Document:

Exhibit 4.3

 

Execution Copy

	
 
    

 

 

 

ASSET REPRESENTATIONS REVIEW AGREEMENT

 

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2016-A,

 

as Issuer

 

and

 

HARLEY-DAVIDSON CREDIT CORP.,

 

as Servicer

 

and

 

CLAYTON FIXED INCOME SERVICES LLC,

 

as Asset Representations Reviewer

 

 

 

 

Dated as of June 1, 2016

 

 

 

 

	
 
    

 

 

TABLE OF CONTENTS

 

	
ARTICLE I. USAGE AND   DEFINITIONS
    	
1
    
	
Section 1.01
    	
Usage   and Definitions
    	
1
    
	
Section 1.02
    	
Definitions
    	
1
    
	
ARTICLE II. ENGAGEMENT; ACCEPTANCE
    	
2
    
	
Section 2.01
    	
Engagement;   Acceptance
    	
2
    
	
Section 2.02
    	
Confirmation   of Status
    	
2
    
	
ARTICLE III. ASSET REPRESENTATIONS REVIEW   PROCESS
    	
3
    
	
Section 3.01
    	
Review   Notices and Identification of Review Contracts
    	
3
    
	
Section 3.02
    	
Review   Materials
    	
3
    
	
Section 3.03
    	
Performance   of Reviews
    	
3
    
	
Section 3.04
    	
Review   Report
    	
4
    
	
Section 3.05
    	
Review   Representatives
    	
5
    
	
Section 3.06
    	
Dispute   Resolution
    	
5
    
	
Section 3.07
    	
Limitations   on Review Obligations
    	
5
    
	
ARTICLE IV. ASSET REPRESENTATIONS REVIEWER
    	
6
    
	
Section 4.01
    	
Representations   and Warranties of the Asset Representations Reviewer
    	
6
    
	
Section 4.02
    	
Fees   and Expenses
    	
7
    
	
Section 4.03
    	
Limitation   on Liability
    	
8
    
	
Section 4.04
    	
Indemnification   by Asset Representations Reviewer
    	
8
    
	
Section 4.05
    	
Indemnification   of Asset Representations Reviewer
    	
8
    
	
Section 4.06
    	
Inspections   of Asset Representations Reviewer
    	
9
    
	
Section 4.07
    	
Delegation   of Obligations
    	
9
    
	
Section 4.08
    	
Confidential   Information
    	
9
    
	
Section 4.09
    	
Personally   Identifiable Information
    	
11
    
	
ARTICLE V. REMOVAL, RESIGNATION
    	
12
    
	
Section 5.01
    	
Eligibility   of the Asset Representations Reviewer
    	
12
    
	
Section 5.02
    	
Resignation   and Removal of Asset Representations Reviewer
    	
12
    
	
Section 5.03
    	
Successor   Asset Representations Reviewer
    	
13
    
	
Section 5.04
    	
Merger,   Consolidation or Succession
    	
13
    
	
ARTICLE VI. OTHER AGREEMENTS
    	
14
    
	
Section 6.01
    	
Independence   of the Asset Representations Reviewer
    	
14
    
	
Section 6.02
    	
No   Petition
    	
14
    
	
Section 6.03
    	
Limitation   of Liability of Owner Trustee
    	
14
    
	
Section 6.04
    	
Termination   of Agreement
    	
14
    
	
ARTICLE VII. MISCELLANEOUS PROVISIONS
    	
14
    
	
Section 7.01
    	
Amendments
    	
14
    
	
Section 7.02
    	
Assignment;   Benefit of Agreement; Third Party Beneficiaries
    	
15
    
	
Section 7.03
    	
Notices
    	
15
    
	
Section 7.04
    	
GOVERNING   LAW
    	
16
    

 

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Section 7.05
    	
WAIVER   OF JURY TRIAL
    	
16
    
	
Section 7.06
    	
No   Waiver; Remedies
    	
16
    
	
Section 7.07
    	
Severability
    	
16
    
	
Section 7.08
    	
Headings
    	
16
    
	
Section 7.09
    	
Counterparts
    	
16
    

 

Schedule A – Review Materials

Schedule B – Representations, Warranties and Tests

 

2

 

This ASSET REPRESENTATIONS REVIEW AGREEMENT (this “Agreement”), entered into as of the 1st day of June, 2016, by and among HARLEY-DAVIDSON MOTORCYCLE TRUST 2016-A (together with its successors and assigns, the “Issuer”), HARLEY-DAVIDSON CREDIT CORP. (solely in its capacity as Servicer, together with its successor and assigns, the “Servicer”), and CLAYTON FIXED INCOME SERVICES LLC (the “Asset Representations Reviewer”).

 

WHEREAS,  the Issuer will engage the Asset Representations Reviewer to perform reviews of certain Contracts for compliance with certain representations and warranties made with respect thereto; and

 

WHEREAS, the Asset Representations Reviewer desires to perform such reviews of Contracts in accordance with the terms of this Agreement.

 

NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

 

ARTICLE I.

 

USAGE AND DEFINITIONS

 

Section 1.01                              Usage and Definitions.

 

Unless otherwise defined in this Agreement, capitalized terms used herein (including in the preamble above) shall have the meanings assigned to them in the Sale and Servicing Agreement.

 

Section 1.02                              Definitions.

 

Whenever used in this Agreement, the following words and phrases shall have the following meanings:

 

“Annual Fee” has the meaning stated in Section 4.02(a).

 

“Confidential Information” has the meaning stated in Section 4.08(b).

 

“Eligible Representations” shall mean those representations identified within the “Tests” included in Schedule B.

 

“Information Recipients” has the meaning stated in Section 4.08(a).

 

“Indemnified Person” has the meaning stated in Section 4.05(a).

 

“Indenture” means the Indenture, dated as of June 1, 2016, between the Issuer and the Indenture Trustee, as the same may be amended, supplemented or modified from time to time.

 

“Indenture Trustee” means The Bank of New York Mellon Trust Company, N.A., as indenture trustee under the Indenture, and any successor thereto.

 

“Issuer PII” has the meaning stated in Section 4.09(a).

 

“PII” has the meaning stated in Section 4.09(a).

 

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“Review” means the completion by the Asset Representations Reviewer of the procedures listed under “Tests” in Schedule B for each Review Contract as further described in Section 3.03.

 

“Review Contracts” means those Contracts identified by the Servicer as requiring a Review by the Asset Representations Reviewer following receipt of a Review Notice according to Section 3.01.

 

“Review Fee” has the meaning stated in Section 4.02(b).

 

“Review Materials” means the documents, data, and other information required for each “Test” in Schedule A.

 

“Review Notice” means a notice delivered to the Asset Representations Reviewer by the Indenture Trustee pursuant to Section 7.04 of the Indenture.

 

“Review Report” has the meaning stated in Section 3.04.

 

“Sale and Servicing Agreement” means the Sale and Servicing Agreement, dated as of June 1, 2016, between the Issuer, Harley-Davidson Customer Funding Corp., as Trust Depositor, Harley-Davidson Motorcycle Grantor Trust 2016-A, and the Servicer, as the same may be amended, supplemented or modified from time to time.

 

“Tests” mean the procedures listed in Schedule B as applied to the process described in Section 3.03.

 

“Test Complete” has the meeting stated in Section 3.03(c).

 

“Test Fail” has the meaning stated in Section 3.03(a).

 

“Test Pass” has the meaning stated in Section 3.03(a).

 

ARTICLE II.

 

ENGAGEMENT; ACCEPTANCE

 

Section 2.01            Engagement; Acceptance.

 

The Issuer hereby engages Clayton Fixed Income Services LLC to act as the Asset Representations Reviewer for the Issuer.  Clayton Fixed Income Services LLC accepts the engagement and agrees to perform the obligations of the Asset Representations Reviewer on the terms stated in this Agreement.

 

Section 2.02                                    Confirmation of Status.

 

The parties confirm that the Asset Representations Reviewer is not responsible for (a) reviewing the Contracts for compliance with the representations and warranties under the Transaction Documents, except as described in this Agreement, (b) determining whether noncompliance with the representations or warranties constitutes a breach of the Transaction Documents, or (c) determining if any Contract is required to be repurchased.

 

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ARTICLE III.

ASSET REPRESENTATIONS REVIEW PROCESS

 

Section 3.01      Review Notices and Identification of Review Contracts.

 

On receipt of a Review Notice from the Indenture Trustee according to Section 7.04 of the Indenture, the Asset Representations Reviewer will start a Review.  Once the Review Notice is issued, the Servicer will provide the list of Review Contracts to the Asset Representations Reviewer within sixty (60) days.  A “Review Contract” includes each Contract that is 60 days or more delinquent (assuming 30-day months) at the end of the prior month, as determined in accordance with the Servicer’s customary servicing practices.

 

The Asset Representations Reviewer will not be obligated to start a Review until a Review Notice, the related list of Review Contracts, and the initial delivery of the Review Materials as described in Section 3.02 is received.  The Asset Representations Reviewer is not obligated to verify (i) whether the Indenture Trustee properly determined that a Review Notice was required or (ii) the accuracy or completeness of the list of Review Contracts provided by the Servicer.

 

Section 3.02      Review Materials.

 

(a)                               Access to Review Materials.  Within sixty (60) days of the delivery of a Review Notice, the Servicer will provide the Asset Representations Reviewer with access to the Review Materials for all Review Contracts in one or more of the following ways: (i) by providing access to the Servicer’s systems, either remotely or at an office of the Servicer, (ii) by electronic posting to a password-protected website to which the Asset Representations Reviewer has access, (iii) by providing originals or photocopies at an office of the Servicer or (iv) in another manner agreed by the Servicer and the Asset Representations Reviewer.  The Servicer may redact or remove Personally Identifiable Information from the Review Materials without changing the meaning or usefulness of the Review Materials.  The Asset Representations Reviewer shall be entitled to rely in good faith, without independent investigation or verification, that the Review Materials are accurate and complete in all material respects, and not misleading in any material respect.

 

(b)                              Missing or Insufficient Review Materials.  The Asset Representations Reviewer will review the Review Materials to determine if any Review Materials are missing or insufficient for the Asset Representations Reviewer to perform any Test.  If the Asset Representations Reviewer determines any missing or insufficient Review Materials, the Asset Representations Reviewer will notify the Servicer promptly, and in any event no less than twenty (20) days before completing the Review.  The Servicer will have fifteen (15) days to give the Asset Representations Reviewer access to the missing Review Materials or other documents or information to correct the insufficiency.  If the missing Review Materials or other documents have not been provided by the Servicer within fifteen (15) days, the related Review Report will  report a Test Fail for each Test that requires use of the missing or insufficient Review Materials.

 

Section 3.03      Performance of Reviews.

 

(a)                               Test Procedures. For a Review, the Asset Representations Reviewer will perform, for each Review Contract, the procedures listed under “Tests” in Schedule B for each Eligible Representation.  In the course of its review, the Asset Representations Reviewer will use the Review Materials listed in Schedule A.  For each Test and Review Contract, the Asset Representations

 

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Reviewer will determine if the Test has been satisfied (a “Test Pass”) or if the Test has not been satisfied (a “Test Fail”).

 

(b)                              Review Period.  The Asset Representations Reviewer will complete the Review within sixty (60) days of receiving access to the Review Materials.  However, if additional Review Materials are provided to the Asset Representations Reviewer as described in Section 3.02(b), the Review period will be extended for an additional thirty (30) days.

 

(c)                               Completion of Review for Certain Review Contracts.  Following the delivery of the list of the Review Contracts and before the delivery of the Review Report by the Asset Representations Reviewer, the Servicer may notify the Asset Representations Reviewer if a Review Contract is paid in full by the Obligor or purchased from the Issuer in accordance with the terms of the Transaction Documents.  On receipt of such notice, the Asset Representations Reviewer will immediately terminate all Tests of the related Review Contract, and the Review of such Review Contracts will be considered complete (a “Test Complete”).  In this case, the related Review Report will indicate a Test Complete for such Review Contract and the related reason.

 

(d)                              Previously Reviewed Contracts; Duplicative Tests.  If any Review Contract was included in a prior Review, the Asset Representations Reviewer will not conduct additional Tests on such Review Contract, but will include the previously reported Test results in the Review Report for the current Review.  If the same Test is required for more than one representation and warranty, the Asset Representations Reviewer will only perform the Test once for each Review Contract, but will report the results of the Test for each applicable representation and warranty on the Review Report.

 

(e)                               Termination of Review.  If a Review is in process and the Notes will be paid in full on the next Distribution Date, the Servicer or the Administrator will notify the Asset Representations Reviewer no less than ten (10) days before that Distribution Date.  On receipt of such notice, the Asset Representations Reviewer will terminate the Review immediately and will not be obligated to deliver a Review Report.

 

(f)        Review Systems; Personnel.  The Asset Representations Reviewer will maintain business process management and/or other systems necessary to ensure that it can perform each Test and, on execution of this Agreement, will load each Test into these systems. The Asset Representations Reviewer will ensure that these systems allow for each Review Contract and the related Review Materials to be individually tracked and stored as contemplated by this Agreement.  The Asset Representations Reviewer will maintain adequate staff that is properly trained to conduct Reviews as required by this Agreement.

 

Section 3.04      Review Report.

 

Within five (5) days after the end of the applicable Review period under Section 3.03(b), the Asset Representations Reviewer will deliver to the Issuer, the Servicer, the Trust Depositor and the Indenture Trustee a Review Report indicating for each Review Contract whether there was a Test Pass, Test Fail or Test Complete for each related Test.  For each Test Fail or Test Complete, the Review Report will indicate the related reason, including (for example) whether the Review Contract was a Test Fail as a result of missing or incomplete Review Materials.  The Review Report will contain a summary of the Review results to be included in the Issuer’s Form 10-D report for the Collection Period in which the Review Report is received.  The Asset Representations Reviewer will ensure that the Review Report does not contain any PII.  On reasonable request of the Servicer, the Asset Representations Reviewer will provide additional details on the Test results.

 

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Section 3.05      Review Representatives.

 

(a)                               Servicer Representative.  The Servicer will designate one or more representatives who will be available to assist the Asset Representations Reviewer in performing the Review, including responding to requests and answering questions from the Asset Representations Reviewer about access to Review Materials on the Servicer’s originations, receivables or other systems, obtaining missing or insufficient Review Materials and/or providing clarification of any Review Materials or Tests.

 

(b)                              Asset Representations Review Representative. The Asset Representations Reviewer will designate one or more representatives who will be available to the Issuer, the Servicer and the Administrator during the performance of a Review.

 

(c)                               Questions About Review.  The Asset Representations Reviewer will make appropriate personnel available to respond in writing to written questions or requests for clarification of any Review Report from the Indenture Trustee or the Servicer until the earlier of (i) the payment in full of the Notes and (ii) one year after the delivery of the Review Report.  The Asset Representations Reviewer will not be obligated to respond to questions or requests for clarification from Noteholders or any other Person and will direct such Persons to submit written questions or requests to the Indenture Trustee.

 

Section 3.06      Dispute Resolution.

 

If a Review Contract that was the subject of a Review becomes the subject of a dispute resolution proceeding under Section 7.12 of the Sale and Servicing Agreement, the Asset Representations Reviewer will participate in the dispute resolution proceeding on request of a party to the proceeding.  The reasonable out-of-pocket expenses of the Asset Representations Reviewer for its participation in any dispute resolution proceeding will be considered expenses of the requesting party for the dispute resolution and will be paid by a party to the dispute resolution as determined by (i) in the case of arbitration, the arbitrator, and (ii) in the case of mediation, as mutually agreed upon by the parties as part of the mediation.  If not paid by a party to the dispute resolution, the expenses will be reimbursed by the Issuer according to Section 4.02(d) of this Agreement.

 

Section 3.07      Limitations on Review Obligations.

 

(a)                               Review Process Limitations.  The Asset Representations Reviewer will have no obligation (i) to determine  whether a Delinquency Trigger has occurred or whether the required percentage of Noteholders has voted to direct a Review under the Indenture; (ii) to determine which Contracts are subject to a Review, (iii) to obtain or confirm the validity of the Review Materials, (iv) to obtain missing or insufficient Review Materials except as specifically described herein,(v) to take any action or cause any other party to take any action under any of the Transaction Documents to enforce any remedies for breaches of representations or warranties about the Eligible Representations, (vi) to determine the reason for the delinquency of any Review Contract, the creditworthiness of any Obligor, the overall quality of any Review Contract or the compliance by the Servicer with its covenants with respect to the servicing of such Review Contract, or (vii) to establish cause, materiality or recourse for any failed Test as described in Section 3.03.

 

(b)                              Testing Procedure Limitations.  The Asset Representations Reviewer will only be required to perform the “Tests” listed under Schedule B, and will not be obligated to perform additional procedures on any Review Contract or to provide any information other than a Review Report.  However, the Asset Representations Reviewer may provide additional information in a 

 

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Review Report about any Review Contract that it determines in good faith to be material to the Review.

 

(c)                               Maintenance of Review Materials.  It will maintain copies of any Review Materials, Review Reports and other documents relating to a Review, including internal correspondence and work papers, for a period of two years after the delivery of any Review Report.

 

ARTICLE IV.

ASSET REPRESENTATIONS REVIEWER

 

Section 4.01                  Representations and Warranties of the Asset Representations Reviewer.

 

The Asset Representations Reviewer hereby makes the following representations and warranties as of the Closing Date:

 

(a)                               Organization and Qualification.  The Asset Representations Reviewer is duly organized and validly existing as a limited liability company in good standing under the laws of State of Delaware.  The Asset Representations Reviewer is qualified as a foreign limited liability company in good standing and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of its properties or the conduct of its activities requires the qualification, license or approval, unless the failure to obtain the qualifications, licenses or approvals would not reasonably be expected to have a material adverse effect on the Asset Representations Reviewer’s ability to perform its obligations under this Agreement.

 

(b)                              Power, Authority and Enforceability.  The Asset Representations Reviewer has the power and authority to execute, deliver and perform its obligations under this Agreement.  The Asset Representations Reviewer has authorized the execution, delivery and performance of this Agreement.  This Agreement is the legal, valid and binding obligation of the Asset Representations Reviewer enforceable against the Asset Representations Reviewer, except as may be limited by insolvency, bankruptcy, reorganization or other laws relating to the enforcement of creditors’ rights or by general equitable principles.

 

(c)                               No Conflicts and No Violation.  The completion of the transactions  contemplated by this Agreement and the performance of the Asset Representations Reviewer’s obligations under this Agreement will not (i) conflict with, or be a breach or default under, any indenture, loan agreement, guarantee or similar document under which the Asset Representations Reviewer is a debtor or guarantor, (ii) result in the creation or imposition of a Lien on the properties or assets of the Asset Representations Reviewer under the terms of any indenture, loan agreement, guarantee or similar document, (iii) violate the organizational documents of the Asset Representations Reviewer or (iv) violate a law or, to the Asset Representations Reviewer’s knowledge, an order, rule or regulation of a federal or State court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Asset Representations Reviewer or its property that applies to the Asset Representations Reviewer, which, in each case, would reasonably be expected to have a material adverse effect on the Asset Representations Reviewer’s ability to perform its obligations under this Agreement.

 

(d)                              No Proceedings.  To the Asset Representations Reviewer’s knowledge, there are no proceedings or investigations pending or threatened in writing before a federal or State court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Asset Representations Reviewer or its properties (i) asserting the invalidity of this Agreement, (ii) 

 

6

 

seeking to prevent the completion of the transactions contemplated by this Agreement or (iii) seeking any determination or ruling that would reasonably be expected to have a material adverse effect on the Asset  Representations Reviewer’s ability to perform its obligations under, or the validity or enforceability of, this Agreement.

 

(e)                               Eligibility.  The Asset Representations Reviewer meets the eligibility requirements in Section 5.01, and will notify the Issuer and the Servicer promptly if it no longer meets, or reasonably expects that it will no longer meet, the eligibility requirements in Section 5.01.

 

Section 4.02                  Fees and Expenses.

 

(a)                               Annual Fee.  As compensation for its activities hereunder, the Asset Representations Reviewer shall be entitled to receive an annual fee (the “Annual Fee”) with respect to each Annual Period prior to the termination of the Issuer, in an amount equal to $7,500.00.  The Annual Fee will be paid by the Servicer on the Closing Date and on each anniversary of the Closing Date until this Agreement is terminated.

 

(b)                              Review Fee.  Following the completion of a Review and the delivery of the related Review Report pursuant to Section 3.04, or the termination of a Review according to Section 3.03(e), and the delivery to the Servicer of a detailed invoice, the Asset Representations Reviewer will be entitled to a fee of $200.00 for each Review Contract for which the Review was started (the “Review Fee”).  However, no Review Fee will be charged for any Review Contract (i) which was included in a prior Review, (ii) for which no Tests were completed prior to the Asset Representations Reviewer being notified of a termination of the Review according to Section 3.03(c) or Section 3.03(e), or (iii) due to missing or insufficient Review Materials under Section 3.02(b).

 

(c)                               Reimbursement of Travel Expenses.  If the Servicer provides access to the Review Materials at one of its properties, the Servicer will reimburse the Asset Representations Reviewer for its reasonable travel expenses incurred in connection with the Review upon receipt of a detailed invoice.

 

(d)                              Dispute Resolution Expenses.  If the Asset Representations Reviewer participates in a dispute resolution proceeding under Section 3.06 of this Agreement and its reasonable out-of-pocket expenses for participating in the proceeding are not paid by a party to the dispute resolution within ninety (90) days after the end of the proceeding, the Servicer will reimburse the Asset Representations Reviewer for such expenses upon receipt of a detailed invoice.

 

(e)                               Payment of Invoices.  When applicable pursuant to this Section 4.02 and Section 4.05, the Asset Representations Reviewer will invoice the Servicer at the notices address set forth in Section 11.04 of the Sale and Servicing Agreement, and all such invoices are payable within thirty (30) days of receipt.  In the event fees, expenses and indemnities of the Asset Representations Reviewer are not paid by the Servicer within thirty (30) days following the Servicer’s receipt of an invoice, the Asset Representations Reviewer will submit invoices to the Issuer (with a copy to the Administrator) at the notices address set forth in Section 11.04 of the Sale and Servicing Agreement, and the Issuer shall or will cause the Administrator to, pay all such invoices up to a maximum amount of $200,000 per year according to the priority of payments described in Section 7.05 of the Sale and Servicing Agreement on the payment date following the month in which the invoice was received by the Issuer. However, if a Review is terminated according to Section 3.03(e), the Asset Representations Reviewer must submit its invoice to the Administrator for fees, expenses and indemnities remaining unpaid no later than ten (10) Business Days before the final payment date to be reimbursed on such final payment date.  The Servicer acknowledges and agrees that its obligation to 

 

7

 

reimburse the Asset Representations Reviewer for its fees and expenses pursuant to this Agreement shall not be limited to or reduced by any reduction in Available Amounts on deposit in the related Collection Account.  For the avoidance of doubt, the aggregate limit on the fees, expenses and indemnities of the Asset Representations Reviewer specified  in Section 7.05 of the Sale and Servicing Agreement shall not be applied to amounts payable by the Servicer to the Asset Representations Reviewer pursuant to this Section 4.02.

 

Section 4.03      Limitation on Liability.

 

The Asset Representations Reviewer will not be liable to any Person for any action taken, or not taken, under this Agreement or for errors in judgment.  However, the Asset Representations Reviewer will be liable for its willful misconduct, bad faith or negligence in performing its obligations under this Agreement.  The Asset Representations Reviewer will not be liable for any errors in any review materials relied on by it to perform a review or for the noncompliance or breach of any representation made about the Contracts.  In no event will the Asset Representations Reviewer be liable for special, indirect or consequential losses or damages (including lost profit), even if the Asset Representations Reviewer has been advised of the likelihood of the loss or damage and regardless of the form of action.

 

Section 4.04      Indemnification by Asset Representations Reviewer.

 

The Asset Representations Reviewer will indemnify each of the Issuer, the Underlying Trust, the Underlying Trustee, the Seller, the Servicer, the Administrator, the Owner Trustee and the Indenture Trustee and their respective directors, officers, employees and agents for all fees, expenses, losses, damages and liabilities resulting from (a) the willful misconduct, bad faith or negligence of the Asset Representations Reviewer in performing its obligations under this Agreement and (b) the Asset Representations Reviewer’s breach of any of its representations or warranties in this Agreement.  The Asset Representations Reviewer’s obligations under this Section 4.04 will survive the termination of this Agreement, the termination of the Issuer and the resignation or removal of the Asset Representations Reviewer.

 

Section 4.05      Indemnification of Asset Representations Reviewer.

 

(a)                               Indemnification.  The Administrator, will, or will cause the Issuer to, indemnify the Asset Representations Reviewer and its officers, directors, employees and agents (each, an “Indemnified Person”), for all damages and liabilities resulting from the performance of its obligations under this Agreement (including the fees and expenses of defending itself against any loss, damage or liability), but excluding any damage or liability resulting from (i) the Asset Representations Reviewer’s willful misconduct, bad faith or negligence or (ii) the Asset Representations Reviewer’s breach of any of its representations or warranties in this Agreement.

 

(b)                              Proceedings.  Promptly on receipt by an Indemnified Person of notice of a Proceeding against it, the Indemnified Person will, if a claim is to be made under Section 4.05(a), notify the Issuer and the Administrator of the Proceeding.  The Servicer may participate in and assume the defense and settlement of a Proceeding at its expense.  If the Servicer notifies the Indemnified Person of its intention to assume the defense of the Proceeding with counsel reasonably satisfactory to the Indemnified Person, and so long as the Servicer assumes the defense of the Proceeding in a manner reasonably satisfactory to the Indemnified Person, the Servicer will not be liable for fees and expenses of counsel to the Indemnified Person unless there is a conflict between the interests of the Servicer or the Issuer, as applicable, and an Indemnified Person.  If there is a 

 

8

 

conflict, the Servicer will, or will cause the Issuer to, pay for the reasonable fees and expenses of separate counsel to the Indemnified Person.  No settlement of a Proceeding may be made without the approval of the Servicer and the Indemnified Person, which approval will not be unreasonably withheld, conditioned or delayed.

 

(c)       Survival of Obligations.  The Servicer’s obligations under this Section 4.05 will survive the resignation or removal of the Asset Representations Reviewer and the termination of this Agreement. The Servicer acknowledges and agrees that its obligation to indemnify the Asset Representations Reviewer shall not be limited to or reduced by any reduction in Available Amounts on deposit in the related Collection Account.  For the avoidance of doubt, the aggregate limit on the fees, expenses and indemnities of the Asset Representations Reviewer specified in Section 7.05 of the Sale and Servicing Agreement shall not be applied to amounts payable by the Servicer to the Asset Representations Reviewer pursuant to this Section 4.05.

 

Section 4.06                  Inspections of Asset Representations Reviewer.

 

The Asset Representations Reviewer agrees that, with reasonable advance notice not more than once during any year, it will permit authorized representatives of the Issuer, the Servicer or the Administrator, during the Asset Representations Reviewer’s normal business hours, to examine and review the books of account, records, reports and other documents and materials of the Asset Representations Reviewer relating to (a) the performance of the Asset Representations Reviewer’s obligations under this Agreement, (b) payments of fees and expenses of the Asset Representations Reviewer for its performance and (c) a claim made by the Asset Representations Reviewer under this Agreement.  In addition, the Asset Representations Reviewer will permit the Issuer’s, the Servicer’s or the Administrator’s representatives to make copies and extracts of any of those documents and to discuss them with the Asset Representations Reviewer’s officers and employees.  Each of the Issuer, the Servicer and the Administrator will, and will cause its authorized representatives to, hold in confidence the information except if disclosure may be required by law or if the Issuer, the Servicer or the Administrator reasonably determines that it is required to make the disclosure under this Agreement or the other Transaction Documents.  The Asset Representations Reviewer will maintain all relevant books, records, reports and other documents and materials for a period of at least two years after the termination of its obligations under this Agreement.

 

Section 4.07                  Delegation of Obligations.  The Asset Representations Reviewer may not delegate or subcontract its obligations under this Agreement to any Person without the consent of the Issuer and the Servicer, which consent will not be unreasonably withheld or delayed.

 

Section 4.08                  Confidential Information.

 

(a)       Treatment.  The Asset Representations Reviewer agrees to hold and treat Confidential Information given to it under this Agreement in confidence and under the terms and conditions of this Section 4.08, and will implement and maintain safeguards to further assure the confidentiality of the Confidential Information.  The Confidential Information will not, without the prior consent of the Issuer and the Servicer, be disclosed or used by the Asset Representations Reviewer, or its officers, directors, employees, agents, representatives or affiliates, including legal counsel (collectively, the “Information Recipients”) other than for the purposes of performing Reviews of Review Contracts or performing its obligations under this Agreement.  The Asset Representations Reviewer agrees that it will not, and will cause its Affiliates to not (i) purchase or sell securities issued by the Issuer or its Affiliates or special purpose entities on the basis of Confidential Information or (ii) use the Confidential Information for the preparation of research reports, newsletters or other publications or similar communications.

 

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(b)      Definition.  “Confidential Information” means oral, written and electronic materials (irrespective of its source or form of communication) furnished before, on or after the date of this Agreement to the Asset Representations Reviewer for the purposes contemplated by this Agreement, including:

 

(i)                                  lists of Review Contracts and any related Review Materials;

 

(ii)                              origination and servicing guidelines, policies and procedures, and form contracts; and

 

(iii)                          notes, analyses, compilations, studies or other documents or records prepared by the Servicer, which contain information supplied by or on behalf of the Servicer or its representatives.

 

However, Confidential Information will not include information that (A) is or becomes generally available to the public other than as a result of disclosure by the Information Recipients, (B) was available to, or becomes available to, the Information Recipients on a non-confidential basis from a Person or entity other than the Issuer or the Servicer before its disclosure to the Information Recipients who, to the knowledge of the Information Recipient is not bound by a confidentiality agreement with the Issuer or the Servicer and is not prohibited from transmitting the information to the Information Recipients, (C) is independently developed by the Information Recipients without the use of the Confidential Information, as shown by the Information Recipients’ files and records or other evidence in the Information Recipients’ possession or (D) the Issuer or the Servicer provides permission to the applicable Information Recipients to release.

 

(c)       Protection.  The Asset Representations Reviewer will take reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of Confidential Information, including those measures that it takes to protect its own confidential information and not less than a reasonable standard of care.  The Asset Representations Reviewer acknowledges that Personally Identifiable Information is also subject to the additional requirements in Section 4.09.

 

(d)      Disclosure.  If the Asset Representations Reviewer is required by applicable law, regulation, rule or order issued by an administrative, governmental, regulatory or judicial authority to disclose part of the Confidential Information, it may disclose the Confidential Information.  However, before a required disclosure, the Asset Representations Reviewer, if permitted by law, regulation, rule or order, will use its reasonable efforts to provide the Issuer and the Servicer with notice of the requirement and will cooperate, at the Servicer’s expense, in the Issuer’s and the Servicer’s pursuit of a proper protective order or other relief for the disclosure of the Confidential Information.  If the Issuer or the Servicer is unable to obtain a protective order or other proper remedy by the date that the information is required to be disclosed, the Asset Representations Reviewer will disclose only that part of the Confidential Information that it is advised by its legal counsel it is legally required to disclose.

 

(e)       Responsibility for Information Recipients.  The Asset Representations Reviewer will be responsible for a breach of this Section 4.08 by its Information Recipients.

 

(f)        Violation.  The Asset Representations Reviewer agrees that a violation of this Agreement may cause irreparable injury to the Issuer and the Servicer and the Issuer and the Servicer may seek injunctive relief in addition to legal remedies.  If an action is initiated by the Issuer or the Servicer to enforce this Section 4.08, the prevailing party will be reimbursed for its fees and expenses, including reasonable attorney’s fees, incurred for the enforcement.

 

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Section 4.09                  Personally Identifiable Information.

 

(a)       Definitions.  “Personally Identifiable Information” or “PII” means information in any format about an identifiable individual, including, name, address, phone number, e-mail address, account number(s), identification number(s), any other actual or assigned attribute associated with or  identifiable to an individual and any information that when used separately or in combination with other information could identify an individual.  “Issuer PII” means PII furnished by the Issuer, the Servicer or their Affiliates to the Asset Representations Reviewer and PII developed or otherwise collected or acquired by the Asset Representations Reviewer in performing its obligations under this Agreement.

 

(b)      Use of Issuer PII.  The Issuer does not grant the Asset Representations Reviewer any rights to Issuer PII except as provided in this Agreement.  The Asset Representations Reviewer will use Issuer PII only to perform its obligations under this Agreement or as specifically directed in writing by the Issuer and will only reproduce Issuer PII to the extent necessary for these purposes.  The Asset Representations Reviewer must comply with all laws applicable to PII, Issuer PII and the Asset Representations Reviewer’s business, including any legally required codes of conduct, including those relating to privacy, security and data protection.  The Asset Representations Reviewer will protect and secure Issuer PII.  The Asset Representations Reviewer will implement privacy or data protection policies and procedures that comply with applicable law and this Agreement.  The Asset Representations Reviewer will implement and maintain reasonable and appropriate practices, procedures and systems, including administrative, technical and physical safeguards to (i) protect the security, confidentiality and integrity of Issuer PII, (ii) ensure against anticipated threats or hazards to the security or integrity of Issuer PII, (iii) protect against unauthorized access to or use of Issuer PII and (iv) otherwise comply with its obligations under this Agreement.  These safeguards include a written data security plan, employee training, information access controls, restricted disclosures, systems protections (e.g., intrusion protection, data storage protection and data transmission protection) and physical security measures.

 

(c)       Additional Limitations.  In addition to the use and protection requirements described in Section 4.09(b), the Asset Representations Reviewer’s disclosure of Issuer PII is also subject to the following requirements:

 

(i)                                  The Asset Representations Reviewer will not disclose Issuer PII to its personnel or allow its personnel access to Issuer PII except (A) for the Asset Representations Reviewer personnel who require Issuer PII to perform a Review, (B) with the prior consent of the Issuer or (C) as required by applicable law.  When permitted, the disclosure of or access to Issuer PII will be limited to the specific information necessary for the individual to complete the assigned task.  The Asset Representations Reviewer will inform personnel with access to Issuer PII of the confidentiality requirements in this Agreement and train its personnel with access to Issuer PII on the proper use and protection of Issuer PII.

 

(ii)                              The Asset Representations Reviewer will not sell, disclose, provide or exchange Issuer PII with or to any third party without the prior consent of the Issuer.

 

(d)      Notice of Breach.  The Asset Representations Reviewer will notify the Issuer promptly in the event of an actual or reasonably suspected security breach, unauthorized access, misappropriation or other compromise of the security, confidentiality or integrity of Issuer PII and, where applicable, immediately take action to prevent any further breach.

 

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(e)       Return or Disposal of Issuer PII.  Except where return or disposal is prohibited by applicable law, promptly on the earlier of the completion of the Review or the request of the Issuer, all Issuer PII in any medium in the Asset Representations Reviewer’s possession or under its control will be (i) destroyed in a manner that prevents its recovery or restoration or (ii) if so directed by the Issuer, returned to the Issuer without the Asset Representations Reviewer retaining any actual or recoverable copies, in both cases, without charge to the Issuer.  Where the Asset Representations Reviewer retains Issuer PII, the Asset Representations Reviewer will limit the Asset Representations Reviewer’s further use or disclosure of Issuer PII to that required by applicable law.

 

(f)        Compliance; Modification.  The Asset Representations Reviewer will cooperate with and provide information to the Issuer regarding the Asset Representations Reviewer’s compliance with this Section 4.09.  The Asset Representations Reviewer and the Issuer agree to modify this Section 4.09 as necessary for either party to comply with applicable law.

 

(g)       Audit of Asset Representations Reviewer.  The Asset Representations Reviewer will permit the Issuer and its authorized representatives to audit the Asset Representations Reviewer’s compliance with this Section 4.09 during the Asset Representations Reviewer’s normal business hours on reasonable advance notice to the Asset Representations Reviewer, and not more than once during any year unless circumstances necessitate additional audits.  The Issuer agrees to make reasonable efforts to schedule any audit described in this Section 4.09 with the inspections described in Section 4.06.  The Asset Representations Reviewer will also permit the Issuer during normal business hours on reasonable advance written notice to audit any service providers used by the Asset Representations Reviewer to fulfill the Asset Representations Reviewer’s obligations under this Agreement.

 

(h)      Affiliates and Third Parties.  If the Asset Representations Reviewer processes the PII of the Issuer’s Affiliates or a third party when performing a Review, and if such Affiliate or third party is identified to the Asset Representations Reviewer, such Affiliate or third party is an intended third-party beneficiary of this Section 4.09, and this Agreement is intended to benefit the Affiliate or third party.  The Affiliate or third party may enforce the PII related terms of this Section 4.09 against the Asset Representations Reviewer as if each were a signatory to this Agreement.

 

ARTICLE V.

 

REMOVAL, RESIGNATION

 

Section 5.01      Eligibility of the Asset Representations Reviewer.

 

The Asset Representations Reviewer must be a Person who (a) is not Affiliated with the Sponsor, the Trust Depositor, the Servicer, the Indenture Trustee, the Owner Trustee or any of their Affiliates and (b) was not, and is not Affiliated with a Person that was, hired by the Sponsor or any underwriter to perform any due diligence on the Contracts prior to the Closing Date.

 

Section 5.02      Resignation and Removal of Asset Representations Reviewer.

 

(a)                               No Resignation.  The Asset Representations Reviewer will not resign as Asset Representations Reviewer unless it determines it is legally unable to perform its obligations under this Agreement.  In such event, the Asset Representations Reviewer will deliver a notice of its resignation to the Issuer and the Servicer, together with an Opinion of Counsel supporting its determination.

 

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(b)                              Removal.  If any of the following events occur, the Issuer, by notice to the Asset Representations Reviewer, may remove the Asset Representations Reviewer and terminate its rights and obligations under this Agreement:

 

(i)                      the Asset Representations Reviewer no longer meets the eligibility requirements in Section 5.01;

 

(ii)                  the Asset Representations Reviewer breaches of any of its representations, warranties, covenants or obligations in this Agreement; or

 

(iii)              an Insolvency Event of the Asset Representations Reviewer occurs.

 

(c)                               Notice of Resignation or Removal.  The Issuer will notify the Servicer, the Owner Trustee and the Indenture Trustee of any resignation or removal of the Asset Representations Reviewer.  Any resignation, removal or substitution of the Asset Representations Reviewer will be reported on the Form 10-D for that month.

 

(d)                              Continue to Perform After Resignation or Removal.  No resignation or removal of the Asset Representations Reviewer will be effective, and the Asset Representations Reviewer will continue to perform its obligations under this Agreement, until a successor Asset Representations Reviewer has accepted its engagement according to Section 5.03(b).

 

Section 5.03                  Successor Asset Representations Reviewer .

 

(a)                               Engagement of Successor Asset Representations Reviewer.  Following the resignation or removal of the Asset Representations Reviewer, the Issuer will engage a successor Asset Representations Reviewer who meets the eligibility requirements of Section 5.01.

 

(b)                              Effectiveness of Resignation or Removal.  No resignation or removal of the Asset Representations Reviewer will be effective until the successor Asset Representations Reviewer has executed and delivered to the Issuer and the Servicer an agreement accepting its engagement and agreeing to perform the obligations of the Asset Representations Reviewer under this Agreement or entering into a new agreement with the Issuer on substantially the same terms as this Agreement.

 

(c)                               Transition and Expenses.  If the Asset Representations Reviewer resigns or is removed, the Asset Representations Reviewer will cooperate with the Issuer and the Servicer and take all actions reasonably requested to assist the Issuer in making an orderly transition of the Asset Representations Reviewer’s rights and obligations under this Agreement to the successor Asset Representations Reviewer.  The Asset Representations Reviewer will pay the reasonable expenses of transitioning the Asset Representations Reviewer’s obligations under this Agreement and preparing the successor Asset Representations Reviewer to take on the obligations on receipt of an invoice with reasonable detail of the expenses from the Issuer and the Servicer or the successor Asset Representations Reviewer.

 

Section 5.04                  Merger, Consolidation or Succession.  Any Person (a) into which the Asset Representations Reviewer is merged or consolidated, (b) resulting from any merger or consolidation to which the Asset Representations Reviewer is a party or (c) succeeding to the business of the Asset Representations Reviewer, if that Person meets the eligibility requirements in Section 5.01, will be the successor to the Asset Representations Reviewer under this Agreement.  Such Person will execute and deliver to the Issuer, the Servicer and the Administrator an agreement to assume the Asset 

 

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Representations Reviewer’s obligations under this Agreement (unless the assumption happens by operation of law).

 

ARTICLE VI.

OTHER AGREEMENTS

 

Section 6.01      Independence of the Asset Representations Reviewer.

 

The Asset Representations Reviewer will be an independent contractor and will not be subject to the supervision of the Issuer for the manner in which it accomplishes the performance of its obligations under this Agreement.  Unless expressly authorized by the Issuer, the Asset Representations Reviewer will have no authority to act for or represent the Issuer and will not be considered an agent of the Issuer.  Nothing in this Agreement will make the Asset Representations Reviewer and the Issuer members of any partnership, joint venture or other separate entity or impose any liability as such on any of them. In no event shall the Indenture Trustee be responsible for monitoring the performance by the Asset Representations Reviewer of its obligations under this Agreement.

 

Section 6.02                  No Petition.

 

Each of the parties agrees that, before the date that is one year and one day (or, if longer, any applicable preference period) after payment in full of all securities issued by the Seller, the Issuer or by a trust for which the Seller was a depositor, it will not start or pursue against, or join any other Person in starting or pursuing against the Seller or the Issuer, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings under any bankruptcy or similar law.  This Section 6.02 will survive the termination of this Agreement.

 

Section 6.03                  Limitation of Liability of Owner Trustee .

 

This Agreement has been signed on behalf of the Issuer by Wilmington Trust, National Association, not in its individual capacity but solely in its capacity as Owner Trustee of the Issuer.  In no event will Wilmington Trust, National Association in its individual capacity or a beneficial owner of the Issuer be liable for the Issuer’s obligations under this Agreement.  For all purposes under this Agreement, the Owner Trustee will be subject to, and entitled to the benefits of, the Trust Agreement.

 

Section 6.04                  Termination of Agreement.

 

This Agreement will terminate, except for the obligations under Section 4.04, on the earlier of (a) the payment in full of all outstanding Notes and the satisfaction and discharge of the Indenture and (b) the date the Issuer is terminated under the Trust Agreement.

 

ARTICLE VII.

MISCELLANEOUS PROVISIONS

 

Section 7.01                  Amendments.

 

(a)                               The parties may amend this Agreement:

 

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(i)          to clarify an ambiguity, correct an error or correct or supplement any term of this Agreement that may be defective or inconsistent with the other terms of this Agreement or to provide for, or facilitate the acceptance of this Agreement by, a successor Asset Representations Reviewer, in each case without the consent of the Noteholders or any other Person;

 

(ii)      to add, change or eliminate terms of this Agreement, in each case without the consent of the Noteholders or any other Person, if the Administrator delivers an Officer’s Certificate to the Issuer, the Owner Trustee and the Indenture Trustee stating that the amendment will not have a material adverse effect on the Noteholders; or

 

(iii)  to add, change or eliminate terms of this Agreement for which an Officer’s Certificate is not or cannot be delivered under Section 7.01(a)(ii), with the consent of a majority of the principal amount of the Notes of the Controlling Class then outstanding, acting together as a single class.

 

Section 7.02                  Assignment; Benefit of Agreement; Third Party Beneficiaries.

 

(a)                               Assignment.  Except as stated in Section 5.04, this Agreement may not be assigned by the Asset Representations Reviewer without the consent of the Issuer and the Servicer.

 

(b)                              Benefit of Agreement; Third-Party Beneficiaries.  This Agreement is for the benefit of and will be binding on the parties and their permitted successors and assigns.  The Owner Trustee and the Indenture Trustee, for the benefit of the Noteholders, will be third-party beneficiaries of this Agreement and may enforce this Agreement against the Asset Representations Reviewer and the Servicer.  No other Person will have any right or obligation under this Agreement.

 

Section 7.03                  Notices.

 

(a)                               Notices to Parties.  All notices, requests, demands, consents, waivers or other communications to or from the parties must be in writing and will be considered given:

 

(i)          for overnight mail, on delivery or, for registered first class mail, postage prepaid, three (3) days after deposit in the mail;

 

(ii)      for a fax, when receipt is confirmed by telephone, reply email or reply fax from the recipient;

 

(iii)  for an email, when receipt is confirmed by telephone or reply email from the recipient; and

 

(iv)  for an electronic posting to a password-protected website to which the recipient has access, on delivery of an email (without the requirement of confirmation of receipt) stating that the electronic posting has occurred.

 

(b)                              Notice Addresses.  Any notice, request, demand, consent, waiver or other communication will be addressed as stated in the Sale and Servicing Agreement or the Administration Agreement, as applicable, or to another address as a party may give by notice to the other parties.

 

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Section 7.04                  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

Section 7.05                  WAIVER OF JURY TRIAL.  EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN LEGAL PROCEEDING RELATING TO THIS AGREEMENT.

 

Section 7.06                  No Waiver; Remedies.  No party’s failure or delay in exercising a power, right or remedy under this Agreement will operate as a waiver.  No single or partial exercise of a power, right or remedy will preclude any other or further exercise of the power, right or remedy or the exercise of any other power, right or remedy.  The powers, rights and remedies under this Agreement are in addition to any powers, rights and remedies under law.

 

Section 7.07                  Severability.  If a part of this Agreement is held invalid, illegal or unenforceable, then it will be deemed severable from the remaining Agreement and will not affect the validity, legality or enforceability of the remaining Agreement.

 

Section 7.08                  Headings.  The headings in this Agreement are included for convenience and will not affect the meaning or interpretation of this Agreement.

 

Section 7.09                  Counterparts.  This Agreement may be executed in multiple counterparts. Each counterpart will be an original and all counterparts will together be one document.

 

[Remainder of Page Left Blank]

 

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IN WITNESS WHEREOF, the Issuer, the Servicer, the Administrator and the Asset Representations Reviewer have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the date first above written.

 

	
 
    	
HARLEY-DAVIDSON   MOTORCYCLE TRUST 2016-A, as 
    
	
 
    	
 
    	
Issuer
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Wilmington   Trust, National Association, not in its individual capacity but solely on   behalf of the Issuer as Owner Trustee under the Trust Agreement
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeanne M. Oller
    
	
 
    	
 
    	
Name: Jeanne   M. Oller
    
	
 
    	
 
    	
Title: Vice   President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
HARLEY-DAVIDSON   CREDIT CORP., as Servicer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   James Darrell Thomas
    
	
 
    	
 
    	
Name:   James Darrell Thomas
    
	
 
    	
 
    	
Title:   Vice President, Treasurer and Assistant Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CLAYTON   FIXED INCOME SERVICES LLC,
    
	
 
    	
 
    	
as   Asset Representations Reviewer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert A. Harris
    
	
 
    	
 
    	
Name: Robert   A. Harris
    
	
 
    	
 
    	
Title: Secretary
    

 

Asset Representations Review Agreement

 

 

Schedule A

 

Review Materials

 

“Review Materials” means, with respect to each Review Contract, electronic copies of:

 

(a)       The Contract, including any modification agreement or correction notices to the Contract completed before the Cutoff Date, as applicable

 

(b)      The List of Approved Contract Forms

 

(c)       Title Documents, including certificates of title, e-titles, applications for title or other evidence showing the security interest in the financed Motorcycle

 

(d)      The Data Tape as of the Cutoff Date

 

(e)       Servicing System Records

 

(f)        Such other documentation or information (whether tangible or electronic, and including, without limitation, screen prints or reports of the Servicer’s receivables and securitization systems) as the Servicer, as the case may be, may maintain and which the Servicer shall have determined to be relevant to any Test with respect to such Review Contract.

 

 

Schedule B

 

Representations and Warranties and Tests

 

Representation

 

(a)       Payments. Except for a payment that is not more than 29 days delinquent as of the Cutoff Date, no payment default exists on the Contract.

 

 

Review Materials

 

Servicing System Records

 

 

Tests

 

i)               Review Servicing System Records and confirm the Contract was not more than 29 days delinquent as of the Cutoff Date

ii)           If step (i) is confirmed, then Test Pass

 

 

Representation

 

(b)      No Waivers. As of the Cutoff Date, no material term of the Contract has been affirmatively amended or modified, except amendments and modifications indicated in the Servicer’s servicing system or in the Contract File.

 

 

Review Materials

 

Contract

Data Tape

Servicing System Records

 

 

Tests

 

i)               Compare the Data Tape to the Contract and confirm there is no indication of modifications or amendments to the following contract terms:

a)            APR

b)           Original number of scheduled payments

c)            Monthly payment amount

d)           Total amount financed

ii)           If modifications or amendments are observed, review the Contact File and Servicing System Records and confirm modifications or amendments were noted

iii)       If Steps (i) and (ii) are confirmed, then Test Pass

 

 

Representation

 

(c)       Binding Obligation. The Contract is in a form of contract that includes rights and remedies allowing the holder to enforce the obligation and realize on the Motorcycle and represents the legal, valid and binding payment obligation of the Obligor, enforceable in all material respects by the holder of the Contract, except as may be limited by bankruptcy, insolvency, reorganization or other laws relating to the enforcement of creditors’ rights or by general equitable principles and consumer protection laws.

 

Review Materials

 

Contract

List of Approved Contract Forms

 

Tests

 

i)               Review the Contract form number and/or revision date and confirm it is on the List of Approved Contract Forms

ii)           Confirm the Obligor(s) signed the Contract

iii)       If Steps (i) and (ii) are confirmed, then Test Pass

 

 

Representation

 

(d)      No Defenses. As of the Cutoff Date, no right of rescission, setoff, counterclaim or defense asserted or threatened with respect to such Contract was indicated in the Servicer’s servicing system or related Contract File.

 

Review Materials

 

Servicing System Records

 

Tests

 

i)               Review the Servicing System Records and confirm there is no evidence of litigation or other attorney involvement as of the Cutoff Date

ii)           If step (i) is confirmed, then Test Pass

 

 

Representation

 

(e)       Insurance. The terms of the Contract require that for the term of such Contract the Motorcycle securing such Contract will be covered by physical damage insurance.

 

Review Materials

 

Contract

List of Approved Contract Forms

 

Tests

 

i)               Review the Contract form number and/or revision date and confirm it is on the List of Approved Contract Forms

ii)           If step (i) is confirmed, then Test pass

 

 

Representation

 

(f)        Origination. The Contract (i) was originated by Eaglemark Savings Bank in the regular course of its business, (ii) was fully and properly executed by the parties thereto, and (iii) has been purchased by Seller in the regular course of its business.

 

Review Materials

 

Contract

 

Tests

 

i)               Review the Contract and confirm Eaglemark Savings Bank is listed as lender

ii)           Review the Contract and confirm it was signed by the Obligor(s)

iii)       Review the Contract and confirm the form of Contract contains language regarding the automatic assignment to the Seller

iv)       If Steps (i) through (iii) are confirmed, then Test Pass

 

 

Representation

 

(g)       Compliance with Law. At the time it was originated, the Contract complied in all material respects with all requirements of law in effect at the time.

 

Review Materials

 

Contract

List of Approved Contract Forms

 

Tests

 

i)               Review contract form number and/or revision date and confirm it is on the List of Approved Contract Forms

ii)           If Step (i) is confirmed, then Test Pass

 

 

Representation

 

(h)      Contract in Force. As of the Cutoff Date, the Servicer’s servicing system indicates that the Contract was not satisfied or subordinated in whole or in part or rescinded, and the related Motorcycle securing the Contract has not been released from the lien of the Contract in whole or in part.

 

Review Materials

 

Servicing System Records

 

Tests

 

i)               Review the Servicing System Records and confirm the Contract was an active account as of the Cutoff Date

ii)           Review the Servicing System Records and confirm there is no indication the Contract was rescinded or subordinated in whole or in part as of the Cutoff Date

iii)       Review the Servicing System Records and confirm there is no indication the Motorcycle securing the Contract has been released from the lien of the Contract in whole or in part as of the Cutoff Date

iv)       If steps (i) through (iii) are confirmed, then Test Pass

 

 

Representation

 

(i)          Valid Security Interest. The Contract has created or shall create a valid, binding and enforceable first priority security interest in favor of the Seller in the Motorcycle, except as to priority for any Permitted Liens, which security interest is assignable by the Seller to the Trust Depositor.

 

Review Materials

 

Contract

Title Documents

List of Approved Contract Forms

 

Tests

 

i)               Review the Title Documents and confirm they identify Eaglemark Savings Bank (ESB), Eaglemark Savings Bank and/or its assigns or the Seller, or an accepted name variation, as the first lienholder

ii)           Confirm the Obligor name(s) on the Contract, taking into account any amendments or correction notices, are consistent with the names on the Title Documents

iii)       Confirm the vehicle identification number on the Contract, taking into account any amendments or correction notices, matches the vehicle identification number on the Title Documents

iv)       Review Contract form number and/or revision date and confirm it is on the List of Approved Contract Forms to confirm assignability

v)           If steps (i) through (iv) are confirmed, then Test Pass

 

 

Representation

 

(j)          No Defaults.  As of the Cutoff Date, no default, breach, violation or event permitting acceleration was reported in the Servicer’s servicing system with respect to any Contract.  Seller has not waived any such default, breach, violation or event permitting acceleration.  As of the Cutoff Date, no Motorcycle was in repossession.

 

 

Review Materials

 

Servicing System Records

 

Tests

 

i)               Review the Servicing System Records and confirm, as of the Cutoff Date, there is no evidence of a continuing condition which would constitute a default, breach, violation or event permitting acceleration

ii)           Review the Servicing System Records and confirm, as of the Cutoff Date, there is no evidence the Seller waived any default, breach, violation or event permitting acceleration

iii)       Review the Servicing System Records and confirm the financed Motorcycle was not in repossession as of the Cutoff Date

iv)       If steps (i) through (iii) are confirmed, then Test Pass

 

 

Representation

 

(k)      Installments.  The Contract has a fixed Contract Rate and provides for monthly payments of principal and interest which, if timely made, would fully amortize the loan on a simple interest basis over its term.

 

 

Review Materials

 

Contract

 

Tests

 

i)               Review the Contract and confirm it specifies a fixed Contact Rate

ii)           Review the Contract and confirm it specifies monthly payments of principal and interest (excluding periods of deferral of first payment)

iii)       Confirm the Contract is a simple interest contract

iv)       From the Truth in Lending Disclosure section of the Contract, calculate the product of the Number of Payments and the Amount of Payments, together with any first and last scheduled payments (if applicable), and confirm this amount equals the Total of Payments amount

v)           If steps (i) through (iv) are confirmed, then Test Pass

 

 

Representation

 

(l)          Owner of Record.  The Seller is identified as the “owner of record” on all electronic chattel paper relating to the Contract, and the Seller has “control,” as defined in Section 9-105 of the UCC, of all electronic chattel paper relating to the Contract. The Contract does not have any marks or notations indicating that it has been pledged, assigned or otherwise conveyed by the Seller to any Person other than the Trust Depositor.

 

 

Review Materials

 

Contract

Servicing System Records

 

Tests

 

i)               If the Contract is electronic chattel paper, confirm the Contract’s authoritative copy is held in the trust’s electronic vault

ii)           Confirm the Contract does not have any marks or notations indicating that it has been pledged, assigned or otherwise conveyed by the Seller to any Person other than the Trust Depositor

iii)       If steps (i) through (ii) are confirmed, then Test Pass

 

 

Representation

 

(m)  Good Title.  Immediately before the sale and assignment under the Transfer and Sale Agreement and under this Agreement, the Seller has good and marketable title to the Contract, free and clear of any encumbrance or lien, except for any Permitted Liens, and, immediately upon the transfer of the Contract by the Seller, the Trust Depositor shall have good and marketable title to the Contract free and clear of any encumbrance or lien, except for any Permitted Liens, and, immediately upon the transfer of the Contract by the Trust Depositor, the Underlying Trust shall have good and marketable title to the Contract free and clear of any encumbrance, equity, loan, pledge, charge, claim or security interest, other than any Permitted Liens.

 

 

Review Materials

 

Contract

List of Approved Contract Forms

Title Documents

Servicing System Records

 

Tests

 

i)               Review the Contract form number and/or revision date and confirm it is on the List of Approved Contract Forms

ii)           Observe the Title Documents and confirm they report Eaglemark Savings Bank (ESB), Eaglemark Savings Bank and/or its assigns or Seller, or an accepted name variation, as the first lien holder

iii)       Observe the Servicing System Records for the Contract and confirm they indicate that the Contract has been marked as sold, the pool number corresponds to the securitization transaction and the sale date corresponds to the Cutoff Date

iv)       If steps (i) and (iii) are confirmed, then Test Pass

 

 

Representation

 

(n)      No Government Obligors. The Obligor is not the United States government or an agency, authority, instrumentality or other political subdivision of the United States government.

 

 

Review Materials

 

Contract

 

Tests

 

i)               Review the Contract and confirm the Obligor’s name indicates a natural person or, if it does not, confirm internet search results indicate the Obligor(s) is not a federal or state government, agency, department subdivision or instrumentality

ii)           If step (i) is confirmed, then Test Pass

 

 

Representation

 

(o)                                    Obligor Bankruptcy.  At the Cutoff Date, the Obligor was not the subject of a bankruptcy proceeding, according to the records in Servicer’s servicing system.

 

 

Review Materials

 

Servicing System Records

 

Tests

 

i)               Observe the Servicing System Records and confirm the Obligor was not the subject of a bankruptcy proceeding as of the Cutoff Date

ii)           If step (i) is confirmed, then Test Pass

 

 

Representation

 

(p)      Chattel Paper; One Original.  The Contract is either “tangible chattel paper” or “electronic chattel paper”.  The Contract is evidenced by either (i) one executed tangible record constituting or forming a part of the Contract that is “tangible chattel paper”, or (ii) a single “authoritative copy” of the electronic record constituting or forming a part of the Contract that is “electronic chattel paper”. Terms in quotation marks have the meaning assigned to them in the applicable UCC.

 

 

Review Materials

 

Contract

Contract File

 

Tests

 

i)               Confirm there is a signature of the appropriate Obligor(s)on the Contract

ii)           If the Contract constitutes “electronic chattel paper,” then confirm the Contract is the “Authoritative Copy”

iii)       If the Contract constitutes “tangible chattel paper,” confirm the Contract File does not contain more than one executed version of the final Contract

iv)       If steps (i) through (iii) are confirmed, then Test PassExhibit 10.1

 

Execution Copy

	
 
    	
 
    

 

 

 

TRANSFER AND SALE AGREEMENT

 

 

by and between

 

 

HARLEY-DAVIDSON CREDIT CORP.,

as Seller

 

 

and

 

 

HARLEY-DAVIDSON CUSTOMER FUNDING CORP.,

as Purchaser

 

 

 

Dated as of June 1, 2016

 

 

	
 
    	
 
    

 

 

TABLE OF CONTENTS

 

 

	
ARTICLE I DEFINITION
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 1.01.
    	
GENERAL
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II TRANSFER OF CONTRACTS;   ASSIGNMENT OF AGREEMENT
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 2.01.
    	
CLOSING
    	
1
    
	
SECTION 2.02.
    	
CONDITIONS TO THE CLOSING
    	
2
    
	
SECTION 2.03.
    	
ASSIGNMENT OF AGREEMENT
    	
3
    
	
 
    	
 
    	
 
    
	
ARTICLE III REPRESENTATIONS AND WARRANTIES
    	
3
    
	
 
    	
 
    
	
SECTION 3.01.
    	
REPRESENTATIONS AND WARRANTIES   REGARDING SELLER
    	
3
    
	
SECTION 3.02.
    	
REPRESENTATIONS AND WARRANTIES   REGARDING EACH CONTRACT
    	
4
    
	
SECTION 3.03.
    	
REPRESENTATIONS AND WARRANTIES   REGARDING THE CONTRACTS IN THE AGGREGATE
    	
6
    
	
SECTION 3.04.
    	
REPRESENTATIONS AND WARRANTIES   REGARDING THE CONTRACT FILES
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE IV PERFECTION OF TRANSFER AND   PROTECTION OF SECURITY INTERESTS
    	
8
    
	
 
    	
 
    
	
SECTION 4.01.
    	
CUSTODY OF CONTRACTS
    	
8
    
	
SECTION 4.02.
    	
FILING
    	
8
    
	
SECTION 4.03.
    	
NAME CHANGE OR RELOCATION
    	
8
    
	
SECTION 4.04.
    	
COSTS AND EXPENSES
    	
8
    
	
SECTION 4.05
    	
SALE TREATMENT
    	
8
    
	
SECTION 4.06
    	
SEPARATENESS FROM TRUST   DEPOSITOR
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE V REMEDIES UPON MISREPRESENTATION
    	
9
    
	
 
    	
 
    
	
SECTION 5.01.
    	
REPURCHASES OF CONTRACTS FOR   BREACH OF REPRESENTATIONS AND WARRANTIES
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE VI INDEMNITIES
    	
10
    
	
 
    	
 
    
	
SECTION 6.01.
    	
SELLER INDEMNIFICATION
    	
10
    
	
SECTION 6.02.
    	
LIABILITIES TO OBLIGORS
    	
10
    
	
SECTION 6.03.
    	
TAX INDEMNIFICATION
    	
10
    
	
SECTION 6.04.
    	
OPERATION OF INDEMNITIES
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE VII MISCELLANEOUS
    	
11
    
	
 
    	
 
    
	
SECTION 7.01.
    	
PROHIBITED TRANSACTIONS WITH   RESPECT TO THE TRUST
    	
11
    
	
SECTION 7.02.
    	
MERGER OR CONSOLIDATION
    	
11
    
	
SECTION 7.03.
    	
TERMINATION
    	
11
    
	
SECTION 7.04.
    	
ASSIGNMENT OR DELEGATION BY   SELLER
    	
11
    
	
SECTION 7.05.
    	
AMENDMENT
    	
11
    
	
SECTION 7.06.
    	
NOTICES
    	
12
    
	
SECTION 7.07.
    	
MERGER AND INTEGRATION
    	
12
    
	
SECTION 7.08.
    	
HEADINGS
    	
12
    
	
SECTION 7.09.
    	
GOVERNING LAW
    	
12
    
	
SECTION 7.10.
    	
NO BANKRUPTCY PETITION
    	
13
    

 

EXHIBITS

 

	
Exhibit A
    	
 
    	
Form of   Assignment
    
	
Exhibit B
    	
 
    	
Form of   Officer’s Certificate
    

 

- i  -

 

THIS TRANSFER AND SALE AGREEMENT, dated as of June 1, 2016 (this “Agreement”), is made by and between Harley-Davidson Credit Corp., a Nevada corporation, as seller hereunder (together with its successors and assigns “Harley-Davidson Credit” or “Seller”), and Harley-Davidson Customer Funding Corp., a Nevada corporation and wholly-owned subsidiary of Seller (together with its successors and assigns “Trust Depositor”), as purchaser hereunder.

 

WHEREAS, in the regular course of its business, Seller purchases and services motorcycle promissory notes and security agreements from Eaglemark Savings Bank, each of which contracts provides for installment payment obligations by or on behalf of the retailer’s customer/purchaser and grants a security interest in the related motorcycle in order to secure such obligations;

 

WHEREAS, Seller and Trust Depositor wish to set forth the terms and conditions pursuant to which Trust Depositor will acquire the “Contract Assets,” as hereinafter defined; and

 

WHEREAS, Trust Depositor intends concurrently with its purchase of Contract Assets hereunder to convey all right, title and interest in such Contract Assets to Harley-Davidson Motorcycle Grantor Trust 2016-A (the “Underlying Trust”) pursuant to the Sale and Servicing Agreement dated as of June 1, 2016 by and among Trust Depositor, Harley-Davidson Credit, as Servicer, the Underlying Trust, the Trust, as issuer (the “Issuer”), and The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee (as amended, supplemented or otherwise modified from time to time, the “Sale and Servicing Agreement”), executed concurrently herewith;

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter set forth, Seller and Trust Depositor agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01.    General.  Unless otherwise defined in this Agreement, capitalized terms used herein (including in the preamble above) shall have the meanings assigned to them in the Sale and Servicing Agreement.

 

ARTICLE II

 

TRANSFER OF CONTRACTS; ASSIGNMENT OF AGREEMENT

 

Section 2.01.    Closing.  Subject to and upon the terms and conditions set forth in this Agreement, Seller hereby sells, transfers, assigns, sets over and otherwise conveys to Trust Depositor, in consideration of Trust Depositor’s payment of a purchase price in cash of $301,811,247.54 (less fees and expenses in connection with the offering and sale of the Notes and certain deposits to the Reserve Fund on the Closing Date), (i) all the right, title and interest of Seller 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 Seller to payments which are collected pursuant thereto after the Cutoff Date, including any liquidation proceeds therefrom, (iii) all rights of Seller under any theft, physical damage, credit life, disability or other individual insurance policy (and rights under a “forced placed” policy, if any), any debt insurance policy or any debt cancellation agreement relating to any such Contract, an Obligor or a Motorcycle securing such Contract, (iv) all security interests in each such Motorcycle, (v) all documents contained in the related Contract Files, (vi) all rights of Seller in the Lockbox, Lockbox Account and related Lockbox Agreement to the extent they relate to the Contracts (but 

 

 

excluding payments received on or before the Cutoff Date), (vii) all rights (but not the obligations) of the Seller under any motorcycle dealer agreements between the dealers and the Seller, (viii) all rights of Seller 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 (ix) all proceeds and products of the foregoing (items (i) - (ix) being collectively referred to herein as the “Contract Assets”).  Although Seller and Trust Depositor agree that any such transfer is intended to be a sale of ownership in the Contract Assets, rather than the mere granting of a security interest to secure a borrowing, in the event such transfer is deemed to be of a mere security interest to secure indebtedness, Seller shall be deemed to have granted Trust Depositor a perfected first priority security interest in such Contract Assets and this Agreement shall constitute a security agreement under applicable law.  If such transfer is deemed to be the mere granting of a security interest to secure a borrowing, Trust Depositor may, to secure Trust Depositor’s own borrowing under the Sale and Servicing Agreement (to the extent that the transfer of the Contract Assets thereunder is deemed to be a mere granting of a security interest to secure a borrowing) repledge and reassign (i) all or a portion of the Contract Assets pledged to Trust Depositor and not released from the security interest of this Agreement at the time of such pledge and assignment, and (ii) all proceeds thereof.  Such repledge and reassignment may be made by Trust Depositor with or without a repledge and reassignment by Trust Depositor of its rights under this Agreement, and without further notice to or acknowledgment from Seller.  Seller waives, to the extent permitted by applicable law, all claims, causes of action and remedies, whether legal or equitable (including any right of setoff), against Trust Depositor or any assignee of Trust Depositor relating to such action by Trust Depositor in connection with the transactions contemplated by the Sale and Servicing Agreement.  To the extent the cash purchase price for the Contract Assets sold by the Seller to the Trust Depositor is less than the Pool Balance as of the Cutoff Date, the difference shall be deemed to be a capital contribution by the Seller to the Trust Depositor.

 

Section 2.02.    Conditions to the Closing.  On or before the Closing Date, Seller shall deliver or cause to be delivered to Trust Depositor each of the documents, certificates and other items as follows:

 

(a)        The List of Contracts, certified by the Chairman of the Board, President or any Vice President of Seller together with an Assignment substantially in the form attached as Exhibit A hereto.

 

(b)        A certificate of an officer of Seller substantially in the form of Exhibit B hereto.

 

(c)        An opinion of counsel for Seller substantially in form and substance reasonably satisfactory to the Underwriters (and including as an addressee thereof each Rating Agency).

 

(d)        A letter or letters from Ernst & Young LLP, or another nationally recognized accounting firm, addressed to Seller, Trust Depositor and the Underwriters and stating that such firm has reviewed a sample of the Contracts and performed specific procedures for such sample with respect to certain contract terms and identifying those Contracts which do not so conform.

 

(e)        Copies of resolutions of the Board of Directors of Seller or of the Executive Committee of the Board of Directors of Seller approving the execution, delivery and performance of this Agreement and the transactions contemplated hereunder, certified in each case by the Secretary or an Assistant Secretary of Seller.

 

(f)        Officially certified recent evidence of due incorporation and good standing of Seller under the laws of Nevada.

 

- 2  -

 

(g)        A UCC financing statement naming Seller as debtor, naming Trust Depositor as assignor secured party, naming the Underlying Trust as secured party and identifying the Contract Assets as collateral, in proper form for filing with the appropriate office in Nevada; a UCC financing statement naming Trust Depositor as debtor and naming the Underlying Trust as secured party and identifying the Trust Corpus as collateral, in proper form for filing with the appropriate office in Nevada; and a UCC financing statement naming the Issuer as debtor, naming the Indenture Trustee as secured party, and identifying the Collateral as collateral, in proper form for filing with the appropriate office in Delaware.

 

(h)        An Officer’s Certificate from Seller certifying that the Seller, on or prior to the Closing Date, has indicated in its computer files, in accordance with its customary standards, policies and procedures, that the Contracts have been conveyed to the Trust Depositor pursuant to this Agreement.

 

(i)         The documents, certificates and other items described in Section 2.02 of the Sale and Servicing Agreement, to the extent not already described above.

 

Section 2.03.    Assignment of Agreement.  Trust Depositor has the right to assign its interest under this Agreement to the Underlying Trust as may be required to effect the purposes of the Sale and Servicing Agreement, without further notice to, or consent of, Seller, and the Underlying Trust shall succeed to such of the rights of Trust Depositor hereunder as shall be so assigned.  Seller acknowledges that pursuant to the Sale and Servicing Agreement, Trust Depositor will assign all of its right, title and interest in and to the Contract Assets and its right to exercise the remedies created by Section 5.01 hereof for breaches of representations and warranties of Seller contained in Sections 3.01, 3.02, 3.03 and 3.04 hereof to the Underlying Trust.  Seller agrees that, upon such assignments to the Underlying Trust, such representations will run to and be for the benefit of the Underlying Trust and the Underlying Trust may enforce directly, without joinder of Trust Depositor, the obligations of Seller set forth herein.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

Seller makes the following representations and warranties, on which Trust Depositor will rely in purchasing the Contract Assets on the Closing Date and concurrently reconveying the same to the Underlying Trust.  Such representations speak as of the execution and delivery of this Agreement and as of the Closing Date, but shall survive the sale, transfer and assignment of the Contracts to the Underlying Trust.  The repurchase obligation of Seller set forth in Section 5.01 below and in Section 7.08 of the Sale and Servicing Agreement constitutes the sole remedy available for a breach of a representation or warranty of Seller set forth in Section 3.02, 3.03 or 3.04 of this Agreement.

 

Section 3.01.    Representations and Warranties Regarding Seller.  Seller represents and warrants, as of the execution and delivery of this Agreement and as of the Closing Date, that:

 

(a)        Organization and Good Standing.  Seller is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has the corporate power to own its assets and to transact the business in which it is currently engaged.  Seller is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the character of the business transacted by it or properties owned or leased by it requires such qualification and in which the failure so to qualify would have a material 

 

- 3  -

 

adverse effect on the business, properties, assets, or condition (financial or otherwise) of Seller or Trust Depositor.

 

(b)        Authorization; Binding Obligation.  Seller has the power and authority to make, execute, deliver and perform this Agreement and the other Transaction Documents to which the Seller is a party and all of the transactions contemplated under this Agreement and the other Transaction Documents to which the Seller is a party, and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement and the other Transaction Documents to which the Seller is a party.  This Agreement and the other Transaction Documents to which the Seller is a party constitute the legal, valid and binding obligations of Seller enforceable in accordance with their terms, except as enforcement of such terms may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and by the availability of equitable remedies.

 

(c)        No Consent Required.  Seller is not required to obtain the consent of any other party or any consent, license, approval or authorization from, or registration or declaration with, any governmental authority, bureau or agency in connection with the execution, delivery, performance, validity or enforceability of this Agreement and the other Transaction Documents to which the Seller is a party.

 

(d)        No Violations.  Seller’s execution, delivery and performance of this Agreement and the other Transaction Documents to which the Seller is a party will not violate any provision of any existing law or regulation or any order or decree of any court or the Articles of Incorporation or Bylaws of Seller, or constitute a material breach of any mortgage, indenture, contract or other agreement to which Seller is a party or by which Seller or any of Seller’s properties may be bound.

 

(e)        Litigation.  No litigation or administrative proceeding of or before any court, tribunal or governmental body is currently pending, or to the knowledge of Seller threatened, against Seller or any of its properties or with respect to this Agreement or any other Transaction Document to which the Seller is a party which, if adversely determined, would in the opinion of Seller have a material adverse effect on the business, properties, assets or condition (financial or other) of Seller or the transactions contemplated by this Agreement or any other Transaction Document to which the Seller is a party.

 

(f)        State of Incorporation; Name; No Changes.  Seller’s state of incorporation is the State of Nevada.  Seller’s exact legal name is as set forth in the first paragraph of this Agreement.  Seller has not changed its name whether by amendment of its Articles of Incorporation, by reorganization or otherwise, and has not changed its state of incorporation, within the four months preceding the Closing Date.

 

(g)        Solvency.  The Seller, after giving effect to the conveyances made by it hereunder, is Solvent.

 

Section 3.02.    Representations and Warranties Regarding Each Contract.  Seller represents and warrants as to each Contract as of the execution and delivery of this Agreement and as of the Closing Date, that:

 

- 4  -

 

(a)        Payments.  Except for a payment that is not more than 29 days delinquent as of the Cutoff Date, no payment default exists on the Contract.

 

(b)        No Waivers.  As of the Cutoff Date, no material term of the Contract has been affirmatively amended or modified, except amendments and modifications indicated in the Seller’s servicing system or in the Contract File.

 

(c)        Binding Obligation.  The Contract is in a form of contract that includes rights and remedies allowing the holder to enforce the obligation and realize on the Motorcycle and represents the legal, valid and binding payment obligation of the Obligor, enforceable in all material respects by the Holder of the Contract, except as may be limited by bankruptcy, insolvency, reorganization or other laws relating to the enforcement of creditors’ rights or by general equitable principles and consumer protection laws.

 

(d)        No Defenses.  As of the Cutoff Date, no right of rescission, setoff, counterclaim or defense asserted or threatened with respect to such Contract was indicated in the Seller’s servicing system or related Contract File.

 

(e)        Insurance.  The terms of the Contract require that for the term of such Contract the Motorcycle securing such Contract will be covered by physical damage insurance.

 

(f)        Origination.  The Contract (i) was originated by Eaglemark Savings Bank in the regular course of its business, (ii) was fully and properly executed by the parties thereto, and (iii) has been purchased by Seller in the regular course of its business.

 

(g)        Compliance with Law.  At the time it was originated, the Contract complied in all material respects with all requirements of law in effect at the time.

 

(h)        Contract in Force.  As of the Cutoff Date, the Seller’s servicing system indicates that the Contract was not satisfied or subordinated in whole or in part or rescinded, and the related Motorcycle securing the Contract has not been released from the lien of the Contract in whole or in part.

 

(i)         Valid Security Interest.  The Contract has created or shall create a valid, binding and enforceable first priority security interest in favor of the Seller in the Motorcycle, except as to priority for any Permitted Liens, which security interest is assignable by the Seller to the Purchaser.

 

(j)         No Defaults.  As of the Cutoff Date, no default, breach, violation or event permitting acceleration was reported in the Seller’s servicing system with respect to any Contract.  Seller has not waived any such default, breach, violation or event permitting acceleration.  As of the Cutoff Date, no Motorcycle was in repossession.

 

(k)        Installments.  The Contract has a fixed Contract Rate and provides for monthly payments of principal and interest which, if timely made, would fully amortize the loan on a simple-interest basis over its term.

 

(l)         Owner of Record.  The Seller is identified as the “owner of record” on all electronic chattel paper relating to the Contract, and the Seller has “control,” as defined in Section 9-105 of the UCC, of all electronic chattel paper relating to the Contract. The Contract 

 

- 5  -

 

does not have any marks or notations indicating that it has been pledged, assigned or otherwise conveyed by the Seller to any Person other than the Purchaser.

 

(m)       Good Title.  Immediately before the sale and assignment under this Agreement, the Seller has good and marketable title to the Contract free and clear of any encumbrance, or lien, except for any Permitted Liens, and, immediately upon the transfer of the Contract by the Seller, the Trust Depositor shall have good and marketable title to the Contract free and clear of any encumbrance or lien, except for any Permitted Liens, and, immediately upon the transfer of the Contract by the Trust Depositor, the Underlying Trust shall have good and marketable title to the Contract free and clear of any encumbrance, equity, loan, pledge, charge, claim or security interest, other than any Permitted Liens.

 

(n)        No Government Obligors.  The Obligor is not the United States government or an agency, authority, instrumentality or other political subdivision of the United States government.

 

(o)        Obligor Bankruptcy.  At the Cutoff Date, the Obligor was not the subject of a bankruptcy proceeding, according to the records in Seller’s servicing system.

 

(p)        Chattel Paper; One Original.  The Contract is either “tangible chattel paper” or “electronic chattel paper”.  The Contract is evidenced by either (i) one executed tangible record constituting or forming a part of the Contract that is “tangible chattel paper”, or (ii) a single “authoritative copy” of the electronic record constituting or forming a part of the Contract that is “electronic chattel paper”. Terms in quotation marks have the meaning assigned to them in the applicable UCC.

 

(q)        Selection Criteria.  The Contract is secured by a new or used Motorcycle.  No Contract has a Contract Rate less than 0.990%.  The Contract amortizes the amount financed over an original term no greater than 84 months (excluding periods of deferral of first payment).  The Contract has a Principal Balance of at least $500.00 as of the Cutoff Date.

 

Section 3.03.    Representations and Warranties Regarding the Contracts in the Aggregate.  Seller represents and warrants, as of the execution and delivery of this Agreement and as of the Closing Date, that:

 

(a)        Amounts.  The Pool Balance as of the Cutoff Date equals or exceeds the aggregate principal amount of the Notes on the Closing Date.

 

(b)        Characteristics.  The Contracts have the following characteristics: (i) all the Contracts are secured by Motorcycles; (ii) no Contract has a remaining maturity of more than 80 months; and (iii) the final scheduled payment on the Contract with the latest maturity is due no later than July 28, 2023.  Approximately 76.35% of the Pool Balance as of the Cutoff Date is attributable to loans for purchases of new Motorcycles and approximately 23.65% is attributable to loans for purchases of used Motorcycles.  No Contract was originated after the Cutoff Date.  No Contract has a Contract Rate less than 0.990%.  100% of the Pool Balance as of the Cutoff Date is attributable to loans for purchases of Motorcycles manufactured by Harley-Davidson Motor Company.

 

(c)        Marking Records.  As of the Closing Date, Seller has caused the Computer File relating to the Contracts sold hereunder and concurrently reconveyed by Trust Depositor to the 

 

- 6  -

 

Underlying Trust to be clearly and unambiguously marked to indicate that such Contracts constitute part of the Trust Corpus, are owned by the Underlying Trust.

 

(d)        No Adverse Selection.  No selection procedures adverse to Noteholders have been employed in selecting the Contracts.

 

(e)        True Sale.  The transactions contemplated by this Agreement and the Sale and Servicing Agreement constitute valid sales, transfers and assignments from Seller to Trust Depositor and from Trust Depositor to the Underlying Trust of all of Seller’s right, title and interest in the Contract Assets as of the Closing Date.

 

(f)        All Filings Made.  All filings (including, without limitation, UCC filings) required to be made by any Person and actions required to be taken or performed by any Person in any jurisdiction to give the Underlying Trust a first priority perfected security interest (subject only to Permitted Liens) in the Contracts, the proceeds thereof and the rest of the Collateral have been made, taken or performed.  All financing statements filed or to be filed against the Seller in favor of the Purchaser in connection herewith describing the Contracts contain a statement to the following effect: “A purchase of or security interest in any collateral described in this financing statement, except as provided in the Transfer and Sale Agreement, will violate the rights of the Purchaser.”

 

(g)        List of Contracts.  The information set forth in the List of Contracts is true, complete and correct in all material respects as of the Cutoff Date.

 

(h)        Lockbox Bank.  All Obligors have been instructed to make payments to a Lockbox Account (either directly by remitting payments to a Lockbox, or indirectly by making payments through direct debit, the telephone or the internet to an account of the Servicer which payments will be subsequently transferred from such account to one or more Lockbox Banks), and no person claiming through or under Seller has any claim or interest in a Lockbox Account other than the related Lockbox Bank; provided, however, that other Persons may have an interest in certain other collections therein not related to the Contracts.

 

Section 3.04.    Representations and Warranties Regarding the Contract Files.  Seller represents and warrants, as of the execution and delivery of this Agreement and as of the Closing Date, that:

 

(a)        Possession.  Immediately prior to the Closing Date, the Servicer or its custodian will have possession of each original Contract and the related complete Contract File.  Each of such documents which is required to be signed by the Obligor has been signed by the Obligor in the appropriate spaces.  All blanks on any form have been properly filled in and each form has otherwise been correctly prepared.  The complete Contract File for each Contract currently is in the possession of the Servicer or its custodian.

 

(b)        Bulk Transfer Laws.  The transfer, assignment and conveyance of the Contracts and the Contract Files by Seller pursuant to this Agreement and by Trust Depositor pursuant to the Sale and Servicing Agreement is not subject to the bulk transfer or any similar statutory provisions in effect in any applicable jurisdiction.

 

- 7  -

 

ARTICLE IV

 

PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS

 

Section 4.01.    Custody of Contracts.  The contents of each Contract File shall be held by the Servicer, or its custodian, for the benefit of the Underlying Trust as the owner thereof in accordance with the Sale and Servicing Agreement.

 

Section 4.02.    Filing.  On or prior to the Closing Date, Seller shall cause the UCC financing statements referred to in Section 2.02(g) hereof and in Section 2.02(g) of the Sale and Servicing Agreement to be filed and from time to time Seller shall take and cause to be taken such actions and execute such documents as are necessary or desirable or as Trust Depositor or the Underlying Trust may reasonably request to perfect and protect the Trust Depositor’s and the Underlying Trust’s ownership interest in the Contract Assets against all other persons, including, without limitation, the filing of financing statements, amendments thereto and continuation statements, the execution of transfer instruments and the making of notations on or taking possession of all records or documents of title.  The Seller authorizes the Trust Depositor to file financing statements describing the Contract Assets as collateral.  All financing statements filed or to be filed against the Seller in favor of the Trust Depositor or the Underlying Trust in connection herewith describing the Contract Assets as collateral shall contain a statement to the following effect: “A purchase of or security interest in any collateral described in this financing statement, except as permitted in the Transfer and Sale Agreement or Sale and Servicing Agreement, will violate the rights of the Secured Party.”

 

Section 4.03.    Name Change or Relocation.  (a) During the term of this Agreement, Seller shall not change its name, identity or structure or state of incorporation without first giving at least 30 days’ prior written notice to Trust Depositor and to the Trustees.

 

(b)        If any change in Seller’s name, identity or structure or other action would make any financing statement or notice of ownership interest or lien filed under this Agreement seriously misleading within the meaning of applicable provisions of the UCC or any title statute, Seller, no later than five days after the effective date of such change, shall file such amendments, if any, as may be required to preserve and protect the Trust Depositor’s and the Underlying Trust’s interests in the Contract Assets and proceeds thereof.  In addition, Seller shall not change its state of incorporation unless it has first taken such action as is advisable or necessary to preserve and protect the Trust Depositor’s and the Underlying Trusts’ interest in the Contract Assets.  Promptly after taking any of the foregoing actions, Seller shall deliver to Trust Depositor and the Trustees an opinion of counsel stating that, in the opinion of such counsel, all financing statements or amendments necessary to preserve and protect the interests of the Trust Depositor and the Underlying Trust in the Contract Assets have been filed, and reciting the details of such filing.

 

Section 4.04.    Costs and Expenses.  Seller agrees to pay all reasonable costs and disbursements in connection with the perfection and the maintenance of perfection, as against all third parties, of (i) Trust Depositor’s and Underlying Trust’s right, title and interest in and to the Contract Assets (including, without limitation, the security interests in the Motorcycles related thereto) and (ii) the security interests provided for in the Indenture.

 

Section 4.05     Sale Treatment.  Each of Seller and Trust Depositor shall treat the transfer of Contract Assets to the Trust Depositor as a sale or capital contribution for all purposes, although the Seller and the Trust Depositor acknowledge that the consolidated financial statements of the Seller and

 

- 8  -

 

the Trust Depositor shall be prepared in accordance with generally accepted accounting principles and, as a result of the consolidation required by generally accepted accounting principles, the transfers will be reflected as a financing by the Seller in its consolidated financial statements; provided, however, that (i) appropriate notations shall be made in any such consolidated financial statements (or in the accompanying notes) to indicate that the Trust Depositor is a separate legal entity from the Seller and to indicate that the Trust Depositor’s assets and credit are not available to satisfy the debts and other obligations of the Seller, (ii) such assets shall also be listed separately on any balance sheet of the Trust Depositor prepared on a stand alone basis, and (iii) following the occurrence of any bankruptcy, insolvency or similar event in respect of the Seller, the Contracts and Contract Assets purportedly conveyed to the Trust Depositor hereunder would not constitute part of the Seller’s estate in bankruptcy.

 

Section 4.06     Separateness from Trust Depositor.  The Seller agrees to take or refrain from taking or engaging in with respect to the Trust Depositor each of the actions or activities specified in the “substantive consolidation” opinion of Foley & Lardner LLP (or in any related certificate of Seller) delivered on the Closing Date, upon which the conclusions expressed therein are based.

 

ARTICLE V

 

REMEDIES UPON MISREPRESENTATION

 

Section 5.01.    Repurchases of Contracts for Breach of Representations and Warranties.

 

(a)        Seller hereby agrees, for the benefit of the Underlying Trust, the Issuer, the Indenture Trustee and the Trust Depositor, that it shall repurchase a Contract (together with all related Contract Assets), at its Repurchase Price, not later than two Business Days prior to the first Distribution Date after the last day of the calendar month in which the Seller becomes aware or receives written notice from Trust Depositor, any of the Trustees or the Servicer of any breach of a representation or warranty of Seller set forth in Article III of this Agreement that materially adversely affects Trust Depositor’s or the Underlying Trust’s interest in such Contract (without regard to the benefits of the Reserve Fund) and which breach has not been cured; provided, however, that with respect to any Contract described on the List of Contracts with respect to an incorrect unpaid Principal Balance which Seller would otherwise be required to repurchase pursuant to this Section 5.01(a) and Section 7.08 of the Sale and Servicing Agreement, Seller may, in lieu of repurchasing such Contract, deposit in the Collection Account not later than one Business Day prior to such Distribution Date cash in an amount sufficient to cure any deficiency or discrepancy; and provided further that with respect to a breach of a representation or warranty relating to the Contracts in the aggregate and not to any particular Contract, Seller may select Contracts (without adverse selection) to repurchase such that had such Contracts not been reconveyed by Trust Depositor and included as part of the Underlying Trust there would have been no breach of such representation or warranty; provided further that the failure to maintain perfection of the security interest in the Motorcycle securing a Contract in accordance with the Sale and Servicing Agreement shall be deemed to be a breach materially and adversely affecting the Underlying Trust’s interest in the Contracts or in the related Contract Assets.

 

(b)        [Reserved].

 

(c)        Notwithstanding any other provision of this Agreement, the obligations of Seller under this Section 5.01 and under Section 7.08 of the Sale and Servicing Agreement shall not terminate upon a Servicing Transfer pursuant to Article Eight of the Sale and Servicing Agreement.

 

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ARTICLE VI

 

INDEMNITIES

 

Section 6.01.    Seller Indemnification.  Seller will defend and indemnify Trust Depositor, the Trust, the Underlying Trust, the Trustees, any agents of the Trustees and the Noteholders against any and all costs, expenses, losses, damages, claims and liabilities, joint or several, including reasonable fees and expenses of counsel and expenses of litigation arising out of or resulting from (i) this Agreement or the use, ownership or operation of any Motorcycle by Seller or the Servicer or any Affiliate of either, (ii) any representation or warranty or covenant made by Seller in this Agreement being untrue or incorrect (subject to the third sentence of the preamble to Article III of this Agreement above), and (iii) any untrue statement or alleged untrue statement of a material fact contained in the Prospectus or in any amendment thereto or the omission or alleged omission to state therein a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement was made in conformity with information furnished to Trust Depositor by Seller specifically for use therein.  Notwithstanding any other provision of this Agreement, the obligation of Seller under this Section 6.01 shall not terminate upon a Servicing Transfer pursuant to Article Eight of the Sale and Servicing Agreement and shall survive any termination of that agreement or this Agreement.

 

Section 6.02.    Liabilities to Obligors.  No obligation or liability to any Obligor under any of the Contracts is intended to be assumed by the Trustees, the Underlying Trust, the Trust or the Noteholders under or as a result of this Agreement and the transactions contemplated hereby.

 

Section 6.03.    Tax Indemnification.  Seller covenants and agrees to pay, and to indemnify, defend and hold harmless the Trust Depositor, the Underlying Trust, the Trust, the Trustees or the Noteholders from, any taxes that may at any time be asserted against any such Person as a result of or relating to the transactions contemplated herein and in the other Transaction Documents, including any sales, gross receipts, gross margin, general corporation, tangible personal property, Illinois personal property replacement privilege or license taxes (but not including any federal, state or other taxes arising out of the creation of the Underlying Trust, the Trust and the issuance of the Notes) and costs, expenses and reasonable counsel fees in defending against the same, whether arising by reason of the acts to be performed by Seller under this Agreement or the Servicer under the Sale and Servicing Agreement or imposed against the Trust Depositor, the Underlying Trust, the Trust, a Noteholder or otherwise.  Notwithstanding any other provision of this Agreement, the obligation of Seller under this Section 6.03 shall not terminate upon a Servicing Transfer pursuant to Article Eight of the Sale and Servicing Agreement and shall survive any termination of this Agreement.

 

Section 6.04.    Operation of Indemnities.  Indemnification under this Article VI shall include, without limitation, reasonable fees and expenses of counsel and expenses of litigation.  If Seller has made any indemnity payments to Trust Depositor or the Trustees pursuant to this Article VI and Trust Depositor or the Trustees thereafter collects any of such amounts from others, Trust Depositor or the Trustees will repay such amounts collected to Seller, except that any payments received by Trust Depositor or the Trustees from an insurance provider as a result of the events under which the Seller’s indemnity payments arose shall be repaid prior to any repayment of the Seller’s indemnity payment.

 

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ARTICLE VII

 

MISCELLANEOUS

 

Section 7.01.    Prohibited Transactions with Respect to the Trust.  Seller shall not:

 

(a)        Provide credit to any Noteholder for the purpose of enabling such Noteholder to purchase Notes;

 

(b)        Purchase any Notes in an agency or trustee capacity; or

 

(c)        Except in its capacity as Servicer as provided in the Sale and Servicing Agreement, lend any money to the Trust or to the Underlying Trust.

 

Section 7.02.    Merger or Consolidation.  (a) Except as otherwise provided in this Section 7.02, Seller will keep in full force and effect its existence, rights and franchises as a Nevada corporation, and will obtain and preserve its qualification to do business as a foreign corporation in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement and of any of the Contracts and to perform its duties under this Agreement.

 

(b)        Any person into which Seller may be merged or consolidated, or any corporation  or other entity resulting from such merger or consolidation to which Seller is a party, or any person succeeding to the business of Seller, shall be the successor to Seller hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

 

(c)        Upon the merger or consolidation of the Seller as described in this Section 7.02, the Seller shall provide the Rating Agencies notice of such merger or consolidation within 30 days after completion of the same.

 

Section 7.03.    Termination.  This Agreement shall terminate (after distribution of any amounts due to Noteholders due pursuant to Section 7.05 of the Sale and Servicing Agreement) on the Distribution Date on which the aggregate Outstanding Amount of the Notes is reduced to zero; provided, that Seller’s representations and warranties and indemnities by Seller shall survive termination.

 

Section 7.04.    Assignment or Delegation by Seller.  Except as specifically authorized hereunder, Seller may not convey and assign or delegate any of its rights or obligations hereunder absent the prior written consent of Trust Depositor and the Trustees, and any attempt to do so without such consent shall be void.

 

Section 7.05.    Amendment.  (a) This Agreement may be amended from time to time by Seller and Trust Depositor, with notice to the Rating Agencies, but without the consent of the Trustees or any of the Noteholders to correct manifest error, to cure any ambiguity, to correct or supplement any provisions herein or therein which may be inconsistent with any other provisions herein, therein or in the Prospectus, as the case may be, or to add any other provisions with respect to matters or questions arising under this Agreement which shall not be inconsistent with the provisions of this Agreement or the Prospectus; provided, however, that such action shall not, as evidenced by an Opinion of Counsel for Seller acceptable to the Indenture Trustee, adversely affect the interests of any Noteholder.

 

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(b)        This Agreement may also be amended from time to time by Seller and Trust Depositor, with the consent of the Required Holders, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Indenture Trustee for the benefit of Noteholders; provided, however, that no such amendment or waiver shall (i) reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on any Contracts or distributions that shall be required to be made on any Note or (ii) reduce the aforesaid percentage of the Outstanding Amount of the Notes, the Holders of which are required to consent to any such amendment or waiver pursuant to this Agreement, without the consent of the Holders of all Notes of the relevant Classes then outstanding.

 

(c)        Promptly after the execution of any amendment or consent pursuant to this Section 7.05, Trust Depositor shall furnish written notification of the substance of such amendment and a copy of such amendment to each Trustee and each Rating Agency.

 

(d)        It shall not be necessary for the consent of Noteholders under this Section 7.05 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent shall approve the substance thereof.  The manner of obtaining such consents and of evidencing the authorization of the execution thereof by Noteholders shall be subject to such reasonable requirements as the Trustees may prescribe.

 

(e)        Upon the execution of any amendment or consent pursuant to this Section 7.05, this Agreement shall be modified in accordance therewith, and such amendment or consent shall form a part of this Agreement for all purposes.

 

Section 7.06.    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.

 

All communications and notices pursuant hereto to Noteholders shall be in writing and delivered or mailed at the address shown in the Note Register.

 

Section 7.07.    Merger and Integration.  Except as specifically stated otherwise herein, this Agreement sets forth the entire understanding of the parties relating to the subject matter hereof, and all prior understandings, written or oral, are superseded by this Agreement.  This Agreement may not be modified, amended, waived, or supplemented except as provided herein.

 

Section 7.08.    Headings.  The headings herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof.

 

Section 7.09.    Governing Law.  This Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Illinois.

 

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Section 7.10.    No Bankruptcy Petition. The Seller covenants and agrees that, prior to the date that is one year and one day after the payment in full of all amounts owing in respect of all outstanding Securities, as well as any other amounts distributable or payable from the Trust Estate, together with any other amounts owing in respect of obligations of the Trust Depositor, it will not institute against, or solicit or join in or cooperate with or encourage any Person to institute against, the Trust Depositor, the Underlying Trust or the Trust, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceedings under the laws of the United States or any State of the United States.  This Section 7.10 shall survive termination of this Agreement.

 

[signature page follows]

 

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

 

	
 
    	
HARLEY-DAVIDSON   CUSTOMER FUNDING CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   James Darrell Thomas
    	
 
    
	
 
    	
Printed   Name: James Darrell Thomas
    
	
 
    	
Title:   Vice President, Treasurer and
    
	
 
    	
Assistant   Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HARLEY-DAVIDSON   CREDIT CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   James Darrell Thomas
    	
 
    
	
 
    	
Printed   Name: James Darrell Thomas
    
	
 
    	
Title:   Vice President, Treasurer and
    
	
 
    	
Assistant   Secretary
    

 

Signature Page to Transfer and Sale Agreement

 

 

Exhibit A

Transfer and Sale

Agreement

 

FORM OF ASSIGNMENT

 

In accordance with the Transfer and Sale Agreement (the “Agreement”) dated as of June 1, 2016 made by and between the undersigned, as seller thereunder (“Seller”), and Harley-Davidson Customer Funding Corp., a Nevada corporation and wholly-owned subsidiary of Seller (“Trust Depositor”), as purchaser thereunder, the undersigned does hereby sell, transfer, convey and assign, set over and otherwise convey to Trust Depositor (i) all the right, title and interest of Seller 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 Seller to payments which are collected pursuant to such Contracts after the Cutoff Date, including any liquidation proceeds therefrom, (iii) all rights of Seller under any theft, physical damage, credit life, disability or other individual insurance policy (and rights under a “forced placed” policy, if any), any debt insurance policy or any debt cancellation agreement relating to any such Contract, an Obligor or a Motorcycle securing such Contract, (iv) all security interests in each such Motorcycle, (v) all documents contained in the related Contract Files, (vi) all rights of Seller in the Lockbox, Lockbox Account and related Lockbox Agreement to the extent they relate to the Contracts (but excluding payments received on or before the Cutoff Date), (vii) all rights (but not the obligations) of the Seller under any motorcycle dealer agreements between the dealers (i.e., the originators of certain Contracts) and the Seller, (viii) all rights of Seller 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 (ix) all proceeds and products of the foregoing.

 

This Assignment is made pursuant to and in reliance upon the representation and warranties on the part of the undersigned contained in Article III of the Agreement and no others.

 

Capitalized terms used herein but not otherwise defined shall have the meanings assigned to such terms in the Sale and Servicing Agreement dated as of June 1, 2016 made by and among the undersigned, as servicer, the Trust Depositor, Harley-Davidson Motorcycle Grantor Trust 2016-A, Harley-Davidson Motorcycle Trust 2016-A, as issuer, and The Bank of New York Mellon Trust Company, N.A., as indenture trustee.

 

A-1

 

IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly executed this        day of June 2016.

 

	
 
    	
HARLEY-DAVIDSON   CREDIT CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Printed   Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
						

 

A-2

 

Exhibit B

Transfer and Sale

Agreement

 

FORM OF OFFICER’S CERTIFICATE

 

 

[Form of Closing Certificate of Servicer/Seller]

 

HARLEY-DAVIDSON CREDIT CORP.

 

Officer’s Certificate

 

The undersigned certifies that [s]he is [                      ] of Harley-Davidson Credit Corp. (“Harley-Davidson Credit”), and that as such is duly authorized to execute and deliver this certificate on behalf of Harley-Davidson Credit, as Servicer, in connection with the Sale and Servicing Agreement (the “Sale and Servicing Agreement”) dated as of June 1, 2016 (the “Effective Date”) by and among Harley-Davidson Credit, as Servicer, Harley-Davidson Customer Funding Corp. (“CFC”), The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee, Harley-Davidson Motorcycle Grantor Trust 2016-A (“Underlying Trust”) and Harley-Davidson Motorcycle Trust 2016-A (“Issuer”), and as Seller in connection with the Transfer and Sale Agreement dated as of the Effective Date (the “Transfer and Sale Agreement”) by and between Harley-Davidson Credit and CFC (all capitalized terms used herein without definition having the respective meanings set forth in the Sale and Servicing Agreement), and further certifies as follows:

 

(1)        Attached hereto as Exhibit I is a true and correct copy of the Articles of Incorporation of Harley-Davidson Credit, together with all amendments thereto as in effect on the date hereof.

 

(2)        There has been no other amendment or other document filed affecting the Articles of Incorporation of Harley-Davidson Credit since August 9, 1999, and no such amendment has been authorized by the Board of Directors or shareholders of Harley-Davidson Credit.

 

(3)        Attached hereto as Exhibit II is a Certificate of the Secretary of State of the State of Nevada dated as of a recent date, stating that Harley-Davidson Credit is duly incorporated under the laws of the State of Nevada and is in good standing.

 

(4)        Attached hereto as Exhibit III is a true and correct copy of the By-laws of Harley-Davidson Credit which were in full force and effect as of August 9, 1999 and at all times subsequent thereto.

 

(5)        Attached hereto as Exhibit IV is a true and correct copy of resolutions adopted pursuant to a unanimous written consent of the Board of Directors of Harley-Davidson Credit and relating to the authorization, execution, delivery and performance of the Transfer and Sale Agreement, the Sale and Servicing Agreement, the Underwriting Agreement and the Administration Agreement.  Said resolutions have not been amended, modified, annulled or revoked, and are on the date hereof in full force and effect and are the only resolutions relating to these matters which have been adopted by the Board of Directors.

 

B-1

 

(6)        No event with respect to Harley-Davidson Credit has occurred and is continuing which would constitute an Event of Termination or an event that, with notice or the passage of time, would constitute an Event of Termination under the Sale and Servicing Agreement.  To the best of my knowledge after reasonable investigation, there has been no material adverse change in the condition, financial or otherwise, or the earnings, business affairs or business prospects of Harley-Davidson Credit, whether or not arising in the ordinary course of business, since the respective dates as of which information is given in the Preliminary Prospectus (as defined in the Underwriting Agreement) or the Prospectus and except as set forth therein.

 

(7)        All federal, state and local taxes of Harley-Davidson Credit due and owing as of the date hereof have been paid.

 

(8)        All representations and warranties of Harley-Davidson Credit contained in the Transfer and Sale Agreement, the Sale and Servicing Agreement, the Underwriting Agreement, the Underlying Trust Agreement and the Administration Agreement (collectively, the “Program Agreements”) or in any document, certificate or financial or other statement delivered in connection therewith are true and correct as of the date hereof.

 

(9)        There is no action, investigation or proceeding pending or, to my knowledge, threatened against Harley-Davidson Credit before any court, administrative agency or other tribunal (a) asserting the invalidity of any Program Agreement to which Harley-Davidson Credit is a party; or (b) which is likely materially and adversely to affect Harley-Davidson Credit’s performance of its obligations under, or the validity or enforceability of, the Program Agreements.

 

(10)      No consent, approval, authorization or order of, and no notice to or filing with, any governmental agency or body or state or federal court is required to be obtained by Harley-Davidson Credit for Harley-Davidson Credit’s consummation of the transactions contemplated by the Program Agreements, except such as have been obtained or made and such as may be required under the blue sky laws of any jurisdiction in connection with the issuance and sale of the Notes or the issuance of the Certificate.

 

(11)      Neither Harley-Davidson Credit’s transfer and assignment of the Contract Assets to CFC, CFC’s concurrent transfer and assignment of the Trust Corpus to the Underlying Trust, nor the concurrent pledge by the Trust of the Collateral to the Indenture Trustee, nor the issuance and sale of the Notes, the issuance of the Certificates or the entering into of the Program Agreements, nor the consummation of any other of the transactions contemplated therein, will violate or conflict with any agreement or instrument to which Harley-Davidson Credit is a party or by which it is otherwise bound.

 

(12)      In connection with the transfers of Contracts and related assets contemplated in the Transfer and Sale Agreement, (a) Harley-Davidson Credit has not made such transfer with actual intent to hinder, delay or defraud any creditor of Harley-Davidson Credit, and (b) Harley-Davidson Credit has not received less than a reasonably equivalent value in exchange for such transfer, is not on the date hereof insolvent (nor will Harley-Davidson Credit become insolvent as a result thereof), is not engaged (or about to engage) in a business or transaction for which it has unreasonably small capital, and does not intend to incur or believe it will incur debts beyond its ability to pay when matured.

 

B-2

 

(13)      The sole shareholder of Harley-Davidson Credit is Harley-Davidson Financial Services, Inc., a Delaware corporation, which has its chief executive office and only office in Chicago, Illinois, and has no other offices in any other state.

 

(14)      Each of the agreements and conditions of Harley-Davidson Credit to be performed or satisfied on or before the Closing Date under the Program Agreements has been performed or satisfied in all material respects.

 

(15)      Each Contract being transferred pursuant to the Transfer and Sale Agreement is evidenced by a written agreement providing for a repayment obligation as well as a security interest in the related Motorcycle securing such obligation.

 

(16)      Harley-Davidson Credit has not authorized the filing of any UCC financing statements listing the Contract Assets as collateral other than financing statements relating to the transactions contemplated in the Transfer and Sale Agreement.

 

*   *   *   *   *   *

 

B-3

 

In Witness Whereof, I have affixed my signature hereto this       day of June 2016.

 

 

	
 
    	
By:
    	
 
    
	
 
    	
Printed   Name:
    	
 
    
	
 
    	
Title:

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