfer Date in the case of Subsequent Contracts), the
related Motorcycle securing each Contract is covered by physical damage
insurance (i) in an amount not less than the value of the Motorcycle at
the time of origination of the Contract, (ii) naming Seller as a loss
payee and (iii) insuring against loss and damage due to fire, theft,
transportation, collision and other risks covered by comprehensive
coverage, and all premiums due on such insurance have been paid in full
from the date of the Contract's origination.
(g) ORIGINATION. Each Contract was originated by a
Harley-Davidson motorcycle dealer in the regular course of its business
which dealer had all necessary licenses and permits to originate the
Contracts in the state where such dealer was located, was fully and
properly executed by the parties thereto, and has been purchased by
Seller in the regular course of its business. Each Contract was sold by
such motorcycle dealer to the Seller without any fraud or
misrepresentation on the part of such motorcycle dealer.
(h) LAWFUL ASSIGNMENT. No Contract was originated in or is
subject to the laws of any jurisdiction whose laws would make the sale,
transfer and assignment of the Contract under this Agreement or under the
Sale and Servicing Agreement or under the Indenture or pursuant to
transfers of the Certificates unlawful, void or voidable.
(i) COMPLIANCE WITH LAW. None of the Contracts, the
origination of the Contracts by the dealers, the purchase of the
Contracts by the Seller, the sale of the Contracts by the Seller to the
Trust Depositor or by the Trust Depositor to the Trust, or any
combination of the foregoing, violated as of the Closing Date or as of
any Subsequent Transfer Date, as applicable, any requirement of any
federal, state or local law and regulations thereunder, including,
without limitation, usury, truth in lending, motor vehicle installment
loan and equal credit
J-2
opportunity laws, applicable to the Contracts and the sale of
Motorcycles. Seller shall, for at least the period of this Agreement,
maintain in its possession, available for the Trust Depositor's, and
the Trustee's inspection, and shall deliver to Trust Depositor or the
Trustee upon demand, evidence of compliance with all such requirements.
(j) CONTRACT IN FORCE. As of the Closing Date (or the
applicable Subsequent Transfer Date in the case of Subsequent Contracts),
no Contract has been satisfied or subordinated in whole or in part or
rescinded, and the related Motorcycle securing any Contract has not been
released from the lien of the Contract in whole or in part.
(k) VALID SECURITY INTEREST. Each Contract creates a valid,
subsisting and enforceable first priority perfected security interest in
favor of Seller in the Motorcycle covered thereby, and such security
interest has been assigned by Seller to the Trust Depositor. The
original certificate of title, certificate of lien or other notification
(the "LIEN CERTIFICATE") issued by the body responsible for the
registration of, and the issuance of certificates of title relating to,
motor vehicles and liens thereon (the "REGISTRAR OF TITLES") of the
applicable state to a secured party which indicates the lien of the
secured party on the Motorcycle is recorded on the original certificate
of title, and original certificate of title for each Motorcycle, show, or
if a new or replacement Lien Certificate is being applied for with
respect to such Motorcycle the Lien Certificate will be received within
180 days of the Closing Date (or the applicable Subsequent Transfer Date
in the case of Subsequent Contracts) and will show, the Seller as
original secured party under each Contract as the holder of a first
priority security interest in such Motorcycle. With respect to each
Contract for which the Lien Certificate has not yet been returned from
the Registrar of Titles, the Seller has received written evidence from
the related dealer that such Lien Certificate showing the Seller as
lienholder has been applied for, the Seller's security interest has been
validly assigned by the Seller to the Trust Depositor and by the Trust
Depositor to the Issuer and Owner Trustee pursuant to this Agreement.
Immediately after the sale, each Contract will be secured by an
enforceable and perfected first priority security interest in the
Motorcycle in favor of the Trust as secured party, which security
interest is prior to all other liens upon and security interests in such
Motorcycle which now exist or may hereafter arise or be created (except,
as to priority, for any lien for taxes, labor, materials or of any state
law enforcement agency affecting a Motorcycle).
(1) CAPACITY OF PARTIES. All parties to any Contract had
capacity to execute such Contract and all other documents related thereto
and to grant the security interest purported to be granted thereby.
(m) GOOD TITLE. Each Contract was purchased by Seller for
value and taken into possession prior to the Cutoff Date (or the
applicable Subsequent Cutoff Date in the case of Subsequent Contracts) in
the ordinary course of its business, without knowledge that the Contract
was subject to a security interest. No Contract has been sold,
assigned or pledged to any person other than Trust Depositor and the
Trustee as the transferee of Trust Depositor, and prior to the transfer
of the Contract to Trust Depositor, Seller had good and marketable title
to each Contract free and clear of any encumbrance, equity, loan, pledge,
charge, claim or security interest (other than the extinguished interest
of BofA described above) and was the sole owner thereof and had full
right to transfer the Contract to Trust Depositor and to permit Trust
Depositor to transfer the same to the Issuer and Owner Trustee, and, as
of the Closing Date (or the applicable Subsequent Transfer Date in the
case of Subsequent Contracts), the Issuer and the Owner Trustee will have
a first priority perfected security interest therein.
(n) NO DEFAULTS. As of the Initial Cutoff Date (or the
applicable Subsequent Cutoff Date in the case of Subsequent Contracts),
no default, breach, violation or event permitting acceleration existed
with respect to any Contract and no event had occurred which, with notice
and the expiration of any grace or cure period, would constitute such a
default, breach, violation or event permitting acceleration under such
Contract. Seller has not waived any such default, breach, violation or
event permitting acceleration, and Seller has not granted any extension
of payment terms on any Contract. As of the Initial Cutoff Date (or the
applicable Subsequent Cutoff Date in the case of Subsequent Contracts),
no Motorcycle had been repossessed.
J-3
(o) NO LIENS. As of the Closing Date (or the applicable
Subsequent Transfer Date in the case of Subsequent Contracts) there are,
to the best of Seller's knowledge, no liens or claims which have been
filed for work, labor or materials affecting the Motorcycle securing any
Contract which are or may be liens prior to, or equal with, the lien of
such Contract.
(p) INSTALLMENTS. Each Contract has a fixed Contract Rate and
provides for monthly payments of principal and interest which, if timely
made, would fully amortize the loan on a simple-interest basis over its
term.
(q) ENFORCEABILITY. Each Contract contains customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the collateral of the
benefits of the security.
(r) ONE ORIGINAL. Each Contract is evidenced by only one
original executed Contract, which original has been delivered to the
Issuer and the Owner Trustee or its designee on or before the Closing
Date (or the applicable Subsequent Transfer Date in the case of
Subsequent Contracts).
(s) NO GOVERNMENT CONTRACTS. No Obligor is the United States
government or an agency, authority, instrumentality or other political
subdivision of the United States government.
(t) LOCKBOX BANK. The Lockbox Bank is the only institution
holding any Lockbox Account for receipt of payments from Obligors, and
all Obligors, and only such Obligors, have been instructed to make
payments to the Lockbox Account, and no person claiming through or under
Seller has any claim or interest in the Lockbox Account other than the
Lockbox Bank; PROVIDED, HOWEVER, NBD Bank, N.A. ("NBD"), Eagle Credit
Trust 1994-1, Eagle Credit Trust 1994-2, Eagle Credit Trust 1994-3, Eagle
Credit Trust 1994-4, Eaglemark Trust 1995-1, Eaglemark Trust 1995-2,
Eaglemark Trust 1996-1, Eaglemark Trust 1996-2 and any other Trusts (as
that term is defined in the Fourth Amended and Restated Lockbox Agreement
dated as of April 1, 1998 by and among Seller, Eaglemark Customer
Funding Corporation-II, Eaglemark Customer Funding Corporation-III,
Purchaser, and acknowledged by Norwest in its capacity as Trustee of
Eagle Credit Trust 1994-1, Eagle Credit Trust 1994-2, Eagle Credit Trust
1994-3, Eagle Credit Trust 1994-4 and Eaglemark Trust 1995-1, Eaglemark
Trust 1995-2 and Xxxxxx Trust and Savings Bank with respect to Future
Trusts (as defined therein)), shall have an interest in certain other
collections therein not related to the Contracts.
(u) OBLIGOR BANKRUPTCY. At the Cutoff Date (or the applicable
Subsequent Cutoff Date in the case of Subsequent Contracts), no Obligor
was subject to a bankruptcy proceeding within the one year preceding such
Cutoff Date.
(v) CHATTEL PAPER. The Contracts constitute chattel paper
within the meaning of the UCC as in effect in the States of Nevada and
Illinois.
(w) NO IMPAIRMENT. Neither the Seller nor the Trust Depositor
has done anything to convey any right to any Person that would result in
such Person having a right to payments due under the Contract or
otherwise to impair the rights of the Trust and the Certificateholders in
any Contract or the proceeds thereof.
(x) CONTRACT NOT ASSUMABLE. No Contract is assumable by
another Person in a manner which would release the Obligor thereof from
such Obligor's obligations to the Trust Depositor with respect to such
Contract.
(3) REPRESENTATIONS AND WARRANTIES REGARDING THE CONTRACTS IN THE
AGGREGATE. Seller represents and warrants, as of the execution and delivery of
this Agreement and as of the Closing Date, in the case of the Initial Contracts,
and as of the applicable Subsequent Transfer Date, in the case of Subsequent
Contracts, that:
(a) AMOUNTS. The sum of the aggregate Principal Balances
payable by Obligors under the Contracts as of the Initial Cutoff Date (or
the applicable Subsequent Cutoff Date in the case of Subsequent
J-4
Contracts), plus the Pre-Funded Amount as of such date, equals the sum of
the principal balance of the Class A-1 Certificate Notes, the Class A-2
Notes and Certificates on the Closing Date or the related Subsequent
Transfer Date, as applicable.
(b) CHARACTERISTICS. The Initial Contracts have the following
characteristics: (i) all the Contracts are secured by Motorcycles; (ii)
no Initial Contract has a remaining maturity of more than 72 months; and
(iii) the final scheduled Distribution Date on the Initial Contract with
the latest maturity is not later than [ ]. Approximately
[ ]% of the Principal Balance of the Initial Contracts as of the
Initial Cutoff Date is attributable to loans for purchases of new
Motorcycles and approximately [ ]% is attributable to loans for
purchases of used Motorcycles. No Initial Contract was originated after
the Initial Cutoff Date. No Initial Contract has a Contract Rate less
than [ ]%. The first payment on each Initial Contract is due on or
before [ ].
(c) MARKING RECORDS. As of the Closing Date (or the applicable
Subsequent Transfer Date in the case of Subsequent Contracts), Seller has
caused the Computer Disk relating to the Contracts sold hereunder and
concurrently reconveyed by Trust Depositor to the Trust and by the Trust
to the Indenture Trustee to be clearly and unambiguously marked to
indicate that such Contracts constitute part of the Trust, are owned by
the Trust and constitute security for the Notes.
(d) NO ADVERSE SELECTION. No selection procedures adverse to
Noteholders and Certificateholders have been employed in selecting the
Contracts.
(e) TRUE SALE. The transaction contemplated by this Agreement
constitutes a valid sale, transfer and assignment from Seller to Trust
Depositor and from Trust Depositor to the Trust of all of Seller's right,
title and interest in the Contract Assets as of the Closing Date and any
Subsequent Transfer Date, as applicable.
(f) ALL FILINGS MADE. All filings (including, without
limitation, UCC filings) required to be made by any Person and actions
required to be taken or performed by any Person in any jurisdiction to
give the Trustee a first priority perfected lien on, or ownership
interest in, the Contracts and the proceeds thereof and the rest of the
Trust Corpus have been made, taken or performed.
(4) REPRESENTATIONS AND WARRANTIES REGARDING THE CONTRACT FILES.
Seller represents and warrants as of the execution and delivery of this
Agreement and as of the Closing Date, in the case of the Initial Contracts, and
as of the applicable Subsequent Transfer Date, in the case of Subsequent
Contracts, that:
(a) POSSESSION. Immediately prior to the Closing Date or any
Subsequent Transfer Date, Seller will have possession of each original
Contract and the related complete Contract File, and there are and there
will be no custodial agreements relating to the same in effect. Each of
such documents which is required to be signed by the Obligor has been
signed by the Obligor in the appropriate spaces. All blanks on any form
have been properly filled in and each form has otherwise been correctly
prepared. The complete Contract File for each Contract currently is in
the possession of the Servicer.
(b) BULK TRANSFER LAWS. The transfer, assignment and
conveyance of the Contracts and the Contract Files by Seller pursuant to
this Agreement or any Subsequent Purchase Agreement and by Trust
Depositor pursuant to the Sale and Servicing Agreement is not subject to
the bulk transfer or any similar statutory provisions in effect in any
applicable jurisdiction.
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EXHIBIT K
[Lockbox Bank and Lockbox Account]
LOCKBOX
Eaglemark, Inc. P. O. Box 52220
Phoenix, Arizona 85072-2220
LOCKBOX BANK
National City Processing Company
d/b/a NPC
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
K-1
EXHIBIT L
[Form of Contract Stamp]
This Contract/Note is subject to a security interest granted to
Harley-Davidson Eaglemark Motorcycle Trust [ ]. UCC-1 Financing
Statements covering this Contract/Note have been filed with the Secretary of
State of the State of Nevada and the Secretary of State of the State of
Illinois. Such lien will be released only in connection with appropriate
filings in such offices. Consequently, potential purchasers of this
Contract/Note must refer to such filings to determine whether such lien has
been released.
L-1
EXHIBIT M
[Form of Subsequent Transfer Agreement]
[see EXHIBIT C of the Transfer and Sale Agreement]
M-1
