Document:

EXHIBIT
10.30

 

 

 

 

ADMINISTRATION
AGREEMENT

among

HARLEY-DAVIDSON MOTORCYCLE TRUST 2003-4,

as Issuer,

HARLEY-DAVIDSON CREDIT CORP.,

as Administrator,

HARLEY-DAVIDSON
CUSTOMER FUNDING CORP.,

as Trust Depositor,

and

BNY MIDWEST TRUST COMPANY,

as Indenture Trustee

Dated as of October 1, 2003

 

 

 

TABLE OF CONTENTS

 

	
  SECTION 1.

  	
  DUTIES OF THE
  ADMINISTRATOR.

  
	
   

  	
   

  
	
  SECTION 2.

  	
  RECORDS

  
	
   

  	
   

  
	
  SECTION 3.

  	
  COMPENSATION

  
	
   

  	
   

  
	
  SECTION 4.

  	
  ADDITIONAL
  INFORMATION TO BE FURNISHED TO THE ISSUER

  
	
   

  	
   

  
	
  SECTION 5.

  	
  INDEPENDENCE OF THE
  ADMINISTRATOR

  
	
   

  	
   

  
	
  SECTION 6.

  	
  NO JOINT VENTURE

  
	
   

  	
   

  
	
  SECTION 7.

  	
  OTHER ACTIVITIES OF
  ADMINISTRATOR

  
	
   

  	
   

  
	
  SECTION 8.

  	
  TERM
  OF AGREEMENT; RESIGNATION AND REMOVAL OF ADMINISTRATOR

  
	
   

  	
   

  
	
  SECTION 9.

  	
  ACTION
  UPON TERMINATION, RESIGNATION OR REMOVAL

  
	
   

  	
   

  
	
  SECTION 10.

  	
  NOTICES

  
	
   

  	
   

  
	
  SECTION 11.

  	
  AMENDMENTS

  
	
   

  	
   

  
	
  SECTION 12.

  	
  SUCCESSORS AND ASSIGNS

  
	
   

  	
   

  
	
  SECTION 13.

  	
  GOVERNING LAW

  
	
   

  	
   

  
	
  SECTION 14.

  	
  HEADINGS

  
	
   

  	
   

  
	
  SECTION 15.

  	
  COUNTERPARTS

  
	
   

  	
   

  
	
  SECTION 16.

  	
  SEVERABILITY

  
	
   

  	
   

  
	
  SECTION 17.

  	
  NOT
  APPLICABLE TO HARLEY-DAVIDSON CREDIT IN OTHER CAPACITIES

  
	
   

  	
   

  
	
  SECTION 18.

  	
  LIMITATION
  OF LIABILITY OF OWNER TRUSTEE AND INDENTURE TRUSTEE

  
	
   

  	
   

  
	
  SECTION 19.

  	
  THIRD-PARTY BENEFICIARY

  
	
   

  	
   

  
	
  SECTION 20.

  	
  SURVIVABILITY

  
			

 

 

This Administration
Agreement, dated as of October 1, 2003, among Harley-Davidson Motorcycle
Trust 2003-4 (the “Issuer”), Harley-Davidson Credit Corp. (together with its
successors and assigns “Harley-Davidson Credit”) in its capacity
as administrator, the “Administrator”), Harley-Davidson Customer
Funding Corp. (the “Trust Depositor”) and BNY Midwest Trust
Company, not in its individual capacity but solely as Indenture Trustee
(together with its successors and assigns, the “Indenture Trustee”).

 

W I T N E S S E T H:

 

WHEREAS, the Issuer is
issuing 1.47% Harley-Davidson Motorcycle Contract Backed Notes, Class A-1
Notes, 2.69% Harley-Davidson Motorcycle Contract Backed Notes, Class A-2 Notes
and 2.19% Harley-Davidson Motorcycle Contract Backed Notes, Class B Notes
(collectively, the “Notes”) pursuant to the Indenture, dated
as of the date hereof (the “Indenture”), between the Issuer and the
Indenture Trustee (capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in the Indenture);

 

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

 

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

 

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

 

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

 

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

 

2

 

Section 1.                                          Duties of the Administrator.

 

(a)                                  Duties
with respect to the Indenture.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

(FF)                          the
appointment of a successor Indenture Trustee.

 

(ii)                                  The
Administrator will:

 

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

 

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

 

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

 

(b)                                 Additional Duties.

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

(c)                                  Non-Ministerial Matters.

 

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

 

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

 

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

 

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

 

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

 

(E)                                 the
removal of the Indenture Trustee.

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

Section 13.                                   Governing Law. 
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF ILLINOIS, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.

 

Section 14.                                   Headings.  The
section and subsection headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.

 

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

 

Section 16.                                   Severability. 
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.

 

Section 17.                                   Not Applicable to Harley-Davidson
Credit in Other Capacities. 
Nothing in this Agreement shall affect any obligation Harley-Davidson
Credit may have in any other capacity.

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

[signature page follows]

 

13

 

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

 

	
   

  	
  HARLEY-DAVIDSON
  MOTORCYCLE TRUST

  2003-4

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Wilmington Trust
  Company, not in its

  individual capacity but solely as Owner

  Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Anita E. Dallago

  	
   

  
	
   

  	
   

  	
  Printed Name: Anita E.
  Dallago

  
	
   

  	
   

  	
  Title: Senior Financial
  Services Officer

  
	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON
  CUSTOMER FUNDING

  CORP., as Trust Depositor

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
  Printed Name:  Perry A. Glassgow

  
	
   

  	
   

  	
  Title:  Treasurer

  
	
   

  	
   

  
	
   

  	
  BNY MIDWEST
  TRUST COMPANY, not in

  its individual capacity but solely as Indenture

  Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Cynthia Davis

  	
   

  
	
   

  	
   

  	
  Printed Name: Cynthia
  Davis

  
	
   

  	
   

  	
  Title: Assistant Vice
  President

  
	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON
  CREDIT CORP.,

  as Administrator

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
  Printed Name:  Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
  Title: Treasurer

  	
   

  
						

 

Signature Page to
Administration Agreement

 

 

LIMITED POWER OF
ATTORNEY

 

	
  State of Illinois

  	
  )

  	
   

  
	
   

  	
  )

  	
  SS.

  
	
  County of Cook

  	
  )

  	
   

  

 

KNOW ALL PERSONS BY THESE
PRESENTS, that Wilmington Trust Company, a Delaware banking corporation (the “Owner
Trustee”), whose principal executive office is located at Wilmington
Trust Company, Rodney Square North, 1100 North Market Street, Wilmington,
Delaware Attention:  Trust
Administration, by and through its duly elected and authorized officer,                                              ,  a
                                             ,  on behalf of itself and of Harley-Davidson
Motorcycle Trust 2003-4 (the “Trust”) as Issuer under the
Administration Agreement, dated as of October 1, 2003 (the
“Administration Agreement”), among the Trust, Harley-Davidson
Customer Funding Corp., BNY Midwest Trust Company, as Indenture Trustee, and
Harley-Davidson Credit Corp., as Administrator, does hereby nominate,
constitute and appoint Harley-Davidson Credit Corp., a Nevada corporation, each
of its officers from time to time and each of its employees authorized by it
from time to time to act hereunder, jointly and each of them severally,
together or acting alone, its true and lawful attorney-in-fact, for the Owner
Trustee and the Issuer in their name, place and stead, in the sole discretion
of such attorney-in-fact, to perform such calculations and prepare or cause the
preparation by other appropriate persons of, and to execute on behalf of the
Issuer or the Owner Trustee, all such documents, reports, filings, instruments,
certificates and opinions that the Issuer or the Owner Trustee is required to
prepare, file or deliver pursuant to the Administration Agreement, and to take
any and all other action, as such attorney-in-fact may deem necessary or
desirable in accordance with the directions of the Owner Trustee and in
connection with its duties as Administrator or successor Administrator under
the Administration Agreement. 
Capitalized terms used herein that are not otherwise defined shall have
the meanings ascribed thereto in the Administration Agreement.

 

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

 

 

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

 

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

 

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

 

Executed as of this
         day of October, 2003.

 

	
   

  	
  Wilmington Trust
  Company, not in its individual

  capacity but solely as Owner Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Printed Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

CERTIFICATE OF
ACKNOWLEDGMENT OF

NOTARY PUBLIC

 

 

	
  State of Delaware   

  	
  )

  	
   

  
	
   

  	
  )

  	
  SS.

  
	
  County of New Castle

  	
  )

  	
   

  

 

On
October      , 2003 before me,
                                                                                       

             [Insert
name and title of notary]

personally appeared
                                                                   .

 

o                                    personally
known to me, or

 

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

 

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

 

WITNESS my hand and
official seal.

 

 

	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [SEAL]Exhibit 10.25

 

FIFTH AMENDMENT AND MODIFICATION TO

LOAN AND SECURITY AGREEMENT

 

THIS FIFTH AMENDMENT AND
MODIFICATION TO LOAN AND SECURITY AGREEMENT (the “Amendment”)
is made this 30th day of July, 2003, by and among SHERWOOD BRANDS OF VIRGINIA, LLC (“VA”), SHERWOOD BRANDS, LLC
(“MD”), SHERWOOD BRANDS OF RI, INC. (“RI”),
ASHER CANDY, INC. (formerly known as Asher
Candy Acquisition Corporation) (“Asher”),
SHERWOOD BRANDS, INC. (“Guarantor”) and WACHOVIA BANK, NATIONAL ASSOCIATION, formerly known as First
Union National Bank (the “Lender”).  VA, MD, RI and Asher are referred to
collectively as “Borrowers” or
each as a “Borrower”.

 

BACKGROUND

 

A.                                   Borrowers,
Guarantor and Lender entered into that certain Loan and Security Agreement
dated June 12, 2001 (as amended by that certain First Amendment and
Modification to Loan and Security Agreement dated April 30, 2002, that certain
Second Amendment and Modification to Loan and Security Agreement dated
September 5, 2002, that certain Third Amendment and Modification to Loan and
Security Agreement dated April 7, 2003, that certain Fourth Amendment and
Modification to Loan and Security Agreement dated May 30, 2003 and as the same
may be further amended from time to time, the “Loan
Agreement”).

 

B.                                     Borrowers,
Guarantor and Lender desire to further amend the Loan Agreement in accordance
with the terms and conditions set forth herein.

 

NOW, THEREFORE,
intending to be legally bound hereby, the parties hereto agree as follows:

 

1.                                     Maximum
Revolving Credit.  Section
10.1(a) of the Loan Agreement, “Maximum Revolving Credit”,
is hereby amended by replacing the reference therein to “$25,000,000.00” with “$18,000,000.00”.  Borrowers’ obligations in respect
of sums due under Revolving Loans and Letters of Credit shall continue to be evidenced
by that certain Amended and Restated Revolving Note from Borrowers to Lender
dated April 30, 2002 in the face amount of Twenty-Five Million Dollars
($25,000,000.00).  However, the Maximum
Revolving Credit shall be Eighteen Million Dollars ($18,000,000.00),
notwithstanding the face amount of such Amended and Restated Revolving Note.

 

2.                                     Subordinated Debt. 

 

(a)                                  On or before the date hereof, Borrowers shall
receive cash proceeds of a loan from Lana, LLC in an amount equal to Two
Million Dollars ($2,000,000.00) (the “Subordinated
Debt”), which amount shall be applied to the outstanding principal
balance of the Revolving Loans.

 

(b)                                 The Subordinated Debt shall be secured solely
by a security interest in the accounts receivable and inventory of Borrowers (the
“Subordinated Debt Collateral”).

 

 

(c)                                  The Subordinated Debt and the Subordinated
Debt Collateral are fully subordinated to all Obligations and all liens,
security interests, rights and remedies in favor of Lender in the Subordinated
Debt Collateral, pursuant to that certain Subordination Agreement of even date
herewith among Borrowers, Lender and Lana, LLC.

 

3.                                     Permitted Out-of-Formula Amount.

 

(a)                                  In
addition to the sums otherwise available to Borrowers as Revolving Loans
supported by the Borrowing Base, Borrowers may borrow the following amounts for
the following periods (the “Permitted
Out-of-Formula Amount”):

 

	
  Period

  	
   

  	
  Permitted
  Out-of-Formula Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date hereof through and including October 31, 2003

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November 1, 2003 through and including November 15, 2003

  	
   

  	
  $

  	
  600,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November 16, 2003 through and including November 30, 2003

  	
   

  	
  $

  	
  350,000

  	
   

  

 

(b)                                 At
all times after November 30, 2003, no Permitted Out-of-Formula Amount shall be
available to Borrowers.

 

(c)                                  Notwithstanding
anything in this Amendment to the contrary, in no event shall the sum of the
(i) Revolving Loans and Letters of Credit supported by the Borrowing Base, plus
(ii) Revolving Loans and Letters of Credit supported by the applicable
Permitted Out-of-Formula Amount, exceed the Maximum Revolving Credit, less any
Reserves.

 

4.                                     Financial Covenants.

 

(a)                                  Lender waives Borrowers’ compliance with the
Fixed Charge Coverage Ratio and Tangible Net Worth covenants set forth in Section 6.19 of the Loan Agreement for
the fiscal periods ended October 30, 2002, January 31, 2003 and April 30, 2003
only.

 

(b)                                 The foregoing waiver applies solely to the
Fixed Charge Coverage Ratio and Tangible Net Worth covenants and only for the
periods stated above.  Borrowers shall
be in compliance with such covenants, as amended, for all other periods.

 

(c)                                  Subsections (a)-(c) of Section
6.19  of the Loan Agreement are hereby deleted in their entirety
and replaced with the following:

 

“(a)                            Borrowers shall maintain Tangible Net Worth
of not less than (i) $5,800,000.00 as of July 31, 2003; (ii) $6,800,000.00 as
of October 31, 2003; (iii) $8,700,000.00 as of January 31, 2004 and of all
times thereafter through April 29, 2004; (iv) $9,100,000.00 as of

 

2

 

April 30, 2004; and (v)
$7,250,000.00 as of July 31, 2004 and at all times thereafter.

 

(b)                                 Borrowers’ shall maintain a Fixed Charge
Coverage Ratio of not less than (i) negative 4.32 to 1.0 for twelve (12) month
period ending July 31, 2003; (ii) negative 3.70 to 1.0 for the twelve (12)
month period ending October 31, 2003; (iii) negative 2.20 to 1.0 for the twelve
(12) month period ending January 31, 2004; (iv) .90 to 1.0 for the twelve (12)
month period ending April 30, 2004; (v) 1.75 to 1.0 for the twelve (12) month
period ending July 31, 2004; and (vi) 1.75 to 1.0 as of the end of each fiscal
quarter of Borrowers’ after July 31, 2004, measured on a rolling four (4)
quarter basis.

 

(c)                                  Borrowers and Guarantor shall not, directly
or indirectly, expend or commit to expend, for fixed or capital assets
(including capital lease obligations) (collectively “Capital Expenditures”) in aggregate amount in excess of
$1,100,000.00 in the fiscal year ending July 31, 2003 and in any fiscal year
thereafter.”

 

5.                                       Additional Collateral.

 

(a)                                  Contemporaneously with the execution of this
Amendment, as additional security for the Obligations, Borrowers shall execute
and deliver to Lender Deeds of Trust and collateral agreements granting to
Lender (i) a first priority mortgage lien on and security interest in the real
property and improvements thereon owned by VA and located at 350 Sherwood
Drive, Keysville, Virginia (together with all rents, leases and other rights
with respect thereto) and (ii) a second priority mortgage lien on and security
interest in the real property and improvements thereon owned by VA and located
at 807 South Main Street, Chase City, Virginia (together with all rents, leases
and other rights with respect thereto) (collectively, the “Additional Collateral”).  In connection with the Additional
Collateral, contemporaneously with the execution of this Amendment, Borrowers
shall cause to be delivered to Lender a title insurance policy insuring
Lender’s lien thereon, which policy shall be from an insurer and in form,
content and amount satisfactory to Lender

 

(b)                                 From and after the date hereof, references to
“Collateral” under the Loan
Agreement shall be deemed to include, without limitation, the Additional
Collateral.

 

(c)                                  On or before September 15, 2003, Borrowers
shall cause to be delivered to Lender, at the sole cost and expense of
Borrowers (i) an appraisal on the Additional Collateral in form, content and
prepared by an appraiser satisfactory to Lender and (ii) an environmental audit
with respect to the Additional Collateral in form, content and performed by an
environmental engineer satisfactory to Lender.

 

6.                                     Inventory.

 

(a)                                  On or before September 30, 2003, at
Borrowers’ sole cost and expense, Borrowers shall cause to be delivered to
Lender an appraisal on Borrowers’ inventory in form, content and from an
appraiser acceptable to Lender.

 

3

 

(b)                                 On or before August 22, 2003, Borrowers,
Lender and Borrowers’ customs broker shall enter in an agreement in the form
attached hereto as Exhibit “A” regarding Borrowers’
in-transit inventory and the documents of title with respect thereto.

 

(c)                                  From and after the date hereof, and without
in any way limiting the generality of any provisions of the Loan Agreement, the
following items of inventory, as determined by Lender from time to time, shall
in no event be deemed Eligible Inventory:

 

(i)                                     inventory which is equal to or greater than
12 months old;

 

(ii)                                  that portion of a particular item of
inventory which is in excess of the quantity of such item of inventory sold by
the Borrowers during the immediately preceding 12 month period;

 

(iii)                               all inventory of a particular type (excluding new items of inventory
which had not been previously offered for sale by Borrowers), regardless of the
age thereof, if no sales of that type of inventory have been made within the
immediately preceding 12 month period; and

 

(iv)                              inventory purchased or manufactured by Borrowers for a particular
holiday season, during the applicable period shown on Exhibit “B” attached
hereto.  By way of example only,
inventory purchased or manufactured by Borrowers and consisting of Christmas
canes would not be Eligible Inventory for the period from December 26 through
and including March 1.

 

7.                                     Key Man Life Insurance.  On
or before the date hereof, Borrowers shall cause to be delivered to Lender an
assignment agreement (with the acknowledgment of the insurance issuer) in form
and content satisfactory to Lender, with respect to a key-man life insurance
policy on the life of Uziel Frydman in an amount equal to at least One Million
Dollars ($1,000,000).

 

8.                                     Movement of Equipment.

 

(a)                                In the event that Borrowers desire to move
any equipment of Borrowers to a location outside of the United States,
Borrowers shall (i) provide Lender with at least 5 Business Days prior notice
thereof (which notice shall include identification of the equipment being
moved), and (ii) on or before the date such equipment is moved, pay to Lender
an amount (the “Additional Term Loan Payment”)
equal to the value of such equipment as shown on that certain equipment
appraisal prepared by Michael Fox, Inc. dated September 24, 2002.

 

(b)                               Each Additional Term Loan Payment shall be
applied to the outstanding principal balance of Term Loan A and/or Term Loan B
as Lender shall determine.  Borrowers
shall not be required to pay any prepayment premium with respect to any
Additional Term Loan Payment.  The
Additional Term Loan Payments shall be deemed to be applied to principal
payments due under Term Loan A and/or Term Loan B, as applicable, in the
inverse order of maturity and shall not change the timing or amount of the
regularly scheduled payments due thereunder.

 

(c)                                Nothing in this Section 7, nor the receipt by Lender of any Additional
Term Loan Payments, shall be deemed to be a release by Lender of its security
interests in or rights and remedies with respect to any equipment in respect of
which an Additional Term Loan Payment is

 

4

 

made, all of which security interests, rights
and remedies shall continue in accordance with the terms and conditions of the
Loan Agreement and each of the other Loan Documents.

 

9.                                     K-Mart Receivables.

 

(a)                                Without
in any way limiting the generality of any provisions of the Loan Agreement,
accounts receivable of Borrowers due from K-Mart (the “K-Mart Receivables”) which are created
after the date of this Amendment shall in no event be deemed Eligible Accounts.

 

(b)                               Lender will consent to Borrowers entering
into a factoring arrangement with a third party with respect to the K-Mart
Receivables, provided that the factor shall have an interest solely in the
K-Mart Receivables and the proceeds thereof and all documentation in connection
therewith shall be otherwise in form and content satisfactory to Lender.

 

10.                               Collateral Servicing Fee.  Section
10.5(f) of the Loan Agreement is hereby amended by replacing the
reference to “$500” therein with “$1,900.00”.  The foregoing increase shall be deemed effective beginning with
the month of June, 2003.

 

11.                               Asher Candy, Inc.

 

(a)                                Asher
has been deemed “administratively dissolved” by the State of Wyoming.

 

(b)                               Within ten (10) days following the date
hereof, Borrower shall have completed all action necessary to cause Asher to be
in good standing in the State of Wyoming and shall have delivered evidence
satisfactory to Lender of all such action.

 

(c)                                On or before October 30, 2003, Borrower shall
cause to be delivered to Lender a good standing certificate for Asher from the
State of Wyoming, which shall be in form and content satisfactory to Lender.

 

12.                               Amendment Fee.

 

(a)                                Borrowers shall pay to Lender an amendment
fee in the amount of $100,000.00 (the “Amendment
Fee”), which has been fully earned by Lender as of the date hereof.

 

(b)                               The Amendment Fee shall be paid as follows:

 

(i)                                     $5,000.00 on the date of execution of this
Amendment; and

 

(ii)                                  $95,000.00 on the earlier of (1) December 1,
2003, (2) the occurrence of an Event of Default and demand by Lender for
payment in full of the Obligations or (3) termination of the Loan Agreement for
any reason.

 

13.                               Further Agreements and
Representations.  Each Borrower and Guarantor does hereby:

 

(a)                                ratify, confirm and acknowledge that, as
amended hereby, the Loan Agreement and the other Loan Documents are valid,
binding and in full force and effect;

 

5

 

(b)                               covenant and agree to perform all of such
Borrower’s and Guarantor’s obligations under the Loan Agreement and the other
Loan Documents, as amended;

 

(c)                                acknowledge and agree that as of the date
hereof, neither any Borrower nor Guarantor has any defense, set-off,
counterclaim or challenge against the payment of any sums owing under any of
the Obligations, as amended, or the enforcement of any of the terms of the Loan
Agreement or of the other Loan Documents, as amended;

 

(d)                               acknowledge and agree that except as
heretofore disclosed to Lender by Borrowers in writing, all representations and
warranties of Borrowers and Guarantor contained in the Loan Agreement and/or
the other Loan Documents, as amended, are true, accurate and correct on and as
of the date hereof as if made on and as of the date hereof;

 

(e)                                represent and warrant that, after giving
effect to this Amendment, no Event of Default or event which with the delivery
of notice, passage of time or both would constitute an Event of Default exists
or will exist and all information described in the foregoing Background is true
and accurate; and

 

(f)                                  covenant and agree that Borrowers’ or
Guarantor’s failure to comply with the terms of this Amendment or any of the
documents executed or delivered to Lender pursuant to the terms hereof shall
constitute an Event of Default under the Loan Agreement.

 

14.                               Additional Documents;
Further Assurances.  Borrowers and Guarantor covenant and agrees
to execute and deliver to Lender, or to cause to be executed and delivered to
Lender contemporaneously herewith, at the sole cost and expense of Borrowers,
all documents, agreements, statements, resolutions, certificates, consents and
information as Lender may require in connection with the matters or actions
described herein.  Borrowers and
Guarantor further covenant and agree to execute and deliver to Lender or to
cause to be executed and delivered at the sole cost and expense of Borrowers,
from time to time, any and all other documents, agreements, statements,
certificates and information as Lender shall reasonably request to evidence or
effect the terms hereof, the Loan Agreement, as amended, or any of the other
Loan Documents, or to enforce or to protect Lender’s interest in the
Collateral.  All such documents,
agreements, statements, etc., shall be in form and content acceptable to Lender
in its reasonable sole discretion.

 

15.                               Release. 
Borrowers and Guarantor acknowledge and agree that they have no claims,
suits or causes of action against Lender and hereby remise, release and forever
discharge Lender and its officers, directors, shareholders, employees, agents,
successors and assigns from any claims, suits or causes of action whatsoever,
in law or equity, which any Borrower or Guarantor has or may have arising from
any act, omission or otherwise, at any time up to and including the date of
this Amendment.

 

16.                               Certain Fees, Costs,
Expenses And Expenditures.  Borrowers will pay all of the Lender’s
expenses in connection with the review, preparation, negotiation, documentation
and closing of this Amendment and the consummation of the transactions
contemplated hereunder, including without limitation, fees, disbursements, expenses,
appraisal costs and fees and expenses of counsel retained by Lender and all
fees related to filings, recording of documents and searches, whether or not
the transactions contemplated hereunder are consummated.  Nothing contained herein shall limit in any
manner whatsoever Lender’s right to reimbursement under any of the Loan
Documents.

 

6

 

17.                               No Further Amendment; No
Course of Dealing.  Nothing contained herein constitutes an
agreement or obligation by Lender to grant any further amendments with respect
to any of the Loan Documents.  Except as
expressly set forth in Section 3(a)
above, any waiver or implied waiver by Lender of any obligations or covenants
of Borrowers, Guarantor or any of them, under the Loan Documents is expressly
terminated and rescinded and Borrowers shall strictly perform and comply with
all obligations and covenants under the Loan Documents.

 

18.                               Inconsistencies. To the extent of any inconsistencies between
the terms and conditions of this Amendment and the terms and conditions of the
Loan Agreement, the terms and conditions of this Amendment shall prevail. All
terms and conditions of the Loan Agreement not inconsistent herewith shall
remain in full force and effect and are hereby ratified and confirmed by
Borrowers.

 

19.                               Construction.  Any
capitalized terms used in this Amendment not otherwise defined shall have the
meaning as set forth in the Loan Agreement.

 

20.                               Binding Effect.  This
Amendment, upon due execution hereof, shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.

 

21.                               Governing Law.  This Amendment shall be governed and
construed in accordance with the laws of the Commonwealth of Pennsylvania.

 

22.                               Severability.  The
provisions of this Amendment and all other Loan Documents are deemed to be
severable, and the invalidity or unenforceability of any provision shall not
affect or impair the remaining provisions which shall continue in full force
and effect.

 

23.                               No Third Party Beneficiaries.  The
rights and benefits of this Amendment and the Loan Documents shall not inure to
the benefit of any third party.

 

24.                               Headings.  The
headings of the Articles, Sections, paragraphs and clauses of this Amendment
are inserted for convenience only and shall not be deemed to constitute a part
of this Amendment.

 

25.                               Counterparts. 
This Amendment may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Amendment by signing any such counterpart.

 

(SIGNATURES ON FOLLOWING PAGE)

 

7

 

IN WITNESS WHEREOF,
the parties hereto, intending to be legally bound hereby, have caused this Amendment
to be executed the day and year first above written.

 

	
  LENDER:

  	
   

  	
  BORROWERS:

  
	
   

  	
   

  	
   

  
	
  WACHOVIA BANK,

  NATIONAL ASSOCIATION

  	
   

  	
  SHERWOOD BRANDS OF VIRGINIA,

  LLC

  
	
   

  	
   

  	
  a Virginia limited liability company

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ George C. Kyvernitis

  	
   

  	
   

  	
  By:

  	
  SHERWOOD BRANDS, INC.,

  
	
   

  	
  George C. Kyvernitis, Vice President

  	
   

  	
   

  	
  Sole Member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Amir Frydman

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Amir
  Frydman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SHERWOOD BRANDS, LLC,

  
	
   

  	
   

  	
  a
  Maryland limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  SHERWOOD BRANDS, INC.,

  
	
   

  	
   

  	
   

  	
  Sole
  Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Amir Frydman

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Amir
  Frydman

  
	
   

  	
   

  	
   

  	
   

  	
  Executive
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SHERWOOD BRANDS OF RI, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Amir Frydman

  	
   

  
	
   

  	
   

  	
   

  	
  Amir Frydman

  
	
   

  	
   

  	
   

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ASHER CANDY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Amir Frydman

  	
   

  
	
   

  	
   

  	
   

  	
  Amir Frydman

  
	
   

  	
   

  	
   

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GUARANTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SHERWOOD BRANDS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Amir Frydman

  	
   

  
	
   

  	
   

  	
   

  	
  Amir Frydman

  
	
   

  	
   

  	
   

  	
  Executive Vice President

  
																

 

8

 

EXHIBIT “B”

 

	
  Type of Inventory

  	
   

  	
  Period of
  Exclusion from Eligible Inventory

  
	
   

  	
   

  	
   

  
	
  Christmas Canes

  	
   

  	
  December 26 through and
  including March 1

  
	
   

  	
   

  	
   

  
	
  Christmas Gift items

  	
   

  	
  December 26 through and
  including April 30

  
	
   

  	
   

  	
   

  
	
  All other Christmas
  Categories

  	
   

  	
  December 26 through and
  including June 30

  
	
   

  	
   

  	
   

  
	
  Valentines items

  	
   

  	
  February 15 through and
  including May 31

  
	
   

  	
   

  	
   

  
	
  Easter items consisting of
  finished goods

  	
   

  	
  Day after Easter through
  and including September 30

  
	
   

  	
   

  	
   

  
	
  Halloween items

  	
   

  	
  October 31 through and
  including March 31

  

 

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]