Document:

Exhibit

Exhibit 4.3

EXECUTION VERSION

M/I HOMES, INC. 
 
$400,000,000 4.950% Senior Notes due 2028 
Guaranteed on a Senior Basis by Certain Subsidiaries of M/I Homes, Inc.
Registration Rights Agreement
January 22, 2020

Citigroup Global Markets Inc.
J.P. Morgan Securities LLC
As Representatives of the Initial Purchasers 

c/o Citigroup Global Markets Inc. 
388 Greenwich Street 
New York, New York 10013
c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179

Ladies and Gentlemen:
M/I Homes, Inc., a corporation organized under the laws of Ohio (the “Company”), proposes to issue and sell to the Initial Purchasers named in Schedule I to the Purchase Agreement (as defined below) (collectively, the “Initial Purchasers”), for whom you (the “Representatives”) are acting as representatives, $400,000,000 principal amount of its 4.950% Senior Notes due 2028 (the “Notes”), upon the terms set forth in the Purchase Agreement dated January 7, 2020 (the “Purchase Agreement”) relating to the initial placement (the “Initial Placement”) of the Notes.  The Notes will be guaranteed on a senior basis (the “Guarantees” and, together with the Notes, the “Securities”) by certain of the Company’s subsidiaries (the “Guarantors” and, together with the Company, the “Issuers”).  To induce the Initial Purchasers to enter into the Purchase Agreement and to satisfy a condition to your obligations thereunder, the Company agrees with you for your benefit and the benefit of the holders from time to time of the Securities (including the Initial Purchasers) (each a “Holder” and, collectively, the “Holders”), as follows:
1.Definitions.  Capitalized terms used herein without definition shall have their respective meanings set forth in the Purchase Agreement.  As used in this Agreement, the following capitalized defined terms shall have the following meanings:
“Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

1

“Affiliate” shall have the meaning specified in Rule 405 under the Act and the terms “controlling” and “controlled” shall have meanings correlative thereto.
“Broker-Dealer” shall mean any broker or dealer registered as such under the Exchange Act.
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City or Columbus, Ohio.
“Closing Date” shall mean the date of the first issuance of the Securities.
“Commission” shall mean the Securities and Exchange Commission.
“Company” shall have the meaning set forth in the preamble hereto.
“Deferral Period” shall have the meaning indicated in Section 4(k)(ii) hereof.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Exchange Offer Registration Period” shall mean the one-year period following the consummation of the Registered Exchange Offer, exclusive of any period during which any stop order shall be in effect suspending the effectiveness of the Exchange Offer Registration Statement.
“Exchange Offer Registration Statement” shall mean a registration statement of the Company on an appropriate form under the Act with respect to the Registered Exchange Offer, all amendments and supplements to such registration statement, including post-effective amendments thereto, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.
“Exchanging Dealer” shall mean any Holder (which may include any Initial Purchaser) that is a Broker-Dealer and elects to exchange any Securities that it acquired for its own account as a result of market-making activities or other trading activities (but not directly from the Company or any Affiliate of the Company) for New Securities.
“Final Memorandum” shall mean the final offering memorandum, dated January 7, 2020, relating to the Securities, including any and all exhibits thereto and any information incorporated by reference therein as of such date.
“FINRA Rules” shall mean the Rulebook of the Financial Industry Regulatory Authority, Inc.
“Guarantors” shall have the meaning set forth in the preamble hereto.
“Holder” shall have the meaning set forth in the preamble hereto.

2

“Indenture” shall mean the Indenture relating to the Securities, dated as of January 22, 2020, among the Company, the Guarantors and U.S. Bank National Association, as trustee, as the same may be amended from time to time in accordance with the terms thereof.
“Initial Placement” shall have the meaning set forth in the preamble hereto.
“Initial Purchasers” shall have the meaning set forth in the preamble hereto.
“Issuers” shall have the meaning set forth in the preamble hereto.
“Losses” shall have the meaning set forth in Section 6(d) hereof.
“Majority Holders” shall mean, on any date, Holders of a majority of the aggregate principal amount of Securities registered under a Registration Statement.
“Managing Underwriters” shall mean the investment banker or investment bankers and manager or managers that administer an underwritten offering, if any, under a Registration Statement.
“New Securities” shall mean the Notes of the Company and guarantees thereof by the Guarantors, in each case, identical in all material respects to the Securities (except that the transfer restrictions shall be modified or eliminated, as appropriate), to be issued under the Indenture in connection with sales or exchanges effected pursuant to this Agreement.
“Notes” shall have the meaning set forth in the preamble hereto.
“Prospectus” shall mean the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Securities or the New Securities covered by such Registration Statement, and all amendments and supplements thereto, including any and all exhibits thereto and any information incorporated by reference therein.
“Purchase Agreement” shall have the meaning set forth in the preamble hereto.
“Registered Exchange Offer” shall mean the proposed offer of the Company to issue and deliver to the Holders of the Securities that are not prohibited by any law or policy of the Commission from participating in such offer, in exchange for the Securities, a like aggregate principal amount of the New Securities.
“Registrable Securities” shall mean (i) Securities other than those that (A) have been registered under a Registration Statement and disposed of in accordance therewith, (B) have been distributed to the public pursuant to Rule 144 under the Act or any successor rule or regulation thereto that may be adopted by the Commission; provided that such distribution is made at least two years after the date such Securities were originally issued and such Securities do not bear any restrictive legend relating to the Act or a restricted CUSIP number after such 

3

distribution or (C) for which a Registered Exchange Offer has been consummated, regardless of whether such Security was validly tendered in and not withdrawn from the Exchange Offer at the time of the consummation thereof and (ii) any New Securities, the resale of which by the Holder thereof requires compliance with the prospectus delivery requirements of the Act.
“Registration Default Damages” shall have the meaning set forth in Section 8 hereof.
“Registration Statement” shall mean any Exchange Offer Registration Statement or Shelf Registration Statement that covers any of the Securities or the New Securities pursuant to the provisions of this Agreement, any amendments and supplements to such registration statement, including post-effective amendments (in each case including the Prospectus contained therein), all exhibits thereto and all material incorporated by reference therein.
“Representatives” shall have the meaning set forth in the preamble hereto.
“Securities” shall have the meaning set forth in the preamble hereto.
“Shelf Registration” shall mean a registration effected pursuant to Section 3 hereof.
“Shelf Registration Period” shall have the meaning set forth in Section 3(b) hereof.
“Shelf Registration Statement” shall mean a “shelf” registration statement of the Issuers pursuant to the provisions of Section 3 hereof which covers some or all of the Securities or New Securities, as applicable, on an appropriate form under Rule 415 under the Act, or any similar rule that may be adopted by the Commission, amendments and supplements to such registration statement, including post‐effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.
“Trustee” shall mean the trustee with respect to the Securities under the Indenture.
“Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Commission promulgated thereunder.
 “underwriter” shall mean any underwriter of Securities in connection with an offering thereof under a Shelf Registration Statement.
2.    Registered Exchange Offer.  
(a)    The Issuers shall prepare and, not later than 120 days following the Closing Date, shall file with the Commission the Exchange Offer Registration Statement with respect to the Registered Exchange Offer.  The Issuers shall use their respective commercially reasonable efforts to cause the Exchange Offer Registration Statement to become effective under the Act within 210 days of the Closing Date.

4

(b)    Upon the effectiveness of the Exchange Offer Registration Statement, the Issuers shall promptly commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each Holder electing to exchange Securities for New Securities (assuming that such Holder is not an Affiliate of the Issuers, acquires the New Securities in the ordinary course of such Holder’s business, has no arrangements or understandings with any person to participate in the distribution of the New Securities and is not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer) to trade such New Securities from and after their receipt without any limitations or restrictions under the Act and without material restrictions under the securities laws of a substantial proportion of the several states of the United States.
(c)    In connection with the Registered Exchange Offer, the Issuers shall:
(i)    cause to be delivered to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents;
(ii)    keep the Registered Exchange Offer open for not less than 20 Business Days and not more than 30 Business Days after the date notice thereof is mailed to the Holders (or, in each case, longer if required by applicable law);
(iii)    use their best efforts to keep the Exchange Offer Registration Statement continuously effective under the Act, supplemented and amended as required, under the Act to ensure that it is available for sales of New Securities by Exchanging Dealers during the Exchange Offer Registration Period;
(iv)    utilize the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan in New York City, which may be the Trustee or an Affiliate of the Trustee;
(v)    permit Holders to withdraw tendered Securities at any time prior to the close of business, New York time, on the last Business Day on which the Registered Exchange Offer is open, by sending to the institution specified in the notice a telex, facsimile transmission or letter received by such time setting forth the name of such Holder, the principal amount of Securities delivered for exchange, and a statement that such Holder is withdrawing such Holder’s election to have such Securities exchanged;
(vi)    prior to effectiveness of the Exchange Offer Registration Statement, provide a supplemental letter to the Commission (A) stating that the Company is conducting the Registered Exchange Offer in reliance on the position of the Commission in Exxon Capital Holdings Corporation (pub. avail. May 13, 1988) and Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991); and (B) including a representation that the Issuers have not entered into any arrangement or understanding with any person to distribute the New Securities to be received in the Registered Exchange Offer and that, to the best of the Issuers’ information and belief, each Holder participating in the Registered Exchange Offer is acquiring the New Securities in the 

5

ordinary course of business and has no arrangement or understanding with any person to participate in the distribution of the New Securities; and
(vii)    comply in all respects with all applicable laws.
(d)    As soon as practicable after the close of the Registered Exchange Offer, the Issuers shall:
(i)    accept for exchange all Securities tendered and not validly withdrawn pursuant to the Registered Exchange Offer;
(ii)    deliver to the Trustee for cancellation in accordance with Section 4(s) all Securities so accepted for exchange; and
(iii)    cause the Trustee promptly to authenticate and deliver to each participating Holder of Securities a principal amount of New Securities equal to the principal amount of the Securities of such Holder so accepted for exchange.
(e)    Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the Registered Exchange Offer to participate in a distribution of the New Securities (x) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission in Exxon Capital Holdings Corporation (pub. avail. May 13, 1988) and Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991), as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993 and similar no-action letters; and (y) must comply with the registration and prospectus delivery requirements of the Act in connection with any secondary resale transaction, which must be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K under the Act if the resales are of New Securities obtained by such Holder in exchange for Securities acquired by such Holder directly from an Issuer or one of their Affiliates.  Accordingly, each Holder participating in the Registered Exchange Offer shall be required to represent to the Issuers that, at the time of the consummation of the Registered Exchange Offer:
(i)    it acquired the New Securities in the ordinary course of business;
(ii)    it is not engaged in, and does not intend to engage in, a distribution of the New Securities and it has no arrangements or understandings with any person to participate in the distribution of the New Securities; and
(iii)    it is not an Affiliate of any Issuer.
Each Holder participating in the Registered Exchange Offer that is a Broker-Dealer also shall be required to represent to the Issuers that the Securities to be exchanged for the New Securities were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus in connection with the resale of such 

6

New Securities; however by so acknowledging and by delivering a prospectus, it will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.
(f)    If any Initial Purchaser determines that it is not eligible to participate in the Registered Exchange Offer with respect to the exchange of Securities constituting any portion of an unsold allotment, at the request of such Initial Purchaser, the Issuers shall issue and deliver to such Initial Purchaser or the person purchasing New Securities registered under a Shelf Registration Statement as contemplated by Section 3 hereof from such Initial Purchaser, in exchange for such Securities, a like principal amount of New Securities.  The Issuers shall use their best efforts to cause the CUSIP Service Bureau to issue the same CUSIP number for such New Securities as for New Securities issued pursuant to the Registered Exchange Offer.
3.    Shelf Registration. 
(a)    If (i) due to any change in law or applicable interpretations thereof by the Commission’s staff, the Issuers determine upon advice of their outside counsel that they are not permitted to effect the Registered Exchange Offer as contemplated by Section 2 hereof; (ii) for any other reason the Registered Exchange Offer is not consummated within 240 days of the date hereof; (iii) any Initial Purchaser so requests with respect to Securities that are not eligible to be exchanged for New Securities in the Registered Exchange Offer and that are held by it following consummation of the Registered Exchange Offer; (iv) any Holder (other than an Initial Purchaser) is not eligible to participate in the Registered Exchange Offer; or (v) in the event that any Initial Purchaser participates in the Registered Exchange Offer or acquires New Securities pursuant to Section 2(f) hereof and such Initial Purchaser does not receive freely tradeable New Securities in exchange for Securities constituting any portion of an unsold allotment (it being understood that (x) the requirement that an Initial Purchaser deliver a Prospectus containing the information required by Item 507 or 508 of Regulation S-K under the Act in connection with sales of New Securities acquired in exchange for such Securities shall result in such New Securities being not “freely tradeable”; and (y) the requirement that an Exchanging Dealer deliver a Prospectus in connection with sales of New Securities acquired in the Registered Exchange Offer in exchange for Securities acquired as a result of market-making activities or other trading activities shall not result in such New Securities being not “freely tradeable”), the Company shall effect a Shelf Registration Statement in accordance with subsection (b) below.
(b)    (1)  The Issuers shall as promptly as practicable (but in no event more than 45 days after so required or requested pursuant to this Section 3), file with the Commission and shall use their respective commercially reasonable efforts to cause to be declared effective under the Act within 180 days after so required or requested, a Shelf Registration Statement relating to the offer and sale of the Securities or the New Securities, as applicable, by the Holders thereof from time to time in accordance with the methods of distribution elected by such Holders and set forth in such Shelf Registration Statement; provided, however, that no Holder (other than an Initial Purchaser) shall be entitled to have the Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all of the provisions of this Agreement applicable to such Holder; and provided, further, that with respect to New Securities received by an Initial Purchaser in exchange for Securities constituting any portion of 

7

an unsold allotment, the Issuers may, if permitted by current interpretations by the Commission’s staff, file a post-effective amendment to the Exchange Offer Registration Statement containing the information required by Item 507 or 508 of Regulation S-K, as applicable, in satisfaction of their obligations under this subsection with respect thereto, and any such Exchange Offer Registration Statement, as so amended, shall be referred to herein as, and governed by the provisions herein applicable to, a Shelf Registration Statement.
(1)    The Issuers shall use their commercially reasonable efforts to keep the Shelf Registration Statement continuously effective, supplemented and amended as required by the Act, in order to permit the Prospectus forming part thereof to be usable by Holders for a period (the “Shelf Registration Period”) from the date the Shelf Registration Statement is declared effective by the Commission until (A) the second anniversary thereof or (B) the date upon which all the Securities or New Securities, as applicable, covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement.  The Issuers shall be deemed not to have used their commercially reasonable efforts to keep the Shelf Registration Statement effective during the Shelf Registration Period if any Issuer voluntarily takes any action that would result in Holders of Securities covered thereby not being able to offer and sell such Securities at any time during the Shelf Registration Period, unless such action is (x) required by applicable law or otherwise undertaken by the Issuers in good faith and for valid business reasons (not including avoidance of the Issuers’ obligations hereunder), including the acquisition or divestiture of assets, and (y) permitted pursuant to Section 4(k)(ii) hereof.
(1)    The Issuers shall cause the Shelf Registration Statement and the related Prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement or such amendment or supplement, (A) to comply in all material respects with the applicable requirements of the Act; and (B) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading.
4.    Additional Registration Procedures.  In connection with any Shelf Registration Statement and, to the extent applicable, any Exchange Offer Registration Statement, the following provisions shall apply.
(a)    The Issuers shall:
(i)    furnish to the Representatives and to counsel for the Holders, not less than five Business Days prior to the filing thereof with the Commission, a copy of any Exchange Offer Registration Statement and any Shelf Registration Statement, and each amendment thereof and each amendment or supplement, if any, to the Prospectus included therein (including all documents incorporated by reference therein after the initial filing, if any) and shall use their best efforts to reflect in each such document, when so filed with the Commission, such comments as the Representatives reasonably propose;

8

(ii)    include the information set forth (A) in Annex A hereto on the facing page of the Exchange Offer Registration Statement, (B) in Annex B hereto in the forepart of the Exchange Offer Registration Statement in a section setting forth details of the Exchange Offer, (C) in Annex C hereto in the underwriting or plan of distribution section of the Prospectus contained in the Exchange Offer Registration Statement, and (D) in Annex D hereto in the letter of transmittal delivered pursuant to the Registered Exchange Offer;
(iii)    if requested by an Initial Purchaser, include the information required by Item 507 or 508 of Regulation S-K, as applicable, in the Prospectus contained in the Exchange Offer Registration Statement; and
(iv)    in the case of a Shelf Registration Statement, include the names of the Holders that propose to sell Securities pursuant to the Shelf Registration Statement as selling security holders.
(b)    The Issuers shall ensure that:
(i)    any Registration Statement and any amendment thereto and any Prospectus forming part thereof and any amendment or supplement thereto complies in all material respects with the Act; and
(ii)    any Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
(c)    The Issuers shall advise the Initial Purchasers, the Holders of Securities covered by any Shelf Registration Statement and any Exchanging Dealer under any Exchange Offer Registration Statement that has provided in writing to the Issuers a telephone or facsimile number and address for notices, and, if requested by either Representative or any such Holder or Exchanging Dealer, shall confirm such advice in writing (which notice pursuant to clauses (ii) through (v) hereof shall be accompanied by an instruction to suspend the use of the Prospectus until the Issuers shall have remedied the basis for such suspension):
(i)    when a Registration Statement and any amendment thereto has been filed with the Commission and when the Registration Statement or any post‐effective amendment thereto has become effective;
(ii)    of any request by the Commission for any amendment or supplement to the Registration Statement or the Prospectus or for additional information;

9

(iii)    of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of any proceeding for that purpose;
(iv)    of the receipt by the Issuers of any notification with respect to the suspension of the qualification of the securities included therein for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose; and
(v)    of the happening of any event that requires any change in the Registration Statement or the Prospectus so that, as of such date, they (A) do not contain any untrue statement of a material fact and (B) do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading.
(d)    The Issuers shall use their best efforts to prevent the issuance of any order suspending the effectiveness of any Registration Statement or the qualification of the securities therein for sale in any jurisdiction and, if issued, to obtain as soon as possible the withdrawal thereof.
(e)    The Issuers shall furnish to each Holder of Securities covered by any Shelf Registration Statement, without charge, at least one copy of such Shelf Registration Statement and any post-effective amendment thereto, including all material incorporated therein by reference, and, if the Holder so requests in writing, all exhibits thereto (including exhibits incorporated by reference therein).
(f)    The Issuers shall, during the Shelf Registration Period, deliver to each Holder of Securities covered by any Shelf Registration Statement, without charge, as many copies of the Prospectus (including the Preliminary Prospectus) included in such Shelf Registration Statement and any amendment or supplement thereto as such Holder may reasonably request.  The Issuers consent to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of Securities in connection with the offering and sale of the Securities covered by the Prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement.
(g)    The Issuers shall furnish to each Exchanging Dealer which so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including all material incorporated by reference therein, and, if the Exchanging Dealer so requests in writing, all exhibits thereto (including exhibits incorporated by reference therein).
(h)    The Issuers shall promptly deliver to each Initial Purchaser, each Exchanging Dealer and each other person required to deliver a Prospectus during the Exchange Offer Registration Period, without charge, as many copies of the Prospectus included in such Exchange Offer Registration Statement and any amendment or 

10

supplement thereto as any such person may reasonably request.  The Issuers consent to the use of the Prospectus or any amendment or supplement thereto by each Initial Purchaser, any Exchanging Dealer and any such other person that may be required to deliver a Prospectus following the Registered Exchange Offer in connection with the offering and sale of the New Securities covered by the Prospectus, or any amendment or supplement thereto, included in the Exchange Offer Registration Statement.
(i)    Prior to the Registered Exchange Offer or any other offering of Securities pursuant to any Registration Statement, the Issuers shall arrange, if necessary, for the qualification of the Securities or the New Securities for sale under the laws of such jurisdictions as any Holder shall reasonably request and shall maintain such qualification in effect so long as required; provided that in no event shall the Issuers be obligated to qualify to do business in any jurisdiction where it is not then so qualified or to take any action that would subject them to service of process in suits, other than those arising out of the Initial Placement, the Registered Exchange Offer or any offering pursuant to a Shelf Registration Statement, in any such jurisdiction where they are not then so subject.
(j)    The Issuers shall cooperate with the Holders of Securities to facilitate the timely preparation and delivery of certificates representing New Securities or Securities to be issued or sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as Holders may request.
(k)    (i)    Upon the occurrence of any event contemplated by subsections (c)(ii) through (v) above, the Issuers shall promptly (or within the time period provided for by clause (ii) hereof, if applicable) prepare a post-effective amendment to the applicable Registration Statement or an amendment or supplement to the related Prospectus or file any other required document so that, as thereafter delivered to the Initial Purchasers of the securities included therein, the Prospectus will not include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.  In such circumstances, the period of effectiveness of the Exchange Offer Registration Statement provided for in Section 2 and the period described in Section 3(b)(ii)(A) shall be extended by the number of days from and including the date of the giving of a notice of suspension pursuant to Section 4(c) to and including the date when the Initial Purchasers, the Holders of the Securities and any known Exchanging Dealer shall have received such amended or supplemented Prospectus pursuant to this Section 4.
(ii)    Upon the occurrence or existence of any pending corporate development or any other material event that, in the reasonable judgment of the Issuers, makes it appropriate to suspend the availability of a Shelf Registration Statement and the related Prospectus, the Issuers shall give notice (without notice of the nature or details of such events) to the Holders that the availability of the Shelf Registration is suspended and, upon actual receipt of any such notice, each Holder agrees not to sell any Registrable Securities pursuant to the Shelf Registration until such Holder’s receipt of copies of the 

11

supplemented or amended Prospectus provided for in Section 4(f) or Section 4(h) hereof, or until it is advised in writing by the Company that the Prospectus may be used, and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in such Prospectus.  The period during which the availability of the Shelf Registration and any Prospectus is suspended (the “Deferral Period”) shall not exceed 60 days in any twelve-month period.
(l)    Not later than the effective date of any Registration Statement, the Issuers shall provide a CUSIP number for the Securities or the New Securities, as the case may be, registered under such Registration Statement and provide the Trustee with printed certificates for such Securities or New Securities, in a form eligible for deposit with The Depository Trust Company.
(m)    The Issuers shall comply with all applicable rules and regulations of the Commission and shall make generally available to the security holders of the Company an earnings statement satisfying the provisions of Section 11(a) of the Act as soon as practicable after the effective date of the applicable Registration Statement and in any event no later than 45 days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning with the first month of the Company’s first fiscal quarter commencing after the effective date of the applicable Registration Statement.
(n)    The Issuers shall cause any indenture governing the Securities or the New Securities, as the case may be, to be qualified under the Trust Indenture Act in a timely manner.
(o)    The Issuers may require each Holder of securities to be sold pursuant to any Shelf Registration Statement to furnish to the Issuers such information regarding the Holder and the distribution of such securities as the Issuers may from time to time reasonably require for inclusion in such Registration Statement.  The Issuers may exclude from such Shelf Registration Statement the Securities of any Holder that fails to furnish such information within a reasonable time after receiving such request.
(p)    In the case of any Shelf Registration Statement, the Issuers shall enter into customary agreements (including, if requested, an underwriting agreement in customary form) and take all other appropriate actions in order to expedite or facilitate the registration or the disposition of the Securities, and in connection therewith, if an underwriting agreement is entered into, cause the same to contain indemnification provisions and procedures no less favorable than those set forth in Section 6 hereof.
(q)    In the case of any Shelf Registration Statement, the Issuers shall:
(i)    make reasonably available for inspection by the Holders of Securities to be registered thereunder, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other agent retained by the Holders or any such underwriter all relevant 

12

financial and other records and pertinent corporate documents of the Company and its subsidiaries;
(ii)    cause the Issuers’ officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by the Holders or any such underwriter, attorney, accountant or agent in connection with any such Registration Statement as is customary for similar due diligence examinations;
(iii)    make such representations and warranties to the Holders of Securities registered thereunder and the underwriters, if any, in form, substance and scope as are customarily made by issuers to underwriters in primary underwritten offerings and covering matters including, but not limited to, those set forth in the Purchase Agreement;
(iv)    obtain opinions of counsel to the Issuers and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the Managing Underwriters, if any) addressed to each selling Holder and the underwriters, if any, covering such matters as are customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such Holders and underwriters;
(v)    obtain “comfort” letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to each selling Holder of Securities registered thereunder and the underwriters, if any, in customary form and covering matters of the type customarily covered in “comfort” letters in connection with primary underwritten offerings; and
(vi)    deliver such documents and certificates as may be reasonably requested by the Majority Holders or the Managing Underwriters, if any, including those to evidence compliance with Section 4(k) and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Issuers.
The actions set forth in clauses (iii), (iv), (v) and (vi) of this paragraph (q) shall be performed at (A) the effectiveness of such Registration Statement and each post-effective amendment thereto; and (B) each closing under any underwriting or similar agreement as and to the extent required thereunder.
(r)    In the case of any Exchange Offer Registration Statement, the Issuers shall, if requested by an Initial Purchaser, or by a broker dealer that holds Securities that were acquired as a result of market making or other trading activities:

13

(i)    make reasonably available for inspection by the requesting party, and any attorney, accountant or other agent retained by the requesting party, all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries;
(ii)    cause the Issuers’ officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by the requesting party or any such attorney, accountant or agent in connection with any such Registration Statement as is customary for similar due diligence examinations;
(iii)    make such representations and warranties to the requesting party, in form, substance and scope as are customarily made by issuers to underwriters in primary underwritten offerings and covering matters including, but not limited to, those set forth in the Purchase Agreement;
(iv)    obtain opinions of counsel to the Issuers and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the requesting party and its counsel, addressed to the requesting party, covering such matters as are customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by the requesting party or its counsel;
(v)    obtain “comfort” letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to the requesting party, in customary form and covering matters of the type customarily covered in “comfort” letters in connection with primary underwritten offerings, or if requested by the requesting party or its counsel in lieu of a “comfort” letter, an agreed-upon procedures letter under Statement on Auditing Standards No. 35, covering matters requested by the requesting party or its counsel; and
(vi)    deliver such documents and certificates as may be reasonably requested by the requesting party or its counsel, including those to evidence compliance with Section 4(k) and with conditions customarily contained in underwriting agreements.
The foregoing actions set forth in clauses (iii), (iv), (v), and (vi) of this paragraph (r) shall be performed at the close of the Registered Exchange Offer and the effective date of any post-effective amendment to the Exchange Offer Registration Statement.
(s)    If a Registered Exchange Offer is to be consummated, upon delivery of the Securities by Holders to the Issuers (or to such other person as directed by the Issuers) in exchange for the New Securities, the Issuers shall mark, or caused to be marked, on the 

14

Securities so exchanged that such Securities are being cancelled in exchange for the New Securities.  In no event shall the Securities be marked as paid or otherwise satisfied.
(t)    The Issuers shall use their best efforts if the Securities have been rated prior to the initial sale of such Securities, to confirm such ratings will apply to the Securities or the New Securities, as the case may be, covered by a Registration Statement.
(u)    In the event that any Broker-Dealer shall underwrite any Securities or participate as a member of an underwriting syndicate or selling group or “assist in the distribution” (within the meaning of the FINRA Rules) thereof, whether as a Holder of such Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Issuers shall assist such Broker-Dealer in complying with the FINRA Rules.
(v)    The Issuers shall use their best efforts to take all other steps necessary to effect the registration of the Securities or the New Securities, as the case may be, covered by a Registration Statement.
5.    Registration Expenses.  The Company shall bear all expenses incurred in connection with the performance of its obligations under Sections 2, 3 and 4 hereof and, in the event of any Shelf Registration Statement, will reimburse the Holders for the reasonable fees and disbursements of one firm or counsel (which shall initially be Cahill Gordon & Reindel LLP, but which may be another nationally recognized law firm experienced in securities matters designated by the Majority Holders) to act as counsel for the Holders in connection therewith, and, in the case of any Exchange Offer Registration Statement, will reimburse the Initial Purchasers for the reasonable fees and disbursements of one firm or counsel acting in connection therewith.
6.    Indemnification and Contribution.  1)  The Issuers, jointly and severally, agree to indemnify and hold harmless each Holder of Securities or New Securities, as the case may be, covered by any Registration Statement, each Initial Purchaser and, with respect to any Prospectus delivery as contemplated in Section 4(f) and Section 4(h) hereof, each Exchanging Dealer, the directors, officers, employees, Affiliates and agents of each such Holder, Initial Purchaser or Exchanging Dealer and each person who controls any such Holder, Initial Purchaser or Exchanging Dealer within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) (1) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any preliminary Prospectus or the Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein (in the case of any preliminary Prospectus or the Prospectus, in the light of the circumstances under which they were made) not misleading or (1) arise out of or are based upon the omission or alleged omission to state in the Registration Statement as originally filed or in any amendment 

15

thereof a material fact required to be stated therein or necessary to make the statements therein not misleading, and agree to reimburse each such indemnified party, as incurred, for any reasonable legal or other expenses incurred by it in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that no Issuer will be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon (x) any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Issuers by or on behalf of the party claiming indemnification specifically for inclusion therein or (y) any breach by the party claiming indemnification of Section 4(k)(ii); provided, further, however, that with respect to clause (y) above, no Issuer will be absolved from liability unless (x) the party claiming indemnification shall have been provided notice as set forth in Section 4(k)(ii) and (y) the loss, claim, damage or liability arises out of or is based upon the same pending corporate development or other material event that caused the Issuer to exercise its right to implement a Deferral Period.  This indemnity agreement shall be in addition to any liability that the Issuers may otherwise have.
The Issuers also agree to indemnify as provided in this Section 6(a) or contribute as provided in Section 6(d) hereof to Losses of each underwriter, if any, of Securities or New Securities, as the case may be, registered under a Shelf Registration Statement, their directors, officers, employees, Affiliates or agents and each person who controls such underwriter on substantially the same basis as that of the indemnification of the Initial Purchasers and the selling Holders provided in this Section 6(a) and shall, if requested by any Holder, enter into an underwriting agreement reflecting such agreement, as provided in Section 4(p) hereof.
(a)    Each Holder of securities covered by a Registration Statement (including each Initial Purchaser that is a Holder, in such capacity) severally and not jointly agrees to indemnify and hold harmless the Issuers, each of their directors, each of their officers who signs such Registration Statement and each person who controls an Issuer within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Issuers to each such Holder, but only with reference to written information relating to such Holder furnished to the Issuers by or on behalf of such Holder specifically for inclusion in the documents referred to in the foregoing indemnity.  This indemnity agreement will be in addition to any liability that any such Holder may otherwise have.
(b)    Promptly after receipt by an indemnified party under this Section 6 or notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses; and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above.  The indemnifying party shall be entitled to appoint counsel (including local counsel) of the indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in 

16

which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel, other than local counsel if not appointed by the indemnifying party, retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party.  Notwithstanding the indemnifying party’s election to appoint counsel (including local counsel) to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party; (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party.  It is understood and agreed that the indemnifying party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all indemnified parties.  An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent (x) includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and (y) does not include any statement as to any admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(c)    In the event that the indemnity provided in paragraph (a) or (b) of this Section 6 is unavailable to or insufficient to hold harmless an indemnified party for any reason (other than because of the proviso in paragraph (a)), then each applicable indemnifying party shall contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending any loss, claim, liability, damage or action) (collectively “Losses”) to which such indemnified party may be subject in such proportion as is appropriate to reflect the relative benefits received by such indemnifying party, on the one hand, and such indemnified party, on the other hand, from the Initial Placement and the Registration Statement which resulted in such Losses; provided, however, that in no case under this paragraph (d), except as set forth in the second proviso of this paragraph (d), shall any Initial Purchaser be responsible for any amount in excess of the purchase discount or commission applicable to such Security, or in the case of a New Security, applicable to the Security that was exchangeable into such New Security, as set forth in the Final Memorandum, nor shall any underwriter be responsible for any amount in excess of the underwriting discount or commission applicable to the securities purchased by such underwriter under the Registration Statement which resulted in such Losses; provided, further, however, that 

17

in no case under this paragraph (d) shall any Holder that sells Securities pursuant to the Shelf Registration Statement be responsible for any amount in excess of the amount by which the total price at which the Securities sold by such Holder exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of Losses resulting from the Shelf Registration Statement.  If the allocation provided by the immediately preceding sentence is unavailable for any reason, the indemnifying party and the indemnified party shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of such indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations.  Benefits received by the Issuers shall be deemed to be equal to the total net proceeds from the Initial Placement (before deducting expenses) as set forth in the Final Memorandum.  Benefits received by the Initial Purchasers shall be deemed to be equal to the total purchase discounts and commissions as set forth on the cover page of the Final Memorandum, and benefits received by any other Holders shall be deemed to be equal to the value of receiving Securities or New Securities, as applicable, registered under the Act.  Benefits received by any underwriter shall be deemed to be equal to the total underwriting discounts and commissions, as set forth on the cover page of the Prospectus forming a part of the Registration Statement which resulted in such Losses.  Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information provided by the indemnifying party, on the one hand, or by the indemnified party, on the other hand, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission.  The parties agree that it would not be just and equitable if contribution were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or any other method of allocation which does not take account of the equitable considerations referred to above.  Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  For purposes of this Section, each person who controls a Holder within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of such Holder shall have the same rights to contribution as such Holder, and each person who controls an Issuer within the meaning of either the Act or the Exchange Act, each officer of an Issuer who shall have signed the Registration Statement and each director of an Issuer shall have the same rights to contribution as the Issuers, subject in each case to the applicable terms and conditions of this paragraph (d).  The Holders’ obligations to contribute pursuant to this Section 6(d) are several in proportion to the respective principal amount of Securities held by each of the Holders hereunder, and not joint.
(d)    The provisions of this Section 6 will remain in full force and effect, regardless of any investigation made by or on behalf of any Holder or any Issuer or any of the indemnified persons referred to in this Section 6, and will survive the sale by a Holder of securities covered by a Registration Statement.

18

7.    Underwritten Registrations.  (1)  If any of the Securities or New Securities, as the case may be, covered by any Shelf Registration Statement are to be sold in an underwritten offering, the Managing Underwriters shall be selected by the Majority Holders.
(a)    No person may participate in any underwritten offering pursuant to any Shelf Registration Statement, unless such person (i) agrees to sell such person’s Securities or New Securities, as the case may be, on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements; and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.
8.    Registration Defaults.  If any of the following events shall occur, then the Company shall pay liquidated damages (the “Registration Default Damages”) to the Holders of Securities in respect of the Securities as follows:
(a)    if any Registration Statement required by this Agreement is not filed with the Commission on or prior to the date specified for such filing in this Agreement, then Registration Default Damages shall accrue on the Registrable Securities at a rate of 0.25% per annum for the first 90 days from and including such specified date and shall increase by 0.25% per annum each 90 days thereafter so long as such Registration Statement is not filed with the Commission, up to a maximum of 1.00%; or
(b)    if any Registration Statement required by this Agreement is not declared effective by the Commission on or prior to the date by which commercially reasonable efforts are to be used to cause such effectiveness under this Agreement, then commencing on the day after such specified date, Registration Default Damages shall accrue on the Registrable Securities at a rate of 0.25% per annum for the first 90 days from and including such specified date and shall increase by 0.25% per annum each 90 days thereafter so long as such Registration Statement is not declared effective by the Commission, up to a maximum of 1.00%; or
(c)    if any Registration Statement required by this Agreement has been declared effective but ceases to be effective at any time at which it is required to be effective under this Agreement, then commencing on the day the Registration Statement ceases to be effective, Registration Default Damages shall accrue on the Registrable Securities at a rate of 0.25% per annum for the first 90 days from and including such date on which the Registration Statement ceases to be effective and shall increase by 0.25% per annum each 90 days thereafter so long as such Registration Statement ceases to be effective, up to a maximum of 1.00%;
provided, however, that (1) upon the filing of the Registration Statement (in the case of paragraph (a) above), (2) upon the effectiveness of the Registration Statement (in the case of paragraph (b) above), or (3) upon the effectiveness of the Registration Statement which had ceased to remain effective (in the case of paragraph (c) above), Registration Default Damages shall cease to accrue.

19

9.    No Inconsistent Agreements.  The Issuers have not entered into, and agree not to enter into, any agreement with respect to their securities that is inconsistent with the rights granted to the Holders herein or that otherwise conflicts with the provisions hereof.
10.    Amendments and Waivers.  The provisions of this Agreement may not be amended, qualified, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Issuers have obtained the written consent of the Holders of a majority of the aggregate principal amount of the Registrable Securities outstanding; provided that, with respect to any matter that directly or indirectly affects the rights of any Initial Purchaser hereunder, the Issuers shall obtain the written consent of each such Initial Purchaser against which such amendment, qualification, supplement, waiver or consent is to be effective; provided, further, that no amendment, qualification, supplement, waiver or consent with respect to Section 8 hereof shall be effective as against any Holder of Registered Securities unless consented to in writing by such Holder; and provided, further, that the provisions of this Section 10 may not be amended, qualified, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Issuers have obtained the written consent of the Initial Purchasers and each Holder.  Notwithstanding the foregoing (except the foregoing provisos), a waiver or consent to departure from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose Securities or New Securities, as the case may be, are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by the Majority Holders, determined on the basis of Securities or New Securities, as the case may be, being sold rather than registered under such Registration Statement.
11.    Notices.  All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail, telex, telecopier or air courier guaranteeing overnight delivery:
(a)    if to a Holder, at the most current address given by such holder to the Company in accordance with the provisions of this Section 11, which address initially is, with respect to each Holder, the address of such Holder maintained by the Registrar under the Indenture;
(b)    if to the Representatives, initially at the address or addresses set forth in the Purchase Agreement; and
(c)    if to the Issuers, initially to the Company at its address set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly given when received.
The Initial Purchasers or the Company by notice to the other parties may designate additional or different addresses for subsequent notices or communications.

20

12.    Remedies.  Each Holder, in addition to being entitled to exercise all rights provided to it herein, in the Indenture or in the Purchase Agreement or granted by law, including recovery of liquidated or other damages, will be entitled to specific performance of its rights under this Agreement. The Issuers agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive in any action for specific performance the defense that a remedy at law would be adequate.
13.    Successors.  This Agreement shall inure to the benefit of and be binding upon the parties hereto, their respective successors and assigns, including, without the need for an express assignment or any consent by the Issuers thereto, subsequent Holders of Securities and New Securities, and the indemnified persons referred to in Section 6 hereof.  The Issuers hereby agree to extend the benefits of this Agreement to any Holder of Securities and New Securities, and any such Holder may specifically enforce the provisions of this Agreement as if an original party hereto.
14.    Counterparts.  This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement.
15.    Headings.  The section headings used herein are for convenience only and shall not affect the construction hereof.
16.    Applicable Law.  This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York.  The parties hereto each hereby waive any right to trial by jury in any action, proceeding or counterclaim arising out of or relating to this Agreement.
17.    Severability.  In the event that any one of more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affected thereby, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law.
18.    Securities Held by the Issuers, etc.  Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities or New Securities is required hereunder, Securities or New Securities, as applicable, held by the Issuers or their Affiliates (other than subsequent Holders of Securities or New Securities if such subsequent Holders are deemed to be Affiliates solely by reason of their holdings of such Securities or New Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.
(a)    [Remainder of Page Intentionally Blank.]

21

[M/I Homes Registration Rights Agreement]

If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement between the Company and the Initial Purchasers.
Very truly yours,
M/I HOMES, INC.
By:    /s/ Phillip G. Creek     
    Name: Phillip G. Creek 
    Title: Executive Vice President and 
Chief Financial Officer

M/I HOMES DEVELOPMENT I, LLC
M/I HOMES FIRST INDIANA LLC 
M/I HOMES OF ALABAMA, LLC
M/I HOMES OF AUSTIN, LLC
M/I HOMES OF CENTRAL OHIO, LLC
M/I HOMES OF CHARLOTTE, LLC
M/I HOMES OF CHICAGO, LLC
M/I HOMES OF CINCINNATI, LLC
M/I HOMES OF DC, LLC
M/I HOMES OF DELAWARE, LLC
M/I HOMES OF DFW, LLC
M/I HOMES OF HOUSTON, LLC
M/I HOMES OF MICHIGAN, LLC
M/I HOMES OF MINNEAPOLIS/ST. PAUL, LLC 
M/I HOMES OF SARASOTA, LLC
M/I HOMES OF ORLANDO, LLC
M/I HOMES OF RALEIGH, LLC
M/I HOMES OF SAN ANTONIO, LLC
M/I HOMES OF TAMPA, LLC
M/I HOMES OF WEST PALM BEACH, LLC
M/I HOMES SERVICE, LLC
MHO HOLDINGS, LLC
MHO, LLC
NORTHEAST OFFICE VENTURE, LIMITED     LIABILITY COMPANY
PRINCE GEORGES UTILITIES, LLC
THE FIELDS AT PERRY HALL, L.L.C.
WILSON FARM, L.L.C.

[M/I Homes Registration Rights Agreement]

By:    /s/ J. Thomas Mason     
    Name: J. Thomas Mason 
    Title: Secretary
M/I HOMES OF FLORIDA, LLC
M/I HOMES SECOND INDIANA LLC

By: M/I Homes, Inc., its Sole Member

By:    /s/ J. Thomas Mason     
    Name: J. Thomas Mason 
    Title: Secretary

M/I HOMES OF INDIANA, L.P.
By: M/I Homes First Indiana LLC, its  
      Sole General Partner

By:    /s/ J. Thomas Mason     
    Name: J. Thomas Mason 
    Title: Secretary

[M/I Homes Registration Rights Agreement]

The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written. 
 
For themselves and the other several  
Initial Purchasers named in Schedule I
to the Purchase Agreement.

By:  CITIGROUP GLOBAL MARKETS INC.
By:  /s/ Justin Tichauer    
Name: Justin Tichauer 
Title: Managing Director

By:  J.P. MORGAN SECURITIES LLC
By:  /s/ Jeffrey Genova    
Name: Jeffrey Genova 
Title: Executive Director

[M/I Homes Registration Rights Agreement]

ANNEX A
Each broker-dealer that receives new securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such new securities.  The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Act.  This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new securities received in exchange for securities where such securities were acquired by such broker-dealer as a result of market-making activities or other trading activities.  The company has agreed that, starting on the expiration date and ending on the close of business one year after the expiration date, it will make this prospectus available to any broker-dealer for use in connection with any such resale.  See “Plan of Distribution”.

A-1

ANNEX B
Each broker-dealer that receives new securities for its own account in exchange for securities, where such securities were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such new securities.  See “Plan of Distribution”.

B-1

ANNEX C 
 
PLAN OF DISTRIBUTION
Each broker-dealer that receives new securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such new securities.  This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new securities received in exchange for securities where such securities were acquired as a result of market-making activities or other trading activities.  The company has agreed that, starting on the expiration date and ending on the close of business one year after the expiration date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale.  In addition, until __________, 20__, all dealers effecting transactions in the new securities may be required to deliver a prospectus.
The company will not receive any proceeds from any sale of new securities by brokers-dealers.  New securities received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the new securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices.  Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such new securities.  Any broker-dealer that resells new securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such new securities may be deemed to be an “underwriter” within the meaning of the Act and any profit of any such resale of new securities and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Act.  The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Act.
For a period of one year after the expiration date, the company will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the Letter of Transmittal.  The company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the holder of the securities) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the securities (including any broker-dealers) against certain liabilities, including liabilities under the Act.
[If applicable, add information required by Regulation S-K Items 507 and/or 508.]

C-1

ANNEX D
Rider A
PLEASE FILL IN YOUR NAME AND ADDRESS BELOW IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
Name:         
Address:         
        
Rider B
If the undersigned is not a Broker-Dealer, the undersigned represents that it acquired the New Securities in the ordinary course of its business, it is not engaged  in, and does not intend to engage in, a distribution of New Securities and it has no arrangements or understandings with any person to participate in a distribution of the New Securities.  If the undersigned is a Broker-Dealer that will receive New Securities for its own account in exchange for Securities, it represents that the Securities to be exchanged for New Securities were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus in connection with any resale of such New Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Act.

D-1Exhibit 4.1

 

	
 
    	
 
    	
 
    

 

AMENDED AND RESTATED TRUST AGREEMENT

 

by and between

 

HARLEY-DAVIDSON CUSTOMER FUNDING CORP.,

as Trust Depositor,

 

and

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,
 as Owner Trustee

 

Dated as of January 1, 2020

 

	
 
    	
 
    	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
ARTICLE ONE   DEFINITIONS
    	
 
    	
1
    
	
Section 1.01.
    	
Capitalized Terms
    	
 
    	
1
    
	
Section 1.02.
    	
Other Definitional Provisions
    	
 
    	
4
    
	
Section 1.03.
    	
Usage of Terms
    	
 
    	
4
    
	
Section 1.04.
    	
Section References
    	
 
    	
4
    
	
Section 1.05.
    	
Accounting Terms
    	
 
    	
4
    
	
ARTICLE TWO   ORGANIZATION
    	
 
    	
4
    
	
Section 2.01.
    	
Name
    	
 
    	
4
    
	
Section 2.02.
    	
Office
    	
 
    	
4
    
	
Section 2.03.
    	
Purposes and Powers
    	
 
    	
5
    
	
Section 2.04.
    	
Appointment of Owner Trustee
    	
 
    	
6
    
	
Section 2.05.
    	
Initial Capital Contribution of   Owner Trust Estate
    	
 
    	
6
    
	
Section 2.06.
    	
Declaration of Trust
    	
 
    	
6
    
	
Section 2.07.
    	
Liability of Trust Depositor
    	
 
    	
6
    
	
Section 2.08.
    	
Title to Trust Property
    	
 
    	
6
    
	
Section 2.09.
    	
Situs of Trust
    	
 
    	
7
    
	
Section 2.10.
    	
Representations and Warranties   of the Trust Depositor
    	
 
    	
7
    
	
Section 2.11.
    	
Tax Treatment
    	
 
    	
8
    
	
Section 2.12.
    	
Texas State Tax Matters
    	
 
    	
8
    
	
ARTICLE THREE   TRUST CERTIFICATES AND TRANSFER OF INTERESTS
    	
 
    	
9
    
	
Section 3.01.
    	
Initial Ownership
    	
 
    	
9
    
	
Section 3.02.
    	
The Trust Certificates
    	
 
    	
9
    
	
Section 3.03.
    	
Authentication and Delivery of   Trust Certificates
    	
 
    	
9
    
	
Section 3.04.
    	
Registration of Transfer and   Exchange of Trust Certificates
    	
 
    	
9
    
	
Section 3.05.
    	
Mutilated, Destroyed, Lost or   Stolen Trust Certificates
    	
 
    	
12
    
	
Section 3.06.
    	
Person Deemed Owner
    	
 
    	
12
    
	
Section 3.07.
    	
Access to List of   Certificateholders’ Name and Address
    	
 
    	
12
    
	
Section 3.08.
    	
Maintenance of Office or Agency
    	
 
    	
13
    
	
Section 3.09.
    	
Trust Certificate
    	
 
    	
13
    
	
Section 3.10.
    	
Appointment of Paying Agent
    	
 
    	
13
    
	
Section 3.11.
    	
Ownership by Trust Depositor of   Initial Trust Certificates
    	
 
    	
14
    
	
ARTICLE FOUR   ACTIONS BY OWNER TRUSTEE AND CERTIFICATEHOLDER
    	
 
    	
14
    
	
Section 4.01.
    	
Prior Notice to Owners with   Respect to Certain Matters
    	
 
    	
14
    
	
Section 4.02.
    	
Action by Owners with Respect   to Certain Matters
    	
 
    	
15
    
	
Section 4.03.
    	
Action by Owners with Respect   to Bankruptcy
    	
 
    	
15
    
	
Section 4.04.
    	
Restrictions on Owners’ Power
    	
 
    	
15
    
	
Section 4.05.
    	
Majority of the Trust   Certificates Control
    	
 
    	
15
    
	
ARTICLE FIVE   APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
    	
 
    	
16
    
	
Section 5.01.
    	
Establishment of Trust Account;   Application of Trust Funds
    	
 
    	
16
    
	
Section 5.02.
    	
Method of Payment
    	
 
    	
17
    
	
Section 5.03.
    	
Accounting and Reports to the   Certificateholder, Owners, the Internal Revenue Service and Others
    	
 
    	
17
    
	
Section 5.04.
    	
Signature on Returns; Tax   Matters Partner
    	
 
    	
17
    
	
ARTICLE SIX   AUTHORITY AND DUTIES OF OWNER TRUSTEE
    	
 
    	
18
    
	
Section 6.01.
    	
General Authority
    	
 
    	
18
    
	
Section 6.02.
    	
General Duties
    	
 
    	
18
    
	
Section 6.03.
    	
Action Upon Instruction
    	
 
    	
18
    
	
Section 6.04.
    	
No Duties Except as Specified   in this Agreement or in Instructions
    	
 
    	
19
    
	
Section 6.05.
    	
No Action Except Under   Specified Documents or Instructions
    	
 
    	
20
    
	
Section 6.06.
    	
Restrictions
    	
 
    	
20
    
	
Section 6.07.
    	
Pennsylvania Motor Vehicle   Sales Finance Act Licenses
    	
 
    	
20
    

 

 

	
Section 6.08.
    	
Succession to Rights of the Indenture   Trustee
    	
 
    	
20
    
	
ARTICLE SEVEN   CONCERNING THE OWNER TRUSTEE
    	
 
    	
20
    
	
Section 7.01.
    	
Acceptance of Trusts and Duties
    	
 
    	
20
    
	
Section 7.02.
    	
Furnishing of Documents
    	
 
    	
22
    
	
Section 7.03.
    	
Representations and Warranties
    	
 
    	
22
    
	
Section 7.04.
    	
Reliance; Advice of Counsel
    	
 
    	
23
    
	
Section 7.05.
    	
Not Acting in Individual   Capacity
    	
 
    	
23
    
	
Section 7.06.
    	
Owner Trustee Not Liable for   Trust Certificate, Notes or Contracts
    	
 
    	
23
    
	
Section 7.07.
    	
Owner Trustee May Own   Trust Certificate and Notes
    	
 
    	
24
    
	
ARTICLE EIGHT   COMPENSATION OF OWNER TRUSTEE
    	
 
    	
24
    
	
Section 8.01.
    	
Owner Trustee’s Fees and   Expenses
    	
 
    	
24
    
	
Section 8.02.
    	
Indemnification
    	
 
    	
24
    
	
Section 8.03.
    	
Payments to the Owner Trustee
    	
 
    	
25
    
	
ARTICLE NINE   TERMINATION OF TRUST AGREEMENT
    	
 
    	
25
    
	
Section 9.01.
    	
Termination of Trust Agreement
    	
 
    	
25
    
	
ARTICLE TEN   SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
    	
 
    	
26
    
	
Section 10.01.
    	
Eligibility Requirements for   Owner Trustee
    	
 
    	
26
    
	
Section 10.02.
    	
Resignation or Removal of Owner   Trustee
    	
 
    	
26
    
	
Section 10.03.
    	
Successor Owner Trustee
    	
 
    	
27
    
	
Section 10.04.
    	
Merger or Consolidation of   Owner Trustee
    	
 
    	
27
    
	
Section 10.05.
    	
Appointment of Co-Trustee or   Separate Trustee
    	
 
    	
28
    
	
ARTICLE ELEVEN   MISCELLANEOUS
    	
 
    	
29
    
	
Section 11.01.
    	
Supplements and Amendments
    	
 
    	
29
    
	
Section 11.02.
    	
No Legal Title to Trust Estate   in Owners
    	
 
    	
30
    
	
Section 11.03.
    	
Limitations on Rights of Others
    	
 
    	
30
    
	
Section 11.04.
    	
Notices
    	
 
    	
31
    
	
Section 11.05.
    	
Severability of Provisions
    	
 
    	
31
    
	
Section 11.06.
    	
Counterparts
    	
 
    	
31
    
	
Section 11.07.
    	
Successors and Assigns
    	
 
    	
31
    
	
Section 11.08.
    	
Covenants of the Trust   Depositor
    	
 
    	
31
    
	
Section 11.09.
    	
No Petition
    	
 
    	
32
    
	
Section 11.10.
    	
No Recourse
    	
 
    	
32
    
	
Section 11.11.
    	
Headings
    	
 
    	
32
    
	
Section 11.12.
    	
Governing Law
    	
 
    	
32
    
	
Section 11.13.
    	
Trust Certificate Transfer   Restrictions
    	
 
    	
33
    
	
Section 11.14.
    	
Trust Depositor Payment   Obligation
    	
 
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
EXHIBITS
    	
 
    	
 
    
	
Exhibit A  —    Form of Certificate of Trust
    	
 
    	
A-1
    
	
Exhibit B  —    Form of Trust Certificate
    	
 
    	
B-1
    
	
Exhibit C  —    Form of Transferee Certificate
    	
 
    	
C-1
    

 

ii

 

AMENDED AND RESTATED TRUST AGREEMENT dated as of January 1, 2020, between HARLEY-DAVIDSON CUSTOMER FUNDING CORP., a Nevada corporation, as Trust Depositor (the “Trust Depositor”), and WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking association, as owner trustee (the “Owner Trustee”).

 

WHEREAS, the Trust Depositor and the Owner Trustee entered into that certain Trust Agreement, dated as of October 1, 2019 (as amended by that certain Amendment No. 1 to Trust Agreement, dated as of December 1, 2019, the “Original Agreement”), and filed a certificate of trust with the Secretary of State of the State of Delaware pursuant to which the Trust (as defined below) was created; and

 

WHEREAS, in connection herewith, the parties have agreed to amend and restate the Original Agreement; and

 

WHEREAS, in connection herewith, the Trust Depositor is willing to purchase the initial Trust Certificate (as defined herein) to be issued pursuant to this Agreement and to assume certain obligations pursuant hereto;

 

NOW, THEREFORE, the parties hereto hereby agree as follows:

 

ARTICLE ONE

 

DEFINITIONS

 

Section 1.01.                         Capitalized Terms.

 

Except as otherwise provided in this Agreement, whenever used in this Agreement the following words and phrases, unless the context otherwise requires, shall have the following meanings:

 

“Administration Agreement” means the Administration Agreement, dated as of January 1, 2020, among the Trust, the Trust Depositor, the Indenture Trustee and Harley-Davidson Credit, as administrator.

 

“Agreement” means this Amended and Restated Trust Agreement, as the same may be amended and supplemented from time to time.

 

“Benefit Plan” means (i) an employee benefit plan (as such term is defined in Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code or (iii) any entity whose underlying assets include plan assets by reason of an employee benefit plan’s or a plan’s investment in the entity.

 

1

 

“Business Day” means any day other than a Saturday, Sunday or other day on which banking institutions in the cities of Chicago, Illinois, Wilmington, Delaware, or New York, New York are authorized or obligated by law, executive order or governmental decree to be closed.

 

“Certificate Distribution Account” means the account established and maintained as such pursuant to Section 5.01.

 

“Certificate Interest” means, with respect to a Trust Certificate, the percentage specified on such Trust Certificate as the Certificate Interest, which represents the beneficial equity interest in the Trust.  The initial Certificate Interest held by the Trust Depositor shall be 100%.

 

“Certificate of Trust” means the Certificate of Trust filed for the Trust pursuant to Section 3810(a) of the Statutory Trust Statute, substantially in the form of Exhibit A hereto.

 

“Certificate Register” and “Certificate Registrar” mean the register maintained and the registrar (or any successor thereto) appointed pursuant to Section 3.04.

 

“Certificateholder” or “Holder” means with respect to a Trust Certificate the Person in whose name such Trust Certificate is registered in the Certificate Register.

 

“Clearing Agency” means an organization registered as a “Clearing Agency” pursuant to Section 17A of the Exchange Act.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Expenses” shall have the meaning assigned to such term in Section 8.02.

 

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

 

“Indemnified Parties” shall have the meaning assigned to such term in Section 8.02.

 

“Indenture” means the Indenture, dated as of January 1, 2020, between the Trust and The Bank of New York Mellon Trust Company, N.A.

 

“Owner” means each Holder of a Trust Certificate.

 

“Owner Trustee” means Wilmington Trust, National Association, a national banking association, not in its individual capacity but solely as owner trustee under this Agreement, and any successor Owner Trustee hereunder.

 

“Owner Trustee Corporate Trust Office” means the office of the Owner Trustee at which its corporate trust business shall be administered, which initially shall be 1100 North Market 

 

2

 

Street, Wilmington, Delaware 19890-1605 Attn: Corporate Trust Administration, or such other office at such other address as the Owner Trustee may designate from time to time by notice to the Certificateholder, the Servicer, the Indenture Trustee, the Trust Depositor and Harley-Davidson Credit.

 

“Paying Agent” means any paying agent or co-paying agent appointed pursuant to Section 3.10.

 

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

 

“Qualified Institutional Buyer” means a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.

 

“Record Date” means, with respect to any Distribution Date, the Business Day immediately preceding such Distribution Date.

 

“Sale and Servicing Agreement” means the Sale and Servicing Agreement, dated as of January 1, 2020, among the Trust, as issuer, the Trust Depositor, Harley-Davidson Credit, as servicer, and The Bank of New York Mellon Trust Company, N.A., as indenture trustee, as the same may be amended or supplemented from time to time.

 

“Secretary of State” means the Secretary of State of the State of Delaware.

 

“Statutory Trust Statute” means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code § 3801 et seq., as the same may be amended from time to time.

 

“Treasury Regulations” means regulations, including proposed or temporary regulations, promulgated under the Code.  References herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations.

 

“Trust” means the trust established by this Agreement.

 

“Trust Certificate” means a trust certificate evidencing the beneficial equity interest of an Owner in the Trust, substantially in the form of Exhibit B hereto.

 

“Trust Depositor” means Harley-Davidson Customer Funding Corp., in its capacity as Trust Depositor hereunder, and its successors.

 

“Trust Estate” means all right, title and interest of the Trust in and to the property and rights assigned to the Trust pursuant to Article Two of the Sale and Servicing Agreement, all funds on deposit from time to time in the Trust Accounts and the Certificate Distribution Account and all other property of the Trust from time to time, including any rights of the Owner 

 

3

 

Trustee and the Trust pursuant to the Sale and Servicing Agreement and the Administration Agreement.

 

Section 1.02.                         Other Definitional Provisions.

 

Capitalized terms used that are not otherwise defined herein shall have the meanings ascribed thereto in the Sale and Servicing Agreement or, if not defined therein, in the Indenture.

 

Section 1.03.                         Usage of Terms.

 

With respect to all terms in this Agreement, the singular includes the plural and the plural the singular; words importing any gender include the other genders; references to “writing” include printing, typing, lithography and other means of reproducing words in a visible form; references to agreements and other contractual instruments include all amendments, modifications and supplements thereto or any changes therein entered into in accordance with their respective terms and not prohibited by this Agreement; references to Persons include their permitted successors and assigns; and the term “including” means “including without limitation”.

 

Section 1.04.                         Section References.

 

All section references, unless otherwise indicated, shall be to Sections in this Agreement.

 

Section 1.05.                         Accounting Terms.

 

All accounting terms used but not specifically defined herein shall be construed in accordance with generally accepted accounting principles in the United States.

 

ARTICLE TWO

 

ORGANIZATION

 

Section 2.01.                         Name.

 

The Trust created hereby shall be known as “Harley-Davidson Motorcycle Trust 2020-A”, in which name the Owner Trustee may conduct the activities of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued.

 

Section 2.02.                         Office.

 

The office of the Trust shall be in care of the Owner Trustee at the Owner Trustee Corporate Trust Office or at such other address in Delaware as the Owner Trustee may designate by written notice to the Owners and the Trust Depositor.

 

4

 

Section 2.03.                         Purposes and Powers.

 

(a)                                 The sole purpose of the Trust is to manage the Trust Estate and collect and disburse the periodic income therefrom for the use and benefit of the Owners, and in furtherance of such purpose to engage in the following ministerial activities:

 

(i)                                     to issue the Notes pursuant to the Indenture and the Trust Certificates pursuant to this Agreement and to sell the Notes;

 

(ii)                                  with the proceeds of the sale of the Notes, to purchase the Contracts, to fund the Reserve Fund, to pay the organizational, start-up and transactional expenses of the Trust, and to pay the balance to the Trust Depositor pursuant to the Sale and Servicing Agreement;

 

(iii)                               to assign, grant, transfer, pledge, mortgage and convey the Trust Estate pursuant to the Indenture and to hold, manage and distribute to the Owners pursuant to the Sale and Servicing Agreement any portion of the Trust Estate released from the Lien of, and remitted to the Trust pursuant to, the Indenture;

 

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

 

(v)                                 to enter into derivative transactions in connection with the Notes or otherwise;

 

(vi)                              to engage in those activities, including entering into agreements, that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith; and

 

(vii)                           subject to compliance with the Transaction Documents, to engage in such other activities as may be required in connection with conservation of the Trust Estate and the making of distributions to the Owners and the Noteholders.

 

The Trust shall not engage in any activities other than in connection with the foregoing.  Nothing contained herein shall be deemed to authorize the Owner Trustee to engage in any business operations or any activities other than those set forth in the introductory sentence of this Section.  Specifically, the Owner Trustee shall have no authority to engage in any business operations, or acquire any assets other than those included in the Trust Estate under Section 1.01, or otherwise vary the assets held by the Trust.  Similarly, the Owner Trustee shall have no discretionary duties other than performing those ministerial acts set forth above necessary to accomplish the purpose of this Trust as set forth in the introductory sentence of this Section.  Notwithstanding Section 2.03(a)(iii) above, the Trust shall not assign, sell or transfer all or any portion of the Trust Estate except as contemplated or permitted by the Indenture or the Sale and Servicing Agreement, without the prior consent of the Trust Depositor.

 

5

 

Section 2.04.                         Appointment of Owner Trustee.

 

The Trust Depositor hereby appoints the Owner Trustee as trustee of the Trust effective as of the date hereof, to have all the rights, powers and duties set forth herein, and the Owner Trustee hereby accepts such appointment.

 

Section 2.05.                         Initial Capital Contribution of Owner Trust Estate.

 

The Trust Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee, as of the date hereof, the sum of $1.  The Owner Trustee hereby acknowledges receipt in trust from the Trust Depositor, as of the date hereof, of the foregoing contribution, which shall constitute the initial Trust Estate.  The Trust Depositor shall pay organizational expenses of the Trust as they may arise or shall, upon the request of the Owner Trustee, promptly reimburse the Owner Trustee for any such expenses paid by the Owner Trustee.

 

Section 2.06.                         Declaration of Trust.

 

The Owner Trustee hereby declares that it will hold the Trust Estate in trust upon and subject to the conditions set forth herein for the sole purpose of conserving the Trust Estate and collecting and disbursing the periodic income therefrom for the use and benefit of the Owners, subject to the obligations of the Trust under the Transaction Documents.  It is the intention of the parties hereto that the Trust constitute a statutory trust under the Statutory Trust Statute and that this Agreement constitute the governing instrument of such statutory trust.  Effective as of the date hereof, the Owner Trustee shall have all rights, powers and duties set forth herein and in the Statutory Trust Statute for the sole purpose and to the extent necessary to accomplish the purpose of this Trust as set forth in the introductory sentence of Section 2.03.

 

Section 2.07.                         Liability of Trust Depositor.

 

(a)                                 All liabilities of the Trust, to the extent not paid by a third party, are and shall be obligations of the Trust and when due and payable shall be satisfied out of the Trust Estate.

 

(b)                                 Except as provided in the Statutory Trust Statute, no Certificateholder shall be personally liable for any liability of the Trust.

 

Section 2.08.                         Title to Trust Property.

 

Legal title to the Trust Estate shall be vested at all times in the Trust as a separate legal entity except where applicable law in any jurisdiction requires title to any part of the Trust Estate to be vested in an owner trustee or owner trustees, in which case title shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a separate trustee, as the case may be.

 

6

 

Section 2.09.                         Situs of Trust.

 

The Trust will be located and administered in the State of Delaware.  All bank accounts maintained by the Owner Trustee on behalf of the Trust shall be located in the State of Illinois or the State of Delaware.  The Trust shall not have any employees in any state other than Delaware; provided, however, that nothing herein shall restrict or prohibit the Owner Trustee from having employees within or without the State of Delaware.  Payments will be received by the Trust only in Delaware and payments will be made by the Trust only from Delaware.  The only office of the Trust will be at the Owner Trustee Corporate Trust Office.

 

Section 2.10.                         Representations and Warranties of the Trust Depositor.

 

The Trust Depositor hereby represents and warrants to the Owner Trustee that:

 

(i)                                     The Trust Depositor is duly organized and validly existing as a corporation organized and existing and in good standing under the laws of the State of Nevada, with power and authority to own its properties and to conduct its business and had at all relevant times, and has, power, authority and legal right to acquire and own the Contracts.

 

(ii)                                  The Trust Depositor is duly qualified to do business as a foreign corporation in good standing and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of property or the conduct of its business requires such qualifications, and where the failure to so qualify or obtain such licenses and approvals would have a material adverse effect on the Trust, the Contracts, the operations or business of the Trust Depositor, or the ability of the Trust Depositor to perform its obligations under this Agreement.

 

(iii)                               The Trust Depositor has the power and authority to execute and deliver this Agreement and to carry out its terms; the Trust Depositor has full power and authority to sell and assign the property to be sold and assigned to and deposited with the Owner Trustee on behalf of the Trust as part of the Trust Estate and has duly authorized such sale and assignment and deposit with the Owner Trustee on behalf of the Trust by all necessary corporate action; and the execution, delivery and performance of this Agreement have been duly authorized by the Trust Depositor by all necessary corporate action.

 

(iv)                              The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the articles of incorporation or bylaws of the Trust Depositor, or any indenture, agreement or other instrument to which the Trust Depositor is a party or by which it is bound; nor result in the creation or imposition of any Lien upon any of the properties of the Trust Depositor pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Transaction Documents); nor violate any law or any order, rule or regulation applicable to the Trust

 

7

 

Depositor of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Trust Depositor or its properties; which breach, default, conflict, Lien or violation in any case would have a material adverse effect on the Trust, the Contracts, the operations or business of the Servicer, or the ability of the Trust Depositor to perform its obligations under this Agreement.

 

(v)                                 There are no proceedings or investigations pending, or to the Trust Depositor’s best knowledge threatened, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Trust Depositor or its properties: (A) asserting the invalidity of this Agreement, any of the other Transaction Documents or the Trust Certificate, (B) seeking to prevent the issuance of the Trust Certificate or the consummation of any of the transactions contemplated by this Agreement or any of the other Transaction Documents, (C) seeking any determination or ruling that might materially and adversely affect the performance by the Trust Depositor of its obligations under, or the validity or enforceability of, this Agreement, any of the other Transaction Documents or the Trust Certificate or (D) involving the Trust Depositor and which would adversely affect the federal income tax or other federal, state or local tax attributes of the Trust Certificate.

 

Section 2.11.                         Tax Treatment.

 

It is the intention of the Trust Depositor that (i) so long as there is only one Certificateholder, the Trust be disregarded as a separate entity pursuant to Treasury Regulations Section 301.7701-3(b)(1)(ii) as in effect for periods after January 1, 1997 (and, in such case, Trust  items of income, gain, loss and deduction for any month as determined for federal income tax purposes shall be allocated entirely to the Trust Depositor (or subsequent purchaser of the sole Trust Certificate) as the sole Certificateholder) and (ii) if there is more than one Certificateholder, the Trust shall be treated as a partnership for purposes of federal income, state and local income and single business tax and any other income taxes.  The parties agree that, unless otherwise required by appropriate tax authorities, the Trust will file or cause to be filed annual or other necessary returns, reports and other forms consistent with the characterization of the Trust as provided in the preceding sentence for such tax purposes.

 

Section 2.12.                         Texas State Tax Matters.

 

For purposes of Texas franchise taxes, it is the intention of the parties that the Trust be classified (i) as a passive entity within the meaning of Sections 171.0002 through 171.0004 of the Texas Tax Code, and (ii) not as a “business trust” within the meaning of Treasury Regulations Section 301.7701-4(b).  The Trust Depositor and the Certificateholder, by acceptance of a Trust Certificate, agree to treat the Trust in a manner consistent with such intention, unless otherwise required by law.  Notwithstanding anything to the contrary contained herein, nothing in this Agreement should be read to imply that the Trust is doing business in Texas or has sufficient nexus with Texas in order for the Texas franchise tax to apply to the Trust.

 

8

 

ARTICLE THREE

 

TRUST CERTIFICATE AND TRANSFER OF INTERESTS

 

Section 3.01.                         Initial Ownership.

 

Upon the formation of the Trust by the contribution by the Trust Depositor pursuant to Section 2.05 and until the issuance of the Trust Certificate, the Trust Depositor shall be the sole beneficiary of the Trust.

 

Section 3.02.                         The Trust Certificate.

 

The Trust Certificate shall be substantially in the form of Exhibit B hereto and represent the entire beneficial equity interest in the Trust.  The Trust Certificate shall be executed by the Owner Trustee on behalf of the Trust by manual or facsimile signature of an authorized officer of the Owner Trustee and shall be deemed to have been validly issued when so executed.  A Trust Certificate bearing the manual or facsimile signature of an individual who was, at the time when such signature was affixed, authorized to sign on behalf of the Owner Trustee shall be a valid and binding obligation of the Trust, notwithstanding that such individual has ceased to be so authorized prior to the authentication and delivery of such Trust Certificate or did not hold such office at the date of such Trust Certificate.  Each Trust Certificate shall be dated the date of its authentication.

 

Section 3.03.                         Authentication and Delivery of Trust Certificate.

 

The Owner Trustee shall cause to be authenticated and delivered upon the order of the Trust Depositor, in exchange for the Contracts and the other assets included in the Trust Estate, simultaneously with the sale, assignment and transfer to the Trust of the Contracts and other assets  included in the Trust Estate, and the constructive delivery to the Owner Trustee of the Contract Files and the other assets included in the Trust Estate, a Trust Certificate duly authenticated by the Owner Trustee, evidencing the entire beneficial equity interest in the Trust.

 

No Trust Certificate shall be valid for any purpose unless there appears on such Trust Certificate a certificate of authentication substantially in the form set forth in the form of Trust Certificate attached hereto as Exhibit B, executed by the Owner Trustee or its authenticating agent, by manual signature, and such certificate upon any Trust Certificate shall be conclusive evidence, and the only evidence, that such Trust Certificate has been duly authenticated and delivered hereunder.  Upon issuance, authorization and delivery pursuant to the terms hereof, the Trust Certificate will be entitled to the benefits of this Agreement.

 

Section 3.04.                         Registration of Transfer and Exchange of Trust Certificate.

 

(a)                                 The Certificate Registrar shall keep or cause to be kept, a Certificate Register, subject to such reasonable regulations as it may prescribe.  The Certificate Register shall provide for the registration of the Trust Certificate and transfers and exchanges of the Trust

 

9

 

Certificate as provided herein.  The Owner Trustee is hereby initially appointed Certificate Registrar for the purpose of registering the Trust Certificate and transfers and exchanges of the Trust Certificate as herein provided.  In the event that, subsequent to the Closing Date, the Owner Trustee notifies the Servicer that it is unable to act as Certificate Registrar, the Servicer shall appoint another bank or trust company, having an office or agency located in the City of Chicago, Illinois, agreeing to act in accordance with the provisions of this Agreement applicable to it, and otherwise acceptable to the Owner Trustee, to act as successor Certificate Registrar hereunder.

 

(b)                                 Upon surrender for registration of transfer of the Trust Certificate at the Owner Trustee Corporate Trust Office, the Owner Trustee shall execute, authenticate and deliver (or shall cause its authenticating agent to execute, authenticate and deliver), in the name of the designated transferee, one or more new Trust Certificates representing the same aggregate Certificate Interest as the Trust Certificate being surrendered.

 

(c)                                  Every Trust Certificate presented or surrendered for registration of transfer shall be accompanied by a written instrument of transfer in form satisfactory to the Owner Trustee and the Certificate Registrar duly executed by the Holder thereof or his attorney duly authorized in writing.

 

(d)                                 No transfer of a Trust Certificate shall be made unless such transfer is made in a transaction which does not require registration or qualification under the Securities Act of 1933 or qualification under any state securities or “Blue Sky” laws.  Neither the Owner Trustee nor the Certificate Registrar shall effect the registration of any transfer of a Trust Certificate unless, prior to such transfer, the Owner Trustee shall have received an Opinion of Counsel that (x) the transfer of such Trust Certificate is being made pursuant to an effective registration under the Securities Act of 1933 or is exempt from the registration requirements of the Securities Act of 1933 and (y) such transfer will not cause the Trust to be treated as an association (or a publicly traded partnership) taxable as a corporation for federal income tax purposes.  Any transferee of a Trust Certificate must be either an Affiliate of the Trust Depositor or a Qualified Institutional Buyer.  Prior to any resale, assignment or transfer of a Trust Certificate as described in this Section 3.04, each prospective purchaser of a Trust Certificate shall have acknowledged, represented and agreed as follows:

 

(i)                                     It (and any Person for which it holds the Trust Certificate) neither has acquired nor will transfer any Trust Certificate it purchases (or any interest therein) or cause any such Trust Certificate (or any interest therein) to be marketed on or through an “established securities market” within the meaning of Section 7704(b)(1) of the Code, including, without limitation, an over-the-counter-market or an interdealer quotation system that regularly disseminates firm buy or sell quotations.

 

(ii)                                  It (and any Person for which it holds the Trust Certificate, collectively for purposes of this Section 3.04(d), a “transferee”) either (A) is not, and will not become, a partnership, S corporation or grantor trust for U.S. federal income tax purposes (or a disregarded entity of any of the foregoing) or (B) is such an entity, but

 

10

 

none of the direct or indirect beneficial owners of any of the interests in such transferee have allowed or caused, or will allow or cause, 50% or more (or, if the Owner Trustee has received an Opinion of Counsel in form and substance acceptable to the Trust Depositor that the proposed transfer to such transferee will not cause the Trust to be treated as a publicly traded partnership within the meaning of Section 7704 of the Code, such other percentage as the Owner Trustee may establish prior to the time of such proposed transfer) of the value of such interests in the transferee to be attributable to such transferee’s ownership of the Trust Certificate.

 

(iii)                               It understands that if it is acquiring any Trust Certificate for the account of one or more Persons, (A) it shall provide to the Owner Trustee and the Trust Depositor information as to the number of such Persons and any changes in the number of such Persons and (B) any such change in the number of Persons for whose account a Trust Certificate is held shall require the written consent of the Owner Trustee, which consent shall be granted unless the Owner Trustee determines that such proposed change in number of Persons would create a risk that the Trust would be classified for federal or any applicable state income tax purposes as an association (or a publicly traded partnership) taxable as a corporation.

 

(iv)                              It understands that no subsequent transfer of a Trust Certificate (or any interest therein) is permitted unless (A) such transfer is of a Trust Certificate with a Certificate Interest of at least 5%, (B) it causes its proposed transferee to provide to the Owner Trustee and the Trust Depositor a certificate substantially in the form of Exhibit C hereto, or such other written statement as the Owner Trustee shall prescribe and (C) the Owner Trustee (on behalf of the Trust) consents in writing to the proposed transfer, which consent shall be granted unless the Owner Trustee determines that such transfer would create a risk that the Trust would be classified for federal or any applicable state income tax purposes as an association (or a publicly traded partnership) taxable as a corporation; provided, however, that any attempted transfer that would cause the number of beneficial owners of the Trust Certificate in the aggregate to exceed 100 or otherwise cause the Trust to become a publicly traded partnership for income tax purposes shall be a void transfer.

 

Notwithstanding anything else to the contrary herein, any purported transfer of a Trust Certificate (or any interest therein) to or on behalf of a Benefit Plan or utilizing the assets of a Benefit Plan shall be void and of no effect.  The Owner Trustee shall not be obligated to register any transfer of a Trust Certificate unless each of the transferor and the transferee have certified to the Owner Trustee that such transfer does not violate any of the transfer restrictions stated herein.  The Owner Trustee shall not be liable to any Person for registering any transfer based on such certifications.

 

(e)                                  No service charge shall be made for any registration of transfer or exchange of a Trust Certificate, but the Owner Trustee may require payment of a sum sufficient 

 

11

 

to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of a Trust Certificate.

 

(f)                                   Any Trust Certificate surrendered for registration of transfer shall be canceled and subsequently destroyed by the Owner Trustee.

 

Section 3.05.                         Mutilated, Destroyed, Lost or Stolen Trust Certificates.

 

If (i) any mutilated Trust Certificate is surrendered to the Certificate Registrar, or the Certificate Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Trust Certificate, and (ii) there is delivered to the Certificate Registrar and the Owner Trustee such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice that such Trust Certificate has been acquired by a bona fide purchaser, the Owner Trustee on behalf of the Trust shall execute and the Owner Trustee or its authenticating agent shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust Certificate, a new Trust Certificate of like tenor and Certificate Interest.  In connection with the issuance of any new Trust Certificate under this Section 3.05, the Owner Trustee may require the payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto.  Any duplicate Trust Certificate issued pursuant to this Section 3.05 shall constitute complete and indefeasible evidence of ownership in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Trust Certificate shall be found at any time.

 

Section 3.06.                         Person Deemed Owner.

 

Prior to due presentation of a Trust Certificate for registration of transfer, the Owner Trustee, the Certificate Registrar and any of their respective agents may treat the Person in whose name any Trust Certificate is registered as the Owner of such Trust Certificate for the purpose of receiving distributions pursuant to Section 5.01 and for all other purposes whatsoever, and none of the Owner Trustee, the Certificate Registrar, any Paying Agent or any of their respective agents shall be affected by any notice of the contrary.

 

Section 3.07.                         Access to List of Certificateholders’ Name and Address.

 

The Owner Trustee shall furnish or cause to be furnished to the Servicer and the Trust Depositor, within 15 days after receipt by the Certificate Registrar of a written request therefor from the Servicer or the Trust Depositor, the name and address of the Certificateholders as of the most recent Record Date in such form as the Servicer or the Trust Depositor may reasonably require.  If (i) one or more Certificateholders evidencing, in the aggregate, not less than 25% of  the Certificate Interests or (ii) three or more Certificateholders apply in writing to the Owner Trustee, and such application states that the applicants desire to communicate with other Certificateholders with respect to their rights under this Agreement or under the Trust Certificate and such application is accompanied by a copy of the communication that such applicants propose to transmit, then the Owner Trustee shall, within five Business Days after the receipt of such application, afford such applicants access during normal business hours to the current list of 

 

12

 

Certificateholders.  The Certificateholder, by receiving and holding a Trust Certificate, agrees with the Servicer, the Trust Depositor and the Owner Trustee that none of the Servicer, the Trust Depositor or the Owner Trustee shall be held accountable by reason of the disclosure of any such information as to the name and address of such Certificateholder hereunder, regardless of the source from which such information was derived.

 

Section 3.08.                         Maintenance of Office or Agency.

 

The Owner Trustee shall maintain in Wilmington, Delaware, an office or offices or agency or agencies where the Trust Certificate may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Owner Trustee in respect of the Trust Certificate and this Agreement may be served.  The Owner Trustee hereby designates the Owner Trustee Corporate Trust Office as its office for such purposes.  The Owner Trustee shall give prompt written notice to the Trust Depositor, the Servicer and to the Certificateholder of any change in the location of the Certificate Register or any such office or agency.

 

Section 3.09.                         Trust Certificate.

 

The Owner Trustee, on behalf of the Trust, shall execute, authenticate and deliver, the initial Trust Certificate.

 

Section 3.10.                         Appointment of Paying Agent.

 

The Paying Agent shall make distributions to the Certificateholder from the Certificate Distribution Account pursuant to Section 5.01(b) and shall report the amounts of such distributions to the Owner Trustee.  The Paying Agent initially shall be Wilmington Trust, National Association and any co-paying agent chosen by the Paying Agent that is acceptable to the Owner Trustee.  Each Paying Agent shall be permitted to resign as Paying Agent upon 30 days’ written notice to the Owner Trustee.  In the event that Wilmington Trust, National Association shall no longer be the Paying Agent, the Owner Trustee shall appoint a successor to act as Paying Agent (which shall be a bank or trust company).  The Owner Trustee shall cause such successor Paying Agent or any additional Paying Agent appointed by the Owner Trustee to execute and deliver to the Owner Trustee an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the Owner Trustee that, as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Certificateholder in trust for the benefit of the Certificateholder entitled thereto until such sums shall have been paid to the Certificateholder.  The Paying Agent shall return all unclaimed funds to the Owner Trustee and upon removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Owner Trustee.  The provisions of Sections 7.01, 7.03, 7.04 and 8.01 shall apply to the Owner Trustee also in its role as Paying Agent, for so long as the Owner Trustee shall act as Paying Agent  and, to the extent applicable, to any other Paying Agent appointed hereunder.  Any reference in this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise.

 

13

 

Section 3.11.                         Ownership by Trust Depositor of Initial Trust Certificate.

 

On the Closing Date, the Trust Depositor or one of its affiliates shall hold a Trust Certificate evidencing 100% of the Certificate Interest.

 

ARTICLE FOUR

 

ACTIONS BY OWNER TRUSTEE AND CERTIFICATEHOLDER

 

Section 4.01.                         Prior Notice to Owners with Respect to Certain Matters.

 

Subject to the provisions and limitation of Section 4.04, with respect to the following matters, the Owner Trustee shall not take action unless (i) at least 30 days before the taking of such action, the Owner Trustee shall have notified the Certificateholder in writing of the proposed action, (ii) the Indenture Trustee shall have consented to such action in the event any Notes are outstanding, and (iii) the Owners shall not have notified the Owner Trustee in writing prior to the 30th day after such notice is given that such Owners have withheld consent or provided alternative direction:

 

(a)                                 the initiation of any claim or lawsuit by the Trust (except claims or lawsuits brought in connection with the collection of the Contracts) or the compromise of any action, claim or lawsuit brought by or against the Trust (except with respect to the aforementioned claims or lawsuits for collection of the Contracts);

 

(b)                                 the election by the Trust to file an amendment to the Certificate of Trust (unless such amendment is required to be filed under the Statutory Trust Statute);

 

(c)                                  the amendment of the Indenture by a supplemental indenture in circumstances where the consent of any Noteholder is required;

 

(d)                                 the amendment of the Indenture by a supplemental indenture in circumstances where the consent of any Noteholder is not required and such amendment materially and adversely affects the interest of the Owners;

 

(e)                                  the amendment, change or modification of the Administration Agreement, except to cure any ambiguity or to amend or supplement any provision in a manner or add any provision that would not materially and adversely affect the interests of the Owners; or

 

(f)                                   the appointment pursuant to the Indenture of a successor Note Registrar or Indenture Trustee or pursuant to this Agreement of a successor Certificate Registrar, or the consent to the assignment by the Note Registrar, Indenture Trustee or Certificate Registrar of its obligations under the Indenture or this Agreement, as applicable.

 

14

 

Section 4.02.                         Action by Owners with Respect to Certain Matters.

 

Subject to the provisions and limitations of Section 4.04, the Owner Trustee shall not have the power, except upon the direction of the Owners, to (a) remove the Administrator pursuant to Section 8 of the Administration Agreement, (b) appoint a successor Administrator pursuant to Section 8 of the Administration Agreement, (c) except as expressly provided in the Transaction Documents, sell the Contracts or other assets included in the Trust Estate after the termination of the Indenture, (d) initiate any claim, suit or proceeding by the Trust or compromise any claim, suit or proceeding brought by or against the Trust, (e) authorize the merger or consolidation of the Trust with or into any other statutory trust or entity (other than in accordance with Section 3.10 of the Indenture) or (f) amend the Certificate of Trust.  The Owner Trustee shall take the actions referred to in the preceding sentence only upon written instructions signed by the Owners.

 

Section 4.03.                         Action by Owners with Respect to Bankruptcy.

 

The Owner Trustee shall not have the power to commence a voluntary proceeding in a bankruptcy relating to the Trust without the prior written consent of all Owners (including the Trust Depositor) and the delivery to the Owner Trustee by each such Owner of a certificate certifying that such Owner reasonably believes that the Trust is insolvent.

 

Section 4.04.                         Restrictions on Owners’ Power.

 

The Owners shall not direct the Owner Trustee to take or to refrain from taking any action if such action or inaction would be contrary to any obligation of the Trust or the Owner Trustee under this Agreement or any of the Transaction Documents or would be contrary to the purpose of this Trust as set forth in Section 2.03, nor shall the Owner Trustee be obligated to follow any such direction, if given.

 

Section 4.05.                         Majority of the Trust Certificates Control.

 

Except as otherwise expressly provided herein, any action that may be taken by the Certificateholder under this Agreement may be taken by the Holders of the Trust Certificates evidencing not less than a majority of the Certificate Interests.  Except as expressly provided herein, any written notice of the Certificateholder delivered pursuant to this Agreement shall be effective if signed by Holders of the Trust Certificates evidencing not less than a majority of the Certificate Interests at the time of the delivery of such notice.

 

15

 

ARTICLE FIVE

 

APPLICATION OF TRUST FUNDS;
 CERTAIN DUTIES

 

Section 5.01.                         Establishment of Trust Account; Application of Trust Funds.

 

(a)                                 On or before the Distribution Date on which the Notes have been paid in full, the Owner Trustee, for the benefit of the Certificateholder, shall establish and maintain (or shall cause to be established and maintained) in the name of the Trust an Eligible Account (the “Certificate Distribution Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Certificateholder.

 

The Trust shall possess all right, title and interest in the funds on deposit from time to time in the Certificate Distribution Account and in the proceeds thereof.  Except as otherwise expressly provided herein, the Certificate Distribution Account shall be under the sole dominion and control of the Owner Trustee for the benefit of the Certificateholder. If, at any time, the Certificate Distribution Account ceases to be an Eligible Account, the Owner Trustee (or the Trust Depositor on behalf of the Owner Trustee, if the Certificate Distribution Account is not then held by the Owner Trustee or an Affiliate thereof) shall within ten Business Days establish a new Certificate Distribution Account as an Eligible Account and shall transfer any funds and/or any investments to such new Certificate Distribution Account. Monies on deposit in the Certificate Distribution Account may be invested in Eligible Investments upon the terms set forth in Section 5.05 of the Sale and Servicing Agreement, as if the Certificate Distribution Account were a Trust Account.

 

(b)                                 On each Distribution Date, the Paying Agent will distribute to the Certificateholder from amounts on deposit in the Certificate Distribution Account, on a pro rata basis in accordance with their respective Certificate Interests, amounts received pursuant to Sections 7.05(a)(x) or 7.05(b)(iii) of the Sale and Servicing Agreement with respect to such Distribution Date.

 

(c)                                  On each Distribution Date, the Paying Agent shall send to the Certificateholder the statement or statements provided to the Indenture Trustee by the Servicer pursuant to Section 9.05 of the Sale and Servicing Agreement with respect to such Distribution Date.

 

(d)                                 In the event that any withholding tax is imposed on the Trust’s payment (or allocation of income) to the Certificateholder, such tax shall reduce the amount otherwise distributable to the Certificateholder in accordance with this Section.  The Paying Agent is hereby authorized and directed to retain from amounts otherwise distributable to the Owners sufficient funds for the payment of any tax that is legally owed by the Trust (but such authorization shall not prevent the Owner 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 any Certificateholder shall be treated as cash distributed to such Certificateholder at the time it is withheld by the Trust and remitted to the appropriate taxing authority.  If there is a possibility that withholding tax is payable with respect to a distribution, the Paying Agent may in its sole discretion withhold such amounts in accordance with this paragraph (d).

 

(e)                                  At such time as the Trust, as issuer, has paid or performed or caused to be paid or performed all amounts and obligations which the Trust owed to or on behalf of the

 

16

 

Indenture Trustee for the benefit of the Noteholders under the Indenture, the balance of the Trust Estate and related interests therein previously transferred to the Trust shall be distributed to the Certificateholder (and, if the Trust Depositor is the sole Certificateholder, such distribution shall be treated as a return of capital for accounting purposes).

 

Section 5.02.                         Method of Payment.

 

Subject to Section 9.01(c) respecting the final payment upon retirement of the Trust Certificate, distributions required to be made to the Certificateholder of record on the related Record Date shall be made by check mailed to such Certificateholder at the addresses of such Holders appearing in the Certificate Register.

 

Section 5.03.                         Accounting and Reports to the Certificateholder, Owners, the Internal Revenue Service and Others.

 

The Owner Trustee shall (a) maintain (or cause to be maintained) the books of the Trust on a calendar year basis and the accrual method of accounting, (b) deliver to the Owners, as may be required by the Code and applicable Treasury Regulations, such information as may be required to enable each Owner to prepare its federal and state income tax returns, (c) file such tax returns relating to the Trust and make such elections as from time to time may be required or appropriate under any applicable state or federal statute or any rule or regulation thereunder so as to maintain the federal income tax treatment for the Trust as set forth in Section 2.11, (d) cause such tax returns to be signed in the manner required by law and (e) collect or cause to be collected any withholding tax as described in and in accordance with Section 5.01(d) with respect to income or distributions to Owners; provided, however, that the Administrator shall be responsible for the performance of such duties of the Owner Trustee to the extent set forth in Section 1(b)(iii) of the Administration Agreement.  The Owner Trustee shall elect under Section 1278 of the Code to include in income currently any market discount that accrues with respect to the Contracts.  If applicable, the Owner Trustee shall not make the election provided under Section 754 or Section 761 of the Code.

 

Section 5.04.                         Signature on Returns; Tax Matters Partner.

 

(a)                                 The Trust Depositor shall sign on behalf of the Trust the tax returns of the Trust.

 

(b)                                 If subchapter K of the Code should be applicable to the Trust, the partnership representative, within the meaning of Section 6223(a) of the Code, shall be the Trust Depositor.  The partnership representative shall, (i) if the Trust is eligible, cause the Trust to elect, pursuant to Section 6221(b) of the Code, that Section 6221(a) of the Code shall not apply to the Trust or (ii) if the election in Section 6221(b) of the Code is not available, to the extent applicable, cause the Trust to make the election under Section 6226(a) of the Code.

 

17

 

ARTICLE SIX

 

AUTHORITY AND DUTIES OF OWNER TRUSTEE

 

Section 6.01.                         General Authority.

 

Subject to the provisions and limitations of Sections 2.03 and 2.06, the Owner Trustee is authorized and directed to execute and deliver the Transaction Documents to which the Trust is to be a party and each certificate or other document attached as an exhibit to or contemplated by the Transaction Documents to which the Trust is to be a party and any amendment or other agreement, as evidenced conclusively by the Owner Trustee’s execution thereof.  In addition to the foregoing, the Owner Trustee is authorized, but shall not be obligated, to take all actions required of the Trust  pursuant to the Transaction Documents.  The Owner Trustee is further authorized from time to time to take such action as the Administrator recommends with respect to the Transaction Documents.

 

Section 6.02.                         General Duties.

 

Subject to the provisions and limitations of Sections 2.03 and 2.06, it shall be the duty of the Owner Trustee to discharge (or cause to be discharged through the Administrator) all of its responsibilities pursuant to the terms of this Agreement and the Transaction Documents to which the Trust is a party and to administer the Trust in the interest of the Owners, subject to the Transaction Documents and in accordance with the provisions of this Agreement.  Without limiting the foregoing, the Owner Trustee shall on behalf of the Trust file and prove any claim or claims that may exist against Harley-Davidson Credit in connection with any claims-paying procedure as part of an insolvency or receivership proceeding involving Harley-Davidson Credit.  Notwithstanding the foregoing, the Owner Trustee shall be deemed to have discharged its duties and responsibilities hereunder and under the Transaction Documents to the extent the Administrator has agreed in the Administration Agreement to perform any act or to discharge any duty of the Owner Trustee hereunder or under any Transaction Document, and the Owner Trustee shall not be held liable for the default or failure of the Administrator to carry out its obligations under the Administration Agreement.

 

Section 6.03.                         Action Upon Instruction.

 

(a)                                 Subject to Article Four, in accordance with the terms of the Transaction Documents, the Owners may by written instruction direct the Owner Trustee in the management of the Trust.

 

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

 

18

 

(c)                                  Whenever the Owner Trustee is unable to decide between alternative courses of action permitted or required by the terms of this Agreement or under any other Transaction Document, the Owner Trustee shall promptly give notice (in such form as shall be appropriate under the circumstances) to the Owners requesting instruction as to the course of action to be adopted, and to the extent the Owner Trustee acts in good faith in accordance with any written instruction of the Owners received, the Owner Trustee shall not be liable on account of such action to any Person.  If the Owner 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 and the other Transaction Documents, as it shall deem to be in the best interests of the Owners, and shall have no liability to any Person for such action or inaction.

 

(d)                                 In the event that the Owner Trustee is unsure as to the applicability 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 to be, in conflict with any other applicable provision, or in the event that this Agreement permits any determination by the Owner Trustee or is silent or is incomplete as to the course of action that the Owner Trustee is required to take with respect to a particular set of facts, the Owner Trustee may give notice (in such form as shall be appropriate under the circumstances) to the Owners requesting instruction and, to the extent that the Owner Trustee acts or refrains from acting in good faith in accordance with any such instruction received, the Owner Trustee shall not be liable, on account of such action or inaction, to any Person.  If the Owner 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 Owners, and shall have no liability to any Person for such action or inaction.

 

Section 6.04.                         No Duties Except as Specified in this Agreement or in Instructions.

 

The Owner 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 Owner Trustee is a party, except as expressly provided by the terms of this Agreement or any document or written instruction received by the Owner Trustee pursuant to Section 6.03; and no implied duties or obligations shall be read into this Agreement or any other Transaction Document against the Owner Trustee.  The Owner Trustee shall have no responsibility for filing 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 prepare or file any Commission filing for the Trust or to record this Agreement or any other Transaction Document.  The Owner Trustee 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, the Owner Trustee that are not related to the ownership or the administration of the Trust Estate.

 

19

 

Section 6.05.                         No Action Except Under Specified Documents or Instructions.

 

The Owner 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 Owner 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 Owner Trustee pursuant to Section 6.03.

 

Section 6.06.                         Restrictions.

 

The Owner Trustee shall not take any action (i) that is inconsistent with the purposes of the Trust set forth in Section 2.03 or (ii) that, to the actual knowledge of the Owner Trustee, would result in the Trust’s becoming taxable as a corporation for federal or state income tax purposes.  The Owners shall not direct the Owner Trustee to take actions that would violate the provisions of this Section.

 

Section 6.07.                         Pennsylvania Motor Vehicle Sales Finance Act Licenses.

 

The Owner Trustee shall use its best efforts to maintain the effectiveness of all licenses required under the Pennsylvania Motor Vehicle Sales Finance Act in connection with the transactions contemplated by the Transaction Documents until the lien and security interest of the Indenture shall no longer be in effect in accordance with its terms.

 

Section 6.08.                         Succession to Rights of the Indenture Trustee.

 

Following the satisfaction and discharge of the Indenture and the payment in full of the principal of and interest on the Notes, the Owner Trustee will succeed to the rights of, and assume the obligations of, the Indenture Trustee pursuant to the Sale and Servicing Agreement.

 

ARTICLE SEVEN

 

CONCERNING THE OWNER TRUSTEE

 

Section 7.01.                         Acceptance of Trusts and Duties.

 

The Owner Trustee accepts the trusts hereby created and agrees to perform its duties hereunder with respect to such trusts but only upon the terms of this Agreement.  The Owner Trustee also agrees to disburse all monies actually received by it constituting part of the Trust Estate upon the terms of the Transaction Documents and this Agreement.  The Owner Trustee shall not be answerable or accountable hereunder or under any other Transaction Document under any circumstances, except for its own willful misconduct, bad faith or negligence.  In particular, but not by way of limitation (and subject to the exceptions set forth in the preceding sentence):

 

20

 

(a)                                 the Owner Trustee shall not be liable for any error of judgment made by a responsible officer of the Owner Trustee;

 

(b)                                 the Owner Trustee shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the instructions of the Administrator or the Owners;

 

(c)                                  no provision of this Agreement or any other Transaction Document shall require the Owner Trustee to expend or risk funds or otherwise incur any financial liability in the performance of any of its rights or powers hereunder or under any Transaction Document if the Owner 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 Owner Trustee be liable for indebtedness evidenced by or arising under any of the Transaction Documents, including the principal of and interest on the Notes;

 

(e)                                  the Owner 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 Trust Depositor or for the form, character, genuineness, sufficiency, value or validity of any of the Trust Estate, or for or in respect of the validity or sufficiency of the Transaction Documents, other than the certificate of authentication on the Trust Certificate, and the Owner Trustee shall in no event assume or incur any liability, duty, or obligation to any Noteholder or to any Owner, other than as expressly provided for herein or expressly agreed to in the Transaction Documents;

 

(f)                                   the Owner Trustee shall not be liable for the default or misconduct of the Administrator, the Trust Depositor, the Indenture Trustee or the Servicer under any of the Transaction Documents or otherwise and the Owner Trustee shall have no obligation or liability to perform the obligations of the Trust under this Agreement or the other Transaction Documents that are required to be performed by the Administrator under the Administration Agreement, the Indenture Trustee under the Indenture, or the Servicer or the Trust Depositor under the Sale and Servicing Agreement; and

 

(g)                                  the Owner Trustee shall be under no obligation to exercise any of the rights or powers vested in it by the Agreement, or to institute, conduct or defend any litigation under this Agreement or otherwise or in relation to this Agreement or any other Transaction Document, at the request, order or direction of any Owner, unless such Owner has offered to the Owner Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred by the Owner Trustee therein or thereby.  The right of the Owner Trustee to perform any discretionary act enumerated in this Agreement or in any other Transaction Document shall not be construed as a duty, and the Owner Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of any such act.

 

21

 

Section 7.02.                         Furnishing of Documents.

 

The Owner Trustee shall furnish to the Owners, promptly upon receipt of a written request therefor, duplicates or copies of all reports, notices, requests, demands, certificates, financial statements and any other instruments furnished to the Owner Trustee under the Transaction Documents.

 

Section 7.03.                         Representations and Warranties.

 

The Owner Trustee hereby represents and warrants to the Trust Depositor and the Owners that:

 

(a)                                 It is a national banking association duly formed under the laws of the United States of America and is authorized thereunder to exercise trust powers.  It has all requisite corporate and trust power and authority to execute, deliver and perform its obligations under this Agreement.

 

(b)                                 It has taken all corporate action necessary to authorize the execution and delivery by it of this Agreement, and this Agreement will be executed and delivered by one of its officers who is duly authorized to execute and deliver this Agreement on its behalf.

 

(c)                                  Neither the execution nor the delivery by it of this Agreement, nor the consummation by it of the transactions contemplated hereby nor compliance by it with any of the terms or provisions hereof will contravene any federal or Delaware law, governmental rule or regulation governing the banking or trust powers of the Owner Trustee or any judgment or order binding on it, or constitute any default under its charter documents or bylaws or any indenture, mortgage, contract, agreement or instrument to which it is a party or by which any of its properties may be bound or result in the creation or imposition of any lien, charge or encumbrance on the Trust Estate resulting from actions by or claims against the Owner Trustee individually which are unrelated to this Agreement or the other Transaction Documents.

 

(d)                                 This Agreement constitutes the legal, valid and binding obligation of the Owner Trustee, enforceable against it in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

 

(e)                                  There are no proceedings or investigations pending or, to the Owner Trustee’s actual knowledge, threatened, before any court, regulatory body, administrative agency, or other governmental instrumentality having jurisdiction over the Owner Trustee or its properties: (i) asserting the invalidity of this Agreement or (ii) seeking any determination or ruling that might materially and adversely affect the performance by the Owner Trustee of its obligations under, or the validity or enforceability of, this Agreement or any other Transaction Document to which it is a party.

 

22

 

Section 7.04.                         Reliance; Advice of Counsel.

 

(a)                                 The Owner 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 Owner 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 Owner 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 Owner Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon.

 

(b)                                 In the exercise or administration of the trusts hereunder and in the performance of its duties and obligations under this Agreement or the other Transaction Documents, the Owner Trustee (i) may act directly or through its agents or attorneys pursuant to agreements entered into by any of them, and the Owner Trustee shall not be liable for the conduct or misconduct of such agents or attorneys as shall have been selected by the Owner Trustee with reasonable care, and (ii) may consult with counsel, accountants and other skilled persons to be selected with reasonable care and employed by it.   The Owner Trustee shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the written opinion or advice of any such counsel, accountants or other such persons.

 

Section 7.05.                         Not Acting in Individual Capacity.

 

Except as provided in this Article Seven, in accepting the trusts hereby created, Wilmington Trust, National Association acts solely as Owner Trustee hereunder and not in its individual capacity, and all Persons having any claim against the Owner Trustee by reason of the transactions contemplated by this Agreement or any other Transaction Document shall look only to the Trust Estate for payment or satisfaction thereof.

 

Section 7.06.                         Owner Trustee Not Liable for Trust Certificate, Notes or Contracts.

 

The recitals contained herein and in the Trust Certificate (other than the signature of the Owner Trustee and the certificate of authentication on the Trust Certificate) shall be taken as the statements of the Trust Depositor, and the Owner Trustee assumes no responsibility for the correctness thereof.  The Owner Trustee makes no representations as to the validity or sufficiency of this Agreement, any other Transaction Document or the Trust Certificate (other than the signature of the Owner Trustee and the certificate of authentication on the Trust Certificate) or the Notes, or of any Contract or related documents.  The Owner Trustee shall at no time have any responsibility or liability for or with respect to the legality, validity and enforceability of any Contract, or the perfection and priority of any security interest created by any Contract in any Motorcycle or the maintenance of any such perfection and priority, or for or with respect to the sufficiency of the Trust Estate or its ability to generate the payments to be distributed to the Certificateholder under this Agreement or the Noteholders under the Indenture or the Sale and Servicing Agreement, including, without limitation, the existence, condition and

 

23

 

ownership of any Motorcycle; the existence and enforceability of any insurance thereon; the existence and contents of any Contract on any computer or other record thereof; the validity of the assignment of any Contract to the Trust or of any intervening assignment; the completeness of any Contract; the performance or enforcement of any Contract; the compliance by the Trust Depositor or the Servicer with any warranty or representation made under any Transaction Document or in any related document or the accuracy of any such warranty or representation; or any action of the Administrator, the Indenture Trustee or the Servicer or any subservicer taken in the name of the Owner Trustee.

 

Section 7.07.                         Owner Trustee May Own Trust Certificate and Notes.

 

The Owner Trustee in its individual or any other capacity may become the owner or pledgee of the Trust Certificate or Notes and may deal with the Trust Depositor, the Administrator, the Indenture Trustee and the Servicer in banking transactions with the same rights as it would have if it were not Owner Trustee.

 

ARTICLE EIGHT

 

COMPENSATION OF OWNER TRUSTEE

 

Section 8.01.                         Owner Trustee’s Fees and Expenses.

 

The Owner Trustee shall receive as compensation for its services hereunder such fees as have been separately agreed upon between the Owner Trustee and the Trust Depositor.  Additionally, the Owner Trustee shall be entitled to be reimbursed by the Trust Depositor for its other reasonable expenses hereunder, including the reasonable compensation, expenses and disbursements of such agents, representatives, experts and counsel as the Owner Trustee may employ in connection with the exercise and performance of its rights and its duties hereunder.

 

Section 8.02.                         Indemnification.

 

The Trust Depositor shall be liable as primary obligor for, and shall indemnify the Owner Trustee and its successors, assigns and servants (collectively, the “Indemnified Parties”) from and against, any and all liabilities, obligations, losses, damages, taxes, claims, actions and suits, and any and all reasonable costs, expenses and disbursements (including reasonable legal fees and expenses) of any kind and nature whatsoever (collectively, “Expenses”) which may at any time be imposed on, incurred by or asserted against the Owner Trustee or any Indemnified Party in any way relating to or arising out of this Agreement, the other Transaction Documents, the Trust Estate, the administration of the Trust Estate or the action or inaction of the Owner Trustee hereunder, except only that the Trust Depositor shall not be liable for or required to indemnify an Indemnified Party from and against Expenses arising or resulting from any of the matters described in the third sentence of Section 7.01.  The indemnities contained in this Section shall survive the resignation or termination of the Owner Trustee or the termination of this Agreement.  In the event of any claim, action or proceeding for which indemnity will be sought pursuant to

 

24

 

this Section 8.02, the Owner Trustee’s choice of legal counsel shall be subject to the approval of the Trust Depositor, which approval shall not be unreasonably withheld.

 

Section 8.03.                         Payments to the Owner Trustee.

 

Any amounts paid to the Owner Trustee pursuant to this Article shall be deemed not to be a part of the Trust Estate immediately after such payment.

 

ARTICLE NINE

 

TERMINATION OF TRUST AGREEMENT

 

Section 9.01.                         Termination of Trust Agreement.

 

(a)                                 This Agreement (other than Article Eight) and the Trust shall terminate and be of no further force or effect upon the earlier of (i) the maturity or other liquidation of the last Contract and the disposition of any amounts received upon liquidation of any property remaining in the Trust, (ii) final distribution by the Owner Trustee of all monies or other property or proceeds of the Trust Estate in accordance with the terms of the Indenture, the Sale and Servicing Agreement and Article Five and (iii) 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.  The bankruptcy, liquidation, dissolution, death or incapacity of any Owner shall not (i) operate to terminate this Agreement or the Trust, (ii) entitle such Owner’s legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of all or any part of the Trust or Trust Estate or (iii) otherwise affect the rights, obligations and liabilities of the parties hereto.

 

(b)                                 Except as provided in Section 9.01(a), neither the Trust Depositor nor any Owner shall be entitled to revoke or terminate the Trust.

 

(c)                                  Notice of any termination of the Trust, specifying the Distribution Date upon which the Certificateholder shall surrender its Trust Certificate to the Paying Agent for payment of the final distribution and cancellation, shall be given by the Owner Trustee by letter to the Certificateholder mailed within five Business Days of receipt of notice of such termination from the Servicer given pursuant to Section 10.01 of the Sale and Servicing Agreement, stating (i) the Distribution Date upon or with respect to which final payment of the Trust Certificate shall be made upon presentation and surrender of the Trust Certificate at the office of the Paying Agent therein designated, (ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to such Distribution Date is not applicable, payments being made only upon presentation and surrender of the Trust Certificate at the office of the Paying Agent therein specified.  The Owner Trustee shall give such notice to the Certificate Registrar (if other than the Owner Trustee) and the Paying Agent at the time such notice is given to the Certificateholder.  Upon presentation and surrender of a Trust Certificate, the Paying Agent shall cause to be

 

25

 

distributed to the Certificateholder amounts distributable on such Distribution Date pursuant to Section 5.01.

 

(d)                                 Upon the winding up of the Trust and its termination, the Owner Trustee shall cause the Certificate of Trust to be canceled by filing a certificate of cancellation with the Secretary of State in accordance with the provisions of Section 3810 of the Statutory Trust Statute.

 

ARTICLE TEN

 

SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

 

Section 10.01.                  Eligibility Requirements for Owner Trustee.

 

The Owner Trustee shall at all times be a corporation satisfying the provisions of Section 3807(a) of the Statutory Trust Statute; authorized to exercise corporate trust powers; and (a)(i) having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal or state authorities and (ii) having (or having a parent that has) a rating of at least “Baa3” by Moody’s, or (b) that satisfies the Rating Agency Condition.  If such corporation shall publish reports of condition at least annually pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purpose of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  In case at any time the Owner Trustee shall cease to be eligible in accordance with the provisions of this Section, the Owner Trustee shall resign immediately in the manner and with the effect specified in Section 10.02.

 

Section 10.02.                  Resignation or Removal of Owner Trustee.

 

The Owner Trustee may at any time resign and be discharged from the trusts hereby created by giving written notice thereof to the Administrator.  Upon receiving such notice of resignation, the Administrator shall promptly appoint a successor Owner Trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Owner Trustee and one copy to the successor Owner Trustee.  If no successor Owner Trustee shall have been so appointed  and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Owner Trustee may petition any court of competent jurisdiction for the appointment of a successor Owner Trustee.

 

If at any time the Owner Trustee shall cease to be eligible in accordance with the provisions of Section 10.01 and shall fail to resign after written request therefor by the Administrator, or if at any time the Owner Trustee shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of the Owner Trustee or of its property shall be appointed or any public officer shall take charge or control of the Owner Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the 

 

26

 

Administrator may remove the Owner Trustee.  If the Administrator shall remove the Owner Trustee under the authority of the immediately preceding sentence, the Administrator shall promptly appoint a successor Owner Trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the outgoing Owner Trustee so removed and one copy to the successor Owner Trustee, and shall pay all fees owed to the outgoing Owner Trustee.

 

Any resignation or removal of the Owner Trustee and appointment of a successor Owner Trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor Owner Trustee pursuant to Section 10.03 and payment of all fees and expenses owed to the outgoing Owner Trustee.  The Administrator shall provide notice of such resignation or removal of the Owner Trustee to each Rating Agency.

 

Section 10.03.                  Successor Owner Trustee.

 

Any successor Owner Trustee appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to the Administrator, and to its predecessor Owner Trustee, an instrument accepting such appointment under this Agreement, and thereupon the resignation or removal of the predecessor Owner Trustee shall become effective, and such successor Owner 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 Owner Trustee.  The predecessor Owner Trustee shall upon payment of its fees and expenses deliver to the successor Owner Trustee all documents and statements and monies held by it under this Agreement; and the Administrator and the predecessor Owner 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 Owner Trustee all such rights, powers, duties and obligations.

 

No successor Owner Trustee shall accept appointment as provided in this Section unless at the time of such acceptance such successor Owner Trustee shall be eligible pursuant to Section 10.01.

 

Upon acceptance of appointment by a successor Owner Trustee pursuant to this Section, the Administrator shall mail notice thereof to the Certificateholder, the Indenture Trustee, the Noteholders and each Rating Agency.

 

Section 10.04.                  Merger or Consolidation of Owner Trustee.

 

Any corporation into which the Owner Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Owner Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Owner Trustee, shall be the successor of the Owner Trustee hereunder, without the execution or filing of any instrument or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided, that such corporation shall be eligible pursuant to Section 10.01.  The Owner Trustee shall, upon any merger, conversion or consolidation described in this Section 10.04, provide

 

27

 

notice to the Administrator detailing such merger, conversion or consolidation, including the full legal name, entity type and jurisdiction of formation or incorporation, of each entity involved in such merger, conversion or consolidation.  Upon receipt of such notice thereof from the Owner Trustee, the Administrator shall mail notice of such merger or consolidation to each Rating Agency.

 

Section 10.05.                  Appointment of Co-Trustee or Separate Trustee.

 

Notwithstanding any other provisions of this Agreement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Trust Estate or any financed Motorcycle may at the time be located, the Administrator and the Owner Trustee acting jointly shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Administrator and Owner Trustee to act as co-trustee, jointly with the Owner Trustee, or as separate trustee or separate trustees, of all or any part of the Trust Estate, and to vest in such Person, in such capacity, such title to the Trust Estate or any part thereof and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Administrator and the Owner Trustee may consider necessary or desirable.  If the Administrator shall not have joined in such appointment within 15 days after the receipt by it of a request so to do, the Owner Trustee alone shall have the power to make such appointment.  No co-trustee or separate trustee under this Agreement shall be required to meet the terms of eligibility as a successor Owner Trustee pursuant to Section 10.01 and no notice of the appointment of any co-trustee or separate trustee shall be required pursuant to Section 10.03.

 

Each separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

 

(a)                                 all rights, powers, duties and obligations conferred or imposed upon the Owner Trustee shall be conferred upon and exercised or performed by the Owner Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Owner Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed, the Owner Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust Estate or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Owner Trustee;

 

(b)                                 no trustee under this Agreement shall be personally liable by reason of any act or omission of any other trustee under this Agreement; and

 

(c)                                  the Administrator and the Owner Trustee acting jointly may at any time accept the resignation of or remove any separate trustee or co-trustee.

 

Any notice, request or other writing given to the Owner Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each

 

28

 

of them.  Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article.  Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Owner Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of, affecting the liability of or affording protection to, the Owner Trustee.  Each such instrument shall be filed with the Owner Trustee and a copy thereof given to the Administrator.

 

Any separate trustee or co-trustee may at any time appoint the Owner Trustee as its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name.  If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Owner Trustee, to the extent permitted by law, without the appointment of a new or successor co-trustee or separate trustee.

 

ARTICLE ELEVEN

 

MISCELLANEOUS

 

Section 11.01.                  Supplements and Amendments.

 

(a)                                 This Agreement may be amended by the Trust Depositor and the Owner Trustee, without the consent of any of the Noteholders or the Certificateholder, to cure any ambiguity, to correct or supplement any provisions in this Agreement or to add any other provisions with respect to matters or questions arising under this Agreement that shall not be inconsistent with the provisions of this Agreement; provided, however, that any such action shall not, as evidenced by an Opinion of Counsel, adversely affect in any material respect the interests of any Noteholder or the Certificateholder.

 

(b)                                 This Agreement may also be amended from time to time by the Trust Depositor and the Owner Trustee, with the consent of the Required Holders and the Holders of Trust Certificates evidencing not less than a majority of the Certificate Interests, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement, or of modifying in any manner the rights of the Noteholders or the Certificateholder; provided, however, that no such amendment shall (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on Contracts or distributions that shall be required to be made for the benefit of the Noteholders or the Certificateholder or (ii) eliminate the requirement for the Certificateholder’s consent or reduce the aforesaid percentage of the Outstanding Amount of the Notes required to consent to any such amendment, without the consent of the Certificateholder and Noteholders affected thereby.

 

29

 

(c)                                  Prior to the execution of any such amendment or consent, the Trust Depositor shall furnish written notification of the substance of such amendment or consent, together with a copy thereof, to the Indenture Trustee, the Administrator and each Rating Agency.

 

(d)                                 Promptly after the execution of any such amendment or consent, the Owner Trustee shall furnish written notification of the substance of such amendment or consent to the Certificateholder.  It shall not be necessary for the consent of the Certificateholder, the Noteholders or the Indenture Trustee pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof.  The manner of obtaining such consent (and any other consent 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 Owner Trustee may prescribe.

 

(e)                                  Promptly after the execution of any amendment to the Certificate of Trust, the Owner Trustee shall cause the filing of such amendment with the Secretary of State.

 

(f)                                   Prior to the execution of any amendment to this Agreement or the Certificate of Trust, the Owner Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement.  The Owner Trustee may, but shall not be obligated to, enter into any such amendment that affects the Owner Trustee’s own rights, duties or immunities under this Agreement or otherwise.

 

Section 11.02.                  No Legal Title to Trust Estate in Owners.

 

No Owner shall have legal title to any part of the Trust Estate.  The Owners shall be entitled to receive distributions with respect to their undivided ownership interest in the Trust only in accordance with Articles Five and Nine.  No transfer, by operation of law or otherwise, of any right, title or interest of the Owners to and in their ownership 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 11.03.                  Limitations on Rights of Others.

 

The provisions of this Agreement are solely for the benefit of the Owner Trustee, the Trust Depositor, the Owners, the Administrator and, to the extent expressly provided herein, the Indenture Trustee and the Noteholders, 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.

 

30

 

Section 11.04.                  Notices.

 

All notices, demands, certificates, requests and communications hereunder (“notices”) shall be in writing and shall be effective (a) upon receipt when sent through the U.S. 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.

 

Section 11.05.                  Severability of Provisions.

 

If any one or more of the covenants, agreements, provisions, or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the Trust Certificate or the rights of the Holder thereof.

 

Section 11.06.                  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 instrument.

 

Section 11.07.                  Successors and Assigns.

 

All covenants and agreements contained herein shall be binding upon, and inure to the benefit of, each of the Trust Depositor and the Owner Trustee and their respective successors and permitted assigns and each Owner and its successors and permitted assigns, all as herein provided.  Any request, notice, direction, consent, waiver or other instrument or action by an Owner shall bind the successors and assigns of such Owner.

 

Section 11.08.                  Covenants of the Trust Depositor.

 

In the event that any litigation with claims in excess of $1,000,000 to which the Trust Depositor is a party which shall be reasonably likely to result in a material judgment against the Trust Depositor that the Trust Depositor will not be able to satisfy shall be commenced, during the period beginning immediately following the commencement of such litigation and continuing until such litigation is dismissed or otherwise terminated (and, if such litigation has resulted in a final judgment against the Trust Depositor, such judgment has been satisfied), the Trust Depositor shall not pay any dividend to the Servicer, or make any distribution on or in respect of its capital stock to the Servicer, or repay the principal amount of any indebtedness of the Trust Depositor held by the Servicer, unless after giving effect to such payment, distribution or

 

31

 

repayment, the Trust Depositor’s liquid assets shall not be less than the amount of actual damages claimed in such litigation.

 

Section 11.09.                  No Petition.

 

(a)                                 The Trust Depositor will not at any time institute against the Trust any bankruptcy proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Trust Certificate, the Notes, this Agreement or any of the other Transaction Documents.

 

(b)                                 The Owner Trustee, by entering into this Agreement, the Certificateholder, by accepting a Trust Certificate, and the Indenture Trustee and each Noteholder, by accepting the benefits of this Agreement, hereby covenant and agree that they will not at any time institute against the Trust Depositor or the Trust, or join in any institution against the Trust Depositor, or the Trust of, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings or other similar proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Trust Certificate, the Notes, this Agreement or any of the other Transaction Documents.

 

Section 11.10.                  No Recourse.

 

The Certificateholder by accepting a Trust Certificate acknowledges that such Certificateholder’s Trust Certificate represents beneficial interests in the Trust only and does not represent interests in or obligations of the Trust Depositor, the Servicer, the Seller, the Administrator, the Owner Trustee, the Indenture Trustee or any of the respective Affiliates (other than the Trust) and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated in this Agreement, the Trust Certificate or the other Transaction Documents.

 

Section 11.11.                  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 11.12.                  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.

 

32

 

Section 11.13.                  Trust Certificate Transfer Restrictions.

 

No Trust Certificate or any interest therein may be acquired or held by or for the account of, or with the assets of, a Benefit Plan.  By accepting and holding a Trust Certificate, the Holder thereof shall be required to have represented and warranted that it is not a Benefit Plan and that it is not acquiring and will not hold such Trust Certificate or any interest therein for the account of, or with the assets of, a Benefit Plan.

 

Section 11.14.                  Trust Depositor Payment Obligation.

 

The Trust Depositor shall be responsible for payment of the Administrator’s compensation pursuant to Section 3 of the Administration Agreement and shall reimburse the Administrator for all expenses and liabilities of the Administrator incurred thereunder.

 

[signature page follows]

 

33

 

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

 

	
 
    	
 
    	
HARLEY-DAVIDSON CUSTOMER   FUNDING  CORP., as Trust   Depositor
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Printed Name: James   Darrell Thomas
    
	
 
    	
 
    	
Title:  Vice President, Treasurer
    
	
 
    	
 
    	
and Assistant Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
WILMINGTON TRUST, NATIONAL    ASSOCIATION,
    
	
 
    	
 
    	
as Owner Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Printed Name:
    
	
 
    	
 
    	
Title:
    

 

Signature Page to Trust Agreement

 

 

EXHIBIT A

 

FORM OF CERTIFICATE OF TRUST OF

Harley-Davidson Motorcycle Trust 2019-B

 

This Certificate of Trust of Harley-Davidson Motorcycle Trust 2019-B (the “Trust”), dated October 1, 2019, is being duly executed and filed by Wilmington Trust, National Association, a national banking association, as Owner Trustee, to form a statutory trust under the Delaware Statutory Trust Act (12 Del. Code, § 3801 et seq.).

 

1.                                      Name.  The name of the statutory trust formed hereby is Harley-Davidson Motorcycle Trust 2019-B.

 

2.                                      Delaware Trustee.  The name and business address of the Owner Trustee of the Trust in the State of Delaware is Wilmington Trust, National Association, 1100 North Market Street, Wilmington, Delaware 19890-1605.

 

IN WITNESS WHEREOF, the undersigned, being the sole Owner Trustee of the Trust, has executed this Certificate of Trust as of the date first above written.

 

	
 
    	
 
    	
WILMINGTON TRUST, NATIONAL   ASSOCIATION,
    
	
 
    	
 
    	
not in its individual   capacity but solely as Owner Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Printed Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

 

EXHIBIT B

 

FORM OF TRUST CERTIFICATE

 

THIS TRUST CERTIFICATE REPRESENTS A BENEFICIAL INTEREST IN THE TRUST (AS DEFINED BELOW) AND IS ENTITLED TO PAYMENTS AS DESCRIBED IN THE SALE AND SERVICING AGREEMENT AND INDENTURE REFERRED TO HEREIN.

 

THIS TRUST CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN HARLEY-DAVIDSON CUSTOMER FUNDING CORP., HARLEY-DAVIDSON CREDIT CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH IN THE TRUST AGREEMENT.  THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR PLEDGED UNLESS THE CONDITIONS SET FORTH IN SECTIONS 3.01, 3.04 AND 11.13 OF THE TRUST AGREEMENT HAVE BEEN COMPLIED WITH.

 

NEITHER THIS TRUST CERTIFICATE NOR ANY INTEREST HEREIN MAY BE ACQUIRED OR HELD BY OR FOR THE ACCOUNT OF OR WITH THE ASSETS OF (A) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)), THAT IS SUBJECT TO TITLE I OF ERISA, (B) A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED OR (C) ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF AN EMPLOYEE BENEFIT PLAN’S OR A PLAN’S INVESTMENT IN THE ENTITY (A “BENEFIT PLAN”).

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2020-A 
 TRUST CERTIFICATE

 

	
NO.   1
    	
Certificate Interest: 100%
    

 

 

THIS CERTIFIES THAT HARLEY-DAVIDSON CUSTOMER FUNDING CORP. is the registered owner of 100% of the non-assessable, fully-paid, fractional undivided beneficial interest in the Harley-Davidson Motorcycle Trust 2020-A (the “Trust”) formed by Harley-Davidson Customer Funding Corp., a Nevada corporation (the “Trust Depositor”).

 

The Trust was created pursuant to a Trust Agreement, dated as of January 1, 2020 (as amended and supplemented from time to time, the “Trust Agreement”), between the Trust Depositor, and Wilmington Trust, National Association, as owner trustee (the “Owner Trustee”), a summary of certain of the pertinent provisions of which is set forth below.  To the extent not otherwise defined herein, the capitalized terms used herein have the meanings assigned to them in (i) the Trust Agreement, (ii) the Sale and Servicing Agreement, dated as of January 1, 2020 

 

 

(the  “Sale and Servicing Agreement”), among the Trust, the Trust Depositor, Harley-Davidson Credit Corp. (“Harley-Davidson Credit”), as Servicer (in such capacity, the “Servicer”) and The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee (the “Indenture Trustee”) or (iii) the Indenture, dated as of January 1, 2020 (the “Indenture”), between the Trust and the Indenture Trustee.

 

This Trust Certificate is a duly authorized Trust Certificate designated as “Harley-Davidson Motorcycle Trust 2020-A Certificate”  (the “Trust Certificate”).  Issued under the Indenture are four classes of notes designated as “1.72625% Motorcycle Contract Backed Notes, Class A-1”, “1.83% Motorcycle Contract Backed Notes, Class A-2a”, “LIBOR + 0.15% Motorcycle Contract Backed Notes, Class A-2b”, “1.87% Motorcycle Contract Backed Notes, Class A-3”, and “1.93% Motorcycle Contract Backed Notes, Class A-4” (collectively, the “Notes”).  This Trust Certificate is issued under and is subject to the terms, provisions and conditions of the Trust Agreement, to which Trust Agreement the Holder of this Trust Certificate by virtue of its acceptance hereof assents and by which such Holder is bound.  The property of the Trust includes, among other things, (i) all the right, title and interest of the Trust Depositor 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 Trust Depositor to payments which are collected pursuant thereto after the Cutoff Date, including any liquidation proceeds therefrom, (iii) all rights of the Trust Depositor 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 the Trust Depositor in the Lockbox, the Lockbox Account and the 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 Trust Depositor under the Transfer and Sale Agreement, including but not limited to the Trust Depositor’s rights under Article V thereof, (viii) the remittances, deposits and payments made into the Trust Accounts from time to time and amounts in the Trust Accounts from time to time (and any investments of such amounts), (ix) all rights of the Trust Depositor to certain rebates of premiums and other amounts relating to insurance policies, debt cancellation agreements, extended service contracts or other repair and protection agreements and other items financed under such Contracts, and (x) all proceeds and products of the foregoing.

 

Under the Trust Agreement, there will be distributed on each Distribution Date to the person in whose name this Trust Certificate is registered as of the close of business on the Business Day immediately preceding such Distribution Date (each, a “Record Date”), such Certificateholder’s fractional undivided beneficial interest in the amount to be distributed to such Certificateholder on such Distribution Date.

 

The holder of this Trust Certificate acknowledges and agrees that its rights to receive distributions in respect of this Trust Certificate are subordinated to the rights of the Noteholders to the extent described in the Sale and Servicing Agreement and the Indenture.

 

 

It is the intention of Harley-Davidson Credit, the Servicer, the Trust Depositor, Owner Trustee, Indenture Trustee and the Certificateholder that, in the event there is only one Certificateholder, the Trust be disregarded as a separate entity pursuant to Treasury Regulations Section 301.7701-3(b)(1)(ii) as in effect for periods after January 1, 1997.  The Trust Depositor has agreed in the Trust Agreement and the Certificateholder, by its acceptance of a Trust Certificate, agrees not to take any action inconsistent with such intended federal income tax treatment.  Because for federal income tax purposes the Trust will be disregarded as a separate entity, Trust items of income, gain, loss and deduction for any month as determined for federal income tax purposes shall be allocated entirely to the Trust Depositor (or subsequent purchaser of the Trust Certificate) as the sole Certificateholder.

 

Solely in the event the Trust Certificates are held by more than a single Certificateholder, it is the intent of the Trust Depositor, the Servicer and the Certificateholder that, solely for purposes of federal income, state and local income and single business tax and any other income taxes, the Trust will be treated as a partnership and the Certificateholders will be treated as partners in the partnership.  The purchaser hereof and the other Certificateholder, by acceptance of a Trust Certificate, agree to treat, and to take no action inconsistent with the treatment of, the Trust Certificates for such tax purposes as partnership interests in the Trust.

 

The Certificateholder, by its acceptance of a Trust Certificate or beneficial interest in a Trust Certificate, covenants and agrees that such Certificateholder will not at any time institute against the Trust or the Trust Depositor, or join in any institution against the Trust or the Trust Depositor, Harley-Davidson Credit or the Servicer 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 Trust Certificate, the Notes, the Trust Agreement or any of the other Transaction Documents.

 

Distributions on this Trust Certificate will be made as provided in the Sale and Servicing Agreement by wire transfer or check mailed to the Certificateholder of record in the Certificate Register without the presentation or surrender of this Trust Certificate or the making of any notation hereon.  Except as otherwise provided in the Trust Agreement and notwithstanding the above, the final distribution on this Trust Certificate will be made after due notice by the Owner Trustee of the pendency of such distribution and only upon presentation and surrender of this Trust Certificate at the office or agency maintained for that purpose by the Owner Trustee in the City of Wilmington, Delaware.

 

 

This Trust Certificate does not represent an obligation of, or an interest in the Trust Depositor, Harley-Davidson Credit, as the Seller or Servicer, the Owner Trustee, the Indenture Trustee or any of their respective Affiliates (other than the Trust) and no recourse may be had against such parties or their assets, except as expressly set forth or contemplated herein or in the Trust Agreement or the other Transaction Documents.  In addition, this Trust Certificate is not guaranteed by any governmental agency or instrumentality and is limited in right of payment to certain collections and recoveries with respect to the Contracts and certain other amounts, in each case as more specifically set forth herein and in the Sale and Servicing Agreement.  A copy of each of the Sale and Servicing Agreement and the Trust Agreement may be examined by any Certificateholder upon written request during normal business hours at the principal office of the Trust Depositor and at such other places, if any, designated by the Trust Depositor.

 

The Trust Agreement permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of the Trust Depositor and the rights of the Certificateholder under the Trust Agreement at any time by the Trust Depositor and the Owner Trustee with the consent of the Holder of this Trust Certificate.  Any such consent by the Holder of this Trust Certificate shall be conclusive and binding on such Holder and on all future Holders of this Trust Certificate and of any Trust Certificate issued upon the transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent is made upon this Trust Certificate.  The Trust Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the Holder of this Trust Certificate.

 

As provided in the Trust Agreement and subject to certain limitations therein set forth, the transfer of this Trust Certificate is registrable in the Certificate Register upon surrender of this Trust Certificate for registration of transfer at the offices or agencies of the Certificate Registrar, accompanied by a written instrument of transfer in form satisfactory to the Owner Trustee and the Certificate Registrar duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Trust Certificates evidencing the same aggregate Certificate Interest in the Trust will be issued to the designated transferee.  The initial Certificate Registrar appointed under the Trust Agreement is the Owner Trustee.

 

The Owner Trustee, the Certificate Registrar and any of their respective agents may treat the Person in whose name this Trust Certificate is registered as the owner hereof for all purposes, and none of the Owner Trustee, the Certificate Registrar or any such agent shall be affected by any notice to the contrary.

 

The obligations and responsibilities created by the Trust Agreement and the Trust created thereby shall terminate upon the payment to the Certificateholder of all amounts required to be paid to it pursuant to the Trust Agreement and the Sale and Servicing Agreement and the disposition of all property held as part of the Trust Estate.  The Servicer may at its option purchase the Trust Estate at a price specified in the Sale and Servicing Agreement, and such purchase of the Contracts and other property of the Trust will affect final payment of the Trust Certificates; however, such right of purchase is exercisable only as of any Distribution Date on which the Pool Balance has declined to less than 10% of the Pool Balance on the Cutoff Date.

 

 

This Trust Certificate or any interest therein may not be acquired or held by, or for the account of, or with the assets of, a Benefit Plan.  The Holder hereof, by accepting and holding a beneficial interest in this Trust Certificate, shall be required to have represented and warranted that it is not a Benefit Plan and is not acquiring and will not hold this Trust Certificate or an interest therein for the account of, or with the assets of, a Benefit Plan.

 

 

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

 

THIS TRUST CERTIFICATE 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.

 

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

 

	
Dated:   January 1,   2020
    	
 
    	
 
    	
Harley-Davidson Motorcycle   Trust 2020-A
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
WILMINGTON TRUST, NATIONAL   ASSOCIATION, not in its individual capacity but solely as Owner Trustee
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Authorized   Signatory
    

 

 

OWNER TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is the Trust Certificate referred to in the within-mentioned Trust Agreement.

 

	
WILMINGTON TRUST, NATIONAL   ASSOCIATION,
    	
 
    	
 
    	
 
    
	
not in its individual   capacity but solely
    	
 
    	
 
    	
 
    
	
as Owner Trustee
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Authorized   Signatory
    	
 
    	
 
    	
 
    

 

 

ASSIGNMENT

 

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

 

PLEASE INSERT SOCIAL SECURITY OR

OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

(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

 

 

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

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature Guaranteed:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
NOTICE:  Signature(s) must be guaranteed by an   eligible guarantor institution.
    	
 
    	
NOTICE:  The signature to this assignment must   correspond with the name of the registered owner as it appears on the face of   the within Trust Certificate in every particular, without alteration or   enlargement or any change whatever.
    

 

 

EXHIBIT C

 

FORM OF TRANSFEREE CERTIFICATE

 

[          ], 20    

 

Harley-Davidson Motorcycle Trust 2020-A,

as Issuer

c/o Wilmington Trust, National Association,

as Owner Trustee

 

Wilmington Trust, National Association,

as Owner Trustee

 

Ladies and Gentlemen:

 

All capitalized terms not defined in this certificate shall have the meaning assigned to them in Sections 1.01 and 1.02 of that certain Amended and Restated Trust Agreement, dated January 1, 2020, by and between Harley-Davidson Customer Funding Corp., as trust depositor (the “Trust Depositor”), and Wilmington Trust, National Association, as owner trustee (the “Owner Trustee”).  In connection with our proposed purchase of 100% Certificate Interest Trust Certificate (the “Trust Certificate”) of Harley-Davidson Motorcycle Trust 2020-A (the “Trust”), a trust formed by the Trust Depositor, we confirm that:

 

(a)                                 We acknowledge that the Trust Certificate has not been and will not be registered under the Securities Act or the securities laws of any jurisdiction.

 

(b)                                 We neither have acquired nor will we transfer the Trust Certificate we purchase (or any interest therein) or cause the Trust Certificate (or any interest therein) to be marketed on or through an “established securities market” within the meaning of Section 7704(b)(1) of the Code, including, without limitation, an over-the-counter-market or an interdealer quotation system that regularly disseminates firm buy or sell quotations;

 

(c)                                  We either (i) are not, and will not become, a partnership, Subchapter S corporation or grantor trust for U.S. federal income tax purposes (or a disregarded entity of any of the foregoing) or (ii) are such an entity, but none of the direct or indirect beneficial owners of any of the interests in us have allowed or caused, or will allow or cause, 50% or more (or, if the Owner Trustee has received an Opinion of Counsel in form and substance acceptable to the Trust Depositor that the proposed transfer to such transferee will not cause the Trust to be treated as a publicly traded partnership within the meaning of Section 7704 of the Code, such other percentage as the Owner Trustee may establish prior to the time of such proposed transfer) of the value of such interests in us to be attributable to our ownership of Trust Certificate.

 

 

(d)                                 We (i) are acquiring the Trust Certificate for the account of [      ] Persons and we will notify the Owner Trustee of any changes in the number of such Persons and (B) understand that any such change in the number of Persons for whose account the Trust Certificate is held shall require the written consent of the Owner Trustee, which consent shall be granted unless the Owner Trustee determines that such proposed change in number of Persons would create a risk that the Trust would be classified for federal or any applicable state tax purposes as an association (or a publicly traded partnership) taxable as a corporation.

 

(e)                                  We understand that no subsequent transfer of the Trust Certificate is permitted unless (i) such transfer is of a Trust Certificate with a Certificate Interest of at least 5%, (ii) we cause the proposed transferee to provide to the Owner Trustee and the Trust Depositor a letter substantially in the form of Exhibit C to the Trust Agreement or such other written statement as the Owner Trustee shall prescribe and (iii) the Trust consents in writing to the proposed transfer, which consent shall be granted unless the Owner Trustee determines that such transfer would create a risk that the Trust would be classified for federal or any applicable state tax purposes as an association (or a publicly traded partnership) taxable as a corporation; provided, however, that any attempted transfer that would either cause the number of registered holders of Trust Certificates in the aggregate to exceed 100 or otherwise cause the Trust to become a publicly traded partnership for income tax purposes shall be a void transfer.

 

(f)                                   We understand that the Opinion of Counsel to the Trust that the Trust is not a publicly traded partnership taxable as a corporation is dependent in part on the accuracy of the representations in paragraphs (b) through (e) above.

 

(g)                                  We are a United States Person within the meaning of Section 7701(a)(30) of the Code.

 

(h)                                 The Trust Certificate will not be acquired or held by or for the account of (i) an employee benefit plan (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is subject to the provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code that is subject to Section 4975 of the Code or (iii) any entity whose underlying assets include plan assets by reason of an employee benefit plan’s or a plan’s investment in the entity.  Each Person who acquires the Trust Certificate or interest therein will certify that the foregoing conditions are satisfied.

 

(i)                                     We are aware that we (or any account for which we are purchasing) may be required to bear the economic risk of an investment in the Trust Certificate for an indefinite period, and we (or such account) are able to bear such risk for an indefinite period.

 

(j)                                    We acknowledge that the Owner Trustee, the Trust Depositor, and their Affiliates, and others will rely upon the truth and accuracy of the foregoing acknowledgments, representations and agreements.

 

 

You are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

 

	
 
    	
 
    	
Very truly yours,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00303-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00303-of-00352.parquet"}]]