Document:

Exhibit 10.1

 

	
DATE:
    	
June 6, 2016
    
	
 
    	
 
    
	
TO:
    	
Affiliated Managers   Group, Inc.
    
	
 
    	
777 South Flagler Drive
    
	
 
    	
West Palm Beach, FL   33401
    
	
ATTENTION:
    	
Jay C. Horgen
    
	
FACSIMILE:
    	
 
    
	
 
    	
 
    
	
FROM:
    	
Bank of America, N.A.
    
	
 
    	
c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated
    
	
 
    	
Bank of America Tower at One Bryant Park
    
	
 
    	
New York, NY 10036
    
	
ATTENTION:
    	
Gary Rosenblum, Senior Vice President and Associate General Counsel
    
	
TELEPHONE:
    	
 
    
	
FACSIMILE:
    	
 
    
	
 
    	
 
    
	
SUBJECT:
    	
Registered Forward   Transaction — Block
    

 

The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the transaction entered into between Bank of America, N.A. (“Dealer”) and Affiliated Managers Group, Inc. (“Counterparty”) on the Trade Date referenced below (the “Transaction”).  This Confirmation constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below.  This Confirmation constitutes the entire agreement and understanding of the parties with respect to the subject matter and terms of the Transaction and supersedes all prior or contemporaneous written and oral communications with respect thereto.

 

The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation.  In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall govern.

 

Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.

 

This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates.  This Confirmation shall supplement, form a part of, and be subject to an agreement in the form of the ISDA 2002 Master Agreement (the “Agreement”) as if Dealer and Counterparty had executed an agreement in such form (without any Schedule except for the election of United States dollars (“USD”) as the Termination Currency and such other elections set forth in this Confirmation).  In the event of any inconsistency between the provisions of the Agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates.  The parties hereby agree that, other than the Transaction to which this Confirmation relates, no other Transaction shall be governed by the Agreement.  The parties also acknowledge that the Transaction to which this Confirmation relates is not governed by, and shall not be treated as a Transaction under, any other ISDA Master Agreement entered into between Dealer and Counterparty from time to time, including the ISDA Master Agreement between the parties entered into on November 7, 2011, as amended on June 21, 2013.

 

The terms of the Transaction to which this Confirmation relates are as follows:

 

	
General Terms:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Trade Date:
    	
 
    	
June 6, 2016.
    

 

 

	
Effective Date:
    	
 
    	
June 10, 2016.
    
	
 
    	
 
    	
 
    
	
Seller:
    	
 
    	
Counterparty
    
	
 
    	
 
    	
 
    
	
Buyer:
    	
 
    	
Dealer
    
	
 
    	
 
    	
 
    
	
Shares:
    	
 
    	
The common stock of Counterparty, par value USD 0.01   per share (Ticker Symbol: “AMG”)
    
	
 
    	
 
    	
 
    
	
Underwriting Agreement:
    	
 
    	
The Underwriting Agreement dated as of June 6,   2016 among Counterparty, Dealer, Merrill Lynch, Pierce, Fenner &   Smith Incorporated and Barclays Capital Inc., as amended.
    
	
 
    	
 
    	
 
    
	
Number of Shares:
    	
 
    	
Initially 2,500,000 (the “Initial   Number of Shares”); provided that   (i) the Number of Shares shall be increased on each Date of Delivery (as   defined in the Underwriting Agreement) by the number of Borrowed Additional   Shares (as defined in the Underwriting Agreement) purchased by the   Underwriters (as defined in the Underwriting Agreement) pursuant to   Section 2(b) of the Underwriting Agreement (the “Option Shares”); (ii) the Number of Shares shall be   reduced by the number of Company Top-Up Initial Shares (as defined in the   Underwriting Agreement); and (iii) on each Settlement Date, the Number   of Shares shall be reduced by the number of Settlement Shares settled on such   date.
    
	
 
    	
 
    	
 
    
	
Hedge Completion Date:
    	
 
    	
The Effective Date.
    
	
 
    	
 
    	
 
    
	
Initial Forward Price:
    	
 
    	
USD 167.25 per Share.
    
	
 
    	
 
    	
 
    
	
Forward Price:
    	
 
    	
(a)
    	
On the Hedge Completion Date, the Initial Forward   Price; and
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)
    	
on each calendar day thereafter, (i) the   Forward Price as of the immediately preceding calendar day multiplied by (ii) the sum of 1 and the Daily Rate   for such day; provided that, if the Number of   Shares is increased in respect of any Borrowed Additional Shares, the Forward   Price shall be adjusted by the Calculation Agent on the Date of Delivery for   such Borrowed Additional Shares to account for the fact that the application of   the Daily Rate under this clause (b) shall not apply prior to such Date   of Delivery with respect to the number of Shares by which the Number of   Shares has been so increased.
    
	
 
    	
 
    	
 
    
	
Daily Rate:
    	
 
    	
For any day, (i) (a) USD-Federal Funds   Rate (or, if the USD-Federal Funds Rate is no longer published, a successor   rate mutually agreed in good faith by Dealer and Counterparty; provided that, if Dealer and Counterparty do not mutually   agree on the successor rate within one Scheduled Trading Day following the date   the USD-Federal Funds Rate ceases to be published, the successor rate shall   be determined by the Calculation Agent acting in good faith and in a   commercially reasonable manner and, following any such determination, the   Calculation Agent will provide to Counterparty the basis for its   determination) for such day minus   (b) the Spread divided by   (ii) 365.
    
	
 
    	
 
    	
 
    
	
USD-Federal Funds Rate:
    	
 
    	
For any day, the rate set forth for such day   opposite the caption “Federal funds”, as such rate is displayed on the   page “FedsOpen <Index><GO>“ on the BLOOMBERG Professional   Service, or any successor page (which displayed rate is, for the   avoidance of doubt, a percentage); provided that   if no rate appears for a particular day on such page, the rate for the   immediately
    

 

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preceding day for which a rate does so appear shall   be used for such day.
    
	
 
    	
 
    	
 
    
	
Spread:
    	
 
    	
0.90%
    
	
 
    	
 
    	
 
    
	
Prepayment:
    	
 
    	
Not Applicable
    
	
 
    	
 
    	
 
    
	
Variable Obligation:
    	
 
    	
Not Applicable
    
	
 
    	
 
    	
 
    
	
Exchange:
    	
 
    	
The New York Stock Exchange
    
	
 
    	
 
    	
 
    
	
Related Exchange(s):
    	
 
    	
All Exchanges
    
	
 
    	
 
    	
 
    
	
Clearance System:
    	
 
    	
The Depository Trust Company
    
	
 
    	
 
    	
 
    
	
Market Disruption Event:
    	
 
    	
Section 6.3(a) of the Equity Definitions   is hereby amended by deleting the words “during the one hour period that ends   at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time   or Knock-out Valuation Time, as the case may be,” in clause   (ii) thereof.
    
	
 
    	
 
    	
 
    
	
Early Closure:
    	
 
    	
Section 6.3(d) of the Equity Definitions   is hereby amended by deleting the remainder of the provision following the   term “Scheduled Closing Time” in the fourth line thereof.
    
	
 
    	
 
    	
 
    
	
Settlement:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Settlement Currency:
    	
 
    	
USD (all amounts shall be converted to the   Settlement Currency in good faith and in a commercially reasonable manner by   the Calculation Agent)
    
	
 
    	
 
    	
 
    
	
Settlement Date:
    	
 
    	
Any Scheduled Trading Day following the Effective   Date and up to and including the applicable Final Date that is either:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a)
    	
designated by Counterparty as a “Settlement Date” by a written notice (a “Settlement Notice”) delivered to Dealer no less than   (i) one Scheduled Trading Day prior to such Settlement Date and five   Scheduled Trading Days prior to such Final Date, if Physical Settlement   applies, and (ii) five Scheduled Trading Days prior to such Settlement   Date, which may be such Final Date, if Cash Settlement or Net Stock   Settlement applies; provided that   if Cash Settlement or Net Stock Settlement applies, any Settlement Date,   including a Settlement Date on the scheduled Final Date, shall be deferred   until the date on which Dealer (or its affiliate) is able to completely   unwind Dealer’s hedge with respect to the portion of the Number of Shares to   be settled if Dealer (or its affiliate) is unable to completely unwind Dealer’s   hedge with respect to the portion of the Number of Shares to be settled   during the Unwind Period due to the restrictions of Rule 10b-18 (“Rule 10b-18”) under the Securities Exchange Act of   1934, as amended (the “Exchange Act”)   agreed to hereunder, the existence of any Suspension Day or Disrupted Day or   the lack of sufficient liquidity in the Shares during the Unwind Period (as   determined by the Calculation Agent); provided further   that if Dealer (or its affiliate) shall fully unwind Dealer’s hedge with   respect to the portion of the Number of Shares to be settled during an Unwind   Period by a date that is more than three Scheduled Trading Days prior to a   Settlement Date specified above, Dealer may, by written notice to   Counterparty, specify any Scheduled Trading Day prior to such original   Settlement Date as the Settlement
    

 

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Date; or
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)
    	
designated by Dealer as a Settlement Date pursuant   to the “Acceleration Events” provisions below;
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
provided that the applicable   Final Date will be a Settlement Date if on such date the applicable Number of   Shares for which a Settlement Date has not already been designated is greater   than zero; provided further that if any   Settlement Date specified above is not an Exchange Business Day, the   Settlement Date shall instead be the next Exchange Business Day; and provided further that, following the occurrence of at   least three consecutive Suspension Days during an Unwind Period and while   such Suspension Days are continuing, Dealer may designate any subsequent   Exchange Business Day as the Settlement Date with respect to the portion of   the Settlement Shares, if any, for which Dealer (or its affiliate) has   determined an Unwind Purchase Price during such Unwind Period (such   Settlement Date, a “Partial Settlement   Date”), it being understood that (x) other than in the case   of a Rule 10b-18 Unavailability Period (as defined below), the Unwind   Period with respect to the remainder of such Settlement Shares shall   recommence on the next succeeding Exchange Business Day that is not a   Suspension Day and (y) in the case of a Rule 10b-18 Unavailability   Period, the remainder of such Settlement Shares shall be treated as if   Counterparty had not designated a Settlement Date with respect thereto and   Counterparty shall be entitled to designate another Settlement Date in   accordance with the terms hereof (or, if the Final Date has passed,   Counterparty shall be deemed to have designated in a Settlement Notice a   Settlement Date of the Scheduled Trading Day immediately following the   related Partial Settlement Date with respect to such remainder of such   Settlement Shares, and Physical Settlement shall apply to such Settlement   Date).
    
	
 
    	
 
    	
 
    
	
Final Date:
    	
 
    	
June 10, 2017 (or if such day is not a   Scheduled Trading Day, the next following Scheduled Trading Day).
    
	
 
    	
 
    	
 
    
	
Settlement Shares:
    	
 
    	
(a)
    	
With respect to any Settlement Date other than the   Final Date, the number of Shares designated or deemed designated as such by   Counterparty in the relevant Settlement Notice or designated pursuant to the   “Acceleration Events” provisions below, as applicable; provided   that the Settlement Shares so designated shall (i) not exceed the   applicable Number of Shares at that time and (ii) be at least equal to   the lesser of 100,000 and such Number of Shares at that time; and
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)
    	
with respect to the Settlement Date on the Final   Date, a number of Shares equal to the applicable Number of Shares at that   time;
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
in each case with the applicable Number of Shares   determined taking into account pending Settlement Shares for the Transaction.
    
	
 
    	
 
    	
 
    
	
Settlement Method Election:
    	
 
    	
Physical Settlement, Cash Settlement, or Net Stock   Settlement, at the election of Counterparty, in its sole discretion, as set   forth in a Settlement Notice; provided that   if Counterparty elects Cash Settlement or Net Stock Settlement, it shall be   deemed to have repeated the representations contained under “Securities Laws   Representations and Agreements” below; provided further that   if no election is made by Counterparty, Physical Settlement shall apply. The   parties hereto acknowledge that Counterparty cannot be obligated to settle   the Transaction by cash payment unless Counterparty elects Cash 
    

 

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Settlement.
    
	
 
    	
 
    	
 
    
	
Physical Settlement:
    	
 
    	
If Physical Settlement is applicable, then   Counterparty shall deliver to Dealer through the Clearance System a number of   Shares equal to the Settlement Shares for such Settlement Date, and Dealer   shall pay to Counterparty, by wire transfer of immediately available funds to   an account designated by Counterparty, an amount equal to the Physical   Settlement Amount for such Settlement Date.
    
	
 
    	
 
    	
 
    
	
Physical Settlement Amount:
    	
 
    	
For any Settlement Date for which Physical   Settlement is applicable, an amount equal to the product of (a) the applicable   Forward Price in effect on the relevant Settlement Date multiplied   by (b) the Settlement Shares for such Settlement Date.
    
	
 
    	
 
    	
 
    
	
Cash Settlement:
    	
 
    	
On any Settlement Date in respect of which Cash   Settlement applies, if the Cash Settlement Amount is a positive number,   Dealer will pay the Cash Settlement Amount to Counterparty. If the Cash   Settlement Amount is a negative number, Counterparty will pay the absolute   value of the Cash Settlement Amount to Dealer. Such amounts shall be paid on   such Settlement Date.
    
	
 
    	
 
    	
 
    
	
Cash Settlement Amount:
    	
 
    	
An amount determined by the Calculation Agent equal   to: (i)(A) the weighted average (weighted on the same basis as clause   (B)) of the Forward Prices on each day during the applicable Unwind Period minus (B) the weighted average price (the “Unwind Purchase Price”) at which Dealer (or its affiliate)   purchases Shares during the Unwind Period to unwind Dealer’s hedge (or, if   Net Stock Settlement applies, to unwind all or a portion of Dealer’s hedge,   including any purchases of Shares for delivery to Counterparty, in each case   as determined by Dealer) with respect to the portion of the applicable Number   of Shares to be settled during the Unwind Period (including, for the   avoidance of doubt, purchases on any Suspension Day or Disrupted Day in   part), taking into account the restrictions of Rule 10b-18 under the   Exchange Act agreed to hereunder, plus USD   0.02, multiplied by (ii) the Settlement   Shares.
    
	
 
    	
 
    	
 
    
	
Net Stock Settlement:
    	
 
    	
On any Settlement Date in respect of which Net Stock   Settlement applies, if the Cash Settlement Amount is a (i) positive   number, Dealer shall deliver through the Clearance System a number of Shares   to Counterparty equal to the Net Stock Settlement Shares, or   (ii) negative number, Counterparty shall deliver through the Clearance   System a number of Shares to Dealer equal to the Net Stock Settlement Shares;   provided that if Dealer determines in   its good faith judgment that it would be required to deliver Net Stock   Settlement Shares to Counterparty, Dealer may elect to deliver a portion of   such Net Stock Settlement Shares on one or more dates prior to the applicable   Settlement Date.
    
	
 
    	
 
    	
 
    
	
Net Stock Settlement Shares:
    	
 
    	
With respect to a Settlement Date, the absolute   value of the Cash Settlement Amount divided by   the applicable Unwind Purchase Price, with the number of Shares rounded up in   the event such calculation results in a fractional number.
    
	
 
    	
 
    	
 
    
	
Unwind Period:
    	
 
    	
The period from and including the first Exchange   Business Day following the date Counterparty elects Cash Settlement or Net   Stock Settlement in respect of a Settlement Date for the Transaction through   the third Scheduled Trading Day preceding such Settlement Date (as such date   may be changed by Dealer as described in the first proviso in clause (a) of   the definition of Settlement Date above and provided   that Dealer may truncate any Unwind Period
    

 

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pending (and reduce the Settlement Shares for such   Unwind Period to the portion thereof, if any, for which Dealer (or its   affiliate) has determined an Unwind Purchase Price) at the time Dealer   designates a Settlement Date pursuant to the “Acceleration Events” provisions   below, effective upon such designation).
    
	
 
    	
 
    	
 
    
	
Failure to Deliver:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Suspension Day:
    	
 
    	
Any day on which Dealer determines, based on the   advice of outside counsel of national standing, that Cash Settlement or Net   Stock Settlement may violate applicable securities laws or cause Dealer (or   its affiliates) to not be in compliance with applicable legal, regulatory or   self-regulatory requirements, or with related policies and procedures   applicable to Dealer (or its affiliates) or that the safe harbor provided by   Rule 10b-18 would be unavailable by virtue of the exclusions from the   definition of “Rule 10b-18 purchase” under clauses (i) or   (iv) thereof (the period of unavailability, a “Rule 10b-18   Unavailability Period”). Dealer shall promptly notify Counterparty   if it receives such advice from its counsel.
    
	
 
    	
 
    	
 
    
	
Share Cap:
    	
 
    	
Except as provided under “Private Placement and   Registration Procedures” below, in no event will Counterparty be required to   deliver to Dealer (or its affiliate) on any Settlement Date, whether pursuant   to Physical Settlement, Net Stock Settlement, any Private Placement   Settlement or any Registration Settlement, a number of Shares in excess of   (i) the Initial Number of Shares plus   (ii) the number of Option Shares minus   (iii) the aggregate number of Shares delivered by Counterparty to Dealer   (or its affiliate) under the applicable Transaction prior to such Settlement   Date.
    
	
 
    	
 
    	
 
    
	
Adjustments:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Method of Adjustment:
    	
 
    	
Calculation Agent Adjustment
    
	
 
    	
 
    	
 
    
	
Extraordinary Events:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
New Shares:
    	
 
    	
In the definition of New Shares in   Section 12.1(i) of the Equity Definitions, the text in   (i) shall be deleted in its entirety and replaced with “publicly quoted,   traded or listed on any of the New York Stock Exchange, The NASDAQ Global   Select Market or The NASDAQ Global Market (or their respective successors)”.
    
	
 
    	
 
    	
 
    
	
Consequences of Merger Events:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(a) Share-for-Share:
    	
 
    	
Cancellation and Payment
    
	
 
    	
 
    	
 
    
	
(b) Share-for-Other:
    	
 
    	
Cancellation and Payment
    
	
 
    	
 
    	
 
    
	
(c) Share-for-Combined:
    	
 
    	
Cancellation and Payment
    
	
 
    	
 
    	
 
    
	
Tender Offer:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Consequences of Tender Offers:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(a) Share-for-Share:
    	
 
    	
Cancellation and Payment
    

 

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(b) Share-for-Other:
    	
 
    	
Cancellation and Payment
    
	
 
    	
 
    	
 
    
	
(c) Share-for-Combined:
    	
 
    	
Cancellation and Payment
    
	
 
    	
 
    	
 
    
	
Composition of Combined Consideration:
    	
 
    	
Not Applicable
    
	
 
    	
 
    	
 
    
	
Nationalization, Insolvency or Delisting:
    	
 
    	
Cancellation and Payment
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
In addition to the provisions of   Section 12.6(a)(iii) of the Equity Definitions, it will also   constitute a Delisting if the Exchange is located in the United States and   the Shares are not immediately re-listed, re-traded or re-quoted on any of   the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ   Global Market (or their respective successors); if the Shares are immediately   re-listed, re-traded or re-quoted on any such exchange or quotation system,   such exchange or quotation system shall be deemed to be the Exchange.
    
	
 
    	
 
    	
 
    
	
Determining Party:
    	
 
    	
For all applicable Extraordinary Events, Dealer; provided, however, that   all calculations, adjustments, specifications, choices and determinations by   the Determining Party shall be made in good faith and in a commercially   reasonable manner. The parties agree that they will work reasonably to   resolve any disputes.
    
	
 
    	
 
    	
 
    
	
Additional Disruption Events:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Change in Law:
    	
 
    	
Applicable; provided that   Section 12.9(a)(ii) of the Equity Definitions is hereby amended by   (i) replacing the phrase “the interpretation” in the third line thereof   with the phrase “or public announcement of the formal or informal   interpretation” and (ii) immediately following the word “Transaction” in   clause (X) thereof, adding the phrase “in the manner contemplated by the   Hedging Party on the Trade Date”. For the avoidance of doubt, “a materially   increased cost in performing its obligations under such Transaction” includes   any materially increased cost to acquire, establish, re-establish,   substitute, maintain, unwind or dispose of any Hedge Positions.
    
	
 
    	
 
    	
 
    
	
Increased Cost of Stock Borrow:
    	
 
    	
Applicable; provided that   Section 12.9(b)(v) of the Equity Definitions is hereby amended by   (A) adding the word “or” immediately before subsection “(B)” and   deleting the comma at the end of subsection (A); and (B)(1) deleting   subsection (C) in its entirety, (2) deleting the word “or”   immediately preceding subsection (C), (3) replacing in the penultimate   sentence the words “either party” with “the Hedging Party” and   (4) deleting clause (X) in the final sentence.
    
	
 
    	
 
    	
 
    
	
Initial Stock   Loan Rate:
    	
 
    	
45 basis points per annum
    
	
 
    	
 
    	
 
    
	
Hedging Party:
    	
 
    	
Dealer or any affiliate of Dealer involved in   hedging a Transaction.
    
	
 
    	
 
    	
 
    
	
Insolvency Filing:
    	
 
    	
Notwithstanding anything to the contrary herein, in   the Agreement or in the Equity Definitions, upon any Insolvency Filing or   other proceeding under the U.S. Bankruptcy Code in respect of the Issuer, the   Transaction shall automatically terminate on the date thereof without further   liability of either party to this Confirmation to the other party (except for   any liability in respect of any breach of representation or covenant by a   party under this Confirmation prior to the date of such Insolvency Filing or   other proceeding), it being understood that the Transaction is a contract for   the issuance of Shares by the
    

 

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Issuer.
    
	
 
    	
 
    	
 
    
	
Determining Party:
    	
 
    	
For all applicable Additional Disruption Events,   Dealer; provided, however,   that all calculations, adjustments, specifications, choices and   determinations by the Determining Party shall be made in good faith and in a   commercially reasonable manner. The parties agree that they will work   reasonably to resolve any disputes.
    
	
 
    	
 
    	
 
    
	
Acknowledgments:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Non-Reliance:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Agreements and Acknowledgments Regarding Hedging   Activities:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Additional Acknowledgments:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Transfer:
    	
 
    	
Notwithstanding anything to the contrary herein or   in the Agreement, Dealer may assign, transfer and set over all rights, title   and interest, powers, privileges and remedies of Dealer under the   Transaction, in whole or in part, to an affiliate of Dealer, or any entity   sponsored or organized by, or on behalf of or for the benefit of, Dealer   without the consent of Counterparty; provided that   either (A) the long-term, unsecured and unsubordinated credit rating (“Credit Rating”) of the transferee or assignee (or any   guarantor of its obligations under the transferred Transaction) is equal to   or greater than the Credit Rating of Dealer, as specified by either   Standard & Poor’s Ratings Services or Moody’s Investors   Service, Inc. (or their respective successors), at the time of such   assignment, transfer or set over, or (B) such transferee’s or assignee’s   obligations hereunder will be guaranteed by Dealer or Dealer’s ultimate   parent entity pursuant to the terms of a customary guarantee in a form used   by such guarantor generally for similar transactions. No later than promptly   following any such assignment, transfer or set over, Dealer shall notify   Counterparty as to whether the transfer, assignment or set over is pursuant   to subclause (A) or subclause (B) above. In the event of any   transfer or assignment of any rights, title and interest, powers, privileges   and remedies of Dealer under any Transaction, the transferee or assignee   shall assume and enter into all of the transferor’s covenants and   representations under Sections 3(e), 3(f), 4(a)(i) and 4(a)(iii) of   the Agreement or enter into new covenants and representations that are agreed   by the other party under the Agreement, and the identity of the transferee or   assignee shall be entered on the books and records maintained by each party   or its respective agents.
    
	
 
    	
 
    	
 
    
	
Calculation Agent:
    	
 
    	
Dealer. All calculations and determinations by the   Calculation Agent shall be made in good faith and in a commercially   reasonable manner. The parties agree that they will work reasonably to   resolve any disputes.
    
	
 
    	
 
    	
 
    
	
Account Details:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(a) Account for   delivery of Shares to Dealer:
    	
 
    	
To be furnished
    
	
 
    	
 
    	
 
    
	
(b) Account for   payments to Counterparty:
    	
 
    	
To be furnished
    

 

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(c) Account for   payments to Dealer:
    	
 
    	
To be furnished
    
	
 
    	
 
    	
 
    
	
Offices:
    	
 
    	
 
    
	
 
    
	
The Office of   Counterparty for the Transaction is: 
    	
Inapplicable, Counterparty is not a Multibranch   Party.
    
	
 
    
	
The Office of   Dealer for the Transaction is: 
    	
New York, New York
    
	
 
    
	
Notices:   For purposes of this Confirmation:
    
	
 
    	
 
    
	
 
    	
(a)
    	
Address for notices or communications to   Counterparty:
    
	
 
    	
 
    	
 
    
	
 
    	
Affiliated Managers Group, Inc.
    
	
 
    	
777 South Flagler Drive
    
	
 
    	
West Palm Beach, FL 33401
    
	
 
    	
Telephone:
    	
(800) 345-1100
    
	
 
    	
Facsimile:
    	
 
    
	
 
    	
Attention:
    	
Jay C. Horgen
    
	
 
    	
 
    
	
 
    	
(b)
    	
Address for notices or communications to Dealer:
    
	
 
    	
 
    
	
 
    	
Bank of America, N.A.
    
	
 
    	
c/o Merrill Lynch, Pierce, Fenner & Smith   Incorporated
    
	
 
    	
Bank of America Tower at One Bryant Park
    
	
 
    	
New York, NY 10036
    
	
 
    	
Attention: 
    	
Gary Rosenblum, Senior Vice President and Associate   General Counsel
    
	
 
    	
Telephone:
    	
 
    
	
 
    	
Facsimile:
    	
 
    
	
 
    	
Email:
    	
Gary.Rosenblum@bankofamerica.com
    
							

 

Effectiveness; Underwriting Agreement; Interpretive Letter.

 

Conditions to Effectiveness. Dealer’s obligations under this Confirmation shall be subject to the satisfaction (or waiver by Dealer) of the following: (i) the condition that the representations and warranties of Counterparty contained in the Underwriting Agreement are true and correct on the Effective Date as if made as of the Effective Date, (ii) the condition that Counterparty has performed all of the obligations required to be performed by it under the Underwriting Agreement on or prior to the Effective Date, (iii) all of the conditions set forth in Section 6 of the Underwriting Agreement, and (iv) the condition that the Underwriting Agreement has not been terminated pursuant to Section 9 or Section 10 thereof.

 

Underwriting Agreement Representations, Warranties and Covenants.  On each Trade Date and on each date on which Dealer or its affiliates deliver a prospectus in connection with a sale to hedge the Transaction, Counterparty repeats and reaffirms as of such date all of the representations and warranties contained in the Underwriting Agreement.  Counterparty hereby agrees to comply with its covenants contained in the Underwriting Agreement as if such covenants were made in favor of Dealer.

 

Interpretive Letter.  Counterparty agrees and acknowledges that the Transaction is being entered into in accordance with the October 9, 2003 interpretive letter from the staff of the Securities and Exchange Commission to Goldman, Sachs & Co. (the “Interpretive Letter”) and agrees to take all actions, and to omit to take any actions, reasonably requested by Dealer for the Transaction to comply with the Interpretive Letter.  Without limiting the foregoing, Counterparty agrees that neither it nor any “affiliated purchaser” (as defined in Regulation M (“Regulation M”) promulgated under the Exchange Act) will, directly or indirectly, bid for, purchase or attempt to induce any person to bid

 

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for or purchase, the Shares or securities that are convertible into, or exchangeable or exercisable for, Shares during any “restricted period” as such term is defined in Regulation M.  In addition, Counterparty represents that it is eligible to conduct a primary offering of Shares on Form S-3, the offering contemplated by the Underwriting Agreement complies with Rule 415 under the Securities Act, and the Shares are “actively traded” as defined in Rule 101(c)(1) of Regulation M.

 

Agreements and Acknowledgments Regarding Shares:

 

(i)                                   Counterparty agrees and acknowledges that, in respect of any Shares delivered to Dealer (or its affiliates) hereunder, such Shares shall be newly issued (unless mutually agreed otherwise by the parties) and upon such delivery, duly and validly authorized, issued and outstanding, fully paid and nonassessable, free of any lien, charge, claim or other encumbrance and not subject to any preemptive or similar rights and shall, upon such issuance, be accepted for listing or quotation on the Exchange.

 

(ii)                                Counterparty agrees and acknowledges that Dealer (or its affiliates) will hedge Dealer’s exposure to the Transaction by selling Shares borrowed from third-party securities lenders or other Shares pursuant to a registration statement, and that, pursuant to the terms of the Interpretive Letter, the Shares (up to the  full Number of Shares) delivered, pledged or loaned by Counterparty to Dealer (or its affiliates) in connection with the Transaction may be used by Dealer (or its affiliates) to return to securities lenders without further registration under the Securities Act.  Accordingly, Counterparty agrees that the Shares that it delivers, pledges or loans to Dealer (or its affiliates) on or prior to the final Settlement Date will not bear a restrictive legend and that such Shares will be deposited in, and the delivery thereof shall be effected through the facilities of, the Clearance System.

 

(iii)                             Counterparty has reserved and will keep available at all times, free from preemptive or similar rights and free from any lien, charge, claim or other encumbrance, authorized but unissued Shares at least equal to the Number of Shares for the Transaction, solely for the purpose of settlement under the Transaction.

 

(iv)                            Unless the provisions set forth below under “Private Placement and Registration Procedures” are applicable, Dealer agrees to use or cause its affiliates to use any Shares delivered by Counterparty hereunder on any Settlement Date to return to securities lenders to close out open securities loans with respect to the Shares.

 

(v)                               In connection with bids and purchases of Shares in connection with any Cash Settlement or Net Stock Settlement of a Transaction, Dealer shall use its good faith efforts to comply, or cause compliance, with the provisions of Rule 10b-18 under the Exchange Act, taking into account any purchases under other Forward Contracts (as defined herein), as if such provisions were applicable to such purchases. “Forward Contract” shall mean this Transaction, any similar transaction relating to Shares sold pursuant to an underwriting agreement (or equivalent agreement) by an affiliate of Dealer and any transaction relating to Shares sold through an affiliate of Dealer, as “Distribution Agent” (or equivalent term), pursuant to a “Forward Sale” (or equivalent term) under an “Equity Distribution Agreement” (or equivalent agreement).

 

Securities Laws Representations and Agreements:

 

(i)                                   Counterparty represents to Dealer on the Trade Date and on any date that Counterparty notifies Dealer that Cash Settlement, Net Stock Settlement or Alternative Settlement under “Accounting Standards Codification (‘ASC’) 815-40; Alternative Settlement” below applies to a Transaction, that (a) each of its filings under the Securities Act, the Exchange Act or other applicable securities laws that are required to be filed have been filed and that, as of the respective dates thereof and as of the date of this representation, there is no misstatement of material fact contained therein or omission of a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading and (b) it has not and will not directly or indirectly violate any applicable law (including, without limitation, the Securities Act and the Exchange Act) in connection with a Transaction.  In addition to any other requirement set forth herein, Counterparty agrees not to designate any Settlement Date or elect Alternative Settlement under “Accounting Standards Codification (‘ASC’) 815-40; Alternative Settlement” below if settlement in respect of such date would result in a violation of any applicable federal or state law or regulation, including the U.S. federal securities laws.

 

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(ii)                                  It is the intent of Dealer and Counterparty that following any election of Cash Settlement or Net Stock Settlement by Counterparty for a Transaction, the purchase of Shares by Dealer (or its affiliates) during the related Unwind Period comply with the requirements of Rule 10b5-l(c)(l)(i)(B) of the Exchange Act and that this Confirmation shall be interpreted to comply with the requirements of Rule 10b5-l(c).

 

Counterparty acknowledges that (a) during any Unwind Period, Counterparty shall not have, and shall not attempt to exercise, any influence over how, when or whether to effect purchases of Shares by Dealer (or its agent or affiliate) in connection with this Confirmation and (b) Counterparty is entering into the Agreement and this Confirmation in good faith and not as part of a plan or scheme to evade compliance with federal securities laws including, without limitation, Rule 10b-5 promulgated under the Exchange Act.

 

Counterparty hereby agrees with Dealer that during any Unwind Period Counterparty shall not communicate, directly or indirectly, any Material Non-Public Information (as defined herein) to any Equity Derivatives Group Personnel (as defined below).  For purposes of the Transaction, “Material Non-Public Information” means information relating to Counterparty or the Shares that (x) has not been widely disseminated by wire service, in one or more newspapers of general circulation, by communication from Counterparty to its shareholders or in a press release, or contained in a public filing made by Counterparty with the Securities and Exchange Commission and (y) a reasonable investor might consider to be of importance in making an investment decision to buy, sell or hold Shares.  For the avoidance of doubt and solely by way of illustration, information should be presumed “material” if it relates to such matters as dividend increases or decreases, earnings estimates, changes in previously released earnings estimates, significant expansion or curtailment of operations, a significant increase or decline of orders, significant merger or acquisition proposals or agreements, significant new products or discoveries, extraordinary borrowing, major litigation, liquidity problems, extraordinary management developments, purchase or sale of substantial assets, or other similar information.  For purposes of the Transaction, “Equity Derivatives Group Personnel” means any employee of Dealer or its affiliates who effects purchases or sales of Shares in connection with this Agreement.

 

(iii)          Counterparty shall, at least one day prior to the first day of any Unwind Period, notify Dealer of the total number of Shares purchased in Rule 10b-18 purchases of blocks pursuant to the once-a-week block exception contained in Rule 10b-18(b)(4) by or for Counterparty or any of its affiliated purchasers during each of the four calendar weeks preceding the first day of the Unwind Period and during the calendar week in which the first day of the Unwind Period occurs (“Rule 10b-18 purchase”, “blocks” and “affiliated purchaser” each being used as defined in Rule 10b-18).

 

(iv)                              During any Unwind Period, Counterparty shall (a) notify Dealer prior to the opening of trading in the Shares on any day on which Counterparty makes, or expects to be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of any merger, acquisition, or similar transaction involving a recapitalization relating to Counterparty (other than any such transaction in which the consideration consists solely of cash and there is no valuation period), (b) promptly notify Dealer following any such announcement that such announcement has been made, and (c) promptly deliver to Dealer following the making of any such announcement information indicating (1) Counterparty’s average daily Rule 10b-18 purchases (as defined in Rule 10b-18) during the three full calendar months preceding the date of the announcement of such transaction and (2) Counterparty’s block purchases (as defined in Rule 10b-18) effected pursuant to paragraph (b)(4) of Rule 10b-18 during the three full calendar months preceding the date of the announcement of such transaction.  In addition, Counterparty shall promptly notify Dealer of the earlier to occur of the completion of such transaction and the completion of the vote by target shareholders.

 

(v)                                 Neither Counterparty nor any of its affiliates shall take or refrain from taking any action (including, without limitation, any direct purchases by Counterparty or any of its affiliates, or any purchases by a party to a derivative transaction with Counterparty or any of its affiliates), either under this Confirmation, under an agreement with another party or otherwise, that might cause any purchases of Shares by Dealer or any of its affiliates in connection with any Cash Settlement or Net Stock Settlement of a Transaction not to meet the requirements of the safe harbor provided by Rule 10b-18 determined as if all such foregoing purchases

 

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were made by Counterparty.  Without limiting the foregoing, Counterparty may not elect Cash Settlement or Net Stock Settlement during a Rule 10b-18 Unavailability Period.

 

(vi)                              Counterparty will not engage in any “distribution” (as defined in Regulation M) that would cause a “restricted period” (as defined in Regulation M) to occur during any Unwind Period.

 

Miscellaneous:

 

Acceleration Events.

 

(i)                                     Stock Borrow Event.  If in Dealer’s reasonable judgment, (a) Dealer (or its affiliate) is not able to hedge Dealer’s exposure under the Transaction because insufficient Shares are made available for borrowing by securities lenders or (b) Dealer (or its affiliate) would incur a cost to borrow (or to maintain a borrow of) sufficient Shares to hedge Dealer’s exposure under the Transaction that is equal to or greater than 300 basis points per annum per any Share (each of (a) and (b), a “Stock Borrow Event”), then Dealer shall be entitled to designate any Scheduled Trading Day prior to the date the Number of Shares is first reduced to zero to be a Settlement Date for the Transaction, by providing Counterparty at least two Scheduled Trading Days’ notice prior to the relevant Settlement Date, and to designate the number of Settlement Shares for the relevant Settlement Date, which shall not exceed the number of Shares as to which the relevant Stock Borrow Event relates.

 

(ii)           Dividends.  If on any day after the Trade Date, Counterparty declares a distribution, issue or dividend to existing holders of the Shares of (a) any cash dividends in excess of USD 0.00 per Share or (b) share capital or other securities of another issuer acquired or owned (directly or indirectly) by Counterparty as a result of a spin-off or similar transaction or (c) any other type of securities (other than Shares), rights or warrants or other assets, in any case for payment (cash or other consideration) at less than the prevailing market price, as determined by Dealer, then Dealer shall be entitled to designate any Scheduled Trading Day prior to the date the Number of Shares is first reduced to zero to be a Settlement Date for the Transaction, by providing Counterparty at least three Scheduled Trading Days’ notice prior to the relevant Settlement Date, and to designate the number of Settlement Shares for the relevant Settlement Date.  Counterparty agrees that it will publicly announce any such distribution, issue or dividend at least 5 Scheduled Trading Days before the record date therefor.

 

(iii)          Stock Price Event.  If at any time after the Trade Date the traded price per Share on the Exchange is less than or equal to 35% of the Initial Forward Price, then Dealer shall be entitled at any time thereafter to designate one or more Scheduled Trading Days prior to the date the Number of Shares is first reduced to zero to be a Settlement Date for the Transaction, by providing Counterparty at least ten Scheduled Trading Days’ notice prior to the relevant Settlement Date, and to designate the number of Settlement Shares for the relevant Settlement Date.

 

(iv)                              Announcement of Merger Event.  If on any day after the Trade Date, Counterparty announces any event that, if consummated, would constitute a Merger Event, then Counterparty shall notify Dealer of such occurrence within one Scheduled Trading Day after such occurrence and Dealer shall be entitled to designate any Scheduled Trading Day prior to the date the Number of Shares is first reduced to zero to be a Settlement Date for the Transaction, by providing Counterparty at least one Scheduled Trading Day’s notice prior to the relevant Settlement Date, and to designate the number of Settlement Shares for the relevant Settlement Date.

 

(v)                                 ISDA Termination.  In lieu of (a) designating an Early Termination Date as the result of an Event of Default or Termination Event, (b) terminating a Transaction and determining a Cancellation Amount as the result of an Additional Disruption Event, or (c) terminating a Transaction and determining an amount payable in connection with an Extraordinary Event to which Cancellation and Payment would otherwise be applicable, Dealer shall be entitled to designate for each affected Transaction any Scheduled Trading Day prior to the date the applicable Number of Shares is first reduced to zero to be a Settlement Date for such Transaction with respect to the applicable Number of Shares as the Settlement Shares.

 

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(vi)                              Termination Settlement.  Notwithstanding anything to the contrary herein, in the Agreement or in the Equity Definitions, if a Settlement Date is designated by Dealer as the result of one of the foregoing sub-paragraphs (i) through (v), Physical Settlement shall apply to the relevant Settlement Shares.

 

Private Placement and Registration Procedures.   If Counterparty notifies Dealer that it is unable to comply with the provisions of sub-paragraph (ii) of “Agreements and Acknowledgments Regarding Shares” above because of a change in law or a change in the policy of the Securities and Exchange Commission or its staff, or Dealer notifies Counterparty that in its reasonable opinion any Shares to be delivered to Dealer (or its affiliate) by Counterparty may not be freely returned by Dealer (or its affiliate) to securities lenders as described under such sub-paragraph (ii), or otherwise constitute “restricted securities” as defined in Rule 144 under the Securities Act (the date such notification is effective being the “Determination Date”), then Counterparty may elect to effect the delivery of any such Shares (the “Restricted Shares”) pursuant to either clause (i) or (ii) below, unless waived by Dealer, on the later of (A)(1) if Private Placement Settlement is applicable, the tenth Scheduled Trading Day following the Determination Date or (2) if Registration Settlement is applicable, the thirtieth calendar day following the Determination Date (or if such day is not a Clearance System Business Day, the next Clearance System Business Day), (B) the date such delivery would otherwise be due pursuant to the terms of this Confirmation and (C) the Clearance System Business Day following notice by Dealer to Counterparty of the number of Shares to be delivered pursuant to these “Private Placement and Registration Procedures”; provided that if Counterparty does not so elect within three Scheduled Trading Days of the Determination Date, Counterparty shall be deemed to have elected clause (i) below.

 

(i)                                     If Counterparty is obligated to settle any Transaction with Restricted Shares (a “Private Placement Settlement”), then delivery of Restricted Shares by Counterparty shall be effected in customary private placement procedures with respect to such Restricted Shares reasonably acceptable to Dealer; provided that Counterparty may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(a)(2) of the Securities Act for the sale by Counterparty to Dealer (or any affiliate designated by Dealer) of the Restricted Shares or the exemption pursuant to Section 4(a)(1) or Section 4(a)(3) of the Securities Act for resales of the Restricted Shares by Dealer (or any such affiliate of Dealer).  The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer and its affiliates, due diligence rights (for Dealer, any affiliate designated by Dealer or any buyer of the Restricted Shares designated by Dealer or its affiliate), opinions and certificates, and such other documentation as is customary for private placement agreements, all reasonably acceptable to Dealer.  In the case of a Private Placement Settlement, Dealer shall, in its good faith discretion, adjust the amount of Restricted Shares to be delivered to Dealer (or its affiliate) hereunder in a commercially reasonable manner to reflect the fact that (A) such Restricted Shares may not be freely returned to securities lenders by Dealer (or its affiliate) and may only be saleable by Dealer (or its affiliates) at a discount to reflect the lack of liquidity in Restricted Shares and (B) Dealer (or its affiliate) will incur carrying costs and other costs in connection with the unwind of Dealer’s hedge as it relates to such Private Placement Settlement; provided that for the Transaction in no event will Counterparty be required to deliver to Dealer (or its affiliate) a number of Restricted Shares in excess of (i) the Initial Number of Shares plus the number of Option Shares multiplied by (ii) two, minus (iii) the aggregate number of Shares delivered by Counterparty to Dealer (or its affiliate) under the Transaction prior to the date of such delivery (the “Maximum Delivery Amount”).  If Dealer adjusts the amount of Restricted Shares, it shall provide Counterparty with a statement indicating in reasonable detail how such share adjustment was determined.

 

If Counterparty delivers any Restricted Shares in respect of a Transaction, Counterparty agrees that (A) such Shares may be transferred by and among Dealer and its affiliates and (B) after the “holding period” specified in Rule 144(d) under the Securities Act has elapsed, Counterparty shall promptly remove, or cause the transfer agent for the Shares to remove, any legends referring to any transfer restrictions from such Shares upon delivery by Dealer (or such affiliate of Dealer) to Counterparty or such transfer agent of any seller’s and broker’s representation letters customarily delivered by Dealer or its affiliates in connection with resales of restricted securities pursuant to Rule 144 under the Securities Act, each without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Dealer (or such affiliate of Dealer).

 

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(ii)                                  If Counterparty elects to settle a Transaction pursuant to this clause (ii) (a “Registration Settlement”), then Counterparty shall promptly (but in any event no later than the Scheduled Trading Day immediately prior to the date delivery of the Shares is due pursuant to the terms of these “Private Placement and Registration Procedures”) file and use its reasonable efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Dealer, to cover the resale of Restricted Shares (the “Registered Shares”) in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts, commissions, indemnities, due diligence rights, opinions and certificates, and such other documentation as is customary for equity resale underwriting agreements, all reasonably acceptable to Dealer.  If Dealer, in its reasonable discretion, is not satisfied with such procedures and documentation or if a Settlement Date is designated by Dealer pursuant to the “Acceleration Events” provisions above, Private Placement Settlement shall apply and Counterparty shall effect delivery of Restricted Shares by the tenth Scheduled Trading Day following notification from Dealer.  In the case of a Registration Settlement, Dealer shall, in its good faith discretion, adjust the amount of Registered Shares to be delivered to Dealer (or its affiliate) under the Transaction in a commercially reasonable manner to reflect the fact that Dealer (or its affiliate) will incur carrying costs and other costs in connection with the unwind of Dealer’s hedge as it relates to such Registered Settlement; provided that for the Transaction in no event will Counterparty be required to deliver to Dealer (or its affiliate) a number of Registered Shares in excess of the Maximum Delivery Amount for the Transaction.  If Dealer adjusts the amount of Registered Shares, it shall provide Counterparty with a statement indicating in reasonable detail how such share adjustment was determined.

 

Indemnity.  Counterparty agrees to indemnify Dealer and its affiliates and their respective directors, officers, employees, agents and controlling persons (Dealer and each such affiliate or person being an “Indemnified Party”) from and against any and all losses, claims, damages and liabilities, joint and several, incurred by or asserted against such Indemnified Party arising out of, in connection with, or relating to, the execution or delivery of this Confirmation, the performance by the parties hereto of their respective obligations under the Transaction, any breach of any covenant or representation made by Counterparty in this Confirmation or the Agreement or the consummation of the transactions contemplated hereby and will reimburse any Indemnified Party for all reasonable expenses (including reasonable legal fees and expenses) as they are incurred in connection with the investigation of, preparation for, or defense of any pending or threatened claim or any action or proceeding arising therefrom, whether or not such Indemnified Party is a party thereto, except to the extent resulting from Dealer’s gross negligence or willful misconduct.

 

Waiver of Trial by Jury.  EACH OF COUNTERPARTY AND DEALER HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY TRANSACTION OR THE ACTIONS OF DEALER OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

Governing Law/Jurisdiction.  This Confirmation shall be governed by the laws of the State of New York without reference to the conflict of laws provisions thereof.  The parties hereto irrevocably submit to the exclusive jurisdiction of the courts of the State of New York and the United States Court for the Southern District of New York in connection with all matters relating hereto and waive any objection to the laying of venue in, and any claim of inconvenient forum with respect to, these courts.

 

Designation by Dealer.  Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities to or from Counterparty, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities and otherwise to perform Dealer obligations in respect of any Transaction and any such designee may assume such obligations.  Dealer shall be discharged of its obligations to Counterparty only to the extent of any such performance.

 

Accounting Standards Codification (‘ASC’) 815-40; Alternative Settlement.  The parties hereby agree that all documentation with respect to a Transaction is intended to qualify such Transaction as an equity instrument for purposes of Accounting Standards Codification (‘ASC’) 815-40.  If, subject to “Netting and Set-off” below, Counterparty owes Dealer any amount in connection with a Transaction pursuant to Section 12.7 or 12.9 of the Equity Definitions (except in the case of an Extraordinary Event in which the consideration or proceeds to be paid to

 

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holders of Shares as a result of such event consists solely of cash) or pursuant to Section 6(d)(ii) of the Agreement (except in the case of an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party, other than (x) an Event of Default of the type described in Section 5(a)(iii), (v), (vi) or (vii) of the Agreement or (y) a Termination Event of the type described in Section 5(b)(i), (ii), (iii), (iv), or (v) of the Agreement that in the case of either (x) or (y) resulted from an event or events outside Counterparty’s control) (a “Payment Obligation”), Counterparty shall have the right, in its sole discretion, to satisfy any such Payment Obligation by delivery of Termination Delivery Units (as defined below) by giving irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, between the hours of 9:00 a.m. and 4:00 p.m. New York time on the Closing Date, Early Termination Date or other date of termination or cancellation, as applicable (“Notice of Termination Delivery”).  Upon Notice of Termination Delivery, Counterparty shall deliver to Dealer a number of Termination Delivery Units having a cash value equal to the amount of such Payment Obligation (such number of Termination Delivery Units to be delivered to be determined by the Calculation Agent acting in a commercially reasonable manner, taking into account whether the Termination Delivery Units so delivered are freely tradable).  Settlement relating to any delivery of Termination Delivery Units pursuant to this provision shall occur within three Scheduled Trading Days.  “Termination Delivery Unit” means (A) in the case of a Termination Event, an Event of Default or an Extraordinary Event (other than an Insolvency, Nationalization, Merger Event or Tender Offer), one Share or (B) in the case of an Insolvency, Nationalization, Merger Event or Tender Offer, a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization, Merger Event or Tender Offer; provided that if such Insolvency, Nationalization, Merger Event or Tender Offer involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash.

 

Disclosure. Effective from the date of commencement of discussions concerning a Transaction, each of Dealer and Counterparty and each of their employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of such Transaction and all materials of any kind (including opinions or other tax analyses) relating to such tax treatment and tax structure.

 

Right to Extend.  Dealer may postpone any Settlement Date or any other date of valuation or delivery, with respect to some or all of the relevant Settlement Shares, if Dealer determines, in its discretion, that such extension is reasonably necessary or appropriate to enable Dealer (or its affiliate) to effect purchases of Shares in connection with Dealer’s hedging activity hereunder or under any other Forward Contract in a manner that would, if Dealer (or its affiliate) were Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal and regulatory requirements, as determined by Dealer based upon the advice of outside counsel of national standing.

 

Counterparty Share Repurchases.  Counterparty agrees not to repurchase any Shares if, immediately following such purchase, the Number of Shares for the Transaction under this Confirmation and all other Forward Contracts would be equal to or greater than 8.0% of the number of then-outstanding Shares or such lower number of Shares as Dealer notifies Counterparty would, in the reasonable judgment of outside counsel of national standing for Dealer, present legal or regulatory issues for Dealer or its affiliates.

 

Limit on Beneficial Ownership.  Notwithstanding any other provisions hereof, neither Dealer nor its affiliates shall be entitled to receive Shares hereunder (whether in connection with the purchase of Shares on any Settlement Date or otherwise) to the extent (but only to the extent) that such receipt would result in Dealer and its affiliates or any “group” of which Dealer (or its affiliates) is a part (i) directly or indirectly beneficially owning (as such term is defined for purposes of Section 13(d) of the Exchange Act or, if it would result in a higher percentage of beneficial ownership, the equivalent calculation for purposes of determining a ten percent beneficial owner under Section 16 of the Exchange Act) at any time in excess of 4.9% of the outstanding Shares or (ii) having direct or indirect ownership or control (for purposes of the Bank Holding Company Act of 1956, as amended) at any time in excess of 4.9% of the outstanding Shares.  Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that such delivery would result in Dealer and its affiliates or such a group directly or indirectly so beneficially owning or so owning or controlling in excess of 4.9% of the outstanding Shares.  If any delivery owed to Dealer (or its affiliates) hereunder is not made, in whole or in part, as a result of this provision, Counterparty’s obligation to make such delivery shall not be extinguished and Counterparty shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Dealer gives notice to Counterparty

 

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that such delivery would not result in Dealer and its affiliates or such a group directly or indirectly so beneficially owning or so owning or controlling in excess of 4.9% of the outstanding Shares.

 

Commodity Exchange Act.  Each of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in the U.S. Commodity Exchange Act, as amended (the “CEA”), and the Agreement and the Transaction are subject to individual negotiation by the parties and have not been executed or traded on a “trading facility” as defined in the CEA.

 

Securities Act.  Each of Dealer and Counterparty agrees and represents that it is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act, or an “accredited investor” as defined under the Securities Act.

 

ERISA.  Each of Dealer and Counterparty agrees and represents that the assets used in the Transaction (a) are not assets of any “plan” (as such term is defined in Section 4975 of the U.S. Internal Revenue Code (the “Code”)) subject to Section 4975 of the Code or any “employee benefit plan” (as such term is defined in Section 3(3) of the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) subject to Title I of ERISA, and (b) do not constitute “plan assets” (as such term is defined in Section 3(42) of ERISA).

 

Bankruptcy Status.  Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights with respect to the transactions contemplated hereby that are senior to the claims of Counterparty’s common stockholders in any U.S. bankruptcy proceedings of Counterparty; provided, however, that nothing herein shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to this Confirmation and the Agreement; and provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transaction other than the Transaction.

 

No Collateral.  The parties acknowledge that the Transaction is not secured by any collateral that would otherwise secure the obligations of Counterparty herein under or pursuant to the Agreement.  Without limiting the generality of the foregoing, the Transaction will not be considered to create obligations covered by any collateral credit support annex to the Agreement and will be disregarded for the purposes of calculating any exposures pursuant to any such annex.

 

Netting and Set-off.  Dealer agrees not to set-off or net amounts due from Counterparty with respect to any Transaction against amounts due from Dealer to Counterparty under obligations other than with respect to the Agreement.  Section 2(c) of the Agreement as it applies to payments due with respect to the Transaction shall remain in effect and is not subject to the first sentence of this provision.

 

Wall Street Transparency and Accountability Act of 2010.  The parties hereby agree that none of (a) Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), (b) any similar legal certainty provision in any legislation enacted, or rule or regulation promulgated, on or after the Trade Date, (c) the enactment of WSTAA or any regulation under the WSTAA, (d) any requirement under WSTAA nor (e) an amendment made by WSTAA, shall limit or otherwise impair either party’s rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Increased Cost of Stock Borrow or Illegality (as defined in the Agreement)).

 

Tax Representations.

 

(i)                                     For the purpose of Section 3(e) of the Agreement, each party makes the following representation:

 

(A)                               It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 9(h) of the Agreement or any other payments of interest or penalty charges for late payment) to be made by it to the other party under the Agreement.

 

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In making this representation, a party may rely on:

 

(i) the accuracy of any representations made by the other party pursuant to Section 3(f) of the Agreement,

 

(ii) the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of the Agreement, and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of the Agreement, and

 

(iii) the satisfaction of the agreement of the other party contained in Section 4(d) of the Agreement;

 

provided that it shall not be a breach of this representation where reliance is placed on clause (ii) above and the other party does not deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position.

 

(ii)           For the purpose of Section 3(f) of the Agreement:

 

(A)          Dealer makes the following representation(s):

 

(1)                                 It is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of United States Treasury Regulations) for United States federal income tax purposes.

 

(2)                                 It is a financial institution that is an exempt recipient under Treasury Regulation Section 1.6049—4(c)(1)(ii)(M).

 

(B)                               Counterparty represents that it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of United States Treasury Regulations) for United States federal income tax purposes and an exempt recipient under Treasury Regulation Section 1.6049-4(c)(1)(ii).

 

Document Delivery

 

(i)                                     Dealer agrees to complete, accurately and in a manner reasonably satisfactory to Counterparty, to execute and to deliver to Counterparty a valid U.S. Internal Revenue Service Form W-9 (or any successor form) and any required attachments thereto (i) upon execution of this Confirmation and thereafter prior to the date on which such form becomes invalid, (ii) promptly upon reasonable demand by Counterparty and (iii) promptly upon learning that any Form W-9 (or any successor thereto) previously provided by Dealer has become obsolete, invalid or incorrect.

 

(ii)                                  Counterparty agrees to complete, accurately and in a manner reasonably satisfactory to Dealer, to execute and to deliver to Dealer a valid U.S. Internal Revenue Service Form W-9 (or any successor form) and any required attachments thereto (i) upon execution of this Confirmation and thereafter prior to the date on which such form becomes invalid, (ii) promptly upon reasonable demand by Dealer and (iii) promptly upon learning that any Form W-9 (or any successor thereto) previously provided by Counterparty has become obsolete, invalid or incorrect.

 

Withholding Tax Imposed on Payments to Non-US Counterparties under the United States Foreign Account Tax Compliance Act. “Tax” as used in the preceding paragraph (i)(A) of this Section (Tax Representations) and “Indemnifiable Tax” as defined in Section 14 of the Agreement shall not include any U.S. federal withholding tax imposed or collected pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code (“FATCA”), or any fiscal or regulatory legislation or rules adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of FATCA (a “FATCA Withholding Tax”). For the avoidance of doubt, a FATCA Withholding Tax is a Tax the deduction or withholding of which is required by applicable law.

 

17

 

Change of Account.  Section 2(b) of the Agreement is hereby amended by the addition after the word “delivery” in the first line thereof of the phrase “to another account in the same legal and tax jurisdiction”.

 

Tax Documents. Section 4(a)(iii) of the Agreement is hereby amended by adding prior to the existing text: “upon the earlier of learning that such form or documents is required or”.

 

18

 

Please confirm your agreement to be bound by the terms stated herein by executing the copy of this Confirmation enclosed for that purpose and returning it to Dealer.

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    	
 
    
	
 
    	
BANK   OF AMERICA, N.A.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ David Moran
    
	
 
    	
 
    	
Name:
    	
David Moran
    
	
 
    	
 
    	
Title:
    	
Managing Director
    

 

Counterparty hereby agrees to, accepts and confirms the terms of the foregoing as of the date first written above.

 

	
AFFILIATED   MANAGERS GROUP, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Jay C. Horgen
    	
 
    	
 
    
	
 
    	
Name: 
    	
Jay C. Horgen
    	
 
    	
 
    
	
 
    	
Title: 
    	
Chief Financial Officer   and Treasurer
    	
 
    	
 
    

 

Signature page to Registered Forward Transaction (Block) Master ConfirmationExhibit 4.1

 

Execution Copy

 

	
 
    

 

AMENDED AND RESTATED

 

TRUST AGREEMENT

 

by and among

 

HARLEY-DAVIDSON CUSTOMER FUNDING CORP.,

as Trust Depositor,

 

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Owner Trustee,

 

and

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

as Paying Agent

 

 

 

 

Dated as of June 8, 2016

 

	
 
    

 

 

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
    	
5
    
	
Section 2.01.
    	
Name
    	
5
    
	
Section 2.02.
    	
Office
    	
5
    
	
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
    	
7
    
	
Section 2.09.
    	
Situs   of Trust
    	
7
    
	
Section 2.10.
    	
Representations   and Warranties of the Trust Depositor
    	
7
    
	
Section 2.11.
    	
Tax   Treatment; Grantor Trust Arrangement
    	
8
    
	
Section 2.12.
    	
Texas   State Tax Matters
    	
9
    
	
Section 2.13.
    	
Covenants   of the Certificateholders
    	
9
    
	
ARTICLE THREE TRUST CERTIFICATES AND TRANSFER   OF INTERESTS
    	
10
    
	
Section 3.01.
    	
Initial   Ownership
    	
10
    
	
Section 3.02.
    	
The   Trust Certificates; Authentication and Delivery
    	
10
    
	
Section 3.03.
    	
Book-Entry   Certificates
    	
10
    
	
Section 3.04.
    	
Definitive   Certificates
    	
12
    
	
Section 3.05.
    	
Registration;   Transfer and Exchange of Trust Certificates
    	
13
    
	
Section 3.06.
    	
Mutilated,   Destroyed, Lost or Stolen Trust Certificates
    	
17
    
	
Section 3.07.
    	
Person   Deemed Owner
    	
17
    
	
Section 3.08.
    	
Access   to List of Certificateholders’ Name and Address
    	
17
    
	
Section 3.09.
    	
Maintenance   of Office or Agency
    	
18
    
	
Section 3.10.
    	
Appointment   of Paying Agent
    	
18
    
	
ARTICLE FOUR ACTIONS BY OWNER TRUSTEE AND   CERTIFICATEHOLDERS
    	
18
    
	
Section 4.01.
    	
Prior   Notice to Owners with Respect to Certain Matters
    	
18
    
	
Section 4.02.
    	
Action   by Owners with Respect to Certain Matters
    	
19
    
	
Section 4.03.
    	
Action   by Owners with Respect to Bankruptcy
    	
19
    
	
Section 4.04.
    	
Restrictions   on Owners’ Power
    	
20
    
	
Section 4.05.
    	
Majority   of the Trust Certificates Control
    	
20
    
	
ARTICLE FIVE APPLICATION OF TRUST FUNDS;   CERTAIN DUTIES
    	
20
    
	
Section 5.01.
    	
Establishment   of Collection Account; Application of Trust Funds
    	
20
    
	
Section 5.02.
    	
Method   of Payment
    	
21
    
	
Section 5.03.
    	
Accounting   and Reports to the Certificateholders, Owners, the Internal Revenue Service   and Others
    	
21
    
	
Section 5.04.
    	
Signature   on Returns
    	
21
    
	
ARTICLE SIX AUTHORITY AND DUTIES OF OWNER   TRUSTEE
    	
21
    
	
Section 6.01.
    	
General   Authority
    	
21
    
	
Section 6.02.
    	
General   Duties
    	
22
    

 

 

	
Section 6.03.
    	
Action   Upon Instruction
    	
22
    
	
Section 6.04.
    	
No   Duties Except as Specified in this Agreement or in Instructions
    	
23
    
	
Section 6.05.
    	
No   Action Except Under Specified Documents or Instructions
    	
23
    
	
Section 6.06.
    	
Restrictions
    	
23
    
	
ARTICLE SEVEN CONCERNING THE OWNER TRUSTEE
    	
24
    
	
Section 7.01.
    	
Acceptance   of Trusts and Duties
    	
24
    
	
Section 7.02.
    	
Furnishing   of Documents
    	
25
    
	
Section 7.03.
    	
Representations   and Warranties
    	
25
    
	
Section 7.04.
    	
Reliance;   Advice of Counsel
    	
26
    
	
Section 7.05.
    	
Not   Acting in Individual Capacity
    	
26
    
	
Section 7.06.
    	
Owner   Trustee Not Liable for Trust Certificates, Notes or Contracts
    	
26
    
	
Section 7.07.
    	
Owner   Trustee May Own Trust Certificate and Notes
    	
27
    
	
Section 7.08.
    	
Rule 144A   Information
    	
27
    
	
ARTICLE EIGHT COMPENSATION OF OWNER TRUSTEE
    	
27
    
	
Section 8.01.
    	
Owner   Trustee’s Fees and Expenses
    	
27
    
	
Section 8.02.
    	
Indemnification
    	
27
    
	
Section 8.03.
    	
Payments   to the Owner Trustee
    	
28
    
	
ARTICLE NINE TERMINATION OF TRUST AGREEMENT
    	
28
    
	
Section 9.01.
    	
Termination   of Trust Agreement
    	
28
    
	
ARTICLE TEN SUCCESSOR OWNER TRUSTEES AND   ADDITIONAL OWNER TRUSTEES
    	
29
    
	
Section 10.01.
    	
Eligibility   Requirements for Owner Trustee
    	
29
    
	
Section 10.02.
    	
Resignation   or Removal of Owner Trustee
    	
29
    
	
Section 10.03.
    	
Successor   Owner Trustee
    	
30
    
	
Section 10.04.
    	
Merger   or Consolidation of Owner Trustee
    	
30
    
	
Section 10.05.
    	
Appointment   of Co-Trustee or Separate Trustee
    	
31
    
	
ARTICLE ELEVEN MISCELLANEOUS
    	
32
    
	
Section 11.01.
    	
Supplements   and Amendments
    	
32
    
	
Section 11.02.
    	
No   Legal Title to Trust Estate in Owners
    	
33
    
	
Section 11.03.
    	
Limitations   on Rights of Others
    	
33
    
	
Section 11.04.
    	
Notices
    	
33
    
	
Section 11.05.
    	
Severability   of Provisions
    	
33
    
	
Section 11.06.
    	
Counterparts
    	
33
    
	
Section 11.07.
    	
Successors   and Assigns
    	
33
    
	
Section 11.08.
    	
Covenants   of the Trust Depositor
    	
34
    
	
Section 11.09.
    	
No   Petition
    	
34
    
	
Section 11.10.
    	
No   Recourse
    	
34
    
	
Section 11.11.
    	
Headings
    	
34
    
	
Section 11.12.
    	
Governing   Law
    	
35
    
	
Section 11.13.
    	
Trust   Certificate Transfer Restrictions
    	
35
    
	
Section 11.14.
    	
Trust   Depositor Payment Obligation
    	
35
    
	
Section 11.15.
    	
Certain   Rights and Protections of the Indenture Trustee
    	
35
    
	
 
    	
 
    	
 
    
	
EXHIBITS
    
	
 
    	
 
    	
 
    
	
Exhibit A - Form of Certificate of Trust
    	
A-1
    
	
Exhibit B - Form of Trust Certificate
    	
B-1
    
	
Exhibit C - Form of Underlying Trust   Certificate
    	
C-1
    
	
Exhibit D - Form of Certificate Investor   Representation Letter
    	
D-1
    
	
Exhibit E - Acknowledgements, Representations   and Agreements of
    	
 
    

 

- ii -

 

	
                    Purchasers of Trust Certificates
    	
E-1
    

 

- iii -

 

AMENDED AND RESTATED TRUST AGREEMENT dated as of June 8, 2016, 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 May 20, 2016 (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, the Trust will issue the Trust Certificates (as defined below) representing the residual interest in the Trust, which Trust Certificates will be sold to investors in one or more negotiated transactions;

 

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 June 1, 2016, among the Trust, the Trust Depositor, the Indenture Trustee, the Underlying Trust, the Underlying 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.

 

“Beneficial Owner” shall mean the Person in whose name a Trust Certificate is recorded as beneficial owner of such Trust Certificate by a securities depository under a book-entry system, or by a participant or indirect participant in such securities depository, as the case may be.

 

“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.

 

“Book-Entry Certificate” means a Trust Certificate, the beneficial interest in, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 3.03.

 

- 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 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 3.05.

 

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

 

“Certificateholder FATCA Information” means with respect to any Certificateholder or Beneficial Owner, information sufficient to eliminate the imposition of, or determine the amount of, U.S. withholding tax under FATCA.

 

“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.

 

“DTC” means the Depository Trust Company, a New York corporation.

 

“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.

 

“FATCA” means Sections 1471 through 1474 of the Code (or any amended or successor version) and any current or future regulations or official interpretations thereof.

 

“FATCA Withholding Tax” means any withholding or deduction pursuant to an agreement described in Section 1471(b) of the Code or otherwise imposed pursuant to FATCA.

 

“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 June 1, 2016, 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.

 

- 2 -

 

“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 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 each Certificateholder, the Servicer, the Indenture Trustee, the Trust Depositor and Harley-Davidson Credit.

 

“Partnership Representative” shall have the meaning provided in Section 2.11(c) hereof.

 

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

 

“Percentage Interest” shall mean, with respect to the Trust Certificates, the proportion of (i) the aggregate nominal principal amount represented by all issued and outstanding Trust Certificates held by any Certificateholder or (if applicable) any group of Certificateholders to (ii) the aggregate nominal principal amount represented by all issued and outstanding Trust Certificates held by all Certificateholders.

 

“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.

 

“Regulation S 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, sold to non-U.S. persons that, at the time of the acquisition of any such beneficial interests, are Qualified Institutional Buyers purchasing such beneficial interests in offshore transactions in reliance on Regulation S under the Securities Act.

 

“Rule 144A Information” means the information specified pursuant to Rule 144A(d)(4) of the Securities Act (or any successor provision thereto).

 

“Rule 144A 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, sold to persons that, at the time of the acquisition of any such beneficial interests, are Qualified Institutional Buyers.

 

“Sale and Servicing Agreement” means the Sale and Servicing Agreement, dated as of June 1, 2016, among the Trust, as Issuer, the Underlying Trust, 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.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“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.

 

- 3 -

 

“Tax Matters Partner” shall have the meaning provided in Section 2.11(c) hereof.

 

“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 Regulation S Trust Certificate or a Rule 144A Trust Certificate.

 

“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 Section 2.5 of the Underlying Trust Agreement and all other property of the Trust from time to time, including the Trust Accounts (as defined in the Sale and Servicing Agreement) and any rights of the Owner Trustee and the Trust pursuant to the Sale and Servicing Agreement, the Underlying Trust Agreement and the Administration Agreement.

 

“Underlying Trust” means Harley-Davidson Motorcycle Grantor Trust 2016-A, together with its successors and assigns.

 

“Underlying Trustee” means the Person acting, not in its individual capacity, but solely as Underlying Trustee under the Underlying Trust Agreement, its successors in interest and any successor underlying trustee under the Underlying Trust 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.

 

- 4 -

 

ARTICLE TWO

 

ORGANIZATION

 

Section 2.01.              Name.

 

The Trust created hereby shall be known as “Harley-Davidson Motorcycle Trust 2016-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.

 

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)                              establishing a grantor trust (the “Underlying Trust”) and depositing therein, in exchange for a certificate evidencing a 100 percent undivided beneficial ownership interest in the Underlying Trust (the “Underlying Trust Certificate”), funds sufficient for the Underlying Trust to purchase the Contracts, including all books, records and other contracts and documents related thereto;

 

(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;

 

- 5 -

 

(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; and

 

(viii)                  directing the Underlying Trust and the Administrator to take actions as may be reasonably necessary to collect interest on and principal of the Contracts.

 

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, without the prior consent of the Trust Depositor.

 

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.

 

- 6 -

 

(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.

 

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 

 

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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 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 Certificates, (B) seeking to prevent the issuance of the Trust Certificates 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 Certificates 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 Certificates.

 

Section 2.11.              Tax Treatment; Grantor Trust Arrangement.

 

The following shall apply to the Trust solely with respect to tax matters:

 

(a)                               In the event that 100% of the interests in the Trust Certificates are held by the same Person, then for United States federal income tax purposes, the Trust shall be treated as a disregarded entity.

 

(b)                              In the event that 100% of the interests in the Trust Certificates are not held by the same Person, the Trust shall be treated as a partnership for purposes of United States federal income taxes.  The Owner Trustee shall timely prepare for the Tax Matters Partner to sign, and shall file, any and all forms required to effect such treatment.  Each owner of a Trust Certificate shall provide the Owner Trustee any information or certifications the Owner Trustee requires for tax purposes and reasonably requests in writing.  The Owner Trustee will timely prepare, for the Tax Matters Partner to sign and file, a partnership information return (Internal Revenue Service Form 1065) with the Internal Revenue Service for each taxable year of the Trust and will report the allocable share of items of income, gain, loss, deduction, expense and credit of the Trust and of each Certificateholder to the Certificateholders and the Internal Revenue Service on Schedule K-1.  Capital accounts shall be maintained by the Owner Trustee for each Certificateholder in accordance with the Treasury regulations promulgated under Section 704(b) of the Code and the capital account balance for each Certificateholder shall be determined by the Owner Trustee in accordance with the terms of this Trust Agreement.  Except in connection with the special allocations required by Treas. Reg. §§ 1.704-2(f) (partnership “minimum gain chargeback” provisions), 1.704-2(i)(4) (“partner nonrecourse debt minimum gain chargeback” provisions), and 1.704-1(b)(2)(ii)(d) (“qualified income offset” provisions), all income, gain, deduction, expense, and loss of the Trust shall be allocated solely to the Certificateholders based on the relative Percentage Interests of their respective Trust Certificates.  The Owner Trustee shall cause to be prepared all necessary tax forms (including without limitation, IRS Form 1065 and Schedule K-1) but shall not be obligated to sign any such tax 

 

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return as a “tax preparer.”  Unless specifically directed otherwise by a majority of the Certificateholders with respect to a specific election, the return of the Trust shall be prepared with any election as the Owner Trustee determines with the approval of the Tax Matters Partner.  Notwithstanding the foregoing, no election shall be made to have the Trust treated as a corporation for United States federal income tax purposes.  Notwithstanding the foregoing, the Owner Trustee shall have no responsibility to verify any information provided by any owner of a Certificate for such purposes, or to prepare documentation dependent upon information not timely received from applicable owners of the Trust Certificates.  The Owner Trustee shall have no duty to investigate the identity or addresses of any of the owners of the Trust Certificates, but shall rely solely on information provided by persons purporting to be such owners.

 

(c)                               The Owner Trustee shall at all times ensure that if there is more than one Beneficial Owner of Trust Certificates that there is a Beneficial Owner that shall have agreed in writing to sign the tax returns on behalf of the Trust.  Any such Beneficial Owner that has so agreed in writing (the “Tax Matters Partner”) shall be designated as the “tax matters partner” of the Trust within the meaning of Section 6231(a)(7) of the Code with respect to taxable years beginning before January 1, 2018.  For the avoidance of doubt, with respect to any taxable year of the Trust that begins after December 31, 2017, the tax returns of the Trust for such taxable year shall be signed by the Beneficial Owner that is the Tax Matters Partner, even though the provisions of the Code that impose responsibilities on the “tax matters partner” (within the meaning of Section 6231(a)(7) of the Code) will not apply with respect to taxable years of the Trust that begin after December 31, 2017.  The Owner Trustee hereby agrees that, with respect to taxable years beginning after December 31, 2017, the Owner Trustee (or another Person chosen by the Owner Trustee) shall be the “partnership representative” (within the meaning of Section 6223 of the Code, as in effect for taxable years beginning after December 31, 2017) with respect to the Trust.

 

(d)                              The Trust shall not authorize the Underlying Trust to modify the terms of a Contract unless a default has occurred or is reasonably foreseeable, such modification would not constitute a “significant modification” under Treas. Reg. § 1.1001-3, or the Owner Trustee has received an opinion of nationally recognized tax counsel that such modification would not result in adverse tax consequences to the Trust.

 

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 each 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.

 

Section 2.13.              Covenants of the Certificateholders.

 

Each Certificateholder, by becoming an owner of a Trust Certificate and beneficial owner of the Trust, hereby acknowledges and agrees (a) that such Certificateholder is subject to the terms, provisions and conditions of this Agreement, to which such Certificateholder agrees to be bound; and (b) that it shall not take any position in such Certificateholder’s tax returns inconsistent with Section 2.11.

 

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ARTICLE THREE

 

TRUST CERTIFICATES 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 Certificates, the Trust Depositor shall be the sole beneficiary of the Trust.  Upon the issuance of the Trust Certificates, the Trust Depositor will no longer be a beneficiary of the Trust, except to the extent that the Trust Depositor is a Certificateholder.

 

Section 3.02.              The Trust Certificates; Authentication and Delivery.

 

(a)                               The Trust Certificates shall represent the entire beneficial interest in the Trust.  The Trust Certificates 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.

 

(b)                              Concurrently with the sale of the Contracts and other assets included in the Trust Estate, at the direction of the Trust Depositor, a single Regulation S Trust Certificate that is a Book-Entry Certificate (a “Regulation S Global Certificate”) and a single Rule 144A Trust Certificate that is a Book-Entry Certificate (a “Rule 144A Global Certificate”) shall each be executed by the Owner Trustee on behalf of the Trust and authenticated and delivered in the name of Cede & Co. Each Certificate will be issued in the form of a typewritten certificate substantially in the form of Exhibit B hereto. The Certificates shall represent, in the aggregate, 100% of the Percentage Interest in the Issuer and shall, to the fullest extent permitted by applicable law, be fully paid and nonassessable.

 

Section 3.03.              Book-Entry Certificates.

 

(a)                               Each of the Trust Certificates will be issued in the form of one or more typewritten certificates, substantially in the form of Exhibit B hereto, representing the Book-Entry Certificates, to be delivered to the Indenture Trustee, as initial agent for the Clearing Agency, by, or on behalf of, the Trust. The Book-Entry Certificates shall be issued in an aggregate nominal principal amount of $100,000 (which shall be deemed to be the equivalent of 100,000 units, with $1 of principal amount the equivalent of 1 unit), and all beneficial interests in the Book-Entry Certificates shall be owned, in the minimum principal amount of $1,000 and integral multiples of $1 in excess thereof. The Issuer shall not issue any Certificate that would cause the aggregate nominal principal amount of all Certificates to exceed $100,000, or 100,000 units, without the prior written consent of all Certificateholders. No distributions of monies to the Certificateholders under the Transaction Documents shall be deemed to reduce the nominal principal amount of any Trust Certificate prior to payment in full of all Notes; provided, however, that the final aggregate $100,000 distributed to the Certificateholders under the Transaction Documents upon final distribution of the Trust Estate and termination of the Trust pursuant to Section 9.01 shall be deemed to repay the aggregate nominal principal amount of the Trust Certificates in full; provided, further, that any failure to pay in full the nominal principal amount of a 

 

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Trust Certificate on such final distribution date shall not result in any recourse to, claim against or liability of any Person for such shortfall. Any amounts payable to the Certificateholders on or in respect of the Trust Certificates under the Transaction Documents shall be paid and allocated to the various Certificateholders ratably based on their respective Percentage Interests. Such Trust Certificates shall initially be registered on the Certificate Register in the name of Cede & Co., the nominee of DTC as the initial Clearing Agency, and no Certificateholder will receive a Definitive Certificate representing such Certificateholder’s interest in such Trust Certificate, except as provided in Section 3.04. Unless and until definitive, fully registered Trust Certificates (“Definitive Certificates”) are issued pursuant to Section 3.04:

 

(i)                                  the provisions of this Section shall be in full force and effect;

 

(ii)                              the Certificate Registrar, the Paying Agent and the Owner Trustee shall be entitled to deal with the Clearing Agency for all purposes of this Agreement (including the payment of amounts payable under the Transaction Documents and the giving of instructions or directions hereunder) as the sole Certificateholders, and shall have no obligation to the Beneficial Owners;

 

(iii)                          to the extent that the provisions of this Section conflict with any other provisions of this Agreement, the provisions of this Section shall control;

 

(iv)                          the rights of the Beneficial Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and/or agreement between or among such Beneficial Owners and the Clearing Agency and/or the Clearing Agency participants or Persons acting through Clearing Agency participants. Pursuant to a depository agreement, unless and until Definitive Certificates are issued pursuant to Section 3.04, the initial Clearing Agency shall make book-entry transfers among the Clearing Agency participants and receive and transmit payments due under the Transaction Documents with regard to the Trust Certificates to such Clearing Agency participants;

 

(v)                              whenever this Agreement requires or permits actions to be taken based upon instructions or directions of Certificateholders representing a specified percentage of the Trust Certificate Percentage Interest, the Clearing Agency shall deliver instructions to the Owner Trustee only to the extent that it has received instructions to such effect from Beneficial Owners and/or Clearing Agency participants or Persons acting through Clearing Agency participants owning or representing, respectively, such required percentage of the beneficial interest in the Trust Certificates;

 

(vi)                          owners of a beneficial interest in a Book-Entry Certificate will not be entitled to have any portion of a Book-Entry Certificate registered in their names and will not be considered to be the Beneficial Owners or Certificateholders of any Trust Certificates under this Trust Agreement; and

 

(vii)                      payments on a Book-Entry Certificate will be made to the Clearing Agency or its nominee as the registered owner thereof and none of the Trust, the Owner Trustee or the Paying Agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Book-Entry Certificate or for maintaining, supervising or reviewing any records relating to the beneficial ownership interests.

 

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(b)                              Notwithstanding any provision to the contrary herein, so long as a Book-Entry Certificate remains outstanding and is held by or on behalf of the Clearing Agency, transfers of a Book-Entry Certificate, in whole or in part, shall only be made in accordance with Section 3.03(a). Subject to clauses (i)-(iii) of Section 3.03(a), transfers of a Book-Entry Certificate shall be limited to transfers of such Book-Entry Certificate in whole, but not in part, to a nominee of the Clearing Agency or to a successor of the Clearing Agency or such successor’s nominee.  In the event that a Book-Entry Certificate is exchanged for one or more Definitive Certificates pursuant to Section 3.04, such Trust Certificates may be exchanged for one another only in accordance with the provisions of this Agreement and with such procedures as may be from time to time adopted by the Trust and the Owner Trustee.

 

(c)                               Whenever a notice or other communication to the Certificateholders is required under this Agreement, unless and until Definitive Certificates are issued to Beneficial Owners pursuant to Section 3.04, the Owner Trustee shall give all such notices and communications specified herein to be given to the Certificateholders to the Clearing Agency and shall have no obligation to the Beneficial Owners.

 

Section 3.04.              Definitive Certificates.

 

(a)                               If (i) the Trust Depositor advises the Owner Trustee in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities with respect to the Trust Certificates, and the Trust Depositor is unable to locate a qualified successor or (ii) the Trust Depositor at its option advises the Owner Trustee in writing that it elects to terminate the book-entry system through the Clearing Agency, then the Clearing Agency shall notify all Beneficial Owners and the Owner Trustee of the occurrence of any such event and of the availability of Definitive Certificates representing the Trust Certificates to Certificate Owners requesting the same. Upon surrender to the Owner Trustee of the typewritten Trust Certificate or Trust Certificates representing the Book-Entry Certificates by the Clearing Agency, accompanied by re-registration instructions, the Trust shall execute and the Owner Trustee shall authenticate Definitive Certificates representing the Trust Certificates in accordance with the instructions of the Clearing Agency. None of the Trust, the Certificate Registrar or the Owner Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Certificates representing the Trust Certificates, the Owner Trustee shall recognize such holders of the Definitive Certificates as the applicable Certificateholders.

 

(b)                              Subject to the transfer restrictions contained herein and in the Trust Certificates, any Certificateholder may transfer all or any portion of the Percentage Interest (subject to the requirements set forth in Sections 3.03 and 3.05) evidenced by such Trust Certificate upon surrender thereof to the Owner Trustee, and with such signature guarantees and evidence of authority of the Person signing the instrument of transfer as the Owner Trustee may reasonably require, and accompanied by the documents required by this Article III. Promptly upon the receipt of such documents and receipt by the Owner Trustee of the transferor’s Trust Certificate, the Owner Trustee shall record the name of the transferee as a Certificateholder and its Percentage Interest in the Certificate Register and execute, authenticate and deliver to such Certificateholder a Certificate evidencing such Percentage Interest dated the date of authentication. In the event a transferor transfers only a portion of its Percentage Interest, the Owner Trustee shall register and issue to such transferor a new Trust Certificate evidencing such transferor’s new Percentage Interest and shall issue, execute and deliver to the transferee a new Trust Certificate evidencing such transferee’s Percentage Interest. Subsequent to each transfer of a beneficial interest and upon the issuance of the new Trust Certificate or Trust Certificates, the Owner Trustee shall cancel and destroy in accordance with its customary practices the Trust Certificate surrendered to it in 

 

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connection with such transfer. The Owner Trustee may treat, for all purposes whatsoever (other than as required under applicable law), the Person in whose name any Certificate is registered as the sole owner of the Percentage Interest evidenced by such Certificate without regard to any notice to the contrary.

 

(c)                               Definitive Certificates will not be eligible for clearing or settlement through DTC, Euroclear or Clearstream.

 

Section 3.05.              Registration; Transfer and Exchange of Trust Certificates.

 

(a)                               The Bank of New York Mellon Trust Company, N.A., as an agent of the Issuer, in its capacity as “Certificate Registrar” (the “Certificate Registrar”) shall maintain at its office, or at the office of any agent appointed by it and approved in writing by the Certificateholders at the time of such appointment, a register (the “Certificate Register”) for the registration and transfer of any Trust Certificate, and the Certificate Registrar shall promptly notify the Owner Trustee of any change in the registered ownership of a Trust Certificate. Prior to the due presentment to the Certificate Registrar for registration of transfer of any Trust Certificate, the Owner Trustee, and the Certificate Registrar or any agent of the Owner Trustee or the Certificate Registrar and the Paying Agent (or any agent of any such party) may treat the Person in whose name any Trust Certificate is registered (as of the applicable Record Date) as the owner of such Trust Certificate for the purpose of receiving distributions on such Trust Certificate and for all other purposes whatsoever. For the avoidance of doubt, a Trust Certificate is not negotiable and the records maintained by the Certificate Registrar in the Certificate Register with respect to each Trust Certificate and its related registered owner are intended to cause the Trust Certificates to be issued in registered form, within the meaning of Treasury Regulation section 5f.103-1(c), and shall record (i) the Percentage Interest evidenced by each Trust Certificate and (ii) all distributions made to each Certificateholder with respect to the Trust’s assets.

 

(b)                              A Certificateholder may assign, convey or otherwise transfer all or any of its right, title and interest in the related Trust Certificate. Each purchaser and transferee of a Definitive Certificate will be required to provide a Certificate Investor Representation Letter substantially in the form of Exhibit D. Each purchaser and transferee of a beneficial interest in a Book-Entry Certificate shall be deemed to have made the acknowledgements, representations, and agreements set forth in Exhibit E, and any transfer of a beneficial interest in a Book-Entry Certificate shall only be made in accordance with this section.

 

(i)                                  Subject to clauses (ii) and (iii) of this Section 3.05(b), transfers of a Book-Entry Certificate shall be limited to transfers of such Book-Entry Certificate in whole, but not in part, to nominees of such Clearing Agency or to a successor Clearing Agency or such successor’s nominee.

 

(ii)                              If a Beneficial Owner of a Rule 144A Global Certificate deposited with the Clearing Agency wishes at any time to exchange its interest in such Rule 144A Global Certificate for an interest in the corresponding Regulation S Global Certificate, or to transfer its interest in such Rule 144A Global Certificate to a Person who wishes to take delivery thereof in the form of an interest in the corresponding Regulation S Global Certificate, such Beneficial Owner, provided such Beneficial Owner or, in the case of a transfer, the transferee is (A) a Qualified Institutional Buyer, (B) not a U.S. person, and (C) is acquiring such interest in an offshore transaction, may, subject to the immediately succeeding sentence and the rules and procedures of the Clearing Agency, exchange or transfer, or cause the exchange or transfer of, such interest for an equivalent beneficial interest in the corresponding Regulation S Global 

 

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Certificate.  Upon receipt by the Clearing Agency of (A) instructions given in accordance with the Clearing Agency’s procedures from a participant directing the Clearing Agency to credit or cause to be credited a beneficial interest in the corresponding Regulation S Global Certificate, but not less than the minimum denomination applicable to such Beneficial Owner’s Trust Certificate, in an amount equal to the beneficial interest in the Rule 144A Global Certificate to be exchanged or transferred, and (B) a written order given in accordance with the Clearing Agency’s procedures containing information regarding the participant account of the Clearing Agency to be credited with such increase, then the Certificate Registrar shall instruct the Clearing Agency to reduce the nominal principal amount of the Rule 144A Global Certificate and to increase the nominal principal amount of the Regulation S Global Certificate by the aggregate nominal principal amount of the beneficial interest in the Rule 144A Global Certificate to be exchanged or transferred, and to credit or cause to be credited to the securities account of the Person specified in such instructions a beneficial interest in the corresponding Regulation S Global Certificate equal to the reduction in the nominal principal amount of the Rule 144A Global Certificate.

 

(iii)                          If a Beneficial Owner of a Regulation S Global Certificate deposited with the Clearing Agency wishes at any time to exchange its interest in such Regulation S Global Certificate for an interest in the corresponding Rule 144A Global Certificate or to transfer its interest in such Regulation S Global Certificate to a Person who wishes to take delivery thereof in the form of an interest in the corresponding Rule 144A Global Certificate, such Beneficial Owner, provided such Beneficial Owner or, in the case of a transfer, the transferee is a Qualified Institutional Buyer, may, subject to the immediately succeeding sentence and the rules and procedures of the Clearing Agency, exchange or transfer, or cause the exchange or transfer of, such interest for an equivalent beneficial interest in the corresponding Rule 144A Global Certificate.  Upon receipt by the Clearing Agency of (A) instructions given in accordance with the Clearing Agency’s procedures from a participant directing the Clearing Agency to credit or cause to be credited a beneficial interest in the corresponding Rule 144A Global Certificate, but not less than the minimum denomination applicable to such Beneficial Owner’s Trust Certificate, in an amount equal to the beneficial interest in the Regulation S Global Certificate to be exchanged or transferred, and (B) a written order given in accordance with the Clearing Agency’s procedures containing information regarding the participant account of the Clearing Agency to be credited with such increase, then the Certificate Registrar shall instruct the Clearing Agency to reduce the nominal principal amount of the Regulation S Global Certificate and to increase the nominal principal amount of the Rule 144A Global Certificate by the aggregate nominal principal amount of the beneficial interest in the Regulation S Global Certificate to be exchanged or transferred, and to credit or cause to be credited to the securities account of the Person specified in such instructions a beneficial interest in the corresponding Rule 144A Global Certificate equal to the reduction in the nominal principal amount of the Regulation S Global Certificate.

 

(c)                               As a condition precedent to any registration of transfer under this Section 3.05, the Owner Trustee or the Certificate Registrar may require the payment of a sum sufficient to cover the payment of any tax or taxes or governmental charges required to be paid in connection with such transfer.

 

(d)                              Each registered owner of and, if different, each owner of a beneficial interest in, a Trust Certificate that is a “United States person” (as defined in Code section 7701(a)(30)) shall deliver to the Owner Trustee, the Administrator and the Paying Agent two properly completed and duly executed originals of U.S. Internal Revenue Service Form W-9 (or applicable successor form) certifying that it is not subject to backup withholding and that it is a U.S. person. Each registered owner of and, if different, each owner of a beneficial interest in, a Trust Certificate that is not a “United States person” shall deliver 

 

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to the Owner Trustee, the Administrator and the Paying Agent two properly completed and duly executed originals of U.S. Internal Revenue Service Form W-8BEN (Certification of Foreign Status as Beneficial Owner), IRS Form W-8BEN-E (Certificate of Status of Beneficial Owner for United States Withholding and Reporting (entities)), IRS Form W-8IMY (Certification of Foreign Intermediary Status) or IRS Form W-8ECI (Certification of Foreign Person’s Claim for Exemption from Withholding on Income Effectively Connected with Conduct of a U.S. Trade or Business), or any applicable successors to such IRS forms or other reasonable information or certification requested by the Owner Trustee, the Administrator or the Paying Agent (i) to permit the Owner Trustee, the Administrator and the Paying Agent to make payments to the registered owner of, and if different, each owner of a beneficial interest in, a Trust Certificate without withholding or deduction (including any FATCA Withholding Tax), (ii) to enable the Trust to qualify for a reduced rate of withholding in any jurisdiction from or through which the Trust receives payments on its assets, or (iii) to enable the Owner Trustee, the Administrator and the Paying Agent to satisfy any reporting or other obligations under any applicable tax law (including FATCA), and will update or replace such form, certification or other information as necessary in accordance with its terms or its subsequent amendments. The applicable Internal Revenue Service forms and information required to be delivered, as described above, shall be delivered on or prior to the date on which a Certificateholder and, if different, a Beneficial Owner becomes a Certificateholder or Beneficial Owner under this Agreement and from time to time thereafter as prescribed by applicable law or upon the request of the Owner trustee or the Paying Agent.

 

(e)                               Each registered owner of, and, if different, each owner of a beneficial interest in, a Trust Certificate represents to the Trust and Owner Trustee by acceptance of this Trust Certificate or interest therein that it is not and will not become subject to any FATCA Withholding Tax.

 

(f)                                Each purchaser, beneficial owner and subsequent transferee of Trust Certificates or an interest therein will be required or deemed to acknowledge that the Trust may provide such information and any other information concerning its investment in the Trust Certificates to the U.S. Internal Revenue Service. In addition, each purchaser, beneficial owner and subsequent transferee of Trust Certificates or an interest therein will be required or deemed to understand and acknowledge that the Trust has the right, hereunder, to withhold on any beneficial owner of an interest in a Trust Certificate that fails to comply with the foregoing requirements.

 

(g)                               No transfers shall be permitted if such transfer is effected through an established securities market or secondary market (or the substantial equivalent thereof) within the meaning of the Code Section 7704 and any proposed, temporary or final Treasury Regulations thereunder.

 

(h)                              Each Trust Certificate shall bear a legend in substantially the following form unless the Trust Depositor determines otherwise in accordance with applicable law:

 

THIS TRUST CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR REGISTERED OR QUALIFIED UNDER ANY SECURITIES OR BLUE SKY LAW OF ANY STATE. THE HOLDER HEREOF, BY PURCHASING THIS TRUST CERTIFICATE, AGREES THAT THIS TRUST CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (I) TO A PERSON THAT IS A QIB (AS DEFINED BELOW) AND IS NOT A “U.S. PERSON” (AS DEFINED IN RULE 902(K) OF REGULATION S UNDER THE SECURITIES ACT) AND IS ACQUIRING THIS SECURITY IN RELIANCE ON THE EXEMPTION FROM THE SECURITIES ACT REGISTRATION PROVIDED BY SUCH REGULATION, (II) PURSUANT TO RULE 144A 

 

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UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A “QIB”), PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, PURCHASING FOR INVESTMENT AND NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO THE RECEIPT BY THE OWNER TRUSTEE OF EVIDENCE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS, (III) PURSUANT TO ANOTHER EXEMPTION AVAILABLE UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (IV) PURSUANT TO A VALID REGISTRATION STATEMENT.  ANY TRANSFER IN VIOLATION OF THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE ISSUER, THE OWNER TRUSTEE, OR ANY INTERMEDIARY. IF, AT ANY TIME, THE ISSUER DETERMINES OR IS NOTIFIED THAT THE HOLDER OF SUCH CERTIFICATE OR PERCENTAGE INTEREST IN SUCH CERTIFICATE WAS IN BREACH, AT THE TIME GIVEN, OF ANY OF THE REPRESENTATIONS SET FORTH IN THE TRUST AGREEMENT, THE ISSUER AND THE OWNER TRUSTEE MAY CONSIDER THE ACQUISITION OF THIS CERTIFICATE OR SUCH INTEREST IN SUCH CERTIFICATE VOID AND REQUIRE THAT THIS CERTIFICATE OR SUCH INTEREST HEREIN BE TRANSFERRED TO A PERSON DESIGNATED BY THE ISSUER.

 

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

 

(i)                                  If the Owner Trustee has actual knowledge that (1) a transfer or attempted or purported transfer of any Trust Certificate or interest therein was consummated in compliance with the provisions of this Section 3.05 on the basis of a materially incorrect certification from the transferor or purported transferee, (2) a transferee of a Definitive Certificate failed to deliver to the Owner Trustee a Certificate Investor Representation Letter substantially in the form of Exhibit D hereto or (3) the Certificateholder of any Trust Certificate or interest therein is in material breach of any representation or agreement set forth in any Trust Certificate or any deemed representation or agreement of such Certificateholder, the Owner Trustee will direct the Certificate Registrar not to register such attempted or purported transfer and, if a transfer has been registered, such transfer shall be absolutely null and void ab initio and shall not operate to transfer any rights to the purported transferee (such purported transferee, a “Disqualified Transferee”) and the last preceding Certificateholder of such Certificateholder that was not a Disqualified Transferee shall be restored to all rights as a Certificateholder thereof retroactively to the date of the purported transfer of such Trust Certificate by such Certificateholder.

 

(j)                                  A Trust Certificate (or beneficial interest therein) may not be sold or transferred to a Person that beneficially owns a Note, unless such Person has obtained and provided to the Owner Trustee an opinion of nationally recognized tax counsel to the effect that, under then-existing law, such 

 

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acquisition of Trust Certificates and Notes will not cause section 385 of the Code, and any proposed, temporary, or final Treasury Regulations promulgated thereunder, to apply to such Notes.

 

(k)                              All Trust Certificates surrendered for registration of transfer shall be canceled and subsequently destroyed by the Owner Trustee.

 

Section 3.06.              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 Percentage Interest.  In connection with the issuance of any new Trust Certificate under this Section, 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 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 3.07.              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 3.08.              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 Percentage 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 Certificates 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 Certificateholders.  Each 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.

 

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Section 3.09.              Maintenance of Office or Agency.

 

(a)                               The Owner Trustee shall maintain in Wilmington, Delaware, an office or offices or agency or agencies where the Trust Certificates 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 Certificates 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 each Certificateholder of any change in the location of the Certificate Register or any such office or agency.

 

(b)                              The Certificate Registrar shall maintain an office or offices or agency or agencies where the Trust Certificates may be surrendered for registration of transfer or exchange.  The Certificate 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 each Certificateholder of any change in the location of the Certificate Register or any such office or agency.

 

Section 3.10.              Appointment of Paying Agent.

 

To the extent Definitive Certificates have been issued, the Paying Agent shall make distributions to the Certificateholders from the Collection Account pursuant to Section 5.01(b) and shall report the amounts of such distributions to the Owner Trustee.  The Paying Agent shall have the revocable power to withdraw funds from the Collection Account for the purpose of making the distributions referred to above. The Owner Trustee may revoke such power and remove the Paying Agent if the Owner Trustee determines in its sole discretion that the Paying Agent shall have failed to perform its obligations under this Agreement in any material respect.  The Paying Agent initially shall be The Bank of New York Mellon Trust Company, N.A. 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 The Bank of New York Mellon Trust Company, N.A. 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 Certificateholders in trust for the benefit of the Certificateholders entitled thereto until such sums shall be paid to such Certificateholders.  The Paying Agent shall return all unclaimed funds by a Certificateholder for two years 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.  Any reference in this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise.

 

ARTICLE FOUR

 

ACTIONS BY OWNER TRUSTEE AND CERTIFICATEHOLDERS

 

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 Certificateholders in writing of the proposed action, (ii) the Indenture 

 

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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.

 

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 Certificateholders, 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 except with the prior approval of all Owners 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.

 

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

 

ARTICLE FIVE

 

APPLICATION OF TRUST FUNDS;
 CERTAIN DUTIES

 

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

 

(a)                               The Collection Account will be established by the Trust Depositor pursuant to Section 5.05 of the Sale and Servicing Agreement.  The Issuer shall possess all right, title and interest in funds on deposit from time to time in the Collection Account.

 

(b)                              On each Distribution Date, to the extent Definitive Certificates have been issued, the Paying Agent will distribute to the Certificateholders from amounts on deposit in the Collection Account, on a pro rata basis based on their respective Percentage Interests, amounts received pursuant to Sections 7.05(a)(xi), 7.05(b)(vii) or 7.05(c)(vi) of the Sale and Servicing Agreement with respect to such Distribution Date.  On the Distribution Date on which the Notes have been paid in full, amounts on deposit in the Reserve Fund, after giving effect to all deposits and withdrawals from the Reserve Fund relating to that Distribution Date, will be distributed to the Certificateholders on a pro rata basis based on their respective Percentage Interests.

 

(c)                               On each Distribution Date, the Paying Agent shall send to the Certificateholders 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 Certificateholders, such tax shall reduce the amount otherwise distributable to the Certificateholders 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 

 

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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 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 Certificateholders.

 

Section 5.02.              Method of Payment.

 

Subject to the Indenture, distributions required to be made to the Owners on any Distribution Date and all amounts received by the Trust or the Owner Trustee on any other date that are payable to the Owners pursuant to this Agreement or any other Transaction Document shall be made to the Owners by wire transfer, in immediately available funds, to the account of each Owner designated by such Owner to the Owner Trustee and Indenture Trustee in writing.

 

Section 5.03.              Accounting and Reports to the Certificateholders, 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, (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, and (f) provide any further information reasonably requested by such Owner to the extent such information is reasonably obtainable; 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.

 

Section 5.04.              Signature on Returns.

 

Concurrently with the issuance of the Trust Certificates, the Owner Trustee shall ensure that one Certificateholder is identified as, and agrees to be, the Certificateholder responsible for signing on behalf of the Trust the tax returns of the Trust.  Such Certificateholder shall only be permitted to assign, convey or otherwise transfer all or any of its right, tile and interest in a Trust Certificate (i) in accordance with Section 3.05, and (ii) if the transferee thereof agrees to, upon its admission as a Certificateholder, be responsible for signing on behalf of the Trust the tax returns of the Trust.

 

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

 

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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, except to the extent Certificateholder consent is expressly required.

 

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.

 

(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 

 

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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.

 

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.

 

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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 (i) for its own willful misconduct or negligence or (ii) in the case of the inaccuracy of any representation or warranty contained in Section 7.03 expressly made by the Owner Trustee.  In particular, but not by way of limitation (and subject to the exceptions set forth in the preceding sentence):

 

(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 Certificates, 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 

 

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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.

 

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.  The Owner Trustee shall promptly give notice to each Owner of any (a) Default or Event of Default of which it has been provided notice pursuant to Section 3.181 of the Indenture and (b) Event of Termination which it has been provided notice pursuant to Section 8.05 of the Sale and Servicing Agreement.

 

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 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 

 

1  NTD: Foley adding to final turn of Indenture.

 

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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.

 

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 Certificates, Notes or Contracts.

 

The recitals contained herein and in the Trust Certificates (other than the signature of the Owner Trustee and the certificate of authentication on the Trust Certificates) 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 Certificates (other than the signature of the Owner Trustee and the certificate of authentication on the Trust Certificates) 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 Certificateholders under this Agreement or the Noteholders under the Indenture or the Sale and Servicing Agreement, including, without limitation, the existence, condition and 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 

 

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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 a 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.

 

Section 7.08.              Rule 144A Information.

 

Upon the request of an Owner in connection with the sale or transfer of such Owner’s Trust Certificate, the Trust Depositor shall promptly furnish or cause to be furnished Rule 144A Information to such Owner, to a prospective purchaser of such Trust Certificate (as designated by such Owner) or to the Owner Trustee for delivery (and the Owner Trustee shall deliver such Rule 144A Information) to such Owner or such prospective purchaser, as the case may be, in order to permit compliance by such Owner with Rule 144A in connection with the resale of such Trust Certificate by such Owner.

 

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, the Paying Agent, the Certificate Registrar 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, the Paying Agent, the Certificate Registrar 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 and, in the case of the Paying Agent and the Certificate Registrar, in the Indenture and 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 

 

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the matters described in the third sentence of Section 7.01 in the case of the Owner Trustee, and in the case of the Paying Agent and Certificate Registrar due to the willful misfeasance, bad faith, or negligence of the Paying Agent or the Certificate Registrar, as applicable, or in the case of the inaccuracy of any representation or warranty in this Agreement made by the Owner Trustee.  The Trust Depositor will also indemnify the Owner Trustee for specified taxes that may be assessed in connection with this transaction.  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 this Section, 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 and (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.  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 Certificateholders shall surrender their Trust Certificates to the Paying Agent for payment of the final distribution and cancellation, shall be given by the Owner Trustee by letter to the Certificateholders 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 Certificates shall be made upon presentation and surrender of the Trust Certificates to the Owner Trustee 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 Certificates at the office of the Owner Trustee 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 Certificateholders.  Upon presentation and surrender of a Trust Certificate, the Paying Agent shall cause to be distributed to the Certificateholders amounts distributable on such Distribution Date pursuant to Section 5.01.

 

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(d)                              In the event that any Owner shall not surrender their Trust Certificates for cancellation within six months after the date specified in the above mentioned written notice, the Owner Trustee shall give a second written notice to the remaining Owners to surrender their Certificates for cancellation and receive the final distribution with respect thereto. If within one year after the second notice any of the Trust Certificates shall not have been surrendered for cancellation, the Owner Trustee may take appropriate steps, or may appoint an agent to take appropriate steps, to contact the remaining Owners concerning surrender of their Trust Certificates and the cost thereof shall be paid out of the funds and other assets that shall remain subject to this Agreement. Subject to applicable escheat laws, any funds remaining in the Trust Estate after exhaustion of such remedies shall be distributed by the Paying Agent to the last Owner of record identified in the Certificate Register for each such remaining Trust Certificate.

 

(e)                               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 Administrator may remove the Owner Trustee.  If the Administrator shall remove the Owner Trustee under the authority of the immediately preceding sentence, the Trust or the Administrator 

 

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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 paid by the Administrator.  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 Certificateholders, 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 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.

 

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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 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.

 

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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 Certificateholders, 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 Certificateholders.

 

(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 Percentage 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 Certificateholders; provided, however, that no such amendment shall, without the consent of all Certificateholders and Noteholders affected, (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 Certificateholders or (ii) eliminate the requirement for Certificateholders’ consent or reduce the aforesaid percentage of the Outstanding Amount of the Notes required to consent to any such amendment.

 

(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 each Certificateholder.  It shall not be necessary for the consent of any 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 consents (and any other consents of the Certificateholders provided for in this Agreement or in any other Transaction Document) and of evidencing the authorization of the execution thereof by the Certificateholders 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.

 

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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 Paying Agent, the Certificate Registrar, 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.

 

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 Certificates or the rights of the Holders 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, 

 

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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 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 Certificates, the Notes, this Agreement or any of the other Transaction Documents.

 

(b)                              The Owner Trustee, by entering into this Agreement, each 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 Certificates, the Notes, this Agreement or any of the other Transaction Documents.

 

Section 11.10.      No Recourse.

 

Each 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 Certificates 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.

 

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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.

 

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.

 

Section 11.15.      Certain Rights and Protections of the Indenture Trustee.

 

The parties hereto agree that The Bank of New York Mellon Trust Company, N.A., in its capacity as Paying Agent and Certificate Registrar, shall be afforded all of the rights, protections, immunities and privileges afforded to The Bank of New York Mellon Trust Company, N.A. under the Indenture in connection with this Agreement.

 

[signature page follows]

 

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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:
    	
/s/James Darrell Thomas
    	
 
    
	
 
    	
Printed Name: James Darrell   Thomas
    
	
 
    	
Title: Vice President, Treasurer and Assistant   Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WILMINGTON   TRUST, NATIONAL ASSOCIATION, as Owner Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/Roseline K. Maney
    
	
 
    	
Printed Name: Roseline K. Maney
    
	
 
    	
Title: Administrative Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE   BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Paying Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/David H. Hill
    	
 
    
	
 
    	
Printed Name: David H. Hill
    
	
 
    	
Title: Vice President
    

 

Signature Page to Trust Agreement

 

 

EXHIBIT A

 

FORM OF CERTIFICATE OF TRUST OF

Harley-Davidson Motorcycle Trust 2016-A

 

This Certificate of Trust of Harley-Davidson Motorcycle Trust 2016-A (the “Trust”), dated May [__], 2016, 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 2016-A.

 

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 [RULE 144A][REGULATION S]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.

 

[ANY TRANSFER, PLEDGE OR OTHER USE OF THIS TRUST CERTIFICATE FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN, UNLESS THIS TRUST CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY TRUST CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR OF SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.).

 

TRANSFERS OF THIS TRUST CERTIFICATE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS TRUST CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO HEREIN.]

 

THIS TRUST CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR REGISTERED OR QUALIFIED UNDER ANY SECURITIES OR BLUE SKY LAW OF ANY STATE. THE HOLDER HEREOF, BY PURCHASING THIS TRUST CERTIFICATE, AGREES THAT THIS TRUST CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (I) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A “QIB”), PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, PURCHASING FOR INVESTMENT AND NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO THE RECEIPT BY THE OWNER TRUSTEE OF EVIDENCE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS, (II) PURSUANT TO ANOTHER EXEMPTION AVAILABLE UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (III) PURSUANT TO A VALID REGISTRATION STATEMENT.  ANY TRANSFER IN VIOLATION OF THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE, 

 

 

NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE ISSUER, THE OWNER TRUSTEE, OR ANY INTERMEDIARY. IF AT ANY TIME, THE ISSUER DETERMINES OR IS NOTIFIED THAT THE HOLDER OF SUCH CERTIFICATE OR PERCENTAGE INTEREST IN SUCH CERTIFICATE WAS IN BREACH, AT THE TIME GIVEN, OF ANY OF THE REPRESENTATIONS SET FORTH IN THE TRUST AGREEMENT, THE ISSUER AND THE OWNER TRUSTEE MAY CONSIDER THE ACQUISITION OF THIS TRUST CERTIFICATE OR SUCH INTEREST IN SUCH CERTIFICATE VOID AND REQUIRE THAT THIS TRUST CERTIFICATE OR SUCH INTEREST HEREIN BE TRANSFERRED TO A PERSON DESIGNATED BY THE ISSUER.

 

NO TRUST CERTIFICATE MAY BE OWNED BY ANY HOLDER OR BENEFICIAL OWNER WHOSE INTEREST THEREIN REPRESENTS LESS THAN $1,000.00 NOMINAL PRINCIPAL AMOUNT OF THE TRUST CERTIFICATES.

 

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

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2016-A
 TRUST CERTIFICATE

 

 

	
NO. R-1
    	
 
    	
Percentage   Interest: [100]%
    
	
 
    	
 
    	
CUSIP:   [41284D AE2][U24664 AA9]
    

 

 

THIS CERTIFIES THAT CEDE&CO. is the registered owner of [__]% of the non-assessable, fully-paid, fractional undivided beneficial interest in the Harley-Davidson Motorcycle Trust 2016-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 May 20, 2016 (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 June 1, 2016 (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”), Harley-Davidson Motorcycle Grantor Trust 2016-A, and The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee (the “Indenture Trustee”) or (iii) the Indenture, dated as of June 1, 2016 (the “Indenture”), between the Trust and the Indenture Trustee.

 

This Trust Certificate is a duly authorized Trust Certificate designated as “Harley-Davidson Motorcycle Trust 2016-A Certificate”  (the “Trust Certificate”).  Issued under the Indenture are five classes of notes designated as “[__]% Motorcycle Contract Backed Notes, Class A-1”, “Motorcycle 

 

 

Contract Backed Notes, Class A-2”, “[__]% Motorcycle Contract Backed Notes, Class A-3”, “[__]% Motorcycle Contract Backed Notes, Class A-4”, and “[__]% Motorcycle Contract Backed Notes, Class B” (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, all the right, title and interest of the Trust Depositor: (i) in, to, and under the Underlying Trust Certificate, the Underlying Trust and the Underlying Trust Agreement, (ii) in, to, and under the Administration Agreement, and (iii) in and to the proceeds of the sale of the Notes (until distributed or expended for the purpose for which the Notes were issued) and the revenues, monies, evidences of indebtedness, instruments, securities, and other financial assets (including any earnings thereon) in and payable into the Collection Account, in the manner and subject to the prior applications provided in Article Seven of the Sale and Servicing Agreement, all as hereinbefore and hereinafter defined, including any contract or any evidence of indebtedness or other rights of the Issuer to receive any of the same.

 

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 occurs (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 Certificateholders 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 each 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.

 

Furthermore, each Certificateholder or Beneficial Owner, by acceptance of such Trust Certificate or such interest therein, agrees to provide to Paying Agent or the Trust, upon its request, the Certificateholder Tax Identification Information and, to the extent FATCA Withholding Tax is applicable, the Certificateholder FATCA Information. In addition, each Certificateholder or holder of an interest in a Trust Certificate, by acceptance of such Trust Certificate or such interest therein, agrees that the Paying Agent has the right to withhold any amounts of interest (properly withholdable under law and without any corresponding gross-up) payable to a Certificateholder or holder of an interest in a Certificate that fails to comply with the requirements of the preceding sentence.

 

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 Certificateholders 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 Certificateholders, 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.

 

Each 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 Certificateholders under the Trust Agreement at any time by the Trust Depositor and the Owner Trustee with the consent of the Holders of Trust Certificates evidencing not less than a majority of the Percentage Interests and the Required Holders.  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 Holders of any of the Trust Certificates.

 

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 a Certificate Investor Representation Letter, and thereupon one or more new Trust Certificates evidencing the same aggregate Percentage Interest in the Trust will be issued to the designated transferee.  The initial Certificate Registrar appointed under the Trust Agreement is The Bank of New York Mellon Trust Company, N.A.

 

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 Certificateholders 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:   June 15,   2016
    	
Harley-Davidson   Motorcycle Trust 2016-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 UNDERLYING TRUST CERTIFICATE

 

 

NUMBER R-1

 

HARLEY-DAVIDSON MOTORCYCLE GRANTOR TRUST 2016-A

 

UNDERLYING TRUST CERTIFICATE

 

Certificate Interest in Trust Estate evidenced by this Certificate:     100%

 

Evidencing a beneficial interest in the assets of Harley-Davidson Motorcycle Grantor Trust 2016-A, a Delaware statutory trust (the “Underlying Trust”), entitling the holder to certain distributions of the Underlying Trust, as defined below, the property of which includes a single pool of fixed rate, simple interest, promissory notes and security agreements relating to the purchase of new or used motorcycles sold to the Underlying Trust by Harley-Davidson Customer Funding Corp., a Nevada corporation (the “Trust Depositor”), pursuant to a Sale and Servicing Agreement dated as of June 1, 2016 (the “Closing Date”) among Harley-Davidson Motorcycle Trust 2016-A, Harley-Davidson Credit Corp., as servicer, the Underlying Trustee, the Trust Depositor, and The Bank of New York Mellon Trust Company, N.A., as indenture trustee (the “Sale and Servicing Agreement”).

 

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

 

THIS CERTIFIES THAT HARLEY-DAVIDSON MOTORCYCLE TRUST 2016-A, a Delaware statutory trust (the “Settlor”), is the registered owner of the Underlying Trust Certificate that is a nonassessable, fully-paid, beneficial interest in the assets of the Underlying Trust, entitling it to certain distributions of the Underlying Trust.

 

The Underlying Trust was created pursuant to a Trust Agreement, dated as of May 20, 2016, between the Settlor and Wilmington Trust, National Association, as underlying trustee (the “Underlying Trustee”) (as amended and restated by that certain Amended and Restated Trust Agreement, dated as of June 8, 2016, among the Settlor, Harley-Davidson Credit Corp., as administrator, and the Underlying Trustee, the “Underlying Trust Agreement”).

 

This Underlying Trust Certificate is the sole duly authorized certificate designated as Harley-Davidson Motorcycle Grantor Trust 2016-A Underlying Trust Certificate (herein called the “Underlying

 

 

Trust Certificate”).  This Underlying Trust Certificate is issued under and is subject to the terms, provisions and conditions of the Underlying Trust Agreement, to which Underlying Trust Agreement the Certificateholder by virtue of the acceptance hereof assents and by which such Certificateholder is bound.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

 

	
 
    	
HARLEY-DAVIDSON   MOTORCYCLE GRANTOR TRUST 2016-A, acting by and through Wilmington Trust,   National Association, as Underlying Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
 
    	
 
    
	
 
    	
 
    

 

 

 

 

 

Dated:  June 15, 2016

 

 

 

UNDERLYING TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
 
    	
WILMINGTON   TRUST, NATIONAL ASSOCIATION, as Underlying Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
 
    	
 
    

 

 

 

 

 

Dated:  June 15, 2016

 

 

ASSIGNMENT

 

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

 

 

 

(Please print or type name and address, including postal zip code, of assignee)

 

 

 

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

 

________________________________________________________ Attorney to

 

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

 

	
Dated:
    	
 
    	
 
    	
 
    	
 
    

 

 

EXHIBIT D

 

FORM OF CERTIFICATE INVESTOR REPRESENTATION LETTER

 

[          ], 20__

 

Harley-Davidson Motorcycle Trust 2016-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 June 8, 2016 (the “Trust Agreement”), 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 [     ]% Percentage Interest Trust Certificates (the “Trust Certificates”) of Harley-Davidson Motorcycle Trust 2016-A (the “Trust”), a trust formed by the Trust Depositor, we hereby make the acknowledgements, representations and agreements set forth on Exhibit E of the Trust Agreement, and further confirm that:

 

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

 

(b)                              We have neither acquired nor will we transfer any Trust Certificate we purchase (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;

 

(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 Certificates.

 

(d)                              We (i) are acquiring the Trust Certificate for the account of [______] Persons and we will notify the Owner Trustee and the Paying Agent of any changes in the number of such Persons and (ii) understand that 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 tax purposes as an association (or a publicly traded partnership) taxable as a corporation.

 

(e)                               We understand that no subsequent transfer of the Trust Certificates is permitted unless (i) such transfer is of a Trust Certificate with a Percentage 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 D 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)                               No Trust Certificate will 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 any Trust Certificate or interest therein will certify that the foregoing conditions are satisfied.

 

(h)                              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 Certificates for an indefinite period, and we (or such account) are able to bear such risk for an indefinite period.

 

(i)                                  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:
    

 

 

EXHIBIT E

 

ACKNOWLEDGEMENTS, REPRESENTATIONS AND AGREEMENTS OF PURCHASERS OF TRUST CERTIFICATES

 

 

Each person that purchases a Trust Certificate issued by Harley-Davidson Motorcycle Trust 2016-A (the “Issuer”) pursuant to the Amended and Restated Trust Agreement, dated as of June [7], 2016, between Harley-Davidson Customer Funding Corp., as Trust Depositor, and Wilmington Trust, National Association, as Owner Trustee (the “Trust Agreement”), by its acceptance of such Trust Certificate, will have (or will be deemed to have, if purchasing a beneficial interest in a Trust Certificate) acknowledged, represented to and agreed with the Trust as follows (capitalized terms having the meanings ascribed to them in the Trust Agreement or in the Issuer’s Private Placement Memorandum dated June [_], 2016 with respect to the Trust Certificates):

 

(a)                               It understands and acknowledges that the Trust Certificates are being offered for sale in transactions not requiring registration under the Securities Act or any other securities laws, that the Trust Certificates have not been registered under the Securities Act or any other applicable securities laws and, unless so registered, may not be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act and any other applicable securities laws, pursuant to an exemption therefrom or in a transaction not subject thereto and in each case in compliance with the conditions for transfer set forth in paragraph (e) below.

 

(b)                              It is either (1) in the case of a beneficial owner of an interest in a Regulation S global security, a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) who is not a “U.S. person” (as defined in Regulation S under the Securities Act) and is acquiring the certificates in an offshore transaction (as defined in Regulation S) in reliance on the exemption from registration provided by Regulation S, or (2) in the case of a beneficial owner of an interest in a Rule 144A global security, a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) and is aware that the initial sale of the certificates to it is intended to be a private placement under Section 4(a)(2) of the Securities Act.

 

(c)                               It is aware that, except as otherwise provided in the Trust Agreement, any Trust Certificates being sold to it will be represented by one or more Book-Entry Trust Certificates and that in each case beneficial interests therein may be held only through a Clearing Agency.

 

(d)                              It acknowledges that none of the Issuer, the Trust Depositor, the Placement Agent, or any person representing the Issuer, the Trust Depositor, or the Placement Agent has made any representation to it with respect to the offering or sale of any Trust Certificates, other than the information contained herein, which has been delivered to it and upon which it is relying in making its investment decision with respect to the Trust Certificates. It has had access to such financial and other information concerning the Issuer and the Trust Certificates as it has deemed necessary in connection with its decision to purchase the Trust Certificates, including an opportunity to ask questions of and request information from the Issuer and the Placement Agent.  It has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of its investment in the Trust Certificates, and it and any accounts for which it is acting are each able to bear the economic risk of such investment.

 

(e)                               It is purchasing the Trust Certificates for its own account, or for one or more investor accounts for which it is acting as a fiduciary or agent, in each case for investment, and not with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act, subject to any requirement of law that the disposition of its property or the property of such investor account or accounts be at all times within its or their control and subject to its or their ability to resell the

 

E-1

 

Trust Certificates pursuant to Rule 144A or any other exemption from registration available under the Securities Act.  It agrees on its own behalf and on behalf of any investor account for which it is purchasing the Trust Certificates and each subsequent holder of the Trust Certificates by its acceptance thereof will agree to offer, sell or otherwise transfer such Trust Certificates only (i) to the Issuer, (ii) to a person it reasonably believes is a qualified institutional buyer that purchases for its own account or for the account of a qualified institutional buyer and to whom notice is given that the transfer is being made in reliance on Rule 144A or (iii) pursuant to another exemption from registration, or pursuant to a valid registration, under the Securities Act.

 

(f)                                It acknowledges that each Trust Certificate will contain a legend substantially to the following effect:

 

ANY TRANSFER, PLEDGE OR OTHER USE OF THIS TRUST CERTIFICATE FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN, UNLESS THIS TRUST CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY TRUST CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR OF SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.).

 

TRANSFERS OF THIS TRUST CERTIFICATE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS TRUST CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO HEREIN.

 

THIS TRUST CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR REGISTERED OR QUALIFIED UNDER ANY SECURITIES OR BLUE SKY LAW OF ANY STATE. THE HOLDER HEREOF, BY PURCHASING THIS TRUST CERTIFICATE, AGREES THAT THIS TRUST CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (I) TO A PERSON THAT IS A QIB (AS DEFINED BELOW) AND IS NOT A “U.S. PERSON” (AS DEFINED IN RULE 902(K) OF REGULATION S UNDER THE SECURITIES ACT) AND IS ACQUIRING THIS SECURITY IN RELIANCE ON THE EXEMPTION FROM THE SECURITIES ACT REGISTRATION PROVIDED BY SUCH REGULATION, (II) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A “QIB”), PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, PURCHASING FOR INVESTMENT AND NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO THE RECEIPT BY THE OWNER TRUSTEE OF EVIDENCE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS, (III) PURSUANT TO ANOTHER EXEMPTION AVAILABLE UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (IV) PURSUANT TO A VALID REGISTRATION STATEMENT.  ANY TRANSFER IN VIOLATION OF THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND WILL NOT OPERATE TO 

 

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TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE ISSUER, THE OWNER TRUSTEE, OR ANY INTERMEDIARY. IF, AT ANY TIME, THE ISSUER DETERMINES OR IS NOTIFIED THAT THE HOLDER OF SUCH CERTIFICATE OR PERCENTAGE INTEREST IN SUCH CERTIFICATE WAS IN BREACH, AT THE TIME GIVEN, OF ANY OF THE REPRESENTATIONS SET FORTH IN THE TRUST AGREEMENT, THE ISSUER AND THE OWNER TRUSTEE MAY CONSIDER THE ACQUISITION OF THIS CERTIFICATE OR SUCH INTEREST IN SUCH CERTIFICATE VOID AND REQUIRE THAT THIS CERTIFICATE OR SUCH INTEREST HEREIN BE TRANSFERRED TO A PERSON DESIGNATED BY THE ISSUER.

 

the Trust Certificates will also contain the following additional legend:

 

NO TRUST CERTIFICATE MAY BE OWNED BY ANY HOLDER OR BENEFICIAL OWNER WHOSE INTEREST THEREIN REPRESENTS LESS THAN $1,000.00 NOMINAL PRINCIPAL AMOUNT OF THE TRUST CERTIFICATES.

 

(g)                               It acknowledges that the Issuer, the Placement Agent and others will rely upon the truth and accuracy of the foregoing acknowledgments, representations and agreements and agrees that, if any of the acknowledgments, representations or warranties deemed to have been made by it by its purchase of Trust Certificates are no longer accurate, it will promptly notify the Placement Agent and the Issuer. If it is acquiring any Trust Certificates as a fiduciary or agent for one or more investor accounts, it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgments, representations and agreements on behalf of each such account.

 

Additional Matters Relating to Trust Certificates

 

Each person that purchases Trust Certificates (such purchaser, a “Certificate Purchaser”), by its acceptance thereof, will have (or will be deemed to have, if purchasing a Book-Entry Certificate) acknowledged, represented to and agreed with the Issuer as follows:

 

(a)                               The Certificate Purchaser acknowledges that the Issuer, the Placement Agent and others will rely upon the truth and accuracy of the following acknowledgments, representations and agreements and agrees that, if any of the acknowledgments, representations or warranties deemed to have been made by it by its purchase of Certificates are no longer accurate, the Certificate Purchaser will promptly notify the Issuer and the Placement Agent.

 

(b)                              The Certificate Purchaser is purchasing the Trust Certificates for its own account, or for one or more investor accounts for which it is acting as a fiduciary or agent.  If the Certificate Purchaser is acquiring any Trust Certificates as a fiduciary or agent for one or more investor accounts, the Certificate Purchaser represents that it has sole investment discretion with respect to each such account and that it has full power to make the following acknowledgments, representations and agreements on behalf of each such account.

 

(c)                               The Certificate Purchaser agrees on its own behalf and on behalf of any investor account for which it is purchasing Certificates to offer, sell or otherwise transfer such Certificates only (i) to the Issuer, (ii) to a person it reasonably believes is a qualified institutional buyer that purchases for its own account or for the account of a qualified institutional buyer and with respect to clause (ii) above, to whom notice is given that the transfer is being made in reliance on Rule 144A or (iii) pursuant to another exemption from registration, or pursuant to a valid registration, under the Securities Act.

 

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

 

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

 

(e)                               With respect to any Trust Certificates that have been purchased by the Certificate Purchaser for its own account:

 

(i)                                  The Certificate Purchaser represents that the nominal principal amount of Certificates that, immediately after such purchase, are owned of record or beneficially by the Certificate Purchaser for its own account is not less than $1,000.00.

 

(ii)                              The Certificate Purchaser represents and agrees that, within 30 days after the date of such purchase, the Certificate Purchaser will furnish to the Issuer the information described in Section 1.743-1(k)(2) of the Treasury Regulations.

 

(iii)                          The Certificate Purchaser represents that if, at the time of such purchase, the Certificate Purchaser is an entity that is classified for U.S. federal income tax purposes as a partnership, S corporation, or grantor trust:

 

(A)                           less than 50% of the value of the interest in the Certificate Purchaser that is held by each owner of an interest in the Certificate Purchaser is attributable, directly or indirectly, to the Trust Certificates owned by on behalf of the Certificate Purchaser; and

 

(B)                            the Certificate Purchaser has no plan or intention to undertake any transaction (such as a distribution of assets other than Trust Certificates) that would result in 50% or more of the value of the interest in the Certificate Purchaser that is held by any owner of an interest in the Certificate Purchaser being attributable, directly or indirectly, to the Trust Certificates owned by or on behalf of the Certificate Purchaser.

 

(iv)                          The Certificate Purchaser represents and agrees that if, at the time of such purchase, it is an entity that is not classified for U.S. federal income tax 

 

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purposes as a partnership, S corporation, or grantor trust, it shall not convert into an entity classified for U.S. federal income tax purposes as a partnership or grantor trust, and shall not make an election to be treated as an S corporation, at any time that the Certificate Purchaser owns a beneficial interest in Trust Certificates, unless:

 

(A)                           at the time of such conversion or election, less than 50% of the value of the interest in the Certificate Purchaser that is held by each owner of an interest in the Certificate Purchaser is attributable, directly or indirectly, to the Trust Certificates owned by or on behalf of the Certificate Purchaser; and

 

(B)                            at the time of such conversion or election, the Certificate Purchaser has no plan or intention to undertake any transaction (such as a distribution of assets other than Certificates) that would result in 50% or more of the value of the interest in the Certificate Purchaser that is held by any owner of an interest in the Certificate Purchaser being attributable, directly or indirectly, to the Trust Certificates owned by or on behalf of the Certificate Purchaser.

 

(v)                              The Certificate Purchaser represents that if it is an entity that is not classified for U.S. federal income tax purposes as a U.S. person, it shall not treat income from the Trust Certificates as effectively connected to a United States trade or business and will not provide a W-8ECI or a W-8IMY that indicates any income from the Trust Certificates will be effectively connected to a United States trade or business.

 

(vi)                          The Certificate Purchaser represents that: (i) if it is not classified for U.S. federal income tax purposes as a U.S. person and if at any time it owns or acquires (directly or constructively under the attribution rules of Section 871(h)(3) of the Code) 10% or more of the Trust Certificates, then it shall not own or acquire any Notes; and (ii) under the attribution rules of Section 871(h)(3) of the Code, none of the Trust Certificates that it owns or acquires will be attributed to a Person that (A) is not classified for U.S. federal income tax purposes as a U.S. person, (B) owns or acquires Notes and (C) owns or acquires (directly or constructively under the attribution rules of Section 871(h)(3) of the Code) 10% or more of the Trust Certificates.

 

(vii)                      The Certificate Purchaser represents that it has neither acquired nor will it 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.

 

(viii)                  The Certificate Purchaser represents and agrees that if it is part of an “expanded group,” within the meaning of Proposed Treasury Regulation section 1.385-1(b)(3), the members of which collectively own $80,000 or more nominal principal amount of the Trust Certificates, then neither the Certificate Purchaser nor any member of such expanded group owns or will thereafter (for so long as the Trust Certificates are so owned) own any Notes, unless it has obtained and provided to the Owner Trustee an opinion of nationally recognized tax counsel to the effect that, under then-existing law, such acquisition of Certificates and Notes will not cause section 385 of the Code, and any

 

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proposed, temporary, or final Treasury Regulations promulgated thereunder, to apply to such Notes.

 

(f)                                With respect to any Trust Certificates that have been purchased by the Certificate Purchaser for an investor account:

 

(i)                                  The Certificate Purchaser represents that the nominal principal amount of Certificates that, immediately after such purchase, are owned by the Certificate Purchaser for the particular investor account is not less than $1,000.00.

 

(ii)                              The Certificate Purchaser represents and agrees that it will furnish to the Issuer, the Owner Trustee and the Paying Agent on a timely basis the information required under Section 6031(c) of the Code (relating to nominee reporting).

 

(iii)                          The Certificate Purchaser represents and agrees that it has neither acquired nor will it transfer any Trust Certificate it purchases (or any interest therein) or cause any such 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.

 

(iv)                          The Certificate Purchaser represents that it is not aware of any inaccuracy in the representations that are deemed to be made by such investor account as described below.

 

(g)                               The Certificate Purchaser agrees that, in connection with any sale or other transfer of its Trust Certificate, it will provide the Paying Agent and the Owner Trustee with written notice of the date of such transfer, the name, address and tax identification number of the transferee, and the nominal principal mount and sale price of the Certificate so transferred.

 

Each person (other than a Certificate Purchaser) on whose behalf a Certificate Purchaser has purchased Trust Certificates (such person, a “Certificate Purchaser Client”), by its acceptance thereof, will be deemed to have acknowledged, represented to and agreed with the Issuer as follows:

 

(a)                               The Certificate Purchaser Client acknowledges that the Issuer, the Placement Agent and others will rely upon the truth and accuracy of the following acknowledgments, representations and agreements and agrees that, if any of the acknowledgments, representations or warranties deemed to have been made by it by the Certificate Purchaser’s purchase of Trust Certificates on behalf of the Certificate Purchaser Client are no longer accurate, the Certificate Purchaser Client will promptly notify the Issuer.

 

(b)                              The Certificate Purchaser Client represents that the nominal principal amount of Certificates that, immediately after such purchase, are owned by the Certificate Purchaser on behalf of the Certificate Purchaser Client is not less than $1,000.00.

 

(c)                               The Certificate Purchaser Client represents and agrees that, within 30 days after the date of such purchase, the Certificate Purchaser Client will furnish to the Issuer, the Owner Trustee and the Paying Agent the information with respect to such purchase that is described in Section 1.743-1(k)(2) of the Treasury Regulations.

 

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(d)                              The Certificate Purchaser Client represents that if, at the time of such purchase, the Certificate Purchaser Client is an entity that is classified for U.S. federal income tax purposes as a partnership, S corporation, or grantor trust:

 

(i)                                  less than 50% of the value of the interest in the Certificate Purchaser Client that is held by each owner of an interest in the Certificate Purchaser Client is attributable, directly or indirectly, to the Trust Certificates owned by on behalf of the Certificate Purchaser Client; and

 

(ii)                              the Certificate Purchaser Client has no plan or intention to undertake any transaction (such as a distribution of assets other than Trust Certificates) that would result in 50% or more of the value of the interest in the Certificate Purchaser Client that is held by any owner of an interest in the Certificate Purchaser Client being attributable, directly or indirectly, to the Trust Certificates owned by or on behalf of the Certificate Purchaser Client.

 

(e)                               The Certificate Purchaser Client represents and agrees that if, at the time of such purchase, the Certificate Purchaser Client is an entity that is not classified for U.S. federal income tax purposes as a partnership, S corporation, or grantor trust, the Certificate Purchaser Client shall not convert into an entity classified for U.S. federal income tax purposes as a partnership or grantor trust, and shall not make an election to be treated as an S corporation, at any time that the Certificate Purchaser Client owns a beneficial interest in Trust Certificates, unless:

 

(i)                                  at the time of such conversion or election, less than 50% of the value of the interest in the Certificate Purchaser Client that is held by each owner of an interest in the Certificate Purchaser Client is attributable, directly or indirectly, to the Trust Certificates owned by or on behalf of the Certificate Purchaser Client; and

 

(ii)                              at the time of such conversion or election, the Certificate Purchaser Client has no plan or intention to undertake any transaction (such as a distribution of assets other than Trust Certificates) that would result in 50% or more of the value of the interest in the Certificate Purchaser Client that is held by any owner of an interest in the Certificate Purchaser Client being attributable, directly or indirectly, to the Trust Certificates owned by or on behalf of the Certificate Purchaser Client.

 

(f)                                The Certificate Purchaser Client represents and agrees that if the Certificate Purchaser Client is an entity that is not classified for U.S. federal income tax purposes as a U.S. person, the Certificate Purchaser Client shall not treat income from the Trust Certificates as effectively connected to a United States trade or business and will not provide a W-8ECI or a W-8IMY that indicates any income from the Trust Certificates will be effectively connected to a United States trade or business.

 

(g)                               The Certificate Purchaser Client represents and agrees that: (i) if it is not classified for U.S. federal income tax purposes as a U.S. person and if at any time it owns or acquires (directly or constructively under the attribution rules of Section 871(h)(3) of the Code) 10% or more of the Trust Certificates, then it shall not own or acquire any Notes; and (ii) under the attribution rules of Section 871(h)(3) of the Code, none of the Trust Certificates that it owns or acquires will be attributed to a Person that (A) is not classified for U.S. federal income tax purposes as a U.S. person, (B) owns or acquires Notes and (C) owns or acquires (directly or constructively under the attribution rules of Section 871(h)(3) of the Code) 10% or more of the Trust Certificates.

 

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(h)                              The Certificate Purchaser Client represents and agrees that if it is part of an “expanded group,” within the meaning of Proposed Treasury Regulation section 1.385-1(b)(3), the members of which collectively own $80,000 or more nominal principal amount of the Trust Certificates, then neither the Certificate Purchaser Client nor any member of such expanded group owns or will thereafter (for so long as the Trust Certificates are so owned) own any Notes, unless it has obtained and provided to the Trustee an opinion of nationally recognized tax counsel to the effect that, under then-existing law, such acquisition of Trust Certificates and Notes will not cause section 385 of the Code, and any proposed, temporary, or final Treasury Regulations promulgated thereunder, to apply to such Notes.

 

(i)                                  The Certificate Purchaser Client agrees that, in connection with any sale or other transfer of the Certificate Purchaser Client’s interest in the Trust Certificates, it will provide the Administrator and the Trustee with written notice of the date of such transfer, the name, address and tax identification number of the transferee, and the nominal principal amount and sale price of the Trust Certificate so transferred.

 

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