<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NUMBER 1
TO
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 7, 1997
EAGLEMARK, INC.
(Exact name of registrant as specified in its charter)
Nevada 333-21793 88-0292891
(State or other jurisdiction (Commission File Number) (IRS Employer
incorporation) Identification Number)
4150 Technology Way
Carson City, Nevada 89706
(Address of principal executive offices) (Zip Code)
(702) 885-1200
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS
The registrant is filing a term sheet relating to the Harley-Davidson
Eaglemark Motorcycle Trust 1997-2 Harley-Davidson Motorcycle Contract Backed
Securities under Item 7(c).
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements: None
(b) Pro Forma Financial Information: None
(c) Exhibits:
EXHIBIT NO. DOCUMENT
99 Term Sheet
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EAGLEMARK, INC.
By: /s/ Donna F. Zarcone
------------------------------------------
Donna F. Zarcone
Vice President and Chief Financial Officer
July 8, 1997
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EXHIBIT INDEX
EXHIBIT NO. DOCUMENT PAGE
99 Term Sheet
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The information contained in the attached materials is referred to as the
"INFORMATION".
The attached Term Sheet has been prepared by Eaglemark, Inc.
("EAGLEMARK") and relates to Harley-Davidson Eaglemark Motorcycle Trust
1997-2. Neither Salomon Brothers Inc ("SALOMON") nor any of its affiliates
makes any representation as to the accuracy or completeness of the
Information herein. The information contained herein is preliminary and will
be superseded by the applicable prospectus supplement and by any other
information subsequently filed with the Securities and Exchange Commission.
The information contained herein will be superseded by the description of
the collateral pool contained in the prospectus supplement relating to the
securities.
The information addresses only certain aspects of the applicable
security's characteristics and thus does not provide a complete assessment.
As such, the Information may not reflect the impact of all structural
characteristics of the security. The assumptions underlying the Information,
including structure and collateral, may be modified from time to time to
reflect changed circumstances.
Although a registration statement (including the prospectus) relating to
the securities discussed in this communication has been filed with the
Securities and Exchange Commission and is effective, the final prospectus
supplement relating to the securities discussed in this communication has not
been filed with the Securities and Exchange Commission. This communication
shall not constitute an offer to sell or the solicitation of an offer to buy
nor shall there be any sale of the securities discussed in this communication
in any state in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
state. Prospective purchasers are referred to the final prospectus and
prospectus supplement relating to the securities discussed in this
communication for definitive Information on any matter discussed in this
communication. Any investment decision should be based only on the data in
the prospectus and the prospectus supplement ("OFFERING DOCUMENTS") and the
then current version of the Information. Offering Documents contain data
that is current as of their publication dates and after publication may no
longer be complete or current. A final prospectus and prospectus supplement
may be obtained by contacting the Salomon Brothers Syndicate Desk at
212-783-3727.
<PAGE>
Harley-Davidson Eaglemark Motorcycle Trust 1997-2
Eaglemark, Inc., Seller and Servicer
Eaglemark Customer Funding Corporation-IV, Trust Depositor
Subject to Revision
Term Sheet dated July 7, 1997
Trust.................... Harley-Davidson Eaglemark Motorcycle Trust 1997-2
(the "TRUST").
Trust Depositor.......... Eaglemark Customer Funding Corporation-IV, a
wholly owned, limited-purpose
subsidiary of Eaglemark, Inc. (the "TRUST
DEPOSITOR")
Seller and Servicer or
Seller/Service......... Eaglemark, Inc. ("EAGLEMARK" or the "SELLER" or,
in its capacity as Servicer, the "SERVICER"),
a 100% owned subsidiary of Eaglemark Financial
Services, Inc.
Owner Trustee........... Wilmington Trust Company, a Delaware banking
corporation (in such capacity, the "OWNER
TRUSTEE").
Indenture Trustee....... Harris Trust and Savings Bank, an Illinois banking
corporation (in such capacity, the "INDENTURE
TRUSTEE"). The Indenture Trustee will also act
as Paying Agent under the Indenture and the
Trust Agreement.
Closing Date............ On or about July 15, 1997
Securities Offered...... The securities offered are as follows:
A. General........ The Harley-Davidson Eaglemark Motorcycle Trust
1997-2 Harley-Davidson Motorcycle Contract
Backed Notes (the "NOTES") will represent
indebtedness of the Trust secured by the assets
of the Trust (other than certain bank accounts
associated with the Certificates). The
Harley-Davidson Eaglemark Motorcycle Trust
1997-2 Harley-Davidson Motorcycle Contract
Backed Certificates (the "CERTIFICATES" and,
together with the Notes, the "SECURITIES") will
represent fractional undivided equity interests
in the Trust.
2
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The Trust will issue two Classes of Notes pursuant
to an Indenture to be dated as of July 1, 1997 (the
"INDENTURE"), between the Trust and the Indenture
Trustee, as follows: (i) $62,500,000 aggregate
principal amount of Class A-1 ____% Harley-Davidson
Motorcycle Contract Backed Notes (the "CLASS A-1
NOTES") and (ii) $31,000,000 aggregate principal
amount of Class A-2 ____% Harley-Davidson
Motorcycle Contract Backed Notes (the "CLASS A-2
NOTES"). Payments of principal, made through the
application of available collections on the
Contracts in an amount reflecting reductions in the
principal balances of the Contracts, and from
certain other available amounts as described
herein, will be made first on the Class A-1 Notes
until the Class A-1 Notes have been repaid in full,
and thereafter on the Class A-2 Notes until the
Class A-2 Notes have been repaid in full, and in
each case prior to any repayment of principal on
the Certificates. Payments of interest on the
Class A-1 Notes and the Class A-2 Notes will be
made from available collections on the Contracts,
and from certain other available amounts as
described herein, without priority of payment
between such Classes, but in each case prior to
payment of interest on the Certificates.
Accordingly, the principal distinction between an
investment in the Class A-1 Notes and the Class A-2
Notes is that holders of Class A-1 Notes will
receive a return of invested principal sooner than
holders of Class A-2 Notes.
The Trust will issue $6,500,000 aggregate principal
amount of ___% Certificates pursuant to a Trust
Agreement to be dated as of July 1, 1997 (the
"TRUST AGREEMENT") by and between the Trust
Depositor and the Owner Trustee (the Owner
Trustee, together with the Indenture Trustee,
being sometimes collectively referred to herein
as the "TRUSTEES"). Payments in respect of
principal and interest on the Certificates will
be subordinated to payments on the Notes to the
extent described herein.
Each Class of Notes and the Certificates will be
issued in minimum denominations of $1,000 and
will be available in book-entry form only.
Security holders will be able to receive
Definitive Securities (as defined herein) only
in certain limited circumstances.
B. Trust Property. The Trust Property consists of, among other things,
the pool of initial contracts (those Contracts
described in Tables 1 through 6 under "THE
CONTRACTS" are hereinafter referred to as the
"INITIAL CONTRACTS") together with any
Subsequent Contracts (as hereinafter defined)
transferred to the Trust, and all rights,
benefits, obligations and proceeds arising
therefrom or in connection therewith, including
security interests in the Harley-Davidson (and,
in certain limited instances, Buell) motorcycles
(see "THE CONTRACTS") securing such Contracts
and proceeds, if any, from certain insurance
policies with respect to individual Motorcycles.
3
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these materials. If you did not receive such a disclaimer please contact
your Salomon Brothers Financial Advisor immediately.
<PAGE>
C. Distribution
Date......... Distributions of interest and principal on the
Securities will be made on the fifteenth day of
each month (or, if such day is not a Business
Day, on the next succeeding Business Day) (each,
a "DISTRIBUTION DATE"), commencing August 15,
1997. Payments on the Securities on each
Distribution Date will be paid to the holders of
the related Securities who are of record on the
last Business Day immediately preceding the
calendar month in which such Distribution Date
occurs (each, a "RECORD DATE").
A "BUSINESS DAY" will be any day other than a
Saturday, a Sunday or a day on which banking
institutions in Chicago, Illinois or Wilmington,
Delaware are authorized or obligated by law,
executive order or government decree to be
closed.
To the extent not previously paid prior to such
dates, the outstanding principal amount of (i)
the Class A-1 Notes will be payable on the
Distribution Date occurring in August 2001 (the
"CLASS A-1 FINAL DISTRIBUTION DATE") and (ii)
the Class A-2 Notes will be payable on the
Distribution Date occurring in November 2002
(the "CLASS A-2 FINAL DISTRIBUTION DATE" and,
together with the Class A-1 Final Distribution
Date, the "NOTE FINAL DISTRIBUTION DATES"). To
the extent not previously paid in full prior to
such date, the unpaid principal balance of the
Certificates will be payable on the Distribution
Date occurring in January 2004 (the "CERTIFICATE
FINAL DISTRIBUTION DATE" and, together with the
Note Final Distribution Dates, the "FINAL
DISTRIBUTION DATES").
Terms of the Notes...... The principal terms of the Notes will be as
described below:
A. Interest Rates. The Class A-1 Notes will bear interest at the rate
of ____% per annum (the "CLASS A-1 RATE") and
the Class A-2 Notes will bear interest at the
rate of ______% per annum (the "CLASS A-2 RATE"
and, together with the Class A-1 Rate, the
"INTEREST RATES").
B. Interest....... Interest on the outstanding principal amount of the
Class A-1 Notes and Class A-2 Notes will accrue
at the related Interest Rate from and including
the fifteenth day of the month of the most
recent Distribution Date based on a 360-day year
consisting 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 (each, an "INTEREST PERIOD").
Interest on the Notes for any Distribution Date
due but not paid on such Distribution Date will
be due on the next Distribution Date, together
with, to the extent permitted by applicable law,
interest on such shortfall at the related
Interest Rate.
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these materials. If you did not receive such a disclaimer please contact
your Salomon Brothers Financial Advisor immediately.
<PAGE>
C. Principal...... Principal of the Notes will be payable on each
Distribution Date in an amount generally equal
to the Note Principal Distributable Amount (as
hereinafter defined) for such Distribution Date.
"NOTE PRINCIPAL DISTRIBUTABLE AMOUNT" means,
with respect to any Distribution Date, the sum
of the Note Monthly Principal Distributable
Amount for such Distribution Date and any
outstanding Note Principal Carryover Shortfall
for the immediately preceding Distribution Date;
PROVIDED, HOWEVER, that the Note Principal
Distributable Amount for a Class of Notes shall
not exceed the outstanding principal amount of
such Class of Notes. On each Distribution
Date, the Note Principal Distributable Amount
will be applied in the following priority: first
to reduce the principal amount of the Class A-1
Notes to zero, and thereafter, to reduce the
principal amount of the Class A-2 Notes to zero.
Notwithstanding the foregoing, if the principal
amount of either the Class A-1 Notes or Class
A-2 Notes has not been paid in full prior to its
related Note Final Distribution Date, the Note
Principal Distributable Amount for such Note
Final Distribution Date will be the unpaid
principal amount of such Class of Notes as of
such Note Final Distribution Date.
D. Optional
Redemption... In the event of an Optional Purchase, the Class A-2
Notes will be redeemed in whole, but not in
part, at a redemption price equal to the unpaid
principal amount of the Class A-2 Notes plus
accrued interest thereon at the related Interest
Rate.
E. Mandatory
Redemption.... Under certain conditions, the Notes may be
accelerated upon the occurrence of an Event of
Default under the Indenture.
F. Mandatory
Special
Redemption.... The holders of Class A-1 Notes ("CLASS A-1
NOTEHOLDERS") and Class A-2 Notes ("CLASS A-2
NOTEHOLDERS") will be prepaid in part, without
premium, 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 (a "MANDATORY SPECIAL
REDEMPTION"). The aggregate principal amount of
Class A-1 Notes and Class A-2 Notes to be
prepaid will be an amount equal to the amount
then on deposit in the Pre-Funding Account
allocated pro rata; PROVIDED, HOWEVER, in the
event the Mandatory Special Redemption Amount is
less than $150,000 such amount shall be
allocated solely to the Class A-1 Noteholders,
pro rata.
5
This page must be accompanied by the disclaimer on the cover page of
these materials. If you did not receive such a disclaimer please contact
your Salomon Brothers Financial Advisor immediately.
<PAGE>
Terms of the Certificate The principal terms of the Certificates will be as
described below:
A. Interest....... On each Distribution Date, the Owner Trustee or any
paying agent or paying agents as the Owner
Trustee may designate from time to time (each, a
"PAYING AGENT", which initially will be the
Indenture Trustee) will distribute pro rata to
Certificateholders of record as of the related
Record Date accrued interest at the rate of
_____% per annum (the "PASS-THROUGH RATE") on
the Certificate Balance (as defined herein) as
of the immediately preceding Distribution Date
(after giving effect to distributions of
principal to be made on such immediately
preceding Distribution Date) or, in the case of
the first Distribution Date, the Initial
Certificate Balance. Interest in respect of a
Distribution Date will accrue from and including
the Closing Date (in the case of the first
Distribution Date) or from and including the
fifteenth day of the month of the most recent
Distribution Date to but excluding the fifteenth
day of the month of the current Distribution
Date based on a 360-day year consisting of 12
months of 30 days each. Interest on the
Certificates for any Distribution Date due but
not paid on such Distribution Date will be due
on the next Distribution Date, together with, to
the extent permitted by applicable law, interest
on such shortfall at the Pass-Through Rate.
The "CERTIFICATE BALANCE" will equal $6,500,000
(the "INITIAL CERTIFICATE BALANCE") on the
Closing Date and on any date thereafter will
equal the Initial Certificate Balance reduced by
all distributions of principal previously made
in respect of the Certificates. Distributions on
the Certificates will be subordinated to
payments of interest and principal on the Notes
to the extent described herein.
B. Principal...... No principal will be paid on the Certificates until
the Distribution Date on which the principal
amounts of the Class A-1 Notes and Class A-2
Notes have been reduced to zero. On such
Distribution Date and each Distribution Date
thereafter, principal of the Certificates will
be payable in an amount equal to the Certificate
Principal Distributable Amount (as defined
herein) for such Distribution Date.
C. Optional
Prepayment.... In the event of an Optional Purchase, the
Certificates will be repaid in whole, but not
in part, at a repayment price equal to the
Certificate Balance plus accrued interest thereon
at the Pass-Through Rate.
6
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these materials. If you did not receive such a disclaimer please contact
your Salomon Brothers Financial Advisor immediately.
<PAGE>
Security for the
Securities............ The principal security for the
Securities will be as described below:
A. The Contract... The Contracts will be fixed-rate, simple-interest
conditional sales contracts for Motorcycles,
including any and all rights to receive payments
collected thereunder on or after the related
Cutoff Date and security interests in the
Motorcycles financed thereby.
On the Closing Date, the Trust Depositor will sell,
transfer and assign to the Trust pursuant to the
Sale and Servicing Agreement dated as of July 1,
1997 (the "AGREEMENT") among the Trust, the
Trust Depositor, the Indenture Trustee and
Eaglemark (as servicer), and the Trust
will pledge to the Indenture Trustee, pursuant
to the Indenture, Initial Contracts with an
aggregate principal balance of $74,425,765.85 as
of June 27, 1997, (the "INITIAL CUTOFF DATE").
Following the Closing Date, pursuant to the
Agreement, the Trust Depositor will be
obligated, subject only to the availability
thereof, to sell, and the Trust will be
obligated to purchase and pledge subject to the
satisfaction of certain conditions set forth
therein, Subsequent Contracts from time to time
during the Funding Period (as defined below)
having an aggregate principal balance equal to
$25,574,234.15, such amount being equal to the
amount on deposit in the Pre-Funding Account
established under the Indenture on the Closing
Date. With respect to each transfer of
Subsequent Contracts to the Trust and the
simultaneous pledge of Subsequent Contracts to
the Indenture Trustee, the Trust Depositor will
designate as a cutoff date (each a "SUBSEQUENT
CUTOFF DATE") the date as of which such
Subsequent Contracts are deemed sold to the
Trust and pledged to the Indenture Trustee.
Each date on which Subsequent Contracts are
conveyed and pledged is referred to herein as a
"SUBSEQUENT TRANSFER DATE."
The Initial Contracts and the Subsequent Contracts
will be selected from retail Motorcycle
installment sales contracts in the Trust
Depositor's portfolio based on the criteria
specified in the Transfer and Sale Agreement.
The Contracts arise and will arise from loans to
Obligors located in the 50 states of the United
States and the District of Columbia. As of the
Initial Cutoff Date, the annual percentage rate
of interest on the Initial Contracts ranges from
8.50% to 22.99% with a weighted average of
approximately 13.22%. The Initial Contracts had
a weighted average term to scheduled maturity,
as of origination, of approximately 65.90
months, and a weighted average term to scheduled
maturity, as of the Initial Cutoff Date, of
approximately 64.74 months. The final scheduled
Distribution Date on the Initial Contract with
the latest maturity is no later than July 2003.
No Contract (including any Subsequent Contract)
will have a scheduled maturity later than
January 2004. The Contracts generally are or
will be prepayable at any time without penalty
to the Obligor. Following the transfer of
Subsequent Contracts to the Trust, the aggregate
characteristics of the entire pool of Contracts
may vary from those of the Initial Contracts as
to the criteria identified and described in
"THE CONTRACTS" herein.
7
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these materials. If you did not receive such a disclaimer please contact
your Salomon Brothers Financial Advisor immediately.
<PAGE>
B. The Reserve
Fund.......... The Securityholders will be afforded certain
limited protection, to the extent described
herein, against losses in respect of the
Contracts by the establishment of an account in
the name of the Indenture Trustee for the
benefit of the Securityholders (the "RESERVE
FUND").
The Reserve Fund will be created with an initial
deposit by the Trust Depositor of $372,128.83
(the "RESERVE FUND INITIAL DEPOSIT") on the
Closing Date. The funds in the Reserve Fund will
thereafter be supplemented on each Distribution
Date by the deposit of certain Excess Amounts
and Subsequent Reserve Fund Amounts (as defined
herein) (such Excess Amounts and Subsequent
Reserve Fund Amounts, together with the Reserve
Fund Initial Deposit and the Certificate Reserve
Amount as defined herein, the "RESERVE FUND
DEPOSITS")), until the amount in the Reserve
Fund reaches the Specified Reserve Fund Balance
(as defined herein). "EXCESS AMOUNTS" in
respect of a Distribution Date will equal the
funds on deposit in the Collection Account in
respect of such Distribution Date, after giving
effect to all distributions required to be made
on such Distribution Date from Available Monies
(as defined herein). The "SUBSEQUENT RESERVE
FUND AMOUNT" will equal the amount on each
Subsequent Transfer Date equal to 0.50% of the
aggregate balance of the Subsequent Contracts
conveyed to the Trust. On each Distribution
Date, funds will be withdrawn from the Reserve
Fund, up to the Available Amount (as hereinafter
defined), for distribution to Securityholders to
cover any shortfalls in interest and principal
required to be paid on the Securities.
In addition to the Reserve Fund Initial Deposit,
the Trust Depositor will deposit $450,000, (the
"CERTIFICATE RESERVE AMOUNT"), into the Reserve
Fund on the Closing Date. If funds in the
Reserve Fund (other than the Certificate Reserve
Amount) are applied in accordance with the last
sentence of the preceding paragraph and 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
applied solely to distribute interest or
principal on the Certificates. The Certificate
Reserve Amount will not be available to pay
interest or principal on the Notes. The
"AVAILABLE AMOUNT" will equal the amount of all
funds on deposit in the Reserve Fund less the
undistributed balance of the Certificate Reserve
Amount, if any.
On each Distribution Date, after giving effect to
all distributions made on such Distribution
Date, any amounts in the Reserve Fund that are
in excess of the Specified Reserve Fund Balance
will be allocated and distributed to the Trust
Depositor.
8
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these materials. If you did not receive such a disclaimer please contact
your Salomon Brothers Financial Advisor immediately.
<PAGE>
C. Pre-Funding
Account........ During the period (the "FUNDING PERIOD") from and
including the Closing Date until the earliest of
(a) the Distribution Date on which the amount on
deposit in the Pre-Funding Account is less than
$150,000, (b) the date on which an Event of
Termination occurs with respect to the Servicer
under the Agreement, (c) the date on which
certain events of insolvency occur with respect
to the Trust Depositor or (d) the close of
business on the date which is 90 days from and
including the Closing Date, the Pre-Funding
Account will be maintained as an account in the
name of the Indenture Trustee on behalf of the
Noteholders to secure the Trust Depositor's
obligations under the Agreement, as applicable,
to purchase and transfer Subsequent Contracts to
the Trust and the Trust's obligations under the
Indenture to pledge Subsequent Contracts to the
Indenture Trustee. The Pre-Funded Amount will
initially equal $25,574,234.15 and, during the
Funding Period, will be reduced by the amount
thereof that the Trust uses to purchase
Subsequent Contracts from the Trust Depositor
and contemporaneously therewith from the Seller
by the Trust Depositor. The Trust Depositor
expects that the Pre-Funded Amount will be
reduced to less than $150,000 by the
Distribution Date occurring in October, 1997.
Any Pre-Funded Amount remaining at the end of
the Funding Period will be payable to the
Noteholders as described above in "TERMS OF THE
NOTES - MANDATORY SPECIAL REDEMPTION."
D. Interest Reserve
Account........ The Trust Depositor will establish, and fund with
an initial deposit on the Closing Date, a
separate collateral account in the name of the
Indenture Trustee on behalf of the
Securityholders under the Agreement (the
"INTEREST RESERVE ACCOUNT"), for the purpose of
providing additional funds for payment of
Carrying Charges (as described below) to pay
certain distributions on Distribution Dates
occurring during (and on the first Distribution
Date following the end of) the Funding Period.
In addition to the initial deposit, all
investment earnings with respect to the
Pre-Funding Account are to be deposited into the
Collection Account and, pursuant to the
Agreement, on each Distribution Date described
above, amounts in respect of Carrying Charges
from such account will be transferred into the
Collection Account. "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, as defined herein) 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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these materials. If you did not receive such a disclaimer please contact
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<PAGE>
The Interest Reserve Account will be established to
account for the fact that a portion of the
proceeds obtained from the sale of the Notes
will be initially deposited in the Pre-Funding
Account (as the initial Pre-Funded Amount)
rather than invested in Contracts, and the
monthly investment earnings on such Pre-Funded
Amount (until the Pre-Funded Amount is used to
purchase Subsequent Contracts) are expected to
be less than the weighted average of the Class
A-1 Rate, the Class A-2 Rate and the
Pass-Through Rate with respect to the
corresponding portion of the Class A-1 Principal
Balance, Class A-2 Principal Balance and the
Certificate Balance, as well as the amount
necessary to pay the Trustees' Fees. The
Interest Reserve Account is not designed to
provide any protection against losses on the
Contracts in the Trust. After the Funding
Period, money remaining in the Interest Reserve
Account will be released to the Trust Depositor.
Optional Purchase....... The Seller, through the Trust Depositor may, but
will not be obligated to, purchase all of the
Contracts in the Trust, and thereby cause early
retirement of all outstanding Securities, on any
Distribution Date as of which the Pool Balance
has declined to less than 10% of the Initial
Pool Balance (an "OPTIONAL PURCHASE").
Ratings................. It is a condition of issuance that the Class A-1
Notes and Class A-2 Notes be rated AAA by
Standard & Poor's Ratings Services, A Division
of The McGraw-Hill Companies ("S&P") and Aaa by
Moody's Investors Service, Inc. ("MOODY'S" and,
together with S&P, the "RATING AGENCIES") and
the Certificates each be rated at least BBB by
S&P and Baa2 by Moody's.
Advances................ The Servicer is obligated to advance each month an
amount equal to accrued and unpaid interest on
the Contracts which was delinquent with respect
to the related Due Period (as defined herein)
(each an "ADVANCE"), but only to the extent that
the Servicer believes that the amount of such
Advance will be recoverable from collections on
the Contracts. The Servicer will be entitled to
reimbursement of outstanding Advances on any
Distribution Date by means of a first priority
withdrawal of Available Monies (as hereinafter
defined) then held in the Collection Account.
Mandatory Repurchase
by the Trust Depositor.. Under the Agreement, the Trust Depositor has
agreed, in the event of a breach of certain
representations and warranties made by the Trust
Depositor and contained therein which materially
and adversely affects the Trust's interest in any
Contract and which has not been cured, to
repurchase such Contract within two business days
prior to the first Determination Date after the
Trust Depositor becomes aware of such breach.
"Determination Date" means the fourth business
day following the conclusion of a Due Period. The
Seller is obligated under the Transfer and Sale
Agreement (which right against the Seller the
Trust Depositor has assigned in such
circumstances to the Trust) to repurchase the
Contracts from the Trust Depositor
contemporaneously with the Trust Depositor's
purchase of the Contracts from the Trust.
10
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these materials. If you did not receive such a disclaimer please contact
your Salomon Brothers Financial Advisor immediately.
<PAGE>
Security Interests and
Other Aspects of the
Contracts................ In connection with the establishment of the Trust
as well as the assignment, conveyance and
transfer of Contracts (including Subsequent
Contracts) to the Trust and pledge to the
Indenture Trustee, security interests in the
Motorcycles securing the Contracts have been (or
will be) (i) conveyed and assigned by the
Seller to the Trust Depositor pursuant to the
Transfer and Sale Agreement (and, in the case of
Subsequent Contracts, the related Subsequent
Purchase Agreement as defined therein and
executed thereunder), (ii) conveyed and assigned
by the Trust Depositor to the Trust pursuant to
the Agreement (and, in the case of Subsequent
Contracts, the related Subsequent Transfer
Agreement as defined herein and executed
thereunder) and (iii) pledged by the Trust to
the Indenture Trustee pursuant to the Indenture.
The Agreement will designate the Servicer as
custodian to maintain possession, as the
Indenture Trustee's agent, of the Contracts and
any other documents relating to the Motorcycles.
Uniform Commercial Code financing statements
will be filed in both Nevada and Illinois,
reflecting the conveyance and assignment of the
Contracts to the Trust Depositor from the
Seller, from the Trust Depositor to the Trust
and the pledge from the Trust to the Indenture
Trustee, and the Seller's and the Trust
Depositor's accounting records and computer
systems will also reflect such conveyance and
assignment and pledge. To facilitate servicing
and save administrative costs, such documents
will not be segregated from other similar
documents that are in the Servicer's possession.
However, the Contracts will be stamped to
reflect their conveyance and assignment and
pledge. If, however, though fraud, negligence
or otherwise, a subsequent purchaser were able
to take physical possession of the Contracts
without notice of such conveyance and assignment
and pledge, the Trust's and Indenture Trustee's
interest in the Contracts could be defeated.
In addition, due to administrative burden and
expense, the certificates of title to the
Motorcycles will not be amended or reissued to
reflect the conveyance and assignment of the
Seller's security interest in the Motorcycles
related to the Contracts to the Trust Depositor
and the Trust or the pledge to the Indenture
Trustee. In the absence of amendments to the
certificates of title, the Trust and Indenture
Trustee will not have a perfected security
interest in the Motorcycles in some states.
Further, federal and state consumer protection
laws impose requirements upon creditors in
connection with extensions of credit and
collections on conditional sales contracts, and
certain of these laws make an assignee of such a
contract liable to the obligor thereon for any
violation of such laws by the lender. The Trust
Depositor has agreed to repurchase any Contract
as to which it has failed to perfect a security
interest in the Motorcycle securing such
Contract, or as to which a breach of federal or
state laws exists if such breach materially and
adversely affects the Trust's interest in such
Contract and if such failure or breach has not
been cured within 90 days. The Seller has
entered into a corresponding obligation to
repurchase such Contracts from the Trust
Depositor under the Transfer and Sale Agreement
and Subsequent Purchase Agreements.
11
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<PAGE>
Monthly Servicing
Fee..................... The Servicer will be entitled to receive for each
Due Period a monthly servicing fee (the "MONTHLY
SERVICING FEE") equal to 1/12th of 1% of the
Principal Balance of the Contracts as of the
beginning of such Due Period. The Servicer will
also be entitled to receive any extension fees
or late payment penalty fees paid by Obligors
(collectively with the Monthly Servicing Fee,
the "SERVICING FEE"). The Servicing Fee is
payable prior to any payments to the Noteholders
or the Certificateholders.
Tax Status.............. In the opinion of Winston & Strawn, federal tax
counsel to the Trust Depositor, for federal
income tax purposes, the Notes will be
characterized as debt, and the Trust will not be
characterized as an association (or a publicly
traded partnership) taxable as a corporation.
Each Noteholder, by the acceptance of a Note,
will agree to treat the Notes as indebtedness,
and each Certificateholder, by the acceptance of
a Certificate, will agree to treat the Trust as
a partnership in which the Certificateholders
are partners for federal income tax purposes.
ERISA Consideration..... Subject to the considerations discussed under
"ERISA CONSIDERATIONS" herein, the Notes will be
eligible for purchase by employee benefit plans.
Any benefit plan fiduciary considering purchase
of the Notes should, however, consult with its
counsel regarding the consequences of such
purchase under ERISA and the Code.
The Certificates are not eligible for purchase by
(i) employee benefit plans subject to ERISA, or
(ii) individual retirement accounts and other
retirement plans subject to Section 4975 of the
Code.
THE CONTRACTS
Each Contract is (or will be, in the case of Subsequent Contracts)
secured by a Motorcycle and is (or will be) a conditional sales contract
originated by a Harley-Davidson dealer and purchased by the Trust Depositor.
No Contract may be substituted by the Seller or the Trust Depositor with
another Motorcycle contract after such Contract has been sold by the Trust
Depositor to the Trust.
Each Contract (a) is (or will be) secured by a Motorcycle, (b) has (or
will have) a fixed annual percentage rate and provide for, if timely made,
payments of principal and interest which fully amortize the loan on a simple
interest basis over its term, (c) with respect to the Initial Contracts, has
its last scheduled payment due no later than July 2003, and with respect to
the Contracts as a whole (including any Subsequent Contracts conveyed to the
Trust after the Closing Date), will have a last scheduled payment due no
later than January 2004, and (d) with respect to the Initial Contracts, has
its first scheduled payment due no later than July 1997. The Contracts were
(or will be) acquired by the Trust Depositor in the ordinary course of the
Trust Depositor's business. (For general composition of the Initial
Contracts see Table 1 below). Approximately 61.58% of the Principal Balance
of the Initial Contracts as of the Initial Cutoff Date is attributable to
loans to purchase Motorcycles which were new and approximately 38.42% is
attributable to loans to purchase Motorcycles which were used at the time the
related Contract was originated. All Initial Contracts have a contractual
rate of interest of at least 8.50% per annum and not more than 22.99% per
annum and the weighted average contractual rate of interest of the Initial
Contracts as of the Initial Cutoff Date is approximately 13.22% per annum
(see Table 2 below). Eaglemark applies a tiered system of interest rates to
reflect varying degrees of risk assigned to different credit underwriting
categories. The Initial Contracts have remaining maturities as of the
Initial Cutoff Date of at least 7 months but not more than, 72 months and
original maturities of at least 12 months but not more than 72 months. The
Initial Contracts had a weighted average term to scheduled maturity, as of
origination, of approximately 65.90 months, and a weighted average term to
scheduled maturity
12
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<PAGE>
as of the Initial Cutoff Date of approximately 64.74 months (see Tables 3 and
4 below). The average principal balance per Initial Contract as of the
Initial Cutoff Date was approximately $11,453.64 and the principal balances
on the Initial Contracts as of the Initial Cutoff Date ranged from $549.18 to
$27,780.00 (see Table 5 below). The Contracts arise (or will arise) from
loans to Obligors located in 50 states and the District of Columbia and with
respect to the Initial Contracts, constitute the following approximate
amounts expressed as a percentage of the aggregate principal balances on the
Initial Contracts as of the Initial Cutoff Date: 9.63% in the state of
California, 8.98% in Texas, 6.85% in Pennsylvania, 6.27% in Ohio, 5.53% in
Washington and 5.23% in Florida, (see Table 6 below). No other state
represented more than 4.84% of the Initial Contracts.
Except for certain criteria specified in the preceding paragraph, there
will be no required characteristics of the Subsequent Contracts. Therefore,
following the transfer of the Subsequent Contracts to the Trust, the
aggregate characteristics of the entire pool of the Contracts, including the
composition of the Contracts, the distribution by weighted average annual
percentage rate of the Contracts, the distribution by calculated remaining
term of the Contracts, the distribution by original term to maturity of the
Contracts, the distribution by current balance of the Contracts, and the
geographic distribution of the Contracts, described in the following tables,
may vary from those of the Initial Contracts as of the Initial Cutoff Date.
TABLE 1
COMPOSITION OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
Aggregate Principal Balance ............................... $74,425,765.85
Number of Contracts........................................ 6,498
Average Principal Balance.................................. $11,453.64
Weighted Average Annual Percentage
Rate ("APR").......................................... 13.22%
(Range)............................................... 8.50%-22.99%
Weighted Average Original Term............................. 65.90
(Range)............................................... 12 to 72
Weighted Average Calculated Remaining Term................. 64.74
(Range)............................................... 7 to 72
13
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<PAGE>
TABLE 2
DISTRIBUTION BY APR OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
TOTAL
PERCENT OF OUTSTANDING
NUMBER OF NUMBER OF PRINCIPAL PERCENT OF POOL
RATE CONTRACTS CONTRACTS(1) BALANCE BALANCE(1)
---- --------- ------------ ------------- ---------------
8.001-9.000% 197 3.03% $ 3,023,912.51 4.06%
9.001-10.000 275 4.23 3,581,481.76 4.81
10.001-11.000 615 9.46 7,879,764.16 10.59
11.001-12.000 875 13.47 10,278,053.39 13.81
12.001-13.000 1613 24.82 18,852,453.40 25.33
13.001-14.000 1116 17.17 12,408,099.19 16.67
14.001-15.000 829 12.76 8,871,642.54 11.92
15.001-16.000 354 5.45 3,657,566.69 4.91
16.001-17.000 102 1.57 957,411.84 1.29
17.001-18.000 129 1.99 1,254,300.15 1.69
18.001-19.000 27 0.42 307,776.60 0.41
19.001-20.000 237 3.65 2,175,038.39 2.92
20.001-21.000 45 0.69 416,647.15 0.56
21.001-22.000 83 1.28 753,079.88 1.01
22.001-23.000 1 0.02 8,538.20 0.01
----- -------- -------------- --------
TOTALS: 6,498 100.00 % $74,425,765.85 100.00 %
(1) Percentages may not add to 100.00% because of rounding.
TABLE 3
DISTRIBUTION BY CALCULATED REMAINING TERM
OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
TOTAL
CALCULATED PERCENT OF OUTSTANDING
REMAINING NUMBER OF NUMBER OF PRINCIPAL PERCENT OF POOL
TERM (MONTHS) CONTRACTS CONTRACTS(1) BALANCE BALANCE(1)
- ------------- --------- ------------ ------------- ---------------
0 - 12 18 0.28% $ 41,904.39 0.06 %
13 - 24 111 1.71 587,513.25 0.79
25 - 36 295 4.54 2,102,019.61 2.82
37 - 48 517 7.96 4,497,353.58 6.04
49 - 60 2,023 31.13 20,995,827.59 28.21
61 - 72 3,534 54.39 46,201,147.43 62.08
----- ------ ------------- --------
TOTALS: 6,498 100.00% $74,425,765.85 100.00 %
(1) Percentages may not add to 100.00% because of rounding.
14
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<PAGE>
TABLE 4
DISTRIBUTION BY ORIGINAL TERM TO MATURITY
OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
TOTAL
PERCENT OF OUTSTANDING
ORIGINAL NUMBER OF NUMBER OF PRINCIPAL PERCENT OF POOL
TERM (MONTHS) CONTRACTS CONTRACTS(1) BALANCE BALANCE(1)
- ------------- ---------- ------------ --------------- ---------------
0 - 12 2 0.03% $ 12,276.33 0.02%
13 - 24 98 1.51% 520,451.64 0.70%
25 - 36 275 4.23% 1,930,051.87 2.59%
37 - 48 490 7.54% 4,244,522.28 5.70%
49 - 60 2,031 31.26% 20,852,319.72 28.02%
61 - 72 3,602 55.43% 46,866,144.01 62.97%
----- -------- --------------- --------
TOTALS: 6,498 100.00% $74,425,765.85 100.00%
(1) Percentages may not add to 100.00% because of rounding.
15
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TABLE 5
DISTRIBUTION BY CURRENT BALANCE OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
TOTAL
PERCENT OF OUTSTANDING
NUMBER OF NUMBER OF PRINCIPAL PERCENT OF POOL
CURRENT BALANCE CONTRACTS CONTRACTS(1) BALANCE BALANCE(1)
--------------- --------- ------------ ------------ --------------
$ 0.01 - 1,000.00 2 0.03% $ 1,117.75 0.00%
$ 1,000.01 - 2,000.00 20 0.31 34,068.68 0.05
$ 2,000.01 - 3,000.00 76 1.17 195,710.28 0.26
$ 3,000.01 - 4,000.00 121 1.86 432,758.22 0.58
$ 4,000.01 - 5,000.00 223 3.43 1,020,876.71 1.37
$ 5,000.01 - 6,000.00 379 5.83 2,114,491.31 2.84
$ 6,000.01 - 7,000.00 412 6.34 2,685,198.23 3.61
$ 7,000.01 - 8,000.00 468 7.20 3,529,627.95 4.74
$ 8,000.01 - 9,000.00 571 8.79 4,867,825.88 6.54
$ 9,000.01 - 10,000.00 519 7.99 4,934,289.62 6.63
$10,000.01 - 11,000.00 437 6.73 4,585,811.51 6.16
$11,000.01 - 12,000.00 345 5.31 3,977,214.91 5.34
$12,000.01 - 13,000.00 357 5.49 4,477,383.09 6.02
$13,000.01 - 14,000.00 441 6.79 5,976,487.88 8.03
$14,000.01 - 15,000.00 502 7.73 7,291,424.43 9.80
$15,000.01 - 16,000.00 472 7.26 7,320,432.97 9.84
$16,000.01 - 17,000.00 365 5.62 6,018,593.87 8.09
$17,000.01 - 18,000.00 287 4.42 5,019,621.45 6.74
$18,000.01 - 19,000.00 193 2.97 3,568,528.03 4.79
$19,000.01 - 20,000.00 133 2.05 2,594,339.35 3.49
$20,000.01 - 21,000.00 86 1.32 1,762,749.32 2.37
$21,000.01 - 22,000.00 37 0.57 793,698.20 1.07
$22,000.01 - 23,000.00 24 0.37 539,997.91 0.73
$23,000.01 - 24,000.00 18 0.28 424,235.78 0.57
$24,000.01 - 25,000.00 2 0.03 49,172.50 0.07
$25,000.01 - 26,000.00 5 0.08 127,756.13 0.17
$27,000.01 - 28,000.00 3 0.05 82,353.89 0.11
----- ------- -------------- -------
TOTALS: 6,498 100.00% $74,425,765.85 100.00%
(1) Percentages may not add to 100.00% because of rounding.
16
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<PAGE>
TABLE 6
GEOGRAPHIC DISTRIBUTION OF THE INITIAL CONTRACTS
TOTAL
PERCENT OF OUTSTANDING
NUMBER OF NUMBER OF PRINCIPAL PERCENT OF POOL
STATE CONTRACTS CONTRACTS(1) BALANCE BALANCE(1)
----- --------- ------------ ------------ -------------
ALASKA 15 0.23 % $ 150,302.03 0.20%
ALABAMA 53 0.82 587,623.13 0.79
ARKANSAS 15 0.23 189,940.90 0.26
ARIZONA 137 2.11 1,525,486.50 2.05
CALIFORNIA 607 9.34 7,163,923.01 9.63
COLORADO 76 1.17 964,937.44 1.30
CONNECTICUT 121 1.86 1,392,968.07 1.87
DISTRICT OF COLUMBIA 2 0.03 28,819.65 0.04
DELAWARE 22 0.34 252,166.18 0.34
FLORIDA 317 4.88 3,894,776.14 5.23
GEORGIA 122 1.88 1,556,251.29 2.09
HAWAII 39 0.60 421,043.00 0.57
IOWA 26 0.40 304,648.49 0.41
IDAHO 17 0.26 182,167.14 0.24
ILLINOIS 164 2.52 1,882,657.91 2.53
INDIANA 70 1.08 781,085.93 1.05
KANSAS 44 0.68 493,346.92 0.66
KENTUCKY 61 0.94 598,653.68 0.80
LOUISIANA 41 0.63 462,480.70 0.62
MASSACHUSETTS 173 2.66 1,807,076.78 2.43
MARYLAND 148 2.28 1,813,855.63 2.44
MAINE 42 0.65 482,799.26 0.65
MICHIGAN 42 0.65 534,076.07 0.72
MINNESOTA 64 0.98 736,167.85 0.99
MISSOURI 37 0.57 390,095.10 0.52
MISSISSIPPI 9 0.14 144,942.22 0.19
MONTANA 17 0.26 161,203.20 0.22
NORTH CAROLINA 296 4.56 3,601,042.99 4.84
NORTH DAKOTA 5 0.08 47,485.98 0.06
NEBRASKA 21 0.32 206,486.26 0.28
NEW HAMPSHIRE 118 1.82 1,238,604.95 1.66
NEW JERSEY 293 4.51 2,934,644.45 3.94
NEW MEXICO 64 0.98 802,839.34 1.08
17
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<PAGE>
TABLE 6
GEOGRAPHIC DISTRIBUTION OF THE INITIAL CONTRACTS
(CONTINUED)
TOTAL
PERCENT OF OUTSTANDING
NUMBER OF NUMBER OF PRINCIPAL PERCENT OF POOL
STATE CONTRACTS CONTRACTS(1) BALANCE BALANCE(1)
----- --------- ------------ ------------ -------------
NEVADA 61 0.94 792,819.70 1.07
NEW YORK 291 4.48 2,988,008.46 4.01
OHIO 438 6.74 4,662,905.12 6.27
OKLAHOMA 53 0.82 633,011.38 0.85
OREGON 159 2.45 1,955,852.14 2.63
PENNSYLVANIA 500 7.69 5,101,520.16 6.85
RHODE ISLAND 27 0.42 276,045.26 0.37
SOUTH CAROLINA 124 1.91 1,526,775.32 2.05
SOUTH DAKOTA 30 0.46 311,761.03 0.42
TENNESSEE 185 2.85 2,278,606.91 3.06
TEXAS 522 8.03 6,680,397.89 8.98
UTAH 28 0.43 342,109.25 0.46
VIRGINIA 208 3.20 2,233,804.79 3.00
VERMONT 16 0.25 150,833.94 0.20
WASHINGTON 329 5.06 4,117,690.66 5.53
WISCONSIN 209 3.22 2,210,428.76 2.97
WEST VIRGINIA 32 0.49 342,149.57 0.46
WYOMING 8 0.12 86,447.32 0.12
----- ------ -------------- ------
TOTALS: 6,498 100.00 % $74,425,765.85 100.00%
(1) Percentages may not add to 100.00% because of rounding.
18
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<PAGE>
DELINQUENCY, LOAN LOSS AND REPOSSESSION INFORMATION
The following tables set forth the delinquency experience and loan loss and
repossession experience of the Seller's portfolio of conditional sales contracts
for Motorcycles. These figures include data in respect of contracts which the
Seller has previously sold with respect to prior securitizations and for which
the Seller acts as servicer.
19
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<PAGE>
DELINQUENCY EXPERIENCE(1)
(DOLLARS IN THOUSANDS)
AT
<TABLE>
<CAPTION>
___________________________________________________________________________________________________________________
DECEMBER 31, DECEMBER 31, DECEMBER 31, MARCH 31, MARCH 31,
1994 1995 1996 1996 1997
<S> <C> <C> <C> <C> <C>
NUMBER OF
CONTRACTS AND
ASSOCIATED
OUTSTANDING
PRINCIPAL
DOLLAR
BALANCES..... 11,695 $97,389.6 20,590 $184,054.0 32,574 $303,682.4 23,515 $212,292.6 35,452 $334,396.92
PERIOD OF
DELINQUENCY AND
ASSOCIATED
OUTSTANDING
PRINCIPAL
BALANCES(2)
30-59 DAYS... 168 $ 1,436.8 477 $ 4,043.3 904 $ 8,002.9 416 $ 3,516.2 891 $ 7,770.4
60-89 DAYS... 41 $ 330.3 157 $ 1,298.7 374 $ 3,170.7 157 $ 1,285.9 271 $ 2,300.2
90 DAYS OR
MORE 31 $ 371.2 140 $ 1,120.2 213 $ 1,880.6 92 $ 855.3 127 $ 1,183.1
TOTAL NUMBER OF
DELINQUENT
CONTRACTS... 240 774 1,491 665 1,289
</TABLE>
_______________________
(1) Excludes Contracts already in repossession, which Contracts the
Servicer does not consider outstanding.
(2) The period of deliquency is based on the number of days payments are
contractually past due (assuming 30-day months). Consequently, a Contract
due on the first day of a month is not 30 days delinquent until the first
day of the next month. Obligors do not receive initial statements until
60 days after the origination of their Contracts; therefore, the Obligors'
associated nonpayment is not considered for delinquency experience until
after the end of such 60-day period.
20
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<PAGE>
<TABLE>
<CAPTION>
___________________________________________________________________________________________________________________
DECEMBER 31, DECEMBER 31, DECEMBER 31, MARCH 31, MARCH 31,
1994 1995 1996 1996 1997
<S> <C> <C> <C> <C> <C>
DELINQUENT
CONTRACTS AS A
% OF
TOTAL NUMBER
OF CONTRACTS... 2.05% 3.76% 4.58% 2.83% 3.64%
AGGREGATE
PRINCIPAL
BALANCE OF
DELINQUENT
CONTRACTS..... $2,138.3 $6,462.2 $13,054.2 $5,657.4 $11,253.7
AGGREGATE
PRINCIPAL
BALANCE OF
DELINQUENT
CONTRACTS
AS A PERCENTAGE
OF THE AGGREGATE
OUTSTANDING
PRINCIPAL
BALANCE OF
CONTRACTS.... 2.20% 3.51% 4.30% 2.66% 3.37%
</TABLE>
21
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<PAGE>
LOAN LOSS/REPOSSESSION EXPERIENCE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
TWELVE TWELVE TWELVE THREE THREE
MONTHS MONTHS MONTHS MONTHS MONTHS
ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, MARCH 31, MARCH 31,
1994 1995 1996 1996 1997
<S> <C> <C> <C> <C> <C>
PRINCIPAL
BALANCE OF ALL
CONTRACTS
SERVICED
(1) . . . . . . . .$97,643.2 $184,548.7 $304,730.9 $212,569.0 $335,755.2
CONTRACT
LIQUIDATIONS
(2) . . . . . . . .0.50% 0.76% 0.74% 1.22% 1.07%
NET LOSSES:
DOLLARS
(3). . . . . . . . $131.1 $866.4 $1,639.5 $453.7 $741.8
PERCENTAGE
(4). . . . . . . . 0.13% 0.47% 0.54% 0.85% 0.88%
</TABLE>
(1) As of period end. Includes Contracts already in repossession.
(2) As a percentage of the total number of Contracts being serviced as of
period end, calculated on an annualized basis.
(3) The calculation of net loss includes actual charge-offs, deficiency
balances remaining after liquidation of repossessed vehicles and expenses
of repossession and liquidation, net of recoveries.
(4) As a percentage of the principal amount of Contracts being serviced as of
period end, calculated on an annualized basis.
THE DATA PRESENTED IN THE FOREGOING TABLES ARE FOR ILLUSTRATIVE PURPOSES ONLY
AND THERE IS NO ASSURANCE THAT THE DELINQUENCY, LOAN LOSS OR REPOSSESSION
EXPERIENCE OF THE CONTRACTS WILL BE SIMILAR TO THAT SET FORTH ABOVe.
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DEFINITIONS
"Specified Reserve Fund Balance" with respect to any Distribution Date will
be an amount equal to the sum of (i) 2.50% of the Principal Balance of the
Contracts in the Trust as of the first day of the immediately preceding Due
Period and (ii) $450,000. In the event of certain trigger events (as defined
in the prospectus supplement) the Specified Reserve Fund Balance shall be
equal to (i) 6.00% of the Principal Balance of the Contracts in the Trust as
of the first day of the immediately preceding Due Period and (ii) $450,000.
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 A-1 Note Balance, Initial Class A-2 Note Balance and Initial
Certificate Balance and (ii) $450,000.
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