Document:

Exhibit 4.4

 

February 27, 2016

	
 
    

 

TRUST AGREEMENT

 

among

 

HARLEY-DAVIDSON MOTORCYCLE TRUST [         ],

as Settlor,

 

HARLEY-DAVIDSON CREDIT CORP.,

as Administrator,

 

and

 

[                         ],

as Underlying Trustee

 

Dated as of [        ], 20[  ]

	
 
    

 

 

Table of Contents

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I - DEFINITIONS
    	
1
    
	
 
    	
 
    
	
SECTION 1.1
    	
Capitalized Terms
    	
1
    
	
SECTION 1.2
    	
Definitions of General   Terms and Other Interpretive Provisions
    	
4
    
	
 
    	
 
    	
 
    
	
ARTICLE II - ORGANIZATION
    	
4
    
	
 
    	
 
    
	
SECTION 2.1
    	
Name
    	
4
    
	
SECTION 2.2
    	
Office
    	
4
    
	
SECTION 2.3
    	
Purposes and Powers
    	
4
    
	
SECTION 2.4
    	
Appointment of   Underlying Trustee
    	
6
    
	
SECTION 2.5
    	
Trust Estate
    	
6
    
	
SECTION 2.6
    	
Declaration of Trust
    	
6
    
	
SECTION 2.7
    	
Title to Trust Estate
    	
6
    
	
SECTION 2.8
    	
Federal Income Tax   Matters
    	
6
    
	
 
    	
 
    	
 
    
	
ARTICLE III - TRUST CERTIFICATES AND   TRANSFER OF INTERESTS
    	
7
    
	
 
    	
 
    
	
SECTION 3.1
    	
Initial Ownership
    	
7
    
	
SECTION 3.2
    	
The Underlying Trust   Certificate
    	
7
    
	
SECTION 3.3
    	
Registration of   Transfer of Trust Certificates
    	
7
    
	
SECTION 3.4
    	
Mutilated, Destroyed,   Lost or Stolen Trust Certificates
    	
8
    
	
SECTION 3.5
    	
Form of the   Underlying Trust Certificate
    	
8
    
	
 
    	
 
    	
 
    
	
ARTICLE IV - APPLICATION OF TRUST FUNDS;   CERTAIN DUTIES
    	
8
    
	
 
    	
 
    
	
SECTION 4.1
    	
Establishment of   Collection Account
    	
8
    
	
SECTION 4.2
    	
Funding and Application   of Collection Account
    	
9
    
	
SECTION 4.3
    	
Contracts
    	
9
    
	
SECTION 4.4
    	
Distributions
    	
9
    
	
SECTION 4.5
    	
Reliance on   Instructions; No Segregation of Monies; No Interest
    	
10
    
	
SECTION 4.6
    	
Investments
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE V - CONCERNING THE CONTRACTS
    	
10
    
	
 
    	
 
    
	
SECTION 5.1
    	
Enforcement of   Contracts
    	
10
    
	
SECTION 5.2
    	
Administration and   Collection of Contracts
    	
10
    
	
SECTION 5.3
    	
Enforcement of Sale and   Servicing Agreement
    	
10
    
	
SECTION 5.4
    	
[Reserved]
    	
11
    
	
SECTION 5.5
    	
Representations and   Warranties of the Settlor
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE VI - AUTHORITY, DUTIES AND RESTRICTIONS   OF UNDERLYING TRUSTEE
    	
12
    
	
 
    	
 
    
	
SECTION 6.1
    	
General Authority
    	
12
    
	
SECTION 6.2
    	
General Duties
    	
12
    

 

 

	
SECTION 6.3
    	
Action upon Instruction
    	
14
    
	
SECTION 6.4
    	
No Duties Except as   Specified in this Agreement or in Instructions
    	
15
    
	
SECTION 6.5
    	
No Action Except under   Specified Documents or Instructions
    	
16
    
	
SECTION 6.6
    	
Restrictions
    	
16
    
	
SECTION 6.7
    	
Prior Consent of   Certificateholder with Respect to Certain Matters
    	
16
    
	
 
    	
 
    	
 
    
	
ARTICLE VII - COMPENSATION OF UNDERLYING   TRUSTEE
    	
17
    
	
 
    	
 
    
	
SECTION 7.1
    	
The Underlying   Trustee’s Fees and Expenses
    	
17
    
	
SECTION 7.2
    	
Indemnification
    	
18
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII - TERMINATION OF TRUST   AGREEMENT
    	
18
    
	
 
    	
 
    
	
SECTION 8.1
    	
Termination of Trust   Agreement
    	
18
    
	
 
    	
 
    	
 
    
	
ARTICLE IX - SUCCESSOR TRUSTEES AND   ADDITIONAL TRUSTEES
    	
18
    
	
 
    	
 
    
	
SECTION 9.1
    	
Resignation of the   Underlying Trustee
    	
18
    
	
SECTION 9.2
    	
Removal of the   Underlying Trustee
    	
19
    
	
SECTION 9.3
    	
Appointment of a   Successor Underlying Trustee
    	
19
    
	
SECTION 9.4
    	
Successor Underlying   Trustee
    	
20
    
	
SECTION 9.5
    	
Accounts
    	
20
    
	
SECTION 9.6
    	
Appointment of   Co-Underlying Trustee or Separate Underlying Trustee
    	
20
    
	
SECTION 9.7
    	
Corporate Underlying   Trustee Required; Eligibility; Disqualification
    	
22
    
	
 
    	
 
    	
 
    
	
ARTICLE X - MISCELLANEOUS
    	
22
    
	
 
    	
 
    
	
SECTION 10.1
    	
Supplements and   Amendments
    	
22
    
	
SECTION 10.2
    	
No Legal Title to Trust   Estate in Certificateholder
    	
22
    
	
SECTION 10.3
    	
Limitations on Rights   of Others
    	
23
    
	
SECTION 10.4
    	
Notices
    	
23
    
	
SECTION 10.5
    	
Severability
    	
23
    
	
SECTION 10.6
    	
Separate Counterparts
    	
23
    
	
SECTION 10.7
    	
Successors and Assigns
    	
23
    
	
SECTION 10.8
    	
No Petition
    	
24
    
	
SECTION 10.9
    	
No Recourse
    	
24
    
	
SECTION 10.10
    	
Headings
    	
24
    
	
SECTION 10.11
    	
GOVERNING LAW
    	
24
    
	
SECTION 10.12
    	
Administrator
    	
24
    
	
SECTION 10.13
    	
Waiver of Jury Trial
    	
24
    
	
SECTION 10.14
    	
Not Acting in   Individual Capacity
    	
25
    
	
SECTION 10.15
    	
Underlying Trustee Not   Liable for Trust Certificate
    	
25
    
	
SECTION 10.16
    	
PATRIOT Act
    	
25
    

 

Exhibit A                                             Form of Underlying Trust Certificate

 

ii

 

TRUST AGREEMENT

 

THIS TRUST AGREEMENT, made as of [      ], 20[  ] (as from time to time amended, supplemented or otherwise modified and in effect, this “Agreement”), by and among HARLEY-DAVIDSON MOTORCYCLE TRUST [     ], a Delaware statutory trust (in its capacity as settlor hereunder, the “Settlor”), HARLEY-DAVIDSON CREDIT CORP., a Nevada corporation (“Harley-Davidson Credit” and, in its capacity as administrator hereunder, the “Administrator”), and [                                         ], a [                   ] (“[          ]” and, in its capacity as trustee hereunder, the “Underlying Trustee”), hereby establishes the HARLEY-DAVIDSON MOTORCYCLE GRANTOR TRUST [                ] (the “Underlying Trust”) as a Delaware [statutory] trust for the purposes of (i) issuing the Harley-Davidson Motorcycle Grantor Trust [           ] Certificate (the “Underlying Trust Certificate”), evidencing the 100% beneficial interest in the Underlying Trust, to the Settlor and (ii) using the proceeds deposited by the Settlor in exchange for the Underlying Trust Certificate to purchase pool of fixed-rate, simple interest promissory notes and security agreements and retail installment sale contracts relating to Harley-Davidson motorcycles and motorcycles not manufactured by Harley-Davidson and related assets (together with the proceeds thereof, the “Trust Estate”) pursuant to the Sale and Servicing Agreement, with respect to which the Underlying Trust Certificate evidences a 100% beneficial ownership interest.

 

NOW THEREFORE, the Underlying Trustee hereby agrees to hold all assets and funds in trust transferred to it hereunder and to issue the Underlying Trust Certificate, as follows:

 

ARTICLE I - DEFINITIONS.

 

SECTION 1.1                                             Capitalized Terms.  For all purposes of this Agreement, capitalized terms used herein and not otherwise defined shall have the meanings assigned thereto in the Indenture, and the following terms shall have the meanings set forth below:

 

“Affiliate” of any specified Person means any other Person controlling or controlled by, or under common control with, such specified Person.  For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” or “controlled” have meanings correlative to the foregoing.

 

“Certificateholder” means the registered owner of the Underlying Trust Certificate.

 

“Collection Account” means the Trust Account by that name created as established pursuant to Section 4.1 of this Agreement.

 

“Contracts” has the meaning set forth in the Sale and Servicing Agreement.

 

“Cutoff Date” means the close of business on [           ].

 

“Date of Issuance” means [     ], 20[  ].

 

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“Distribution Date” means the 15th day of each month (or, if any such day is not a Business Day, the next succeeding Business Day), commencing [          ], 20[  ].

 

“Harley-Davidson Credit” means Harley-Davidson Credit Corp., a Nevada corporation.

 

“Indenture” means the Indenture, dated as of the date hereof, between the Issuer and the Indenture Trustee.

 

“Indenture Trustee” means the Person acting as Indenture Trustee under the Indenture, including any successor trustee under the Indenture.

 

“Officer’s Certificate” means a certificate signed by the Chairman, the President, a Vice President, the Treasurer, an Assistant Treasurer, the Controller, an Assistant Controller, the Secretary or an Assistant Secretary of any Person delivering such certificate and delivered to the Person to whom such certificate is required to be delivered, including any certificate delivered under any of the Transaction Documents required to be executed by a Servicing Officer.  In the case of an Officer’s Certificate of the Servicer, at least one of the signing officers must be a Servicing Officer.  Unless otherwise specified, any reference herein to an Officer’s Certificate shall be to an Officers’ Certificate of the Servicer.

 

“Opinion of Counsel” means one or more written opinions of counsel which shall be acceptable to the Underlying Trustee, and which opinion or opinions shall be addressed to the Underlying Trust and the Underlying Trustee, and shall be in form and substance acceptable to the Underlying Trustee.

 

“Person” means any individual, corporation, estate, limited liability company, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof.

 

“Principal Office” means when used with respect to the Underlying Trustee, the designated office of the Underlying Trustee at which at any time its corporate trust business shall be administered, which office is the address specified in Section 10.4 hereof, or such other address as the Underlying Trustee may designate from time to time by notice to the Settlor, the Administrator, the Servicer and the Indenture Trustee.

 

“Responsible Officer” means, when used with respect to the Underlying Trustee, any officer within the corporate trust department of the Underlying Trustee, including any managing director, vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Underlying Trustee who customarily performs functions similar to those performed by Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and in each case who shall have direct responsibility for the administration of this Agreement.

 

“Sale and Servicing Agreement” means the Sale and Servicing Agreement dated as of [           ] by and among Harley-Davidson Credit, as Servicer, Harley-Davidson Customer

 

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Funding Corp., [                   ], as Indenture Trustee, Harley-Davidson Motorcycle Trust [           ], and the Underlying Trust.

 

“Servicing Officer” means any officer of the Servicer involved in, or responsible for, the administration and servicing of Contracts whose name appears on a list of servicing officers appearing in an Officer’s Certificate furnished to the Indenture Trustee by the Servicer, as the same may be amended from time to time.

 

“Settlor” means Harley-Davidson Motorcycle Trust [     ], a Delaware statutory trust.

 

“Transaction Documents” means this Agreement, the Transfer and Sale Agreement, the Lockbox Agreement, the Indenture, the Trust Agreement[, the Underlying Trust Agreement], the Asset Representations Review Agreement, the Administration Agreement[, the Interest Rate [Swap][Cap] Agreement], and the Note Depository Agreement.

 

“Trust Certificate Distribution Amount” means, as of any Distribution Date, the sum of the following:

 

(1)                                 all amounts received in the Collection Account and not yet paid out as of the last day of the related Due Period; and

 

(2)                                 other amounts received in the Collection Account after the last day of the related Due Period and at least [two] Business Days before such Distribution Date to the extent necessary to increase the balance of Available Monies under the Sale and Servicing Agreement to an amount sufficient to pay the fees described in Section 7.02 thereof.

 

For each Distribution Date, the “related” Due Period is the Due Period that ends on the last day of the month immediately preceding the month in which such Distribution Date occurs.

 

“Trust Estate” means all money, instruments, rights and other property of the Underlying Trust (including property held by the Underlying Trustee on behalf of the Underlying Trust) from time to time, including all proceeds thereof.

 

“Underlying Trust” means Harley-Davidson Motorcycle Grantor Trust [         ], a Delaware [statutory] trust established by this Agreement, acting by and through the Underlying Trustee.

 

“Underlying Trustee Corporate Trust Office” means the office of the Underlying Trustee at which its corporate trust business shall be administered, which initially shall be [           ] Attn: [           ], or such other office at such other address as the Underlying Trustee may designate from time to time by notice to the Holder of the Underlying Trust Certificate, the Servicer, the Indenture Trustee, the Trust Depositor and Harley-Davidson Credit.

 

“Underlying Trust Certificate” means the certificate issued by the Underlying Trust to the Settlor hereunder, substantially in the form of Exhibit A hereto, evidencing the 100% beneficial interest in the Underlying Trust.

 

3

 

SECTION 1.2                                             Definitions of General Terms and Other Interpretive Provisions.  All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document delivered pursuant hereto unless otherwise defined therein.  For purposes of this Agreement and all such certificates and other documents, unless the context otherwise requires: (a) accounting terms not otherwise defined in this Agreement, and accounting terms partly defined in this Agreement to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles; (b) terms defined in Article 9 of the UCC as in effect in the State of [             ] and not otherwise defined in this Agreement are used as defined in that Article; (c) the words “hereof,” “herein” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) references to any Article, Section, Schedule or Exhibit are references to Articles, Sections, Schedules and Exhibits in or to this Agreement, and references to any paragraph, subsection, clause or other subdivision within any Section or definition refer to such paragraph, subsection, clause or other subdivision of such Section or definition; (e) the term “including” means “including without limitation”; (f) references to any Person include that Person’s successors and assigns; (g) headings are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof; and (h) terms shall be equally applicable to both the singular and the plural forms thereof.

 

ARTICLE II - ORGANIZATION.

 

SECTION 2.1                                             Name.  The [common law] trust created hereby shall be known as “Harley-Davidson Motorcycle Grantor Trust [     ]”, in which name the Underlying Trustee may engage in the transactions contemplated hereby, make and execute contracts and other instruments on behalf of such trust and sue and be sued on behalf of the Underlying Trust.

 

SECTION 2.2                                             Office.  The office of the Underlying Trust shall be in care of the Underlying Trustee at the Underlying Trustee Corporate Trust Office.

 

SECTION 2.3                                             Purposes and Powers.

 

(a)                                 The purpose of the Underlying Trust is, and the Underlying Trust and the Underlying Trustee on behalf of the Underlying Trust shall have the power and authority, to engage in the following activities, and the activities incidental thereto:

 

(i)                                     to issue the Underlying Trust Certificate pursuant to this Agreement and to pay distributions on the Underlying Trust Certificate;

 

(ii)                                  [to establish the Collection Account;]

 

(iii)                               to acquire and own (through the Underlying Trustee) the Contracts and other related assets set forth in the Sale and Servicing Agreement sold and transferred by Harley-Davidson Customer Funding Corp. pursuant to the terms thereof;

 

(iv)                              to hold and distribute (through the Underlying Trustee) the Trust Estate to the Certificateholder;

 

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(v)                                 to enter into and perform its obligations under the Transaction Documents to which it is a party; and

 

(vi)                              to engage (through the Underlying Trustee) in those activities, including entering into agreements (including, without limitation, the Sale and Servicing Agreement, and the Administration Agreement), that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith;

 

provided, however, that nothing herein shall give the Underlying Trustee or any other person acting on behalf of the Underlying Trust the power to accept additional contributions[, and neither the Underlying Trustee nor any other person acting on behalf of the Underlying Trust shall have the power to vary the investment of the Certificateholder in a manner that would prevent the Underlying Trust from qualifying as a grantor trust for United Stated federal income tax purposes].

 

(b)                                 In addition, the Underlying Trust shall comply with the following requirements:

 

(i)                                     maintain books and records separate from any other Person;

 

(ii)                                  maintain its bank accounts separate from any other Person;

 

(iii)                               conduct its permitted business in its own name and not that of the Harley-Davidson Credit or any Affiliate;

 

(iv)                              other than as contemplated by the Transaction Documents, pay its own liabilities and expenses only out of its own funds;

 

(v)                                 not guarantee or become obligated for the debts of any other Person;

 

(vi)                              not hold out its credit as being available to satisfy the obligation of any other Person;

 

(vii)                           not acquire the obligations or securities of the Settlor or its Affiliates;

 

(viii)                        other than as contemplated by the Transaction Documents, not make loans to any other person or entity or buy or hold evidence of indebtedness issued by any other Person;

 

(ix)                              other than as contemplated by the Transaction Documents and related documentation, not pledge its assets for the benefit of any other Person;

 

(x)                                 hold itself out as separate from the Certificateholder and not conduct any business in the name of the Certificateholder;

 

(xi)                              correct any known misunderstanding regarding its separate identity;

 

(xii)                           not identify itself as a division of any other Person; and

 

(xiii)                        except as required or specifically provided in this Agreement, conduct business with the Certificateholder or any Affiliate thereof only on an arm’s-length basis.

 

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(c)                                  The Underlying Trust (or the Underlying Trustee on behalf of the Underlying Trust) is hereby authorized to engage in the activities stated in paragraphs (a) and (b) above.  Neither the Underlying Trust nor the Underlying Trustee shall engage in any activity other than in connection with the foregoing or other than as required or authorized by the terms of this Agreement or the other Transaction Documents.

 

SECTION 2.4                                             Appointment of Underlying Trustee.  The Settlor hereby appoints the Underlying Trustee as trustee of the Underlying Trust, to have all the rights, powers and duties set forth herein, and the Underlying Trustee hereby accepts such appointment.

 

SECTION 2.5                                             Trust Estate.  Concurrently with the issuance of the Underlying Trust Certificate, (i) the Settlor shall cause to be deposited with the Underlying Trustee an amount equal to $[     ] (representing the proceeds of the Notes and [        ]) to establish the Trust Estate in exchange for the Underlying Trust Certificate, and (ii) the Underlying Trustee shall enter into the Sale and Servicing Agreement pursuant to which the Underlying Trustee shall purchase the Contracts and related assets from Harley-Davidson Credit, using portions of such amount, on the date of such deposit.

 

SECTION 2.6                                             Declaration of Trust.  The Underlying Trustee hereby declares that it will hold the Trust Estate in trust upon and subject to the conditions set forth herein for the use and benefit of the Certificateholder, subject to the obligations of the Underlying Trust under the Transaction Documents to which the Underlying Trust is a party.  It is the intention of the parties hereto that the Underlying Trust constitute a [statutory] trust under the laws of the State of Delaware, and that this Agreement constitute the governing instrument of the Underlying Trust.  It is further the intention of the parties hereto that the Underlying Trust constitute a “grantor trust” for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the “Code”), and all parties hereto agree to treat this Agreement, the Trust Estate, any distributions therefrom and the Underlying Trust Certificate consistently with such characterization.  The provisions of this Agreement shall be interpreted consistently with such characterization.

 

SECTION 2.7                                             Title to Trust Estate.  Legal title to all the Trust Estate shall be vested at all times in the Underlying Trustee, as fiduciary on behalf of the Underlying Trust, until this Agreement terminates pursuant to Article VIII, except where applicable law in any jurisdiction requires title to any part of the Trust Estate to be vested in a co-trustee and/or a separate trustee, as the case may be.

 

SECTION 2.8                                             Federal Income Tax Matters.  The Underlying Trustee shall treat the Underlying Trust as a grantor trust for United States federal income tax purposes, and the Settlor shall not take an inconsistent position on any United States federal, state or local tax return.  Notwithstanding anything to the contrary in this Agreement, neither the Underlying Trustee, the Settlor nor any Certificateholder shall have the authority to take any action that would cause the Underlying Trust to fail to be characterized for federal income tax purposes as a grantor trust.  The Administrator shall be responsible for the preparation and filing of any tax returns and related forms with respect to the Underlying Trust and for the distribution of any such returns and related forms or other tax-related information to the Certificateholder.

 

6

 

ARTICLE III - TRUST CERTIFICATES AND TRANSFER OF INTERESTS.

 

SECTION 3.1                                             Initial Ownership.  Upon the formation of the Underlying Trust, the contribution by the Settlor pursuant to Section 2.5 and the issuance of the Underlying Trust Certificate, the Settlor shall be the sole beneficiary of the Underlying Trust.

 

SECTION 3.2                                             The Underlying Trust Certificate.  The Underlying Trust Certificate shall be issued to the Settlor as a single Trust Certificate upon the deposit by the Settlor of the amounts described in Section 2.5 hereof.  The Underlying Trust Certificate shall be executed on behalf of the Underlying Trust by manual or facsimile signature of an authorized officer of the Underlying Trustee, and the Underlying Trustee shall have the power and authority and it is hereby authorized and empowered, in the name and on behalf of the Underlying Trust, to authorize, execute, issue and deliver the Underlying Trust Certificate. The Underlying Trust Certificate shall be dated the date of its issuance.

 

SECTION 3.3                                             Registration of Transfer of Trust Certificates.

 

(a)                                 The Underlying Trustee shall keep or cause to be kept, at its principal office, a Trust Certificate register (the “Register”) in which, subject to such reasonable regulations as it may prescribe, the Underlying Trustee shall provide for the registration of the Underlying Trust Certificate and of transfers and exchanges thereof as herein provided.  The Underlying Trust Certificate may not be sold, transferred, assigned, participated, pledged, or otherwise disposed of to any Person except in accordance with the provisions of this Section, and any attempted transfer in violation of this Section shall be null and void.  In addition, a transfer shall not be effective until recorded in the Register.  This Section is intended to cause the Underlying Trust Certificate to be considered to be issued in registered form for purposes of Treas. Reg. § 5F.103-1(c) and shall be interpreted and applied consistent with such intent.

 

(b)                                 The Underlying Trust Certificate may not be sold, assigned or transferred (including by pledge or hypothecation) except for (i) the pledge to the Indenture Trustee pursuant to the Indenture, (ii) an assignment to a successor of the Settlor permitted in accordance with Section 3.10 of the Indenture, or (iii) a transfer effected by the Indenture Trustee pursuant to Article Five of the Indenture.

 

(c)                                  (i) The Underlying Trust Certificate may not under any circumstances be reoffered, resold, pledged or otherwise transferred to an “employee benefit plan” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) that is otherwise made subject to ERISA, including entities such as collective investment funds and separate accounts whose underlying assets include the assets of such plans (collectively, “ERISA Plans”), a “governmental plan” as defined in Section 3(32) of ERISA, a “church plan” as defined in Section 3(33) of ERISA, or “plan” as defined in Section 4975(e)(1) of the Code, (ii) such prohibition on transfers applies whether or not such plan is a Qualified Institutional Buyer for purposes of Rule 144A and whether or not such transfer would be otherwise be exempt from registration, and (iii) the Underlying Trust Certificate will contain an additional legend substantially to the following effect:

 

7

 

THE HOLDER HEREOF AGREES THAT THIS UNDERLYING TRUST CERTIFICATE MAY NOT BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED TO AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 (“ERISA”), A “GOVERNMENTAL PLAN” AS DEFINED IN SECTION 3(32) OF ERISA, A “CHURCH PLAN” AS DEFINED IN SECTION 3(33) OF ERISA, OR A “PLAN” AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THAT IS OTHERWISE SUBJECT TO ERISA, WITHOUT REGARD TO WHETHER SUCH PLAN IS A QIB.

 

(d)                                 No service charge shall be made for any registration of transfer of the Underlying Trust Certificate, but the Underlying Trust or the Underlying Trustee may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer of the Underlying Trust Certificate.

 

SECTION 3.4                                             Mutilated, Destroyed, Lost or Stolen Trust Certificates.  If (a) a mutilated Trust Certificate shall be surrendered to the Underlying Trustee, or if the Underlying Trustee shall receive evidence to its satisfaction of the destruction, loss or theft of the Underlying Trust Certificate and (b) there shall be delivered to the Underlying Trustee such security or indemnity as may be required by it to save it harmless, the Underlying Trustee on behalf of the Underlying Trust shall execute and the Underlying Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust Certificate, a new Trust Certificate.  In connection with the issuance of a new Trust Certificate under this Section, the Underlying Trustee may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.  Any duplicate Trust Certificate issued pursuant to this Section shall constitute conclusive evidence of the ownership interest in the Underlying Trust, as if originally issued, whether or not the lost, stolen or destroyed Trust Certificate shall be found at any time.

 

SECTION 3.5                                             Form of the Underlying Trust Certificate.  The Underlying Trust Certificate, upon original issuance, will be issued in the form of a definitive Trust Certificate in substantially the form set forth on Exhibit A and shall be registered in the name of “Harley-Davidson Motorcycle Trust [     ]” as the initial registered owner thereof.  Upon the issuance of the Underlying Trust Certificate, the Underlying Trustee shall recognize the Settlor as the Certificateholder.  The Underlying Trust Certificate shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Underlying Trustee, as evidenced by its execution thereof.

 

ARTICLE IV - APPLICATION OF TRUST FUNDS; CERTAIN DUTIES.

 

SECTION 4.1                                             Establishment of Collection Account.

 

(a)                                 The Collection Account will be established by the Trust Depositor pursuant to Section 5.05 of the Sale and Servicing Agreement.

 

(b)                                 All funds on deposit from time to time in the Collection Account and all proceeds thereof (including investment income thereon) shall be part of the Trust Estate.

 

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SECTION 4.2                                             Funding and Application of Collection Account.

 

(a)                                 Amounts shall be credited to and transferred from the Collection Account in the priority set forth in Section 7.05 of the Sale and Servicing Agreement.

 

SECTION 4.3                                             Contracts.  The Contracts shall be a part of the Trust Estate.  Contracts may be sold or assigned by the Underlying Trustee at the written direction of the Administrator or Settlor only in connection with (a) the resale to the Trust Depositor of any Contracts pursuant to the Trust Depositor’s repurchase obligation under the Sale and Servicing Agreement, or (b) the sale to the Servicer of any Contracts pursuant to the terms of the Sale and Servicing Agreement, or (c) as provided in the following paragraph.  The Underlying Trustee shall also sell Contracts as directed by the Indenture Trustee pursuant to Article Five of the Indenture.

 

The Contracts shall, at the option of and upon the written direction of the Servicer, be sold by the Underlying Trustee to the Servicer on or after the first date on which the Pool Balance is less than 10% of the Pool Balance as of the Cut-Off Date.  The purchase price shall be equal to [          ].

 

Any Contracts sold or assigned as provided in this Section shall, upon receipt of the purchase price therefor be released from the Trust Estate and shall no longer be considered Contracts, and the revenues from such Contracts shall no longer be available for distributions with respect to the Underlying Trust Certificate.  Upon receipt of a written instruction from the Settlor directing the assignment of Contracts as provided in this Section 4.3 and upon receipt of the purchase price therefor, the Underlying Trustee shall execute such documents (in form and substance satisfactory to the Underlying Trustee) as the Administrator or Settlor may direct in writing to join in such assignment or evidence the release of such Contracts from the Trust Estate. The proceeds of any such sale shall be deposited into the Collection Account.

 

SECTION 4.4                                             Distributions.

 

It is the intent of the parties that no withholding tax will be imposed on the Underlying Trust’s distributions (or allocations of income) to the Settlor.  In the event, however, that any withholding tax is imposed on the Underlying Trust’s payment (or allocations of income) to the Settlor or any Certificateholder, such tax shall reduce the amount otherwise distributable to the Settlor or such Certificateholder in accordance with this Section.  The Underlying Trustee is hereby authorized and directed to retain from amounts otherwise distributable to the Settlor sufficient funds for the payment of any tax that is legally owed by the Underlying Trust (but such authorization shall not prevent the Underlying Trustee from contesting any such tax in appropriate proceedings, and withholding payment of such tax, if permitted by law, pending the outcome of such proceedings).  The amount of any withholding tax imposed with respect to the Settlor or such Certificateholder shall be treated as cash distributed to the Settlor or such Certificateholder at the time it is withheld by the Underlying Trust and remitted to the appropriate taxing authority.  If there is a possibility that withholding tax is payable with respect to a distribution, the Underlying Trustee may in its sole discretion withhold such amounts in accordance with this Section 4.4.  In the event that the Settlor or such Certificateholder wishes to apply for a refund of any such withholding tax, the Underlying Trustee, at the expense of the Settlor or such Certificateholder, shall reasonably cooperate with the Settlor or such Certificateholder in making such claim.

 

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Each Certificateholder or holder of an interest in a Certificate, by acceptance of such Certificate or such interest therein, agrees to provide to the Underlying Trustee, upon its request, information sufficient to eliminate the imposition of, or determine the amount of, any withholding or deduction pursuant to an agreement described in Section 1471(b) of the Code or otherwise imposed pursuant to Sections 1471 through 1474 of the Code (or any amended or successor version) and any current or future regulations or official interpretations thereof.  In addition, each Certificateholder or holder of an interest in a Certificate, by acceptance of such Certificate or such interest therein, agrees that the Underlying Trustee has the right to withhold any amounts (properly withholdable under law and without any corresponding gross-up) payable to a Certificateholder or holder of an interest in a Certificate that fails to comply with the requirements of the preceding sentence.

 

SECTION 4.5                                             Reliance on Instructions; No Segregation of Monies; No Interest.  In making deposits to the Collection Account pursuant to the Sale and Servicing Agreement, the Indenture Trustee shall be fully protected in relying upon the instructions of the Servicer and shall have no duty to verify any calculations with respect thereto. Monies received by the Indenture Trustee thereunder need not be segregated in any manner except as provided therein with respect to the deposit of such monies into the accounts created thereby, and to the extent required by law, and may be deposited under such general conditions as may be prescribed by law, and the Indenture Trustee shall not be liable for any interest thereon.

 

SECTION 4.6                                             Investments.  Moneys held by the Indenture Trustee for the credit of the Collection Account shall be invested by the Indenture Trustee, solely as directed in writing by the Servicer or as provided in the Sale and Servicing Agreement.

 

ARTICLE V - CONCERNING THE CONTRACTS.

 

SECTION 5.1                                             Enforcement of Contracts.  The Servicer, on behalf of the Underlying Trust, shall cause to be diligently enforced all terms, covenants and conditions of all Contracts pursuant to the terms of the Sale and Servicing Agreement.  Neither the Settlor nor the Underlying Trustee shall permit the release of the obligations of any obligor under any Contract and the Settlor and the Underlying Trust shall at all times, to the extent permitted by law, cause to be defended, enforced, preserved and protected the rights and privileges of the Underlying Trust and the Underlying Trustee under or with respect to each Contract.  Neither the Settlor nor the Underlying Trustee shall consent or agree to or permit any amendment or modification of any Contract or agreement in connection therewith which will in any manner materially adversely affect the rights or security of any of the Holders of the Notes.

 

SECTION 5.2                                             Administration and Collection of Contracts.  The Settlor, on behalf of the Underlying Trust, shall cause to be diligently enforced, and take all reasonable steps, actions and proceedings necessary for the enforcement of, the provisions in the Sale and Servicing Agreement requiring the Servicer to provide for the servicing of the Contracts.

 

SECTION 5.3                                             Enforcement of Sale and Servicing Agreement .  The Administrator, on behalf of the Underlying Trustee, shall cause to be diligently enforced, and take all reasonable steps, actions and proceedings necessary for the enforcement of, all terms, covenants and conditions of the Sale and Servicing Agreement, and neither the Administrator, the Settlor nor

 

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the Underlying Trustee shall permit the release of the obligations of the parties thereunder. The Administrator, on behalf of the Underlying Trust, shall at all times, to the extent permitted by law, cause to be defended, enforced, preserved and protected the rights and privileges of the Underlying Trust and the Underlying Trustee under or with respect to the Sale and Servicing Agreement.  Neither the Administrator, the Settlor nor the Underlying Trustee shall enter into, consent or agree to, or permit any amendment or modification of the Sale and Servicing Agreement which will in any manner materially adversely affect the rights or security of any of the Holders of the Notes. Notwithstanding the foregoing, the Settlor and/or the Underlying Trustee may amend the Sale and Servicing Agreement or in any respect pursuant to terms therein.

 

SECTION 5.4                                             [Reserved].

 

SECTION 5.5                                             Representations and Warranties of the Settlor.  By execution of this Agreement, the Settlor makes the following representations and warranties for the benefit of the Underlying Trustee (which are made as of the date of this Agreement as shall survive the execution and delivery of this Agreement and the issuance of the Underlying Trust Certificate):

 

(a)                                 A Servicer (or other third party custodian) has in its possession all original copies of the simple interest promissory notes and security agreements and retail installment sale contracts that constitute or evidence those Contracts evidenced by physical or electronic contracts.  The Seller is identified as the “owner of record” on all electronic chattel paper relating to the Contract, and the Seller has “control,” as defined in Section 9-105 of the UCC, of all electronic chattel paper relating to the Contract. The Contract does not have any marks or notations indicating that it has been pledged, assigned or otherwise conveyed by the Seller to any Person other than the Trust Depositor.

 

(b)                                 The Underlying Trust is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or is exempt from registration under such act, and does not rely solely upon the exemptions in Sections 3(c)(1) and 3(c)(7) of such act.

 

(c)                                  As of the Date of Issuance, the Sale and Servicing Agreement is in full force and effect, and all of the Contracts are being serviced thereunder.

 

(d)                                 The Settlor represents and warrants (which representations and warranties are made with respect to the particular Contracts acquired by the Underlying Trustee as of the date of acquisition thereof, survive the acquisition of the Contracts on such date, and may not be waived):

 

(i)                                     Each Contract is either “tangible chattel paper” or “electronic chattel paper”.  Each Contract is evidenced by either (i) one executed tangible record constituting or forming a part of the Contract that is “tangible chattel paper”, or (ii) a single “authoritative copy” of the electronic record constituting or forming a part of the Contract that is “electronic chattel paper”. Terms in quotation marks have the meaning assigned to them in the applicable UCC.

 

(ii)                                  Upon the acquisition thereof pursuant to the Sale and Servicing Agreement, the Underlying Trustee will own and have good and marketable title to the Contract free and clear of any encumbrance or lien, except for any Permitted Liens.

 

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(iii)                               No consents are required by the terms of the Contracts to the acquisition of Contracts by the Underlying Trustee pursuant to the Sale and Servicing Agreement.

 

(iv)                              The Sale and Servicing Agreement creates a valid and continuing “security interest” (as defined in Article 9 of the UCC) in the Contracts sold pursuant thereto, in favor of the Underlying Trustee.

 

(v)                                 The Settlor has caused or will have caused, within ten days of each date of acquisition of Contracts, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interests in such Contracts granted to the Underlying Trustee under the Sale and Servicing Agreement.

 

(vi)                              The Settlor has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any interest in the Contracts.  The Settlor has not authorized the filing of and is not aware of any financing statements against the Settlor that include a description of collateral covering the Contracts.  The Settlor is not aware of any judgment or tax lien filings against the Settlor.

 

ARTICLE VI - AUTHORITY, DUTIES AND RESTRICTIONS OF UNDERLYING TRUSTEE.

 

SECTION 6.1                                             General Authority.  The Underlying Trustee is authorized and directed to execute and deliver the Transaction Documents to which the Underlying Trust is named as a party and each certificate or other document attached as an exhibit to or contemplated by the Transaction Documents to which the Underlying Trust is named as a party and any amendment thereto, in each case, in such form as the Settlor, in its capacities as Settlor and Certificateholder shall approve.  Any such execution and delivery is hereby ratified and confirmed in all respects and does not and will be deemed not to conflict with, constitute or result in a breach or violation of, or a default under, any provision of or any duty under this Agreement.  In addition to the foregoing, the Underlying Trustee is authorized to take all actions required of the Underlying Trust pursuant to the Transaction Documents, it being understood that such authorization shall not constitute a duty.  The Underlying Trustee is further authorized to take such action from time to time as the Certificateholder directs in writing with respect to and in accordance with the Transaction Documents.

 

SECTION 6.2                                             General Duties.  It shall be the duty of the Underlying Trustee to discharge (or cause to be discharged) all of its responsibilities pursuant to the terms of this Agreement and to administer the Underlying Trust in the interest of the Certificateholder, in accordance with the provisions of this Agreement.  The Underlying Trustee agrees to perform its duties under this Agreement in good faith and in the best interests of the Certificateholder, but only upon the express terms of this Agreement. Every provision of this Agreement relating to the conduct or affecting the liability of or affording protection to the Underlying Trustee shall be subject to the provisions of this Article.  The Underlying Trustee shall have no obligation to administer, service or collect the Contracts or to maintain, monitor or otherwise supervise the administration, servicing or collection of the Contracts.  The Underlying Trustee shall not be answerable or accountable hereunder under any circumstances, except for its own willful

 

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misconduct or gross negligence in the performance of its express duties under this Agreement.  In addition, and notwithstanding any other provision of this Agreement or the Transaction Documents (but subject to the exceptions set forth in the preceding sentence):

 

(a)                                 the Underlying Trustee shall not be liable for any error of judgment made by a responsible officer of the Underlying Trustee in good faith;

 

(b)                                 the Underlying Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction or instructions of the Settlor, the Certificateholder or the Administrator;

 

(c)                                  no provision of this Agreement shall require the Underlying Trustee to expend or risk funds or otherwise incur any financial liability in the performance of any of its rights or powers hereunder, if the Underlying Trustee shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured or provided to it;

 

(d)                                 under no circumstances shall the Underlying Trustee be liable for indebtedness of the Underlying Trust or otherwise evidenced by or arising under this Agreement;

 

(e)                                  the Underlying Trustee shall not be responsible for or in respect of the validity or sufficiency of this Agreement or for the due execution hereof by the Settlor or for the form, character, genuineness, sufficiency, value or validity of any of the Trust Estate, other than (in the case of the Underlying Trustee) the certificate of authentication on the Underlying Trust Certificate, and the Underlying Trustee shall not in any event assume or incur any liability, duty, or obligation to any Certificateholder, other than as expressly provided for herein;

 

(f)                                   the Underlying Trustee shall not be liable for the action or inaction, default or misconduct of the Settlor, the Certificateholder or the Administrator hereunder or otherwise;

 

(g)                                  the Underlying Trustee shall not be under any obligation to exercise any of the rights or powers vested in it by this Agreement, or to institute, conduct or defend any litigation under this Agreement or otherwise or in relation to this Agreement, at the request, order or direction of the Settlor or Certificateholder, unless the Settlor or such holder has offered to the Underlying Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred by the Underlying Trustee therein or thereby.  The right of the Underlying Trustee to perform any discretionary act enumerated in this Agreement shall not be construed as a duty, and the Underlying Trustee shall not be answerable for other than its gross negligence or willful misconduct in the performance of any such act.

 

(h)                                 in no event shall the Underlying Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Underlying Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action;

 

(i)                                     in no event shall the Underlying Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages,

 

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accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Underlying Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances;

 

(j)                                    in the exercise or administration of the trusts hereunder and in the performance of its duties and obligations under this Agreement and the other Transaction Documents, the Underlying Trustee may act directly or through agents, attorneys, custodian or nominee, and the Underlying Trustee shall not be liable for the conduct or misconduct of such agents, attorneys, custodian or nominee if such agents, attorneys, custodian or nominee shall have been selected by the Underlying Trustee in the exercise of reasonable care;

 

(k)                                 in the exercise or administration of the trusts hereunder and in the performance of its duties and obligations under this Agreement and the other Transaction Documents, the Underlying Trustee may consult with counsel, accountants and other skilled persons selected in the exercise of reasonable care and employed by it.  The Underlying Trustee shall not be liable for anything done, suffered or omitted by it in good faith reliance on the opinion or advice of any such counsel, accountants or other such persons; provided in each case that the Settlor and the Certificateholder (as their interests may appear) are third party beneficiaries of such arrangement; and

 

(l)                                     in no event shall the Underlying Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Underlying Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

SECTION 6.3                                             Action upon Instruction.

 

(a)                                 In accordance with the Transaction Documents, the Administrator shall, by written instruction, direct the Underlying Trustee in the management and administration of the Underlying Trust.

 

(b)                                 Subject to Section 6.1, the Underlying Trustee shall not be required to take any action hereunder or under any other Transaction Document if the Underlying Trustee shall have reasonably determined or been advised by counsel that such action is likely to result in liability on the part of the Underlying Trustee or is contrary to the terms hereof or of any other Transaction Document or is otherwise contrary to law.

 

(c)                                  Whenever the Underlying Trustee is unable to decide between alternative courses of action permitted or required by the terms of this Agreement or any other Transaction Document or is unsure as to the application of any provision of this Agreement or any other Transaction Document or any such provision is ambiguous as to its application, or is, or appears

 

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to be, in conflict with any other applicable provision, or in the event that this Agreement permits any determination by the Underlying Trustee or is silent or is incomplete as to the course of action that the Underlying Trustee is required to take with respect to a particular set of facts, the Underlying Trustee shall promptly give notice (in such form as shall be appropriate under the circumstances) to the Certificateholder and Administrator requesting instruction as to the course of action to be adopted or application of such provision, and to the extent the Underlying Trustee acts or refrains from acting in good faith in accordance with any written instruction of the Administrator or the Certificateholder received, the Underlying Trustee shall not be liable on account of such action or inaction to any Person.  If the Underlying Trustee shall not have received appropriate instruction within ten days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with this Agreement or the other Transaction Documents, as it shall deem to be in the best interests of the Settlor, and shall have no liability to any Person for such action or inaction.

 

(d)                                 The Underlying Trustee shall incur no liability to anyone in acting upon any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, bond or other document or paper believed by it to be genuine and believed by it to be signed by the proper party or parties.  The Underlying Trustee need not investigate any fact or matter stated in any such document, including verifying the correctness of any numbers or calculations.  The Underlying Trustee may accept a certified copy of a resolution of the board of directors or other governing body of any corporate party as conclusive evidence that such resolution has been duly adopted by such body and that the same is in full force and effect.  As to any fact or matter the method of determination of which is not specifically prescribed herein, the Underlying Trustee may for all purposes hereof rely on a certificate, signed by the president or any vice president or by the treasurer or other authorized officers of the relevant party, as to such fact or matter, and such certificate shall constitute full protection to the Underlying Trustee, for any action taken or omitted to be taken by it in good faith in reliance thereon.

 

SECTION 6.4                                             No Duties Except as Specified in this Agreement or in Instructions.  The Underlying Trustee shall not have any duty or obligation to manage, make any payment with respect to, register, record, sell, dispose of, or otherwise deal with the Trust Estate, or to otherwise take or refrain from taking any action under, or in connection with, any document contemplated hereby to which the Underlying Trust is a party, except as expressly provided by the terms of this Agreement or in any document or written instruction received by the Underlying Trustee pursuant to Section 6.3; and no implied duties or obligations shall be read into this Agreement or any other Transaction Document against the Underlying Trustee.  The Underlying Trustee shall have no responsibility for filing any tax or securities law filing (except as prepared by and in accordance with the written direction of the Administrator) or any financing or continuation statement in any public office at any time or to otherwise perfect or maintain the perfection of any security interest or lien granted to it hereunder or to record this Agreement or any other Transaction Document.  [            ] in its individual capacity nevertheless agrees that it will, at its own cost and expense, promptly take all action as may be necessary to discharge any Liens on any part of the Trust Estate that result from actions by, or claims against, [            ] or the Underlying Trustee that are not related to the ownership or the administration of the Trust Estate.

 

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SECTION 6.5                                             No Action Except under Specified Documents or Instructions.  The Underlying Trustee shall not manage, control, use, sell, dispose of or otherwise deal with any part of the Trust Estate except (i) in accordance with the powers granted to and the authority conferred upon the Underlying Trustee pursuant to this Agreement, (ii) in accordance with the other Transaction Documents or (iii) in accordance with any document or instruction delivered to the Underlying Trustee pursuant to any provisions of this Agreement.

 

SECTION 6.6                                             Restrictions.  The Underlying Trustee shall not take any action that is inconsistent with the purposes of the Underlying Trust set forth in Section 2.3 unless otherwise permitted by the Transaction Documents.  Neither the Certificateholder nor the Settlor nor the Administrator shall direct the Underlying Trustee to take or refrain from taking any action if such action or inaction would be contrary to any obligation of the Underlying Trust or the Underlying Trustee under this Agreement or any of the Transaction Documents or would be contrary to Section 2.3, or that otherwise would cause the Trust Estate or the Underlying Trust not to be treated as a “grantor trust” as provided in Section 2.6, nor shall the Underlying Trustee be obligated to follow any such direction, if given.  Neither the Underlying Trustee nor the Settlor shall take any action to:

 

(a)                                 merge or consolidate the Underlying Trust with or into any other entity, or convey or transfer all or substantially all of the Underlying Trust’s assets to any other entity (other than a transfer of trust estate assets in trust to a successor Underlying Trustee hereunder); or

 

(b)                                 cause the Underlying Trust to incur, assume or guaranty any indebtedness other than as set forth in this Agreement or the other Transaction Documents.

 

SECTION 6.7                                             Prior Consent of Certificateholder with Respect to Certain Matters.  With respect to the following matters, the Underlying Trustee shall not take any of the following actions without the prior written consent or written direction, as applicable, of the Certificateholder and the satisfaction of the Approval Condition unless otherwise permitted by the Transaction Documents:

 

(a)                                 the initiation of any claim or lawsuit by the Underlying Trust and the compromise of any action, claim or lawsuit brought by or against the Underlying Trust;

 

(b)                                 the amendment, change, termination or modification of any Transaction Document to which the Underlying Trust is a party or the exercise of any voting, consent or control right under any Transaction Document to which the Underlying Trust is a party;

 

(c)                                  remove the Servicer under the Sale and Servicing Agreement or appoint a successor Servicer under the Sale and Servicing Agreement;

 

(d)                                 except as expressly provided herein (including Section 4.3) or in the Transaction Documents, sell, transfer or otherwise encumber any of the Contracts;

 

(e)                                  except as provided in this Agreement, dissolve, terminate or liquidate the Underlying Trust in whole or in part;

 

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(f)                                   perform any act that a Responsible Officer of the Underlying Trustee actually knows would make it impossible to carry on the ordinary business of the Underlying Trust as described in this Agreement;

 

(g)                                  confess a judgment against the Underlying Trust;

 

(h)                                 commence a voluntary proceeding in bankruptcy relating to the Underlying Trust;

 

(i)                                     cause the Underlying Trust to lend any funds to any entity;

 

(j)                                    change the Underlying Trust’s purpose and powers from those enumerated in this Agreement; or

 

(k)                                 possess Underlying Trust assets or assign the Underlying Trust’s right to property for other than a Underlying Trust purpose.

 

ARTICLE VII - COMPENSATION OF UNDERLYING TRUSTEE.

 

SECTION 7.1                                             The Underlying Trustee’s Fees and Expenses. The Settlor agrees to pay to the Underlying Trustee from time to time such compensation as set forth in the fee letter between the Settlor and the Indenture Trustee dated [     ], 20[  ] (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust).  The Underlying Trustee shall be entitled to payment and/or reimbursement by the Settlor for reasonable expenses and all advances, legal fees and expenses of counsel and other experts, disbursements and other expenses reasonably made or incurred by it in and about the execution of the trusts created by this Agreement and in and about the exercise and performance of the powers and duties of the Underlying Trustee and for the reasonable and necessary costs and expenses incurred in defending any liability in the premises of any character whatsoever (unless such liability is adjudicated by a court of competent jurisdiction in a final, non-appealable order to have resulted from the gross negligence or willful misconduct of the Underlying Trustee in the performance of its express duties under this Agreement).

 

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SECTION 7.2                                             Indemnification.  To the fullest extent permitted by applicable law, the Settlor shall indemnify the Underlying Trustee for, and hold the Underlying Trustee and its officers, directors, employees and agents harmless against, any and all loss, damage, claims, liability or expense (including, but not limited to, fees and expenses of counsel and other experts) incurred by it in connection with the acceptance or administration of this Agreement and the performance of its duties hereunder.  The Settlor shall not be required to indemnify the Underlying Trustee against any loss, damage, claim, liability or expense incurred by the Underlying Trustee through the Underlying Trustee’s own gross negligence or willful misconduct, as determined by a court of competent jurisdiction in a final, non-appealable order.  The provisions of this Section 7.2 shall survive the termination of this Agreement or the earlier resignation or removal of the Underlying Trustee.

 

ARTICLE VIII - TERMINATION OF TRUST AGREEMENT.

 

SECTION 8.1                                             Termination of Trust Agreement.

 

(a)                                 The Underlying Trust shall dissolve upon the final distribution by the Underlying Trustee of all monies or other property or proceeds of the Trust Estate in accordance with Section 4.4; provided, however, that in no event shall the Underlying Trust and the trust arrangement created by this Agreement continue beyond the expiration of 21 years from the death of the last survivor of the descendants of Joseph P. Kennedy, the late Ambassador of the United States to the Court of St. James’s, living on the date hereof.  To the extent permitted by applicable law, the bankruptcy, liquidation, or dissolution of the Settlor shall not (i) operate to terminate this Agreement or the Underlying Trust, nor (ii) otherwise affect the rights, obligations and liabilities of the parties hereto.

 

(b)                                 Except as provided in paragraph (a) the Settlor shall not be entitled to revoke or terminate the Underlying Trust or this Agreement.

 

(c)                                  Upon dissolution and completion of the winding up of the Underlying Trust, including the payment or making reasonable provision for payment of all obligations of the Underlying Trust this Agreement shall terminate.  The Settlor shall act as the liquidator of the Underlying Trust and shall, at its expense, be responsible for directing the Underlying Trustee in writing to take all required actions in connection with the winding up of the Underlying Trust.

 

ARTICLE IX - SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES.

 

SECTION 9.1                                             Resignation of the Underlying Trustee.  The Underlying Trustee may at any time resign from the trusts and be discharged of the duties and obligations hereby created by giving 60 days’ written notice to the Settlor and the Administrator and such resignation shall take effect upon the appointment of a successor Underlying Trustee by the Administrator or the Certificateholder.  No such resignation of the Underlying Trustee shall become effective until the acceptance of appointment by a successor Underlying Trustee under Section 9.3 hereof.  Upon the appointment and acceptance of a successor Underlying Trustee, (a) the Underlying Trustee shall promptly cause written notice of such appointment to be given to the Settlor and the Indenture Trustee, which notice shall include the address of the Principal Office of such successor and (b) the Settlor and the Indenture Trustee shall acknowledge the replacement of the

 

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Underlying Trustee as the case may be, by written instrument.  If an instrument of acceptance by a successor Underlying Trustee shall not have been delivered to the resigning Underlying Trustee within 60 days after the giving of such notice of resignation, the resigning Underlying Trustee may petition any court of competent jurisdiction for the appointment of a successor and the costs incurred in connection with any such petition (including, but not limited to, attorneys’ fees and expenses) shall be payable by the Settlor.

 

SECTION 9.2                                             Removal of the Underlying Trustee.  The Settlor may at any time, subject to the provisions of this Article IX, remove the Underlying Trustee by written notice to the Underlying Trustee.  The Settlor shall remove the Underlying Trustee if at any time so requested by an instrument or concurrent instruments in writing, filed with the Indenture Trustee and the Settlor, and signed by the Acting Holders.  Notwithstanding the foregoing, the Underlying Trustee may not be removed during the existence of an Event of Default under the Indenture.

 

In case the Underlying Trustee shall be dissolved, fail to comply with Section 9.7 hereof or otherwise become incapable of acting hereunder, or in case it shall be taken under the control of any public officer or officers, or of a receiver appointed by a court, any Holder of the Securities may petition any court of competent jurisdiction for the removal of the Underlying Trustee and the appointment of a successor Underlying Trustee.

 

No removal of the Underlying Trustee, and no appointment of a successor Underlying Trustee, pursuant to the provisions of this Article IX shall become effective until the acceptance of appointment by the successor Underlying Trustee under Section 9.3 hereof.

 

SECTION 9.3                                             Appointment of a Successor Underlying Trustee.  Any successor Underlying Trustee appointed pursuant to Section 9.2 shall execute, acknowledge and deliver to the Certificateholders and to its predecessor Underlying Trustee an instrument accepting such appointment under this Agreement, and thereupon the resignation or removal of the predecessor Underlying Trustee shall become effective and such successor Underlying Trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor under this Agreement, with like effect as if originally named as the Underlying Trustee.  The predecessor Underlying Trustee shall, upon payment of its fees and expenses, deliver to the successor Underlying Trustee all documents and statements and monies (including, without limitation, the Collection Account) held by it under this Agreement; and the predecessor Underlying Trustee shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming in the successor Underlying Trustee all such rights, powers, duties and obligations (including the transfer of the Contracts and related assets to such successor).

 

No successor Underlying Trustee shall accept appointment as provided in this Section 9.3 unless at the time of such acceptance such successor Underlying Trustee shall be eligible pursuant to Section 9.7.

 

Upon acceptance of appointment by a successor Underlying Trustee pursuant to this Section, the successor Underlying Trustee shall mail (or cause to be mailed) notice of the succession to the Settlor and the Rating Agencies.

 

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SECTION 9.4                                             Successor Underlying Trustee.  Any corporation, association or agency into which the Underlying Trustee may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, ipso facto, shall be and become successor Underlying Trustee hereunder and vested with all of the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided that no such merger, conversion or consolidation shall relieve the Underlying Trustee of its obligation to comply with Section 9.7 hereof.

 

SECTION 9.5                                             Accounts.  In the event of a change in the office of Underlying Trustee, the predecessor Underlying Trustee which has resigned or been removed shall cease to be holder of the Collection Account, and the successor Underlying Trustee shall be and become such holder.

 

SECTION 9.6                                             Appointment of Co-Underlying Trustee or Separate Underlying Trustee.  At any time or times, for the purpose of meeting any legal requirements of any state in which the Underlying Trustee determines it necessary to take any action hereunder, or the Underlying Trustee shall have power to appoint, and, upon the request of the Underlying Trustee, the Settlor shall for such purpose join with the Underlying Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint one or more Persons approved by the Underlying Trustee either to act as co-trustee or co-trustees, jointly with the Underlying Trustee of all or any part of the trust estate, or to act as separate trustee or separate trustees of all or any part of the trust estate, and to vest in such person or persons, in such capacity, such title to the trust estate or any part thereof, and such rights, powers, duties, trusts or obligations as the Underlying Trustee may consider necessary or desirable, subject to the remaining provisions of this Section 9.6.  No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor Underlying Trustee under Section 9.7 hereof.

 

If the Settlor shall not have joined in such appointment within fifteen days after the receipt by it of a request so to do, or in case an Event of Default shall have occurred under the Indenture and be continuing, the Underlying Trustee alone shall have power to make such appointment.

 

The Settlor shall execute, acknowledge and deliver all such instruments as may be required by any such co-trustee or separate trustee.

 

Every co-trustee or separate trustee shall, to the extent permitted by law but to such extent only, be appointed subject to the following terms, namely:

 

(a)                                 The Underlying Trust Certificate shall be authenticated and delivered, and all rights, powers, trusts, duties and obligations by this Agreement conferred upon the Underlying Trustee in respect of the custody, control and management of moneys, papers, securities and other personal property shall be exercised, solely by the Underlying Trustee.

 

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(b)                                 All rights, powers, trusts, duties and obligations conferred or imposed upon the trustees shall be conferred or imposed upon and exercised or performed by the Underlying Trustee, or by the Underlying Trustee and such co-trustee or co-trustees or separate trustee or separate trustees jointly, as shall be provided in the instrument appointing such co-trustee or co-trustees or separate trustee or separate trustees, except to the extent that, under the law of any jurisdiction in which any particular act or acts are to be performed, the Underlying Trustee shall be incompetent or unqualified to perform such act or acts, in which event such act or acts shall be performed by such co-trustee or co-trustees or separate trustee or separate trustees.

 

(c)                                  Any request in writing by the Underlying Trustee to any co-trustee or separate trustee to take or to refrain from taking any action hereunder shall be sufficient warrant for the taking, or the refraining from taking, of such action by such co-trustee or separate trustee.

 

(d)                                 Any co-trustee or separate trustee may delegate to the Underlying Trustee the exercise of any right, power, trust, duty or obligations, discretionary or otherwise.

 

(e)                                  The Underlying Trustee at any time, by any instrument in writing, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section 9.6.  Upon the request of the Underlying Trustee, the Settlor shall join with the Underlying Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal.

 

(f)                                   No trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder.

 

(g)                                  Any demand, request, direction, appointment, removal, notice, consent, waiver or other action in writing delivered to the Underlying Trustee shall be deemed to have been delivered to each such co-trustee or separate trustee.

 

(h)                                 Any moneys, papers, securities or other items of personal property received by any such co-trustee or separate trustee hereunder shall forthwith, so far as may be permitted by law, be turned over to the Underlying Trustee.

 

Upon the acceptance in writing of such appointment by any such co-trustee or separate trustee, he, she, or it shall be vested with such title to the trust estate or any part thereof, and with such rights, powers, duties or obligations, as shall be specified in the instrument of appointment jointly with the Underlying Trustee (except insofar as local law makes it necessary for any such co-trustee or separate trustee to act alone) subject to all the terms of this Agreement.  Every such acceptance shall be filed with the Underlying Trustee.  Any co-trustee or separate trustee may, at any time by an instrument in writing, constitute the Underlying Trustee, his, her or its attorney-in-fact and agent, with full power and authority to do all acts and things and to exercise all discretion on his, her or its behalf and in his, her or its name.

 

In case any co-trustee or separate trustee shall die, become incapable of acting, resign or be removed, the title to the trust estate, and all rights, powers, trusts, duties and obligations of said co-trustee or separate trustee shall, so far as permitted by law, vest in and be exercised by

 

21

 

the Underlying Trustee unless and until a successor co-trustee or separate trustee shall be appointed in the manner herein provided.

 

SECTION 9.7                                             Corporate Underlying Trustee Required; Eligibility; Disqualification.  There shall at all times be a Underlying Trustee hereunder which shall be a corporation or banking association organized and doing business under the laws of the United States of America or of any state, authorized under such laws to exercise corporate trust powers, having a combined capital stock, capital surplus and undivided profits of at least $25,000,000, subject to supervision or examination by a federal or state authority.  If such corporation or banking association publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 9.7, the combined capital stock, capital surplus and undivided profits of such corporation or banking association shall be deemed to be its combined capital stock, capital surplus and undivided profits as set forth in its most recent report of condition so published.

 

ARTICLE X - MISCELLANEOUS.

 

SECTION 10.1                                      Supplements and Amendments.

 

(a)                                 This Agreement may be amended from time to time by the Settlor, the Administrator, and the Underlying Trustee, with the prior written consent of the Certificateholder, provided, that no amendment that adversely affects the Holders of the Securities shall be entered into except upon the satisfaction of the Approval Condition.  Notwithstanding the foregoing, this Agreement may be amended from time to time by the Settlor, the Administrator, and the Underlying Trustee to conform the terms of this Agreement to the terms as described in the Settlor’s Prospectus dated [     ], 20[  ] with respect to the Notes.

 

(b)                                 It shall not be necessary for the consent of the Certificateholder pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent, where required, shall approve the substance thereof.  The manner of obtaining such consents (and any other consents of the Certificateholder provided for in this Agreement or in any other Transaction Document) and of evidencing the authorization of the execution thereof by the Certificateholder shall be subject to such reasonable requirements as the Underlying Trustee may prescribe.

 

(c)                                  Prior to the execution of any amendment to this Agreement (or the Underlying Trust Certificate) the Underlying Trustee shall receive and rely upon an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and that all conditions precedent to the execution and delivery of such amendment have been satisfied.  The Underlying Trustee may, but shall not be obligated to, enter into any such amendment which affects the Underlying Trustee’s own rights, duties or immunities under this Agreement or otherwise.

 

SECTION 10.2                                      No Legal Title to Trust Estate in Certificateholder.  The Certificateholder shall not have legal title to any part of the Trust Estate.  The Certificateholder shall be entitled to receive distributions with respect to its beneficial interest therein only in

 

22

 

accordance with Articles IV and VIII.  No transfer, by operation of law or otherwise, of any right, title or interest of the Certificateholder to and in its beneficial interest in the Trust Estate shall operate to terminate this Agreement or the trusts hereunder or entitle any transferee to an accounting or to the transfer to it of legal title to any part of the Trust Estate.

 

SECTION 10.3                                      Limitations on Rights of Others.  The provisions of this Agreement are solely for the benefit of the Underlying Trustee, the Underlying Trust, the Settlor, the Administrator and the Certificateholder, and to the extent expressly provided herein, the Indenture Trustee, and the Holders of the Securities, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein.

 

SECTION 10.4                                      Notices.

 

(a)                                 Unless otherwise expressly specified or permitted by the terms hereof, all notices shall be in writing and shall be deemed given by email with receipt acknowledged by the recipient thereof or upon receipt personally delivered, delivered by overnight courier or mailed certified mail, return receipt requested, if to the Underlying Trustee or the Underlying Trust, addressed to:

 

[UNDERLYING TRUSTEE NAME AND ADDRESS]

 

 

if to the Settlor, addressed to:

 

Harley-Davidson Motorcycle Trust [      ]

 

 

 

(b)                                 Any notice required or permitted to be given to the Certificateholder shall be given by first-class mail, postage prepaid, at the address of such Certificateholder as shown in the Underlying Trust Certificate Register.  Any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the Certificateholder receives such notice.

 

SECTION 10.5                                      Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

SECTION 10.6                                      Separate Counterparts.  This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

 

SECTION 10.7                                      Successors and Assigns.  All covenants and agreements contained herein shall be binding upon, and inure to the benefit of, the Settlor, the Administrator, the

 

23

 

Underlying Trustee and their respective successors, and each Certificateholder and its successors and permitted assigns, all as herein provided.  Any request, notice, direction, consent, waiver or other instrument or action by a Certificateholder shall bind the successors and assigns of such Certificateholder.

 

SECTION 10.8             No Petition.  [               ] (both in its individual capacity and as the Underlying Trustee) and the Administrator, by entering into this Agreement, and the Certificateholder, by accepting an Trust Certificate, hereby covenants and agrees, to the fullest extent permitted by applicable law, that they will not within one year and one day after the termination of the Underlying Trust institute against the Settlor, or solicit or join in or cooperate with or encourage any institution against the Settlor of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States Federal or state bankruptcy or similar law in connection with any obligations relating to the Underlying Trust Certificates, this Agreement or any of the other Transaction Documents.

 

SECTION 10.9             No Recourse.  Each Certificateholder, by accepting a Trust Certificate acknowledges that its Trust Certificate represents beneficial interests in the Underlying Trust only and does not represent interests in or obligations of Harley-Davidson Credit, the Settlor, the Underlying Trustee or any Affiliate thereof and no recourse may be had against such parties or their assets, except as expressly set forth or contemplated in this Agreement, the Underlying Trust Certificates or the other Transaction Documents provided, however, nothing in this Section shall preclude the Underlying Trustee from (i) taking any action prior to the expiration of the aforementioned period in (A) any case or proceeding voluntarily filed or commenced by the Settlor or (B) any involuntary insolvency proceeding filed or commenced by a Person other than the Underlying Trustee, or (ii)  commencing against the Settlor or any of its property any legal action which is not a bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceeding.

 

SECTION 10.10          Headings.  The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

 

SECTION 10.11          GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

SECTION 10.12          Administrator.  The Administrator agrees to perform its duties and obligations as provided in this Agreement, in accordance with the terms and provisions of the Administration Agreement.  The performance of the duties and obligations of the Administrator hereunder is subject to the terms and conditions of the Administration Agreement.

 

SECTION 10.13          Waiver of Jury Trial.  EACH OF THE SETTLOR, THE ADMINISTRATOR AND THE UNDERLYING TRUSTEE HEREBY IRREVOCABLY WAIVES, AND EACH CERTIFICATEHOLDER BY ITS ACCEPTANCE OF THE TRUST CERTIFICATE SHALL BE DEEMED TO HAVE IRREVOCABLY WAIVED, TO THE

 

24

 

FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE SECURITIES, OR THE TRANSACTION CONTEMPLATED HEREBY.

 

SECTION 10.14          Not Acting in Individual Capacity.  Except as expressly provided herein, in accepting the trusts hereby created, [               ] is acting solely as Underlying Trustee hereunder and not in its individual capacity and all Persons having any claim against the Underlying Trustee by reason of the transactions contemplated by this Agreement shall look only to the Trust Estate for payment or satisfaction thereof.

 

SECTION 10.15          Underlying Trustee Not Liable for Trust Certificate.  The recitals contained herein and in the Underlying Trust Certificate (other than the signature of and authentication by the Underlying Trustee on the Underlying Trust Certificate) shall be taken as the statements of the Settlor and the Underlying Trustee assumes no responsibility for the correctness thereof.  The Underlying Trustee make no representations as to the validity or sufficiency of this Agreement or the Underlying Trust Certificate (other than the signature of and authentication by the Underlying Trustee on the Underlying Trust Certificate), or related documents.  The Underlying Trustee shall not at any time have any responsibility for or with respect to the legality, validity and enforceability of the Underlying Trust Certificate, or for or with respect to the sufficiency of the Trust Estate or its ability to generate the payments to be distributed to the holders of the Underlying Trust Certificate under this Agreement.

 

SECTION 10.16          PATRIOT Act.  The parties hereto acknowledge that, in accordance with Section 326 of the USA PATRIOT Act, [               ], in order to fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account.  The parties to this Agreement agree that they will provide [               ] with such information as it may request in order for [               ] to satisfy the requirements of the USA PATRIOT Act.

 

[SIGNATURE PAGE FOLLOWS]

 

25

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written.

 

 

	
 
    	
[                             ],
   as Underlying Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
HARLDY-DAVIDSON MOTORCYCLE TRUST   [       ]
   By:   [            ],   in its capacity as Owner Trustee,
   as Settlor
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
HARLEY-DAVIDSON CREDIT CORP.,
   as Administrator
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Page to Trust Agreement]

 

 

EXHIBIT A

 

FORM OF UNDERLYING TRUST CERTIFICATE

 

	
NUMBER R-       
    

 

HARLEY-DAVIDSON MOTORCYCLE GRANTOR TRUST [          ]

 

UNDERLYING TRUST CERTIFICATE

 

Percentage interest in Trust Estate evidenced by this Certificate:              100%

 

Evidencing a beneficial interest in the assets of Harley-Davidson Motorcycle Grantor Trust [            ], a Delaware [statutory] trust (the “Underlying Trust”), entitling the holder to certain distributions of the Underlying Trust, as defined below, the property of which includes a pool of fixed-rate, simple interest promissory notes and security agreements and retail installment sale contracts relating to Harley-Davidson motorcycles and motorcycles not manufactured by Harley-Davidson sold to the Underlying Trust by Harley-Davidson Customer Funding Corp., a Nevada corporation (the “Sponsor”), pursuant to a Sale and Servicing Agreement dated as of [     ], 20[  ] (the “Closing Date”) between the Underlying Trustee and the Sponsor (the “Sale and Servicing Agreement”).

 

THIS UNDERLYING TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR ANY OTHER APPLICABLE SECURITIES OR “BLUE SKY” LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE RESOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR ANY OTHER APPLICABLE SECURITIES OR “BLUE SKY” LAWS, PURSUANT TO AN EXEMPTION THEREFROM OR IN A TRANSACTION NOT SUBJECT THERETO.  THE HOLDER OF THIS UNDERLYING TRUST CERTIFICATE AGREES, ON ITS OWN BEHALF AND ON BEHALF OF ANY ACCOUNTS FOR WHICH IT IS ACTING AS AGENT, THAT (1) SUCH UNDERLYING TRUST CERTIFICATE MAY NOT BE RESOLD, ASSIGNED, PLEDGED OR TRANSFERRED EXCEPT IN ACCORDANCE WITH A MERGER, CONSOLIDATION OR OTHER SALE IN ACCORDANCE WITH SECTION 3.10 OF THE INDENTURE.

 

THIS CERTIFIES THAT HARLEY-DAVIDSON MOTORCYCLE TRUST [     ], a Delaware statutory trust (the “Settlor”), is the registered owner of the Underlying Trust Certificate that is a nonassessable, fully-paid, beneficial interest in the assets of the Underlying Trust, entitling it to certain distributions of the Underlying Trust.

 

The Underlying Trust was created pursuant to a Trust Agreement dated as of the Closing Date (the “Underlying Trust Agreement”), among the Settlor, Harley-Davidson Credit Corp., as administrator, the Trust Depositor and [             ], as underlying trustee (the “Underlying Trustee”).

 

 

This Underlying Trust Certificate is the sole duly authorized certificate designated as Harley-Davidson Motorcycle Grantor Trust [     ] Trust Certificate (herein called the “Underlying Trust Certificate”).  This Underlying Trust Certificate is issued under and is subject to the terms, provisions and conditions of the Underlying Trust Agreement, to which Underlying Trust Agreement the Certificateholder by virtue of the acceptance hereof assents and by which such Certificateholder is bound.

 

“Certificateholder” means the registered owner of this Certificate and its registered assigns.

 

Under the Underlying Trust Agreement, there will be distributed on each Monthly Distribution Date to or for the account of the Certificateholder, the “Trust Certificate Distribution Amount” as defined in the Underlying Trust Agreement.

 

It is the intent of the Sponsor, the Underlying Trustee and the Certificateholder that, for purposes of federal income taxes, and to the extent permitted by law, for purposes of applicable state income or franchise tax, the Underlying Trust will be treated as a grantor trust for federal income tax purposes.  The Certificateholder, by acceptance of an Underlying Trust Certificate, agrees to treat, and to take no action inconsistent with the treatment of, the Underlying Trust and the Underlying Trust Certificate for such tax purposes as just described.

 

The Certificateholder by accepting this Underlying Trust Certificate acknowledges that the Certificateholder’s Underlying Trust Certificate represents beneficial interests in the Underlying Trust only and does not represent interests in or obligations of Harley-Davidson Credit Corp., the Settlor, the Underlying Trustee or any affiliate thereof and no recourse may be had against such parties or their assets, except as expressly set forth or contemplated in the Underlying Trust Agreement, this Underlying Trust Certificate or the other Transaction Documents.

 

Unless the certificate of authentication hereon shall have been executed by an authorized officer of the Underlying Trustee, by manual signature, this Underlying Trust Certificate shall not entitle the Certificateholder hereof to any benefit under the Underlying Trust Agreement or be valid for any purpose.

 

THIS UNDERLYING TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF [DELAWARE], AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN THE PROVISIONS OF THE UCC).

 

THE HOLDER HEREOF AGREES THAT THIS UNDERLYING TRUST CERTIFICATE MAY NOT BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED TO AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 (“ERISA”), A “GOVERNMENTAL PLAN” AS DEFINED IN SECTION 3(32) OF ERISA, A “CHURCH PLAN” AS DEFINED IN SECTION 3(33) OF ERISA, OR A “PLAN” AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,

 

A-2

 

THAT IS OTHERWISE SUBJECT TO ERISA, WITHOUT REGARD TO WHETHER SUCH PLAN IS A QIB.

 

A-3

 

IN WITNESS WHEREOF, the Underlying Trustee, on behalf of the Underlying Trust and not in its individual capacity, has caused this Underlying Trust Certificate to be duly executed.

 

 

	
 
    	
HARLEY-DAVIDSON MOTORCYCLE GRANTOR TRUST   [     ], acting by and through   [               ],as   Underlying Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    

 

 

Dated:            , 20  

 

UNDERLYING TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Underlying Trust Certificates referred to in the within-mentioned Grantor Trust Agreement.

 

	
 
    	
[                     ],   as Underlying Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    

 

 

Dated:            , 20  

 

A-4

 

ASSIGNMENT

 

	
FOR VALUE RECEIVED the   undersigned hereby sells, assigns and transfers unto
    
	
 
    
	
 
    
	
(Please print or type   name and address, including postal zip code, of assignee)
    
	
 
    
	
 
    

 

the within Trust Certificate, and all rights thereunder, hereby irrevocably constituting and appointing                                            Attorney to

transfer said Trust Certificate on the books of the Trust Certificate Registrar, with full power of substitution in the premises.

 

	
Dated:
    	
 
    	
 
    

 

A-5Exhibit 10.1

	
 
    

 

TRANSFER AND SALE AGREEMENT

 

by and between

 

HARLEY-DAVIDSON CREDIT CORP.,

as Seller

 

and

 

HARLEY-DAVIDSON CUSTOMER FUNDING CORP.,

as Purchaser

 

Dated as of [                  ]

	
 
    

 

 

TABLE OF CONTENTS

 

	
ARTICLE I DEFINITION
    	
1
    
	
 
    	
 
    
	
SECTION 1.01.
    	
GENERAL
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II TRANSFER OF CONTRACTS;   ASSIGNMENT OF AGREEMENT
    	
1
    
	
 
    	
 
    
	
SECTION 2.01.
    	
CLOSING
    	
1
    
	
SECTION 2.02.
    	
CONDITIONS TO THE CLOSING
    	
2
    
	
SECTION 2.03.
    	
ASSIGNMENT OF AGREEMENT
    	
3
    
	
 
    	
 
    	
 
    
	
ARTICLE III REPRESENTATIONS AND WARRANTIES
    	
3
    
	
 
    	
 
    
	
SECTION 3.01.
    	
REPRESENTATIONS AND WARRANTIES   REGARDING SELLER
    	
4
    
	
SECTION 3.02.
    	
REPRESENTATIONS AND WARRANTIES   REGARDING EACH CONTRACT
    	
5
    
	
SECTION 3.03.
    	
REPRESENTATIONS AND WARRANTIES   REGARDING THE CONTRACTS IN THE AGGREGATE
    	
7
    
	
SECTION 3.04.
    	
REPRESENTATIONS AND WARRANTIES   REGARDING THE CONTRACT FILES
    	
8
    
	
 
    	
 
    	
 
    
	
ARTICLE IV PERFECTION OF TRANSFER AND   PROTECTION OF SECURITY INTERESTS
    	
8
    
	
 
    	
 
    
	
SECTION 4.01.
    	
CUSTODY OF CONTRACTS
    	
8
    
	
SECTION 4.02.
    	
FILING
    	
8
    
	
SECTION 4.03.
    	
NAME CHANGE OR RELOCATION
    	
8
    
	
SECTION 4.04.
    	
COSTS AND EXPENSES
    	
9
    
	
SECTION 4.05
    	
SALE TREATMENT
    	
9
    
	
SECTION 4.06
    	
SEPARATENESS FROM TRUST   DEPOSITOR
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE V REMEDIES UPON MISREPRESENTATION
    	
9
    
	
 
    	
 
    
	
SECTION 5.01.
    	
REPURCHASES OF CONTRACTS FOR   BREACH OF REPRESENTATIONS AND WARRANTIES
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE VI INDEMNITIES
    	
10
    
	
 
    	
 
    
	
SECTION 6.01.
    	
SELLER INDEMNIFICATION
    	
10
    
	
SECTION 6.02.
    	
LIABILITIES TO OBLIGORS
    	
11
    
	
SECTION 6.03.
    	
TAX INDEMNIFICATION
    	
11
    
	
SECTION 6.04.
    	
OPERATION OF INDEMNITIES
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE VII MISCELLANEOUS
    	
11
    
	
 
    	
 
    
	
SECTION 7.01.
    	
PROHIBITED TRANSACTIONS WITH   RESPECT TO THE TRUST
    	
11
    
	
SECTION 7.02.
    	
MERGER OR CONSOLIDATION
    	
11
    
	
SECTION 7.03.
    	
TERMINATION
    	
12
    
	
SECTION 7.04.
    	
ASSIGNMENT OR DELEGATION BY   SELLER
    	
12
    
	
SECTION 7.05.
    	
AMENDMENT
    	
12
    
	
SECTION 7.06.
    	
NOTICES
    	
13
    
	
SECTION 7.07.
    	
MERGER AND INTEGRATION
    	
13
    
	
SECTION 7.08.
    	
HEADINGS
    	
13
    
	
SECTION 7.09.
    	
GOVERNING LAW
    	
13
    
	
SECTION 7.10.
    	
NO BANKRUPTCY PETITION
    	
13
    

 

EXHIBITS

 

	
Exhibit A
    	
Form of Assignment
    
	
Exhibit B
    	
Form of Officer’s   Certificate
    

 

i

 

THIS TRANSFER AND SALE AGREEMENT, dated as of [                  ] (this “Agreement”), is made by and between Harley-Davidson Credit Corp., a Nevada corporation, as seller hereunder (together with its successors and assigns “Harley-Davidson Credit” or “Seller”), and Harley-Davidson Customer Funding Corp., a Nevada corporation and wholly-owned subsidiary of Seller (together with its successors and assigns “Trust Depositor”), as purchaser hereunder.

 

WHEREAS, in the regular course of its business, Seller purchases and services (i) motorcycle promissory notes and security agreements from Eaglemark Savings Bank and (ii) motorcycle retail installment sale contracts from Harley-Davidson motorcycle retailers, each of which contracts provides for installment payment obligations by or on behalf of the retailer’s customer/purchaser and grants a security interest in the related motorcycle in order to secure such obligations;

 

WHEREAS, Seller and Trust Depositor wish to set forth the terms and conditions pursuant to which Trust Depositor will acquire the “Contract Assets,” as hereinafter defined; and

 

WHEREAS, Trust Depositor intends concurrently with its purchase of Contract Assets hereunder to convey all right, title and interest in such Contract Assets to Harley-Davidson Motorcycle [Grantor[ Trust [      ] (the “[Underlying] Trust”) pursuant to the Sale and Servicing Agreement dated as of             , 20[  ] by and among Trust Depositor, Harley-Davidson Credit, as Servicer, [the Underlying Trust,] the Trust, as issuer (the “Issuer”), and [                    ], as Indenture Trustee (as amended, supplemented or otherwise modified from time to time, the “Sale and Servicing Agreement”), executed concurrently herewith;

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter set forth, Seller and Trust Depositor agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01.                         General.  Unless otherwise defined in this Agreement, capitalized terms used herein (including in the preamble above) shall have the meanings assigned to them in the Sale and Servicing Agreement.

 

ARTICLE II

 

TRANSFER OF CONTRACTS; ASSIGNMENT OF AGREEMENT

 

Section 2.01.                         Closing.  Subject to and upon the terms and conditions set forth in this Agreement, Seller hereby sells, transfers, assigns, sets over and otherwise conveys to Trust Depositor, in consideration of Trust Depositor’s payment of a purchase price in cash of $[                 ] (less fees and expenses in connection with the offering and sale of the Notes and certain deposits to the Reserve Fund on the Closing Date) and the Trust’s issuance of the Class [   ] Notes and the Certificate to [the Trust Depositor], (i) all the right, title and interest of Seller in and to the Contracts listed on the List of Contracts delivered on the Closing Date (including, without limitation, all security interests created thereunder), (ii) all rights of the Seller to payments which are collected pursuant thereto after the Cutoff Date, including any liquidation proceeds therefrom, (iii) all rights of Seller under any theft, physical damage, credit life, disability or other individual insurance policy (and rights under a “forced placed” policy, if any), any debt insurance policy or any debt cancellation agreement relating to any such Contract, an Obligor or a Motorcycle securing such Contract, (iv) all security interests in each such 

 

 

Motorcycle, (v) all documents contained in the related Contract Files, (vi) all rights of Seller in the Lockbox, Lockbox Account and related Lockbox Agreement to the extent they relate to the Contracts (but excluding payments received on or before the Cutoff Date), (vii) all rights (but not the obligations) of the Seller under any motorcycle dealer agreements between the dealers (i.e. the originators of certain Contracts) and the Seller, (viii) all rights of Seller to rebates of premiums and other amounts relating to insurance policies, debt cancellation agreements, extended service contracts or other repair agreements and other items financed under such Contracts and (ix) all proceeds and products of the foregoing (items (i) - (ix) being collectively referred to herein as the “Contract Assets”).  Although Seller and Trust Depositor agree that any such transfer is intended to be a sale of ownership in the Contract Assets, rather than the mere granting of a security interest to secure a borrowing, in the event such transfer is deemed to be of a mere security interest to secure indebtedness, Seller shall be deemed to have granted Trust Depositor a perfected first priority security interest in such Contract Assets and this Agreement shall constitute a security agreement under applicable law.  If such transfer is deemed to be the mere granting of a security interest to secure a borrowing, Trust Depositor may, to secure Trust Depositor’s own borrowing under the Sale and Servicing Agreement (to the extent that the transfer of the Contract Assets thereunder is deemed to be a mere granting of a security interest to secure a borrowing) repledge and reassign (i) all or a portion of the Contract Assets pledged to Trust Depositor and not released from the security interest of this Agreement at the time of such pledge and assignment, and (ii) all proceeds thereof.  Such repledge and reassignment may be made by Trust Depositor with or without a repledge and reassignment by Trust Depositor of its rights under this Agreement, and without further notice to or acknowledgment from Seller.  Seller waives, to the extent permitted by applicable law, all claims, causes of action and remedies, whether legal or equitable (including any right of setoff), against Trust Depositor or any assignee of Trust Depositor relating to such action by Trust Depositor in connection with the transactions contemplated by the Sale and Servicing Agreement.  To the extent the cash purchase price for the Contract Assets sold by the Seller to the Trust Depositor is less than the Pool Balance as of the Cutoff Date, the difference shall be deemed to be a capital contribution by the Seller to the Trust Depositor.

 

Section 2.02.                         Conditions to the Closing.  On or before the Closing Date, Seller shall deliver or cause to be delivered to Trust Depositor each of the documents, certificates and other items as follows:

 

(a)                                 The List of Contracts, certified by the Chairman of the Board, President or any Vice President of Seller together with an Assignment substantially in the form attached as Exhibit A hereto.

 

(b)                                 A certificate of an officer of Seller substantially in the form of Exhibit B hereto.

 

(c)                                  An opinion of counsel for Seller substantially in form and substance reasonably satisfactory to the Underwriters (and including as an addressee thereof each Rating Agency).

 

(d)                                 A letter or letters from [                  ], or another nationally recognized accounting firm, addressed to Seller, Trust Depositor and the Underwriters and stating that such firm has reviewed a sample of the Contracts and performed specific procedures for such sample with respect to certain contract terms and identifying those Contracts which do not so conform.

 

(e)                                  Copies of resolutions of the Board of Directors of Seller or of the Executive Committee of the Board of Directors of Seller approving the execution, delivery and performance of this Agreement and the transactions contemplated hereunder, certified in each case by the Secretary or an Assistant Secretary of Seller.

 

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(f)                                   Officially certified recent evidence of due incorporation and good standing of Seller under the laws of Nevada.

 

[USE IF NO GRANTOR TRUST:][(g)                                         A UCC financing statement naming Seller as debtor, naming Trust Depositor and the Issuer as assignor secured parties, naming the Indenture Trustee as secured party and identifying the Contract Assets as collateral, in proper form for filing with the appropriate office in Nevada; a UCC financing statement naming Trust Depositor as debtor, naming the Trust as assignor secured party, naming the Indenture Trustee as secured party and identifying the Trust Corpus as collateral, in proper form for filing with the appropriate office in Nevada; and a UCC financing statement naming the Issuer as debtor, naming the Indenture Trustee, as secured party and identifying the Collateral as collateral, in proper form for filing with the appropriate office in Delaware.]

 

[USE FOR GRANTOR TRUST STRUCTURE:][(g)                  A UCC financing statement naming Seller as debtor, naming Trust Depositor as assignor secured party, naming the Underlying Trust as secured party and identifying the Contract Assets as collateral, in proper form for filing with the appropriate office in Nevada; and a UCC financing statement naming Trust Depositor as debtor and naming the Underlying Trust as secured party and identifying the Trust Corpus as collateral, in proper form for filing with the appropriate office in Nevada.

 

(h)                                 An Officer’s Certificate from Seller certifying that the Seller, on or prior to the Closing Date, has indicated in its computer files, in accordance with its customary standards, policies and procedures, that the Contracts have been conveyed to the Trust Depositor pursuant to this Agreement.

 

(i)                                     The documents, certificates and other items described in Section 2.02 of the Sale and Servicing Agreement, to the extent not already described above.

 

Section 2.03.                         Assignment of Agreement.  Trust Depositor has the right to assign its interest under this Agreement to [the Issuer][the Underlying Trust] as may be required to effect the purposes of the Sale and Servicing Agreement, without further notice to, or consent of, Seller, and [the Issuer][the Underlying Trust] shall succeed to such of the rights of Trust Depositor hereunder as shall be so assigned.  Seller acknowledges that [(i)] pursuant to the Sale and Servicing Agreement, Trust Depositor will assign all of its right, title and interest in and to the Contract Assets and its right to exercise the remedies created by Section 5.01 hereof for breaches of representations and warranties of Seller contained in Sections 3.01, 3.02, 3.03 and 3.04 hereof to [the Issuer][the Underlying Trust] [and (ii) pursuant to the Indenture, the Issuer shall assign such rights to the Indenture Trustee for the benefit of the Noteholders].  Seller agrees that, upon such assignments to [the Underlying Trust][the Issuer and the Indenture Trustee], such representations will run to and be for the benefit of [the Underlying Trust][the Issuer and the Indenture Trustee] and [the Underlying Trust][the Issuer and the Indenture Trustee] may enforce directly, without joinder of Trust Depositor, the obligations of Seller set forth herein.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

Seller makes the following representations and warranties, on which Trust Depositor will rely in purchasing the Contract Assets on the Closing Date and concurrently reconveying the same to the [Underlying Trust][Trust, and on which the Trust, the Indenture Trustee and the Noteholders will rely 

 

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under the Sale and Servicing Agreement and the Indenture].  Such representations speak as of the execution and delivery of this Agreement and as of the Closing Date, but shall survive the sale, transfer and assignment of the Contracts to the [Underlying Trust] [Trust and the pledge of the Contracts to the Indenture Trustee].  The repurchase obligation of Seller set forth in Section 5.01 below and in Section 7.08 of the Sale and Servicing Agreement constitutes the sole remedy available for a breach of a representation or warranty of Seller set forth in Section 3.02, 3.03 or 3.04 of this Agreement.

 

Section 3.01.                         Representations and Warranties Regarding Seller.  Seller represents and warrants, as of the execution and delivery of this Agreement and as of the Closing Date, that:

 

(a)                                 Organization and Good Standing.  Seller is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has the corporate power to own its assets and to transact the business in which it is currently engaged.  Seller is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the character of the business transacted by it or properties owned or leased by it requires such qualification and in which the failure so to qualify would have a material adverse effect on the business, properties, assets, or condition (financial or otherwise) of Seller or Trust Depositor.

 

(b)                                 Authorization; Binding Obligation.  Seller has the power and authority to make, execute, deliver and perform this Agreement and the other Transaction Documents to which the Seller is a party and all of the transactions contemplated under this Agreement and the other Transaction Documents to which the Seller is a party, and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement and the other Transaction Documents to which the Seller is a party.  This Agreement and the other Transaction Documents to which the Seller is a party constitute the legal, valid and binding obligations of Seller enforceable in accordance with their terms, except as enforcement of such terms may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and by the availability of equitable remedies.

 

(c)                                  No Consent Required.  Seller is not required to obtain the consent of any other party or any consent, license, approval or authorization from, or registration or declaration with, any governmental authority, bureau or agency in connection with the execution, delivery, performance, validity or enforceability of this Agreement and the other Transaction Documents to which the Seller is a party.

 

(d)                                 No Violations.  Seller’s execution, delivery and performance of this Agreement and the other Transaction Documents to which the Seller is a party will not violate any provision of any existing law or regulation or any order or decree of any court or the Articles of Incorporation or Bylaws of Seller, or constitute a material breach of any mortgage, indenture, contract or other agreement to which Seller is a party or by which Seller or any of Seller’s properties may be bound.

 

(e)                                  Litigation.  No litigation or administrative proceeding of or before any court, tribunal or governmental body is currently pending, or to the knowledge of Seller threatened, against Seller or any of its properties or with respect to this Agreement or any other Transaction Document to which the Seller is a party which, if adversely determined, would in the opinion of Seller have a material adverse effect on the business, properties, assets or condition (financial or 

 

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other) of Seller or the transactions contemplated by this Agreement or any other Transaction Document to which the Seller is a party.

 

(f)                                   State of Incorporation; Name; No Changes.  Seller’s state of incorporation is the State of Nevada.  Seller’s exact legal name is as set forth in the first paragraph of this Agreement.  Seller has not changed its name whether by amendment of its Articles of Incorporation, by reorganization or otherwise, and has not changed its state of incorporation, within the four months preceding the Closing Date.

 

(g)                                  Solvency.  The Seller, after giving effect to the conveyances made by it hereunder, is Solvent.

 

Section 3.02.                         Representations and Warranties Regarding Each Contract.  Seller represents and warrants as to each Contract as of the execution and delivery of this Agreement and as of the Closing Date, that:

 

(a)                                 Payments.  Except for a payment that is not more than 29 days delinquent as of the Cutoff Date, no payment default exists on the Contract.

 

(b)                                 No Waivers.  As of the Cutoff Date, no material term of the Contract has been affirmatively amended or modified, except amendments and modifications indicated in the Seller’s servicing system [or in the Contract File].

 

(c)                                  Binding Obligation.  The Contract is in a form of contract that includes rights and remedies allowing the holder to enforce the obligation and realize on the Motorcycle and represents the legal, valid and binding payment obligation of the Obligor, enforceable in all material respects by the Holder of the Contract, except as may be limited by bankruptcy, insolvency, reorganization or other laws relating to the enforcement of creditors’ rights or by general equitable principles and consumer protection laws.

 

(d)                                 No Defenses.  As of the Cutoff Date, no right of rescission, setoff, counterclaim or defense asserted or threatened with respect to such Contract was indicated in the Seller’s servicing system [or related Contract File].

 

(e)                                  Insurance.  The terms of the Contract require that for the term of such Contract the Motorcycle securing such Contract will be covered by physical damage insurance.

 

(f)                                   Origination.  The Contract (i) was originated by Eaglemark Savings Bank or a Harley-Davidson motorcycle dealer or by, in each case, in the regular course of its business, (ii) was fully and properly executed by the parties thereto, and (iii) has been purchased by Seller in the regular course of its business.

 

(g)                                  Compliance with Law.  At the time it was originated, the Contract complied in all material respects with all requirements of law in effect at the time.

 

(h)                                 Contract in Force.  As of the Cutoff Date, the Seller’s servicing system indicates that the Contract was not satisfied or subordinated in whole or in part or rescinded, and the related Motorcycle securing the Contract has not been released from the lien of the Contract in whole or in part.

 

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(i)                                     Valid Security Interest.  The Contract has created or shall create a valid, binding and enforceable first priority security interest in favor of the Seller in the Motorcycle, except as to priority for any Permitted Liens, which security interest is assignable by the Seller to the Purchaser.

 

(j)                                    No Defaults.  As of the Cutoff Date, no default, breach, violation or event permitting acceleration was reported in the Seller’s servicing system with respect to any Contract.  Seller has not waived any such default, breach, violation or event permitting acceleration.  As of the Cutoff Date, no Motorcycle was in repossession.

 

(k)                                 Installments.  The Contract has a fixed Contract Rate and provides for monthly payments of principal and interest which, if timely made, would fully amortize the loan on a simple-interest basis over its term.

 

(l)                                     Owner of Record.  The Seller is identified as the “owner of record” on all electronic chattel paper relating to the Contract, and the Seller has “control,” as defined in Section 9-105 of the UCC, of all electronic chattel paper relating to the Contract. The Contract does not have any marks or notations indicating that it has been pledged, assigned or otherwise conveyed by the Seller to any Person other than the Purchaser.

 

(m)                             Good Title.  Immediately before the sale and assignment under this Agreement, the Seller has good and marketable title to the Contract free and clear of any encumbrance or lien, except for any Permitted Liens, and, immediately upon the transfer of the Contract by the Seller, the Trust Depositor shall have good and marketable title to the Contract free and clear of any encumbrance or lien, except for any Permitted Liens, and, immediately upon the transfer of the Contract by the Trust Depositor, the [Issuer][Underlying Trust] shall have good and marketable title to the Contract free and clear of any encumbrance, equity, loan, pledge, charge, claim or security interest, other than [the liens created by the Indenture] and any Permitted Liens.

 

(n)                                 No Government Obligors.  The Obligor is not the United States government or an agency, authority, instrumentality or other political subdivision of the United States government.

 

(o)                                 Obligor Bankruptcy.  At the Cutoff Date, the Obligor was not the subject of a bankruptcy proceeding, according to the records in Seller’s servicing system.

 

(p)                                 Chattel Paper; One Original.  The Contract is either “tangible chattel paper” or “electronic chattel paper”.  The Contract is evidenced by either (i) one executed tangible record constituting or forming a part of the Contract that is “tangible chattel paper”, or (ii) a single “authoritative copy” of the electronic record constituting or forming a part of the Contract that is “electronic chattel paper”. Terms in quotation marks have the meaning assigned to them in the applicable.

 

(q)                                 Selection Criteria.  The Contract is secured by a new or used Motorcycle.  No Contract has a Contract Rate less than [    ]%.  The Contract amortizes the amount financed over an original term no greater than [    ] months (excluding periods of deferral of first payment).  The Contract has a Principal Balance of at least $[       ] as of the Cutoff Date.

 

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Section 3.03.                         Representations and Warranties Regarding the Contracts in the Aggregate.  Seller represents and warrants, as of the execution and delivery of this Agreement and as of the Closing Date, that:

 

(a)                                 Amounts.  The Pool Balance as of the Cutoff Date equals or exceeds the aggregate principal amount of the Notes on the Closing Date.

 

(b)                                 Characteristics.  The Contracts have the following characteristics: (i) all the Contracts are secured by Motorcycles; (ii) no Contract has a remaining maturity of more than [    ] months; and (iii) the final scheduled payment on the Contract with the latest maturity is due no later than [                   ].  Approximately [         ]% of the Pool Balance as of the Cutoff Date is attributable to loans for purchases of new Motorcycles and approximately [     ]% is attributable to loans for purchases of used Motorcycles.  No Contract was originated after the Cutoff Date.  No Contract has a Contract Rate less than [    ]%.  Approximately [      ]% of the Pool Balance as of the Cutoff Date is attributable to loans for purchases of Motorcycles manufactured by Harley-Davidson Motor Company, and approximately [     ]% of the Pool Balance as of the Cutoff Date is attributable to loans to purchase Motorcycles not manufactured by Harley-Davidson Motor Company.

 

(c)                                  Marking Records.  As of the Closing Date, Seller has caused the Computer File relating to the Contracts sold hereunder and concurrently reconveyed by Trust Depositor to the [Underlying Trust] [Trust and pledged by the Trust to the Indenture Trustee] to be clearly and unambiguously marked to indicate that such Contracts constitute part of the Trust Corpus, are owned by the [Underlying Trust][Trust and constitute security for the Notes].

 

(d)                                 No Adverse Selection.  No selection procedures adverse to Noteholders have been employed in selecting the Contracts.

 

(e)                                  True Sale.  The transactions contemplated by this Agreement and the Sale and Servicing Agreement constitute valid sales, transfers and assignments from Seller to Trust Depositor and from Trust Depositor to the [Underlying] Trust of all of Seller’s right, title and interest in the Contract Assets as of the Closing Date.

 

(f)                                   All Filings Made.  All filings (including, without limitation, UCC filings) required to be made by any Person and actions required to be taken or performed by any Person in any jurisdiction to give the [Indenture Trustee][Underlying Trust] a first priority perfected security interest (subject only to Permitted Liens) in the Contracts, the proceeds thereof and the rest of the Collateral have been made, taken or performed.  All financing statements filed or to be filed against the Seller in favor of the Purchaser in connection herewith describing the Contracts contain a statement to the following effect: “A purchase of or security interest in any collateral described in this financing statement, except as provided in the Transfer and Sale Agreement, will violate the rights of the Purchaser.”

 

(g)                                  List of Contracts.  The information set forth in the List of Contracts is true, complete and correct in all material respects as of the Cutoff Date.

 

(h)                                 Lockbox Bank.  All Obligors have been instructed to make payments to a Lockbox Account (either directly by remitting payments to a Lockbox, or indirectly by making payments through direct debit, the telephone or the internet to an account of the Servicer which 

 

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payments will be subsequently transferred from such account to one or more Lockbox Banks), and no person claiming through or under Seller has any claim or interest in a Lockbox Account other than the related Lockbox Bank; provided, however, that other Persons may have an interest in certain other collections therein not related to the Contracts.

 

Section 3.04.                         Representations and Warranties Regarding the Contract Files.  Seller represents and warrants, as of the execution and delivery of this Agreement and as of the Closing Date, that:

 

(a)                                 Possession.  Immediately prior to the Closing Date, the Servicer or its custodian will have possession of each original Contract and the related complete Contract File.  Each of such documents which is required to be signed by the Obligor has been signed by the Obligor in the appropriate spaces.  All blanks on any form have been properly filled in and each form has otherwise been correctly prepared.  The complete Contract File for each Contract currently is in the possession of the Servicer or its custodian.

 

(b)                                 Bulk Transfer Laws.  The transfer, assignment and conveyance of the Contracts and the Contract Files by Seller pursuant to this Agreement and by Trust Depositor pursuant to the Sale and Servicing Agreement is not subject to the bulk transfer or any similar statutory provisions in effect in any applicable jurisdiction.

 

ARTICLE IV

 

PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS

 

Section 4.01.                         Custody of Contracts.  The contents of each Contract File shall be held by the Servicer, or its custodian, for the benefit of the [Underlying] Trust as the owner thereof in accordance with the Sale and Servicing Agreement.

 

Section 4.02.                         Filing.  On or prior to the Closing Date, Seller shall cause the UCC financing statements referred to in Section 2.02(g) hereof and in Section 2.02(g) of the Sale and Servicing Agreement to be filed and from time to time Seller shall take and cause to be taken such actions and execute such documents as are necessary or desirable or as Trust Depositor or the [Underlying] Trust may reasonably request to perfect and protect the Trust Depositor’s and the [Underlying] Trust’s ownership interest in the Contract Assets against all other persons, including, without limitation, the filing of financing statements, amendments thereto and continuation statements, the execution of transfer instruments and the making of notations on or taking possession of all records or documents of title.  The Seller authorizes the Trust Depositor to file financing statements describing the Contract Assets as collateral.  All financing statements filed or to be filed against the Seller in favor of the Trust Depositor or the [Underlying] Trust in connection herewith describing the Contract Assets as collateral shall contain a statement to the following effect: “A purchase of or security interest in any collateral described in this financing statement, except as permitted in the Transfer and Sale Agreement or Sale and Servicing Agreement, will violate the rights of the Secured Party.”

 

Section 4.03.                         Name Change or Relocation.  (a) During the term of this Agreement, Seller shall not change its name, identity or structure or state of incorporation without first giving at least 30 days’ prior written notice to Trust Depositor and to the Trustees.

 

(b)                                 If any change in Seller’s name, identity or structure or other action would make any financing statement or notice of ownership interest or lien filed under this Agreement seriously

 

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misleading within the meaning of applicable provisions of the UCC or any title statute, Seller, no later than five days after the effective date of such change, shall file such amendments, if any, as may be required to preserve and protect the Trust Depositor’s and the [Underlying] Trust’s interests in the Contract Assets and proceeds thereof.  In addition, Seller shall not change its state of incorporation unless it has first taken such action as is advisable or necessary to preserve and protect the Trust Depositor’s and the [Underlying] Trusts’ interest in the Contract Assets.  Promptly after taking any of the foregoing actions, Seller shall deliver to Trust Depositor and the Trustees an opinion of counsel stating that, in the opinion of such counsel, all financing statements or amendments necessary to preserve and protect the interests of the Trust Depositor and the [Underlying] Trust in the Contract Assets have been filed, and reciting the details of such filing.

 

Section 4.04.                         Costs and Expenses.  Seller agrees to pay all reasonable costs and disbursements in connection with the perfection and the maintenance of perfection, as against all third parties, of (i) Trust Depositor’s, [the Issuer’s] [Underlying Trust’s] and the Indenture Trustee’s right, title and interest in and to the Contract Assets (including, without limitation, the security interests in the Motorcycles related thereto) and (ii) the security interests provided for in the Indenture.

 

Section 4.05                            Sale Treatment.  Each of Seller and Trust Depositor shall treat the transfer of Contract Assets to the Trust Depositor as a sale or capital contribution for all purposes, although the Seller and the Trust Depositor acknowledge that the consolidated financial statements of the Seller and the Trust Depositor shall be prepared in accordance with generally accepted accounting principles and, as a result of the consolidation required by generally accepted accounting principles, the transfers will be reflected as a financing by the Seller in its consolidated financial statements; provided, however, that (i) appropriate notations shall be made in any such consolidated financial statements (or in the accompanying notes) to indicate that the Trust Depositor is a separate legal entity from the Seller and to indicate that the Trust Depositor’s assets and credit are not available to satisfy the debts and other obligations of the Seller, (ii) such assets shall also be listed separately on any balance sheet of the Trust Depositor prepared on a stand alone basis, and (iii) following the occurrence of any bankruptcy, insolvency or similar event in respect of the Seller, the Contracts and Contract Assets purportedly conveyed to the Trust Depositor hereunder would not constitute part of the Seller’s estate in bankruptcy.

 

Section 4.06                            Separateness from Trust Depositor.  The Seller agrees to take or refrain from taking or engaging in with respect to the Trust Depositor each of the actions or activities specified in the “substantive consolidation” opinion of Foley & Lardner LLP (or in any related certificate of Seller) delivered on the Closing Date, upon which the conclusions expressed therein are based.

 

ARTICLE V

 

REMEDIES UPON MISREPRESENTATION

 

Section 5.01.                         Repurchases of Contracts for Breach of Representations and Warranties.

 

(a)                                 Seller hereby agrees, for the benefit of [the Underlying Trust,] the Issuer, the Indenture Trustee and the Trust Depositor, that it shall repurchase a Contract (together with all related Contract Assets), at its Repurchase Price, not later than two Business Days prior to the first Distribution Date after the last day of the calendar month in which the Seller becomes aware or receives written notice from Trust Depositor, [either][any] of the Trustees or the Servicer of any breach of a representation or warranty of Seller set forth in Article III of this Agreement that materially adversely affects Trust Depositor’s or the [Underlying] Trust’s interest in such Contract (without regard to the benefits of the Reserve Fund) and 

 

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which breach has not been cured; provided, however, that with respect to any Contract described on the List of Contracts with respect to an incorrect unpaid Principal Balance which Seller would otherwise be required to repurchase pursuant to this Section 5.01(a) and Section 7.08 of the Sale and Servicing Agreement, Seller may, in lieu of repurchasing such Contract, deposit in the Collection Account not later than one Business Day prior to such Distribution Date cash in an amount sufficient to cure any deficiency or discrepancy; and provided further that with respect to a breach of a representation or warranty relating to the Contracts in the aggregate and not to any particular Contract, Seller may select Contracts (without adverse selection) to repurchase such that had such Contracts not been reconveyed by Trust Depositor and included as part of the [Underlying] Trust there would have been no breach of such representation or warranty; provided further that the failure to maintain perfection of the security interest in the Motorcycle securing a Contract in accordance with the Sale and Servicing Agreement shall be deemed to be a breach materially and adversely affecting the [Underlying] Trust’s interest in the Contracts or in the related Contract Assets.

 

(b)                                 If the Servicer determines in good faith that the representation and warranty of the Seller as set forth in Section 3.02(i) herein may have been violated with respect to one or more Contracts, and that amendment of the terms of such Contract(s) could better ensure compliance with applicable laws and if the Seller shall have notified the Servicer in writing of its intention to amend the terms of such Contract(s) to ensure compliance with applicable laws upon reacquisition pursuant to Section 7.08(b) of the Sale and Servicing Agreement and this Agreement, the Servicer shall give prompt written notice of such determination to the other parties. The Seller shall reacquire from the Trust Depositor, in accordance with Section 7.08 of the Sale and Servicing Agreement, a Contract at its Purchase Price (which shall be deposited into the Collection Account), not later than two Business Days prior to the first Distribution Date after the last day of the calendar month in which the Trust Depositor and the Seller receive the written notice from the Servicer described above; provided, however, that no Contract shall be reacquired pursuant to this Section 5.01(b) if, after giving effect to such reacquisition, the aggregate Principal Balance of the Contracts so reacquired, measured as of the Cutoff Date, would exceed 10% of the Pool Balance as of the Cutoff Date.  For the avoidance of doubt, this provision does not limit the obligation of the Seller to repurchase any Contract for which there is a breach of a representation or warranty of the Seller as set forth in Article III of this Agreement and there shall be no limitation on the Principal Balance or the number of Contracts that are required to be repurchased by the Seller in connection with a breach of a representation or warranty of the Seller as set forth in Article III of this Agreement.

 

(c)                                  Notwithstanding any other provision of this Agreement, the obligations of Seller under this Section 5.01 and under Section 7.08 of the Sale and Servicing Agreement shall not terminate upon a Service Transfer pursuant to Article Eight of the Sale and Servicing Agreement.

 

ARTICLE VI

 

INDEMNITIES

 

Section 6.01.                         Seller Indemnification.  Seller will defend and indemnify Trust Depositor, the Trust, [the Underlying Trust,] the Trustees, any agents of the Trustees and the Noteholders against any and all costs, expenses, losses, damages, claims and liabilities, joint or several, including reasonable fees and expenses of counsel and expenses of litigation arising out of or resulting from (i) this Agreement or the use, ownership or operation of any Motorcycle by Seller or the Servicer or any Affiliate of either, (ii) any representation or warranty or covenant made by Seller in this Agreement being untrue or incorrect (subject to the third sentence of the preamble to Article III of this Agreement above), and (iii) any untrue statement or alleged untrue statement of a material fact contained in the Prospectus or in any amendment 

 

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thereto or the omission or alleged omission to state therein a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement was made in conformity with information furnished to Trust Depositor by Seller specifically for use therein.  Notwithstanding any other provision of this Agreement, the obligation of Seller under this Section 6.01 shall not terminate upon a Service Transfer pursuant to Article Eight of the Sale and Servicing Agreement and shall survive any termination of that agreement or this Agreement.

 

Section 6.02.                         Liabilities to Obligors.  No obligation or liability to any Obligor under any of the Contracts is intended to be assumed by the Trustees, [the Underlying Trust,] the Trust or the Noteholders under or as a result of this Agreement and the transactions contemplated hereby.

 

Section 6.03.                         Tax Indemnification.  Seller covenants and agrees to pay, and to indemnify, defend and hold harmless the Trust Depositor, [the Underlying Trust,] the Trust, the Trustees or the Noteholders from, any taxes that may at any time be asserted against any such Person as a result of or relating to the transactions contemplated herein and in the other Transaction Documents, including any sales, gross receipts, gross margin, general corporation, tangible personal property, Illinois personal property replacement privilege or license taxes (but not including any federal, state or other taxes arising out of the creation of [the Underlying Trust,] the Trust and the issuance of the Notes) and costs, expenses and reasonable counsel fees in defending against the same, whether arising by reason of the acts to be performed by Seller under this Agreement or the Servicer under the Sale and Servicing Agreement or imposed against the Trust Depositor, [the Underlying Trust,] the Trust, a Noteholder or otherwise.  Notwithstanding any other provision of this Agreement, the obligation of Seller under this Section 6.03 shall not terminate upon a Service Transfer pursuant to Article Eight of the Sale and Servicing Agreement and shall survive any termination of this Agreement.

 

Section 6.04.                         Operation of Indemnities.  Indemnification under this Article VI shall include, without limitation, reasonable fees and expenses of counsel and expenses of litigation.  If Seller has made any indemnity payments to Trust Depositor or the Trustees pursuant to this Article VI and Trust Depositor or the Trustees thereafter collects any of such amounts from others, Trust Depositor or the Trustees will repay such amounts collected to Seller, except that any payments received by Trust Depositor or the Trustees from an insurance provider as a result of the events under which the Seller’s indemnity payments arose shall be repaid prior to any repayment of the Seller’s indemnity payment.

 

ARTICLE VII

 

MISCELLANEOUS

 

Section 7.01.                         Prohibited Transactions with Respect to the Trust.  Seller shall not:

 

(a)                                 Provide credit to any Noteholder for the purpose of enabling such Noteholder to purchase Notes;

 

(b)                                 Purchase any Notes in an agency or trustee capacity; or

 

(c)                                  Except in its capacity as Servicer as provided in the Sale and Servicing Agreement, lend any money to the Trust [or to the Underlying Trust].

 

Section 7.02.                         Merger or Consolidation.  (a) Except as otherwise provided in this Section 7.02, Seller will keep in full force and effect its existence, rights and franchises as a Nevada corporation, and 

 

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will obtain and preserve its qualification to do business as a foreign corporation in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement and of any of the Contracts and to perform its duties under this Agreement.

 

(b)                                 Any person into which Seller may be merged or consolidated, or any corporation  or other entity resulting from such merger or consolidation to which Seller is a party, or any person succeeding to the business of Seller, shall be the successor to Seller hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

 

(c)                                  Upon the merger or consolidation of the Seller as described in this Section 7.02, the Seller shall provide the Rating Agencies notice of such merger or consolidation within 30 days after completion of the same.

 

Section 7.03.                         Termination.  This Agreement shall terminate (after distribution of any amounts due to Noteholders due pursuant to Section 7.05 of the Sale and Servicing Agreement) on the Distribution Date on which the aggregate Outstanding Amount of the Notes is reduced to zero; provided, that Seller’s representations and warranties and indemnities by Seller shall survive termination.

 

Section 7.04.                         Assignment or Delegation by Seller.  Except as specifically authorized hereunder, Seller may not convey and assign or delegate any of its rights or obligations hereunder absent the prior written consent of Trust Depositor and the Trustees, and any attempt to do so without such consent shall be void.

 

Section 7.05.                         Amendment.  (a) This Agreement may be amended from time to time by Seller and Trust Depositor, with notice to the Rating Agencies, but without the consent of the Trustees or any of the Noteholders to correct manifest error, to cure any ambiguity, to correct or supplement any provisions herein or therein which may be inconsistent with any other provisions herein, therein or in the Prospectus, as the case may be, or to add any other provisions with respect to matters or questions arising under this Agreement which shall not be inconsistent with the provisions of this Agreement or the Prospectus; provided, however, that such action shall not, as evidenced by an Opinion of Counsel for Seller acceptable to the Indenture Trustee, adversely affect the interests of any Noteholder.

 

(b)                                 This Agreement may also be amended from time to time by Seller and Trust Depositor, with the consent of the Required Holders, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Indenture Trustee for the benefit of Noteholders; provided, however, that no such amendment or waiver shall (i) reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on any Contracts or distributions that shall be required to be made on any Note or (ii) reduce the aforesaid percentage of the Outstanding Amount of the Notes, the Holders of which are required to consent to any such amendment or waiver pursuant to this Agreement, without the consent of the Holders of all Notes of the relevant Classes then outstanding.

 

(c)                                  Promptly after the execution of any amendment or consent pursuant to this Section 7.05, Trust Depositor shall furnish written notification of the substance of such amendment and a copy of such amendment to each Trustee and each Rating Agency.

 

(d)                                 It shall not be necessary for the consent of Noteholders under this Section 7.05 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent shall approve the 

 

12

 

substance thereof.  The manner of obtaining such consents and of evidencing the authorization of the execution thereof by Noteholders shall be subject to such reasonable requirements as the Trustees may prescribe.

 

(e)                                  Upon the execution of any amendment or consent pursuant to this Section 7.05, this Agreement shall be modified in accordance therewith, and such amendment or consent shall form a part of this Agreement for all purposes.

 

Section 7.06.                         Notices.  All notices, demands, certificates, requests and communications hereunder (“notices”) shall be in writing and shall be effective (a) upon receipt when sent through the U.S. mail, registered or certified mail, return receipt requested, postage prepaid, with such receipt to be effective the date of delivery indicated on the return receipt, or (b) upon receipt when sent through an overnight courier, or (c) on the date personally delivered to an Authorized Officer of the party to which sent, or (d) on the date transmitted by legible telecopier or electronic mail transmission with a confirmation of receipt, in all cases addressed to the recipient at the address for such recipient set forth in the Sale and Servicing Agreement.

 

Each party hereto may, by notice given in accordance herewith to each of the other parties hereto, designate any further or different address to which subsequent notices shall be sent.

 

All communications and notices pursuant hereto to Noteholders shall be in writing and delivered or mailed at the address shown in the Note Register.

 

Section 7.07.                         Merger and Integration.  Except as specifically stated otherwise herein, this Agreement sets forth the entire understanding of the parties relating to the subject matter hereof, and all prior understandings, written or oral, are superseded by this Agreement.  This Agreement may not be modified, amended, waived, or supplemented except as provided herein.

 

Section 7.08.                         Headings.  The headings herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof.

 

Section 7.09.                         Governing Law.  This Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Illinois.

 

Section 7.10.                         No Bankruptcy Petition. The Seller covenants and agrees that, prior to the date that is one year and one day after the payment in full of all amounts owing in respect of all outstanding Securities, as well as any other amounts distributable or payable from the Trust Estate, together with any other amounts owing in respect of obligations of the Trust Depositor, it will not institute against, or solicit or join in or cooperate with or encourage any Person to institute against, the Trust Depositor[, the Underlying Trust] or the Trust, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceedings under the laws of the United States or any State of the United States.  This Section 7.10 shall survive termination of this Agreement.

 

[signature page follows]

 

13

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first written above.

 

	
 
    	
HARLEY-DAVIDSON   CUSTOMER FUNDING CORP.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Printed Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
HARLEY-DAVIDSON CREDIT   CORP.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Printed Name:
    	
 
    
	
 
    	
Title:
    	
 
    
					

 

Signature Page to Transfer and Sale Agreement

 

 

Exhibit A

Transfer and Sale

Agreement

 

FORM OF ASSIGNMENT

 

In accordance with the Transfer and Sale Agreement (the “Agreement”) dated as of [           ] made by and between the undersigned, as seller thereunder (“Seller”), and Harley-Davidson Customer Funding Corp., a Nevada corporation and wholly-owned subsidiary of Seller (“Trust Depositor”), as purchaser thereunder, the undersigned does hereby sell, transfer, convey and assign, set over and otherwise convey to Trust Depositor (i) all the right, title and interest of Seller in and to the Contracts listed on the List of Contracts delivered on the Closing Date (including, without limitation, all security interests created thereunder), (ii) all rights of the Seller to payments which are collected pursuant to such Contracts after the Cutoff Date, including any liquidation proceeds therefrom, (iii) all rights of Seller under any theft, physical damage, credit life, disability or other individual insurance policy (and rights under a “forced placed” policy, if any), any debt insurance policy or any debt cancellation agreement relating to any such Contract, an Obligor or a Motorcycle securing such Contract, (iv) all security interests in each such Motorcycle, (v) all documents contained in the related Contract Files, (vi) all rights of Seller in the Lockbox, Lockbox Account and related Lockbox Agreement to the extent they relate to the Contracts (but excluding payments received on or before the Cutoff Date), (vii) all rights (but not the obligations) of the Seller under any motorcycle dealer agreements between the dealers (i.e., the originators of certain Contracts) and the Seller, (viii) all rights of Seller to rebates of premiums and other amounts relating to insurance policies, debt cancellation agreements, extended service contracts or other repair agreements and other items financed under such Contracts and (ix) all proceeds and products of the foregoing.

 

This Assignment is made pursuant to and in reliance upon the representation and warranties on the part of the undersigned contained in Article III of the Agreement and no others.

 

Capitalized terms used herein but not otherwise defined shall have the meanings assigned to such terms in the Sale and Servicing Agreement dated as of [               ] made by and among the undersigned, as servicer, the Trust Depositor, [Harley-Davidson Motorcycle Grantor Trust [              ],] Harley-Davidson Motorcycle Trust [              ], as issuer, and [                ], as indenture trustee.

 

A-1

 

IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly executed this [     ] day of               .

 

	
 
    	
HARLEY-DAVIDSON CREDIT   CORP.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Printed Name:
    	
 
    
	
 
    	
Title:
    	
 
    
				

 

A-2

 

Exhibit B

Transfer and Sale

Agreement

 

FORM OF OFFICER’S CERTIFICATE

 

[Form of Closing Certificate of Servicer/Seller]

 

HARLEY-DAVIDSON CREDIT CORP.

 

Officer’s Certificate

 

The undersigned certifies that [s]he is [             ] of Harley-Davidson Credit Corp. (“Harley-Davidson Credit”), and that as such is duly authorized to execute and deliver this certificate on behalf of Harley-Davidson Credit, as Servicer, in connection with the Sale and Servicing Agreement (the “Sale and Servicing Agreement”) dated as of [           ] (the “Effective Date”) by and among Harley-Davidson Credit, as Servicer, Harley-Davidson Customer Funding Corp. (“CFC”), [               ], as Indenture Trustee[, Harley-Davidson Motorcycle Grantor Trust [      ]] and Harley-Davidson Motorcycle Trust [         ] (“Issuer”), and as Seller in connection with the Transfer and Sale Agreement dated as of the Effective Date (the “Transfer and Sale Agreement”) by and between Harley-Davidson Credit and CFC (all capitalized terms used herein without definition having the respective meanings set forth in the Sale and Servicing Agreement), and further certifies as follows:

 

(1)                                 Attached hereto as Exhibit I is a true and correct copy of the Articles of Incorporation of Harley-Davidson Credit, together with all amendments thereto as in effect on the date hereof.

 

(2)                                 There has been no other amendment or other document filed affecting the Articles of Incorporation of Harley-Davidson Credit since August 9, 1999, and no such amendment has been authorized by the Board of Directors or shareholders of Harley-Davidson Credit.

 

(3)                                 Attached hereto as Exhibit II is a Certificate of the Secretary of State of the State of Nevada dated as of a recent date, stating that Harley-Davidson Credit is duly incorporated under the laws of the State of Nevada and is in good standing.

 

(4)                                 Attached hereto as Exhibit III is a true and correct copy of the By-laws of Harley-Davidson Credit which were in full force and effect as of August 9, 1999 and at all times subsequent thereto.

 

(5)                                 Attached hereto as Exhibit IV is a true and correct copy of resolutions adopted pursuant to a unanimous written consent of the Board of Directors of Harley-Davidson Credit and relating to the authorization, execution, delivery and performance of the Transfer and Sale Agreement, the Sale and Servicing Agreement, the Underwriting Agreement and the Administration Agreement.  Said resolutions have not been amended, modified, annulled or revoked, and are on the date hereof in full force and effect and are the only resolutions relating to these matters which have been adopted by the Board of Directors.

 

B-1

 

(6)                                 No event with respect to Harley-Davidson Credit has occurred and is continuing which would constitute an Event of Termination or an event that, with notice or the passage of time, would constitute an Event of Termination under the Sale and Servicing Agreement.  To the best of my knowledge after reasonable investigation, there has been no material adverse change in the condition, financial or otherwise, or the earnings, business affairs or business prospects of Harley-Davidson Credit, whether or not arising in the ordinary course of business, since the respective dates as of which information is given in the Preliminary Prospectus (as defined in the Underwriting Agreement) or the Prospectus and except as set forth therein.

 

(7)                                 All federal, state and local taxes of Harley-Davidson Credit due and owing as of the date hereof have been paid.

 

(8)                                 All representations and warranties of Harley-Davidson Credit contained in the Transfer and Sale Agreement, the Sale and Servicing Agreement, the Underwriting Agreement and the Administration Agreement (collectively, the “Program Agreements”) or in any document, certificate or financial or other statement delivered in connection therewith are true and correct as of the date hereof.

 

(9)                                 There is no action, investigation or proceeding pending or, to my knowledge, threatened against Harley-Davidson Credit before any court, administrative agency or other tribunal (a) asserting the invalidity of any Program Agreement to which Harley-Davidson Credit is a party; or (b) which is likely materially and adversely to affect Harley-Davidson Credit’s performance of its obligations under, or the validity or enforceability of, the Program Agreements.

 

(10)                          No consent, approval, authorization or order of, and no notice to or filing with, any governmental agency or body or state or federal court is required to be obtained by Harley-Davidson Credit for Harley-Davidson Credit’s consummation of the transactions contemplated by the Program Agreements, except such as have been obtained or made and such as may be required under the blue sky laws of any jurisdiction in connection with the issuance and sale of the Notes or the issuance of the Certificate.

 

(11)                          Neither Harley-Davidson Credit’s transfer and assignment of the Contract Assets to CFC, CFC’s concurrent transfer and assignment of the Trust Corpus to the [Underlying Trust][Trust, nor the concurrent pledge by the Trust of the Collateral to the Indenture Trustee], nor the issuance and sale of the Notes, the issuance of the Certificate or the entering into of the Program Agreements, nor the consummation of any other of the transactions contemplated therein, will violate or conflict with any agreement or instrument to which Harley-Davidson Credit is a party or by which it is otherwise bound.

 

(12)                          In connection with the transfers of Contracts and related assets contemplated in the Transfer and Sale Agreement, (a) Harley-Davidson Credit has not made such transfer with actual intent to hinder, delay or defraud any creditor of Harley-Davidson Credit, and (b) Harley-Davidson Credit has not received less than a reasonably equivalent value in exchange for such transfer, is not on the date hereof insolvent (nor will Harley-Davidson Credit become insolvent as a result thereof), is not engaged (or about to engage) in a business or transaction for which it has unreasonably small capital, and does not intend to incur or believe it will incur debts beyond its ability to pay when matured.

 

B-2

 

(13)                          The sole shareholder of Harley-Davidson Credit is Harley-Davidson Financial Services, Inc., a Delaware corporation, which has its chief executive office and only office in Chicago, Illinois, and has no other offices in any other state.

 

(14)                          Each of the agreements and conditions of Harley-Davidson Credit to be performed or satisfied on or before the Closing Date under the Program Agreements has been performed or satisfied in all material respects.

 

(15)                          Each Contract being transferred pursuant to the Transfer and Sale Agreement is evidenced by a written agreement providing for a repayment obligation as well as a security interest in the related Motorcycle securing such obligation.

 

(16)                          Harley-Davidson Credit has not authorized the filing of any UCC financing statements listing the Contract Assets as collateral other than financing statements relating to the transactions contemplated in the Transfer and Sale Agreement.

 

*   *   *   *   *   *

 

B-3

 

In Witness Whereof, I have affixed my signature hereto this     day of [        ].

 

	
 
    	
By:
    	
 
    
	
 
    	
Printed Name:
    	
 
    
	
 
    	
Title:

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