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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 24, 1998
EAGLEMARK, INC.
(Exact name of registrant as specified in its charter)
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Nevada 333-21793 88-0292891
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification
incorporation) Number)
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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 1998-2 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
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20 Term Sheet
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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/ Donnna F. Zarcone
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Donna F. Zarcone
Vice President and Chief Financial Officer
July 24, 1998
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EXHIBIT INDEX
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EXHIBIT NO. DOCUMENT PAGE
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20 Term Sheet 1
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EXHIBIT 20
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
1998-2. Neither Salomon Smith Barney 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The information contained herein is preliminary and will be superseded by the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 Smith Barney Syndicate Desk at
212-783-3727.
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Harley-Davidson Eaglemark Motorcycle Trust 1998-2
Eaglemark, Inc., Seller and Servicer
Eaglemark Customer Funding Corporation-IV, Trust Depositor
Subject to Revision
Term Sheet dated July 24, 1998
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Trust......................................... Harley-Davidson Eaglemark Motorcycle Trust 1998-2 (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/Servicer............................. 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 31, 1998
Securities Offered............................ The securities offered are as follows:
A. General.......................... The Harley-Davidson Eaglemark Motorcycle Trust 1998-2 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 1998-2 Harley-Davidson Motorcycle Contract Backed
Certificates (the "CERTIFICATES" and, together with the
Notes, the "SECURITIES") will represent fractional undivided
equity interests in the Trust.
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The Trust will issue two Classes of Notes pursuant to an Indenture to
be dated as of July 1, 1998 (the "INDENTURE"), between the Trust and the
Indenture Trustee, as follows: (i) $87,000,000 aggregate principal
amount (the "INITIAL CLASS A-1 NOTE BALANCE") of Class A-1 ____%
Harley-Davidson Motorcycle Contract Backed Notes (the "CLASS
A-1 NOTES") and (ii) $35,200,000 aggregate principal amount (the
"INITIAL CLASS A-2 NOTE BALANCE") 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 $7,800,000 aggregate principal amount of ___% Certificates
pursuant to a Trust Agreement to be dated as of July 1, 1998 (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.
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C. Distribution Dates............... 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 17, 1998.
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 September
2002 (the "CLASS A-1 FINAL DISTRIBUTION DATE") and (ii) the
Class A-2 Notes will be payable on the Distribution Date
occurring in April 2004 (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 May 2005
(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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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.
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Terms of the Certificates..................... 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 $7,800,000 (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.
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materials. If you did not receive such a disclaimer please contact your Salomon
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Security for the Securities................... The principal security for the Securities will be as described below:
A. The Contracts.................... 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, 1998 (the "AGREEMENT") among the Trust Depositor, the
Trust, 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 $105,161,800.50 as of July 15, 1998, (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 $24,838,199.50, 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,
the District of Columbia and the U.S. Territories. As of the
Initial Cutoff Date, the annual percentage rate of interest on the
Initial Contracts ranges from 8.5% to 22.99% with a weighted average of
approximately 13.30%. The Initial Contracts had a weighted average
term to scheduled maturity, as of origination, of approximately 67.77
months, and a weighted average term to scheduled maturity, as of the
Initial Cutoff Date, of approximately 65.62 months. The final scheduled
Distribution Date on the Initial Contract with the latest
maturity is no later than August 2004. No Contract (including any
Subsequent Contract) will have a scheduled maturity later than
November 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.
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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 $525,809.00 (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 .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.
The "SPECIFIED RESERVE FUND BALANCE" will equal 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) $585,000; PROVIDED,
HOWEVER, that if certain trigger events occur (as more specifically
described in the Prospectus Supplement),the Specified Reserve
Fund Balance will be equal to the sum of (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) $585,000; PROVIDED, FURTHER,
that 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)
$585,000.
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In addition to the Reserve Fund Initial Deposit, the Trust Depositor will
deposit $473,228.10, (the "INITIAL CERTIFICATE RESERVE AMOUNT"), into the
Reserve Fund on the Closing Date. On each Subsequent Transfer Date, the
Trust Depositor will deposit into the Reserve Fund an amount equal to .45%
of the aggregate balance of the Subsequent Contracts conveyed to the Trust
on such date (the "SUBSEQUENT CERTIFICATE RESERVE AMOUNT", and together
with the Initial Certificate Reserve Amount, the "CERTIFICATE RESERVE
AMOUNT"). If funds in the Reserve Fund (other than the Certificate Reserve
Amount) are applied in accordance with the last sentence of the second
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 cover any shortfalls of interest on the Certificates on each Distribution
Date and of interest and principal on the Certificates on the Certificate
Final Distribution Date. 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.
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 $24,838,199.50 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 1998. 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."
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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 Interest Reserve 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.
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.
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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.
</TABLE>
11
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
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, through 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.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
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 Considerations.......................... Subject to the considerations discussed under "ERISA
CONSIDERATIONS" in the Prospectus Supplement, 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.
</TABLE>
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 August 2004, 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 November 2004, and (d) with respect to the Initial
Contracts, has its first scheduled payment due no later than September 1998.
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 64.42% 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 35.58% 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 13.30% 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 6 months but
not more than, 72 months and original maturities of at least 12 months but
not more than 72 months. The
13
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<PAGE>
Initial Contracts had a weighted average term to scheduled maturity, as of
origination, of approximately 67.77 months, and a weighted average term to
scheduled maturity as of the Initial Cutoff Date of approximately 65.62
months (see Tables 3 and 4 below). The average principal balance per Initial
Contract as of the Initial Cutoff Date was approximately $11,557.51 and the
principal balances on the Initial Contracts as of the Initial Cutoff Date
ranged from $808.74 to $35,316.38 (see Table 5 below). The Contracts arise
(or will arise) from loans to Obligors located in 50 states, the District of
Columbia and the U.S. Territories 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: 10.61% in California, 9.29% in Texas, 6.22% in Florida and 5.88%
in Pennsylvania, (see Table 6 below). No other state represented more than
4.76% 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)
<TABLE>
<CAPTION>
<S> <C>
Aggregate Principal Balance............................ $105,161,800.50
Number of Contracts.................................... 9,099
Average Principal Balance.............................. $11,557.51
Weighted Average Annual Percentage
Rate ("APR")...................................... 13.30%
(Range)........................................... 8.50%-22.99%
Weighted Average Original Term (in months)............. 67.77
(Range)........................................... 12 to 72
Weighted Average Calculated Remaining Term (in months). 65.62
(Range)........................................... 6 to 72
</TABLE>
14
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materials. If you did not receive such a disclaimer please contact your Salomon
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<PAGE>
TABLE 2
DISTRIBUTION BY APR OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF NUMBER OF TOTAL OUTSTANDING PERCENT OF POOL
RATE CONTRACTS CONTRACTS(1) PRINCIPAL BALANCE BALANCE(1)
---- ------------ --------------- ---------------------- --------------------
<S> <C> <C> <C> <C>
8.500- 9.000% 161 1.77% $ 2,302,071.23 2.19%
9.001-10.000 541 5.95 7,474,054.87 7.11
10.001-11.000 820 9.01 10,639,308.38 10.12
11.001-12.000 1,123 12.34 14,023,483.28 13.34
12.001-13.000 2,194 24.11 25,945,828.42 24.67
13.001-14.000 1,708 18.77 19,004,125.74 18.07
14.001-15.000 1,059 11.64 11,037,177.34 10.50
15.001-16.000 560 6.15 4,992,763.69 4.75
16.001-17.000 142 1.56 1,310,060.68 1.25
17.001-18.000 268 2.95 2,865,895.60 2.73
18.001-19.000 65 0.71 778,831.85 0.74
19.001-20.000 251 2.76 2,651,617.76 2.52
20.001-21.000 73 0.80 779,508.40 0.74
21.001-22.000 132 1.45 1,341,140.43 1.28
22.001-22.990 2 0.02 15,932.83 0.02
--- ---- --------- ----
Totals: 9,099 100.00% $105,161,800.50 100.00 %
</TABLE>
(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)
<TABLE>
<CAPTION>
PERCENT OF
CALCULATED REMAINING NUMBER OF NUMBER OF TOTAL OUTSTANDING PERCENT OF
TERM (MONTHS) CONTRACTS CONTRACTS (1) PRINCIPAL BALANCE POOL BALANCE (1)
------------- --------- ------------- ---------------- ----------------
<S> <C> <C> <C> <C>
0 - 12 97 1.07% $ 228,024.85 0.22%
13 - 24 588 6.46 2,481,461.90 2.36
25 - 36 399 4.39 2,671,571.56 2.54
37 - 48 455 5.00 3,932,885.21 3.74
49 - 60 1,931 21.22 20,353,638.61 19.35
61 - 72 5,629 61.86 75,494,218.37 71.79
----- ----- ------------- -----
TOTALS: 9,099 100.00% $105,161,800.50 100.00%
</TABLE>
(1) Percentages may not add to 100.00% because of rounding.
15
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<PAGE>
TABLE 4
DISTRIBUTION BY ORIGINAL TERM TO MATURITY
OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
<TABLE>
<CAPTION>
PERCENT OF TOTAL
NUMBER OF OUTSTANDING PERCENT OF
ORIGINAL NUMBER OF CONTRACTS PRINCIPAL POOL BALANCE
TERM (MONTHS) CONTRACTS (1) BALANCE (1)
----------------- ------------- ------------- --------------------- -------------------
<S> <C> <C> <C> <C>
0 - 12 5 0.05% $ 23,361.04 0.02%
13 - 24 105 1.15 622,623.06 0.59
25 - 36 243 2.67 1,648,861.89 1.57
37 - 48 408 4.48 3,359,470.68 3.19
49 - 60 2,472 27.17 22,283,640.18 21.19
61 - 72 5,866 64.47 77,223,843.65 73.43
----- ----- ------------- -----
TOTALS: 9,099 100.00% $105,161,800.50 100.00%
</TABLE>
(1) Percentages may not add to 100.00% because of rounding.
16
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<PAGE>
TABLE 5
DISTRIBUTION BY CURRENT BALANCE OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF NUMBER OF TOTAL OUTSTANDING PERCENT OF
CURRENT BALANCE CONTRACTS CONTRACTS (1) PRINCIPAL BALANCE POOL BALANCE (1)
--------------- --------- ------------- ----------------- ----------------
<S> <C> <C> <C> <C>
$ 0.01 - 1,000.00 5 0.05% $ 4,336.96 0.00%
$ 1,000.01 - 2,000.00 81 0.89 130,835.45 0.12
$ 2,000.01 - 3,000.00 194 2.13 484,895.49 0.46
$ 3,000.01 - 4,000.00 302 3.32 1,064,066.07 1.01
$ 4,000.01 - 5,000.00 383 4.21 1,744,081.28 1.66
$ 5,000.01 - 6,000.00 405 4.45 2,249,792.06 2.14
$ 6,000.01 - 7,000.00 517 5.68 3,387,631.84 3.22
$ 7,000.01 - 8,000.00 593 6.52 4,467,803.80 4.25
$ 8,000.01 - 9,000.00 667 7.33 5,678,430.26 5.40
$ 9,000.01 - 10,000.00 624 6.86 5,942,148.21 5.65
$ 10,000.01 - 11,000.00 559 6.14 5,869,059.65 5.58
$ 11,000.01 - 12,000.00 449 4.93 5,180,540.46 4.93
$ 12,000.01 - 13,000.00 521 5.73 6,529,073.27 6.21
$ 13,000.01 - 14,000.00 519 5.70 7,014,199.22 6.67
$ 14,000.01 - 15,000.00 636 6.99 9,250,556.23 8.80
$ 15,000.01 - 16,000.00 722 7.93 11,198,216.08 10.65
$ 16,000.01 - 17,000.00 603 6.63 9,948,252.02 9.46
$ 17,000.01 - 18,000.00 480 5.28 8,386,340.55 7.97
$ 18,000.01 - 19,000.00 368 4.04 6,800,824.90 6.47
$ 19,000.01 - 20,000.00 198 2.18 3,859,104.27 3.67
$ 20,000.01 - 21,000.00 112 1.23 2,290,397.87 2.18
$ 21,000.01 - 22,000.00 64 0.70 1,370,057.56 1.30
$ 22,000.01 - 23,000.00 47 0.52 1,053,583.94 1.00
$ 23,000.01 - 24,000.00 20 0.22 470,948.36 0.45
$ 24,000.01 - 25,000.00 11 0.12 267,919.87 0.25
$ 25,000.01 - 26,000.00 9 0.10 229,878.64 0.22
$ 26,000.01 - 27,000.00 4 0.04 106,194.58 0.10
$ 27,000.01 - 28,000.00 2 0.02 54,471.24 0.05
$ 28,000.01 - 29,000.00 1 0.01 28,073.32 0.03
$ 30,000.01 - 31,000.00 1 0.01 30,971.70 0.03
$ 33,000.01 - 34,000.00 1 0.01 33,798.97 0.03
$ 35,000.01 - 36,000.00 1 0.01 35,316.38 0.03
--- ---- --------- ----
TOTALS: 9,099 100.00% $105,161,800.50 100.00%
</TABLE>
(1) Percentages may not add to 100.00% because of rounding.
17
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<PAGE>
TABLE 6
GEOGRAPHIC DISTRIBUTION OF THE INITIAL CONTRACTS
(AS OF THE INITIAL CUTOFF DATE)
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF NUMBER OF TOTAL OUTSTANDING PERCENT OF POOL
STATE CONTRACTS CONTRACTS (1) PRINCIPAL BALANCE BALANCE (1)
----- --------- ------------- ----------------- -----------
<C> <C> <C> <C> <C>
ALABAMA 105 1.15 % $ 1,309,957.51 1.25%
ALASKA 28 0.31 364,868.54 0.35
ARIZONA 198 2.18 2,376,001.38 2.26
ARKANSAS 35 0.38 411,594.70 0.39
CALIFORNIA 1,001 11.00 11,158,328.38 10.61
COLORADO 138 1.52 1,763,504.76 1.68
CONNECTICUT 201 2.21 2,216,881.24 2.11
DELAWARE 39 0.43 428,661.39 0.41
DISTRICT OF COLUMBIA 5 0.05 49,332.71 0.05
FLORIDA 535 5.88 6,543,882.51 6.22
GEORGIA 176 1.93 2,206,137.14 2.10
HAWAII 49 0.54 473,461.64 0.45
IDAHO 16 0.18 152,597.96 0.15
ILLINOIS 365 4.01 4,182,966.25 3.98
INDIANA 168 1.85 1,940,042.68 1.84
IOWA 80 0.88 937,922.96 0.89
KANSAS 49 0.54 588,488.54 0.56
KENTUCKY 91 1.00 958,782.22 0.91
LOUISANA 93 1.02 1,139,386.90 1.08
MAINE 45 0.49 523,692.16 0.50
MARYLAND 220 2.42 2,568,145.70 2.44
MASSACHUSETTS 225 2.47 2,385,433.00 2.27
MICHIGAN 155 1.70 1,918,981.04 1.82
MINNESOTA 82 0.90 986,302.60 0.94
MISSISSIPPI 18 0.20 202,436.57 0.19
MISSOURI 75 0.82 779,892.73 0.74
MONTANA 21 0.23 246,272.04 0.23
NEBRASKA 31 0.34 410,606.95 0.39
NEVADA 126 1.38 1,493,880.74 1.42
NEW HAMPSHIRE 123 1.35 1,350,612.22 1.28
NEW JERSEY 395 4.34 4,239,797.61 4.03
NEW MEXICO 115 1.26 1,453,174.62 1.38
</TABLE>
18
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<PAGE>
TABLE 6
GEOGRAPHIC DISTRIBUTION OF THE INITIAL CONTRACTS
(CONTINUED)
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF NUMBER OF TOTAL OUTSTANDING PERCENT OF POOL
STATE CONTRACTS CONTRACTS (1) PRINCIPAL BALANCE BALANCE (1)
----- --------- ------------- ----------------- -----------
<S> <C> <C> <C> <C>
NEW YORK 388 4.26% $ 3,978,170.63 3.78%
NORTH CAROLINA 367 4.03 4,261,089.56 4.05
NORTH DAKOTA 8 0.09 98,662.95 0.09
OHIO 410 4.51 4,290,450.05 4.08
OKLAHOMA 65 0.71 798,089.44 0.76
OREGON 158 1.74 1,907,348.14 1.81
PENNSYLVANIA 592 6.51 6,178,440.12 5.88
RHODE ISLAND 29 0.32 297,541.38 0.28
SOUTH CAROLINA 124 1.36 1,592,878.19 1.51
SOUTH DAKOTA 28 0.31 319,712.74 0.30
TENNESSEE 233 2.56 2,896,622.60 2.75
TEXAS 773 8.50 9,772,644.76 9.29
UTAH 32 0.35 386,349.82 0.37
VERMONT 12 0.13 120,818.10 0.11
VIRGINIA 242 2.66 2,871,123.01 2.73
WASHINGTON 394 4.33 5,004,144.05 4.76
WEST VIRGINIA 16 0.18 202,137.00 0.19
WISCONSIN 206 2.26 2,212,299.19 2.10
WYOMING 8 0.09 90,597.63 0.09
OTHER 11 0.12 120,653.75 0.11
---- ---- ---------- ----
TOTALS: 9,099 100.00% $105,161,800.50 100.00%
</TABLE>
(1) Percentages may not add to 100.00% because of rounding.
19
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materials. If you did not receive such a disclaimer please contact your Salomon
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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.
20
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<PAGE>
DELINQUENCY EXPERIENCE(1)/
(DOLLARS IN THOUSANDS)
AT
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, DECEMBER 31, JUNE 30,
1995 1996 1997 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
NUMBER OF CONTRACTS AND
ASSOCIATED OUTSTANDING PRINCIPAL
DOLLAR BALANCES................... 20,590 $184,054.0 32,574 $303,682.4 45,258 $434,890.7 39,886 $382,086.0
PERIOD OF DELINQUENCY AND
ASSOCIATED OUTSTANDING PRINCIPAL
BALANCES(2)/......................
30-59 DAYS........................ 477 $4,043.3 904 $8,002.9 1,264 $11,454.6 941 $ 8,289.6
60-89 DAYS........................ 157 $1,298.7 374 $3,170.7 559 $5,112.1 359 $ 3,113.8
90 DAYS OR MORE................... 140 $1,120.2 213 $1,880.6 269 $2,196.5 175 $ 1,471.3
TOTAL NUMBER OF DELINQUENT
CONTRACTS......................... 774 1,491 2,092 1,475
DELINQUENT CONTRACTS AS A % OF
TOTAL NUMBER OF CONTRACTS......... 3.76% 4.58% 4.62% 3.70%
JUNE 30,
1997
NUMBER OF CONTRACTS AND
ASSOCIATED OUTSTANDING PRINCIPAL
DOLLAR BALANCES................... 52,546 $511,856.8
PERIOD OF DELINQUENCY AND
ASSOCIATED OUTSTANDING PRINCIPAL
BALANCES(2)/......................
30-59 DAYS........................ 999 $9,256.7
60-89 DAYS........................ 254 $2,247.1
90 DAYS OR MORE................... 72 $661.2
TOTAL NUMBER OF DELINQUENT
CONTRACTS......................... 1,325
DELINQUENT CONTRACTS AS A % OF
TOTAL NUMBER OF CONTRACTS......... 2.52%
</TABLE>
21
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<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, DECEMBER 31, JUNE 30, JUNE 30,
1995 1996 1997 1997 1998
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
AGGREGATE PRINCIPAL BALANCE OF
DELINQUENT CONTRACTS.............. $6,462.2 $13,054.2 $18,763.2 $12,874.7 $12,165.0
AGGREGATE PRINCIPAL BALANCE OF
DELINQUENT CONTRACTS AS A
PERCENTAGE OF THE AGGREGATE
OUTSTANDING PRINCIPAL BALANCE OF
CONTRACTS......................... 3.51% 4.30% 4.31% 3.37% 2.38%
</TABLE>
(1) Excludes Contracts already in repossession, which Contracts the
Servicer does not consider outstanding.
(2) The period of delinquency 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.
22
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<PAGE>
LOAN LOSS/REPOSSESSION EXPERIENCE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
TWELVE TWELVE TWELVE
MONTHS MONTHS MONTHS SIX SIX
ENDED ENDED ENDED MONTHS ENDED MONTHS END
DECEMBER DECEMBER DECEMBER JUNE JUNE
31, 31, 31, 30, 30,
1995 1996 1997 1997 1998
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
PRINCIPAL BALANCE
OF ALL CONTRACTS
SERVICED(1)/................ $184,548.7 $304,730.9 $436,771.0 $382,619.3 $513,828.0
CONTRACT
LIQUIDATIONS(2)/............ 0.76% 0.74% 1.42% 1.41% 1.43%
NET LOSSES:
DOLLARS(3)/................. $866.4 $1,639.5 $3,781.1 $1,614.7 $1,748.1
PERCENTAGE(4)/.............. 0.47% 0.54% 0.87% 0.84% 0.68%
</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.
23
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