Document:

Exhibit 10.1

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

Execution Version

 

COMMERCIAL MANUFACTURING and PACKAGING AGREEMENT
  (Phentermine Hydrochloride and Topiramate capsules)

 

This Commercial Manufacturing and Packaging Agreement (“Agreement”) is made as of this 17th day of July, 2012 (“Effective Date”), by and between VIVUS, Inc., a Delaware corporation, with a place of business at 1172 Castro St., Mountain View, CA 94040 (“Client”), and Catalent Pharma Solutions, LLC, a Delaware limited liability company with a place of business at 14 Schoolhouse Road, Somerset, New Jersey 08873, USA (“Catalent”).

 

RECITALS

 

A.            Client is a pharmaceutical company that develops, markets and sells pharmaceutical products, including the Product (as defined below);

 

B.            Catalent provides certain pharmaceutical development, manufacturing, packaging and analytical services to the pharmaceutical industry;

 

C.            Client and Catalent have entered into a Development and License Agreement dated 5 September 2006 (the “Development Agreement”), pursuant to which Catalent developed a formulation of the API (as defined below); and

 

D.            Client desires to engage Catalent to manufacture and supply Product to Client for commercial use, and Catalent desires to manufacture and supply such Product to Client for such use, all pursuant to the terms and conditions set forth in this Agreement.

 

THEREFORE, in consideration of the mutual covenants, terms and conditions set forth below, the parties agree as follows:

 

ARTICLE 1

DEFINITIONS

 

The following terms have the following meanings in this Agreement:

 

1.1                        “Acknowledgement” has the meaning set forth in Section 4.2.

 

1.2                        “Adverse Supply Event” means the occurrence of any one of the following: (1) with respect to quantities of Product specified in the Firm Commitment, any failure to deliver, during the initial *** period (the “Initial Period”), at least *** percent (***%) of Product within *** days of the requested delivery date and *** percent (***%) of Product within *** days of the delivery date set forth in the Purchase Order; (2) with respect to quantities of Product specified in the Firm Commitment, any failure to deliver, during any *** period following the Initial Period, at least *** percent (***%) of Product within *** days of the requested delivery date and *** percent (***%) of Product within *** days of the delivery date set forth in the Purchase Order; or (3) interruption in supply of Product to Client for a period of *** consecutive days, due to Catalent’s failure to maintain Facility Approvals (as defined in

 

 

Section 9.3).  For clarity, failure to deliver, shall not include any delay in shipment of Product caused by events outside of Supplier’s reasonable control, such as (i) availability of Client-supplied Materials or Raw Materials, (ii) US FDA customs clearance of shipment to Client or its designee, (iii) a delay in Product release approval from Client or receipt of non-conforming Client-supplied Materials or Raw materials, or (iv) any extensions agreed upon pursuant to Section 3.3 with respect to long lead time materials.

 

1.3                        “Affiliate(s)” means, with respect to Client or any third party, any corporation, firm, partnership or other entity that controls, is controlled by or is under common control with such entity; and with respect to Catalent, Catalent Pharma Solutions, Inc. (“CPS, Inc.”) and any corporation, firm, partnership or other entity controlled by CPS, Inc.  For the purposes of this definition, “control” shall mean the ownership of at least fifty percent (50%) of the voting share capital of an entity or any other comparable equity or ownership interest.

 

1.4                        “Agreement” has the meaning set forth in the introductory paragraph, and includes all its Attachments and other appendices (all of which are incorporated herein by reference) and any amendments to any of the foregoing made as provided herein or therein.

 

1.5                        “API” means the compounds Phentermine HCl and Topiramate, as further described in the Specifications, that have been released by Client and provided to Catalent, along with a certificate of analysis, as provided in this Agreement.

 

1.6                        “Applicable Laws” means all laws, ordinances, rules and regulations, as amended from time to time, of each country within the Territory applicable to the Processing and/or Packaging or any aspect of either of the foregoing, and the activities of Catalent or Client, as the context requires, under this Agreement, including (A) all applicable federal, state and local laws and regulations of each country within the Territory, (B) the U.S. Federal Food, Drug and Cosmetic Act, (C) if applicable, Drug Enforcement Agency regulations, Regulation no. 726/2004 and Directive 2004/27/EEC, each as implemented in any country of the Territory, and (C) cGMP.

 

1.7                        “Batch” means a defined quantity of Bulk Product or Packaged Product that has been or is being Processed or Packaged in accordance with the Specifications.

 

1.8                        “Bulk Product” means the fully Processed pharmaceutical capsule product containing the combination of APIs in the specific strengths and concentrations described in the Specifications and that has been Processed in accordance with the Specifications.

 

1.9                        “Catalent Defective Processing” has the meaning set forth in Section 5.1.

 

1.10                      “Catalent Defective Packaging” has the meaning set forth in Section 5.1.

 

1.11                      “Catalent” has the meaning set forth in the introductory paragraph, or any successor or permitted assign.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

2

 

1.12                      “Catalent Indemnitees” has the meaning set forth in Section 13.2.

 

1.13                      “Catalent Background IP” has the meaning set forth in Article 11.

 

1.14                      “cGMP” means current Good Manufacturing Practices promulgated by the Regulatory Authorities, including within the meaning of 21 C.F.R. Parts 210 and 211, as amended, and equivalent non-U.S. regulations (including 2003/94/EEC Directive as implemented in any country of the Territory, as supplemented by Volume 4 of EudraLex published by the European Commission), as amended, solely to the extent such non-U.S. regulations are otherwise included in Applicable Laws.

 

1.15                      “Change of Control” means, with respect to a party: (a) any merger, reorganization, consolidation, or other business combination of such party with a Third Party that results in the voting securities of such party outstanding immediately prior thereto ceasing to represent at least fifty percent (50%) of the combined voting power of the surviving entity immediately after such merger, reorganization, consolidation, or other business combination; (b) a Third Party becoming the beneficial owner of fifty percent (50%) or more of the combined voting power of such party; or (c) the sale, transfer, exchange or other disposition to a Third Party of all or substantially all of a party’s assets or business relating to this Agreement (whether alone or in connection with a sale, transfer, exchange or other disposition of other assets or businesses of such Party).  Notwithstanding the foregoing, Change in Control shall not include any transaction in which a party or its successor(s) issues securities to investors solely for capital raising purposes.

 

1.16                      “Client” has the meaning set forth in the introductory paragraph, or any successor or permitted assign.

 

1.17                      “Client Indemnitees” has the meaning set forth in Section 13.1.

 

1.18                      “Client Background IP” has the meaning set forth in Article 11.

 

1.19                      “Client-supplied Materials” means any materials to be supplied by or on behalf of Client to Catalent for Processing or Packaging, as provided in Attachment B, including API.

 

1.20                      “Confidential Information” has the meaning set forth in Section 10.2.

 

1.21                      “Contract Year” means each consecutive 12 month period beginning on the Launch Date or anniversary thereof, as applicable.

 

1.22                      “Defective Product” has the meaning set forth in Section 5.1.

 

1.23                      “Effective Date” has the meaning set forth in the introductory paragraph.

 

1.24                      “Exception Notice” has the meaning set forth in Section 5.1.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

3

 

1.25                      “Facility” means each of Catalent’s facilities located in ***; or such other facility as agreed in writing by the parties.

 

1.26                      “Firm Commitment” has the meaning set forth in Section 4.1.

 

1.27                      “Invention” has the meaning set forth in Article 11.

 

1.28                      “Launch Date” means the date of the first commercial sale of Packaged Product by Client to a Third Party.

 

1.29                      “Losses” has the meaning set forth in Section 13.1.

 

1.30                      “Packaging,” “Package” or “Packaged” means the final (secondary) packaging of Bulk Product in accordance with the Packaging Specifications, as well as any testing or quality-related activities required by this Agreement or the Quality Agreement in connection with the foregoing.

 

1.31                      “Packaging Facility” means the facility located in ***, or such other facility as agreed in writing by the parties.

 

1.32                      “Packaged Product” means Bulk Product that has been Processed and Packaged in accordance with the Specifications and under the terms of this Agreement.

 

1.33                      Packaging Specifications” means the specifications for Packaging set forth in Attachment B, along with any mutually agreed upon valid amendments or modifications thereto, in accordance with Article 8.

 

1.34                      “Process,” “Processed” or “Processing” means the compounding, filling, producing and bulk packaging of the API and Raw Materials into Bulk Product (including the production of beads containing API and encapsulation of such beads), in accordance with the Specifications, Applicable Laws and the terms of this Agreement, as well as any testing or quality-related activities required by this Agreement or the Quality Agreement in connection with the foregoing.

 

1.35                      “Processing Date” means the day on which Product is scheduled to be compounded by Catalent, as identified in an Acknowledgement in accordance with Section 4.2.

 

1.36                      “Processing Facility” means Catalent’s facility located in ***.

 

1.37                      “Processing Specifications” means the specifications for Processing set forth in Attachment B, along with any mutually agreed upon valid amendments or modifications thereto, in accordance with Article 8.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

4

 

1.38                      “Product” means Bulk Product and/or Packaged Product, as applicable.

 

1.39                      “Product Maintenance Services” has the meaning set forth in Section 2.3.

 

1.40                      “Purchase Order” has the meaning set forth in Section 4.2.

 

1.41                      “Qualified Capability” means, with respect to a particular activity at Catalent’s *** site, Catalent having the necessary manufacturing capabilities and Facility Approvals needed for Client to apply for Regulatory Approval for such activity.

 

1.42                      “Quality Agreement” has the meaning set forth in Section 9.7.

 

1.43                      “Raw Materials” means all raw materials, excipients, supplies, components, labeling and packaging, in each case, as necessary to perform Processing and/or Packaging in accordance with the Specifications, as provided in Attachment B, but not including Client-supplied Materials.

 

1.44                      “Recall” has the meaning set forth in Section 9.6.

 

1.45                      “Regulatory Approval” means any approvals, permits, product and/or establishment licenses, registrations or authorizations, including approvals pursuant to U.S. Investigational New Drug applications, New Drug Applications and Abbreviated New Drug Applications (or equivalent non-U.S. filings within the Territory, such as European marketing authorization applications), as applicable, of any Regulatory Authorities that are necessary or advisable in connection with the development, manufacture, testing, packaging, use, storage, exportation, importation, transport, promotion, marketing, distribution or sale of API or Product in the Territory.

 

1.46                      “Regulatory Authority” means the international, federal, state or local governmental or regulatory bodies, agencies, departments, bureaus, courts or other entities located within the Territory (including the United States Food and Drug Administration and the European Medicines Agency) responsible for or involved in (A) the regulation (including pricing) of any aspect of pharmaceutical or medicinal products intended for human use, including the development, manufacture, marketing, sale, distribution, packaging or use thereof or (B) health, safety or environmental matters generally.

 

1.47                      “Review Period” has the meaning set forth in Section 5.1.

 

1.48                      “Rolling Forecast” has the meaning set forth in Section 4.1.

 

1.49                      “Specifications” means, collectively the Processing and Packaging procedures, processes, directions, requirements, standards, quality control testing and other data and the scope of services, in each case as set forth in Attachment B, along with any valid mutually agreed upon written amendments or modifications thereto, in accordance with Article 8.  The

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

5

 

Specifications include, without limitation, the Processing Specifications and the Packaging Specifications.

 

1.50                      “Term” has the meaning set forth in Section 16.1.

 

1.51                      “Territory” means ***.

 

1.52                      “Third Party” means any person or entity other than Client, Catalent or their respective Affiliates.

 

1.53                      “Unit Pricing” has the meaning set forth in Section 7.1(B).

 

1.54                      “Validation Services” has the meaning set forth in Section 2.1.

 

ARTICLE 2

VALIDATION, PROCESSING, PACKAGING, & RELATED SERVICES

 

2.1          Validation Services.  Catalent shall perform the qualification, validation and stability services described in Section 7.8 and Attachment A (as amended, the “Validation Services”).

 

2.2          Exclusive Supply and Purchase of Product.  Catalent shall Process and Package Bulk Product at the Facilities in accordance with the Specifications, the Applicable Laws and the terms and conditions of this Agreement.  Except as provided below with respect to an Adverse Supply Event, for the Contract Years specified in the table below, Client shall purchase from Catalent the indicated percentage of Client’s and Client’s Affiliates’ requirements of Product and Packaged Product for commercial sale, physician samples, and trade samples in the Territory.

 

	
Contract Year
    	
 
    	
Percentage of Requirements
    	
 
    
	
1st Contract Year
    	
 
    	
100
    	
%
    
	
2nd Contract Year
    	
 
    	
100
    	
%
    
	
3rd Contract Year
    	
 
    	
***
    	
%
    
	
4th Contract Year
    	
 
    	
***
    	
%
    

 

Notwithstanding the foregoing:

 

(I)            the percentage for the 3rd Contract Year shall automatically increase to *** percent (***%) if each of the following requirements (“Requirements”) is satisfied:

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

6

 

(a)           Catalent is Packaging Product (or has the Qualified Capability to Package Product) in accordance with the terms of this Agreement at its Facility in *** no later than ***; and

 

(b)           Catalent is performing the encapsulation step of Processing (or has the Qualified Capability to do so) in accordance with the terms of this Agreement at its Facility in *** no later than ***; and

 

(c)           Subject to Section (IV) below, Catalent is performing all steps of Processing (or has the Qualified Capability to do so) in accordance with the terms of this Agreement at its Facility in *** no later than ***; and

 

(d)           Catalent has satisfied the KPI requirements as set forth in Attachment E for each and every measurement period during the first two (2) Contract Years; and

 

(e)           as of the end of the 2nd Contract Year, the processing and analytical portion of the Unit Price has decreased by *** percent (***%) relative to the processing and analytical portion of the Unit Price (as set forth on Attachment C) as of the Effective Date (e.g., as a result of the sharing of cost savings with Client pursuant to Section 8.2, or any other reductions in the processing and analytical portion of the Unit Price charged to Client).  For clarity, any price increases pursuant to Section 7.2 shall not be counted in calculating the percentage price decrease.  For example, if the processing and analytical portion of the Unit Price is $50.00 on the first anniversary of the Effective Date and thereafter is increased to $52.50 pursuant to Section 7.2, a ***% decrease would be satisfied by a processing and analytical portion of the Unit Price of $*** (calculated as follows: ***).

 

(II)          the percentage for the 4th Contract Year shall automatically increase to *** percent (***%), if (x) Requirements (I)(a)-(e) are satisfied, (y) Catalent has met the operational performance KPI requirements set forth in Attachment E for each and every measurement period during the second Contract Year and during the *** period beginning on the first day of the third Contract Year, and (z) as of the end of the 3rd Contract Year, the processing and analytical portion of the Unit Price has decreased by *** percent (***%) relative to the processing and analytical portion of the Unit Price as of the Effective Date (e.g., as a result of the sharing of cost savings with Client pursuant to Section 8.2, or any other reductions in the processing and analytical portion of the Unit Price charged to Client).  For clarity, any price increases pursuant to Section 7.2 shall not be counted in calculating the price decrease.

 

(III)        Catalent shall meet operational performance KPIs as set forth in Attachment E.  In the event that Catalent does not meet such KPIs during the *** period beginning on the first day of the third Contract Year, then (x) if, pursuant to Section (I), the percentage for the 3rd Contract Year has been adjusted to ***%, then the percentage in Section 2.2 applicable to the fourth Contract Year remain at ***%; and (y) if, pursuant to Section (I), the percentage for the 3rd Contract Year has not been adjusted, then the percentage in Section 2.2 applicable to the fourth Contract Year shall automatically change to *** percent (***%).

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

7

 

(IV)         On or before ***, the parties shall meet to discuss whether Catalent should obtain the Qualified Capability to permit all steps of Processing to be performed at its Facility in ***.  If the parties mutually agree that Catalent should do so, then, and only then, will item (I)(c) be included as a Requirement.

 

A.            The parties agree to negotiate in good faith terms to expand Processing and Packaging capacity in response to market signals if Product demand increases.  In the event that, despite such good faith negotiations, the parties fail to agree in principle on the material “heads of terms” to expand the Processing and Packaging capacity within *** days after Client first notifies Catalent of such increased demand, then Client shall have the right to source from an alternative supplier the quantity of Packaged Product that Catalent is unable to Process and/ or Package; provided, however, that for the first two (2) years following Client’s retention of such alternative supplier, Client shall be permitted to source from such alternative supplier *** percent (***%) (or a lower percentage selected by Client in its sole discretion) of Client’s and Client’s Affiliates’ requirements of Product and Packaged Product for commercial sale, physician samples, and trade samples in the Territory.

 

B.            In the event of an Adverse Supply Event, Client shall have the right to source from an alternative supplier the quantity of Packaged Product that is the subject of the Adverse Supply Event; provided, however, that for the first *** following Client’s retention of such alternative supplier, Client shall be permitted to source from such alternative supplier *** percent (***%) (or a lower percentage selected by Client in its sole discretion) of Client’s and Client’s Affiliates’ requirements of Product and Packaged Product for commercial sale, physician samples, and trade samples in the Territory.

 

E.            For the avoidance of doubt, nothing herein shall limit Client’s (or its Affiliates’) ability, at its (or their) sole discretion (1) to obtain Bulk Product or Processed Product for clinical use from one or more Third Parties or (2) after ***, to qualify one or more Third Parties for the Processing and/or Packaging of Product for commercial sale (including allowing such Third Parties to Process and/or Package Product in order to generate validation Batches), it being understood that during the first four Contract Years, Client shall not obtain Product for commercial sale from such Third Parties unless and until a Adverse Supply Event has occurred or unless and until the applicable percentage in the table above for a particular Contract Year is less than one hundred percent (100%).  After ***, Catalent shall use its commercially reasonable efforts to provide reasonable technical assistance to Client, as reasonably requested by Client, in connection with Client’s efforts to establish and qualify the Third Party or Third Parties described in subsection (2) above in a timely and orderly manner at Catalent’s then-prevailing rates for such services, which efforts shall include, without limitation,

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

8

 

Catalent providing Client with access to Catalent Background IP and Catalent Inventions licensed to Client pursuant to Article 11.

 

2.3          Product Maintenance Services.  Catalent shall provide the following product maintenance services (the “Product Maintenance Services”):

 

A.            With respect to Processing, the annual audit rights (as further described in Section 9.5) per Contract Year; regulatory audits (as further described in Section 9.4), including pre-approval inspection activities; one (1) annual Bulk Product review (within the meaning of 21 CFR § 211.180) per contract year (except during the first Contract Year, when Catalent shall provide *** such annual reviews); access to document library over and above the Quality Agreement, including additional copies of Batch paperwork or other Batch documentation; assistance in seeking Regulatory Approvals in the United States; Bulk Product document and sample storage relating to cGMP requirements; vendor re-qualification; maintenance, updates and storage of master Batch documentation and audit reports; sampling of all incoming API and Raw Materials, monthly inventory reports in Catalent format and as set forth in Section 3.4(B), coordination of shipping activities as directed by Client; and maintenance of miscellaneous dedicated items, such as tooling, equipment filter bags, PLC and other dedicated electronic systems and equipment replacement parts, as applicable.

 

B.            With respect to Packaging, the annual audit rights (as further described in Section 9.5) per contract year; regulatory audits (as further described in Section 9.4), including pre-approval inspection activities; one (1) annual product review (within the meaning of 21 CFR § 211.180) (except during the ***, when Catalent shall provide *** such annual reviews); and equipment and tooling maintenance, as applicable.

 

C.            For avoidance of doubt, (X) the following services are not included in Product Maintenance Services or Unit Price with respect to Processing:  technology transfer; analytical work; stability, other than the bulk stability described above; and process rework, as applicable; and (Y) the following services are not included in Product Maintenance Services or Unit Price with respect to Packaging:  tooling purchases and repair; technology transfer; analytical work; stability; auditing of Suppliers; and retain storage.  The Parties shall agree on prices for the foregoing services prior to Catalent performing them.

 

2.4          Other Related Services.  Catalent shall provide such Product-related services, other than Validation Services, Processing, Packaging, and Product Maintenance Services, as agreed to in writing by the parties from time to time.  Such writing shall include the scope and fees for any such services and be appended to this Agreement.  The terms and conditions of this Agreement shall govern and apply to such services.

 

2.5          Approval of Subcontracting.  Other than its supply arrangements with respect to Raw Materials pursuant to Article 3 below, Catalent may not subcontract, sublicense or otherwise delegate all or any portion of its obligations under this Agreement to a Third Party without Client’s prior written approval, which shall not be unreasonably withheld. Notwithstanding the

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

9

 

foregoing, the parties agree that Catalent may, without further approval or consent, subcontract the Packaging portion of services to an acquirer of Catalent’s commercial packaging business. Catalent shall have the right to cause any of its Affiliates to perform any of its obligations hereunder, provided that it provides Client with prior written notice that is sufficiently in advance of any changes in responsibilities so as to permit Client to make any and all necessary regulatory submissions and obtain any and all necessary regulatory approvals.  Any activities performed by subcontractors, including Catalent’s Affiliates, shall be subject to the terms of this Agreement and Catalent shall ensure that such subcontractors comply with the terms of this Agreement.  In any event, Catalent shall be responsible for all subcontracted activities as if the same were performed by Catalent itself pursuant to the terms of this Agreement.

 

ARTICLE 3

MATERIALS

 

3.1          General.  Catalent shall be responsible for the procurement of all Raw Materials (other than as set forth in Section 3.2 below) necessary to Process and Package Bulk Product, consistent with the quantity of Product forecasted by Client in the Firm Commitment portion of each Rolling Forecast pursuant to Section 4.1 below and consistent with the requirements set forth in Section 3.3.

 

3.2          API; Client-supplied Materials.

 

A.            Client shall, at Client’s sole cost and risk, provide to Catalent for Processing API, applicable reference standards,  and any other Client-supplied Materials agreed to by the Parties from time to time, in quantities sufficient to meet Client’s requirements for Product. Upon Client’s request, Catalent will procure the applicable reference standards on Client’s behalf and charge to the Client the cost thereof as a pass through, without additional mark-up. Client shall deliver such items, together with associated certificates of analysis, to the designated Facility no later than *** days before the Processing Date upon which such items will be used by Catalent, provided that (i) such Processing Date shall be communicated by Catalent to Client in writing at least *** days in advance of its occurrence and (ii) Client shall deliver such items not earlier than *** days before the Processing Date.  Until the end of the first Contract Year, upon reasonable notice to Catalent, Client may send API to the Processing Facility earlier (but in no event more than *** days earlier), and Catalent will store any such API at the Processing Facility at no charge to Client.  Client shall be responsible at its expense for securing any necessary export or import clearances or permits required in respect of supply to Catalent of such items.  Catalent shall use such items solely and exclusively for Processing and Packaging of Product in accordance with this Agreement.  Prior to delivery of any such items, Client shall provide to Catalent a copy of all applicable material safety data sheets, safe handling instructions and health and environmental information, and shall promptly provide any updates or revisions thereto.

 

B.            Within *** days of receipt of API or any other Client-supplied Materials by Catalent, Catalent shall inspect such items to verify their identity and to visually check for

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

10

 

damage to the shipping containers and shall perform only such testing as expressly required of Catalent in the Specifications.  Catalent shall not be liable for any defects in API or any other Client-supplied Materials, or in Product as a result of defective API or any other Client-supplied Materials, unless Catalent failed to properly perform the foregoing obligations.  Catalent shall follow Client’s reasonable written instructions in respect of return or disposal of defective API or any other Client-supplied Materials, at Client’s direction and Client’s sole cost and risk.

 

C.            Client shall retain title to API and any other Client-supplied Materials at all times and shall bear the risk of loss thereof, provided that during the time API or other Client-supplied Materials are in Catalent’s control (including, without limitation, during transport from one Facility to another), Catalent shall bear the risk of loss of API or other Client-supplied Materials arising from the negligence or willful misconduct of, or breach of this Agreement or Applicable Laws by, Catalent, its Affiliates or their respective personnel, subject to the limits set forth in Article 14.  Catalent will keep and use the API or other Client-supplied Materials only at the designated Facility.  Catalent agrees that the API or other Client-supplied Materials will not be removed from such Facility unless Catalent receives prior written notice from Client to move it.  Catalent shall provide appropriate segregated storage for API or other Client-supplied Materials at such Facility in accordance with the Specifications and in full compliance with Applicable Laws.  Catalent shall not handle the API or other Client-supplied Materials except as necessary to Process and Package Product or otherwise expressly instructed by Client.  Catalent shall limit access to the API and other Client-supplied Materials to those of its employees that require such access for the purposes of Processing and Packaging Product under this Agreement. Catalent agrees to use its commercially reasonable efforts to minimize the wastage of API or other Client-supplied Materials involved in the Processing and Packaging of Product hereunder.  Promptly following Client’s request at any time during the Term, any and all API and/or other Client-supplied Materials (as specified by Client) will be delivered by Catalent to Client at Client’s expense, or made available for collection by Client at the Facility at which such items are stored, as directed by Client, and Catalent will fully cooperate with and assist Client in connection with any such request.

 

3.3          Raw Materials.

 

A.            Catalent shall be responsible for procuring, inspecting and releasing adequate Raw Materials as necessary to meet the Firm Commitment, unless otherwise agreed to by the parties in writing. The Unit Price set forth on Attachment C, incorporates the cost of all Catalent-supplied Raw Materials.  Catalent shall not be liable for any delay in delivery of Product if all of the following are true:  (i) such delivery delay is caused by Catalent being unable to obtain, in a timely manner, a particular Raw Material necessary for Processing or Packaging, (ii) Catalent placed orders for such Raw Materials promptly following receipt of Client’s Firm Commitment, and (iii) Catalent’s inability to obtain such Raw Material in a timely manner was the result of circumstances outside Catalent’s reasonable control.  At all times during the first Contract Year, Catalent shall establish and maintain a stock of Raw Materials sufficient to meet *** percent (***%) of the Firm Commitment.  In the event that any Raw Material becomes subject to

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

11

 

purchase lead times beyond the Firm Commitment time frame, the parties will negotiate in good faith an appropriate amendment to this Agreement, including Section 4.1.  Catalent shall use commercially reasonable efforts to promptly notify Client in the event that an impairment to Catalent’s credit or any other financial issue has, or is reasonably likely to have, a material negative impact on Catalent’s ability to purchase the Raw Materials in a timely manner.

 

B.            In obtaining Raw Materials hereunder, Catalent shall only use those specific suppliers, manufacturers, and/or vendors (“Vendors”) that have been approved by Client in advance.  The approved Vendors as of the Effective Date are listed in the Specifications, and the parties agree to update the Specifications to reflect any additions or amendments to the list of Client-approved Vendors.  Catalent shall use commercial reasonable efforts to procure the supply of all Raw Materials for Client at the lowest prices reasonably available, consistent with and having regard to such matters as security and sources or supply, quality of product, volume requirements, and terms and conditions of supply.  Client will be responsible for all costs associated with qualification of any Vendor who has not been previously qualified by Catalent.  If Client requests Catalent to change a Vendor and the cost of the Raw Material from any such alternate Vendor is greater than Catalent’s costs for the same raw material of equal quality from the existing Vendor, Catalent shall add the difference between Catalent’s cost of the Raw Material and the alternate Vendor’s cost of the Raw Material to the Unit Pricing.  If Client requests Catalent to change a Vendor and the cost of the Raw Material from any such alternate Vendor is lower than Catalent’s costs for the same raw material of equal quality from the existing Vendor, Catalent shall subtract the difference between Catalent’s cost of the Raw Material and the alternate Vendor’s cost of the Raw Material from the Unit Pricing.

 

C.            All Raw Materials hereunder, and Catalent’s use thereof in the Processing and Packaging, shall comply with: (a) the specifications applicable thereto as reasonably determined by Client and as set forth in the Specifications, current batch records, and/or other appropriate documentation (provided that such specifications may only be amended upon Client’s prior written approval); (b) all Applicable Laws, the Quality Agreement, and all applicable Regulatory Approvals; and (c) the use, re-test, or expiration date, as applicable, of such Raw Materials, if applicable, in accordance with the recommendations of the manufacturers or vendors thereof.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

12

 

3.4         Storage and Use of Raw Materials; Inventory Reports.

 

A.            Storage and Use.  Catalent shall ensure that all Raw Materials are stored in accordance with Applicable Laws, any other requirements mutually agreed upon by Client and Catalent, and any instructions of Third Party suppliers.  Catalent shall use the first-in, first-out (FIFO) method of materials storage for Raw Materials and Client-supplied Materials, subject to the prudent and appropriate usage of the first expiring, first out (FEFO) method.  Catalent shall be responsible, at its expense, to obtain and maintain at all times during the term of this Agreement all permits and licenses required for it to carry out its obligations hereunder.  Except as set forth in Section 3.6 below, Catalent shall be responsible for, and shall bear all costs associated with, any obsolete or expired Raw Materials.

 

B.            Inventory Reports.  Commencing no later than the first full calendar month after Client provides the first Rolling Forecast pursuant to Section 4.1 below, within five (5) business days after the end of each calendar month, Catalent shall provide to Client a monthly written report outlining, by Facility:  (a) the amount of its inventory of all API, other Client-supplied Materials, other critical Raw Materials (as such critical Raw Materials are identified by Client from time to time), and Product (including work-in-process) as of the end of the applicable calendar month, separately identifying such amounts of API, each such other Client-supplied Materials, such other critical Raw Material, and Product (including work-in-process, which will be separately identified); and (b) the quantity of API used in the immediately preceding calendar month and the extent to which such quantity of API was more or less than Catalent’s predicted requirements of API for such month.

 

3.5           Artwork and Packaging.  Client shall provide or approve, prior to the procurement of applicable components, all artwork, advertising and packaging information necessary for Processing or Packaging.  Such artwork, advertising and packaging information is and shall remain the exclusive property of Client, and Client shall be solely responsible for the content thereof.  Such artwork, advertising and packaging information or any reproduction thereof may not be used by Catalent in any manner other than performing its obligations hereunder.  For the avoidance of doubt, (i) Client shall have the right to modify, update or otherwise change any such artwork, advertising and packaging information in its sole discretion, provided Client notifies Catalent of the same as set forth in Section 8.1 and provides Catalent with all necessary materials with respect thereto, and any such modification, update or change shall be considered a change in the Specification (and, in particular, the Packaging Specification), including for purposes of 3.6 below.  Client must obtain Catalent’s prior written consent prior to utilizing Catalent’s name on any packaging.

 

3.6           Reimbursement for Materials.  In the event of (A) a Specification change for any reason, (B) obsolescence of any Raw Material (which, for clarity, does include any expiration of Raw Material), (C) termination of this Agreement by Catalent pursuant to Section 16.2(A) or 16.2(B), or (D) termination of this Agreement by Client, other than pursuant to Section 16.2 (B), Client shall bear the cost of any unused Raw Materials (including packaging at direct cost, plus the

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

13

 

lower of *** percent (***%) or $***, per event) procured by Catalent, so long as Catalent purchased such Raw Materials in quantities consistent with Client’s most recent Rolling Forecast, including amounts purchased by Catalent to comply with its obligations under Section 4.2(c), and the supplier’s minimum purchase obligations (if any).  Catalent shall employ commercially reasonable efforts to mitigate such costs, including, to the extent approved by Client, (1) using such Raw Materials in connection with other activities performed by Catalent, including with respect to the supply of product to Third Parties or the performance of services on behalf of Third Parties, or (2) returning such Raw Materials to the original vendor thereof.

 

ARTICLE 4

MINIMUM COMMITMENT, PURCHASE ORDERS & FORECASTS

 

4.1           Forecast.  On or before the *** of each calendar month, beginning with the first full calendar month following the Effective Date, Client shall furnish to Catalent a written *** rolling forecast of the quantities of Bulk Product and/or Packaged Product that Client intends to order from Catalent during such period (“Rolling Forecast”).  The first *** of each Rolling Forecast shall constitute a binding order for the quantities of Product specified therein (“Firm Commitment”) and the following *** of the Rolling Forecast shall be non-binding, good faith estimates.  Starting with the first full month in which the *** occurs and for the remainder of the Term, Client shall use its commercially reasonable efforts to ***.

 

4.2           Purchase Orders.

 

A.            From time to time as provided in this Section 4.2(A), Client shall submit to Catalent a binding, non-cancelable purchase order for Product specifying the number of Batches of Bulk Product on a per strength basis, the number Batches of Packaged Product in each configuration, and the mutually agreed upon delivery date for such Product (“Purchase Order”).  Concurrently with the submission of each Rolling Forecast, Client shall submit a Purchase Order for the Firm Commitment.  Purchase Orders for quantities of Product in excess of the Firm Commitment shall be submitted by Client in accordance with lead times mutually agreed by the parties.

 

B.            Within *** days following receipt of a Purchase Order, Catalent shall issue a written acknowledgement (“Acknowledgement”) that it accepts such Purchase Order, provided that Catalent may reject a Purchase Order solely (i) to the extent such Purchase Order is for quantities of Product in excess of the Firm Commitment or (ii) if such Purchase Order has not otherwise been submitted in accordance with this Agreement.

 

C.            Notwithstanding Section 4.2(B), and subject to Section 4.2(A), Catalent shall use commercially reasonable efforts to supply Client with quantities of Product which are up to the percentage of the quantities specified in the Firm Commitment that are specified in the table below, subject to Catalent’s other supply commitments and manufacturing, packaging and equipment capacity:

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

14

 

	
Contract Year
    	
 
    	
Percentage of Firm Commitment
    	
 
    
	
1st Contract Year
    	
 
    	
***
    	
%
    
	
First 6 months of 2ndContract Year
    	
 
    	
***
    	
%
    
	
Second 6 months of 2nd Contract Year
    	
 
    	
***
    	
%
    
	
3rd and 4th Contract Years
    	
 
    	
***
    	
%
    

 

For the avoidance of doubt, Catalent’s failure to supply Client with quantities in excess of the quantities specified in the Firm Commitment shall not constitute a breach of this Agreement by Catalent.

 

D.            No terms or conditions contained in any Purchase Order or Acknowledgement, or similar standardized form, given or received pursuant to this Agreement shall be construed to amend or modify the terms of this Agreement.  In the event of a conflict between the terms of any Purchase Order or Acknowledgement, or similar standardized form, and this Agreement, the terms of this Agreement shall control.

 

4.3           Sufficient API and Client-supplied Materials. Client acknowledges and agrees that Catalent’s ability to Process and Package Product under this Agreement is dependent upon Client’s provision to Catalent of sufficient quantities of API and Client-supplied Materials.  Accordingly, Catalent shall have no liability with respect to amounts of Products specified in any Purchase Order to the extent Client refuses or fails to timely supply API or any other Client-supplied Materials in accordance with Section 3.1.

 

4.4           Client’s Modification or Cancellation of Purchase Orders.

 

A.            Client may modify the delivery date or quantity of Product in a Purchase Order only by submitting a written change order to Catalent.  Change orders must be submitted at least

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

15

 

*** days in advance of the earliest Processing Date (of which Catalent notifies Client in accordance with Section 3.2(A) above) covered by such change order.  Catalent shall use commercially reasonable efforts to implement any change orders submitted by such deadline.  For change orders submitted after this deadline, Catalent will respond within *** days whether or not such change is possible.  Notwithstanding the foregoing, Client shall remain responsible for the Firm Commitment.

 

B.            In addition to any amounts due to Catalent with respect to Product ordered pursuant to Section 4.2, if Client fails to place Purchase Orders sufficient to satisfy the Firm Commitment (which, for clarity, is required by Section 4.2(A)), Client shall, within *** days of receipt of invoice ***.

 

4.5           Unplanned Delay or Elimination of Processing.  Catalent shall use commercially reasonable efforts to meet the mutually agreed upon delivery dates specified in the Purchase Orders, subject to the terms and conditions of this Agreement.  Catalent shall provide Client with as much advance notice as possible (and will use its best efforts to provide at least *** days’ advance notice where possible) if Catalent determines that any Processing or Packaging will be delayed or eliminated for any reason.

 

4.6           Observation of Processing and Packaging.  In addition to Client’s audit right pursuant to Section 9.5, Client may send *** representatives to each Facility to observe Processing or Packaging activities, the Validation Services, or Product Maintenance Services for a maximum of up to *** per Facility, so long as Client provides Catalent at least *** advance written notice of the attendance of such Client representatives.  Return visits of reasonable duration to follow up on deficiencies noted in earlier visits shall not count towards this *** limit.  In addition, Client may visit the Facilities for process improvement and other activities, in each case as mutually agreed.  Such representatives shall abide by all Catalent safety rules and other applicable employee policies and procedures communicated by Catalent to Client, and Client shall be responsible for such compliance.  Client shall indemnify and hold harmless Catalent for any action, omission or other activity of such representatives in breach of such policies and procedures while on Catalent’s premises.  Client’s representatives who are not employees of Client may be required to sign Catalent’s standard visitor confidentiality agreement prior to being allowed access to the Facility. Any information obtained by Client through such inspections and shall be treated as Confidential Information of Catalent in accordance with Article 10 below.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

16

 

ARTICLE 5

TESTING; SAMPLES; RELEASE

 

5.1           Testing; Releasing; Rejection.  Unless otherwise agreed to by the parties during their ordinary course of dealings, after Catalent completes Processing of a Batch, Catalent shall provide Client with copies of Batch records prepared in accordance with the Specifications; provided, that if testing reveals an out-of-Specification result, Catalent shall provide such Batch records promptly following resolution of the out-of Specification result.  After Catalent completes Processing of a Batch, Catalent shall also provide Client or its designee with a certificate of analysis and certificate of conformance for such Batch.  Issuance of a certificate of analysis and certificate of conformance  constitutes release of the Batch by Catalent to Client.  Client shall be responsible for final release of Product (including any additional testing that it elects to perform) to the market, at its cost. Following Client’s receipt of a shipment of a Batch of Packaged Product, Client or Client’s designee may test samples of such Batch to confirm that the Specifications have been met (or for any other purpose).  Unless, within *** days after Client’s receipt of a Batch (“Review Period”), Client or its designee notifies Catalent in writing (an “Exception Notice”) that such Batch does not meet the warranty set forth in Section 12.1(A)  (“Defective Product”), and provides a sample of the alleged Defective Product, the Batch shall be deemed accepted by Client and Client shall have no right to reject such Batch, subject to Section 5.3 with respect to Latent Defects.  Upon timely receipt of an Exception Notice from Client, Catalent shall conduct an appropriate investigation in its discretion to determine whether or not it agrees with Client that Product is Defective Product and to determine the cause of any nonconformity.  If Catalent agrees that Product is Defective Product and determines that the cause of nonconformity is *** (“Catalent Defective Processing” or “Catalent Defective Packaging”), then Section 5.4 shall apply.  For avoidance of doubt, where the parties agree that the cause of nonconformity cannot be determined or assigned, or where the independent third party retained pursuant to Section 5.2 cannot determine or assign the cause of nonconformity, it shall be deemed not Catalent Defective Processing or Catalent Defective Packaging, as applicable.

 

5.2           Discrepant Results.  In the event of a disagreement between the parties regarding whether Product is Defective Product and/or whether the cause of the nonconformity is Catalent Defective Processing or Catalent Defective Packaging, then Catalent and Client shall use reasonable efforts to resolve such disagreement as promptly as possible.  Without limiting the foregoing, Catalent and Client shall discuss in good faith mutually acceptable testing procedures pursuant to which both Catalent and Client will re-test a sample of the disputed Product to determine whether such Product is Defective Product.  Notwithstanding the foregoing, in the event such disagreement cannot be resolved by the parties within *** days of the date of the Exception Notice, the parties shall cause a mutually agreeable independent third party to review records, test data and to perform comparative tests and/or analyses on samples of the alleged Defective Product and its components, including API and other Client-supplied Materials.  The

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

17

 

independent party’s results as to whether or not Product is Defective Product and the cause of any nonconformity shall be final and binding.  Unless otherwise agreed to by the parties in writing, the costs associated with such testing and review shall be borne by Catalent if Product is Defective Product attributable to Catalent Defective Processing or Catalent Defective Packaging, and by Client in all other circumstances.

 

5.3           Latent Defects.  Notwithstanding Section 5.1, Client or its designee shall have the right to reject Defective Product due to a Latent Defect for up to *** from the date of delivery.  In such case, Client shall notify Catalent within *** of its discovery of a Latent Defect.  For purposes of this Section 5.3, “Latent Defect” shall mean any defect which such defect is not reasonably discoverable upon initial inspection and testing by Catalent or the Client or Client’s designee, as applicable.

 

5.4           Defective Processing or Packaging.  Catalent shall, at Client’s option, either (A) re-Process or re-Package (or if re-Processing or re-Packaging is not permissible under cGMPs, then replace), at Catalent’s cost any Batch of Defective Product attributable to Catalent Defective Processing or Catalent Defective Packaging (and Client shall be liable to pay for either the rejected Batch(es) or the replacement Batch(es), but not both), or (B) credit any payments made by Client for such Batch.  Any re-Processing, re-Packaging, or replacement under subsection (A) above shall be performed on an expedited basis.  THE OBLIGATION OF CATALENT TO (i) REPLACE CATALENT DEFECTIVE PROCESSING OR CATALENT DEFECTIVE PACKAGING IN ACCORDANCE WITH THE SPECIFICATIONS OR CREDIT PAYMENTS MADE BY CLIENT FOR DEFECTIVE PRODUCT ATTRIBUTABLE TO CATALENT DEFECTIVE PROCESSING OF CATALENT DEFECTIVE PACKAGING AND (ii) REIMBURSE CLIENT FOR API OR CLIENT-SUPPLIED MATERIAL LOST IN CATALENT DEFECTIVE PROCESSING OR CATALENT DEFECTIVE PACKAGING, (SUBJECT, FOR THE AVOIDANCE OF DOUBT, TO SECTION 14.1), SHALL BE, TOGETHER WITH CLIENT’S RIGHTS UNDER SECTIONS 13.1 (indemnification) AND 9.6 (recall), CLIENT’S SOLE AND EXCLUSIVE REMEDY UNDER THIS AGREEMENT FOR DEFECTIVE PRODUCT AND IS IN LIEU OF ANY OTHER WARRANTY, EXPRESS OR IMPLIED.

 

5.5           Supply of Material for Defective Product.  In the event Catalent replaces Defective Product pursuant to Section 5.4, Client shall supply, at Client’s cost, Catalent with sufficient quantities of API and other Client-supplied Materials in order for Catalent to complete Processing and Packaging for such replacement Product and Catalent shall reimburse Client for its API and Client-supplied Materials costs, subject to the limitations in Article 14.

 

ARTICLE 6

DELIVERY

 

6.1           Delivery.  Catalent shall deliver Packaged Product Ex Works (Incoterms 2010) the *** promptly following Catalent’s release of the Packaged Product.  Catalent

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

18

 

shall segregate and store all Packaged Product until tender of delivery.  Title to the Packaged Product shall transfer to Client upon such tender of delivery.  Client shall qualify at least one (1) carrier to deliver Packaged Product; provided, that if Client does not provide such carrier, Catalent may select one.

 

6.2           Failure to Take Delivery.  If Client fails to take delivery of any Packaged Product on any scheduled delivery date, Catalent shall store such Product and Client shall be invoiced on the first day of each month following such scheduled delivery at the storage rates specified in Attachment C.  ***.

 

6.3           Transport Between Facilities.  Notwithstanding anything the contrary herein, Catalent shall be solely responsible for paying the cost for, and subject to the limitations set forth in Article 14, shall bear the risk of loss associated with, the transport between Facilities of any Raw Materials, API, other Client-supplied Materials, Product (including work-in-process), or any other materials, and shall charge the Client the documented cost thereof as a pass-through.  Such transportation shall be performed pursuant to mutually agreed upon instructions from Client.

 

ARTICLE 7

PAYMENTS

 

7.1           Fees.  In consideration for Catalent performing services hereunder:

 

(A)          Client shall pay to Catalent the fees for Validation Services set forth on Attachment A.  Such fees shall be paid within *** days following Client’s receipt of invoice, which invoice shall be submitted to Client by Catalent upon the completion of the relevant phase of the Validation Services.

 

(B)           Client shall pay Catalent the unit pricing for Product set forth on Attachment C (“Unit Pricing”).  Such fees shall be paid within *** days following Client’s receipt of an invoice for each shipment of Product, which invoice shall be submitted to Client by Catalent upon tender of delivery of Product or storage as provided in Section 6.1 or 6.2, provided that during the first ***, Catalent shall be permitted to submit to Client an invoice for a progress payment once the Processed Product has been ***. All invoices will be issued by, and all payments will be delivered to, the Processing Site.

 

(C)           Client shall pay Catalent the annual fees for Product Maintenance Services set forth on Attachment C.  Such fees shall be paid within *** days following Client’s receipt of an invoice therefor, which invoice shall be submitted to Client by Catalent upon the Effective Date and upon each anniversary of the Effective Date during the Term.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

19

 

(D)          Other Fees.  Client shall pay Catalent for all other fees and expenses of Catalent owing in accordance with the terms of this Agreement, including pursuant to Sections 2.4, 4.5, 6.2 and 16.3.  Such fees and expenses shall be paid within *** days following Client’s receipt of an invoice therefor, which invoice shall be submitted to Client by Catalent as and when appropriate.

 

7.2           Unit Pricing Increase. Beginning with (and effective for) the ***, and annually thereafter, the processing and analytical components of the Unit Pricing may be adjusted by Catalent on an annual basis, upon *** days’ written notice from Catalent to Client, in proportion to the rate of inflation as measured by the PPI for Pharmaceutical Preparations (PCU325412325412); provided that such annual price increase does not exceed *** percent (***%).  Notwithstanding the foregoing or any change in the PPI, price increases for Raw Materials shall be passed through to Client via an increase in the Unit Price (such price increase, a “Raw Materials Price Increase”).

 

7.3           Product Approval.  Notwithstanding anything to the contrary set forth in this Agreement, Client shall use commercially reasonable efforts to expedite and obtain all Regulatory Approvals (other than any necessary Facility Approvals (as defined in Section 9.3)) necessary for Catalent to commence Processing at the Facilities, and in the event such Regulatory Approvals have not been obtained by Client within *** following the Effective Date, then Client and Catalent shall each have the right to terminate this Agreement immediately upon notice to the other.

 

7.4           Payment Terms.  Client shall make payment in U.S. dollars, and otherwise as directed in the applicable invoice.  In the event any undisputed payment is not received by Catalent on or before the *** day after Client’s receipt of the invoice, then Catalent may, in addition to any other remedies available at equity or in law, at its option, elect to do any one or more of the following:  (A) charge interest on the outstanding sum from the due date (both before and after any judgment) at *** per month until paid in full (or, if less, the maximum amount permitted by Applicable Laws) and/or (B) notify Client in writing that such undisputed payment is late and, if such undisputed payment is not paid within *** days after Client’s receipt of such notice, suspend any further performance hereunder until such undisputed payment is paid in full.

 

7.5           Advance Payment.  If at any time, Catalent reasonably determines that Client’s credit is impaired, Catalent shall have the right to require payment in advance before performing any further Processing or Packaging of the Product.  If Client shall fail, within a reasonable time, to make such payment in advance, or if Client shall fail to make payment when due, Catalent shall have the right, at its option, to suspend any further performance hereunder until such default is corrected.

 

7.6           Taxes.  All taxes, duties and other amounts assessed (excluding tax based on net income and franchise taxes) on services, API or Product prior to or upon provision or sale to Catalent or Client, as the case may be, and on any other Client-supplied Materials, are the responsibility of

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

20

 

Client, and Client shall reimburse Catalent for all such taxes, duties or other expenses paid by Catalent or such sums will be added to invoices directed at Client, where applicable, upon presentation of documentation of such payment by Catalent to Client.

 

7.7           Client and Third Party Expenses.  Except as may be expressly covered by Product Maintenance Service fees, as between the parties hereto, Client shall be responsible for one hundred percent (100%) of its own and all third-party expenses associated with obtaining Regulatory Approvals for the Product (other than any Facility Approvals) and commercialization of Product, including regulatory filings and post-approval marketing studies.

 

7.8           Development Batches.  Each Batch produced under this Agreement, including those necessary to support the validation portion of Client’s submissions for Regulatory Approvals, will be considered to be a “development batch” unless and until Processing has been validated.  Client shall be responsible for the cost of each such Batch as set forth in Attachment C, even if such Batch fails to meet the Specifications, unless Catalent was grossly negligent or engaged in willful misconduct in the manufacture of the out-of-Specification Batch.  Catalent and Client shall cooperate in good faith to resolve any problems causing the out-of-Specification Batch.

 

ARTICLE 8

CHANGES TO SPECIFICATIONS

 

8.1           Changes to Specifications or Processing.

 

A.            Catalent shall not make any changes to Raw Materials (or suppliers thereof), formulations, processes, equipment, tests or any other item in any manner that would adversely impact the Processing and/or Packaging activities related to Product to be supplied by Catalent hereunder, or affect any of Client’s Regulatory Approvals (including pending Regulatory Approvals) related to the Product, without Client’s prior written approval.

 

B.            All Specifications and any changes thereto agreed to by the parties from time to time shall be in writing, dated and signed by the parties.  Any change to the Process or Packaging shall be deemed a Specification change.  No change in the Specifications shall be implemented by Catalent, whether requested by Client, or requested or required by any Regulatory Authority, or otherwise, without Client’s prior written approval or until the parties have agreed in writing to such change, the implementation date of such change (“Change Date”), and any increase or decrease in costs, expenses or fees associated with such change (including any change to Unit Pricing) (“Change Costs”).  Catalent shall respond promptly to any request made by Client for a change in the Specifications, and both parties shall use commercially reasonable, good faith efforts to agree to the terms of such change in a timely manner; provided, however, that in the case of any change that is requested by Client in response to (i) requirements imposed by a Regulatory Authority or Applicable Laws or (ii) a safety or toxicity issue, the only terms of such change that Catalent may object to are the Change Date, the Change Costs and any requested change that would reasonably be expected to affect Catalent’s other customers or regulatory status, and Catalent shall use commercially reasonable, good faith efforts to resolve any such

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

21

 

objection in an expedited manner.  As soon as possible after a request is made for any change in Specifications, Catalent shall notify Client of the costs associated with such change and shall provide such supporting documentation as Client may reasonably require.  Client shall pay all reasonable direct costs directly attributable to such agreed upon changes.  If there is a conflict between the terms of this Agreement and the terms of the Specifications, this Agreement shall control.  Catalent reserves the right to postpone effecting changes to the Specifications until such time as the parties agree to and execute the required written amendment thereto in accordance with this Section 8.1(B).

 

8.2           Other Changes.  Catalent shall use commercially reasonable efforts to identify and develop changes to the manufacturing process and other mechanisms for maintaining quality and lowering costs by seeking productivity improvements, by minimizing waste and improving yields, by purchasing quality materials at lower cost, by improving manufacturing processes, by streamlining organizational processes, by achieving operational efficiencies, by reducing cycle times and lead times and the like.  Catalent shall promptly notify Client regarding any such potential changes that it identifies.  In addition, Client may propose to Catalent certain changes to the Specifications or the manufacturing process which it reasonably believes will improve the manufacturing process or lower costs or that Client otherwise wishes to implement in connection with the Product or the Processing thereof.  Upon Client’s request, Catalent shall review and analyze any such change and provide a development plan, cost proposal and timeline for the implementation of such change.  The parties shall mutually agree on which changes, if any, shall be further developed or implemented in accordance with the change control procedures set forth in the Quality Agreement.  Except as the parties may otherwise agree in writing, Catalent and Client shall share *** in any cost savings resulting from the implementation thereof (net of any costs required to implement such change), and promptly following such implementation, the Unit Pricing for the Product payable by Client as set forth on Attachment C shall be reduced to reflect Client’s share of such cost savings.

 

8.3           Deviations.  Without limiting Catalent’s obligations under Section 5.1 above, in the event any material deviations occur during the course of the Processing or Packaging of any Product under this Agreement, Catalent shall promptly provide Client with a detailed written description of any such deviation and, to the extent known by Catalent, an explanation of the cause of such deviation.  In addition to the provision of such notice, Catalent shall undertake those actions to investigate the cause of such deviation and to correct the same as set out in the Quality Agreement. Notifications and actions taken by Catalent are governed by the Quality Agreement requirements.

 

ARTICLE 9

RECORDS; REGULATORY MATTERS

 

9.1           Batch Records and Data.  Within *** days following the completion of Processing and/or Packaging of each Batch, Catalent shall provide Client with a certificate of conformance, certificate of analysis and, to the extent requested by Client, Batch records, QC data sheets and 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

22

 

other test results; provided, that if testing reveals an out-of-Specification result, Catalent shall provide corresponding Batch records within *** days following resolution of the out-of Specification result.

 

9.2           Recordkeeping.  Catalent shall maintain materially complete and accurate books, records, test and laboratory data, reports and all other information relating to Processing, Packaging, Validation Services, and Product Maintenance Services, including all information required to be maintained by Applicable Laws, in accordance with Catalent standard operating procedures and any other reasonable procedures upon which the parties mutually agree.  Such information shall be maintained in forms, notebooks and records for a period of at least *** from the relevant finished Product expiration date or longer if required under Applicable Laws or under the Quality Agreement, provided that prior to Catalent’s destruction of any such books, records, data or information, Catalent shall provide Client with written notice thereof and, if requested by Client, shall transfer such documentation to Client, at Client’s cost.  Without limiting the foregoing, at any time, upon request by Client, and at Client’s cost, Catalent shall provide Client with reasonable access to, and copies of, such records.

 

9.3           Regulatory Compliance.  Catalent shall obtain and maintain all permits and licenses with respect to general Facility operations required by any Regulatory Authority in the jurisdiction in which Catalent Processes or Packages Product (any such approval, a “Facility Approval”). Other than Facility Approvals, Client shall be solely responsible for all Regulatory Approvals for the Product, including any applications and amendments in connection therewith, and Client shall obtain all necessary Regulatory Approvals (other than Facility Approvals).  During the Term, Catalent will assist Client with all regulatory matters relating to Processing and Packaging of Product under this Agreement, and/or to Validation Services or Product Maintenance Services, at Client’s request and at Client’s expense, including providing all information and data in Catalent’s possession or control necessary or useful for Client to apply for, obtain and maintain Regulatory Approvals for Product in any country within the Territory, including information relating to any Facility and/or Raw Materials, or required or requested to be provided to the FDA or any other Regulatory Authority, in each case, subject to Catalent’s obligations of confidentiality to its other customers.  Moreover, Client shall have, or cooperate with Catalent to obtain, full access to and the right to use and reference any records, correspondence, validation documentation, batch records, reports, analyses and any other data and documentation in connection with the Processing, Packaging, Validation Services, or Product Maintenance Services conducted by Catalent hereunder.  Each party intends and commits to cooperate to satisfy all Applicable Laws relating to Processing, Packaging, Validation Services, and Product Maintenance Services.

 

9.4           Governmental Inspections and Requests.  Catalent shall permit any Regulatory Authority to conduct inspections of any Facility as such Regulatory Authority may request, including pre-approval inspections, and shall cooperate with such Regulatory Authority with respect to such inspections and any related matters, in each case that is related to the Product or its Processing or Packaging.  Catalent shall promptly advise Client if an authorized agent of any Regulatory

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

23

 

Authority visits or schedules a visit to any Facility concerning the Product or its Processing or Packaging.  Catalent shall permit Client or its representative to assist in the preparation for and be present on site for such inspections; provided that Client shall not participate in such inspection unless requested to do so by Catalent.  Catalent shall furnish to Client a copy of the report by such Regulatory Authority, if any, within *** of Catalent’s receipt of such report and notify Client of any actions taken by Catalent to remedy conditions cited in any such report.  Further, upon receipt of a Regulatory Authority request to inspect any Facility or audit Catalent’s books and records with respect to Processing or Packaging, Catalent shall promptly notify Client, and shall provide Client with a copy of any written document received from such Regulatory Authority.  In addition, Catalent agrees to promptly notify and provide Client copies of any request, directive or other communication of any Regulatory Authority relating to the Product or its Processing or Packaging.  Prior to responding to any reports, requests, directive or other communications issued by any Regulatory Authority relating to the Product or its Processing or Packaging or general Processing or Packaging issues, Catalent shall provide Client a copy of its proposed response for Client’s review and comments and Catalent shall take under careful consideration and use good faith efforts to implement any comments or recommendations provided by Client with respect thereto direct towards the Product or its Processing or Packaging prior to submitting such response to the applicable Regulatory Authority.

 

9.5           Client Inspections and Audits.

 

A.            During the Term and for *** years thereafter, or as otherwise required by Applicable Law, duly-authorized employees, agents and representatives of Client shall be granted access upon at least *** days prior notice and at reasonable times during regular business hours to (i) the portion of any Facility where Catalent performs Processing, Packaging, Validation Services, or Product Maintenance Services, (ii) relevant personnel involved in Processing, Packaging, Validation Services, or Product Maintenance Services and (iii) Processing, Packaging, Validation Services, or Product Maintenance Services records described in Section 9.2, in each case solely for the purpose of (1) inspecting and verifying that Catalent is Processing, Packaging, Validation Services, and Product Maintenance Services in accordance with cGMPs, this Agreement, the Specifications and the Product master Batch records and environmental, health and safety regulations, (2) performing inventories of the API and Client-supplied Materials, and (3) reviewing correspondence, reports, filings and other documents from or to Regulatory Authorities to the extent related to the Processing or Packaging of Product or the Validation Services or Product Maintenance Services.  Client’s Representatives who are not employees of the Client may be required to sign Catalent’s standard visitor confidentiality agreement prior to being allowed access to the Facility. Any information obtained by Client through such inspections shall be treated as Confidential Information in accordance with Article 10 below.  Catalent agrees to reasonably assist Client in the performance of any such inspections.

 

B.            Client’s Quality Assurance Manager will arrange audit visits with Catalent Quality Management.  Inspections shall be designed to minimize disruption of operations at the applicable Facility.  Subject to Section 4.6, Client may not conduct an inspection under this 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

24

 

Section 9.5 more than *** during any 12-month period; provided, that additional inspections may be conducted in the event there is a material quality or compliance issue concerning Product, its Processing or Packaging, or the Validation Services or Product Maintenance Services.

 

9.6           Recall.  In the event Catalent believes a recall, field alert, Product withdrawal or field correction (“Recall”) may be necessary with respect to any Product provided under this Agreement, Catalent shall immediately notify Client in writing. Client shall be solely responsible for implementing any such Recall and Catalent will not act to initiate a Recall without the express prior written approval of Client, unless otherwise required by Applicable Laws.  In the event Client determines a Recall may be necessary with respect to any Product provided under this Agreement, Client shall notify Catalent promptly in writing, and Catalent shall provide all necessary cooperation and assistance to Client.  The cost of any Recall shall be borne by Client except to the extent such Recall is caused in whole or in part by Catalent’s breach of its obligations, warranties, or representations under this Agreement or Applicable Laws or its negligence or willful misconduct, which such portion of the cost shall be borne by Catalent.  For purposes hereof, such cost shall be limited to reasonable, actual and documented costs incurred by Client for such Recall (including freight, and shipping) and replacement of the Product subject to Recall in accordance with Section 5.5     The liability of each party under this Section 9.6 shall be subject to the limitations set forth in Article 14.

 

9.7           Quality Agreement.  Within *** after the Effective Date, and in any event prior to the first Processing and Packaging of Product hereunder, the parties shall negotiate in good faith and enter into a Quality Agreement substantially in the form attached hereto as Attachment D (the “Quality Agreement”).  The Quality Agreement shall in no way determine liability or financial responsibility of the parties for the responsibilities set forth therein.  Additionally, the Quality Agreement is not intended and shall not be construed to limit any of the rights and obligations of the parties set forth in this Agreement.  Subject to the foregoing, to the extent possible, the Quality Agreement will be interpreted with the terms set forth in the body of this Agreement. In the event of a conflict between any of the provisions of this Agreement and the Quality Agreement with respect to quality-related activities, including compliance with cGMP, the provisions of the Quality Agreement shall govern. In the event of a conflict between any of the provisions of this Agreement and the Quality Agreement with respect to any commercial matters, including allocation of risk, liability and financial responsibility, the provisions of this Agreement shall govern.

 

ARTICLE 10

CONFIDENTIALITY AND NON-USE

 

10.1         Mutual Obligation.  Catalent and Client agree that they will not disclose the other party’s Confidential Information to any third party without the prior written consent of the other party, except as otherwise permitted in this Article 10.  Each party may use or disclose Confidential Information of the other party solely to the extent necessary to perform its obligations and/or

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

25

 

exercise its rights hereunder, and in disclosures to Regulatory Authorities, or as required by law, regulation or court or administrative order; provided, that prior to making any such legally required disclosure, the party making such disclosure shall give the other party as much prior notice of the requirement for and contents of such disclosure as is practicable under the circumstances in order for such party to allow the other party to seek a protective order or otherwise prevent or restrict disclosure of such Confidential Information.  Notwithstanding the foregoing, each party may disclose the other party’s Confidential Information to any of its Affiliates and/or its employees, contractors, advisors (including legal or financial advisors), or consultants that (A) need to know such Confidential Information for the purpose of performing its obligations and/or exercising its rights under this Agreement, (B) are advised of the confidential nature of the Confidential Information, and (C) are bound by confidentiality obligations that are no less onerous than the terms of this Article 10.

 

10.2         Definition.  As used in this Agreement, the term “Confidential Information” of a party means all information disclosed or otherwise furnished by such party, or any of its representatives or Affiliates, to the other party or its representatives or Affiliates relating to the disclosing or furnishing party’s business, products, or operations (or that is otherwise deemed to be Confidential Information pursuant to other provisions of this Agreement), whether furnished before, on or after the Effective Date and furnished in any form, including written, verbal, visual, electronic or in any other media or manner.  Confidential Information may include, without limitation, proprietary technologies, know-how, trade secrets, discoveries, inventions and other intellectual property (whether or not patented), analyses, compilations, or business or technical information.  The existence of this Agreement and its terms shall be deemed to be the Confidential Information of both parties; provided that either party may disclose the specific terms of this Agreement to its advisors (including legal or financial advisors), current and prospective investors, potential acquirers, or, solely in the case of Client, third parties who have acquired from Client, or who Client reasonably believes may have a bona-fide interest in acquiring, some or all of the rights to the Product, whether by acquisition or license, in each case on a need-to-know basis under reasonable and customary confidentiality obligations.  For clarity, it is understood that all Specifications, Client-supplied Materials, Rolling Forecasts, Purchase Orders, and Client Inventions shall be deemed the Confidential Information of Client.

 

10.3         Exclusions.  Notwithstanding Section 10.2, Confidential Information does not include information that (A) is or becomes generally available to the public or within the industry to which such information relates other than as a result of a breach of this Agreement, (B) is already known by the receiving party at the time of disclosure without any obligation of confidentiality as evidenced by the receiving party’s written records, (C) becomes available to the receiving party on a non-confidential basis from a source that is entitled to disclose it on a non-confidential basis or (D) was or is independently developed by or for the receiving party without reference to the Confidential Information of the other party as evidenced by the receiving party’s written records.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

26

 

10.4         No Implied License.  Except as expressly set forth in Section 10.1, the receiving party will obtain no right of any kind or license under any Confidential Information of the disclosing party, including any patent application or patent, by reason of this Agreement.  All Confidential Information will remain the sole property of the party disclosing such information or data, subject to Article 11.

 

10.5         Return of Confidential Information.  Upon expiration or termination of this Agreement, the party receiving Confidential Information will cease its use and, upon request, within 30 days either return or destroy (and certify as to such destruction) all Confidential Information of the other party, including any copies thereof, except for a single copy thereof which may be retained for the sole purpose of determining the scope of the obligations incurred under this Agreement.

 

10.6         Prior Agreement.  This Agreement supersedes the Mutual Confidentiality Agreement between the Parties dated August 18, 2003 (the “CDA”) and the confidentiality provisions of the Development Agreement with respect to information disclosed thereunder.  All information exchanged between the parties under the CDA and the Development Agreement shall be deemed Confidential Information of the disclosing party and shall be subject to the terms of this Article 10.

 

10.7         Survival.  The obligations of this Article will terminate *** years from the expiration or termination of this Agreement, except with respect to trade secrets, for which the obligations of this Article will continue for so long as such information remains a trade secret under applicable law.

 

ARTICLE 11

INTELLECTUAL PROPERTY

 

For purposes hereof, “Client Background IP” means all intellectual property and embodiments thereof owned or controlled by Client as of the date hereof or developed and controlled by Client other than in connection with this Agreement; “Catalent Background IP” means all intellectual property and embodiments thereof owned or controlled by Catalent as of the date hereof or developed and controlled by Catalent other than in connection with this Agreement; “Invention” means any invention or know-how (whether patentable or not), including intellectual property rights therein, developed solely or jointly by Catalent in connection with this Agreement; “Client Inventions” means any Invention that (a) is specific to the ***, or (b) is specific to the *** of the ***, the *** of the ***, or otherwise is specific to the ***; and “Catalent Inventions” means (a) any Invention that is specific to the Catalent Background IP or Catalent’s Confidential Information, or (b) any Invention, other than a Client Invention, related to ***.  All Client Background IP and Client 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

27

 

Inventions shall be owned solely by Client and no right therein is granted to Catalent under this Agreement, except that Catalent shall have a non-exclusive, royalty-free license to such items solely to the extent necessary to perform its obligations under this Agreement.  All Catalent Background IP and Catalent Inventions shall be owned solely by Catalent and no right therein is granted to Client under the this Agreement, except that, to the extent that the Product incorporates, or the Processing or Packaging of the Product utilizes, any Catalent Background IP and/or Catalent Inventions, Client shall have, and is hereby granted, a non-exclusive, transferable, worldwide, royalty-free, irrevocable license (including the right to grant and authorize sublicenses) to use such Catalent Background IP and/or Catalent Inventions solely in connection with ***.  Catalent hereby assigns to Client all Client Inventions.  Client hereby assigns to Catalent all Catalent Inventions.  Each party hereby agrees to execute such documents and otherwise cooperate with the other party, as reasonably requested by such other party, to achieve the allocation of rights to Inventions as set forth herein.  For the avoidance of doubt, each party shall be solely responsible for costs associated with the protection of its own intellectual property.

 

ARTICLE 12

REPRESENTATIONS AND WARRANTIES

 

12.1         Catalent.  Catalent represents, warrants and undertakes to Client that:

 

A.            at the time of delivery by Catalent as provided in Section 6.1, Product shall meet all Specifications therefor and shall have been Processed and Packaged in accordance with Applicable Laws and in conformance with the Specifications and shall not be adulterated, misbranded or mislabeled within the meaning of Applicable Laws; provided, that Catalent shall not be liable for defects attributable to API or other Client-supplied Materials existing at the time of delivery to Catalent;

 

B.            during the term of this Agreement, each Facility, all equipment used for the Processing and/or Packaging of Product (and the Validation Services or Product Maintenance Services) within each Facility, and the Processing, Packaging, Validation Services, and Product Maintenance Services activities contemplated herein will conform to all Applicable Laws;

 

C.            title to all Product supplied under this Agreement will pass as provided in this Agreement, free and clear of any security interest, lien, or other encumbrance;

 

D.            each employee and subcontractor of Catalent who will receive or have access to Confidential Information of Client or perform activities hereunder will have signed Catalent’s confidentiality agreement (which such agreement contains normal and customary provisions for confidentiality and assignment of inventions), prior to the earlier to occur of: (i) any disclosure of Confidential Information of Client to such employee or subcontractor; or (ii) the commencement of any such performance by such employee or subcontractor;

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

28

 

E.             neither Catalent nor any of its employees or subcontractors performing or involved with its performance under this Agreement have been “debarred” by the FDA or a Regulatory Authority in any jurisdiction outside the United States, nor have debarment proceedings against Catalent or any of its employees or subcontractors been commenced.  Catalent will promptly notify Client in writing if any such proceedings have commenced or if Catalent or any of its employees or subcontractors are debarred by the FDA or a Regulatory Authority in any jurisdiction outside the United States; and

 

F.             all Validation Services and Product Maintenance Services shall be carried out in a diligent, professional manner in accordance with Catalent’s standard operating procedures and the prevailing standards in the pharmaceutical industry that are applicable to such services, including cGMP and cGLP, if applicable.

 

12.2         Client.  Client represents, warrants and undertakes to Catalent that:

 

A.            the API and all other Client-supplied Materials shall have been produced in accordance with Applicable Laws, shall comply with all applicable specifications, including the Specifications, shall not be adulterated, misbranded or mislabeled within the meaning of Applicable Laws, and shall have been provided in accordance with the terms and conditions of this Agreement;

 

B.            to Client’s knowledge, no specific safe handling instructions, health and environmental information or material safety data sheets are applicable to Product, API or any other Client-supplied Materials, except as provided to Catalent in writing by Client in accordance with this Agreement;

 

C.            all Product delivered to Client by Catalent will be held, used and disposed of by or on behalf of the Client in accordance with all Applicable Laws and this Agreement;

 

D.            Client has all necessary authority to use and to permit Catalent to use pursuant to this Agreement API and other Client-supplied Materials (including artwork) for purposes of Processing and Packaging Product hereunder; and

 

E.             the content of all artwork provided to Catalent shall comply with all Applicable Laws.

 

12.3         Mutual.   Each party hereby represents and warrants to the other party as of the Effective Date that:

 

A.            Existence and Power.  Such party (1) is duly organized, validly existing and in good standing under the laws of the state in which it is organized, and (2) has the power and authority and the legal right to own and operate its property and assets, and to carry on its business as it is now being conducted;

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

29

 

B.            Authorization and Enforcement of Obligations.  Such party (1) has the power and authority and the legal right to enter into this Agreement and to perform its obligations hereunder and (2) has taken all necessary action on its part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder;

 

C.            Execution and Delivery.  This Agreement has been duly executed and delivered on behalf of such party, and constitutes a legal, valid, binding obligation, enforceable against such party in accordance with its terms;

 

D.            No Consents.  All necessary consents, approvals and authorizations of all Regulatory Authorities and other persons required to be obtained by such party in connection with the Agreement have been obtained; and

 

E.             No Conflict.  The execution and delivery of this Agreement and the performance of such party’s obligations hereunder (1) do not, to the best of such party’s knowledge, conflict with or violate any requirement of Applicable Laws; and (2) do not materially conflict with, or constitute a material default or require any consent under, any contractual obligation of such party.

 

12.4         Limitations.  THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE ARE THE SOLE AND EXCLUSIVE REPRESENTATIONS AND WARRANTIES MADE BY EACH PARTY TO THE OTHER PARTY, AND NEITHER PARTY MAKES ANY OTHER REPRESENTATIONS, WARRANTIES OR GUARANTEES OF ANY KIND WHATSOEVER, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE.

 

ARTICLE 13

INDEMNIFICATION

 

13.1         Indemnification by Catalent.  Catalent shall indemnify, defend and hold harmless Client, its Affiliates, and their respective directors, officers, employees and agents (“Client Indemnitees”) from and against any and all suits, claims, losses, demands, liabilities, damages, costs and expenses (including reasonable attorneys’ fees and reasonable investigative costs) in connection with any suit, demand or action by any third party (“Losses”) to the extent arising out of or resulting from (A) any breach of its representations, warranties or obligations set forth in this Agreement, (B) actual or alleged infringement or violation of a third party’s patent or trade secret that directly results from Catalent’s use of Catalent Background IP, Catalent Confidential Information, or any manufacturing method or equipment supplied by Catalent in the performance of its activities under this Agreement, or (C) any negligence or willful misconduct by Catalent; except to the extent that any of the foregoing arises out of or results from any Client Indemnitee’s negligence, willful misconduct or breach of this Agreement.  In addition, Catalent shall indemnify, defend and hold harmless the Client Indemnitees from and against any and all suits, claims, losses, demands, liabilities, damages, costs and expenses (including reasonable attorneys’ fees and

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

30

 

reasonable investigative costs) associated with any obligation of a Client Indemnitee to respond to third party or government subpoenas that arise from any of the causes listed in Sections 13.1(A), (B), or (C)).

 

13.2         Indemnification by Client.  Client shall indemnify, defend and hold harmless Catalent, its Affiliates, and their respective directors, officers, employees and agents (“Catalent Indemnitees”) from and against any and all Losses to the extent arising out of or resulting from (A) any breach of its representations, warranties or obligations set forth in this Agreement, (B) any manufacture (other than due to Catalent Defective Processing), packaging (other than due to Catalent Defective Packaging), sale, promotion, distribution or use of or exposure to Bulk Product, Packaged Product, API or any other Client-supplied Materials, including product liability or strict liability, (C) the conduct of any clinical trials utilizing Product or API by or under the authority of Client or its designee, (D) any actual or alleged infringement or violation of any patent or trade secret, that results from (i) Catalent’s use in accordance with this Agreement of Client Background IP or Client Confidential Information or Client-supplied Materials, or (ii) Client’s sale of the Product, or (E) any negligence or willful misconduct by Client; except to the extent that any of the foregoing arises out of or results from any Catalent Indemnitee’s negligence, willful misconduct or breach of this Agreement. In addition, Client shall indemnify, defend and hold harmless the Catalent Indemnitees from and against any and all suits, claims, losses, demands, liabilities, damages, costs and expenses (including reasonable attorneys’ fees and reasonable investigative costs) associated with Catalent’s obligation to respond to third party or government subpoenas relating to Client or the Product (other than to the extent such third party or government subpoenas arise from any of the causes listed in Sections 13.1(A), (B), or (C)).

 

13.3         Indemnification Procedures.  All indemnification obligations in this Agreement are conditioned upon the party seeking indemnification (A) promptly notifying the indemnifying party of any claim or liability of which the party seeking indemnification becomes aware (including a copy of any related complaint, summons, notice or other instrument); provided, that failure to provide such notice within a reasonable period of time shall not relieve the indemnifying party of any of its obligations hereunder except to the extent the indemnifying party is prejudiced by such failure, (B) allowing the indemnifying party, if the indemnifying party so requests, to conduct and control the defense of any such claim or liability and any related settlement negotiations (at the indemnifying party’s expense), (C) cooperating with the indemnifying party in the defense of any such claim or liability and any related settlement negotiations (at the indemnifying party’s expense) and (D) not compromising or settling any claim or liability without prior written consent of the indemnifying party, which shall not be unreasonably withheld or delayed.  The indemnifying party shall have discretion to settle any action subject to indemnification under this Agreement; provided that the indemnifying party shall not enter into any settlement that would adversely affect the indemnified party’s rights hereunder, or impose any obligations on the indemnified party, without the indemnified party’s written consent, which shall not be unreasonably withheld or delayed.  The indemnified party shall have the right, but not the obligation, to be represented in such defense by counsel of its own selection and at its own expense.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

31

 

ARTICLE 14

LIMITATIONS OF LIABILITY

 

14.1        CATALENT’S LIABILITY UNDER THIS AGREEMENT FOR LOST, DAMAGED OR DESTROYED API OR OTHER CLIENT-SUPPLIED MATERIALS, WHETHER OR NOT SUCH API OR CLIENT-SUPPLIED MATERIALS ARE INCORPORATED INTO PRODUCT, SHALL NOT EXCEED $*** PER BATCH (ASSUMING A BATCH SIZE CONTAINING *** KILOGRAMS OF TOPIRAMATE PER BATCH ) OF PRODUCT THAT GIVES RISE TO THE APPLICABLE CLAIM FOR LOST, DAMAGED OR DESTROYED API OR OTHER CLIENT-SUPPLIED MATERIALS.  For clarity, if the Batch size is changed to a value other than *** kilograms of Topiramate per batch, the foregoing limit shall automatically change in proportion to any such changes; provided that in no event shall it exceed $*** per batch.

 

14.2        CATALENT’S TOTAL LIABILITY UNDER THIS AGREEMENT IN ANY *** PERIOD SHALL IN NO EVENT EXCEED $***, PROVIDED THAT THE FOREGOING LIMITATION ON LIABILITY SHALL NOT APPLY TO: (A) ANY LIABILITY ARISING FROM CATALENT’S BREACH OF ITS OBLIGATIONS UNDER ARTICLE *** RESULTING FROM CATALENT’S GROSS NEGLIGENCE OR WILLFULL MISCONDUCT; OR (B) CATALENT’S LIABILITY UNDER ARTICLE 13 (Indemnification) WITH RESPECT TO LOSSES FOR DEATH OR BODILY INJURY DUE TO CATALENT’S NEGLIGENCE.  NOTHING IN THIS SECTION 14.2 SHALL LIMIT CATALENT’S LIABILITY FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.  In addition, the foregoing limitation on liability shall not apply to, or include any amounts with respect to, (i) any of Catalent’s internal overhead or personnel costs associated with Processing and Packaging for replacing Defective Product pursuant to Section 5.4, or (ii) any credits granted for Defective Product pursuant to Section 5.4.

 

14.3        EXCEPT FOR BREACHES OF ARTICLE ***, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OR LOSS OF REVENUES, PROFITS OR DATA ARISING OUT OF PERFORMANCE UNDER THIS AGREEMENT, WHETHER IN CONTRACT OR IN TORT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. FOR PURPOSES OF CLARITY, INDEMNIFIABLE LOSSES UNDER ARTICLE 13 SHALL NOT BE CHARACTERIZED AS CONSEQUENTIAL TO CLIENT OR CATALENT SOLELY ON THE BASIS THAT SUCH LOSSES ARISE FROM DAMAGES SUFFERED BY A THIRD PARTY.

 

ARTICLE 15

INSURANCE

 

Each party shall, at its own cost and expense, obtain and maintain in full force and effect during

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

32

 

the Term the following:  (A) Commercial General Liability Insurance with a per-occurrence limit of not less than $***; (B) Products and Completed Operations Liability Insurance with a per-occurrence limit of not less than $***; (C) Workers’ Compensation Insurance with statutory limits and Employers Liability Insurance with limits of not less than $*** per accident; and (D) All Risk Property Insurance, including transit coverage, in an amount equal to the full replacement value of its property while in, or in transit to, a Catalent facility as required under this Agreement.  Each party may self-insure all or any portion of the required insurance as long as, together with its Affiliates, its US GAAP net worth is greater than $*** or its annual EBITDA (earnings before interest, taxes, depreciation and amortization) is greater than $***.  Each required insurance policy, other than self-insurance, shall be obtained from an insurance carrier with an A.M. Best rating of at least A- VII.  If any of the required policies of insurance are written on a claims made basis, such policies shall be maintained throughout the Term and for a period of at least *** years thereafter.  Each party shall obtain a waiver of subrogation clause from its property insurance carriers in favor of the other party.  Each party shall be named as an additional insured within the other party’s products liability insurance policies; provided, that such additional insured status will apply solely to the extent of the insured party’s indemnity obligations under this Agreement.  Such waivers of subrogation and additional insured status obligations will operate the same whether insurance is carried through third parties or self-insured. Upon the other party’s written request from time to time, each party shall promptly furnish to the other party a certificate of insurance or other evidence of the required insurance.

 

ARTICLE 16

TERM AND TERMINATION

 

16.1        Term.  This Agreement shall commence on the Effective Date and shall continue for four (4) years following the Launch Date, unless earlier terminated in accordance with Section 16.2 (as may be extended in accordance with this Section, the “Term”).  Notwithstanding the foregoing, in the event of a Change of Control of Client prior to the end of the ***, Client (or its acquiror or successor) may elect to change the percentage in Section 2.2 applicable to the fourth Contract Year to *** percent (***%), which election shall require (A) written notice to Catalent of such election within *** after such Change of Control and (B) payment of the Termination Fee to Catalent within 30 days of such notice.  The “Termination Fee” shall be $*** and shall be increased to $*** if at the time of Catalent’s receipt of such notice, Catalent is performing the *** (or has the Qualified Capability to do so) at its Facility in ***.  If the Termination Fee has increased to $*** pursuant to the prior sentence, and Client has contributed funds towards the capital expenditure necessary for Catalent to obtain such capability, then the Termination Fee shall be reduced in an amount equal to such contribution.

 

16.2        Termination.  This Agreement may be terminated as provided below:

 

A.            immediately without further action by either party if the other party files a petition in bankruptcy, or enters into an agreement with its creditors, or applies for or consents to the

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

33

 

appointment of a receiver, administrative receiver, trustee or administrator, or makes an assignment for the benefit of creditors, or suffers or permits the entry of any order adjudicating it to be bankrupt or insolvent and such order is not discharged within 60 days, or takes any equivalent or similar action in consequence of debt in any jurisdiction;

 

B.            immediately by either party if the other party materially breaches any of the provisions of this Agreement and such breach is not cured within *** days after the giving of written notice requiring the breach to be remedied; provided, that in the case of a failure of Client to make undisputed payments in accordance with the terms of this Agreement, Catalent may terminate this Agreement if such payment breach is not cured within *** days of receipt of notice of non-payment from Catalent; or

 

C.            immediately by Client or Catalent in the circumstances described in Section 7.3.

 

16.3        Effect of Termination.  Expiration or termination of this Agreement shall be without prejudice to any rights or obligations that accrued to the benefit of either party prior to such expiration or termination.  In the event of a termination of this Agreement:

 

A.            Catalent shall promptly return to Client, at Client’s expense and at Client’s direction, any remaining inventory of Product, API or other Client-supplied Materials; provided,  that Catalent shall have no obligation to so return such items until all outstanding and undisputed invoices sent by Catalent to Client have been paid in full;

 

B.            Client shall pay Catalent all undisputed invoiced amounts outstanding hereunder, plus, upon receipt of invoice therefor, for any (i) Product that has been shipped pursuant to Purchase Orders but not yet invoiced, provided such Product meets the Specifications therefor and conforms to the warranties set forth in Section 12.1, (ii) Product Processed pursuant to Purchase Orders that has been completed but not yet shipped and which meets the Specifications and conforms to the warranties set forth in Section 12.1, and (iii) in the event that this Agreement is terminated for any reason other than by Client pursuant to Section 16.2(A) or (B), all Product in process of being Processed or Packaged pursuant to Purchase Orders (or, alternatively, Client may instruct Catalent to complete such work in process, and the resulting completed Product shall be governed by clause (ii)); and

 

C.            in the event that this Agreement is terminated by Catalent pursuant to Section 16.2(A) or (B), or by either Party pursuant to Section 16.2(C), Client shall pay Catalent for all costs and expenses incurred, and all noncancellable commitments made, in connection with Catalent’s performance of this Agreement (except to the extent that such costs, expenses, and commitments relate to activities for which Catalent has been or will be paid under Section 7.1 or 16.3(B)), so long as such costs, expenses or commitments were made by Catalent in a reasonable manner that is consistent with Client’s most recent Rolling Forecast and any vendor’s minimum purchase obligations.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

34

 

D.            in the event that (i) this Agreement is terminated for any reason other than by Catalent pursuant to Section 16.2(A) or (B) or by either Party pursuant to Section 16.2(C), and (ii) Client demonstrates that at the time of such termination Catalent had been the sole supplier of the Product and Packaged Product to Client and its Affiliates over the preceding 12 month period, Catalent shall use its commercially reasonable efforts to assist Client, as reasonably requested, to transition the manufacture and supply of the Product to Client, its Affiliate, or its designated Third Party manufacturer in a timely and orderly manner at Catalent’s then prevailing rates for such services, which efforts shall include, without limitation, Catalent providing Client with access to the relevant Catalent Background IP and Catalent Inventions licensed to Client pursuant to Article 11.

 

16.4        Survival.  The rights and obligations of the parties shall continue under Articles 11 (Intellectual Property), 13 (Indemnification), 14 (Limitations of Liability), 17 (Notice), 18 (Miscellaneous); under Articles 10 (Confidentiality and Non-Use) and 15 (Insurance), and under Sections 7.4 (Payment Terms), 7.6 (Taxes), 7.7 (Client and Third Party Expenses), 9.2 (Recordkeeping), 9.3 (Regulatory Compliance), 9.4 (Governmental Inspections and Requests), 9.5 (Client Inspections and Audits), 9.6 (Recall), 12.1 (Catalent Warranties), 12.2 (Client Warranties,12.3 (Limitations on Warranties), 16.1 (Term),16.3 (Effect of Termination) and 16.4 (Survival), in each case in accordance with their respective terms if applicable, notwithstanding expiration or termination of this Agreement.

 

ARTICLE 17

NOTICE

 

All notices and other communications hereunder shall be in writing and shall be deemed given:    (A) when delivered personally; (B) when delivered by facsimile transmission (receipt verified);   (C) when received or refused, if mailed by registered or certified mail (return receipt requested), postage prepaid; (D) when delivered if sent by express courier service; or (E) except with respect to Sections 2.5, 3.2(C), 3.3, 3.4, 4.6, 7.2, 8.1, 8.3, 9.2, 9.6, 10.1, 13.3, 16.1, 16.2 and 18.12 (under which Sections such notices shall only be deemed given when delivered pursuant to a method described in (A)-(D) above), when emailed, to the parties at the following addresses (or at such other address for a party as shall be specified by like notice; provided, that notices of a change of address shall be effective only upon receipt thereof):

 

	
To   Client:
    	
VIVUS, Inc.
    
	
 
    	
1172   Castro St.
    
	
 
    	
Mountain   View, CA 94040
    
	
 
    	
Attn:
    	
Peter   Tam
    
	
 
    	
 
    	
John   L. Slebir, Esq.
    
	
 
    	
Facsimile:   +1 (650) 934-5389
    

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

35

 

	
To   Catalent (as applicable):
    	
Catalent   Pharma Solutions, LLC
    
	
 
    	
1100   Enterprise Drive
    
	
 
    	
Winchester,   KY 40391
    
	
 
    	
Attn:   General Manager
    
	
 
    	
Facsimile:   (859)745-6636
    
	
 
    	
 
    
	
 
    	
 
    
	
With   a copy to:
    	
Catalent   Pharma Solutions
    
	
 
    	
14   Schoolhouse Road
    
	
 
    	
Somerset,   NJ 08873
    
	
 
    	
USA
    
	
 
    	
Attn:   General Counsel (Legal Department)
    
	
 
    	
Facsimile:   (732) 537-6491
    

 

ARTICLE 18

MISCELLANEOUS

 

18.1        Entire Agreement; Amendments.  This Agreement, together with the Quality Agreement, constitutes the entire understanding between the parties, and supersedes any contracts, agreements or understandings (oral or written) of the parties, with respect to the subject matter hereof, including the CDA.  For the avoidance of doubt, the Development Agreement shall remain in full force and effect according to the terms set forth therein and shall not be modified or otherwise affected by this Agreement, except with respect to the confidentiality provisions therein as stated in Section 10.6 above.  No term of this Agreement may be amended except upon written agreement of both parties, unless otherwise expressly provided in this Agreement.

 

18.2        Captions; Certain Conventions.  The captions in this Agreement are for convenience only and are not to be interpreted or construed as a substantive part of this Agreement.  Unless otherwise expressly provided herein or the context of this Agreement otherwise requires, (A) words of any gender include each other gender, (B) words such as “herein”, “hereof”, and “hereunder” refer to this Agreement as a whole and not merely to the particular provision in which such words appear, (C) words using the singular shall include the plural, and vice versa, (D) the words “include(s)” and “including” shall be deemed to be followed by the phrase “but not limited to”, “without limitation” or words of similar import, (E) the word “or” shall be deemed to include the word “and” (e.g., “and/or”) and (F) references to “Article,” “Section,” “subsection,” “clause” or other subdivision, or to an Attachment or other appendix, without reference to a document are to the specified provision or Attachment of this Agreement.  This Agreement shall be construed as if it were drafted jointly by the parties.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

36

 

18.3        Further Assurances.  The parties agree to execute, acknowledge and deliver such further instruments and to take all such other incidental acts as may be reasonably necessary or appropriate to carry out the purpose and intent of this Agreement.

 

18.4        No Waiver.  Failure by either party to insist upon strict compliance with any term of this Agreement in any one or more instances will not be deemed to be a waiver of its rights to insist upon such strict compliance with respect to any subsequent failure.

 

18.5        Severability.  If any term of this Agreement is declared invalid or unenforceable by a court or other body of competent jurisdiction, the remaining terms of this Agreement will continue in full force and effect.

 

18.6        Independent Contractors.  The relationship of the parties is that of independent contractors, and neither party will incur any debts or make any commitments for the other party except to the extent expressly provided in this Agreement.  Nothing in this Agreement is intended to create or will be construed as creating between the parties the relationship of joint ventures, co-partners, employer/employee or principal and agent.  Neither party shall have any responsibility for the hiring, termination or compensation of the other party’s employees or contractors or for any employee benefits of any such employee or contractor.

 

18.7        Successors and Assigns.  This Agreement will be binding upon and inure to the benefit of the parties, and their respective successors and permitted assigns.  This Agreement will not be assignable by either party to any third party without the prior written consent of the other party, except that Client will have the right to assign this Agreement without Catalent’s consent to an entity that acquires all or substantially all of the business or assets of Client to which this Agreement relates.  Similarly, Catalent will have the right to assign this Agreement, in whole or in part, without Client’ consent to an entity that acquires all or substantially all of the business or assets of Catalent or the Catalent business unit responsible for performance of any services under this Agreement, unless: (a) such assignment would result in the transfer of the Processing, Packaging, Validation Services, or Product Maintenance Services activities with respect to the Product to facilities other than those in which such activities are being conducted immediately prior to such proposed assignment, such that Client would be required to modify, change or file an amendment to its regulatory filings for the Product; or (b) the acquiring party is a competitor of Client in the field of obesity or any obesity-related disorder(s) in the Territory.

 

18.8        No Third Party Beneficiaries.  This Agreement shall not confer any rights or remedies upon any person or entity other than the parties named herein and their respective successors and permitted assigns.

 

18.9        Governing Law.  This Agreement shall be governed by and construed under the laws of the State of Delaware, USA, excluding its conflicts of law provisions.  The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

37

 

18.10 Alternative Dispute Resolution.  If any dispute arises between the parties in connection with this Agreement (other than a dispute described in Section 5.2), such dispute shall be presented to the respective presidents or senior executives of Catalent and Client for their consideration and resolution for *** days.  If such parties cannot reach a resolution of the dispute with such *** day period, then such dispute shall be resolved by binding alternative dispute resolution in accordance with the then existing commercial arbitration rules of the Judicial Arbitration and Mediation Services, Inc. (or any successor thereto) (“JAMS”) as modified by this Agreement.  Arbitration shall be conducted by a panel of three (3) arbitrators in ***.  Each Party will nominate one (1) arbitrator, and these arbitrators shall mutually agree on a third arbitrator.  The panel shall engage an independent expert with experience in the subject matter of the dispute to advise the panel.  The parties agree that the decision of the panel shall be the sole, exclusive and binding remedy between them regarding the dispute.  Pending the selection of the arbitrators or pending the panel’s determination of the merits of any dispute, either party may seek appropriate interim or provisional relief from any court of competent jurisdiction as necessary to protect the rights or property of that party.

 

18.11 Prevailing Party.  In any dispute resolution proceeding between the parties in connection with this Agreement as set forth in Section 18.10, the prevailing party will be entitled to recover all costs associated with such proceedings, including its reasonable attorney’s fees, from the other party.

 

18.12 Publicity.  Neither party will make any press release or other public disclosure regarding this Agreement or the transactions contemplated hereby without the other party’s express prior written consent, except as required under Applicable Laws, by any governmental agency or by the rules of any stock exchange on which the securities of the disclosing party are listed, in which case the party required to make the press release or public disclosure shall use commercially reasonable efforts to obtain the approval of the other party (such approval not to be unreasonably withheld) as to the form, nature and extent of the press release or public disclosure prior to issuing the press release or making the public disclosure.  Notwithstanding the foregoing or anything else in this Agreement (including Article 10), Catalent acknowledges that, pursuant to Client’s disclosure obligations as a publicly traded company, Client may file this Agreement with the Securities and Exchange Commission (the “SEC”) (and/or may disclose the material terms of this Agreement in its filings with the SEC), in which case, Client covenants that it will use commercially reasonable efforts to obtain confidential treatment of certain mutually agreed upon terms of this Agreement pursuant to Rule 24b-2 promulgated by the SEC under the Securities Exchange Act of 1934, as amended.

 

18.14 Force Majeure.  Except as to payments required under this Agreement, neither party shall be liable in damages for, nor shall this Agreement be terminable or cancelable by reason of, any delay or default in such party’s performance hereunder if such default or delay is caused by events beyond such party’s reasonable control, including acts of God, law or regulation or other action or failure to act of any government or agency thereof, war or insurrection, civil commotion, destruction of production facilities or materials by earthquake, fire, flood or weather, 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

38

 

labor disturbances, epidemic or failure of suppliers, public utilities or common carriers;  provided, that the party seeking relief under this Section shall immediately notify the other party of such cause(s) beyond such party’s reasonable control.  The party that may invoke this Section shall use commercially reasonable efforts to reinstate its ongoing obligations to the other party as soon as practicable.  If the cause(s) shall continue unabated for ***, then both parties shall meet to discuss and negotiate in good faith what modifications to this Agreement should result from such cause(s).  Notwithstanding the foregoing, in the event that Catalent is the party experiencing any such force majeure event, Client shall not be obligated to exclusively purchase Product from Catalent as set forth in Section 2.2 or 4.1.

 

18.15   Counterparts.  This Agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.  Any photocopy, facsimile or electronic reproduction of the executed Agreement shall constitute an original.

 

[Signature page follows]

 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

39

 

IN WITNESS WHEREOF, the parties have caused their respective duly authorized representatives to execute this Agreement effective as of the Effective Date.

 

	
CATALENT   PHARMA SOLUTIONS, LLC
    	
 
    	
VIVUS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Ian Muir
    	
 
    	
By: 
    	
/s/ Peter Tam
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name: 
    	
Ian Muir
    	
 
    	
Name:
    	
 Peter Tam
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Its: 
    	
President, MRT
    	
 
    	
Its: 
    	
President
    

 

Signature Page to Commercial Manufacturing Agreement

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

ATTACHMENT A

 

VALIDATION SERVICES

 

***

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

ATTACHMENT B

 

SPECIFICATIONS

 

***

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

ATTACHMENT C

 

UNIT PRICING, FEES

 

***

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

ATTACHMENT D

 

FORM OF QUALITY AGREEMENT FOR PROCESSING

 

FORM OF QUALITY AGREEMENT FOR PACKAGING

 

***

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

ATTACHMENT E

 

KEY PERFORMANCE INDICATORS

 

***

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.Exhibit 4.1

 

 

TRUST AGREEMENT

 

by and between

 

HARLEY-DAVIDSON CUSTOMER FUNDING CORP.,

as Trust Depositor,

 

and

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Owner Trustee

 

 

Dated as of July 10, 2012

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
ARTICLE ONE DEFINITIONS
    	
1
    
	
Section 1.01.
    	
Capitalized Terms
    	
1
    
	
Section 1.02.
    	
Other Definitional Provisions
    	
4
    
	
Section 1.03.
    	
Usage of Terms
    	
4
    
	
Section 1.04.
    	
Section References
    	
4
    
	
Section 1.05.
    	
Accounting Terms
    	
4
    
	
ARTICLE TWO ORGANIZATION
    	
4
    
	
Section 2.01.
    	
Name
    	
4
    
	
Section 2.02.
    	
Office
    	
4
    
	
Section 2.03.
    	
Purposes and Powers
    	
5
    
	
Section 2.04.
    	
Appointment of Owner Trustee
    	
6
    
	
Section 2.05.
    	
Initial Capital Contribution of Owner Trust Estate
    	
6
    
	
Section 2.06.
    	
Declaration of Trust
    	
6
    
	
Section 2.07.
    	
Liability of Trust Depositor
    	
6
    
	
Section 2.08.
    	
Title to Trust Property
    	
6
    
	
Section 2.09.
    	
Situs of Trust
    	
7
    
	
Section 2.10.
    	
Representations and Warranties of the Trust Depositor
    	
7
    
	
Section 2.11.
    	
Tax Treatment
    	
8
    
	
Section 2.12.
    	
Texas State Tax Matters
    	
9
    
	
ARTICLE THREE TRUST   CERTIFICATES AND TRANSFER OF INTERESTS
    	
9
    
	
Section 3.01.
    	
Initial Ownership
    	
9
    
	
Section 3.02.
    	
The Trust Certificates
    	
9
    
	
Section 3.03.
    	
Authentication and Delivery of Trust Certificates
    	
9
    
	
Section 3.04.
    	
Registration of Transfer and Exchange of Trust Certificates
    	
10
    
	
Section 3.05.
    	
Mutilated, Destroyed, Lost or Stolen Trust Certificates
    	
12
    
	
Section 3.06.
    	
Person Deemed Owner
    	
12
    
	
Section 3.07.
    	
Access to List of Certificateholders’ Name and Address
    	
13
    
	
Section 3.08.
    	
Maintenance of Office or Agency
    	
13
    
	
Section 3.09.
    	
Trust Certificates
    	
13
    
	
Section 3.10.
    	
Appointment of Paying Agent
    	
13
    
	
Section 3.11.
    	
Ownership by Trust Depositor of Initial Trust Certificates
    	
14
    
	
ARTICLE FOUR ACTIONS BY   OWNER TRUSTEE AND CERTIFICATEHOLDERS
    	
14
    
	
Section 4.01.
    	
Prior Notice to Owners with Respect to Certain Matters
    	
14
    
	
Section 4.02.
    	
Action by Owners with Respect to Certain Matters
    	
15
    
	
Section 4.03.
    	
Action by Owners with Respect to Bankruptcy
    	
15
    
	
Section 4.04.
    	
Restrictions on Owners’ Power
    	
15
    
	
Section 4.05.
    	
Majority of the Trust Certificates Control
    	
16
    
	
ARTICLE FIVE APPLICATION OF   TRUST FUNDS; CERTAIN DUTIES
    	
16
    
	
Section 5.01.
    	
Establishment of Trust Account; Application of Trust Funds
    	
16
    
	
Section 5.02.
    	
Method of Payment
    	
17
    
	
Section 5.03.
    	
Accounting and Reports to the Certificateholders, Owners,   the Internal Revenue Service and Others
    	
17
    
	
Section 5.04.
    	
Signature on Returns; Tax Matters Partner
    	
18
    
	
ARTICLE SIX AUTHORITY AND   DUTIES OF OWNER TRUSTEE
    	
18
    
	
Section 6.01.
    	
General Authority
    	
18
    
	
Section 6.02.
    	
General Duties
    	
18
    
	
Section 6.03.
    	
Action Upon Instruction
    	
19
    
	
Section 6.04.
    	
No Duties Except as Specified in this Agreement or in   Instructions
    	
20
    
	
Section 6.05.
    	
No Action Except Under Specified Documents or Instructions
    	
20
    

 

 

	
Section 6.06.
    	
Restrictions
    	
20
    
	
Section 6.07.
    	
Pennsylvania Motor Vehicle Sales Finance Act Licenses
    	
20
    
	
ARTICLE SEVEN CONCERNING THE   OWNER TRUSTEE
    	
21
    
	
Section 7.01.
    	
Acceptance of Trusts and Duties
    	
21
    
	
Section 7.02.
    	
Furnishing of Documents
    	
22
    
	
Section 7.03.
    	
Representations and Warranties
    	
22
    
	
Section 7.04.
    	
Reliance; Advice of Counsel
    	
23
    
	
Section 7.05.
    	
Not Acting in Individual Capacity
    	
24
    
	
Section 7.06.
    	
Owner Trustee Not Liable for Trust Certificate, Notes or   Contracts
    	
24
    
	
Section 7.07.
    	
Owner Trustee May Own Trust Certificate and Notes
    	
24
    
	
ARTICLE EIGHT COMPENSATION   OF OWNER TRUSTEE
    	
25
    
	
Section 8.01.
    	
Owner Trustee’s Fees and Expenses
    	
25
    
	
Section 8.02.
    	
Indemnification
    	
25
    
	
Section 8.03.
    	
Payments to the Owner Trustee
    	
25
    
	
ARTICLE NINE TERMINATION OF   TRUST AGREEMENT
    	
26
    
	
Section 9.01.
    	
Termination of Trust Agreement
    	
26
    
	
ARTICLE TEN SUCCESSOR OWNER   TRUSTEES AND ADDITIONAL OWNER TRUSTEES
    	
27
    
	
Section 10.01.
    	
Eligibility Requirements for Owner Trustee
    	
27
    
	
Section 10.02.
    	
Resignation or Removal of Owner Trustee
    	
27
    
	
Section 10.03.
    	
Successor Owner Trustee
    	
28
    
	
Section 10.04.
    	
Merger or Consolidation of Owner Trustee
    	
28
    
	
Section 10.05.
    	
Appointment of Co-Trustee or Separate Trustee
    	
29
    
	
ARTICLE ELEVEN MISCELLANEOUS
    	
30
    
	
Section 11.01.
    	
Supplements and Amendments
    	
30
    
	
Section 11.02.
    	
No Legal Title to Trust Estate in Owners
    	
31
    
	
Section 11.03.
    	
Limitations on Rights of Others
    	
31
    
	
Section 11.04.
    	
Notices
    	
31
    
	
Section 11.05.
    	
Severability of Provisions
    	
32
    
	
Section 11.06.
    	
Counterparts
    	
32
    
	
Section 11.07.
    	
Successors and Assigns
    	
32
    
	
Section 11.08.
    	
Covenants of the Trust Depositor
    	
32
    
	
Section 11.09.
    	
No Petition
    	
33
    
	
Section 11.10.
    	
No Recourse
    	
33
    
	
Section 11.11.
    	
Headings
    	
33
    
	
Section 11.12.
    	
Governing Law
    	
33
    
	
Section 11.13.
    	
Trust Certificate Transfer Restrictions
    	
34
    
	
Section 11.14.
    	
Trust Depositor Payment Obligation
    	
34
    

 

	
EXHIBITS
    	
 
    
	
 
    	
 
    
	
Exhibit A   - Form of Certificate of Trust
    	
A-1
    
	
Exhibit B   - Form of Trust Certificate
    	
B-1
    

 

ii

 

TRUST AGREEMENT dated as of July 10, 2012, 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, in connection herewith, the Trust Depositor is willing to assume certain obligations pursuant hereto; and

 

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

 

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

 

ARTICLE ONE

 

DEFINITIONS

 

Section 1.01.                         Capitalized Terms.

 

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

 

“Administration Agreement” means the Administration Agreement, dated as of July 1, 2012, among the Trust, the Trust Depositor, the Indenture Trustee and Harley-Davidson Credit, as administrator.

 

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

 

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

 

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

 

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

 

1

 

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

 

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

 

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

 

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

 

“Class” means all Notes whose form is identical except for variation in denomination, principal amount or owner.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Indenture” means the Indenture, dated as of July 1, 2012, between the Trust and The Bank of New York Mellon Trust Company, N.A.

 

“Owner” means each Holder of a Trust Certificate.

 

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

 

“Owner Trustee Corporate Trust Office” means the office of the Owner Trustee at which its corporate trust business shall be administered, which initially shall be 1100 North Market Street, Wilmington, Delaware 19890-1605 Attn: Corporate Trust Administration, or such other

 

2

 

office at such other address as the Owner Trustee may designate from time to time by notice to the Certificateholder, the Servicer, the Indenture Trustee, the Trust Depositor and Harley-Davidson Credit.

 

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

 

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

 

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

 

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

 

“Sale and Servicing Agreement”  means the Sale and Servicing Agreement, dated as of July 1, 2012, among the Trust, as Issuer, the Trust Depositor, Harley-Davidson Credit, as servicer, and The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee, as the same may be amended or supplemented from time to time.

 

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

 

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

 

“Tax Matters Partner” shall have the meaning provided in Section 5.04(b) 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 trust certificate evidencing the beneficial equity interest of an Owner in the Trust, substantially in the form of Exhibit B hereto.

 

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

 

“Trust Estate” means all right, title and interest of the Trust in and to the property and rights assigned to the Trust pursuant to Article Two of the Sale and Servicing Agreement, all

 

3

 

funds on deposit from time to time in the Trust Accounts and the Certificate Distribution Account, all other property of the Trust from time to time, including any rights of the Owner Trustee and the Trust pursuant to the Sale and Servicing Agreement and the Administration Agreement.

 

Section 1.02.                         Other Definitional Provisions.

 

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

 

Section 1.03.                         Usage of Terms.

 

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

 

Section 1.04.                         Section References.

 

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

 

Section 1.05.                         Accounting Terms.

 

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

 

ARTICLE TWO

 

ORGANIZATION

 

Section 2.01.                         Name.

 

The Trust created hereby shall be known as “Harley-Davidson Motorcycle Trust 2012-1”, 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.

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

The Trust shall not engage in any activities other than in connection with the foregoing.  Nothing contained herein shall be deemed to authorize the Owner Trustee to engage in any business operations or any activities other than those set forth in the introductory sentence of this Section.  Specifically, the Owner Trustee shall have no authority to engage in any business operations, or acquire any assets other than those included in the Trust Estate under Section 1.01, or otherwise vary the assets held by the Trust.  Similarly, the Owner Trustee shall have no discretionary duties

 

5

 

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 the Contracts except as contemplated or permitted by the Indenture or the Sale and Servicing Agreement, 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.

 

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

 

6

 

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.

 

7

 

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

 

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

 

8

 

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.

 

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.

 

Section 3.02.                         The Trust Certificates.

 

The Trust Certificates shall be substantially in the form of Exhibit B hereto and 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 individuals who were, at the time when such signatures were affixed, authorized to sign on behalf of the Owner Trustee shall be a valid and binding obligation of the Trust, notwithstanding that such individuals or any of them have ceased to be so authorized prior to the authentication and delivery of such Trust Certificate or did not hold such offices at the date of such Trust Certificate.  Each Trust Certificate shall be dated the date of its authentication.

 

Section 3.03.                         Authentication and Delivery of Trust Certificates.

 

The Owner Trustee shall cause to be authenticated and delivered upon the order of the Trust Depositor, in exchange for the Contracts and the other Trust Assets, simultaneously with the sale, assignment and transfer to the Trust of the Contracts and other Trust Assets, and the constructive delivery to the Owner Trustee of the Contract Files and the other Trust Assets, a Trust Certificate duly authenticated by the Owner Trustee, evidencing the entire ownership of the Trust.  No Trust Certificate shall be valid for any purpose unless there appears on such Trust

 

9

 

Certificate a certificate of authentication substantially in the form set forth in the form of Trust Certificate attached hereto as Exhibit B, executed by the Owner Trustee or its authenticating agent, by manual signature, and such certificate upon any Trust Certificate shall be conclusive evidence, and the only evidence, that such Trust Certificate has been duly authenticated and delivered hereunder.  Upon issuance, authorization and delivery pursuant to the terms hereof, the Trust Certificates will be entitled to the benefits of this Agreement.

 

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

 

(a)                                  The Certificate Registrar shall keep or cause to be kept, a Certificate Register, subject to such reasonable regulations as it may prescribe.  The Certificate Register shall provide for the registration of the Trust Certificates and transfers and exchanges of the Trust Certificates as provided herein.  The Owner Trustee is hereby initially appointed Certificate Registrar for the purpose of registering the Trust Certificates and transfers and exchanges of the Trust Certificates as herein provided.  In the event that, subsequent to the Closing Date, the Owner Trustee notifies the Servicer that it is unable to act as Certificate Registrar, the Servicer shall appoint another bank or trust company, having an office or agency located in the City of Chicago, Illinois, agreeing to act in accordance with the provisions of this Agreement applicable to it, and otherwise acceptable to the Owner Trustee, to act as successor Certificate Registrar hereunder.

 

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

 

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

 

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

 

10

 

or a Qualified Institutional Buyer.  Prior to any resale, assignment or transfer of a Trust Certificate described in this Section 3.04, each prospective purchaser of a Trust Certificate shall have acknowledged, represented and agreed as follows:

 

(i)                                     It (and any Person for which it holds Trust Certificates) 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.

 

(ii)                                  It (and any Person for which it holds Trust Certificates, collectively for purposes of this Section 3.4(d), a “transferee”) either (A) is not, and will not become, a partnership, S corporation or grantor trust for U.S. federal income tax purposes (or a disregarded entity of any of the foregoing) or (B) is such an entity, but none of the direct or indirect beneficial owners of any of the interests in such transferee have allowed or caused, or will allow or cause, 50% or more (or, if the Owner Trustee has received an Opinion of Counsel in form and substance acceptable to the Trust Depositor that the proposed transfer to such transferee will not cause the Trust to be treated as a publicly traded partnership within the meaning of Section 7704 of the Code, such other percentage as the Owner Trustee may establish prior to the time of such proposed transfer) of the value of such interests in the transferee to be attributable to such transferee’s ownership of Trust Certificates.

 

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

 

(iv)                              It understands that no subsequent transfer of the Trust Certificates (or any interest therein) is permitted unless (A) such transfer is of a Trust Certificate with a Certificate Interest of at least 5%, (B) it causes its proposed transferee to provide to the Owner Trustee and the Trust Depositor a letter substantially in the form of Exhibit C hereto, or such other written statement as the Owner Trustee shall prescribe and (C) the Trust consents in writing to the proposed transfer, which consent shall be granted unless the Owner Trustee determines that such transfer would either create a risk that the Trust would be classified for federal or any applicable state tax purposes as an association (or a

 

11

 

publicly traded partnership) taxable as a corporation; provided, however, that any attempted transfer that would cause the number of beneficial owners 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.

 

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

 

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

 

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

 

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

 

If (i) any mutilated Trust Certificate is surrendered to the Certificate Registrar, or the Certificate Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Trust Certificate, and (ii) there is delivered to the Certificate Registrar and the Owner Trustee such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice that such Trust Certificate has been acquired by a bona fide purchaser, the Owner Trustee on behalf of the Trust shall execute and the Owner Trustee or its authenticating agent shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust Certificate, a new Trust Certificate of like tenor and fractional undivided 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 3.06.                         Person Deemed Owner.

 

Prior to due presentation of a Trust Certificate for registration of transfer, the Owner Trustee, the Certificate Registrar and any of their respective agents may treat the Person in whose name any Trust Certificate is registered as the owner of such Trust Certificate for the

 

12

 

purpose of receiving distributions pursuant to Section 5.01 and for all other purposes whatsoever, and none of the Owner Trustee, the Certificate Registrar, any Paying Agent or any of their respective agents shall be affected by any notice of the contrary.

 

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

 

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

 

Section 3.08.                         Maintenance of Office or Agency.

 

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

 

Section 3.09.                         Trust Certificates.

 

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

 

Section 3.10.                         Appointment of Paying Agent.

 

The Paying Agent shall make distributions to the Certificateholders from the Certificate Distribution Account pursuant to Section 5.01(a) and shall report the amounts of such distributions to the Owner Trustee.  The Paying Agent initially shall be Wilmington Trust,

 

13

 

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

 

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

 

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

 

ARTICLE FOUR

 

ACTIONS BY OWNER TRUSTEE AND 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 at least 30 days before the taking of such action, the Owner Trustee shall have notified the Certificateholders in writing of the proposed action, the Indenture Trustee shall have consented to such action in the event any Notes are outstanding and 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) and 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);

 

14

 

(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 the 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 Owners, to (a) remove the Administrator pursuant to Section 8 of the Administration Agreement, (b) appoint a successor Administrator pursuant to Section 8 of the Administration Agreement, (c) except as expressly provided in the Transaction Documents, sell the Contracts or other Trust Assets 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 assigned by the Owners.

 

Section 4.03.                         Action by Owners with Respect to Bankruptcy.

 

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

 

Section 4.04.                         Restrictions on Owners’ Power.

 

The Owners shall not direct the Owner Trustee to take or to refrain from taking any action if such action or inaction would be contrary to any obligation of the Trust or the Owner Trustee under this Agreement or any of the Transaction Documents or would be contrary to the

 

15

 

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 Certificate 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 Certificate Interests at the time of the delivery of such notice.

 

ARTICLE FIVE

 

APPLICATION OF TRUST FUNDS;
 CERTAIN DUTIES

 

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

 

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

 

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

 

(b)                                 On each Distribution Date, the Paying Agent will distribute to the Certificateholders from amounts on deposit in the Certificate Distribution Account, on a pro rata basis in accordance with their respective Certificate Interests, amounts received pursuant to

 

16

 

Sections 7.05(a)(xi), 7.05(b)(vii) or 7.05(c)(vii) of the Sale and Servicing Agreement with respect to such Distribution Date.

 

(c)                                  On each Distribution Date, the Paying Agent shall send to the Certificateholders the statement or statements provided to the Owner Trustee by the Servicer pursuant to Section 9.01 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 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).

 

Section 5.02.                         Method of Payment.

 

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

 

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

 

The Administrator shall (a) maintain (or cause to be maintained) the books of the Trust on a calendar year basis and the accrual method of accounting, (b) deliver to the Owners, as may be required by the Code and applicable Treasury Regulations, such information as may be required to enable each Owner to prepare its federal and state income tax returns, (c) file such tax returns relating to the Trust and make such elections as from time to time may be required or appropriate under any applicable state or federal statute or any rule or regulation thereunder so as to maintain the federal income tax treatment for the Trust as set forth in Section 2.11, (d) cause such tax returns to be signed in the manner required by law and (e) collect or cause to be collected any withholding tax as described in and in accordance with Section 5.01(d) with respect to income or distributions to Owners.  The Owner Trustee shall elect under Section 1278 of the Code to include in income currently any market discount that accrues with respect to the

 

17

 

Contracts.  If applicable, the Owner Trustee shall not make the election provided under Section 754 or Section 761 of the Code.

 

Section 5.04.                         Signature on Returns; Tax Matters Partner.

 

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

 

(b)                                 If subchapter K of the Code should be applicable to the Trust, the Trust Depositor shall be designated the “tax matters partner” of the Trust pursuant to Section 6231(a)(7)(A) of the Code and applicable Treasury Regulations.

 

ARTICLE SIX

 

AUTHORITY AND DUTIES OF OWNER TRUSTEE

 

Section 6.01.                         General Authority.

 

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

 

Section 6.02.                         General Duties.

 

Subject to the provisions and limitations of Sections 2.03 and 2.06, it shall be the duty of the Owner Trustee to discharge (or cause to be discharged through the Administrator) all of its responsibilities pursuant to the terms of this Agreement and the Transaction Documents to which the Trust is a party and to administer the Trust in the interest of the Owner, 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

 

18

 

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 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

 

19

 

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.

 

Section 6.07.        Pennsylvania Motor Vehicle Sales Finance Act Licenses.

 

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

 

20

 

Section 6.08.        Succession to Rights of the Indenture Trustee.

 

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

 

ARTICLE SEVEN

 

CONCERNING THE OWNER TRUSTEE

 

Section 7.01.        Acceptance of Trusts and Duties.

 

The Owner Trustee accepts the trusts hereby created and agrees to perform its duties hereunder with respect to such trusts but only upon the terms of this Agreement.  The Owner Trustee also agrees to disburse all moneys 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 any Owner;

 

(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

 

21

 

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 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.

 

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 power and authority to execute, deliver and perform its obligations under this Agreement.

 

22

 

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

 

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

 

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

 

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

 

23

 

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

 

Section 7.05.        Not Acting in Individual Capacity.

 

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

 

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

 

The recitals contained herein and in the Trust Certificates (other than the signature and countersignature 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 and countersignature 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 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.

 

24

 

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.

 

ARTICLE EIGHT

 

COMPENSATION OF OWNER TRUSTEE

 

Section 8.01.        Owner Trustee’s Fees and Expenses.

 

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

 

Section 8.02.        Indemnification.

 

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

 

25

 

ARTICLE NINE

 

TERMINATION OF TRUST AGREEMENT

 

Section 9.01.        Termination of Trust Agreement.

 

(a)           This Agreement (other than Article Eight) and the Trust shall terminate and be of no further force or effect upon the earlier of (i) the maturity or other liquidation of the last Contract and the disposition of any amounts received upon liquidation of any property remaining in the Trust, (ii) final distribution by the Owner Trustee of all moneys or other property or proceeds of the Trust Estate in accordance with the terms of the Indenture, the Sale and Servicing Agreement and Article Five and (iii) the expiration of 21 years from the death of the last survivor of the descendants of Joseph P. Kennedy, the late Ambassador of the United States to the Court of St. James’s, living on the date hereof.  The bankruptcy, liquidation, dissolution, death or incapacity of any Owner shall not (i) operate to terminate this Agreement or the Trust, (ii) entitle such Owner’s legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of all or any part of the Trust or Trust Estate or (iii) otherwise affect the rights, obligations and liabilities of the parties hereto.

 

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

 

(c)           Notice of any termination of the Trust, specifying the Distribution Date upon which the 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 at the office of the Paying Agent therein designated, (ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to such Distribution Date is not applicable, payments being made only upon presentation and surrender of the Trust Certificates at the office of the Paying Agent therein specified.  The Owner Trustee shall give such notice to the Certificate Registrar (if other than the Owner Trustee) and the Paying Agent at the time such notice is given to the 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.

 

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

 

26

 

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) having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal or state authorities; and having (or having a parent that has) a rating of at least Baa3 by Moody’s; or (b) which 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 Administrator shall promptly appoint a successor Owner Trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the outgoing Owner Trustee so removed and one copy to the successor Owner Trustee, and shall pay all fees owed to the outgoing Owner Trustee.

 

Any resignation or removal of the Owner Trustee and appointment of a successor Owner Trustee pursuant to any of the provisions of this Section shall not become effective until

 

27

 

acceptance of appointment by the successor Owner Trustee pursuant  to Section 10.03 and payment of all fees and expenses owed to the outgoing Owner Trustee.  The Administrator shall provide notice of such resignation or removal of the Owner Trustee to each Rating Agency.

 

Section 10.03.      Successor Owner Trustee.

 

Any successor Owner Trustee appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to the Administrator, and to its predecessor Owner Trustee, an instrument accepting such appointment under this Agreement, and thereupon the resignation or removal of the predecessor Owner Trustee shall become effective, and such successor Owner Trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor under this Agreement, with like effect as if originally named as Owner Trustee.  The predecessor Owner Trustee shall upon payment of its fees and expenses deliver to the successor Owner Trustee all documents and statements and monies held by it under this Agreement; and the Administrator and the predecessor Owner Trustee shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming in the successor Owner Trustee all such rights, powers, duties and obligations.

 

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

 

Upon acceptance of appointment by a successor Owner Trustee pursuant to this Section, the Administrator shall mail notice thereof to the 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.

 

28

 

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

 

29

 

provided therein, subject to all the provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of, affecting the liability of or affording protection to, the Owner Trustee.  Each such instrument shall be filed with the Owner Trustee and a copy thereof given to the Administrator.

 

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

 

ARTICLE ELEVEN

 

MISCELLANEOUS

 

Section 11.01.      Supplements and Amendments.

 

(a)           The 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 Certificate Interests, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement, or of modifying in any manner the rights of the Noteholders or the Certificateholders; provided, however, that no such amendment shall increase or reduce in any manner the amount of, or accelerate or delay the timing of, (i) 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 Certificateholders’ consent or reduce the aforesaid percentage of the Outstanding Amount of the Notes required to consent to any such amendment, without the consent of all Certificateholders and Noteholders affected.

 

(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,

 

30

 

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.

 

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.

 

Except for Section 2.07, the provisions of this Agreement are solely for the benefit of the Owner Trustee, the Trust Depositor, the Owners, the Administrator and, to the extent expressly provided herein, the Indenture Trustee and the Noteholders, and nothing in this Agreement (other than Section 2.07), 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.

 

31

 

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 Holder thereof.

 

Section 11.06.      Counterparts.

 

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

 

Section 11.07.      Successors and Assigns.

 

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

 

Section 11.08.      Covenants of the Trust Depositor.

 

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

 

32

 

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.

 

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.

 

33

 

Section 11.13.      Trust Certificate Transfer Restrictions.

 

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

 

Section 11.14.      Trust Depositor Payment Obligation.

 

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

 

[signature page follows]

 

34

 

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/ Jennifer A. Luce
    
	
 
    	
Printed   Name: Jennifer A. Luce
    
	
 
    	
Title:   Vice President
    

 

Signature Page to Trust Agreement

 

 

EXHIBIT A

 

FORM OF CERTIFICATE OF TRUST OF

Harley-Davidson Motorcycle Trust 2012-1

 

This Certificate of Trust of Harley-Davidson Motorcycle Trust 2012-1 (the “Trust”), dated July 10, 2012, 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 2012-1.

 

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

 

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

 

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

 

 

EXHIBIT B

 

FORM OF TRUST CERTIFICATE

 

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

 

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

 

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

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2012-1 TRUST CERTIFICATE

 

	
NO.
    	
Certificate Interest:
    	
 
    
	
100%
    	
 
    

 

THIS CERTIFIES THAT                                    is the registered owner of  100% of the non-assessable, fully-paid, fractional undivided beneficial interest in the Harley-Davidson Motorcycle Trust 2012-1 (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 July 10, 2012 (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 July 1, 2012 (the “Sale and Servicing Agreement”), among the Trust, the Trust Depositor, Harley-Davidson Credit Corp. (“Harley-Davidson Credit”), as Servicer (in such capacity, the “Servicer”) and The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee (the “Indenture Trustee”) or (iii) the Indenture, dated as of July 1, 2012 (the “Indenture”), between the Trust and the Indenture Trustee.

 

This Trust Certificate is a duly authorized Trust Certificate designated as “Harley-Davidson Motorcycle Trust 2012-1 Certificate”   (the “Trust Certificate”).  Issued under the Indenture are six 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”, “        % Motorcycle Contract Backed Notes, Class B”, and “        % Motorcycle Contract Backed Notes, Class C” (collectively, the “Notes”).  This Trust Certificate is issued under and is subject to the terms, provisions and conditions of the Trust Agreement, to which Trust Agreement the Holder of this Trust Certificate by virtue of its acceptance hereof assents and by which such Holder is bound.  The property of the Trust includes, among other things, (i) all the right, title and interest of the Trust Depositor in and to the Contracts listed on the List of Contracts delivered on the Closing Date (including, without limitation, all security interests created thereunder), (ii) all rights of the Trust Depositor to payments which are collected pursuant thereto after the Initial Cutoff Date, including any liquidation proceeds therefrom, (iii) all rights of the Trust Depositor under any theft, physical damage, credit life, disability or other individual insurance policy (and rights under a “forced placed” policy, if any), any debt insurance policy or any debt cancellation agreement relating to any such Contract, an Obligor or a Motorcycle securing such Contract, (iv) all security interests in each such Motorcycle, (v) all documents contained in the related Contract Files, (vi) all rights (but not the obligations) of the Trust Depositor under any related motorcycle dealer agreements between dealers (i.e., the originators of certain Contracts) and Harley-Davidson Credit, (vii) all rights of the Trust Depositor in the Lockbox, the Lockbox Account and the related Lockbox Agreement to the extent they relate to the Contracts (but excluding payments received on or before the Cutoff Date), (viii) all rights (but not the obligations) of the Trust Depositor under the Transfer and Sale Agreement, including but not limited to the Trust Depositor’s rights under Article V thereof, (ix) the remittances, deposits and payments made into the Trust Accounts from time to time and amounts in the Trust Accounts from time to time (and any investments of such amounts), (x) all rights of the Trust Depositor to rebates of premiums and other amounts relating to insurance policies, debt cancellation agreements, extended service contracts or other repair agreements and other items financed under such Contracts and (xi) all proceeds and products of the foregoing.

 

Under the Trust Agreement, there will be distributed on each Distribution Date to the person in whose name this Trust Certificate is registered as of the Business Day immediately

 

 

preceding the calendar month in which 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 and the Certificateholders agree not to take any action inconsistent with such intended federal income tax treatment.  Because for federal income tax purposes the Trust will be disregarded as a separate entity, Trust items of income, gain, loss and deduction for any month as determined for federal income tax purposes shall be allocated entirely to the Trust Depositor (or subsequent purchaser of the Trust Certificate) as the sole Certificateholder.

 

Solely in the event the Trust Certificates are held by more than a single Certificateholder, it is the intent of the Trust Depositor, the Servicer and the 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 Certificate 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 registerable in the Certificate Register upon surrender of this Trust Certificate for registration of transfer at the offices or agencies of the Certificate Registrar, accompanied by a written instrument of transfer in form satisfactory to the Owner Trustee and the Certificate Registrar duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Trust Certificates evidencing the same aggregate Certificate Interest in the Trust will be issued to the designated transferee.  The initial Certificate Registrar appointed under the Trust Agreement is the Owner Trustee.

 

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

 

The Trust Depositor shall be liable directly to and will indemnify any injured party or any other creditor of the Trust for all losses, claims, damages, liabilities and expenses of the Trust to the extent that the Trust Depositor would be liable if the Trust were a partnership under the Delaware Revised Uniform Limited Partnership Act in which the Trust Depositor were a general partner; provided, however, that the Trust Depositor shall not be liable for any losses incurred by

 

 

a Certificateholder in the capacity of any investor in the Trust Certificate or a Noteholder in the capacity of an investor in the Notes.  In addition, any third party creditors of the Trust (other than in connection with the obligations described in the immediately preceding sentence for which the Trust Depositor shall not be liable) shall be deemed third party beneficiaries of this paragraph.

 

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 early retirement 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:
    	
 
    	
Harley-Davidson   Motorcycle Trust 2012-1
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
WILMINGTON   TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely as   Owner Trustee
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Authorized Signatory
    

 

OWNER TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

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

 

 

ASSIGNMENT

 

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

 

PLEASE INSERT SOCIAL SECURITY OR

OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

 

 

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

 

 

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

 

 

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

 

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

 

 

EXHIBIT C

 

FORM OF TRANSFEREE CERTIFICATE

 

              , 20   

 

Harley-Davidson Motorcycle Trust 2012-1,

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 Trust Agreement, dated July 10, 2012, 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       % Certificate Percentage Interest Asset Backed Trust Certificates (the “Trust Certificates”) of Harley-Davidson Motorcycle Trust 2012-1 (the “Trust”), a trust formed by the Trust Depositor, we 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 (A) 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 (B) 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 (A) are acquiring the Trust Certificate for the account of            Persons and we will notify the Owner Trustee of any changes in the number of such Persons and (B) understand that any such change in the number of Persons for whose account 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 (A) such transfer is of a Trust Certificate with a Certificate Interest of at least 5%, (B) we cause the proposed transferee to provide to the Owner Trustee and the Trust Depositor a letter substantially in the form of this Exhibit C to the Trust Agreement or such other written statement as the Owner Trustee shall prescribe and (C) the Trust consents in writing to the proposed transfer, which consent shall be granted unless the Owner Trustee determines that such transfer would create a risk that the Trust would be classified for federal or any applicable state tax purposes as an association (or a publicly traded partnership) taxable as a corporation; provided, however, that any attempted transfer that would either cause the number of registered holders of Trust Certificates in the aggregate to exceed 100 or otherwise cause the Trust to become a publicly traded partnership for income tax purposes shall be a void transfer.

 

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

 

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

 

(h)                                 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.

 

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

 

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

 

 

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

 

	
 
    	
 
    	
Very   truly yours,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00206-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00206-of-00352.parquet"}]]