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SALE AND SERVICING AGREEMENT
among
HARLEY-DAVIDSON EAGLEMARK OWNER TRUST[ ___],
as Issuer,
EAGLEMARK CUSTOMER FUNDING CORPORATION-[___],
as Trust Depositor,
EAGLEMARK, INC,
as Servicer
and
XXXXXX TRUST AND SAVINGS BANK
as Indenture Trustee
Dated as of [_______]
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TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS..............................................................................................1
Section 1.01. Definitions............................................................................1
Section 1.02. Usage of Terms........................................................................14
Section 1.03. Section References....................................................................14
Section 1.04. Calculations..........................................................................14
Section 1.05. Accounting Terms......................................................................14
ARTICLE TWO
ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACTS...........................................................15
Section 2.01. Closing...............................................................................15
Section 2.02. Conditions to the Closing.............................................................16
Section 2.03. Acceptance by Owner Trustee...........................................................17
Section 2.04. Conveyance of Subsequent Contracts....................................................17
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES..........................................................................20
Section 3.01. Representations and Warranties Regarding the Trust Depositor..........................20
Section 3.02. Representations and Warranties Regarding the Servicer.................................21
ARTICLE FOUR
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS.............................................23
Section 4.01. Custody of Contracts..................................................................23
Section 4.02. Filing................................................................................24
Section 4.03. Name Change or Relocation.............................................................24
Section 4.04. Chief Executive Office................................................................24
Section 4.05. Costs and Expenses....................................................................24
ARTICLE FIVE
SERVICING OF CONTRACTS..................................................................................25
Section 5.01. Responsibility for Contract Administration............................................25
Section 5.02. Standard of Care......................................................................25
Section 5.03. Records...............................................................................25
Section 5.04. Inspection............................................................................25
Section 5.05. Trust Accounts........................................................................25
Section 5.06. Enforcement...........................................................................26
Section 5.07. Trustees to Cooperate.................................................................27
Section 5.08. Costs and Expenses....................................................................27
Section 5.09. Maintenance of Security Interests in Motorcycles......................................28
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Section 5.10. Successor Servicer/Lockbox Agreements.................................................28
ARTICLE SIX
THE TRUST DEPOSITOR.....................................................................................29
Section 6.01. Corporate Existence...................................................................29
Section 6.02. Liability of Trust Depositor; Indemnities.............................................29
Section 6.03. Merger or Consolidation of, or Assumption of the Obligations of,
Trust Depositor; Certain Limitations..................................................30
Section 6.04. Limitation on Liability of Trust Depositor and Others.................................30
Section 6.05. Trust Depositor Not to Resign.........................................................31
Section 6.06. Trust Depositor Will Own Certificates.................................................31
ARTICLE SEVEN
DISTRIBUTIONS; RESERVE FUND.............................................................................32
Section 7.01. Monthly Distributions.................................................................32
Section 7.02. Fees..................................................................................32
Section 7.03. Advances; Realization of Carrying Charge..............................................32
Section 7.04. Interest Reserve Account..............................................................32
Section 7.05. Distributions.........................................................................33
Section 7.06. Reserve Fund; Certificate Reserve Amount..............................................34
Section 7.07. Establishment of Pre-Funding Account..................................................34
Section 7.08. Repurchases of Contracts for Breach of Representations and Warranties.................35
Section 7.09. Reassignment of Repurchased Contracts.................................................36
Section 7.10. Seller's Repurchase Option............................................................36
ARTICLE EIGHT
EVENTS OF TERMINATION; SERVICE TRANSFER.................................................................37
Section 8.01. Events of Termination.................................................................37
Section 8.02. Service Transfer......................................................................38
Section 8.03. Successor Servicer to Act; Appointment of Successor Servicer..........................38
Section 8.04. Notification to Certificateholders....................................................38
Section 8.05. Effect of Transfer....................................................................38
Section 8.06. Database File.........................................................................39
Section 8.07. Successor Servicer Indemnification....................................................39
Section 8.08. Responsibilities of the Successor Servicer............................................39
ARTICLE NINE
REPORTS.................................................................................................40
Section 9.01. Monthly Reports.......................................................................40
Section 9.02. Officer's Certificate.................................................................40
Section 9.03. Other Data............................................................................40
Section 9.04. Annual Report of Accountants..........................................................40
Section 9.05. Annual Statement of Compliance from Servicer..........................................41
Section 9.06. Monthly Reports to Securityholders....................................................41
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ARTICLE TEN
TERMINATION.............................................................................................43
Section 10.01. Sale of Trust Assets....................................................................43
ARTICLE ELEVEN
MISCELLANEOUS...........................................................................................44
Section 11.01. Amendment...............................................................................44
Section 11.02. Protection of Title to Trust............................................................44
Section 11.03. Governing Law...........................................................................46
Section 11.04. Notices.................................................................................46
Section 11.05. Severability of Provisions..............................................................47
Section 11.06. Assignment.............................................................................47
Section 11.07. Third Party Beneficiaries...............................................................47
Section 11.08. Counterparts............................................................................47
Section 11.09. Headings................................................................................47
EXHIBITS
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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
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SALE AND SERVICING AGREEMENT, dated as of [_____], among
Harley-Davidson Eaglemark Owner Trust [___] (together with its successors and
assigns, the "Issuer" or the "Trust"), Eaglemark Customer Funding Corporation-
[___] (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. At the time of initial issuance of the
Securities, the initial aggregate principal amount of the Securities will equal
the Aggregate Principal 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 the last sentence
of 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 Default Ratio" means, for any Distribution Date, the
arithmetic average of the Default Ratios for such Distribution Dates and the two
immediately preceding Distribution Dates.
"Average Delinquency Ratio" means, the arithmetic average of the
Delinquency Ratios for that Distribution Date and the two immediately preceding
Distribution Dates.
"Average Loss Ratio" means, for a Distribution Date is equal to the
arithmetic average of the Loss Ratios for such Distribution Date and the two
immediately preceding Distribution Dates.
"Base Prospectus" means the Prospectus dated [_____] 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.
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"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.
"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 April 2004
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 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, 0% until the
principal amount of the Class A-2 Notes has been reduced to zero 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 Register" shall have the meaning specified in the Trust
Agreement.
"Certificate Reserve Amount" means $[ ], 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).
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"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 April 2001 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 April 2003 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.
"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.
4
"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.
"Default Ratio" means, as of any Distribution Date, the fraction
(expressed as a percentage) derived by dividing (x) the Principal Balance for
all Contracts that become Defaulted 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 related Due Period.
"Delinquency Amount" means, as of any Distribution Date means 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.
"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,
5
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 Xxxxx'x.
"Eligible Investments" means any one or more of the following types of
investments:
(a) (i) direct interest-bearing obligations of, and
interest-bearing obligations guaranteed as to timely payment of
principal and interest by, the United States or any agency or
instrumentality of the United States the obligations of which are
backed by the full faith and credit of the United States; and (ii)
direct interest-bearing obligations of, and interest-bearing
obligations guaranteed as to timely payment of principal and
interest by, the Federal National Mortgage Association or the Federal
Home Loan Mortgage Corporation, but only if, at the time of investment,
such obligations are assigned the highest credit rating by each Rating
Agency; and
(b) demand or time deposits in, certificates of deposit of, or
bankers' acceptances issued by any depositary institution or trust
company organized under the laws of the United States or any State and
subject to supervision and examination by federal and/or State banking
authorities (including, if applicable, the Trustee or any agent of the
Trustee acting in their respective commercial capacities); provided
that the short-term unsecured debt obligations of such depositary
institution or trust company at the time of such investment, or
contractual commitment providing for such investment, are assigned the
highest credit rating by each Rating Agency.
"Event of Termination" means an event specified in Section 8.01.
"Excess Amounts" shall have the meaning specified in Section 7.06(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
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.
6
"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 .018% 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 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.
"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.
7
"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 Owner 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 Third Amended and Restated Lockbox
Administration Agreement dated as of March 1, 1996 by and among the Servicer,
the Trust Depositor, Eaglemark Customer Funding Corporation-II, NBD Bank, N.A.,
Bank of America National Trust and Savings Association ("BofA"), Norwest Bank
Minnesota, National Association (the "Predecessor Trustee"), the Trustee,
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.
"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.
8
"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, to the extent
permitted by applicable law, interest on the amount of interest due but not paid
to Noteholders of such Class on the preceding Distribution Date 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 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
9
Distribution Date, after giving effect to all payments
of principal to Noteholders of such Class on or prior to such 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, 100% until the
principal amount of the Class A-2 Notes has been reduced 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 Monthly 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 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 $208.33 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 Trust Depositor 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 dated [___] and the Supplement
dated [_____].
"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
11
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 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 last
Business Day of the preceding calendar month.
"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 Additional Deposit" means, with respect to any transfer
of Subsequent Contracts to the Trust, one percent (1.00%) of the Principal
Balance on the date of such transfer.
"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 as of any particular Distribution
Date (i) the Average Delinquency Ratio is equal to or greater than 2.50%; (ii)
the Average Loss Ratio is equal to or greater than 1.75%, (iii) the Cumulative
Loss Ratio is equal to or greater than (a) 0.75% 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) 1.50% 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) 1.75% for any Distribution Date
following the second anniversary of the Closing Date or (iv) the Average Default
Ratio is equal to or greater than 7.00%.
"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 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.
12
"Securities" means the Notes and the Certificates.
"Securityholders" means the Holders of the Notes and 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, 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) 1.00% of the aggregate of the Initial Class X- 0 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 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.
"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.
13
"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 1.00% 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 [___] 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 Amended and Restated 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.
"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
14
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.
"Underwriter" means, Salomon Brothers Inc.
"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.
15
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 Owner 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 initial deposit of $[ ], as well as the $[ ]
representing the 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;
16
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.
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 Initial
Purchaser 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.
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(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.
(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
(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 Initial Purchaser 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;
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(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 O 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;
(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 Reserve Fund Additional Deposit for such
Subsequent Transfer Date (if any is required) shall have been made;
(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 "A" by Standard & Poor's and Baa2
by 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 Initial
Purchaser;
(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 Initial Purchaser 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 12.25%, (B) that the weighted average
calculated remaining term to maturity of the Contracts collectively,
following the transfer of the Subsequent Contracts, does not exceed 66
months, and (C) the Principal Balance of all Contracts 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;
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(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 in the Subsequent Transfer Agreement
have been sold to the Issuer pursuant to this Agreement and the
Transfer and Sale Agreement;
(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; and
(xvii) the Indenture Trustee shall transfer an amount equal to
one percent (1.00%) of the Principal Balance of the Subsequent
Contracts conveyed to the Trust on a Subsequent Transfer Date from the
Pre-Funding Account to the Reserve Fund.
(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 $150,00 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.
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
21
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.
(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 and
have assets of $[ ] (inclusive of the Demand Note).
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.
22
(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 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.
24
(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 Certificateholders and the Noteholders,
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
26
(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;
(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 and Pre-Funding Account) 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 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
27
reasonably necessary to enforce the Contract, including bringing suit in its
name or the names of the Noteholders and Certificateholders.
(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 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 been in good standing for the previous
twelve-month period, (iii) such extension is consistent with the Servicer's
customary servicing procedures and is consistent with Section 5.02, (iv) 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 (v) 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
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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
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) consent 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 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
31
shall not be incidental to its obligations under this
Agreement, and that in its opinion may involve it in any expense or liability.
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 Section 7.03 (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 Owner Trust [___] - Xxxxxx Trust and Savings
Bank, as Indenture Trustee" (such account being the "Interest Reserve Account").
33
(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 addition, on the
Payment Date with respect to which such disbursement of Carrying Charges was
made, and following such disbursement and the distribution thereof, the
Indenture Trustee shall release to the Trust Depositor an amount equal to the
excess (if any) of the Interest Reserve Amount at such time over the Requisite
Interest Reserve Amount for such Payment Date. 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 Payment 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
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 Account is less than
$150,000 such amount shall be distributed solely to the Class A-1 Noteholders;
(ii) to the Servicer from Available Monies, reimbursement 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, 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, 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;
34
(vii) to the Certificate Distribution Account from Available Interest,
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.
(viii) to the Certificate Distribution Account from Available
Principal, 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 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 clause 7.6(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 into the
Reserve Fund held 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 Collection Account.
(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 Collection Account, solely to distribute
interest or principal on the Certificates.
(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.
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(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-[__] Pre-Funding
Account - Harley Davidson Eaglemark Owner 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 form 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 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)
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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 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 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
ARTICLE VII
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 Trustee 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 Trustee, the
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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 51% of the outstanding
balance of the Notes voting as a single class and Certificateholders with
aggregate fractional interests representing 51% 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").
(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 51% or more of the outstanding balance of each Class of
Notes and Certificateholders with aggregate fractional interests representing
51% 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
39
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.
(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.
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ARTICLE IX
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 substantially in the form of Exhibit C, 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 Initial Purchaser 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,
19__, 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
41
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.
Section 9.05. Annual Statement of Compliance from Servicer. The
Servicer will deliver to the Trustees, the Initial Purchaser and each of the
Rating Agencies, on or before January 31 of each year commencing January 31,
19__, 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
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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
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, the Average Delinquency Ratio, the
Default Ratio and the Average Default 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 9.06, attributable to such Noteholder
or Certificateholder.
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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
44
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.
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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 not less than
51% of the Outstanding Amount of the Notes, and the consent of
Certificateholders evidencing not less than 51% 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.
45
(f) 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
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.
(g) 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 10.02(a) seriously misleading within the meaning of ss.
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.
(h) 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.
(i) 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.
(j) 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.
(k) 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.
(l) 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.
(m) 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.
46
(n) 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 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-[___]
0000 Xxxxxxxx Xxxxx, Xxxxx X
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
47
(iv) If to the Owner Trustee:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
Telecopier No.: (000) 000-0000
(v) If to Moody's:
Moody's Investor's 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 Initial Purchaser:
Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset-Backed Securities Group
Telecopier No.: (000) 000-0000
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 7.02, this Agreement may not
be assigned by the Trust Depositor or the Servicer without the prior
48
written consent of Holders of Notes aggregating not less than 66% 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.
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.
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 OWNER 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-
[___], as Trust Depositor
By: ______________________________________
Printed Name: Xxxxxxx X. Xxxxxxxx
Title: Treasurer
EAGLEMARK INC, as Servicer
By: ______________________________________
Printed Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
49
XXXXXX TRUST AND SAVINGS BANK, not in its
individual capacity but solely as Indenture Trustee
By: ______________________________________
Printed Name: Xxxxxx X. Xxxxx
Title: Vice President
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"), and Harley-Davidson Eaglemark Owners 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
right, title and interest in and to the Initial Contracts (including, without
limitation, all security interests and any and all rights to receive payments
which are collected pursuant thereto on or after [___] (including liquidation
proceeds therefrom) but excluding any rights to receive payments which were
collected pursuant thereto prior to [___]) identified in the initial List of
Contracts delivered pursuant to Section 2.02(a) of the Transfer and Sale
Agreement, (ii) all rights under any physical damage or other individual
insurance policy (including a "forced placed" policy, if any) relating to any
such Contract, an Obligor or a Motorcycle securing a Contract, (iii) all
security interests in each Motorcycle, (iv) all documents contained in the
Contract Files, (v) all rights of the Trust Depositor in the Lockbox, Lockbox
Account and related Lockbox Agreement, (vi) all rights (but not the obligations)
of the Trust Depositor under any motorcycle dealer agreements between the
dealers originating the Contracts and the Trust Depositor, and (vii) 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 _____, 19___.
EAGLEMARK CUSTOMER FUNDING CORPORATION-IV
By: ________________________________________
Printed Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
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, Eaglemark, Inc. ("Eaglemark"), as Servicer, and Harley-Davidson
Eaglemark Owner 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 Issuer; the Administrative
Agreement dated as of the Effective Date between the Trust Depositor,
the Issuer, Xxxxxx Trust and Savings Bank, as Indenture Trustee,
Eaglemark, as Administrator; the Purchase Agreement dated [___] among
the Trust Depositor, Eaglemark and Salomon Brothers Inc dated [___]
(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
___, 19 ___.
By: ________________________________
Printed Name: Xxxxxx X. Deli
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
April 1, 1997 (the "Effective Date") by and among Eaglemark, as Servicer,
Eaglemark Customer Funding Corporation-IV ("CFC"), and Harley-Davidson Eaglemark
Owner Trust 1997-1 ("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 April __, 1997 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 Purchase Agreement dated April
__, 1997 among Eaglemark, CFC and Salomon Brothers Inc (the "Purchase
Agreement"); and the Administration Agreement dated April 1, 1997 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 Purchase 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 _____, 19__.
By: _________________________________
Printed Name: Xxxxxxx X. Case
Title: President
C-3
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 s/he is a ____________________________
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 April 1, 1997 by and among Eaglemark Customer Funding
Corporation-[___], as Trust Depositor, the Servicer, Xxxxxx Trust and Savings
Bank, as Indenture Trustee and Harley-Davidson Eaglemark Owner Trust 1997-1 (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 April, 1997.
Eaglemark, Inc.
By: ___________________________________
Printed Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
G-1
EXHIBIT H
[List of Contracts]
H-1
EXHIBIT I
[Form of Monthly Report to Noteholders And Certificateholders]
Harley-Davidson Eaglemark Owner Trust 1997-1
$[ ] [ ]% 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,
100% until the principal amount of the Class A-2
Notes has been reduced 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 Monthly Distributable Amount (sum of D.3(e) plus
E.6.) $_____________
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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 0.00%
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) $____________
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2. Late Payment Penalty Fees for such Distribution Date $____________
3. Extension Fees for such Distribution Date $____________
4. Owner Trust Fee equal to 220.00 per month $220.00
5. Trustee's Fee for such Distribution Date excluding expense
component (1/12 of the product of .018% 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 $_____________
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h. Total amount of funds deposited into the Collection
Account pursuant to Section 5.05(b) (the sum of a.
through g.) $_____________
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 IndentureTrustee'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. $____________
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O. The amount on deposit in the Reserve Fund after giving
effect to deposits and withdrawals therefrom on such Distribution Date $____________
P. The Reserve Fund Requisite Amount for such Distribution Date 3.50% of
the Principal Balance of the Contracts in the Trust as of the first
day of the immediately preceding Due Period; 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 7.00% of
the Principal Balance of the Contracts in the Trust as of the first
day of the immediately preceding Due Period) $____________
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 $____________
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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 $____________
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2. Carrying Charges (if any) to be paid on upcoming Distribution
Date $____________
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 Default Ratio for such Distribution Date
(a) The Default Ratio (the fraction (expressed as a
percentage) derived by dividing (x) the Principal
Balance for all Contracts that become Defaulted
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 related Due Period) for such
Distribution Date
-----%
(b) The Default Ratio for the prior Distribution Date _____%
(c) The Default Ratio for the second prior Distribution
Date _____%
(d) The Average Default Ratio (the arithmetic average of a.
through c.) _____ %
3. 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) $__________
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(b) The Delinquency Ratio (the fraction (expressed as
a percentage) computed by dividing (a) the
Delinquency Amount during the immediately
preceding Due Period multiplied by twelve 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.) _____%
4. 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 _____%
(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.) _____%
5. Computation of Reserve Fund Requisite Amount
Trigger Events
(1) Average Delinquency Ratio (if Average Delinquency
Ratio>= 2.50%, then a Reserve Fund Trigger Event) _____%
(2) Average Loss Ratio (if Average Loss Ratio is Ratio>=
1.75%, then a Reserve Fund Trigger Event) _____%
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(3) Cumulative Loss Ratio (if Cumulative Loss Ratio is
Ratio >= (i) .75% 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) 1.50% 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) 1.75% for any Distribution Date following
the second anniversary of the Closing Date Ratio>=
than a Reserve Fund Trigger Event). _____%
(4) Average Default Ratio (If Average Default Ratio is
Ratio>= 7.00% than a Reserve Fund Trigger Event). _____%
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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.
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0000 Xxxxxxxx Xxxxx, Xxxxx X
Xxxxxx Xxxx, Xxxxxx 00000
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, 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
J-2
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 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 theTrustee'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. Except with respect to (i)
the security interest of NBD Bank, N.A. individually and as agent for
certain other lenders, which security interest is released and of no
further force and effect by its terms upon the transfer of such
Contract pursuant hereto, and (ii) the security interest of Bank of
America National Trust and Savings Association ("BofA") as
administrator for the Second Parties under the Security Agreement dated
as of March 15, 1996 between Eaglemark and BofA, which security
interest shall be released (A) in the case of the Initial Contracts,
concurrently with the issuance of the Certificates upon receipt by BofA
of monies in the amount described in a release agreement provided by
BofA and (B) in the case of Subsequent Contracts, concurrently
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with the Subsequent Transfer Date upon receipt by
BofA of monies in the amount
described in a similar release agreement to be provided by BofA, 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 self-extinguishing interest of NBD Bank, N.A. described
above and 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.
(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 Third Amended and Restated
Lockbox Agreement dated as of February 1, 1996 by and among Seller,
Eaglemark Customer Funding Corporation-II, Purchaser, NBD and BofA 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.
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(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
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 April 2003. Approximately
65% 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 35% 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 8.50%.
The first payment on each Initial Contract is due on or before May 15,
1997.
(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.
J-5
(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.
J-6
EXHIBIT K
[Lockbox Bank and Lockbox Account]
Lockbox
Eaglemark, Inc. O. Xxx 00000
Xxxxxxx, Xxxxxxx 00000-0000
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 Owner Trust 1997-1. 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
