Document:

EXHIBIT
10.3

 

 

 

ADMINISTRATION AGREEMENT

 

among

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2004-2,

 

as Issuer,

 

HARLEY-DAVIDSON CREDIT CORP.,

 

as Administrator,

 

HARLEY-DAVIDSON CUSTOMER FUNDING CORP.,

 

as Trust Depositor,

 

and

 

BNY MIDWEST TRUST COMPANY,

 

as Indenture Trustee

 

 

Dated as of May 1, 2004

 

 

 

TABLE
OF CONTENTS

 

	
  SECTION
  1.

  	
  DUTIES OF THE
  ADMINISTRATOR.

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  RECORDS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  COMPENSATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  ADDITIONAL
  INFORMATION TO BE FURNISHED TO THE ISSUER

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  INDEPENDENCE OF THE
  ADMINISTRATOR

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  6.

  	
  NO
  JOINT VENTURE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  OTHER ACTIVITIES OF
  ADMINISTRATOR

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  TERM
  OF AGREEMENT; RESIGNATION AND REMOVAL OF ADMINISTRATOR

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  ACTION
  UPON TERMINATION, RESIGNATION OR REMOVAL

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  11.

  	
  AMENDMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  12.

  	
  SUCCESSORS AND ASSIGNS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  13.

  	
  GOVERNING
  LAW

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 14.

  	
  HEADINGS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  15.

  	
  COUNTERPARTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  16.

  	
  SEVERABILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 17.

  	
  NOT
  APPLICABLE TO HARLEY-DAVIDSON CREDIT IN OTHER CAPACITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 18.

  	
  LIMITATION
  OF LIABILITY OF OWNER TRUSTEE AND INDENTURE TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  19.

  	
  THIRD-PARTY BENEFICIARY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  20.

  	
  SURVIVABILITY

  	
   

  

 

 

This Administration Agreement, dated as of May 1, 2004, among
Harley-Davidson Motorcycle Trust 2004-2 (the
“Issuer”), Harley-Davidson Credit Corp. (together with its
successors and assigns “Harley-Davidson
Credit”) in its capacity as administrator, the “Administrator”), Harley-Davidson Customer
Funding Corp. (the “Trust Depositor”)
and BNY Midwest Trust Company, not in its individual capacity but solely as
Indenture Trustee (together with its successors and assigns, the “Indenture Trustee”).

 

W
I T N E S S E T H:

 

WHEREAS, the Issuer is issuing 2.18% Harley-Davidson Motorcycle
Contract Backed Notes, Class A-1 Notes, 3.56% Harley-Davidson Motorcycle
Contract Backed Notes, Class A-2 Notes and 2.96% Harley-Davidson Motorcycle
Contract Backed Notes, Class B Notes (collectively, the “Notes”) pursuant to the Indenture, dated
as of the date hereof (the “Indenture”),
between the Issuer and the Indenture Trustee (capitalized terms used herein
that are not otherwise defined shall have the meanings ascribed thereto in the
Indenture);

 

WHEREAS, the Issuer has entered into certain agreements in connection
with the issuance of the Notes including (i) a Sale and Servicing Agreement,
dated as of the date hereof (the “Sale and
Servicing Agreement”), among the Issuer, the Indenture Trustee, the
Trust Depositor and Harley-Davidson Credit, as servicer (in such capacity, the “Servicer”), and (ii) the Indenture
(collectively referred to hereinafter as the “Transaction
Documents”);

 

WHEREAS, pursuant to the Transaction Documents, the Issuer and the
Owner Trustee are required to perform certain duties in connection with (i) the
Notes and the collateral therefor pledged pursuant to the Indenture (the “Collateral”) and (ii) the beneficial
ownership interest in the Issuer (the registered holder of such interest being
referred to herein as the "Owner");

 

WHEREAS, the Issuer and the Owner Trustee desire to have the
Administrator perform certain of the duties of the Issuer and the Owner Trustee
referred to in the preceding clause and to provide such additional services
consistent with the terms of this Agreement and the Transaction Documents as
the Issuer and the Owner Trustee may from time to time request; and

 

WHEREAS, the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer and the
Owner Trustee on the terms set forth herein;

 

NOW, THEREAFTER, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:

 

2

 

Section 1.              Duties of the Administrator.

 

(a)           Duties with respect to the Indenture.

 

(i)            The Administrator agrees to perform
all its duties as Administrator and the duties of the Issuer and the Owner
Trustee under the Transaction Documents. 
In addition, the Administrator shall consult with the Owner Trustee
regarding the duties of the Issuer or the Owner Trustee under the Indenture.  The Administrator shall monitor the
performance of the Issuer and shall advise the Owner Trustee when action is
necessary to comply with the respective duties of the Issuer and the Owner
Trustee under the Indenture.  The
Administrator shall prepare for execution by the Issuer or shall cause the
preparation by other appropriate persons of, all such documents, reports,
filings, instruments, certificates and opinions that it shall be the duty of
the Issuer or the Owner Trustee to prepare, file or deliver pursuant to the
Indenture.  In furtherance of the foregoing,
the Administrator shall take all appropriate action that the Issuer or the
Owner Trustee is required to take pursuant to the Indenture including, without
limitation, such of the foregoing as are required with respect to the following
matters under the Indenture (references are to Sections of the Indenture):

 

(A)          the duty to cause the Note Register to
be kept and to give the Indenture Trustee notice of any appointment of a new
Note Registrar and the location, or change in location, of the Note Register
(Section 2.04);

 

(B)           the notification of Noteholders of
the final principal payment on their Notes (Section 2.07(b));

 

(C)           the fixing or causing to be fixed of
any special record date and the notification of the Indenture Trustee and
Noteholders with respect to special payment dates, if any (Section 2.07(c));

 

(D)          the preparation of or obtaining of the
documents and instruments required for execution and authentication of the
Notes and delivery of the same to the Indenture Trustee (Section 2.02);

 

(E)           the preparation, obtaining or filing
of the instruments, opinions and certificates and other documents required for
the release of Collateral (Section 2.12);

 

(F)           the maintenance of an office in the
City of Wilmington, Delaware, for registration of transfer or exchange of Notes
(Section 3.02);

 

(G)           the duty to cause newly appointed
Paying Agents, if any, to deliver to the Indenture Trustee the instrument
specified in the Indenture regarding funds held in trust (Section 3.03);

 

3

 

(H)          the direction to the Indenture Trustee
to deposit monies with Paying Agents, if any, other than the Indenture Trustee
(Section 3.03);

 

(I)            the obtaining and preservation of
the Issuer’s qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes, the Collateral and each other
instrument and agreement included in the Collateral (Section 3.04);

 

(J)            the preparation of all supplements
and amendments to the Indenture and all financing statements, continuation
statements, instruments of further assurance and other instruments and the
taking of such other action as is necessary or advisable to protect the
Collateral other than as prepared by the Servicer (Section 3.05);

 

(K)          the delivery of the Opinion of Counsel
on the Closing Date and certain other statements as to compliance with the
Indenture (Sections 3.06 and 3.09);

 

(L)           the identification to the Indenture
Trustee in an Officer’s Certificate of a Person with whom the Issuer has
contracted to perform its duties under the Indenture (Section 3.07(b));

 

(M)         the notification of the Indenture
Trustee and each Rating Agency of an Event of Termination under the Sale and
Servicing Agreement;

 

(N)          the duty to cause the Servicer to
comply with Article Five and Article Nine of the Sale and Servicing Agreement
(Section 3.14);

 

(O)          the preparation and obtaining of
documents and instruments required for the release of the Issuer from its obligations
under the Indenture (Section 3.10(b) and Section 3.11(b));

 

(P)           the delivery of written notice to the
Indenture Trustee and each Rating Agency of each Event of Default under the
Indenture and each Event of Termination by the Servicer under the Sale and
Servicing Agreement (Section 3.18);

 

(Q)          the monitoring of the Issuer’s
obligations as to the satisfaction and discharge of the Indenture and the
preparation of an Officer’s Certificate and the obtaining of the Opinion of
Counsel and the Independent Certificate relating thereto (Section 4.01);

 

(R)           the compliance with any written
directive of the Indenture Trustee with respect to the sale of the Collateral
in a commercially reasonable manner if an Event of Default shall have occurred
and be continuing (Section 5.04);

 

4

 

(S)           the preparation and delivery of
notice to Noteholders of the removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee (Section 6.08);

 

(T)           the preparation of any written
instruments required to confirm more fully the authority of any co-trustee or
separate trustee and any written instruments necessary in connection with the
resignation or removal of the Indenture Trustee or any co-trustee or separate trustee
(Sections 6.08 and 6.10);

 

(U)          the furnishing of the Indenture
Trustee with the names and addresses of Noteholders during any period when the
Indenture Trustee is not the Note Registrar (Section 7.01);

 

(V)           the opening of one or more accounts
in the Indenture Trustee’s name, the preparation and delivery of Issuer Orders,
Officer’s Certificates and Opinions of Counsel and all other actions necessary
with respect to investment and reinvestment of funds in the Trust Accounts
(Sections 8.02 and 8.03);

 

(W)         the preparation of an Issuer Request
and Officer’s Certificate and the obtaining of an Opinion of Counsel and
Independent Certificates, if necessary, for the release of the Collateral
(Sections 8.04 and 8.05);

 

(X)          the preparation of Issuer Orders and
the obtaining of Opinions of Counsel with respect to the execution of
supplemental indentures and the mailing to the Noteholders of notices with
respect to such supplemental indentures (Sections 9.01, 9.02 and 9.03);

 

(Y)           the execution and delivery of new Notes
conforming to any supplemental indenture (Section 9.06);

 

(Z)           the duty to notify Noteholders of
redemption of the Notes or to cause the Indenture Trustee to provide such
notification (Section 10.02);

 

(AA)       the preparation and delivery of all
Officer’s Certificates, Opinions of Counsel and Independent Certificates with
respect to any requests by the Issuer to the Indenture Trustee to take any
action under the Indenture (Section 11.01(a));

 

(BB)        the preparation and delivery of
Officer’s Certificates and the obtaining of Independent Certificates, if
necessary, for the release of property from the lien of the Indenture (Section
11.01(b));

 

(CC)        the notification of the Rating Agencies,
upon the failure of the Issuer, the Owner Trustee or the Indenture Trustee to
provide notification;

 

5

 

(DD)       the preparation and delivery to
Noteholders and the Indenture Trustee of any agreements with respect to
alternate payment and notice provisions (Section 11.06);

 

(EE)         the recording of the Indenture, if
applicable (Section 11.14); and

 

(FF)         the appointment of a successor
Indenture Trustee.

 

(ii)           The Administrator will:

 

(A)          except as otherwise expressly provided
in the Indenture, pay the Indenture Trustee’s fees and reimburse the Indenture
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Indenture Trustee in accordance with any
provision of the Indenture (including the reasonable compensation, expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith;

 

(B)           indemnify the Indenture Trustee and
its agents for, and hold them harmless against, any loss, liability or expense
incurred without negligence or bad faith on their part, arising out of or in
connection with the acceptance or administration of the transactions
contemplated by the Indenture, including the reasonable costs and expenses of
defending themselves against any claim or liability in connection with the
exercise or performance of any of their powers or duties under the Indenture;
and

 

(C)           indemnify the Owner Trustee and its
agents for, and hold them harmless against, any loss, liability or expense
incurred without negligence or bad faith on their part, arising out of or in
connection with the acceptance or administration of the transactions
contemplated by the Trust Agreement, including the reasonable costs and
expenses of defending themselves against any claim or liability in connection
with the exercise or performance of any of their powers or duties under the
Trust Agreement.                

 

(b)           Additional
Duties.

 

(i)            In addition to the duties set forth
in Section 1(a)(i), the Administrator shall perform such calculations and shall
prepare or shall cause the preparation by other appropriate persons of, and
shall execute on behalf of the Issuer or the Owner Trustee, all such documents,
reports, filings, instruments, certificates and opinions that the Issuer or the
Owner Trustee are required to prepare, file or deliver pursuant to the
Transaction Documents or under Section 5.03 of the Trust Agreement, and at the
request of the Owner Trustee shall take all appropriate action that the Issuer
or the Owner Trustee are required to take pursuant to the Transaction
Documents.  In furtherance thereof, the
Owner Trustee shall, on behalf of the Issuer, execute and deliver to the
Administrator

 

6

 

and to each
successor Administrator appointed pursuant to the terms hereof, one or more
powers of attorney substantially in the form of Exhibit A hereto, appointing the Administrator the
attorney-in-fact of the Issuer for the purpose of executing on behalf of the
Owner Trustee and the Issuer all such documents, reports, filings, instruments,
certificates and opinions.  Subject to
Section 5, and in accordance with the directions of the Issuer, the
Administrator shall administer, perform or supervise the performance of such
other activities in connection with the Collateral (including the Transaction
Documents) as are not covered by any of the foregoing provisions and as are
expressly requested by the Issuer and are reasonably within the capability of
the Administrator.

 

(ii)           Notwithstanding anything in this
Agreement or the Transaction Documents to the contrary, the Administrator shall
be responsible for promptly notifying the Owner Trustee in the event that any
withholding tax is imposed on the Trust’s payments (or allocations of income)
to the Owner as contemplated in Section 5.01(c) of the Trust Agreement.  Any such notice shall specify the amount of
any withholding tax required to be withheld by the Owner Trustee pursuant to
such provision.

 

(iii)          Notwithstanding anything in this
Agreement or the Transaction Documents to the contrary, the Administrator shall
be responsible for performance of the duties of the Owner Trustee set forth in
Section 5.03(a), (b), (c) and (d), the penultimate sentence of Section 5.03 and
Section 5.04(a) of the Trust Agreement with respect to, among other things,
accounting and reports to the Owner; provided,
however, that the Owner Trustee shall retain responsibility for the
distribution of information forms necessary to enable the Owner to prepare its
federal and state income tax returns.

 

(iv)          The Administrator shall satisfy its
obligations with respect to clauses (ii) and (iii) above by retaining, at the
expense of the Trust payable by the Administrator, a firm of independent public
accountants (the “Accountants”)
acceptable to the Owner Trustee, which shall perform the obligations of the
Administrator thereunder.

 

(v)           The Administrator shall perform the
duties of the Administrator specified in Section 10.02 of the Trust Agreement
required to be performed in connection with the resignation or removal of the
Owner Trustee, and any other duties expressly required to be performed by the
Administrator under the Trust Agreement.

 

(vi)          In carrying out the foregoing duties
or any of its other obligations under this Agreement, the Administrator may
enter into transactions or otherwise deal with any of its Affiliates; provided, however, that the terms of any
such transactions or dealings shall be in accordance with any directions
received from the Issuer and shall be, in the Administrator’s opinion, no less
favorable to the Issuer than would be available from unaffiliated parties.

 

7

 

(c)           Non-Ministerial
Matters.

 

(i)            With respect to matters that in the
reasonable judgment of the Administrator are non-ministerial, the Administrator
shall not take any action unless within a reasonable time before the taking of
such action, the Administrator shall have notified the Owner Trustee of the
proposed action and the Owner Trustee shall not have withheld consent or
provided an alternative direction.  For
the purpose of the preceding sentence, “non-ministerial
matters” shall include, without limitation:

 

(A)          the amendment of or any supplement to
the Indenture;

 

(B)           the initiation of any claim or
lawsuit by the Issuer and the compromise of any action, claim or lawsuit
brought by or against the Issuer (other than in connection with the collection
of the Contracts);

 

(C)           the amendment, change or modification
of any other Transaction Documents;

 

(D)          the appointment of successor Note
Registrars, successor Paying Agents and successor Indenture Trustees pursuant
to the Indenture or the appointment of successor Administrators or a successor
Servicer, or the consent to the assignment by the Note Registrar, Paying Agent
or Indenture Trustee of its obligations under the Indenture; and

 

(E)           the removal of the Indenture Trustee.

 

(ii)           Notwithstanding anything to the
contrary in this Agreement, the Administrator shall not be obligated to, and
shall not, (A) make any payments to the Noteholders under the Transaction
Documents, (B) sell the Collateral pursuant to clause (iv) of Section 5.04 of
the Indenture, (C) take any other action that the Issuer directs the
Administrator not to take on its behalf or (D) take any other action which may
be construed as having the effect of varying the investment of the Holders.

 

Section 2.              Records.   The Administrator shall maintain appropriate books of account
and records relating to services performed hereunder, which books of account
and records shall be accessible for inspection by the Issuer and the Owner
Trustee at any time during normal business hours.

 

Section 3.              Compensation.  As compensation for the performance of the
Administrator’s obligations under this Agreement and as reimbursement for its
expenses related thereto, the Administrator shall be entitled to a monthly fee
which shall be solely an obligation of the Trust Depositor and shall be in an
amount as shall be agreeable to the Trust Depositor and the Administrator.

 

8

 

Section 4.              Additional Information to be
Furnished to the Issuer.  The Administrator shall furnish to the Issuer from time to time
such additional information regarding the Collateral as the Issuer shall
reasonably request.

 

Section 5.              Independence of the Administrator.  For all purposes of this Agreement, the
Administrator shall be an independent contractor and shall not be subject to
the supervision of the Issuer or the Owner Trustee with respect to the manner in
which it accomplishes the performance of its obligations hereunder.  Unless expressly authorized by the Issuer,
the Administrator shall have no authority to act for or represent the Issuer or
the Owner Trustee in any way and shall not otherwise be deemed an agent of the
Issuer or the Owner Trustee.

 

Section 6.              No Joint Venture.  Nothing contained in this Agreement (i)
shall constitute the Administrator and either of the Issuer or the Owner
Trustee as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.

 

Section 7.              Other Activities of Administrator.  Nothing herein shall prevent the
Administrator or its Affiliates from engaging in other business or, in its sole
discretion, from acting in a similar capacity as an administrator for any other
Person or entity even though such person or entity may engage in business
activities similar to those of the Issuer, the Owner Trustee or the Indenture
Trustee.

 

Section 8.              Term of Agreement; Resignation and
Removal of Administrator.  This Agreement shall continue in force until
the termination of the Issuer, upon which event this Agreement shall
automatically terminate.

 

(a)           Subject to Section 8(d) and Section
8(e), the Administrator may resign its duties hereunder by providing the Issuer
with at least 60 days’ prior written notice.

 

(b)           Subject to Section 8(d) and Section
8(e), the Issuer may remove the Administrator without cause by providing the
Administrator with at least 60 days’ prior written notice.

 

(c)           Subject to Section 8(d) and Section
8(e), at the sole option of the Issuer, the Administrator may be removed
immediately upon written notice of termination from the Issuer to the
Administrator if any of the following events shall occur:

 

(i)            the Administrator shall default in
the performance of any of its duties under this Agreement and, after notice of
such default, shall not cure such default within ten days (or, if

 

9

 

such default
cannot be cured in such time, shall not give within ten days such assurance of
cure as shall be reasonably satisfactory to the Issuer);

 

(ii)           a court having jurisdiction in the
premises shall enter a decree or order for relief, and such decree or order
shall not have been vacated within 60 days, in respect of the Administrator in
any involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect or appoint a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official for the
Administrator or any substantial part of its property or order the winding-up
or liquidation of its affairs; or

 

(iii)          the Administrator shall commence a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, shall consent to the entry of an order for relief
in an involuntary case under any such law, or shall consent to the appointment
of a receiver, liquidator, assignee, trustee, custodian, sequestrator or
similar official for the Administrator or any substantial part of its property,
shall consent to the taking of possession by any such official of any
substantial part of its property, shall make any general assignment for the
benefit of creditors or shall fail generally to pay its debts as they become
due.

 

The Administrator
agrees that if any of the events specified in clauses (ii) or (iii) above shall
occur, it shall give written notice thereof to the Issuer and the Indenture
Trustee within seven days after the occurrence of such event.

 

(d)           No resignation or removal of the
Administrator pursuant to this Section shall be effective until (i) a successor
Administrator shall have been appointed by the Issuer and (ii) such successor
Administrator shall have agreed in writing to be bound by the terms of this
Agreement in the same manner as the Administrator is bound hereunder.

 

(e)           The appointment of any successor
Administrator shall be effective only after the satisfaction of the Rating
Agency Condition with respect to the proposed appointment.

 

(f)            Subject to Section 8(d) and 8(e),
the Administrator acknowledges that upon the appointment of a Successor
Servicer pursuant to the Sale and Servicing Agreement, the Administrator shall
immediately resign and such Successor Servicer shall automatically become the
Administrator under this Agreement.

 

Section 9.              Action upon Termination, Resignation
or Removal.  Promptly
upon the effective date of termination of this Agreement pursuant to Section 8
or the resignation or removal of the Administrator pursuant to Section 8(a),
(b) or (c) respectively, the Administrator shall be entitled to be paid all
fees and reimbursable expenses accruing to it to the date of such termination,
resignation or removal.  The
Administrator shall forthwith upon such termination pursuant to Section 8
deliver to the Issuer all property and documents of or relating to the

 

10

 

Collateral
then in the custody of the Administrator. 
In the event of the resignation or removal of the Administrator pursuant
to Section (a), (b) or (c), respectively, the Administrator shall cooperate
with the Issuer and take all reasonable steps requested to assist the Issuer in
making an orderly transfer of the duties of the Administrator.

 

Section 10.            Notices.  All notices, demands, certificates, requests and communications
hereunder (“notices”) shall be in writing and shall be effective (a) upon
receipt when sent through the U.S. mails, registered or certified mail, return
receipt requested, postage prepaid, with such receipt to be effective the date
of delivery indicated on the return receipt, or (b) one Business Day after
delivery to an overnight courier, or (c) on the date personally delivered to an
Authorized Officer of the party to which sent, or (d) on the date transmitted
by legible telecopier transmission with a confirmation of receipt, in all cases
addressed to the recipient 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.

 

Section 11.            Amendments.  This Agreement may be amended from time to
time by a written amendment duly executed and delivered by the parties hereto,
with the written consent of the Owner Trustee but without the consent of the
Noteholders, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying
in any manner the rights of the Noteholders; provided that such amendment will
not, in the Opinion of Counsel satisfactory to the Indenture Trustee,
materially and adversely affect the interest of any Noteholder.  This Agreement may also be amended by the
parties hereto with the written consent of the Owner Trustee and 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 Noteholders; provided, however,
that no such amendment may (i) increase or reduce in any manner the amount of,
or accelerate or delay the timing of, collections of payments on the Contracts
or distributions that are required to be made for the benefit of the
Noteholders or (ii) reduce the aforesaid percentage of the holders of Notes
which are required to consent to any such amendment, without the consent of the
holders of all outstanding Notes. 
Notwithstanding the foregoing, the Administrator may not amend this
Agreement without the permission of the Trust Depositor, which permission shall
not be unreasonably withheld.

 

Section 12.            Successors and Assigns.  This Agreement may not be
assigned by the Administrator unless such assignment is previously consented to
in writing by the Issuer, the Indenture Trustee and the Owner Trustee and
subject to the satisfaction of the Rating Agency Condition in respect
thereof.  An assignment with such
consent and satisfaction, if accepted by the assignee, shall bind the assignee
hereunder in the same manner as the Administrator is bound hereunder.  Notwithstanding the foregoing, this
Agreement may be assigned by the

 

11

 

Administrator
without the consent of the Issuer or the Owner Trustee to a corporation or
other organization that is a successor (by merger, consolidation or purchase of
assets) to the Administrator; provided that such successor organization
executes and delivers to the Issuer, the Owner Trustee and the Indenture
Trustee an agreement, in form and substance reasonably satisfactory to the
Owner Trustee and the Indenture Trustee, in which such corporation or other
organization agrees to be bound hereunder by the terms of said assignment in
the same manner as the Administrator is bound hereunder.  Subject to the foregoing, this Agreement
shall bind any successors or assigns of the parties hereto.

 

Section 13.            Governing Law. 
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF ILLINOIS, 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 14.            Headings.  The section and subsection headings hereof
have been inserted for convenience of reference only and shall not be construed
to affect the meaning, construction or effect of this Agreement.

 

Section 15.            Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same agreement.

 

Section 16.            Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall 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 17.            Not Applicable to Harley-Davidson
Credit in Other Capacities.  Nothing in this Agreement shall affect any
obligation Harley-Davidson Credit may have in any other capacity.

 

Section 18.            Limitation of Liability of Owner
Trustee and Indenture Trustee.

 

(a)           Notwithstanding anything contained
herein to the contrary, this instrument has been countersigned by Wilmington
Trust Company not in its individual capacity but solely in its capacity as
Owner Trustee of the Issuer and in no event shall Wilmington Trust Company in
its individual capacity or any beneficial owner of the Issuer have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder, as to all of which recourse shall be had
solely to the assets of the Issuer.  For
all purposes of this Agreement, in the performance of any duties or obligations
of the Issuer hereunder, the Owner

 

12

 

Trustee shall
be subject to, and entitled to the benefits of, the terms and provisions of
Articles Six, Seven and Eight of the Trust Agreement.

 

(b)           Notwithstanding anything contained
herein to the contrary, this Agreement has been countersigned by BNY Midwest
Trust Company not in its individual capacity but solely as Indenture Trustee
and in no event shall BNY Midwest Trust Company have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer.

 

Section 19.            Third-party Beneficiary.  The Owner Trustee is a third-party
beneficiary to this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party hereto.

 

Section 20.            Survivability. 
The obligations of the Administrator described in Section 1(a)(ii)
hereof shall survive termination of this Agreement.

 

[signature
page follows]

 

13

 

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.

 

	
   

  	
  HARLEY-DAVIDSON MOTORCYCLE TRUST

  
	
   

  	
  2004-2

  
	
   

  	
   

  
	
   

  	
  By:
  Wilmington Trust Company, not in its

  
	
   

  	
   

  	
  individual capacity but solely as Owner

  
	
   

  	
   

  	
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Janel R. Havrilla

  	
   

  
	
   

  	
   

  	
  Printed
  Name: Janel R. Havrilla

  
	
   

  	
   

  	
  Title:
  Financial Services Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON CUSTOMER FUNDING

  
	
   

  	
  CORP., as Trust Depositor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
  Printed
  Name:  Perry A. Glassgow

  
	
   

  	
   

  	
  Title:  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  BNY MIDWEST TRUST COMPANY, not in

  
	
   

  	
  its individual capacity but solely as
  Indenture

  
	
   

  	
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Cynthia Davis

  	
   

  
	
   

  	
   

  	
  Printed
  Name: Cynthia Davis

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON CREDIT CORP.,

  
	
   

  	
  as Administrator

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
  Printed
  Name:  Perry A. Glassgow

  
	
   

  	
   

  	
  Title:
  Treasurer

  

 

Signature Page to Administration Agreement

 

 

LIMITED
POWER OF ATTORNEY

 

	
  State of Illinois

  	
  )

  	
   

  
	
   

  	
  )

  	
  SS.

  
	
  County of Cook

  	
  )

  	
   

  

 

KNOW ALL
PERSONS BY THESE PRESENTS, that Wilmington Trust Company, a Delaware banking
corporation (the “Owner Trustee”),
whose principal executive office is located at Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware Attention:  Trust Administration, by and through its
duly elected and authorized officer,
                                             ,  a
                                             ,  on behalf of itself and of Harley-Davidson
Motorcycle Trust 2004-2 (the “Trust”)
as Issuer under the Administration Agreement, dated as of May 1, 2004 (the “Administration Agreement”), among the
Trust, Harley-Davidson Customer Funding Corp., BNY Midwest Trust Company, as
Indenture Trustee, and Harley-Davidson Credit Corp., as Administrator, does
hereby nominate, constitute and appoint Harley-Davidson Credit Corp., a Nevada
corporation, each of its officers from time to time and each of its employees
authorized by it from time to time to act hereunder, jointly and each of them
severally, together or acting alone, its true and lawful attorney-in-fact, for
the Owner Trustee and the Issuer in their name, place and stead, in the sole
discretion of such attorney-in-fact, to perform such calculations and prepare
or cause the preparation by other appropriate persons of, and to execute on behalf
of the Issuer or the Owner Trustee, all such documents, reports, filings,
instruments, certificates and opinions that the Issuer or the Owner Trustee is
required to prepare, file or deliver pursuant to the Administration Agreement,
and to take any and all other action, as such attorney-in-fact may deem
necessary or desirable in accordance with the directions of the Owner Trustee
and in connection with its duties as Administrator or successor Administrator
under the Administration Agreement. 
Capitalized terms used herein that are not otherwise defined shall have
the meanings ascribed thereto in the Administration Agreement.

 

The Owner
Trustee hereby ratifies and confirms the execution, delivery and performance
(whether before or after the date hereof) of the above-mentioned documents,
reports, filings, instruments, certificates and opinions, by the
attorney-in-fact and all that the attorney-in-fact shall lawfully do or cause
to be done by virtue hereof.

 

 

The Owner
Trustee hereby agrees that no person or other entity dealing with the
attorney-in-fact shall be bound to inquire into such attorney-in-fact’s power
and authority hereunder and any such person or entity shall be fully protected
in relying on such power of authority.

 

This Limited
Power of Attorney may not be assigned without the prior written consent of the
Owner Trustee.  It is effective
immediately and will continue until it is revoked.

 

This Limited
Power of Attorney shall be governed and construed in accordance with the laws
of the State of Illinois without reference to principles of conflicts of law.

 

Executed as of
this       day of May, 2004.

 

	
   

  	
  Wilmington Trust Company, not in its
  individual

  
	
   

  	
  capacity but solely as Owner Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Printed
  Name: 

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

 

CERTIFICATE
OF ACKNOWLEDGMENT OF

NOTARY
PUBLIC

 

	
  State of Delaware 

  	
  )

  	
   

  
	
   

  	
  )

  	
  SS.

  
	
  County of New Castle

  	
  )

  	
   

  

 

	
  On May
          , 2004 before me,

  	
   

  	
   

  
	
   

  	
  [Insert name and title of notary]

  	
   

  
	
   

  
	
  personally
  appeared
                                          .

  	
   

  
				

 

o            personally known to me, or

 

o            proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are

 

subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ties), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which person(s) acted,
executed the instrument.

 

	
   

  	
   

  	
  WITNESS my hand and official seal.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
  [SEAL]EXHIBIT 10.1

 

AMENDED
AND RESTATED EMPLOYMENT AGREEMENT DATED

AS OF JANUARY 22, 2004 BETWEEN THE COMPANY AND NEAL GOLDBERG

 

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

AMENDED
AND RESTATED EMPLOYMENT AGREEMENT, dated as of January 22, 2004 between Neal
Goldberg (“Executive”) and THE CHILDREN’S PLACE RETAIL STORES, INC., a Delaware
corporation (“Employer”).

 

WHEREAS,
Employer and Executive entered into a certain Employment Agreement dated
January 22, 2004 (“Employment Agreement”); and 

 

WHEREAS,
this Amended and Restated Employment Agreement replaces and supersedes the
Employment Agreement; 

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the parties agree as follows:

 

SECTION 1

EMPLOYMENT OF EXECUTIVE

 

1.01.        Employer hereby agrees to employ Executive and Executive
hereby agrees to be and remain in the employ of Employer upon the terms and
conditions hereinafter set forth.

 

SECTION 2

EMPLOYMENT PERIOD

 

2.01.        The terms of Executive’s employment under this Agreement (the
“Employment Period”) shall commence on January 22, 2004 (the “Commencement
Date”) and shall continue unless terminated in accordance with the provisions
of Section 5.

 

SECTION 3

DUTIES

 

3.01.        Generally. 
During the Employment Period, Executive (i) shall be employed as
President of Employer, (ii) shall serve as a member of the Executive Management
Committee of Employer, (iii) shall devote all of his business time and
attention to the business and affairs of Employer and other enterprises
controlled by, or under common control with, Employer (collectively,
“Company”), and (iv) shall use his best efforts, skills and abilities in the
diligent and faithful performance of his duties and responsibilities hereunder.  Notwithstanding the

 

 

1

 

foregoing, Executive shall
have the right to (i) engage in personal investment activities for himself and
his family and (ii) engage in charitable and civic activities, provided the
outside activities set forth in (i) and (ii) hereof do not interfere with
Executive’s performance of his duties and responsibilities hereunder.  In no event shall Executive serve as an
officer or director of any other business corporation or as a general partner
of any partnership except with the prior written approval of the Chief
Executive Officer of Employer.  

 

3.02.        Reporting. 
Executive shall report directly to the Chief Executive Officer of
Employer.  During the Employment Period,
Executive will be subject to all of the written policies, rules and regulations
of which Executive is given notice applicable to senior executives of Employer
and will comply with all directions and instructions of the Chairman of the
Board and the Chief Executive Officer.

 

SECTION 4

COMPENSATION

 

4.01.        Compensation, Generally.  For all services rendered and required to be rendered by
Executive under this Agreement, Employer shall pay to Executive during and with
respect to the Employment Period, and Executive agrees to accept (in full payment),
Base Salary and Performance Bonus, all as more fully described on Exhibit A
(collectively, the “Compensation”).

 

4.02         Other Benefits. 
During the Employment Period, Executive shall be eligible to receive
such benefits that the Employer generally makes available to Employer’s senior
executives from time to time (other than those benefits provided under or
pursuant to separately negotiated individual employment agreements or
arrangements).  Executive’s Base Salary
shall constitute the compensation on the basis of which the amount of
Executive’s benefits under any such plan or program shall be fixed and
determined.

 

4.03         Expense Reimbursement.  Employer shall reimburse Executive for all business expenses
reasonably incurred by him in the performance of his duties under this
Agreement upon his presentation, not less frequently than monthly, of signed,
itemized accounts of such expenditures all in accordance with Employer’s
procedures and policies as adopted and in effect from time to time and
applicable to its senior executives.

 

2

 

4.04         Vacations. 
Executive shall be entitled to three weeks vacation with additional
vacation as approved by the Chief Executive Officer, each twelve-month period
worked, which vacation will accrue ratably over the course of such twelve-month
period, which shall be taken at such time or times as may be approved by the
Chief Executive Officer and shall not unreasonably interfere with Executive’s
performance of his duties under this Agreement. 

 

4.05         Options.

 

(i)            On the Commencement Date, Executive shall be
granted stock options to purchase 250,000 shares of Common Stock of the Company
at an exercise price equal to the Fair Market Value (as that term is defined in
the Company’s current stock option plan) of the Company’s common stock as of
the close of business on the Commencement Date (the “Initial Stock Option”) and
pursuant to the vesting schedule set forth in this Section 4.05(i).  Subject to Section 6.02, Executive shall
vest in the Initial Stock Option granted herein in accordance with the
following schedule: 50,000 shares on January 31, 2005 and 50,000 shares on each
of the next four anniversaries thereof. 

 

(ii)           On January 3, 2005, Executive shall be granted stock options to purchase
50,000 shares of Common Stock of the Company at an exercise price equal to the
Fair Market Value (as that term is defined in the Company’s current stock
option plan) of the Company’s common stock as of January 3, 2005 (the
“Additional Stock Option”) and pursuant to the vesting schedule set forth in
this Section 4.05(ii).  Subject to
Section 6.02, Executive shall vest in the Additional Stock Option granted
herein in accordance with the following schedule: 10,000 shares on January 31,
2005 and 10,000 shares on each of the next four anniversaries thereof.  

 

SECTION 5

TERMINATION OF EMPLOYMENT PERIOD

 

5.01.        Termination Without Cause.  At any time during the Employment Period, by notice to the other,
Employer or Executive may terminate Executive’s employment under this Agreement
without cause. Such notice shall specify the effective date of termination,
which in the case of termination by Executive, shall not be less than 30 days
after the date of such notice.

 

3

 

5.02.        By Employer: Cause. 
At any time during the Employment Period, by notice to Executive,
Employer may terminate Executive’s employment under this Agreement “for Cause,”
effective immediately. Such notice shall specify the cause for termination. For
the purposes of this Section 5.02, “for Cause” means:

 

(i)            a breach by Executive of any of the material
provisions of this Agreement that Executive fails to remedy or cease within ten
(10) business days after notice thereof to Executive; or

 

(ii)           any conduct, action or behavior by Executive that has or may reasonably
be expected to have a material adverse effect on the reputation or interests of
the Company or Executive; or

 

(iii)          the commission by Executive of an act involving moral turpitude,
dishonesty or fraud, or the engagement in any other willful or intentional
misconduct, whether or not in connection with Executive’s employment hereunder;
or

 

(iv)          Executive shall have committed an act constituting a felony under the
laws of the United States or any state or political subdivision thereof.

 

5.03.        Disability.  If
during the Employment Period, Executive becomes incapable of fulfilling his
obligations hereunder because of injury or physical or mental illness, and such
incapacity exists for a period of at least 120 consecutive days or for shorter
periods aggregating at least 180 days during any period of twelve consecutive
months (“Disability”), Employer may, upon at least fifteen days’ prior written
notice to Executive, but in no event shall the termination date be prior to
January 3, 2005, terminate Executive’s employment under this Agreement.  The Disability of Executive shall be
determined by an independent physician acceptable to both Employer and
Executive or his representative.

 

SECTION 6

TERMINATION COMPENSATION

 

6.01.        Entitlement to Payment Upon Termination Without Cause.  Subject to the provisions of Sections 6.02
and 9.08, if Executive’s employment hereunder is terminated by Employer
pursuant to Section 5.01, Executive terminates his employment with Employer
pursuant to Section 5.01 for “Good Reason,” or Executive’s employment is
terminated for any reason following a Change of Control as defined in Section
8, Executive shall be entitled to continuation of his Base Salary for a period
of one (1) year following such termination, subject to execution of a

 

4

 

separation agreement and
general release (the terms of which shall be consistent with this Agreement) in
a form reasonably satisfactory to Employer. 
The amount to be paid pursuant to this Section 6.01 is referred to as
the “Termination Compensation” and the period for which such compensation is to
be paid is referred to as the “Relevant Period”.  For purposes of this Section 6.01, “Good Reason” shall mean: (1)
a relocation of Employer’s headquarters outside the New York City metropolitan
area; (2) a demotion of Executive’s position, a material, adverse change in
Executive’s duties and responsibilities, or an adverse change in Executive’s
reporting as set forth in Paragraph 3.02; (3) Employer’s failure to pay any
amount or benefits when due, which failure is not cured within ten (10)
business days after notice to Employer; (4) Employer’s material breach of this
Agreement which breach is not cured within ten (10) business days after notice
to Employer; or (5) Ezra Dabah no longer holds the position of Chief Executive
Officer of Employer.  Such Termination
Compensation shall be paid to Executive in equal consecutive monthly
installments during the Relevant Period, with the first such installment paid
on the first day of the month next following the effective date of termination
of Executive’s employment hereunder.  

 

6.02.        Stock Options Upon Termination.  In the event Executive’s employment
hereunder is terminated by Employer pursuant to Section 5.01 or Executive
terminates his employment with Employer pursuant to Section 5.01 for “Good
Reason” prior to January 3, 2005, (i) 60,000 stock options scheduled to vest
pursuant to Section 4.05(i), which number of shares shall be prorated based on
the date of termination of Executive’s employment, shall vest immediately, and
(ii) Executive shall have a period of three months during which any vested
options held by Executive may be exercised (at the conclusion of which period
any unexercised options shall permanently expire).  In the event Executive’s employment hereunder is terminated by
Employer pursuant to Section 5.01 or Executive terminates his employment with
Employer pursuant to Section 5.01 for “Good Reason” on or after January 3, 2005
(i) the stock options scheduled to vest pursuant to Section 4.05(i) and
4.05(ii) on the next anniversary date following the date of termination of
Executive’s employment, which number of shares shall be prorated based on the date
of termination of Executive’s employment, shall immediately vest, and (ii)
Executive shall have a period of three months during which any vested options
held by Executive may be exercised (at the conclusion of which period any
unexercised options shall permanently expire). 
In the event that Executive’s employment is terminated by Employer
pursuant to Section 5.02 or Executive voluntarily terminates his employment for
any reason other than “Good

 

5

 

Reason”, (i) all stock
options previously granted to Executive that have not yet vested shall be
forfeited, and (ii) Executive shall have a period of three months during which
any vested options held by Executive may be exercised (at the conclusion of
which period any unexercised options shall permanently expire).  In the event that Executive’s employment is
terminated by Employer or Executive for any reason following a Change in
Control as defined in Section 8, (i) all stock options previously granted to
Executive that have not yet vested shall vest immediately; and (ii) Executive
shall have a period of three months during which any vested options held by
Executive may be exercised (at the conclusion of which period any unexercised
options shall permanently expire).   In
the event that Executive’s employment is terminated by Employer by reason of
Disability pursuant to Section 5.03, or if Executive dies, (i) all stock
options previously granted to Executive that have not yet vested shall vest
immediately, and (ii) Executive (or his estate or personal representative)
shall have a period of twelve months during which any vested options held by
Executive may be exercised (at the conclusion of which period any unexercised
options shall permanently expire).

 

6.03.        No Other Termination Compensation. Executive shall not
be entitled to any benefit or compensation following termination of his
employment hereunder, except as set forth in this Section 6 and Section 8.01,
if applicable.

 

SECTION 7

LOCATION OF EXECUTIVE’S ACTIVITIES

 

7.01.        Principal Place of Business.  Executive’s principal place of business in the performance of his
duties and obligations under this Agreement shall be in the New York
metropolitan area, which includes Secaucus, New Jersey. For so long as Employer’s
headquarters are located in the New York City metropolitan area, Executive’s
principal place of business shall be located at such headquarters.

 

7.02.        Travel. 
Notwithstanding the provisions of Section 7.01, Executive will engage in
such travel and spend time in other places as may be necessary or appropriate
in furtherance of his duties hereunder.

 

6

 

SECTION 8

CHANGE IN CONTROL

 

8.01.        Effect of Change in Control.  If a Change in Control (as hereinafter defined) shall occur and
if Executive is terminated by Employer or Executive for any reason, all
outstanding stock options under the stock option plan shall immediately vest
and Executive shall be entitled to all the payments in Section 6.01.

 

As
used in this Agreement, “Change in Control” means the occurrence during the
Term of any of the following events:

 

(i)            The sale to any purchaser of (A) all or
substantially all of the assets of the Employer or (B) capital stock
representing more than 50% of the stock of the Employer entitled to vote
generally in the election of directors of the Employer; or

 

(ii)           The merger or consolidation of the Employer with another corporation
if, immediately after such merger or consolidation, less than a majority of the
combined voting power of the then-outstanding securities entitled to vote
generally in the election of directors of the surviving or resulting
corporation in such merger or consolidation is held, directly or indirectly, in
the aggregate by the holders immediately prior to such transaction of the
outstanding securities of the Employer; or

 

(iii)          There is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form, or report or item therein), each promulgated pursuant
to the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
disclosing that any person (as the term “person” is used in Section 13(d)(3) or
Section 14(d) (2) of the Exchange Act) has become the beneficial owner (as the
term “beneficial owner” is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of securities representing 50%
or more of the combined voting power of the voting stock of Employer; or

 

(iv)          Employer files a report or proxy statement with the Securities and
Exchange Commission pursuant to the Exchange Act disclosing in response to Form
8-K or Schedule 14A (or any successor schedule, form, or report or item
therein) that a change in control of Employer has occurred or will occur in the
future pursuant to any then existing contract or transaction. 

 

7

 

SECTION 9

EXCLUSIVITY OF SERVICES, CONFIDENTIAL

INFORMATION AND RESTRICTIVE COVENANTS

 

9.01.        Exclusivity of Services; Use of Name.  During the Employment Period and continuing
through the first anniversary of the date in which Executive ceases to be an
employee of the Company (the “Covenant Period”), Executive will not:

 

(i)            Promote, participate or engage in any
business on behalf of any Direct Competitor of the Company, whether Executive
is acting as owner, partner, stockholder, employee, broker, agent, principal,
trustee, corporate officer, director, consultant or in any other capacity
whatsoever; provided, however, that this will not prevent Executive from
holding for investment up to 1% of any class of stock or other securities
quoted or dealt in on a recognized stock exchange or on Nasdaq.  For purposes of this Section, a Direct
Competitor of the Company means (A) any division of The Gap, Inc. or any Person
under common control with The Gap, Inc. that is engaged in the retail sale of
children’s apparel, (B) any division of The Limited, Inc. or any Person under
common control with The Limited, Inc. that is engaged in the retail sale of
children’s apparel, (C) Gymboree or Kids R Us or any Person under common
control with Gymboree or Kids R Us, as the case may be, or (D) any other Person
engaged in the retail sale of children’s apparel.

 

(ii)           Directly or indirectly employ (other than on behalf of the Company),
solicit or entice away any director, officer or employee of the Company or any
of its subsidiaries; or

 

(iii)          Take any action to interfere, directly or indirectly, with the goodwill
of the Company or any of its subsidiaries, or induce or attempt to induce any
Person doing business with the Company to cease doing business with the
Company; or

 

(iv)          Use the name of the Company or its subsidiaries in the conduct of any
business activities (except in furtherance of the Company’s business) or for
Executive’s personal use without the prior written consent of the Company.

 

8

 

9.02.        Confidential and Proprietary Information; Work Product;
Warranty.

 

a.             Confidentiality.  Executive acknowledges and agrees that there
are certain trade secrets and confidential and proprietary information
(collectively, “Confidential Information”) which have been developed by the
Company and which are used by the Company in its business.  Confidential Information shall include,
without limitation:  (i) customer lists
and supplier lists; (ii) the details of the Company’s relationships with its
customers, including the financial relationship with a customer; (iii) the
Company’s marketing and development plans, business plans; and (iv) other
information proprietary to the Company’s business.  Executive shall not, at any time during or after his employment
hereunder, use or disclose such Confidential Information, except to authorized
representatives of the Company or as required in the performance of his duties
and responsibilities hereunder. 
Executive shall return all Company property, such as computers, software
and cell phones, and documents (and any copies including in machine or
human-readable form), to the Company when his employment terminates.  Executive shall not be required to keep
confidential any information, which is or becomes publicly available or is
already in his possession (unless obtained from the Company).  Further, Executive shall be free to use and
employ his general skills, know-how and expertise, and to use, disclose and
employ any generalized ideas, concepts, know-how, methods, techniques or
skills, including those gained or learned during the course of the performance
of any services hereunder, so long as he applies such information without
disclosure or use of any Confidential Information.  Executive hereby acknowledges that his employment under this
Agreement does not conflict with, or breach any existing confidentiality,
non-competition or other agreement to which Executive is a party or to which he
may be subject.

 

b.             Work
Product.  Executive agrees that all
copyrights, patents, trade secrets or other intellectual property rights
associated with any ideas, concepts, techniques, inventions, processes, or
works of authorship developed or created by him during his employment by the
Company and for a period of 6 months thereafter, that (i) relate, whether
directly or indirectly, to the Company’s actual or anticipated business,
research or development or (ii) are derived from any work performed by
Executive on the Company’s behalf, shall, to the extent possible, be considered
works made for hire within the meaning of the Copyright Act (17 U.S.C. § 101
et. seq.) (the “Work Product”).  All
Work Product shall be and remain the property of the Company.  To the extent that any such Work Product may
not, under applicable law, be considered works made for hire, Executive hereby
grants, transfers, assigns, conveys and relinquishes, and agrees to grant,
transfer, assign, convey and relinquish from time to time, on

 

9

 

an exclusive basis, all of his
right, title and interest in and to the Work Product to the Company in
perpetuity or for the longest period otherwise permitted by law.  Consistent with his recognition of the
Company’s absolute ownership of all Work Product, Executive agrees that he
shall (i) not use any Work Product for the benefit of any party other than the
Company and (ii) perform such acts and execute such documents and instruments
as the Company may now or hereafter deem reasonably necessary or desirable to
evidence the transfer of absolute ownership of all Work Product to the Company;
provided, however, if following ten (10) business days’ written notice from the
Company, Executive refuses, or is unable, due to disability, incapacity, or
death, to execute such documents relating to the Work Product, he hereby
appoints any of the Company’s officers as his attorney-in-fact to execute such
documents on his behalf.  This agency is
coupled with an interest and is irrevocable without the Company’s prior written
consent.

 

c.             Warranty.  Executive represents and warrants to the
Company that (i) there are no claims that would adversely affect his ability to
assign all right, title and interest in and to the Work Product to the Company;
(ii) the Work Product does not violate any patent, copyright or other
proprietary right of any third party; (iii) Executive has the legal right to
grant the Company the assignment of his interest in the Work Product as set
forth in this Agreement; and (iv) he has not brought and will not bring to his
employment hereunder, or use in connection with such employment, any trade
secret, confidential or proprietary information of another, or computer
software, except for software that he has a right to use for the purpose for
which it shall be used, in his employment hereunder.

 

9.03.        Injunctive Relief. 
Executive acknowledges that a breach or threatened breach of any of the
terms set forth in this Section 9 shall result in an irreparable and continuing
harm to the Company for which there shall be no adequate remedy at law.  The Company shall, without posting a bond,
be entitled to obtain injunctive and other equitable relief, in addition to any
other remedies available to the Company.

 

9.04.        Essential and Independent Agreements.  It is understood by the parties hereto that
Executive’s obligations and the restrictions and remedies set forth in this
Section 9 are essential elements of this Agreement and that but for his
agreement to comply with and/or agree to such obligations, restrictions and
remedies, the Company would not have entered into this Agreement or employed
him.  Executive’s obligations and the
restrictions and remedies set

 

 

forth in this Section 9 are
independent agreements and the existence of any claim or claims by him against
the Company under this Agreement or otherwise will not excuse his breach of any
of his obligations or affect the restrictions and remedies set forth under this
Section 9.

 

9.05.        Survival of Terms; Representations.  Obligations under this Section 9 hereof
shall remain in full force and effect notwithstanding the termination of
Executive’s employment.  Executive
acknowledges that he is sophisticated in business, and that the restrictions
and remedies set forth in this Section 9 do not create an undue hardship on him
and will not prevent him from earning a livelihood.  He further acknowledges that he has had a sufficient period of
time within which to review this Agreement, including this Section 9, with an
attorney of his choice and he has done so to the extent he desired.  Executive and the Company agree that the
restrictions and remedies contained in this Section 9 are reasonable and
necessary to protect the Company’s legitimate business interests regardless of
the reason for or circumstances giving rise to such termination and that he and
the Company intend that such restrictions and remedies shall be enforceable to
the fullest extent permissible by law. 
Executive agrees that given the scope of the Company’s business and the
sophistication of the information highway, any further geographic limitation on
such remedies and restrictions would deny the Company the protection to which
it is entitled hereunder.  If it shall
be found by a court of competent jurisdiction that any such restriction or
remedy is unenforceable but would be enforceable if some part thereof were
deleted or modified, then such restriction or remedy shall apply with such
modification as shall be necessary to make it enforceable to the fullest extent
permissible under law.

 

9.06.        Mutually Non-Disparagement.  Neither Executive nor senior executives of Employer will make or
authorize any public statement disparaging the other in its or his business
interests and affairs. Notwithstanding the foregoing, neither party shall be
(i) required to make any statement that it or he believes to be false or
inaccurate, or (ii) restricted in connection with any litigation, arbitration
or similar proceeding or with respect to its response to any legal process.

 

9.07.        Other Duties of Employee During and After Employment
Period.  Both during and after the
Employment Period, Executive shall, upon reasonable notice, furnish such
information as may be in his possession

 

10

 

to, and cooperate with, the
Company as may reasonably be requested by the Company in connection with any
litigation in which the Company is or may be a party.

 

9.08.        Breaches of Provisions.  If Executive breaches any of the provisions of this Section 9
then, and in any such event, in addition to other remedies available to
Employer, Executive shall not be entitled to any Termination Compensation,
including any Termination Compensation made to him hereunder prior to
Employer’s discovery of such breach.

 

SECTION 10

MISCELLANEOUS

 

10.01.      Notices.  Any notice, consent, or authorization required or permitted to be
given pursuant to this Agreement shall be in writing and sent to the party for
or to whom intended, at the address of such party set forth below, by certified
mail, postage paid, or at such other address as either party shall designate by
notice given to the other in the manner provided herein.

 

If
to Employer:

 

Attention:                 Steven Balasiano, Esq.

Vice President & General Counsel

The Children’s Place Retail Stores, Inc.

915 Secaucus Road

Secaucus, NJ 07094

 

With
Copies to:

 

Ezra Dabah

Chairman/Chief Executive Officer

The Children’s Place Retail Stores, Inc.

915 Secaucus Road

Secaucus, NJ 07094

 

11

 

If to Executive: 

Neal Goldberg

The Children’s Place Retail Stores, Inc.

915 Secaucus Road

Secaucus, NJ 07094

 

With
Copies to:

 

Hollis Gonerka Bart, Esq.

McGuire Woods LLP

65 E. 55th Street

New York, NY 10022

 

10.02.      Taxes.  Employer is authorized to withhold from payments made hereunder
to Executive such amounts for income tax, social security, unemployment
compensation and other judgment of Employer to comply with applicable laws and
regulations.

 

10.03.      Governing Law.  This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
applicable to agreements made and to be performed therein.

 

10.04.      Headings.  All descriptive headings in this Agreement are inserted for
convenience only and shall be disregarded in construing or applying any
provision of this Agreement.  Should any
provision of this Agreement require judicial interpretation, the court
interpreting or construing the same shall not construe the provision against
any party by reason of the rule of interpretation that a document is to be
construed more strictly against the party who prepared the same.

 

10.05.      Waiver of Breach.  The waiver by either party of a breach of
any provision of this Agreement by the other party must be in writing and shall
not operate or be construed as a waiver of any other or subsequent breach by
such other party.

 

10.06.      Assignment.  This Agreement is personal in its nature and
the parties shall not, without the consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder; provided, however, that

 

12

 

Employer may assign this
Agreement to any of its affiliates or in connection with the reorganization,
merger or sale of Employer or the sale of substantially all the assets of
Employer, and the provisions of this Agreement shall inure to the benefit of,
and be binding upon, each successor of Employer , whether by merger,
consolidation, transfer of all or substantially all of its assets, or
otherwise.

 

10.07.      Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

 

10.08.      Severability.  If any provision of this Agreement or part
thereof, is held to be unenforceable, the remainder of such provisions of this
Agreement, as the case may be, shall nevertheless remain in full force and
effect.

 

10.09.      Entire Agreement and Integration.  This Agreement contains the entire agreement
and understanding between Employer and Executive with respect to the subject
matter hereof. Such agreement supersedes any prior agreement between the
parties relating to the subject matter hereof.

 

IN WITNESS
WHEREOF, the parties
hereto have executed this Agreement as of the date first written above.

 

 

	
   

  	
  THE
  CHILDREN’S PLACE RETAIL STORES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Ezra
  Dabah

  	
   

  
	
   

  	
   

  	
  EZRA DABAH

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Neal
  Goldberg

  	
   

  
	
   

  	
   

  	
  NEAL GOLDBERG

  	
   

  

 

13

 

Exhibit A

 

COMPENSATION

 

1.             Base Salary:  At the initial rate of $625,000 per year,
payable in equal installments not less frequently than monthly during each year
of the Employment Period. Base Salary shall be subject to annual review by the
Compensation Committee.

 

2.             Performance Bonus:  Following each Bonus Period (as defined
below), Executive shall be entitled to receive a Performance Bonus based upon
the Operating Income of Employer during such Bonus Period. The Performance
Bonus for each such Period will be payable within 90 days after the end of such
period. The amount of the Performance Bonus for each Bonus Period will be equal
to a product equal to (a) Executive’s semi-annual Base Salary, times (b) 50%,
times (c) the Bonus Percentage (as hereinafter defined). The following
provisions shall apply to determinations relating to Performance Bonus.

 

“Bonus
Percentage” shall mean, for each Bonus Period, a percentage for such period
that is determined based upon Operating Income in accordance with a schedule
adopted by the Board for all senior executives prior to commencement of such
period or as soon thereafter as possible, except that the Bonus percentage
shall be not more than 200% for any Bonus Period.

 

“Bonus
Period” shall mean each of the two periods of approximately six months duration
within each fiscal year of the Employer, one beginning on the first day of the
fiscal year and ending on this Saturday on or nearest (whether following or
preceding) July 31, of the calendar year in which it commenced, and the other
beginning on the Sunday following such Saturday and ending on the last day of
such fiscal year.

 

“Operating
Income” shall mean, for each Bonus Period, the operating income of Employer for
such period as determined in accordance with generally accepted accounting
principles. The amount of Operating Income shall be determined by the
Compensation Committee, with respect to the Bonus Period ending on
approximately July 31st and January 31st of each year.

 

3.             Guaranteed Performance Bonus:  Executive shall be entitled to a minimum
Performance Bonus of $156,250 during the Bonus Period ending on July 31, 2004.

 

14

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